N.Y. Comp. Codes R. & Regs. Tit. 6 §§ 242-6.5

Current through Register Vol. 46, No. 45, November 2, 2024

Section 242-6.5 - Compliance

(a) 'Allowances available for compliance deduction'. CO₂ allowances that meet the following criteria are available to be deducted in order for a CO₂ budget source to comply with the CO₂ requirements of subdivision 242-1.5(c) of this Part for a control period or an interim control period.

(1) The CO₂ allowances, other than CO₂ offset allowances, are of allocation years that fall within a prior control period, the same control period or the same interim control period for which the allowances will be deducted.

(2) The CO₂ allowances are held in the CO₂ budget source's compliance account as of the CO₂ allowance transfer deadline for that control period or interim control period or are transferred into the compliance account by a CO₂ allowance transfer correctly submitted for recordation under section 242-7.1 of this Part by the CO₂ allowance transfer deadline for that control period or interim control period.

(3) For CO₂ offset allowances, the number of CO₂ offset allowances that are available to be deducted in order for a CO₂ budget source to comply with the CO₂ requirements under subdivision 242-1.5(c) of this Part for a control period or an interim control period may not exceed 3.3 percent of the CO₂ budget source's CO₂ emissions for that control period, or of 0.50 times the CO₂ budget source's CO₂ emissions for an interim control period, as determined in accordance with this Subpart and Subpart 242-8 of this Part.

(4) The CO₂ allowances are not necessary for deductions for excess emissions for a prior control period under subdivision (d) of this section.

(b) 'Deductions for compliance'. Following the recordation, in accordance with section 242-7.2 of this Part, of CO₂ allowance transfers submitted for recordation in the CO₂ budget source's compliance account by the CO₂ allowance transfer deadline for a control period or interim control period, the department or its agent will deduct CO₂ allowances available under subdivision (a) of this section to cover the source's CO₂ emissions (as determined in accordance with Subpart 242-8 of this Part) for the control period or interim control period, as follows:

(1) until the amount of CO₂ allowances deducted equals the number of tons of total CO₂ emissions less the CO₂ allowances deducted to meet the requirements of paragraph 242-1.5(c)(2) of this Part with respect to the previous two interim control periods, or 0.50 times the number of tons of total CO₂ emissions for an interim control period, less any CO₂ emissions attributable to the burning of eligible biomass, determined in accordance with Subpart 242-8 of this Part from all CO₂ budget units at the CO₂ budget source for the control period or interim control period; or

(2) if there are insufficient CO₂ allowances to complete the deductions in paragraph (1) of this subdivision, until no more CO₂ allowances available under subdivision (a) of this section remain in the compliance account.

(c) 'Identification of available CO₂ allowances by serial number; default compliance deductions'.

(1) The CO₂ authorized account representative for a source's compliance account may request that specific CO₂ allowances, identified by serial number, in the compliance account be deducted for emissions or excess emissions for a control period or interim control period in accordance with subdivision (b) or (d) of this section. Such identification shall be made in the compliance certification report submitted in accordance with section 242-4.1 of this Part.

(2) The department or its agent will deduct CO₂ allowances for a control period or interim control period from the CO₂ budget source's compliance account, in the absence of an identification or in the case of a partial identification of available CO₂ allowances by serial number under paragraph (1) of this subdivision, in the following order:

(i) First, subject to the relevant compliance deduction limitations under paragraphs (a)(3) and (d)(1) of this section, CO₂ offset allowances. CO₂ offset allowances shall be deducted in chronological order ('i.e.', CO₂ offset allowances from earlier allocation years shall be deducted before CO₂ offset allowances from later allocation years). In the event that some, but not all CO₂ offset allowances from a particular allocation year are to be deducted, CO₂ allowances shall be deducted by serial number, with lower serial numbered allowances deducted before higher serial numbered allowances.

(ii) Second, any CO₂ allowances, other than CO₂ offset allowances, which are available for deduction under subdivision (a) of this section. CO₂ allowances shall be deducted in chronological order ('i.e.', CO₂ allowances from earlier allocation years shall be deducted before CO₂ allowances from later allocation years). In the event that some, but not all CO₂ allowances from a particular allocation year are to be deducted, CO₂ allowances shall be deducted by serial number, with lower serial numbered allowances deducted before higher serial numbered allowances.

(d) 'Deductions for excess emissions'.

(1) After making the deductions for compliance under subdivision (b) of this section, the department or its agent will deduct from the CO₂ budget source's compliance account a number of CO₂ allowances, equal to three times the number of the source's excess emissions. In the event that a source has insufficient CO₂ allowances to cover three times the number of the source's excess emissions, the source shall be required to immediately transfer sufficient allowances into its compliance account. No CO₂ offset allowances may be deducted to account for the source's excess emissions.

(2) Any CO₂ allowance deduction required under paragraph (1) of this subdivision shall not affect the liability of the owners and operators of the CO₂ budget source or the CO₂ units at the source for any fine, penalty, or assessment, or their obligation to comply with any other remedy, for the same violation, as ordered under applicable State law. The following guidelines will be followed in assessing fines, penalties or other obligations.

(i) For purposes of determining the number of days of violation, if a CO₂ budget source has excess emissions for a control period, each day in the control period constitutes a day in violation unless the owners and operators of the unit demonstrate that a lesser number of days should be considered.

(ii) Each ton of excess emissions is a separate violation.

(iii) For the purposes of determining the number of days of violation, if a CO₂ budget source has excess interim emissions for an interim control period, each day in the interim control period constitutes a day in violation unless the owners and operators of the unit demonstrate that a lesser number of days should be considered.

(iv) Each ton of excess interim emissions is a separate violation.

(3) The propriety of the department's determination that a CO₂ budget source had excess emissions and the concomitant deduction of CO₂ allowances from that CO₂ budget source's account may be later challenged in the context of the initial administrative enforcement, or any civil or criminal judicial action arising from or encompassing that excess emissions violation. The commencement or pendency of any administrative enforcement, or civil or criminal judicial action arising from or encompassing that excess emissions violation will not act to prevent the department or its agent from initially deducting the CO₂ allowances resulting from the department's original determination that the relevant CO₂ budget source has had excess emissions. Should the department's determination of the existence or extent of the CO₂ budget source's excess emissions be revised either by a settlement or final conclusion of any administrative or judicial action, the department will act as follows.

(i) In any instance where the department's determination of the extent of excess emissions was too low, the department will take further action under paragraphs (1) and (2) of this subdivision to address the expanded violation.

(ii) In any instance where the department's determination of the extent of excess emissions was too high, the department will distribute to the relevant CO₂ budget source a number of CO₂ allowances equaling the number of CO₂ allowances deducted which are attributable to the difference between the original and final quantity of excess emissions. Should such CO₂ budget source's compliance account no longer exist, the CO₂ allowances will be provided to a general account selected by the owner or operator of the CO₂ budget source from which they were originally deducted.

(e) The department or its agent will record in the appropriate compliance account all deductions from such an account pursuant to Subdivisions (b) and (d) of this section.

(f) 'Action by the department on submissions'.

(1) The department may review and conduct independent audits concerning any submission under the CO₂ Budget Trading Program and make appropriate adjustments of the information in the submissions.

(2) The department may deduct CO₂ allowances from or transfer CO₂ allowances to a source's compliance account based on information in the submissions, as adjusted under paragraph (1) of this subdivision.

N.Y. Comp. Codes R. & Regs. Tit. 6 §§ 242-6.5

Amended New York State Register December 16, 2020/Volume XLII, Issue 50, eff. 12/31/2020