Or. Admin. Code § 340-253-1100

Current through Register Vol. 63, No. 10, October 1, 2024

Section 340-253-1100 - Advance Crediting

(1) General Provisions.

(a) Advance Credits are used to advance the state's transportation electrification goals.

(b) All advance credits represent actual reductions of greenhouse gas emissions against the clean fuel standards.

(c) Vehicles must be registered in the State of Oregon to be eligible to earn advanced credits.

(2) Eligibility to generate Advance Credits.

(a) The following entities may apply for advance credits:

(A) Public Transit Agencies;

(B) Political subdivisions of the State of Oregon;

(C) Tribes;

(D) School Districts; and

(E) Companies under contract to provide services to a political subdivision of the State of Oregon or an Oregon School District may apply if the political subdivision endorses the application, and the vehicles covered by the application are intended to provide contracted services to the public.

(b) The entities identified in subsection (a) may apply to earn advance credits for the purchase and use of the following vehicle types:

(A) Medium and Heavy Duty vehicles; and

(B) Light-duty vehicles if they are part of an organization's plan to fully electrify its light-duty fleet within a 15-year time period.

(3) Applications for Advance Credits. All of the following requirements apply to applications for advance credits:

(a) Applications for advance crediting will be accepted by DEQ at least once per year from entities eligible to apply under section (2). DEQ will notify stakeholders when applications will be accepted and will provide application materials and guidance about how it will process and consider applications.

(b) Applicants must supply the following information to DEQ:

(A) A letter describing the activities or purchases that they want to receive advance crediting for, including the number of vehicles, charging equipment, and estimated timeframes for when those vehicles and equipment will be put into useful service;

(B) A detailed estimate of the potential credit generation from the electric vehicles and charging equipment that they want to receive advance crediting for. In the case of electric vehicles, that detailed estimate must at least include the number of miles each vehicle will travel within Oregon annually and an estimated amount of charging for each vehicle;

(C) If covered electric vehicles will mainly use existing charging equipment, details on the ownership of that charging equipment, and how the applicant will ensure that another entity will not generate credits, and will not attempt to general credits, from that vehicle until it has exited the payback period;

(D) Information on where the electric vehicles will be charged, if they will be charged using grid or renewable electricity, and, if applicable, the utility-specific CI for where the charging equipment will be located;

(E) A proposed number of credits to be advanced for each vehicle; and

(F) An attestation that the applicant will remain the owner or lessee of the vehicle or charging equipment until the vehicle has paid back the advanced credits, or that, if the vehicle is sold prior to the end of the payback period, that the applicant will buy and retire credits against the remaining unearned amount.

(c) If the applicant is a company under contract to provide school bus services to an Oregon School District, it must also provide:

(A) A contract with the Oregon School District that the school buses will be serving that shows they will be the provider of school bus services to that district for at least three years following their purchase or lease of the school buses covered by the Advance Crediting Agreement; and

(B) A letter from the school district that is endorsing their application for advance crediting.

(d) If the applicant is a company under a multi-year contract with a political subdivision of the State of Oregon, it must also provide:

(A) A contract with the political subdivision showing how the electric vehicles will be used and that they will be used in state for at least three years following their purchase or lease; and

(B) A letter endorsing the application from the political subdivision.

(e) In considering applications under this rule, DEQ will prioritize applications where the vehicles or charging equipment will reduce emissions in vulnerable communities disproportionately impacted by climate change, air toxics, and criteria air pollution.

(f) DEQ may request additional documentation from an applicant prior to making a decision on the application. If the applicant does not provide the requested documentation, then DEQ may deny the application without prejudice.

(4) Approval of Advance Credits. If DEQ determines that an application for advance credits meets the requirements of sections (2) and (3), then DEQ will negotiate an agreement with the applicant to issue advance credits consistent with this rule and based on all of the following considerations and requirements:

(a) A clear and objective milestone for issuing advance credits that represents when the vehicles and equipment covered by the application are placed into useful service;

(b) The number of credits being advanced in total or per vehicle;

(c) The length of the payback period, which must be one year longer than the number of years of credits that will be advanced;

(d) An attestation from the applicant that it understands that the advanced credits must represent real reductions and that if the activity covered by the agreement does not generate sufficient credits within the payback period that it is responsible for retiring a sufficient number of credits to make up the difference. The attestation must also include a statement that the applicant understands that it is responsible for making up the difference in credits if it sells or relocates covered vehicles outside of Oregon; and

(e) An attestation from the applicant that it will ensure that actual credits are not generated from charging equipment serving these vehicles until the credits have been paid back.

(5) Issuance of Advance Credits. If DEQ approves an application and has executed an agreement with the applicant under section (4), then:

(a) DEQ will issue advance credits to the applicant only after the vehicles or equipment are placed into useful service as agreed to under section (4) of this rule;

(b) Credits will only be issued to the applicant named in the agreement; and

(c) DEQ may advance no more than six years of credits for any single vehicle or piece of infrastructure.

(6) Payback Period. Advanced credits issued under this rule are subject to the following requirements:

(a) The payback period for a vehicle or charging equipment will be specified in the agreement between DEQ and the applicant, except that the payback period may not exceed nine years. The payback period must be at least one year longer than the number of years of credits advanced to the applicant.

(b) In the event that the number of advanced credits was not realized during the payback period, the recipient is responsible for acquiring and retiring sufficient credits to ensure the environmental integrity of the program.

(c) If a vehicle or charging equipment is sold to another entity prior to the close of the payback period, the applicant is responsible for purchasing and retiring credits against the volume of advanced credits that has not yet been covered by actual credit generation.

(7) Reporting Requirements. An applicant that has received advance credits under this rule must:

(a) File quarterly reports to DEQ showing the amount of charging going into the individual electric vehicles covered by the agreement; and

(b) May not generate additional credits for such charging until the advanced credits are paid back. DEQ and the applicant will monitor the amount of charging and credits that would have been generated to determine when an equal number of credits has been generated to the number of credits advanced.

(8) Overall limitation on advance credits. DEQ may not issue more advance credits in any one calendar year than an amount equal to five percent of the number of deficits generated in the prior compliance year. DEQ will process applications, negotiate and issue advance credits on a first-come, first served basis, and will stop working on any pending applications when it has issued advance credits equal to five percent of the number of deficits generated in the prior compliance year.

Or. Admin. Code § 340-253-1100

DEQ 7-2021, adopt filed 03/26/2021, effective 3/26/2021; DEQ 17-2022, amend filed 09/23/2022, effective 1/1/2023

Statutory/Other Authority: ORS 468.020, ORS 468A.266, ORS 468A.268, ORS 468A.277 & ORS 468A.265 through 468A.277

Statutes/Other Implemented: ORS 468.020 & ORS 468A.265 through 468A.277