| (a) Emission reduction strategy.
(1) An emission reduction credit (ERC) may be generated
using one of the following strategies or any other method that is
approved by the executive director:
(A) the permanent shutdown of a facility that causes
a loss of capability to produce emissions;
(B) the installation and operation of pollution control
equipment that reduces emissions below baseline emissions for the
facility;
(C) a change in a manufacturing process that reduces
emissions below baseline emissions for the facility;
(D) a permanent curtailment in production that reduces
the facility's capability to produce emissions; or
(E) pollution prevention projects that produce surplus
emission reductions.
(2) An ERC may not be generated from the following
strategies:
(A) reductions from the shifting of activity from one
facility to another facility at the same site;
(B) that portion of reductions funded through state
or federal programs, unless specifically allowed under that program;
(C) reductions from a facility without state implementation
plan (SIP) emissions; or
(D) reductions from the shutdown of specific types
of inelastic area sources that are driven by population needs. The
executive director shall maintain a public list of area source categories
determined to be inelastic categories.
(i) The list of inelastic area source categories will
be made available to the public on the commission's website.
(ii) Any person may submit a written petition requesting
that the executive director add or remove a category from the list.
(iii) Within 60 days of receiving a petition under
clause (ii) of this subparagraph, the executive director shall prepare
a draft revised list or propose denial of the petition by preparing
a draft denial statement supporting denial of the petition.
(iv) The executive director may on its own motion propose
revisions to the list by preparing a draft revised list.
(v) The executive director's draft revised list, or
draft denial statement, under clauses (iii) and (iv) of this subparagraph
shall be made available for public comment for 30 days.
(vi) Within 30 days of the public comment period ending,
the executive director shall issue a proposed final list or a proposed
final denial statement for consideration and approval by the commission.
(vii) The commission shall approve, modify, or deny
the proposed revisions to the list of inelastic area sources categories
made by the executive director under clauses (iii) and (iv) of this
subparagraph.
(viii) The commission shall approve, modify, or remand
to the executive director for further consideration a recommendation
to deny a petition submitted by the executive director under clause
(iii) of this subparagraph.
(ix) The shutdown of an area source category that falls
into one of the categories on the list under clause (i) of this subparagraph
is ineligible for emissions reduction credit generation.
(b) ERC baseline emissions.
(1) The baseline emissions may not exceed the facility's
SIP emissions.
(2) The activity and emission rate used to calculate
the facility's historical adjusted emissions must be determined from
the same two consecutive calendar years.
(A) For point sources, the historical adjusted emissions
must be based on two consecutive calendar years from the ten consecutive
years immediately before the emissions reduction is achieved.
(B) For area sources, the historical adjusted emissions
must be based on two consecutive years from the five consecutive years
immediately before the emissions reduction is achieved unless detailed
operational records are available for more than five years. The historical
adjusted emissions may be determined from two consecutive calendar
years up to six to ten consecutive years immediately before the emissions
reduction is achieved when detailed operational records are available
for those years.
(3) For a facility in existence less than 24 months
or not having two complete calendar years of activity data, a shorter
period of not less than 12 months may be considered by the executive
director.
(c) ERC calculation.
(1) The quantity of ERCs is determined by subtracting
the facility's strategic emissions from the facility's baseline emissions,
as calculated in the following equation.
Attached Graphic
(2) For area sources generating credits from the permanent
shutdown of a facility, the amount of ERCs calculated will be reduced
by 15% or 0.1 ton per year, whichever is greater.
(3) For an area source facility, the amount of ERCs
calculated will be adjusted to account for the quality of the data
used to quantify the emissions. The adjustment will be:
(A) no reduction for the same type of records that
are required to be maintained for a point source facility; or
(B) 15% or 0.1 ton per year, whichever is greater,
reduction for records supporting alternative methods approved according
to §101.302(e)(1)(E) of this title (relating to General Provisions).
(4) If the facility is subject to both of the adjustments
in paragraphs (2) and (3) of this subsection, the total combined adjustment
to the amount of ERCs issued will be a reduction of 20% or 0.1 ton
per year, whichever is greater.
(d) ERC certification.
(1) The owner or operator of a facility with potential
ERCs shall submit an application form specified by the executive director
and signed by an authorized account representative as specified in
subparagraphs (A) - (D) of this paragraph.
(A) Applications will be reviewed to determine the
credibility of the reductions. Reductions determined to be creditable
will be certified by the executive director and an ERC will be issued
to the owner.
(B) The application for ERCs must be submitted no more
than two years after the facility's emissions reduction date, except
as provided by subparagraphs (C) and (D) of this paragraph.
(C) The application for ERCs from all facilities affected
by a complete site shutdown of an oil and gas production site may
be submitted no more than two years after the site's production well
is plugged in accordance with requirements of the Railroad Commission
of Texas if the plugging is completed within one year of final production
being reported to the Railroad Commission of Texas. Emission credits
certified under this exception will be available for use for 72 months
from the date well plugging is completed in lieu of the provisions
outlined in §101.309(b)(2) of this title (relating to Emission
Credit Banking and Trading).
(D) For an area source facility, the application for
ERCs may be submitted as follows.
(i) For emission reductions that occurred after June
1, 2013 and prior to January 1, 2015, the application for ERCs must
be submitted by December 31, 2017.
(ii) For emissions reductions that occurred between
January 1, 2015 and January 1, 2017, the application for ERCs may
be submitted up to three years after the facility's emissions reduction
date.
(iii) The application deadline exceptions specified
in clauses (i) and (ii) of this subparagraph no longer apply after
December 31, 2019.
(iv) Emission credits certified under the application
deadline exceptions specified in clauses (i) and (ii) of this subparagraph
or certified for area source emission reductions occurring before
and included on an application submitted, but not acted on, before
January 1, 2017 shall be available for use for 72 months from the
date of the emission reduction in lieu of the provisions outlined
in §101.309(b)(2) of this title.
(2) ERCs must be quantified in accordance with §101.302(e)
of this title. The executive director shall have the authority to
inspect and request information to assure that the emissions reductions
have actually been achieved.
(3) An application for ERCs must include, but is not
limited to, a completed application form specified by the executive
director signed by an authorized representative of the applicant along
with the following information for each pollutant reduced at each
applicable facility:
(A) a complete description of the emission reduction
strategy;
(B) the amount of ERCs generated;
(C) for volatile organic compound reductions, a list
of the specific compounds reduced;
(D) documentation, including records for approved or
approvable methods to quantify emissions, supporting the activity,
emission rate, historical adjusted emissions, SIP emissions, baseline
emissions, and strategic emissions;
Cont'd... |
