|(a) Applicable pollutants.
(1) A discrete emission credit may be generated from
a reduction of a criteria pollutant, excluding lead, or a precursor
of a criteria pollutant.
(2) A discrete emission credit generated from the reduction
of one pollutant or precursor may not be used to meet the requirements
for another pollutant or precursor, except as provided in §101.376
of this title (relating to Discrete Emission Credit Use).
(b) Eligible generator categories. Eligible categories
include the following:
(1) point source facilities;
(2) mobile sources;
(3) any facility, including area sources, or mobile
source associated with actions by federal agencies under 40 Code of
Federal Regulations Part 93, Subpart B, Determining Conformity of
General Federal Actions to State or Federal Implementation Plans;
(4) area source facilities, including those comprised
of multiple emission points as allowed under §101.370(12) of
this title (relating to Definitions). Credit generation from grouped
emission points cannot exceed the lower of the group’s actual
emissions in the SIP emissions year or the historical adjusted emissions.
Facilities comprised of grouped emission points may include equipment
that was not operational during the SIP emissions year or the historical
adjusted emissions years as long as the emissions from the group were
present during the SIP emissions year. Characteristics that may be
considered to determine if emission points qualify for consideration
as a single facility for the purposes of generating emission credits,
include but are not limited to:
(A) source classification codes;
(B) primary standard industrial classification code;
(C) location, origin of, characteristics of, and controls
on the emissions;
(D) the generation period; and
(E) other credit calculation-related characteristics,
such as fuel, equipment type, emissions reduction strategy, and quantification
(c) Ineligible generator categories. The following
categories are not eligible to generate discrete emission credits:
(1) residential area sources;
(2) on-road mobile sources that are not part of an
industrial, commercial, nonprofit, institutional, or municipal/government
(3) mobile sources within a nonattainment area that
do not primarily operate within that nonattainment area with the exception
of marine and locomotive sources that use capture and control emissions
(d) Discrete emission credit requirements.
(1) A discrete emission reduction credit (DERC) is
a certified emission reduction that:
(A) must be real, quantifiable, and surplus at the
time the DERC is generated;
(B) must occur after the year used to determine the
state implementation plan (SIP) emissions for a facility in a nonattainment
(C) must occur at a facility with SIP emissions for
a facility in a nonattainment area.
(2) To be creditable as a mobile discrete emission
reduction credit, an emission reduction must meet the following:
(A) the reduction must be real, quantifiable, and surplus
at the time it is created;
(B) the reduction must have occurred after the SIP
emissions year for a mobile source in a nonattainment area; and
(C) for a mobile source in a nonattainment area, the
mobile source must have operated during the SIP emissions year.
(3) Emission reductions from a facility or mobile source
certified as discrete emission credits under this division cannot
be recertified in whole or in part as emission credits under another
division within this subchapter.
(1) All generators or users of discrete emission credits
must use a protocol which has been submitted by the executive director
to the United States Environmental Protection Agency (EPA) for approval,
if existing for the applicable facility or mobile source, to measure
and calculate baseline emissions. If the generator or user wishes
to deviate from a protocol submitted by the executive director, EPA
approval is required before the protocol can be used. Protocols shall
be used as follows.
(A) The owner or operator of a facility subject to
the emission specifications under §§117.110, 117.310, 117.410,
117.1010, 117.1210, 117.1310, 117.2010, 117.2110, or 117.3310 of this
title (relating to Emission Specifications for Attainment Demonstration;
Emission Specifications for Eight-Hour Attainment Demonstration; and
Emission Specifications) shall use the testing and monitoring methodologies
required under Chapter 117 of this title (relating to Control of Air
Pollution from Nitrogen Compounds) to show compliance with the emission
specification for that pollutant.
(B) The owner or operator of a facility subject to
the control requirements or emission specifications under Chapter
115 of this title (relating to Control of Air Pollution from Volatile
Organic Compounds) shall use the testing and monitoring methodologies
required under Chapter 115 of this title to show compliance with the
(C) For area sources, except as specified in subparagraphs
(A) and (B) of this paragraph, the owner or operator of a facility
subject to the requirements under Chapter 106 of this title (relating
to Permits by Rule) or a permit issued under Chapter 116 of this title
(relating to Control of Air Pollution by Permits for New Construction
or Modification) shall use the testing and monitoring methodologies
required under Chapter 106 of this title or a permit issued under
Chapter 116 of this title to demonstrate compliance with the applicable
(D) The executive director may approve the use of a
methodology approved by the EPA to quantify emissions from the same
type of facility.
(E) Except as specified in subparagraph (D) of this
paragraph, if the executive director has not submitted a protocol
for the applicable facility or mobile source to the EPA for approval,
the following applies:
(i) the amount of discrete emission credits from a
facility or mobile source, in tons, will be determined and certified
based on quantification methodologies at least as stringent as the
methods used to demonstrate compliance with any applicable requirements
for the facility or mobile source;
(ii) the generator shall collect relevant data sufficient
to characterize the facility's or mobile source's emissions of the
affected pollutant and the facility's or mobile source's activity
level for all representative phases of operation in order to characterize
the facility's or mobile source's baseline emissions;
(iii) the owner or operator of a facility with a continuous
emissions monitoring system or predictive emissions monitoring system
in place shall use this data in quantifying emissions;
(iv) the chosen quantification protocol must be made
available for public comment for a period of 30 days and must be viewable
on the commission's website;
(v) the chosen quantification protocol and any comments
received during the public comment period must, upon approval by the
executive director, be submitted to the EPA for a 45-day adequacy
(vi) quantification protocols may not be accepted for
use with this division if the executive director receives a letter
objecting to the use of the protocol from the EPA during the 45-day
adequacy review or the EPA proposes disapproval of the protocol in
the Federal Register.
(2) If the monitoring and testing data specified in
paragraph (1) of this subsection is missing or unavailable, the generator
or user shall determine the facility's emissions for the period of
time the data is missing or unavailable using the most conservative
method for replacing the data and these listed methods in the following
(A) continuous monitoring data;
(B) periodic monitoring data;
(C) testing data;
(D) manufacturer's data;
(E) EPA Compilation of Air Pollution Emission Factors
(AP-42), September 2000; or
(F) material balance.
(3) When quantifying actual emissions in accordance
with paragraph (2) of this subsection, the generator or user shall
submit the justification for not using the methods in paragraph (1)
of this subsection and submit the justification for the method used.
(f) Credit application. Beginning January 1, 2018,
a credit application must be submitted through the State of Texas
Environmental Reporting System unless the applicant receives prior
approval from the executive director for an alternative means of application
(g) Credit certification.
(1) The amount of discrete emission credits must be
rounded down to the nearest tenth of a ton when generated and must
be rounded up to the nearest tenth of a ton when used. A facility,
aggregated fugitive emissions, or aggregated mobile sources that cannot
generate at least 0.1 ton of credit after all adjustments are applied
may not generate discrete emission credits. Fugitive emissions or
mobile source emissions aggregated to meet the requirement that emission
reductions be certified for at least 0.1 ton must be represented on
the same application and will have an application deadline determined
by the earliest emission reduction date among the aggregated sources.
(2) The executive director shall review an application
for certification to determine the credibility of the reductions and
may certify reductions. Each DERC certified will be assigned a certificate
number. Reductions determined to be creditable will be certified by
the executive director.
(3) The applicant will be notified in writing if the
executive director denies the discrete emission credit notification.
The applicant may submit a revised application in accordance with
the requirements of this division.
(4) If a facility's or mobile source's emissions exceed
any applicable local, state, or federal requirement, reductions of
emissions exceeding the requirement may not be certified as discrete
(h) Geographic scope. Except as provided in paragraph
(7) of this subsection and §101.375 of this title (relating to
Emission Reductions Achieved Outside the United States), only emission
reductions generated in the State of Texas may be creditable and used
in the state with the following limitations.
(1) volatile organic compounds (VOC) and nitrogen oxides
(NOX ) discrete emission credits generated
in an ozone attainment area may be used in any county or portion of
a county designated as attainment or unclassified, except as specified
in paragraphs (4) and (5) of this subsection and may not be used in
an ozone nonattainment area.
(2) VOC and NOX discrete
emission credits generated in an ozone nonattainment area may be used
either in the same ozone nonattainment area in which they were generated,
or in any county or portion of a county designated as attainment or
(3) VOC and NOX discrete
emission credits generated in an ozone nonattainment area may not
be used in any other ozone nonattainment area, except as provided
in this subsection.
(4) VOC discrete emission credits are prohibited from
use within the covered attainment counties, as defined in §115.10
of this title (relating to Definitions), if generated outside of the
covered attainment counties. VOC discrete emission credits generated
in a nonattainment area may be used in the covered attainment counties,
except those generated in El Paso.
(5) NOX discrete emission
credits are prohibited from use within the covered attainment counties,
as defined in §115.10 of this title, if generated outside of
the covered attainment counties. NOX discrete
emission credits generated in a nonattainment area, except those generated
in El Paso, may be used in the covered attainment counties.
(6) carbon monoxide (CO), sulfur dioxide (SO2), and particulate matter with diameters less
than or equal to 10 micrometers (PM10 )
discrete emission credits must be used in the same metropolitan statistical
area (as defined in Office of Management and Budget Bulletin Number
93-17 entitled "Revised Statistical Definitions for Metropolitan Areas"
dated June 30, 1993) in which the reduction was generated.
(7) VOC and NOX discrete
emission credits generated in other counties, states, or emission
reductions in other nations may be used in any attainment or nonattainment
county provided a demonstration has been made and approved by the
executive director and the EPA, to show that the emission reductions
achieved in the other county, state, or nation improve the air quality
in the county where the credit is being used.
(i) Ozone season. In areas having an ozone season of
less than 12 months (as defined in 40 Code of Federal Regulations
Part 58, Appendix D) VOC and NOX discrete
emission credits generated outside the ozone season may not be used
during the ozone season.