| (a) Requirements to use discrete emission credits.
Discrete emission credits may be used if the following requirements
are met.
(1) The user shall have ownership of a sufficient amount
of discrete emission credits before the use period for which the specific
discrete emission credits are to be used.
(2) The user shall hold sufficient discrete emission
credits to cover the user's compliance obligation at all times.
(3) The user shall acquire additional discrete emission
credits during the use period if it is determined the user does not
possess enough discrete emission credits to cover the entire use period.
The user shall acquire additional credits as allowed under this section
prior to the shortfall, or be in violation of this section.
(4) The user may acquire and use only discrete emission
credits listed in the registry.
(5) The user shall obtain executive director approval
to use nitrogen oxides (NOX ) discrete
emission reduction credits (DERCs) in Collin, Dallas, Denton, Ellis,
Johnson, Kaufman, Parker, Rockwall, and Tarrant Counties as provided
by subsection (f) of this section.
(6) A discrete emission credit may not be used unless
it is available in the account for the site where it will be used.
(b) Use of discrete emission credits. With the exception
of uses prohibited in subsection (c) of this section or precluded
by a commission order or a condition within an authorization under
the same commission account number, discrete emission credits may
be used to meet or demonstrate compliance with any facility or mobile
regulatory requirement including the following:
(1) to exceed any allowable emission level, if the
following conditions are met:
(A) in ozone nonattainment areas, permitted facilities
may use discrete emission credits to exceed permit allowables by no
more than 10 tons for NOX or 5 tons for
volatile organic compounds in a 12-month period as approved by the
executive director. This use is limited to one exceedance, up to 12
months within any 24-month period, per use strategy. The user shall
demonstrate that there will be no adverse impacts from the use of
discrete emission credits at the levels requested; or
(B) at permitted facilities in counties or portions
of counties designated as attainment or, attainment/unclassifiable,
or unclassifiable, discrete emission credits may be used to exceed
permit allowables by values not to exceed the prevention of significant
deterioration significance levels as provided in 40 Code of Federal
Regulations (CFR) §52.21(b)(23), as approved by the executive
director before use. This use is limited to one exceedance, up to
12 months within any 24-month period, per use strategy. The user shall
demonstrate that there will be no adverse impacts from the use of
discrete emission credits at the levels requested;
(2) as new source review (NSR) permit offsets, if the
following requirements are met:
(A) the user shall obtain the executive director's
approval prior to the use of specific discrete emission credits to
cover, at a minimum, one year of operation of the new or modified
facility in the NSR permit;
(B) the amount of discrete emission credits needed
for NSR offsets equals the quantity of tons needed to achieve the
maximum allowable emission level set in the user's NSR permit. The
user shall also purchase and retire enough discrete emission credits
to meet the offset ratio requirement in the user's ozone nonattainment
area. The user shall purchase and retire either the environmental
contribution of 10% or the offset ratio, whichever is higher; and
(C) the user shall submit a completed application form
specified by the executive director at least 90 days before the start
of operation and at least 90 days before continuing operation for
any period in which discrete emission credits not included in a prior
application will be used as offsets;
(3) to comply with the Mass Emissions Cap and Trade
Program requirements as provided by §101.356(h) of this title
(relating to Allowance Banking and Trading); or
(4) to comply with Chapter 115 or 117 of this title
(relating to Control of Air Pollution from Volatile Organic Compounds;
and Control of Air Pollution from Nitrogen Compounds), as allowed.
(c) Discrete emission credit use prohibitions. A discrete
emission credit may not be used under this division:
(1) before it has been acquired by the user;
(2) for netting to avoid the applicability of federal
and state NSR requirements;
(3) to meet (as codified in 42 United States Code (USC),
Federal Clean Air Act (FCAA)) requirements for:
(A) new source performance standards under FCAA, §111
(42 USC, §7411);
(B) lowest achievable emission rate standards under
FCAA, §173(a)(2) (42 USC, §7503(a)(2));
(C) best available control technology standards under
FCAA, §165(a)(4) (42 USC, §7475(a)(4)) or Texas Health and
Safety Code, §382.0518(b)(1);
(D) hazardous air pollutants standards under FCAA,
§112 (42 USC, §7412), including the requirements for maximum
achievable control technology;
(E) standards for solid waste combustion under FCAA,
§129 (42 USC, §7429);
(F) requirements for a vehicle inspection and maintenance
program under FCAA, §182(b)(4) or (c)(3) (42 USC, §7511a(b)(4)
or (c)(3));
(G) ozone control standards set under FCAA, §183(e)
and (f) (42 USC, §7511b(e) and (f));
(H) clean-fueled vehicle requirements under FCAA, §246
(42 USC, §7586);
(I) motor vehicle emissions standards under FCAA, §202
(42 USC, §7521);
(J) standards for non-road vehicles under FCAA, §213
(42 USC, §7547);
(K) requirements for reformulated gasoline under FCAA,
§211(k) (42 USC, §7545); or
(L) requirements for Reid vapor pressure standards
under FCAA, §211(h) and (i) (42 USC, §7545(h) and (i));
(4) to allow an emissions increase of an air contaminant
above a level authorized in a permit or other authorization that exceeds
the limitations of §106.261 or §106.262 of this title (relating
to Facilities (Emission Limitations); and Facilities (Emission and
Distance Limitations)) except as approved by the executive director
and the United States Environmental Protection Agency (EPA). This
paragraph does not apply to limit the use of discrete emission credits
in lieu of allowances under §101.356 of this title;
(5) to authorize a facility whose emissions are enforceably
limited to below applicable major source threshold levels, as defined
in §122.10 of this title (relating to General Definitions), to
operate with actual emissions above those levels without triggering
applicable requirements that would otherwise be triggered by such
major source status;
(6) to exceed an allowable emission level where the
exceedance would cause or contribute to a condition of air pollution
as determined by the executive director; or
(7) in Collin, Dallas, Denton, Ellis, Johnson, Kaufman,
Parker, Rockwall, and Tarrant Counties, if the NOX DERC
usage requested exceeds the limit specified in subsection (f) of this
section.
(d) Notice of intent to use.
(1) A completed application form specified by the executive
director, signed by an authorized representative of the applicant,
must be submitted to the executive director in accordance with the
following requirements.
(A) Discrete emission credits may be used only after
the applicant has submitted the notice and received executive director
approval.
(B) The application must be submitted:
(i) except as provided in subsection (f)(4) of this
section, for NOX DERC use in Collin,
Dallas, Denton, Ellis, Johnson, Kaufman, Parker, Rockwall, and Tarrant
Counties, by August 1 before the beginning of the calendar year in
which the DERCs are intended for use;
(ii) for use for the Mass Emissions Cap and Trade Program
in accordance with §101.356 of this title, by October 1 of the
control period in which the DERC are intended for use; or
(iii) for use for NSR offsets, as required by subsection
(b)(2)(C) of this section; or
(iv) for all other use, at least 45 days before the
first day of the use period if the discrete emission credits were
generated from a facility, 90 days if the discrete emission credits
were generated from a mobile source, and every 12 months thereafter
for each subsequent year if the use period exceeds 12 months.
(C) A copy of the application must also be sent to
the federal land manager 30 days prior to use if the user is located
within 100 kilometers of a Class I area, as listed in 40 CFR Part
81 (2001).
(D) The application must include, but is not limited
to, the following information for each use:
(i) the applicable state and federal requirements that
the discrete emission credits will be used to comply with and the
intended use period;
(ii) the amount of discrete emission credits needed;
(iii) the baseline emission rate, activity level, and
total emissions for the applicable facility or mobile source;
(iv) the actual emission rate, activity level, and
total emissions for the applicable facility or mobile source;
(v) the most stringent emission rate and the most stringent
emission level for the applicable facility or mobile source, considering
all applicable local, state, and federal requirements;
(vi) a complete description of the protocol, as submitted
by the executive director to the EPA for approval, used to calculate
the amount of discrete emission credits needed;
(vii) the actual calculations performed by the user
to determine the amount of discrete emission credits needed;
(viii) the date that the discrete emission credits
were acquired;
(ix) the discrete emission credit generator and the
original certificate number of the discrete emission credits acquired;
(x) the price of the discrete emission credits acquired,
except for transfers between sites under common ownership or control;
(xi) a statement that due diligence was taken to verify
that the discrete emission credits were not previously used, the discrete
emission credits were not generated as a result of actions prohibited
under this regulation, and the discrete emission credits will not
be used in a manner prohibited under this regulation; and
(xii) a certification of use, that must contain certification
under penalty of law by a responsible official of the user of truth,
accuracy, and completeness. This certification must state that based
on information and belief formed after reasonable inquiry, the statements
and information in the document are true, accurate, and complete.
(2) Discrete emission credit use calculation.
(A) To calculate the amount of discrete emission credits
necessary to comply with §§117.123, 117.320, 117.323, 117.423,
117.1020, 117.1220, or 117.3020 of this title (relating to Source
Cap; and System Cap), a user may use the equations listed in those
sections, or the following equations.
(i) For the rolling average cap:
Attached Graphic
(ii) For maximum daily cap:
Attached Graphic
(B) The amount of discrete emission credits needed
to demonstrate compliance or meet a regulatory requirement is calculated
as follows.
Attached Graphic
(C) The amount of discrete emission credits needed
to exceed an allowable emissions level is calculated as follows.
Attached Graphic
(D) The user shall retire 10% more discrete emission
credits than are needed, as calculated in this paragraph, to ensure
that the facility or mobile source environmental contribution retirement
obligation will be met.
(E) If the amount of discrete emission credits needed
to meet a regulatory requirement or to demonstrate compliance is greater
than 10 tons, an additional 5.0% of the discrete emission credits
needed, as calculated in this paragraph, must be acquired to ensure
that sufficient discrete emission credits are available to the user
with an adequate compliance margin.
(3) A user may submit a late application in the case
of an emergency, or other exigent circumstances, but the notice must
be submitted before the discrete emission credits can be used. The
user shall include a complete description of the situation in the
notice of intent to use. All other notices submitted less than 45
days prior to use, or 90 days prior to use for a mobile source, will
be considered late and in violation.
(4) The user is responsible for determining the credits
it will purchase and notifying the executive director of the selected
generating facility or mobile source in the application. If the generator's
credits are rejected or the application is incomplete, the use of
discrete emission credits by the user may be delayed by the executive
director. The user cannot use any discrete emission credits that have
not been certified by the executive director. The executive director
may reject the use of discrete Cont'd... |
