40 CFR § 72.95 - Allowance deduction formula.
The following formula shall be used to determine the total number of allowances to be deducted for the calendar year from the allowances held in an affected source's compliance account as of the allowance transfer deadline applicable to that year:
(a) “Tons emitted” is the total tons of sulfur dioxide emitted by the affected units at the source during the calendar year, as reported in accordance with part 75 of this chapter.
(b) “Allowances surrendered for underutilization” is the total number of allowances calculated in accordance with § 72.92 (a) and (c).
(c) “Allowances deducted for Phase I extensions” is the total number of allowances calculated in accordance with § 72.42(f)(1)(i).
(d) “Allowances deducted for substitution or compensating units” is the total number of allowances calculated in accordance with the surrender requirements specified under § 72.41(d)(3) or (e)(1)(iii)(B) or § 72.43(d)(2).