30 Tex. Admin. Code § 101.376 - Discrete Emission Credit Use
(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:
(ii) For maximum daily cap:
(B) The amount of
discrete emission credits needed to demonstrate compliance or meet a regulatory
requirement is calculated as follows.
(C) The
amount of discrete emission credits needed to exceed an allowable emissions
level is calculated as follows.
(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 emission credits by a facility or mobile source if the credit and use
cannot be demonstrated to meet the requirements of this section.
(5) If the facility is in an area with an
ozone season less than 12 months, the user shall calculate the amount of
discrete emission credits needed for the ozone season separately from the
non-ozone season.
(e)
Notice of use.
(1) The user shall calculate:
(A) the amount of discrete emission credits
used, including the amount of discrete emission credits retired to cover the
environmental contribution, as described in subsection (d)(2)(D) of this
section, associated with actual use; and
(B) the amount of discrete emission credits
not used, including the amount of excess discrete emission credits that were
purchased to cover the environmental contribution, as described in subsection
(d)(2)(D) of this section, but not associated with the actual use, and
available for future use.
(2) Discrete emission credit use is
calculated by the following equations.
(A)
The amount of discrete emission credits used to demonstrate compliance or meet
a regulatory requirement is calculated as follows.
(B) The
amount of discrete emission credits used to comply with permit allowables is
calculated as follows.
(3) A form specified by the executive
director for using credits must be submitted to the executive director in
accordance with the following requirements.
(A) The notice must be submitted within 90
days after the end of the use period. Each use period must not exceed 12
months.
(B) The notice is to be
used as the mechanism to update or amend the notice of intent to use and must
include any information different from that reported in the notice of intent to
use, including, but not limited to, the following items:
(i) purchase price of the discrete emission
credits obtained prior to the current use period, except for transfers between
sites under common ownership or control;
(ii) the actual amount of discrete emission
credits possessed during the use period;
(iii) the actual emissions during the use
period for volatile organic compounds and NOX;
(iv) the actual amount of discrete emission
credits used;
(v) the actual
environmental contribution; and
(vi) the amount of discrete emission credits
available for future use.
(4) Discrete emission credits that are not
used during the use period are surplus and remain available for transfer or use
by the holder. In addition, any portion of the calculated environmental
contribution not attributed to actual use is also available.
(5) The user is in violation of this section
if the user submits the report of use later than the allowed 90 days following
the conclusion of the use period.
(f) DERC use in Collin, Dallas, Denton,
Ellis, Johnson, Kaufman, Parker, Rockwall, and Tarrant Counties.
(1) For the 2015 calendar year, the use of
NOX DERCs in Collin, Dallas, Denton, Ellis, Johnson,
Kaufman, Parker, Rockwall, and Tarrant Counties may not exceed 42.8 tons per
day.
(2) Beginning in the 2016
calendar year, the use of NOX DERCs in Collin, Dallas,
Denton, Ellis, Johnson, Kaufman, Parker, Rockwall, and Tarrant Counties may not
exceed 17.0 tons per day.
(3) If
the total number of DERCs submitted for the upcoming calendar year in all
applications received by the August 1 deadline in subsection (d)(1)(B)(i) of
this section is greater than the applicable limit in paragraph (1) or (2) of
this subsection, the executive director shall apportion the number of DERCs for
use.
(A) In determining the amount of DERC use
to approve for each application, the executive director may take into
consideration:
(i) the total number of DERCs
existing in the nonattainment area bank;
(ii) the total number of DERCs submitted for
use in the upcoming control period;
(iii) the proportion of DERCs requested for
use to the total amount requested;
(iv) the amount of DERCs required by the
applicant for compliance;
(v) the
technological and economic aspects of other compliance options available to the
applicant; and
(vi) the location of
the facilities for which owners or operators are requesting use of
DERCs.
(B) The executive
director shall consider the appropriate amount of DERCs allocated for each
application submitted on a case-by-case basis.
(4) If the total number of DERCs submitted
for use during the upcoming calendar year in all applications received by the
August 1 deadline in subsection (d)(1)(B)(i) of this section is less than the
limit, the executive director may:
(A) approve
all requests for DERC usage provided that all other requirements of this
section are met; and
(B) consider
any late application submitted as provided under subsection (d)(3) of this
section that is not an Electric Reliability Council of Texas, Inc.
(ERCOT)-declared emergency situation as defined in paragraph (5) of this
subsection, but will not otherwise approve a late submittal that would exceed
the limit established in this subsection.
(5) If the applications are submitted in
response to an ERCOT-declared emergency situation, the request will not be
subject to the limit established in this subsection and may be approved
provided all other requirements are met. For the purposes of this paragraph, an
ERCOT-declared emergency situation is defined as the period of time that an
ERCOT-issued emergency notice or energy emergency alert (EEA) (as defined in
ERCOT Nodal Protocols, Section 2: Definitions and Acronyms (June 1, 2012) and
issued as specified in ERCOT Nodal Protocols, Section 6: Adjustment Period and
Real-Time Operations (June 1, 2012)) is applicable to the serving electric
power generating system. The emergency situation is considered to end upon
expiration of the emergency notice or EEA issued by ERCOT.
(g) Inter-pollutant use of discrete emission
credits. With prior approval from the executive director and the EPA, a
NOX or VOC discrete emission credit may be used to meet
the nonattainment new source review offset requirements for the other ozone
precursor if photochemical modeling demonstrates that overall air quality and
the regulatory design value in the nonattainment area of use will not be
adversely affected by the substitution.
Notes
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