Section 96.254 - Compliance with CAIR SO[2] emissions limitation(a)Allowance transfer deadline. The CAIR SO2 allowances are available to be deducted for compliance with a source's CAIR SO2 emissions limitation for a control period in a given calendar year only if the CAIR SO2 allowances:(1) Were allocated for the control period in the year or a prior year; and(2) Are held in the compliance account as of the allowance transfer deadline for the control period or are transferred into the compliance account by a CAIR SO2 allowance transfer correctly submitted for recordation under §§ 96.260 and 96.261 by the allowance transfer deadline for the control period.(b)Deductions for compliance. Following the recordation, in accordance with § 96.261 , of CAIR SO2 allowance transfers submitted for recordation in a source's compliance account by the allowance transfer deadline for a control period, the Administrator will deduct from the compliance account CAIR SO2 allowances available under paragraph (a) of this section in order to determine whether the source meets the CAIR SO2 emissions limitation for the control period as follows:(1) For a CAIR SO2 source subject to an Acid Rain emissions limitation, the Administrator will, in the following order: (i) Deduct the amount of CAIR SO2 allowances, available under paragraph (a) of this section and not issued by a permitting authority under § 96.288 , that is required under §§ 73.35(b) and (c) of this part. If there are sufficient CAIR SO2 allowances to complete this deduction, the deduction will be treated as satisfying the requirements of §§ 73.35(b) and (c) of this chapter.(ii) Deduct the amount of CAIR SO2 allowances, not issued by a permitting authority under § 96.288 , that is required under §§ 73.35(d) and 77.5 of this part. If there are sufficient CAIR SO2 allowances to complete this deduction, the deduction will be treated as satisfying the requirements of §§ 73.35(d) and 77.5 of this chapter.(iii) Treating the CAIR SO2 allowances deducted under paragraph (b)(1)(i) of this section as also being deducted under this paragraph (b)(1)(iii), deduct CAIR SO2 allowances available under paragraph (a) of this section (including any issued by a permitting authority under § 96.288 ) in order to determine whether the source meets the CAIR SO2 emissions limitation for the control period, as follows: (A) Until the tonnage equivalent of the CAIR SO2 allowances deducted equals, or exceeds in accordance with paragraphs (c)(1) and (2) of this section, the number of tons of total sulfur dioxide emissions, determined in accordance with subpart HHH of this part, from all CAIR SO2 units at the source for the control period; or(B) If there are insufficient CAIR SO2 allowances to complete the deductions in paragraph (b)(1)(iii)(A) of this section, until no more CAIR SO2 allowances available under paragraph (a) of this section (including any issued by a permitting authority under § 96.288 ) remain in the compliance account.(2) For a CAIR SO2 source not subject to an Acid Rain emissions limitation, the Administrator will deduct CAIR SO2 allowances available under paragraph (a) of this section (including any issued by a permitting authority under § 96.288 ) in order to determine whether the source meets the CAIR SO2 emissions limitation for the control period, as follows: (i) Until the tonnage equivalent of the CAIR SO2 allowances deducted equals, or exceeds in accordance with paragraphs (c)(1) and (2) of this section, the number of tons of total sulfur dioxide emissions, determined in accordance with subpart HHH of this part, from all CAIR SO2 units at the source for the control period; or(ii) If there are insufficient CAIR SO2 allowances to complete the deductions in paragraph (b)(2)(i) of this section, until no more CAIR SO2 allowances available under paragraph (a) of this section (including any issued by a permitting authority under § 96.288 ) remain in the compliance account.(c)(1)Identification of CAIR SO2allowances by serial number. The CAIR authorized account representative for a source's compliance account may request that specific CAIR SO2 allowances, identified by serial number, in the compliance account be deducted for emissions or excess emissions for a control period in accordance with paragraph (b) or (d) of this section. Such request shall be submitted to the Administrator by the allowance transfer deadline for the control period and include, in a format prescribed by the Administrator, the identification of the CAIR SO2 source and the appropriate serial numbers.(2)First-in, first-out. The Administrator will deduct CAIR SO2 allowances under paragraph (b) or (d) of this section from the source's compliance account, in the absence of an identification or in the case of a partial identification of CAIR SO2 allowances by serial number under paragraph (c)(1) of this section, on a first-in, first-out (FIFO) accounting basis in the following order:(i) Any CAIR SO2 allowances that were allocated to the units at the source for a control period before 2010, in the order of recordation;(ii) Any CAIR SO2 allowances that were allocated to any entity for a control period before 2010 and transferred and recorded in the compliance account pursuant to subpart GGG of this part or subpart D of part 73 of this chapter, in the order of recordation;(iii) Any CAIR SO2 allowances that were allocated to the units at the source for a control period during 2010 through 2014, in the order of recordation;(iv) Any CAIR SO2 allowances that were allocated to any entity for a control period during 2010 through 2014 and transferred and recorded in the compliance account pursuant to subpart GGG of this part or subpart D of part 73 of this chapter, in the order of recordation;(v) Any CAIR SO2 allowances that were allocated to the units at the source for a control period in 2015 or later, in the order of recordation; and(vi) Any CAIR SO2 allowances that were allocated to any entity for a control period in 2015 or later and transferred and recorded in the compliance account pursuant to subpart GGG of this part or subpart D of part 73 of this chapter, in the order of recordation.(d)Deductions for excess emissions.(1) After making the deductions for compliance under paragraph (b) of this section for a control period in a calendar year in which the CAIR SO2 source has excess emissions, the Administrator will deduct from the source's compliance account the tonnage equivalent in CAIR SO2 allowances, allocated for the control period in the immediately following calendar year (including any issued by a permitting authority under § 96.288 ), equal to, or exceeding in accordance with paragraphs (c)(1) and (2) of this section, 3 times the following amount: the number of tons of the source's excess emissions minus, if the source is subject to an Acid Rain emissions limitation, the amount of the CAIR SO2 allowances required to be deducted under paragraph (b)(1)(ii) of this section.(2) Any allowance deduction required under paragraph (d)(1) of this section shall not affect the liability of the owners and operators of the CAIR SO2 source or the CAIR SO2 units at the source for any fine, penalty, or assessment, or their obligation to comply with any other remedy, for the same violations, as ordered under the Clean Air Act or applicable State law.(e)Recordation of deductions. The Administrator will record in the appropriate compliance account all deductions from such an account under paragraphs (b) and (d) of this section and subpart III.(f)Administrator's action on submissions.(1) The Administrator may review and conduct independent audits concerning any submission under the CAIR SO2 Trading Program and make appropriate adjustments of the information in the submissions.(2) The Administrator may deduct CAIR SO2 allowances from or transfer CAIR SO2 allowances to a source's compliance account based on the information in the submissions, as adjusted under paragraph (f)(1) of this section, and record such deductions and transfers. 70 FR 25362 , May 12, 2005, as amended at 71 FR 25389 , Apr. 28, 2006; 71 FR 74794 , Dec. 13, 2006