310 CMR, 7, B
(1) Introduction. 310 CMR 7.00: Appendix B(1) through (6) establishes principles and procedures which can be utilized by facilities to comply with the requirements of 310 CMR 7.18, 310 CMR 7.19 and 310 CMR 7.00: Appendix A. 310 CMR 7.00: Appendix B contains provisions to allow emission averaging or "bubbles" and provisions to allow for the creation and use of emission reduction credits to be "banked", used or traded among facilities.
(2) Definitions. The definitions found in 310 CMR 7.00 apply to 310 CMR 7.00: Appendix B. The following words and phrases shall have the following meanings as they appear in 310 CMR 7.00: Appendix B. Where a term is defined in the 310 CMR 7.00 definitions section and the definition also appears in 310 CMR 7.00: Appendix B, the definition in 310 CMR 7.00: Appendix B controls.
Actual Emissions means, the average rate, in tons per year, at which a unit actually emitted the pollutant during the two-year period which precedes the date of application and which is representative of normal production rates or activity levels. The Department shall allow the use of a different two year consecutive time period, within five years immediately prior to the date of application, upon a determination that the alternative two year period is more representative of normal source operation. Actual emissions shall be calculated using the eligible source's actual operating hours, production rates, and types of materials processed, stored, or combusted during the selected time period.
Allowable Emissions means the emissions rate of a source calculated using either the production or activity rates associated with the maximum rated capacity of the source, and the hours of operation or the permitted hours of operation or capacity provided that such permit is federally enforceable and so as not to exceed the following:
(a) Any applicable standards set forth in 40 CFR Part 60 (NSPS) or 61 (NESHAPS);
(b) Any applicable Massachusetts SIP emissions limitation including a limitation with a future compliance date; or
(c) Any emissions rate specified as a federally enforceable permit condition, including a limitation with a future compliance date.
Area Source means stationary and non-road sources of emissions who are too small and/or too numerous to be individually included in a stationary source emission inventory examples being home heating furnaces, aircraft, commercial vessels, gas stations and lawn mowers.
Baseline means the emission level set for an eligible source and calculated in accordance with methods described in 310 CMR 7.00: Appendix B(3)(c), which reflects the lower of actual emissions, or allowable emissions and which serves as the level below which emission reductions are considered surplus and can be eligible for approval by the Department as Emission Reduction Credits (ERC). As future allowable emission rates or emission standards become effective, the lowest of future allowable emissions, allowable emissions or actual emissions will be the baseline below which reductions must be made to be considered surplus.
Bubble means an alternative emission control strategy where two or more existing emission points are regarded as being placed under a hypothetical bubble, which is then regarded as a single emission source.
Curtailment means a permanent reduction in hours of operation or process rate, said reduction approved in a permit issued by the Department.
Direct Determination means a calculation or measurement based on source specific information rather than from estimates of emission and control efficiencies.
Eligible Source means any stationary, area or mobile source of VOC, NOx or CO emissions which is eligible to participate in emissions banking and trading at any point in time.
Emission Estimation means calculation of emissions using estimated emission factors and assumptions of control efficiency not based in whole or in part on actual measurement or detailed records for an emission unit.
Emission Limiting means a program or strategies that directly specify limits on total mass emission, emission related parameters (e.g., emission rates per unit of product) or levels of emission reductions that are required to be met by eligible sources.
Emission Reduction Credit (ERC) means the actual air pollutant reductions from an emitting source that have been certified by the Department as enforceable, permanent, quantifiable, real, and surplus in accordance with the requirements of 310 CMR 7.00: Appendix B.
Enforceable means those limitations and conditions which are enforceable by the Department of Environmental Protection and the EPA. Examples of such enforceable mechanisms include, but are not limited to the following:
(a) Conditions in pre-construction permits issued pursuant to 40 CFR 52.21 (federal delegated PSD programs); or
(b) Limitations developed pursuant to 40 CFR Parts 60 (NSPS) and 61 (NESHAPS); or (c) Requirements contained in the EPA-approved Massachusetts State Implementation Plan (SIP), or source-specific SIP revisions that are approved by EPA; or
(d) Conditions in pre-construction "plan approvals" issued by the Commonwealth of Massachusetts, provided that those pre-construction "plan approval" regulations have been approved by the EPA in the Federal Register as meeting the requirements of 40 CFR 51.160. (e) Permits issued pursuant to generic bubble regulations that have been approved by EPA as adhering to the December 4, 1986, Emissions Trading Policy Statement.
(f) Information contained in a Department-issued Emission Reduction Credit approval for retrospectively approved ERCs, as to by what means the ERCs were created.
Future Allowable means the maximum emission rate, process rate or activity level assumed in the most recent Department adopted State Implementation Plan for Ozone or State Implementation Plan for Carbon Monoxide. An example might be the future allowable (1994) emission rate for Leather Coating operations at 27.4 pounds of VOC per gallon of solid applied [310 CMR 7.18(22)] which when applied to the two year average capacity utilization factor and two year average hours of operation for an eligible source, would result in the estimate of baseline starting on the rule effective date in 1994. Prior to this effective date, credit is calculated using a baseline that includes the lower of actual or allowable emissions at the time of application.
Irreversible Process Change means a process modification or equipment substitution that completely and irreversibly eliminates key emitting properties of the emission unit. For example, elimination of solvent use in a process line.
Mass ERC Bank means the Massachusetts registry for ERCs quantified by mass (e.g. tons). ERCs from this bank may be used either for compliance pursuant to 310 CMR 7.00: Appendix B(3) or for "discrete" offsets pursuant to 310 CMR 7.00: Appendix B(3) and 310 CMR 7.00: Appendix A.
NEPOOL Marginal Emission Rate or Successor Organization Rate means the corresponding calendar year NO emission rate determined by NEPOOL or a successor organization through accepted modeling or data gathering techniques reviewed and approved by the Department.
Netting means the mechanism used to secure an exemption of modifications at existing stationary sources from preconstruction permit requirements under 310 CMR 7.00 Appendix A (Emission Offsets and Nonattainment Review) and/or 40 CFR 52.21 (Prevention of Significant Deterioration) regulations which apply when there is a significant net emissions increase.
Non-inventoried Emission Source Category means air pollutants emitted into the ambient air from any source category which has not been included in the Department's 1990 emission inventories.
Offset means the use of an Emission Reduction Credit to compensate for emission increases of a nonattainment pollutant from a new major stationary or modified major stationary source subject to the requirements of 310 CMR 7.00: Appendix A.
Permanent means that emission reductions implemented for the purpose of generating Emission Reduction Credit must be assured for the life of the corresponding Emission Reduction Credit through a federally enforceable mechanism.
Program Baseline means the level of emissions, or emission related parameters for each eligible source or group of sources from which the program results (e.g. quantifiable emission reductions) shall be determined. For purposes of 310 CMR 7.00: Appendix B, the program baseline shall be the 1990 Base Year Emission Inventory of Volatile Organic Compound, Oxides of Nitrogen and Carbon Monoxide.
Quantifiable means that the amount, rate, and characteristics of an emission reduction can be measured through a replicable method acceptable to the Department of Environmental Protection and the EPA.
Rate ERC Bank means the Massachusetts registry of ERC that have been certified at a continuous rate (i.e. tons per year). ERCs from the Rate ERC Bank may be used for the purposes of offsets pursuant to 310 CMR 7.00: Appendix B(3) and 310 CMR 7.00: Appendix A.
Real means the reduction in actual emissions released into the air.
Remaining Useful Life means the length of time for which the equipment that is being shut down would have continued to operate had the owner/operator chosen not to shut down the equipment and apply for certification of credits at that time. Remaining useful life shall be ten years except in those cases where the Department determines a shorter period is appropriate, or the applicant demonstrates to the Department's satisfaction that a period of longer than ten years is warranted. The Department will use the following criteria for making the determination including, but not limited to: the age of the equipment; the type of equipment; maintenance history; operating history; and industry norms. In any case, remaining useful life shall not exceed 20 years.
Replicable means methods which are sufficiently clear and unambiguous such that the same or equivalent results would be obtained by the application of the methods by different users.
Shutdown means the earlier of (1) the date that the Department verifies that the source is shutdown or 2) the date that operations and emissions from an emitting unit ceased and the associated emission units have been removed or rendered inoperable.
State Implementation Plan (SIP) means the most recently prepared plan or revision thereof required by the Clean Air Act, 42 USC Section 7410, which has been either adopted by the Department and submitted to the United States Environmental Protection Agency (EPA) for approval or approved by the United States Environmental Protection Agency (EPA), whichever is more stringent.
Surplus means, emission reductions beyond an established source baseline which, as such, are not required by the Department adopted SIP, relied upon in any applicable attainment demonstration, or credited in any RFP or milestone demonstration.
Transfer means the conveyance of ownership of an Emission Reduction Credit from one entity to another.
Use for the purposes of 310 CMR 7.00: Appendix B, the term "use" shall mean to employ for emission averaging or emission trading an ERC such that the person who owns or controls the ERC has received a plan approval from the Department which factors the ERC into the emissions from the facility for purposes of compliance with emission limitations or emission offset requirements.
(3) Emission Reduction Credit Banking and Trading.
(a) Introduction and statement of purpose. The goal of the program, defined by 310 CMR 7.00: Appendix B(3), is to encourage the creation and trading of surplus emission reductions as Emission Reduction Credits (ERC) to be used for purposes of offsets, netting and cost effective compliance without interfering with any applicable requirements concerning attainment, reasonable further progress or any other applicable air pollution control requirement.
(b) Applicability.
1. Entry into this program is voluntary.
2. 310 CMR 7.00: Appendix B(3) applies to the owner/operator of eligible sources
including stationary sources, area sources and mobile sources applying for certification of surplus emission reductions as emission reduction credits (ERC).
3. Nothing in 310 CMR 7.00: Appendix B shall require that ERCs be listed in either the Rate ERC Bank or the Mass ERC Bank if the ERCs are being transferred to other facilities operated or owned, in whole or part, by the creator of the ERCs, provided that the requirements of 310 CMR 7.00: Appendix B(3)(e) are met prior to use of the ERCs. 4. Nothing in 310 CMR 7.00: Appendix B shall require that emission reductions, created for the purpose of offsets, be submitted for approval through the emission banking program if the emission reductions are used by the facility or within facilities owned by the same economic entity which created the emission reductions and provided that the requirements of 310 CMR 7.00: Appendix A are met.
(c) Generation of Emission Reduction Credit.
1. General Principles which apply to generation of Emission Reduction Credits (ERC). a. Emission reductions within Massachusetts shall be recognized as ERCs only after the approval of the Department has been obtained in accordance with 310 CMR 7.00: Appendix B(3).
b. Emission reductions generated for the purpose of creating ERCs must meet, at minimum, all of the following principles, to receive approval as emission reduction credits.
i. The reductions must have occurred after December 31, 1990.
ii. The reductions must be real reductions of emissions of: Volatile Organic Compounds (VOC), Oxides of Nitrogen (NOx), or Carbon Monoxide (CO);
iii. The reductions must be surplus in that they are reductions in emissions below the baseline established for the eligible source.
iv. The reductions must be permanent and the amount and duration of the reduction must be documented; and,
v. The reductions must be quantifiable, with a replicable basis for calculating the amount of reduction as well as reliable methods for assessing compliance with the emission rates after the reduction has been made, and the reductions must be enforceable.
c. Emission reductions cannot be recognized as ERCs if said reductions are required by Federal or Department permits, plan approvals, agreements, administrative or judicial orders, or other enforcement actions or regulations.
d. Emission reductions can only be eligible for certification pursuant to 310 CMR 7.00: Appendix B(3) if said reductions occur from emissions sources within the geographical boundaries of Massachusetts. ERCs generated by sources outside of the Commonwealth may be used by facilities within the Commonwealth pursuant to 310 CMR 7.00: Appendix B(3)(f).
e. Emission reductions eligible for credit are those emissions reductions below baseline for the eligible source.
f. Emission reductions considered eligible for consideration as ERCs include:
i. Shutdown or curtailment provided that the applicant can demonstrate to the satisfaction of the Department that demand for the services or product will not or cannot shift to other similar sources in the State resulting in no net decrease in emissions from the source category. Where emission reductions from shutdowns of electric generating facilities will be used exclusively as offsets for new facilities pursuant to 310 CMR 7.00: Appendix A, the ERC will not be adjusted for shifting demand. If such reductions are to be deposited in the Mass ERC Bank, credit will be available only to the extent that the emission rate from the unit being shut down or curtailed is greater than the applicable NEPOOL marginal emission rate or successor organization rate.
ii. Control of an emission unit beyond that required by Massachusetts Air Pollution Regulations or federal law and regulations.
iii. Seasonal Controls with the recognition that VOC and NOx emission reductions created by the application of seasonal controls will be subject to use restrictions as defined in 310 CMR 7.00: Appendix B(3)(e)8.
iv. Early implementation of future emission controls provided that the reductions commence before promulgation of the regulations establishing the new emission controls. These reductions are surplus only up to the effective date for compliance with the program or emission controls. Credit will cease to accrue upon the effective date of the new emission controls.
v. Emission reductions which result from application of mobile and area source controls provided that the reductions meet all other requirements of 310 CMR 7.00: Appendix B including provisions for establishment of baseline and
replicable quantification as well as compliance monitoring methods.
g. Emission reductions are not eligible for consideration as an ERCs if said reductions are generated by an un-inventoried area source category (e.g., small bakeries) or if said reductions are generated by biogenic sources (e.g., trees).
2. Calculation of Credit.
a. Credit shall be calculated by first calculating baseline emissions, second calculating the post reduction emissions, and third multiplying the difference between the baseline emissions and post reduction emissions by the applicable compliance assurance factor. The ERC amount is the result of complete application of these three steps.
b. Baseline emissions will be expressed in tons of pollutant emitted per day or per year, whichever is more appropriate and shall be further defined as ozone or nonozone (October 1 - April 30) season.
Step 1:
c. Baseline emissions will be established for each stationary source according to the following formula:
baseline = ER x (CU x H)
Where:
ER equals the lower of the actual or allowable emission rate
ER shall be expressed as mass of emission per unit of production or thruput (e.g., pounds of VOC per gallon of solids applied or pounds of NOx per million Btu)
CU equals the actual average hourly capacity utilization (e.g., expressed in terms of millions of Btu per hour or numbers of gallons of solids applied in an hour).
H equals the actual number of hours of operation per day.
ERC, CU and H are based on average historical values for the factors for two representative years within the five years immediately prior to the date of application. d. Baseline emissions will be established for each area source measure according to the following formula:
baseline = ER x ACT
Where:
ER equals the emission rate as determined by the Department and EPA in the most recent emission inventory using EPA approved methods and emission factors including AP-42 and Volume IV for Area Source, or the EPA Off-road Study for off-road sources. Assumptions shall be consistent with the most recent adopted periodic emission inventory prepared by the Department.
ER must be the lower of actual, or allowable emission rate and shall be expressed as mass of emission per unit of production or thruput (e.g., pounds per 1000 gallons burned or pounds per capita, as is appropriate)
ACT equals the actual average activity factor expressed in a manner so as to be consistent with the units required by the emission rate such as number of gallons burned, or number of persons affected.
e. Baseline emissions will be established for each Mobile Source by methods approved or published by EPA or the Department, including but not limited to:
i. Interim guidelines on the Generation of Mobile Source ERC, 58 FR 11134.
ii. Guidance for Implementation of Accelerated Retirement of Vehicle programs, U.S. EPA, February 1993.
iii. Program for Generation of Emission Credits by Urban Buses, U.S. EPA, January 1993.
3. Calculation of post-reduction emissions.
Step 2:
a. Creditable, workable and replicable methods must be used to quantify postreduction emissions reflecting the real emission reduction below baseline emissions. The post-reduction emissions shall be calculated using methods as or more accurate than those used to calculate baseline emissions.
b. Post-reduction emissions for DSM shall be determined after implementation of these DSM measure(s) and based on review of historical records covering a period of no less than one year collected since implementation, and shall be calculated in conformance with guidance provided and approved by the Massachusetts DPU.
4. Calculation of the Emission Reduction Credit.
a. Step 3: The emission reduction is calculated by first subtracting postreduction emissions from baseline emissions.
b. The emission reduction will be certified by the Department as an emission reduction credit after application of a compliance assurance multiplier to the resulting difference between baseline emissions and post-reduction emissions. The applicable compliance assurance multiplier will be determined by the Department within the ranges provided in the table below. Actual ERC adjustment will be set for individual circumstances and conditions within these ranges.
Method of Compliance Assurance | Compliance Assurance Multiplier |
Irreversible process change Compliance Assessment by Direct Determination: Continuous Emission Monitoring System (CEMS) | 1.0 |
installed pursuant to 40 CFR part 75 | 1.0 |
Mass Balance Reconciliation | 0.85 - 0.99 |
CEMS other than 40 CFR part 75 | 0.80 - 0.95 |
Compliance Assessment by Testing: Periodic Stack Test / Emission Test Testing of Capture Efficiency and control | 0.80 - 0.90 |
Emission Determinations using estimates of capture and control and/or emission factors | 0.50 - 0.80 |
i. The resulting amount of credit will be rounded to the nearest ton.
ii. Once the three step calculation has been completed, and the result rounded to the nearest ton, the resulting ERCs shall not be subject to adjustment of value.
c. ERCs certified from discrete, retrospective reductions shall be expressed in total tons and will be placed in the Mass ERC Bank. ERCs from the Mass ERC Bank may be used as offsets pursuant to 310 CMR 7.00: Appendix A with approval of the Department.
d. ERCs certified from either shutdowns or enforceable prospective over-control of emissions shall be expressed in tons per year, and will be placed in the Rate ERC Bank. In the event the owner of ERCs from a shutdown wishes to transfer the ERCs to the Mass ERC Bank, the Department will assign the ERCs from the shutdown a "remaining useful life" in years, which will be used to transfer the ERCs from the Rate ERC Bank to the Mass ERC Bank. If the ERC transferred are from shutdown of an electric generating facility, the Department will also subtract the NEPOOL marginal emission rate or successor organization rate replacement power in effect at the time of original certification of the ERCs.
(d) Procedure For Certification of Emission Reductions as ERC.
1. An application for certification of ERCs may be submitted in advance of the time when the reduction is actually made (prospective certification) or after the reduction has been made (retrospective certification).
2. Unapprovable sources of generation and quantities.
a. ERCs may not be generated from non-inventoried sources. In other words, only sources accounted for in SIP and RFP planning (inventoried sources) may be used to generate credits.
b. ERCs can be approved only where the emission reduction, as calculated under 310 CMR 7.00Appendix B(3)(c)4.a., is greater than 5 tons per year for deposit in the Rate ERC Bank, or greater than 5 tons for the Mass ERC Bank.
3. For emission reductions implemented prior to January 1, 1994, an Emission Reduction Credit Application must be submitted to the Department by September 30, 1994.
4. For emission reductions implemented after January 1, 1994, an Emission Reduction Credit Application must be submitted to the Department within six months of:
a. the end date of the period being evaluated for a retrospective discrete emission reductions.
b. the approval date of a federally enforceable mechanism for prospective emission reductions other than 310 CMR 7.00Appendix B(3).
5. Application Procedures.
a. Any person who owns or operates an emission unit at which an eligible emission reduction has occurred or will occur may submit an Emission Reduction Credit (ERC) application in accordance with the requirements of 310 CMR 7.00: Appendix B.
b. The ERC application shall be submitted on a standard form supplied by the Department with documentation provided by the applicant as to the calculation method for baseline and the post-reduction emissions as required by 310 CMR 7.00: Appendix B(3) as well as a proposed method for determining and assuring compliance.
c. ERC applications shall express emission reductions in tons, or in tons per year if for offsets, and indicate what portions of the reductions were made during the period May 1 - September 30 (ozone season).
d. ERC applications shall contain sufficient information to allow the Department to evaluate each emission reduction consistent with the requirements of 310 CMR 7.00: Appendix B(3).
e. The ERC application shall be signed by a responsible official.
f. The ERC application shall comply with provisions of 310 CMR 4.00et seq. for fees and permit procedures.
6. ERC approvals will be emission-limiting, either prospectively or retrospectively, as applicable. An ERC approval will be issued pursuant to 310 CMR 7.00: Appendix B(3). To be made federally enforceable, it must contain the specific quantifiable emission limits reflecting the change in emission rate, operating conditions and other measures taken to generate the ERCs. All emissions limitations, controls, and other requirements imposed by such approvals must be at least as stringent as all other applicable limitations and requirements contained in the SIP, enforceable under the SIP, or otherwise federally enforceable. All limitations, controls, and other requirements imposed by such approvals must be permanent, quantifiable, and enforceable as a practical matter.
a. In order to confirm emission reductions claimed in conjunction with an application for a prospective Emission Reduction Credit, the Department will require sources to implement compliance assurance methods such as monitoring, recordkeeping and reporting as part of the ERC certification approval.
b. The Department may also require the applicant to conduct source testing utilizing Department or EPA approved test methods, including but not limited to those methods referenced in 40 CFR Part 60 Appendix A, or 310 CMR 7.18(2), or 310 CMR 7.19(13), as appropriate for the source.
c. In addition, the Department may require regular submittal of information which the Department determines is necessary to maintain the integrity of the ERC.
7. A person having ownership of ERCs has the exclusive right to possess and dispose of the ERCs subject to the applicable restrictions contained in the certification approval and 310 CMR 7.00: Appendix B(3).
8. ERCs in the Rate ERC Bank shall revert to the state to be retired for the benefit of the environment if they have not been used by midnight of the date ten years from the date of Department approval. ERCs in the Mass ERC Bank shall not expire or cease to exist after a set period of time, even if not traded or used.
(e) Withdrawal, Transfer, and Use of Emission Reduction Credits.
1. The Department must issue a federally enforceable approval to a person seeking to use ERCs prior to the use of any ERCs. This includes approvals to construct or operate issued to stationary sources and a practical equivalent to be issued to persons who have applied to use ERCs in area and mobile source situations.
2. Persons seeking to use ERCs must obtain an amount of credit equal to five percent more than the amount needed for the offset or compliance calculation. This five percent increment shall be held by the applicant and not used or sold until such time that the Department determines whether or not the excess credit can be released for use. Such a determination shall be made by the Department on or about January 1, 1999. If the Department determines it cannot release said ERCs for use, the ERCs will by operation of law be retired for the benefit of the environment.
3. ERCs may not be used to meet the requirements of, or result in violation of federal New Source Performance Standards (NSPS), National Emission Standards for Hazardous Air Pollutants (NESHAPS), the requirements for Lowest Achievable Emission Rate (LAER), the requirements for Best Available Control Technology (BACT), Maximum Achievable Control Technology (MACT), Title IV, section 183(e) and 183(f) of the Clean Air Act, cause a violation of a National Ambient Air Quality Standard for criteria pollutants, cause a violation of a PSD increment or create a nuisance condition. ERCs may not be used to stay below an applicability threshold of the Clean Air Act or 310 CMR 7.00et seq.
4. ERCs may not be used to comply with performance standards established by regulation, such as, operating procedure requirements (e.g. covers on degreasers, operating within a specific temperature range) or to comply with requirements for record keeping, reporting or facility testing as may be required by the Department.
5. Where ERCs are used for netting under 310 CMR 7.00: Appendix A, the ERCs must meet the criteria in 310 CMR 7.00: Appendix ANet Emissions Increase (a) through (g), as applicable.
6. Certified ERCs can be traded between emission sectors (e.g., from mobile sources to stationary sources) provided that credit generated by stationary source reductions may under no circumstances be used to comply with any mobile source requirement.
7. ERCs generated through emission reductions of one pollutant can not be used for trading or averaging with another pollutant.
8. ERCs generated by the control of ozone precursors (VOC and NOx) during the period May 1st through September 30th, can be used at any time during the calendar year. ERCs generated by control of ozone precursors during the period October 1st through April 30th, can only be used in the same season as generated (October 1st through April 30th).
9. ERCs generated by the use of seasonal control of carbon monoxide during the period November 1st through February 28th, can be used at any time during the calendar year. ERCs generated through use of seasonal control of carbon monoxide during the period March 1st through October 31st can only be used in the in the same season as generated (March 1st through October 31st).
10. ERCs approved from shutdown or curtailment of an emission unit where the emitting operations are based on manufacturing activity and the operations, and jobs associated with the emitting activity are shifted outside of Massachusetts, are eligible for use only in Massachusetts. 310 CMR 7.00: Appendix B(3)(e)11. does not apply to electric generating facilities.
11. ERCs generated by shutdowns are presumptively available only for offsets pursuant to 310 CMR 7.00: Appendix A. If at any time prior to use ofERCs as offsets an owner of said ERCs wishes to use them for compliance purposes, the Department will assign a "remaining useful life" to said ERCs which will be used to transfer the ERCs from the Rate ERC Bank to the Mass ERC Bank. If the ERCs were generated by an electric generating facility shutdown, the Department will also subtract the NEPOOL marginal emission rate or successor organization rate in effect at the time of original ERC certification. Offset credits generated outside of the Commonwealth of Massachusetts are not eligible for conversion to mass-based credits.
12. ERCs from the Rate ERC Bank used as offsets pursuant to a 310 CMR 7.00: Appendix A approval, must be retired at the approved annual offset rate regardless of the facility's annual actual emissions. In addition, ERCs from the Mass ERC Bank used as offsets pursuant to a 310 CMR 7.00: Appendix A approval, must be obtained for the current year of operation plus four subsequent years of operation; and five years of ERCs, available for use in each of those five years, must be held at all times for the approval to remain valid. These ERCs will be retired on December 31st of each year, beginning with the first calendar year or any portion thereof, in which the facility operates.
13. ERCs utilized as offsets are considered "used" commencing with startup of a facility; ERCs with an expiration date prior to actual startup of a source needing offsets will not be acceptable as offsets for the facility.
14. Conversions to Allowances. (Reserved)
(f) Interstate Trading of ERCs .
1. Federally enforceable emission reductions generated by facilities outside the Commonwealth may be used in the Commonwealth, and ERC generated in the Commonwealth may be used in other states or jurisdictions, provided that the State within which the other facility is located has executed a Memorandum of Understanding concerning emission trading with the Commonwealth.
2. Said Memoranda of Understanding will include at a minimum:
a. the requirement that creditable emission reductions be real, surplus, permanent, quantifiable and federally enforceable;
b. discounts as appropriate to make ERCs generated outside of the Commonwealth equivalent with ERCs generated in the Commonwealth;
c. restrictions on allowable directionality oftrades if necessary;
d. state-specific notification or other requirements, as necessary;
e. ERC lifetimes and expiration dates, if applicable;
f. ozone season definition and restrictions;
g. the requirement that any ERC generated outside of the Commonwealth can be used in the Commonwealth only in compliance with 310 CMR 7.00: Appendix B(3)(e), except where specifically stated otherwise; and
h. averments of cooperation on enforcement and reporting.
3. Interstate emission reduction credit trades must comply with the specific requirements of the applicable Memorandum of Understanding.
(g) Emission Reduction Credit Registry .
1. Upon satisfaction of all applicable requirements of 310 CMR 7.00: Appendix B, approved emission reduction credits shall be registered in an Emission Reduction Credit Registry operated or overseen by the Department. Such registry shall include:
a. Name of generator and contact person;
b. Pollutant associated with the ERCs;
c. Amount of ERC expressed in tons, or in tons per year if banked in Rate ERC Bank;
d. Any seasonal use restrictions on the ERCs;
e. Whether the ERCs may be used or are reserved as part of a 5% set aside pursuant to 310 CMR 7.00: Appendix B(3)(e)2.
2. ERCs shall be tracked within the Emission Reduction Credit Registry by assigning a serial number to each ton of ERC, or ton per year if banked for use as offsets. The serial number will provide information about the type of pollutant, type of ERC (rate/mass), seasonality and first year available for use.
3. Information related to emission reduction credits maintained in the Emission Reduction Credit Registry shall be available for public review.
(h) Program review.
1. The Department shall maintain records of ERCs and shall account for unused ERCs as "emitted" within the context of RFP and periodic emission inventory reports.
2. The Department shall conduct a review of the emission trading program beginning in 1995 and every three years thereafter. This review shall evaluate the handling of applications for ERC approval and use, and the legitimacy of approved ERCs, and may include review of ERCs creation and use protocols, and compliance assessment of sources using ERCs.
3. The program review shall also include assessment of the impact of the program on Reasonable Further Progress, attainment or maintenance of the National Ambient Air Quality Standards, and ascertain if there is any significant effect from interstate trades pursuant to 310 CMR 7.00: Appendix B(3)(f).
4. Should a review reveal the need to make program revisions, the Department shall, within six months of the review findings, propose the appropriate program revisions.
5. The results of Department reviews and the findings shall be reported in the context of required RFP and periodic inventory reports (every three years).
6. Program Baseline for this program is the most recent revision of the 1990 Base Year Emission Inventory of Volatile Organic Compound, Oxides of Nitrogen and Carbon Monoxide and the State Implementation Strategy Plan submittal of November 15, 1993 which describes programs and strategies to be used by the Commonwealth to attain and maintain NAAQS for ozone and carbon monoxide. Source baseline as described in previous sections is defined within the context of the program baseline (the lower of actual, allowable or future allowable emissions) so as to avoid interference with attainment and maintenance of NAAQS.
(4) Emission Averaging (Bubble) .
(a) Introduction.
1. The purpose of 310 CMR 7.00Appendix B(4) is to specify requirements by which one or more facilities operated or controlled by the same economic entity can comply with either 310 CMR 7.18 or 7.19, respectively, using emissions averaging, herein referred to as a bubble, under either 310 CMR 7.18(2)(b) or 7.19(14).
2. In an emissions bubble, a person who operates or controls one or more facilities with more than one emission unit subject to regulation by 310 CMR 7.00, may apply to the Department to meet the requirements of either 310 CMR 7.18 or 7.19 through a mix of control techniques. The emissions of the various emission units are averaged over a 24 hour period, except as provided for in 310 CMR 7.00Appendix B(4)(e)5.
(b) Applicability.
1. 310 CMR Appendix B(4) applies to any person who operates or controls a facility(ies) subject to either 310 CMR 7.18(3) through (6), (10) through (12), (14) through (16), (21) through (26), (30)(c)7., (31) or 310 CMR 7.19(4), (5), (7), (8), (12), that set an emission limitation in either pounds of VOC per gallon of solids applied or pounds of NOx per million Btu of heat input, respectively, and who chooses to comply by emission averaging.
2. For bubbles to comply with 310 CMR 7.18, emission units subject to emissions standards other than pounds of VOC per gallon of solids applied (e.g. such as pounds of VOC per pound of solids applied, pounds of VOC per 1000 square feet covered, metric units, etc.) may be averaged with other emission units subject to an emission limitation in the same units of measure.
3. For bubbles under 310 CMR 7.19, 310 CMR 7.19(14)(a), through (c) describe which emissions units can be averaged together to comply with 310 CMR 7.19 and under what replicable and equivalent methods.
4. A bubble can not be used to comply with work practice requirements of either 310 CMR 7.18 or 7.19.
5. For purposes of 310 CMR 7.00Appendix B(4), emission bubbles are only allowed for the purpose of compliance at a single facility or multiple facilities which are operated by or under the control of the same economic entity.
6. Nothing in 310 CMR 7.00Appendix B(4) relieves a facility from having to comply with other requirements of 310 CMR 7.00 as may be applicable.
7. For facilities that have bubbles that were approved by the Department under 310 CMR 7.18(2)(b) and for which the application was received prior to May 25, 1988, the approved bubble conditions, recordkeeping and reporting requirements shall remain in force and no revision of said bubble approvals is required by 310 CMR 7.00: Appendix B(4), unless and until the facility seeks to have the existing bubble approval modified. At that time, the request to modify the bubble shall be subject to 310 CMR 7.00: Appendix B(4). However, with respect to those bubbles that were approved by the Department under 310 CMR 7.18(2)(b) and for which the application was received prior to May 25, 1988, modification of said bubbles solely to incorporate a more stringent Reasonably Available Control Technology adopted pursuant to 310 CMR 7.18 shall not make the facility subject to 310 CMR 7.00: Appendix B(4).
(c) General Bubble Requirements .
1. Compliance with emission requirements, through use of a bubble, will be approved by the Department providing that:
a. The bubble has been approved by the Department in accordance with 310 CMR 7.00Appendix B(4).
b. At no time may the use of a bubble result in a violation of a National Ambient Air Quality Standard for nitrogen dioxide (NO), particulate matter or carbon monoxide (CO) as determined by modelling.
c. At no time may the use of a bubble result in total VOC or NO emissions at a facility exceeding the applicable emission limitations in 310 CMR 7.18 or 7.19 averaged over a 24 hour period (except as provided for in 310 CMR 7.00Appendix B(4)(e)5.) for emission units in the bubble.
d. At no time may use of a bubble result in total VOC emissions exceeding a monthly facility emission baseline as calculated under 310 CMR 7.00: Appendix B(4)(e)2. At no time may use of a bubble with an averaging time longer than 24 hours result in NO emissions exceeding the daily cap as calculated in 310 CMR 7.00 Appendix B(4)(e)5.
e. Organic compounds, that are specifically excluded from the definition of VOC in 310 CMR 7.00, shall not be used to emission average.
f. At no time may use of a bubble under 310 CMR 7.00Appendix B(4) be used to meet the requirements of, or result in an increase in emissions for any emission unit above a New Source Performance Standard (NSPS), National Emission Standard for Hazardous Air Pollutants (NESHAP), the requirement for Best Available Control Technology (BACT), the requirement for Lowest Achievable Emission Rate (LAER) or Maximum Achievable Control Technology (MACT).
g. Emission reductions used in a bubble must be real in that the emission reductions must be from an emission unit which actually operated within the two year time period immediately preceding the application for the bubble.
h. Emission reductions used in a bubble must be permanent and the amount and duration of the reduction must be documented.
i. Emission reductions used in the bubble must be quantifiable with a replicable method for calculating the amount of reduction, as well as, a replicable method for assessing compliance with the emission rates after the reduction has been made.
j. Emission limitations must be federally enforceable and will be documented in the facility's emission control plan approval issued by the Department.
(d) Application for a Bubble.
1. Application for approval of an emission bubble shall be made as part of the submittal to the Department of an emission control plan pursuant to either 310 CMR 7.18(20) or 310 CMR 7.19(3) and shall include:
a. Identification of all emission units to be included in the bubble, and
b. Demonstration of how compliance will be met and maintained, and
c. Demonstration that all emission units included in the bubble are operated by or under the control of the same economic entity, and
d. Demonstration that the bubble will not increase emissions of an emission unit included in the bubble above the following standards as applicable:
i. A Best Available Control Technology (BACT) determination pursuant to 310 CMR 7.02(3), or 40 CFR 52.21, or
ii. A Lowest Achievable Emission Rate (LAER) determination pursuant to 310 CMR 7.00Appendix A, or
iii. A Federal New Source Performance Standard (NSPS [40 CFR Part 60]), or iv. A National Emission Standard for Hazardous Air Pollutants (NESHAP [ 40 CFR Part 61 ]), or
v. A Maximum Achievable Control Technology (MACT) determination pursuant to 40 CFR Part 63 .
e. For bubbles to comply with 310 CMR 7.19, evidence that the bubble will not cause an exceedance of the National Ambient Air Quality Standard for nitrogen dioxide (NO2) or carbon monoxide (CO).
f. For facilities wishing to bubble either VOC or NO emissions, documentation that the bubble will result in total VOC or NOx emissions, respectively, in compliance with the applicable emission limitation on a 24-hour basis as calculated under 310 CMR 7.00: Appendix B(4)(e)1. Exceptions to this averaging period may be granted by the Department as provided for in 310 CMR 7.00Appendix B(4)(e)5. For VOC bubbles, the person must document that the bubble will result in total VOC emissions below the emissions baseline on a monthly basis.
g. Documentation that emission reductions used in the bubble are real, quantifiable, permanent and federally enforceable.
2. After approval of 310 CMR 7.00 Appendix B(4) by EPA into the Massachusetts SIP, certain applications to bubble will still require EPA approval. Persons wishing to include mobile and area sources in a bubble are required to have the approval of the EPA prior to inclusion of those sources in the bubble.
3. Sources subject to enforcement action require the approval of EPA prior to use of a bubble to comply with 310 CMR 7.18 or 7.19. If EPA does not object to the use of a bubble by any facility subject to enforcement action during the public comment period, then this will be taken as EPA approval to bubble.
(e) Bubble Calculation.
1. In order to comply with a bubble for VOC or NO, the combined actual emissions (AcE) over a daily (or other period as allowed by 310 CMR 7.00Appendix B(4)(e)5.) from all emission units in the bubble must be less than or equal to the allowable emission total (AlE) as determined by the following equations:
AcE = (Ac1 x B1) + (Ac2 x B2) + (...) + (Acn x Bn)
AlE = (A1 x B1) + (A2 x B2) + (...) + (An x Bn) + ERC
Where:
AcE = the combined actual emissions from the facility in pounds per day.
AlE = the allowable emissions from the facility in pounds per day.
Ac1, Ac2,...Acn = the actual emission rate of each emission unit (e.g. for VOC; pounds of VOC per gallon of solids applied; for NOx, pounds of NOx per million Btu heat input) included in the bubble. Where a single CEMS is used to determine the emission rate of more than one emission unit, this will be a combined emission rate.
A1, A2,...An = the most stringent applicable emission limitation for each unit of production (e.g. for vOC; pounds of VOC per gallon of solids applied; and for NOx, pounds of NOx per million Btu heat input).
B1,B2,...Bn = the actual number of production units processed each day (e.g. for VOC: gallons of solids applied; for NOx; million Btu heat input per day).
ERC = the daily quantity of federally enforceable emission reduction credits (ERCs) from sources of either VOC or NOx emissions, certified by the Department under 310 CMR 7.00 Appendix B(3).
2. In addition to 310 CMR 7.00Appendix B(4)(e)1., in order to comply with a bubble for VOC the total combined actual emissions, over a calendar month, from all emission units in the bubble must be less than the baseline emissions determined by the following equation:
BE = (ER x CU x H) + (ERC x D)
Where:
BE = the baseline emissions from the facility in pounds per month. Baseline emissions for a bubble is the sum of the baseline emissions for all emission units in the bubble.
ER = Emission rate specified in terms of mass emission per unit of production or throughput (e.g. pounds of VOC per gallon of solids applied) representative of the 1990 emission rate, the future allowable emission rate as determined by the SIP, 310 CMR 7.18 or other federally enforceable emission rate, whichever is lowest.
CU = Average hourly capacity utilization (e.g. gallons of solids applied per hour).
H = average number of hours of operation per month.
D = Number of days per month that the ERC generating facility operates.
ERC = the daily quantity of federally enforceable ERCs from emission units emitting VOC certified by the Department under 310 CMR 7.00 Appendix B(3).
3. In order to determine the average hourly Capacity Utilization (CU) and average number of hours of operation per month (H) in 310 CMR 7.00Appendix B(4)(e)2., the facility shall average the CU rate and monthly H over the two calendar year period immediately preceding the date of the application for a bubble. Documentation in sufficient detail to enable Department staff to replicate the determination of CU and H must be submitted with the application.
4. Should it be determined that the two year historical production information required to determine CU and H is not representative of normal historical production for the facility, the applicant may submit suitable and sufficient documentation to demonstrate to the Department that two alternative consecutive years within the five year period preceding the application should be used to determine CU and H for the facility. The Department shall have final approval of the use of alternative historical production information.
5. Should it be determined for a NOx bubble that a 24 hour averaging period is insufficient to respond to the production demands at a specific facility, a facility operator or controller may submit suitable and sufficient documentation to demonstrate to the Department that an averaging period of up to and including 30 days for the bubble is more feasible given the production process and product requirements of the specific facility. Applications for a bubble with an averaging period of greater than 24 hours shall include a commitment from the facility to maintain a daily "cap" on maximum total emissions. The cap shall be determined according to the following equation:
Cap = (A1 x EI2 x H) + (A2 X EI 2 X H) + (....)
+ (AN x EIn x H) + ERC
Where:
Cap = The emission cap for the facility in pounds per day. The emission cap for a bubble is the sum of the emission caps for all emission units in the bubble.
A 1, A 2,...AN = The emission rate for each emission unit specified in terms of mass emission per unit of production (e.g. pounds of NOx per million Btu) representative of the 1990 emission rate, the future allowable emission rate as determined by the SIP, 310 CMR 7.19 or other federally enforceable emission rate, whichever is lowest.
EI1, EI2, ...EIn = The maximum energy input capacity for each emission unit in million Btu per hour.
H = 24 hours per day.
ERC = the daily quantity of federally enforceable ERCs from emission units emitting NOx certified by the Department under 310 CMR 7.00 Appendix B(3).
(f) Department Review of a Request to Bubble. The following conditions apply to bubble applications;
1. The Department shall review each application for a bubble in a complete submittal of an emission control plan pursuant to 310 CMR 7.18(20) and 7.19(3).
2. An approved emissions bubble shall be in effect for a period of no more than five years from the date of Department final approval. However, for facilities subject to 310 CMR 7.00 Appendix C, with five year terms or less, the expiration date of the bubble shall be identical with the expiration date of the operating permit. At least nine months prior to the expiration of the bubble, the facility must reapply for permission to bubble. The Department shall review the bubble for compliance and may either renew the bubble or allow the bubble to expire. Should the bubble expire, the facility that held the bubble shall return to complying with applicable regulations based on continuous compliance for each regulated emission unit which was formerly in the bubble. Bubbles that do not already contain an emissions cap will not be required to take one as part of the renewal. For facilities with existing caps, new caps will not be recalculated.
3. The emission limitations in a bubble approval may be specific for each emission unit or may be expressed as a multi-emission unit average.
(g) Compliance Determination.
1. The Department shall determine compliance with the terms and conditions of the bubble through any means the Department judges to be adequate based upon the criteria listed below:
a. The provisions and emission limitations of any approved bubble shall be incorporated in the approval of the emission control plan submitted under 310 CMR 7.18(20) or 7.19(3).
b. Said emission control plan approval shall include, but not be limited to source specific emission limitation (e.g. pounds of VOC per gallon of solids applied; pounds of NOx per million Btu heat input) and emission cap (e.g. pounds of VOC per month; pounds of NOx per day) limits where applicable, record keeping requirements and test methods used to determine compliance.
c. Compliance with this approval shall be determined utilizing Department and EPA approved test methods and/or continuous emissions monitoring system, including but not limited to those methods referenced in 310 CMR 7.13, 7.14, 7.18(2), 7.19(13) as appropriate for the facility and emissions units.
d. In order for a facility to demonstrate compliance with the emission limitations of a bubble it is required that records shall be maintained. Records shall be kept on a daily basis for each emissions unit in the bubble and shall be specific enough to demonstrate compliance with the emission limits of the bubble for the facility as a whole. Record keeping shall include, but not be limited to:
i. Process information and identification of equipment;
ii. For surface coating operations, coating formulation information including the name of the coating, the color of the coating, the identification number for the coating as it relates to coating consumption information, the density of the coating, the total VOC contained in the coating by weight percent, the solids content of the coating as a volume percent, the percent by weight of exempt solvents as identified in the definition of VOC at 310 CMR 7.00 and the formulation of the diluents used or mixed in the coating (pounds VOC per gallon of diluent);
iii. For surface coating, daily coating/diluent consumption rate for each emissions unit in the bubble. Daily total of solvents used in clean-up.
iv. For bubbles to comply with 310 CMR 7.19, comply with the recordkeeping requirements contained in 310 CMR 7.19(13)(d).
v. Daily emissions or emission rates calculated in a manner to be consistent with the compliance averaging period approved for the facility.
vi. Any other information determined to be necessary by the Department to demonstrate compliance.
2. Records shall be kept at the facility and maintained for a five-year period. The records must be accessible for review by the Department or EPA.
3. Persons holding an approved bubble plan must submit to the appropriate regional office of the Department quarterly (January - March, April - June, July - September, October - December) summary calculations based on daily emission calculations of 1) actual emissions, 2) allowable emissions, 3) whether actual emission exceeded allowable emissions over the reporting period, and 4) whether the facility was in compliance with the emission baseline cap for each day/month. Said submittal must be made 30 days after the end of the quarter for which the report is being prepared.
4. Any exceedance of the bubble emissions limitations must be recorded and reported to include the date of exceedance and quantity of excess emissions and reported to the Department by the 30th of the month following the close of the calendar quarter in which the exceedance occurred.
(5) Enforcement.
(a) The Department shall enforce the provisions of 310 CMR 7.00: Appendix B under applicable law and regulations.
(b) For purposes of 310 CMR 7.00: Appendix B(3), a violation of the emission limitation provisions of any permit issued or modified to reflect the creation of an emission reduction credit shall be enforced at the point of ERC creation.
(6) Public Participation. The following conditions apply to applications under 310 CMR 7.00: Appendix B:
(a) For persons applying under 310 CMR 7.00: Appendix B(4) to comply with either 310 CMR 7.18 or 7.19, the ECP approved by the Department must be approved by EPA as a SIP revision if EPA has not approved 310 CMR 7.00Appendix B(4) as a part of the Massachusetts SIP.
(b) For persons applying for Emission Reduction Credit under 310 CMR 7.00: Appendix B(3), the approval issued by the Department must be approved by EPA as a SIP revision if EPA has not approved 310 CMR 7.00: Appendix B(3) as a part of the Massachusetts SIP.
(c) The Department shall notify all applicants as to any administrative or technical deficiencies in the application or information submitted.
(d) For each Emission Reduction Credit (ERC) application submitted pursuant to 310 CMR 7.00: Appendix B(3) or (4), the Department shall:
1. Make a proposed decision as to whether the application should be approved, approved with conditions, or a decision that the application should be disapproved.
2. Provide a 30-day comment period for submittal of public comment.
3. Post on a public website identified by the Department (which may be the Department's own website), for the duration of the public comment period, the following:
a. A notice of availability of the Department's proposed decision to approve or deny the ERC application and information on how to submit public comment;
b. The Department's proposed decision to approve or deny the ERC application; and c. Information on how to access the administrative record for the Department's proposed decision on whether to approve or deny the ERC application.
4. Send a copy of the notice required under 310 CMR 7.00: Appendix B(6)(d)3.a. to EPA.
5. Consider all public comments in making a final decision whether or not to approve the application. The Department shall make all comments available for public inspection in the same location(s) where the Department made available information relating to the proposed approval under 310 CMR 7.00: Appendix B(3) or (4).
6. Make a final decision as to whether the plan approval application should be approved, approved with conditions, or disapproved.
7. Notify the applicant and the EPA in writing of the final decision and make such notification available for public inspection at the same location where the Department made available information and public comments relating to the source.
(7) Greenhouse Gas Credit Banking and Trading.
(a) Introduction and statement of purpose. The goal of the program set forth in 310 CMR 7.00: Appendix B(7) is to reduce, avoid or sequester emissions of greenhouse gas (GHG) in order for affected facilities as defined in 310 CMR 7.29 ("affected facilities") to use GHG Credits for compliance with the applicable provisions of 310 CMR 7.29(5)(a)5. (b) Definitions. The definitions in 310 CMR 7.00 apply to 310 CMR 7.00: Appendix B(7). However, the following terms have the following meanings when they appear in 310 CMR 7.00: Appendix B(7). Where a term defined in 310 CMR 7.00 definitions also appears in 310 CMR 7.00: Appendix B(7)(b), the definition in 310 CMR 7.00: Appendix B(7)(b) controls.
Additional means GHG emission reductions, avoided emissions, or sequestered emissions that are not required by local, state or federal law or regulation, or as part of a local, state or federal permit, plan, or plan approval, agreement, administrative or judicial order, or as part of an enforcement action (including such laws, regulations, permits, plans, plan approvals, agreements, orders or actions taken to reduce other pollutants) at the time of submittal of a certification application. A requirement to obtain a permit or plan approval under local, state, or federal law solely for the purpose of constructing, installing, or operating a voluntary emission reduction, avoided emission, or sequestered emission project shall not be considered when determining whether or not such project is additional.
Afforestation means the conversion of land that has been in a non-forested state for at least the ten years prior to the filing of an initial application for GHG Credit certification to a forested state.
Avoided Emissions means emissions of a GHG that do not occur and which would have otherwise occurred if not for specific projects undertaken.
Cancel, Cancelled, or Cancellation means transferring an allowance or credit to a cancellation account, or otherwise terminating such allowance or credit in a manner consistent with its program of origin, to prevent subsequent use in a regulatory or voluntary program, or use for any purpose other than compliance with the CO emissions standards of 310 CMR 7.29.
Cancellation Account means the account established in a Kyoto Protocol signatory country for purposes of canceling allowances. Such account will not be established by the Department.
Carbon Dioxide Equivalent or CO means the weight of a quantity of a GHG multiplied by its Global Warming Potential.
Certification means the process of reviewing and conditionally approving a quantity of emission reductions, avoided emissions or sequestered emissions as GHG Credits.
Clean Development Mechanism, or CDM, means a mechanism, created under the Kyoto Protocol, that allows for the creation and use of CDM CERs to demonstrate compliance with emissions targets established by the Kyoto Protocol.
Clean Development Mechanism Certified Emissions Reduction, or CDM CER, means a greenhouse gas emissions offset currency created for projects that reduce, avoid, or sequester emissions of greenhouse gases in developing countries. CDM CERs are issued by the Executive Board of the Clean Development Mechanism, and are usable for meeting country-specific greenhouse gas emissions targets established by the Kyoto Protocol.
Coastal Waters means the waters within the 12-mile limit pursuant to the Tariff Act of 1930 19 USC § 1401.
Energy Conservation Measure means an action that reduces demand for electricity. An Energy Conservation Measure means the installation or implementation of one or more of the following measures:
(a) the design, acquisition, and installation of projects which result in energy savings, or (b) the modification of maintenance and operating procedures in a building or facility which result in energy savings, or
(c) the installation, replacement, or modification of equipment, fixtures, or materials in a building or facility which reduce energy consumption, and include, but are not limited to, modifications to windows and doors; caulking and weather-stripping, insulation; automatic energy control systems; hot water systems; equipment required to operate steam, hydraulic, and ventilation systems; plant and distribution system modifications including replacement of burners, furnaces or boilers; devices for modifying fuel openings; electrical or mechanical furnace ignition stems; utility plant system conversions; replacement or modification of lighting fixtures; and energy recovery systems.
Energy Conservation Measures do not include reductions in labor, load shifting, or measures that do not reduce energy use directly.
Enforceable means enforceable by the Department.
European Union Emissions Trading Scheme or EU ETS means a multi-country, multi-sector greenhouse gas emission trading scheme implemented in 2005 by the European Commission to control emissions of greenhouse gases.
European Union Emissions Trading Scheme Phase II Allowance or EU ETS Phase II Allowance means an allowance that can be used during the second trading period of the EU ETS, which lasts from 2008-2012, and can be used to demonstrate compliance with emission reduction targets established by the European Commission.
GHG Credit means a credit based on an amount of emission reductions, avoided emissions or sequestered emissions of a GHG. One GHG Credit has an assigned value of one ton of carbon dioxide equivalent. GHG Credits shall be expressed in whole tons. When certifying or verifying GHG Credits, the number of GHG Credits is rounded down for decimals less than 0.5 and rounded up for decimals of 0.5 or greater.
GHG Expendable Trust means the trust established pursuant to 801 CMR 50.00 for the purpose of providing a separate segregated interest-bearing account for the receipt of payments made pursuant to 310 CMR 7.00: Appendix B(7)(d)5.
GHG Registry means the database of Massachusetts GHG Credits that have been certified, verified, voided or used.
Global Warming Potential or GWP means the ratio of the global heat trapping effect, direct and indirect, of one mass unit of a gas to that of the same mass unit of carbon dioxide over 100 years. In implementing 310 CMR 7.00: Appendix B(7), the Department shall utilize the GHG GWPs, as published by the Intergovernmental Panel on Climate Change (IPCC), at the time of submittal of a certification application.
Greenhouse Gas or GHG means any of the gases for which a GWP is listed by the Intergovernmental Panel on Climate Change.
Kyoto Protocol means an international commitment, adopted in Kyoto on December 11 1997, to stabilize greenhouse gas emissions.
Leakage means displacement of reduced, avoided, or sequestered GHG emissions to an area or location outside of the boundary of a project which reduced, avoided or sequestered the GHG emissions.
Permanent means that GHG emission reductions, avoided emissions, or sequestered emissions implemented for the purpose of generating GHG Credits must be assured for the life of the corresponding GHG Credits.
Phase II of the EU ETS means the second trading period of the EU ETS, which lasts from 20082012.
Real means actual.
Renewable Energy Generation Measure means an energy supply-side measure using sources that are essentially inexhaustible or regenerative. Renewable sources of energy include, but are not limited to, wood, geothermal, wind, photovoltaic and solar thermal energy.
Sequestered Emissions means carbon that has successfully been captured and securely stored that would have otherwise been emitted to or remained in the atmosphere.
Verifiable means that emission reductions, avoided emissions or sequestered emissions can be determined through replicable (as defined in 310 CMR 7.00: Appendix B(2)) methods which are acceptable to the Department.
Verification means the process of determining the extent to which certified GHG emission reductions, avoided emissions or sequestered emissions actually occurred.
(c) Applicability.
1. Entry into this GHG Banking and Trading Program is voluntary.
2. 310 CMR 7.00: Appendix B(7) applies to affected facilities and any other person
applying for certification or verification of GHG Credits.
3. GHG Credits certified or verified under 310 CMR 7.00: Appendix B(7) may only be used to satisfy the requirements of 310 CMR 7.29(5)(a)5., except as provided in 310 CMR 7:00: Appendix B(7)(h).
4. Applications for certification or verification of GHG Credits pursuant to 310 CMR 7.00: Appendix B(7)(e) may be submitted by any person.
5. Applications to verify and use EU ETS Phase II Allowances and CDM CERs pursuant to 310 CMR 7.00: Appendix B(7)(i) may be submitted only by affected facilities.
(d) Creation of GHG Credits.
1. GHG Credits may be created by projects which reduce emissions, avoid emissions, or sequester emissions. Examples include, but are not limited to: landfill gas combustion; sulfur hexafluoride (SF6) capture; afforestation; natural gas, oil and propane end-use efficiency; methane capture from farming operations; stationary, area and mobile source projects; renewable energy projects; and energy conservation measures.
2. The following are not eligible for certification as GHG Credits: nuclear power generation, under-water and under-ground sequestration, and over-compliance with the cap and rate limitations in 310 CMR 7.29 by affected facilities.
3. Except as allowed pursuant to 310 CMR 7.00: Appendix B(7)(d)4, emission reduction, avoided emission or sequestered emission projects shall be located within the geographic limits of:
a. Connecticut, Delaware, Maine, Massachusetts, Maryland, New Hampshire, New Jersey, New York, Rhode Island, Vermont, or the coastal waters thereof; or, b. The United States, or the coastal waters thereof, not including those regions specified in 310 CMR 7.00: Appendix B(7)(d)3.a.
4. Offset Trigger Price.
a. The Department shall establish an offset trigger price for 2006, 2007, and 2008. The offset trigger price for calendar year 2006 shall be $6.50 per ton of CO. For each calendar year after 2006, until such time as the offset trigger price is exceeded, the Department shall publish the new offset trigger price by January 31st, which shall be equal to the previous year's offset trigger price adjusted up or down according to the previous year's Consumer Price Index.
b. By February 15, 2007, the Department shall determine whether the offset trigger price for the previous calendar year was exceeded, or whether there are insufficient GHG Credits available for purchase at or below the offset trigger price for the previous calendar year in the geographic region specified in 310 CMR 7.00: Appendix B(7)(d)3. In determining whether the offset trigger price for the previous calendar year was exceeded, the Department may consider the average calendar year price of GHG Credits or of applied-for GHG Credits for the previous year, or any other relevant information.
c. Notwithstanding 310 CMR 7.00: Appendix B(7)(d)3., if the Department determines by February 15, 2007 that the offset trigger price for the previous calendar year was exceeded, or that there are insufficient GHG Credits available for purchase at or below the offset trigger price for the previous calendar year in the geographic region specified in 310 CMR 7.00: Appendix B(7)(d)3., then, for all subsequent years, applicants may apply for certification and verification of projects that occur anywhere on Earth, and certification and verification of greenhouse gas allowances and credits from any allowance or credit system.
d. By June 1, 2008, the Department shall determine whether there are insufficient GHG Credits available for purchase at or below the offset trigger price in the geographic regions specified in 310 CMR 7.00: Appendix B(7)(d)3. In determining whether there are insufficient GHG Credits available for purchase at or below the offset trigger price, the Department may consider the average price of GHG Credits or applied-for GHG Credits, or any other relevant information. Notwithstanding 310 CMR 7.00: Appendix B(7)(d)3., if the Department determines by June 1, 2008 that there are insufficient GHG Credits available for purchase at or below the offset trigger price in the geographic regions specified in 310 CMR 7.00: Appendix B(7)(d)3., then, pursuant to 310 CMR 7.00: Appendix B(7)(i), affected facilities may apply to verify and use EU ETS Phase II Allowances and CDM CERs that are eligible for use under Phase II of the EU ETS.
5. Trust Trigger Price.
a. The Department shall establish a trust trigger price for 2006, 2007, and 2008. The trust trigger price for calendar year 2006 shall be $10.00 per ton of CO. For each calendar year after 2006, the Department shall publish the new trust trigger price by January 31st, which shall be equal to the previous year's trust trigger price adjusted up or down according to the previous year's Consumer Price Index plus 2%.
b. By February 15, 2007, the Department shall determine whether the trust trigger price for the previous calendar year was exceeded. In making this determination, the Department may consider the average calendar year price of GHG Credits, of applied-for GHG Credits, or of projects funded or credits or allowances purchased by the GHG Expendable Trust for the previous year, or any other relevant information.
c. Notwithstanding 310 CMR 7.00: Appendix B(7)(d)3. and 4., if the Department determines by February 15, 2007 that the trust trigger price for the previous calendar year was exceeded, then, to demonstrate compliance with 310 CMR 7.29(5)(a)5., affected facilities may pay into the GHG Expendable Trust at the price established pursuant to 310 CMR 7.00: Appendix B(7)(d)5.a. to offset all or a portion of emissions above the historical actual emissions or excess emissions pursuant to 310 CMR 7.29(5)(a)5.c. and d., so that a combination of GHG Credits and payments into the GHG Expendable Trust equals emissions above historical actual emissions plus excess emissions.
6. Notwithstanding 310 CMR 7.00: Appendix B(7)(d)3., 4., and 5., if, at any time prior to September 1, 2009, the Commissioner determines that the price of GHG Credits or of applied-for GHG Credits substantially exceeds either of the price thresholds established in 310 CMR 7.00: Appendix B(7)(d)4. or 5., or if insufficient GHG Credits are available, then the Commissioner may, after public notice in the Environmental Monitor, and an opportunity for public comment: expand the geographic scope; allow payments into the GHG Expendable Trust at the rate set forth in 310 CMR 7.00: Appendix B(7)(d)5; or reduce the annual average CO tonnage requirements for certification of projects under 310 CMR 7.00: Appendix B(7)(e)3. If the geographic scope is expanded pursuant to 310 CMR 7.00: Appendix B(7)(d)6., then applicants for projects that occur outside of the geographic limits of the United States or the coastal waters thereof shall follow the procedures in 310 CMR 7.00: Appendix B(7)(i). This provision shall have no effect on and after September 1, 2009.
7. In order to be certified or verified as GHG Credits pursuant to 310 CMR 7.00: Appendix B(7), emission reductions, avoided emissions, or sequestered emissions shall be real, additional, verifiable, permanent, and enforceable and occur on or after January 1, 2006.
8. In the case of sequestered emissions, in order for a GHG Credit to be permanent, the owner shall, at a minimum, place the land within the sequestration project boundary under a legally binding instrument, acceptable to the Department, such that the sequestered emissions remain captured and securely stored in perpetuity.
9. In order to be certified or verified as GHG Credits pursuant to 310 CMR 7.00: Appendix B(7), emission reductions, avoided emissions, or sequestered emissions shall be generated only by projects built and generating energy (in the case of certain avoided emissions), or built and in use, or installed and operational (in the case of emission reductions or sequestered emissions) on or after January 1, 2006.
10. Except as provided in 310 CMR 7.00: Appendix B(7)(h), GHG Credits may be created for emissions reduced, avoided, or sequestered up to and including December 31, 2008, provided administratively complete applications for certification and verification are submitted to the Department no later than March 31, 2009. The Department shall have sole discretion to determine whether applications for certification and verification of GHG Credits are administratively complete.
(e) Procedure For Certification and Verification of Emission Reductions, Avoided Emissions, or Sequestered Emissions that Occur Within the Geographic Limits of the United States and the Coastal Waters Thereof as GHG Credits.
1. An application for certification of GHG Credits may be submitted to the Department in advance of the time when the emission reduction, avoided emission, or sequestered emission actually occurs (prospective certification) or after the emission reduction, avoided emission, or sequestered emission has actually occurred (retrospective certification).
2. In order for GHG Credits to be eligible for verification, an application for verification of GHG Credits shall be submitted to the Department within two calendar years after the end of the calendar year in which the emission reduction, avoided emission, or sequestered emission actually occurred. Applicants may apply for verification a maximum of two times per calendar year per approved certification.
3. For project-based emission reductions, avoided emissions, or sequestered emissions located within the geographic scope set forth in 310 CMR 7.00: Appendix B(7)(d)3.a., only those projects which generate an annual average over the period applied for of 5,000 or more tons CO2e, as calculated under 310 CMR 7.00: Appendix B(7)(d), are eligible to be certified as GHG Credits. For project-based emission reductions, avoided emissions, or sequestered emissions located within the geographic scope set forth in 310 CMR 7.00: Appendix B(7)(d)3.b., only those projects which generate an annual average over the period applied for of 20,000 or more tons CO2e, as calculated under 310 CMR 7.00: Appendix B(7)(d), are eligible to be certified as GHG Credits.
4. Application Procedures for projects.
a. Applications are required for certification and verification of GHG Credits from emissions reduction, avoided emission and sequestration projects.
b. The GHG Credit application shall be submitted on a form supplied by the Department and shall include but not be limited to: a complete description of the project; a quantification protocol that details the calculation method for the quantification of pre- and post-project emissions for emission reductions, quantity of avoided emissions, or quantity of sequestered emissions; and a proposed method for determining, monitoring and assuring compliance.
c. GHG Credit applications shall express emission reductions, avoided emissions, and or sequestered emissions in whole tons of CO2e. When certifying or verifying GHG Credits, the number of GHG Credits is rounded down for decimals less than 0.5 and rounded up for decimals of 0.5 or greater.
d. GHG Credit applications shall contain sufficient information to allow the Department to evaluate each emission reduction, avoided emission or sequestered emission consistent with the requirements of 310 CMR 7.00: Appendix B(7). Where applicable, the applicant shall specify the best management practice used to determine an emissions baseline.
e. GHG Credit applications shall be submitted by and bear the signature of a responsible official having the legal authority to bind the applicant.
f. GHG Credit applications shall comply with provisions of 310 CMR 4.00et seq. for fees and permit procedures as applicable.
g. Concurrent participation in other registries and certification programs.
i. If an applicant has submitted information relative to the emission reductions, avoided emissions, or sequestered emissions for which the applicant is seeking certification under 310 CMR 7.00: Appendix B(7) to any other certification system, registry or inventory, then the applicant shall submit a copy of such information with its application for certification of GHG Credit in Massachusetts. The applicant shall state the status of its submittal to such other certification system, registry or inventory.
ii. If an applicant for GHG Credit fails to comply with 310 CMR 7.00: Appendix B(7)(e)4.g.i., then the Department may deny any GHG Credit applied for and void any GHG Credits that may have been approved. GHG Credits shall be voided in cases where the GHG Credit is found to have been used for a purpose other than those specified in 310 CMR 7.00: Appendix B(7).
h. GHG Credit certification and verification applications shall contain a description of potential project leakage, and describe how such leakage was or will be monitored and avoided. The Department shall void GHG Credits to the extent of any leakage that has been identified.
i. GHG Credit applications shall document the negotiated or anticipated price per ton of GHG Credit applied for.
6. Conditions of GHG Credit Certification and Verification Approvals.
a. The Department may approve, approve with conditions, or deny GHG Credit applications.
b. The Department may require applicants to implement compliance assurance methods such as testing, monitoring, recordkeeping and reporting as part of the GHG Credit certification and verification approval.
c. The Department may consider scientific uncertainty and the extent to which a project may be harmful to the environment or public health when certifying or verifying GHG Credits.
(f) Public participation procedures for certification and verification applications pursuant to 310 CMR 7:00: Appendix B(7).
1. The Department shall publish, at the applicant's expense, a notice of public comment on a proposed approval, conditional approval, or disapproval. The Department will allow a 30-day public comment period following publication of the notice, and may hold a public hearing. After the close of the public comment period, the Department will issue a final decision.
2. 310 CMR 7.00: Appendix B(7)(f) shall apply to applications for certification and
verification pursuant to 310 CMR 7.00: Appendix B(7), instead of the procedures under 310 CMR 7.00: Appendix B(6).
3. The public participation procedures of 310 CMR 7.00: Appendix B(7)(f) and 310 CMR 7.00: Appendix B(6) shall not apply to applications for use pursuant to 310 CMR 7.00: Appendix B(7)(I)5.
(g) Use and Purchase of GHG Credits .
1. To the extent that affected facilities use GHG Credits to comply with 310 CMR 7.29(5)(a)5., only GHG Credits verified under 310 CMR 7.00: Appendix B(7) may be used.
2. GHG Credits that have been used to satisfy any GHG liability or requirement other than 310 CMR 7.29, with the exception of requirements to disclose environmental and other attributes of electricity generation, shall not be eligible for use to comply with the requirements of 310 CMR 7.29.
3. Any person who purchases a GHG Credit from any source shall report the price paid per GHG Credit to the Department within 30 days of purchase.
5. Nothing in 310 CMR 7.00: Appendix B(7) or 310 CMR 7.29(5)(a)5. shall be construed to limit the authority of the Department to terminate, void, or limit GHG Credits that have been certified or verified.
6. If the Department determines that any emission reductions, avoided emissions, or sequestered emissions used to generate GHG Credits are not real, additional, verifiable, permanent, or enforceable as defined in 310 CMR 7.00: Appendix B(7)(b), such GHG Credits shall become void.
7. Any affected facility using voided GHG Credits shall replace the voided GHG Credits with an equivalent amount of valid GHG Credits and shall demonstrate compliance with this provision within one year of the date that the Department determines that such GHG Credits are void.
8. Violations of the requirements, for purposes of 310 CMR 7.00: Appendix B(7), may be enforced against the affected facility, any person who applied for certification or verification of GHG Credits, or any combination thereof. Nothing in 310 CMR 7.00: Appendix B(7) shall limit the ability of the Department to take enforcement action for violations of 310 CMR 7.29 or 310 CMR 7.00: Appendix B(7).
(h) Exchange of GHG Credits for CO Budget Trading Program CO Allowances.
1. Eligibility. GHG Credits shall be eligible for exchange with CO Budget Trading Program CO2 Allowances provided:
a. The project from which the GHG Credits were derived is not an offset project type listed under 310 CMR 7.70(10)(c)1.a.
b. The GHG Credits were not created from allowances or credits from another carbon constraining program.
c. An administratively complete application for certification of GHG Credits was submitted to the Department no later than January 25, 2008. The Department shall have sole discretion to determine whether an application for certification of GHG Credits is administratively complete.
2. Verification Deadline. GHG Credits may be created for emissions reduced, avoided, or sequestered up to and including December 31, 2012, provided:
a. The GHG Credits meet the requirements of 310 CMR 7.00: Appendix B(7)(h)1.; and
b. An administratively complete application for verification is submitted to the Department no later than March 31, 2013. The Department shall have sole discretion to determine whether an application for verification of GHG Credits is administratively complete.
3. Exchange.
a. At any time after January 1, 2009 and prior to December 1, 2013, any person may apply to the Department for CO Budget Trading Program CO Allowances in exchange for GHG Credits that meet the requirements of 310 CMR 7.00: Appendix B(7)(h)1. and 2. and which have been verified by the Department pursuant to 310 CMR 7.00: Appendix B(7)(e) and (f).
b. The Department shall exchange one CO Budget Trading Program CO allowance set aside pursuant to 310 CMR 7.70(5)(c)1.a. for every two GHG Credits provided to the Department pursuant to 310 CMR 7.00: Appendix B(7)(h)3.a.
c. The Department shall retire all GHG Credits exchanged for CO Budget Trading Program CO Allowances.
(i) Procedures for Verification and Use of EU ETS Phase II Allowances and CDM CERs that are Eligible for Use Under Phase II of the EU ETS.
1. Eligibility. Provided the geographic scope is expanded beyond the United States and its coastal waters pursuant to 310 CMR 7.00: Appendix B(7)(d)4. or 6., the following are eligible to be used to demonstrate compliance with the CO emissions standards of 310 CMR 7.29(5)(a)5. provided they have been verified.
a. EU ETS Phase II allowances; and,
b. CDM CERs provided that:
i. The CDM CERs are acceptable and valid for use in Phase II of the European Union Emissions Trading Scheme at the time of application for verification;
ii. The CDM CERs were not created for a project type listed under 310 CMR 7.00: Appendix B(7)(d)2.; and
iii. The CDM CERs are permanent.
2. For purposes of 310 CMR 7.00: Appendix B(7), EU ETS Phase II Allowances and CDM CERs that are eligible for use under Phase II of the EU ETS are presumed to be certified GHG emission reductions, avoided emissions, or sequestered emissions.
3. Applications for verification shall be submitted in a form determined by the Department and shall include but not be limited to:
a. Name of the allowances and credits;
b. Name of the regulatory scheme and issuing body of the allowances or credits;
c. Where applicable, the type of project for which the CDM CERs were created;
d. Serial numbers of the allowances and credits;
e. Total tons of CO2e represented by the allowances and credits;
f. Demonstration that the CDM CERs are acceptable and valid for use with Phase II of the EU ETS at the time of application for verification;
g. Identification of the owner of the allowances and credits;
h. Certification by the relevant regulatory body that the allowances and credits have been issued;
i. The price paid, or to be paid, for such allowances or credits.
4. Applications for verification shall be for not less than 20,000 tons CO, or 18,144 metric tons CO2e.
5. Applications to use verified EU ETS Phase II Allowances and verified eligible CDM CERs for compliance with the CO emission standards in 310 CMR 7.29(5)(a)5., shall be submitted in a form determined by the Department and shall include but not be limited to a demonstration and certification that the allowances or credits were cancelled to prevent their use for any other regulatory or voluntary purposes other than for compliance with 310 CMR 7.29(5)(a)5.
a. This demonstration shall include but not be limited to:
i. Evidence that the allowance or credit was actually purchased;
ii. A legal document or other written statement issued by the relevant regulatory body that the allowances and credits have been cancelled; and,
iii. Evidence that the allowance or credit has not and cannot be used for any other regulatory or voluntary program.
b. The certification statement shall be signed under the pains and penalties of perjury by a Responsible Official of the affected facility and the entity that cancelled the allowance or credit (if not the affected facility).
6. Application Deadlines.
a. Administratively complete applications submitted pursuant to 310 CMR 7.00: Appendix B(7)(i)3. shall be submitted to the Department no later than March 31, 2009.
b. Administratively complete applications submitted pursuant to 310 CMR 7.00: Appendix B(7)(i)5. shall be submitted to the Department no later than June 30, 2009. c. The Department shall have sole discretion to determine whether applications submitted pursuant to 310 CMR 7.00: Appendix B(7)(i)3. or 5. are administratively complete.
7. The Department will make a finding regarding the administrative completeness for applications submitted pursuant to 310 CMR 7.00: Appendix B(7)(i) within 15 business days of submittal, and will make a consistency determination within 30 days of its finding that an application is administratively complete.
8. The Department may approve, approve with conditions, or deny applications submitted pursuant to 310 CMR 7.00: Appendix B(7)(i)3. or 5.
9. Verified cancelled allowances or credits are not GHG Credits under 310 CMR 7.00: Appendix B(7) and cannot be transferred, exchanged pursuant to 310 CMR 7.00: Appendix B(7)(h), or used for any purpose other than compliance with the CO2 emissions standards of 310 CMR 7.29, or by any entity other than the affected facility that submitted an application pursuant to 310 CMR 7.00: Appendix B(7)(i)3. and 5.
310 CMR, 7, B