Md. Code Regs. 26.09.03.02

Current through Register Vol. 51, No. 22, November 1, 2024

Section 26.09.03.02 - General Requirements for CO[2] Emission Offset Projects

A. Eligible CO₂ Emissions Offset Projects. In order to qualify for the award of CO₂ offset allowances, the following offset projects shall satisfy all applicable requirements identified in this chapter:

(1) Landfill methane capture and destruction;

(2) Sequestration of carbon due to reforestation, improved forest management, or avoided conversion; and

(3) Avoided methane emissions from agricultural manure management operations.

B. Offset Project Locations. Eligible offset projects may be located in any of the following locations:

(1) In any participating state; and

(2) In any state or other United States jurisdiction in which a cooperating regulatory agency has entered into a memorandum of understanding with the appropriate regulatory agencies of all participating states relative to CO₂ emissions offset projects.

C. General Requirements.

(1) Any person may act as the project sponsor of a CO₂ emissions offset project. The general requirements described in this section apply.

(2) CO₂ offset allowances may not be awarded to an offset project that is required by any local, state, or federal law, regulation, or administrative or judicial order.

(3) If an offset project receives a consistency determination and is later required by local, state or federal law, regulation, or administrative or judicial order, the offset project remains eligible for the award of CO₂ offset allowances until the end of its current allocation period but its eligibility will not be extended for an additional allocation period.

(4) CO₂ offset allowances may not be awarded to an offset project that includes an electric generation component if the project is additionally being used for compliance with a renewable portfolio standard or other regulatory requirement.

(5) CO₂ offset allowances may not be awarded to an offset project that receives funding from the Fund or other incentives derived from the Fund.

(6) CO₂ offset allowances may not be awarded to an offset project that is awarded credits or allowances under any other mandatory or voluntary greenhouse gas program, except for as described in the forest offset protocol.

D. Maximum Allocation Periods for CO₂ Emissions Offset Projects.

(1) The Department may award CO₂ offset allowances for an initial 10-year allocation period. At the end of the initial 10-year allocation period, the Department may award CO₂ offset allowances for a second 10-year allocation period if the project sponsor has submitted a consistency application before the expiration of the initial allocation period, and the Department has issued a consistency determination.

(2) Reforestation, Improved Forest Management, or Avoided Conversion Projects.

(a) The Department may award CO₂ offset allowances for any reforestation, improved forest management, or avoided conversion offset project for an initial 25-year allocation period.

(b) At the end of the initial 25-year allocation period, or any subsequent crediting period, the Department may award CO₂ offset allowances for a second 25-year allocation period if the project sponsor has submitted a consistency application for the offset project before the expiration of the initial allocation period, and the Department has issued a consistency determination.

E. Offset Project Audit.

(1) Project sponsors shall, in writing, grant access to the Department to the physical location of the offset project to inspect for compliance. For offset projects located in any state or other U.S. jurisdiction that is not a participating state, project sponsors shall also provide a copy to the Department of the access agreement in which the project sponsor grants the cooperating regulatory agency access to the physical location of the offset project to inspect for compliance.

(2) If at any time the Department determines that a project sponsor or project has not complied with applicable requirements, the Department may revoke and retire all CO₂ offset allowances in the project sponsor's account.

(3) If at any time the Department determines that an offset project does not comply with applicable requirements, the Department may revoke any approvals it has issued relative to an offset project.

F. Application Process.

(1) Establishment of a General Account. The project sponsor of an offset project shall establish a general account. All submissions to the Department required for the award of CO₂ offset allowances shall be provided by the project sponsor.

(2) Consistency Application Deadlines.

(a) For offset projects not involving reforestation, improved forest management or avoided conversion, the consistency application must be submitted no later than 6 months following the date the offset project is commenced.

(b) For offset projects involving reforestation, improved forest management or avoided conversion, the consistency application must be submitted no later than 1 year after the date the offset project is commenced, except as described in Regulation .04J of this chapter.

(c) Any consistency application that fails to meet the deadlines shall result in the denial of the consistency application and the continued ineligibility of the offset project.

G. Consistency Application Contents. The consistency application for an offset project shall include the following information:

(1) The project sponsor's name, address, email address, telephone number, facsimile transmission number, and account number;

(2) The offset project description;

(3) A demonstration that the offset project meets all applicable requirements;

(4) The emissions baseline determination;

(5) An explanation of how the projected reduction or avoidance of atmospheric loading of CO₂ , CO₂ equivalent, or the sequestration of carbon is to be quantified, monitored, and verified;

(6) A completed consistency application agreement that reads as follows: "The undersigned project sponsor recognizes and accepts that the application for, and the receipt of, CO₂ offset allowances under the CO₂ Budget Trading Program is predicated on the project sponsor complying with all applicable requirements. I have been granted all the necessary authority to carry out the duties and responsibilities for the offset project under this subtitle. I understand that eligibility for the award of CO₂ offset allowances is contingent on meeting all applicable requirements. I authorize the Department or its agent to audit this offset project for purposes of verifying that the offset project, including the monitoring and verification plan, has been implemented as described in this application. I understand that the Department's right to audit shall include the right to enter the physical location of the offset project. I submit to the legal jurisdiction of the State.";

(7) A statement and certification report signed by the project sponsor certifying that all offset projects for which the project sponsor has received CO₂ offset allowances under the project sponsor's ownership or control are in compliance with all applicable requirements of this subtitle in all participating states;

(8) A verification report and certification statement signed by an independent accredited verifier that states that the independent verifier has reviewed the entire application and evaluated the report in relation to all applicable requirements and any applicable guidance issued by the Department;

(9) A statement regarding the adequacy and validity of information supplied by the project sponsor that demonstrates that the offset project meets the applicable eligibility requirements of this subtitle and baseline emissions;

(10) A statement regarding the adequacy of the monitoring and verification plan and other evaluations and statements as required by the Department;

(11) Disclosure of any voluntary or mandatory programs, other than this subtitle, to which greenhouse gas emissions data related to the offset project has been or will be reported; and

(12) For offset projects located in a state or United States jurisdiction that is not a participating state, a demonstration that the project sponsor has complied with all requirements of the cooperating regulatory agency in the state or United States jurisdiction where the offset project is located.

H. Filing the Consistency Application.

(1) For an offset project located wholly or in part in a participating state, the consistency application shall be filed with the regulatory agency in that state.

(2) For an offset project located wholly outside all participating states, the consistency application shall be filed with the appropriate regulatory agency in any one participating state, provided a copy of the consistency application is filed with the cooperating regulatory agency in the state or United States jurisdiction where the offset project is located.

(3) For an offset project located in more than one participating state, the consistency application shall be filed in the participating state where the larger part of the CO₂ equivalent emissions reduction or carbon sequestration due to the offset project is projected to occur.

(4) For CO₂ emissions credit retirements, the consistency application may be filed with the regulatory agency in any one participating state.

I. Action on Consistency Applications.

(1) Completeness Determination. Within 30 days following receipt of the consistency application, the Department shall notify the project sponsor whether the consistency application is complete. A complete consistency application is one that is in an approved form and is determined by the Department to be complete for the purpose of commencing review of the consistency application. A completeness determination does not prevent the Department from requesting additional information in order to enable the Department to make a consistency determination.

(2) Consistency Determination. Within 90 days of making the completeness determination, the Department shall issue a determination as to whether the offset project is consistent with all applicable requirements. The Department shall provide its consistency determination to the project sponsor.

Md. Code Regs. 26.09.03.02

Regulation .02 amended effective May 18, 2009 (36:10 Md. R. 717); amended effective 45:26 Md. R. 1249, eff. 12/31/2018