SAN DIEGO COUNTY AIR POLLUTION CONTROL DISTRICT


RULE 26.0. BANKING, GENERAL (Effective 2/16/83; Rev. Effective 5/1/90)

Definitions for terms used in Banking, Rules 26.0 through 26.10, may be found in Rule 20.1.

(a) The Air Pollution Control Officer may allow actual emission reductions to be banked for used in the future. Emission reductions banked on or after July 5, 1979 pursuant to Rule 20.1, but before adoption of this rule, shall not be invalidated by this rule and shall be transferred to the bank created by this rule and recorded as Class A emission reduction credits ("ERCs") at the request of the owner of such banked emission reductions.

(b) Any person wishing to bank emission reductions shall apply for a written authorization from the Air Pollution Control Officer. A separate authorization shall be required for each piece of equipment, product line, system, process line or process that produces a product or performs a service independently of other equipment, product lines, systems, process lines or processes. A separate authorization shall be required for each pollutant to be banked. Upon approval of the application by the Air Pollution Control Officer, the District shall record such reductions in a register and shall issue a certificate evidencing ownership of such banked reductions to the owner of the ERC. ERCs may only be used as emission offsets in accordance with the offset requirements of Rules 20.1(d)(4), 20.4, 20.5, 20.8 and 26.8. ERCs may be required to be used pursuant to Rule 20.8.

(c) ERCs shall be classified as either Class A or Class B emission reduction credits. The applicant has the burden to show that an ERC is Class A rather than Class B. A reduction shall be classified as a Class A ERC if:

  1. The reduction is the result of a modification to, or limitation on use of, existing equipment such that after the reduction is made the equipment will remain in service with a Permit to Operate; or

  2. The reduction is the result of a shutdown and there will likely be no resulting emission increase by a replacement source(s). If there will likely be only a partial emission increase at the replacement source(s), the difference between the reduction at the shutdown source and the likely emission increase at the replacement source(s) shall be eligible to be classified as Class A. An emission increase by a replacement source(s) will be deemed to likely occur when the Air Pollution Control Officer determines that:

  3. (i) The products manufactured by or the materials processed through the source to be shutdown are products or materials which will likely be replaced by the manufacturing or processing of other products and materials by other new or existing sources; and

    (ii) Such replacement source(s) is located within the District; and

    (iii) Emissions from such replacement source(s) will likely increase above the level of actual emissions at the replacement source(s) prior to the shutdown; and

    (iv) Any likely emission increase from such replacement source(s) will not likely be offset pursuant to Rules 20.4, 20.5, 20.8 or 26.8.

    All other reductions that do not qualify as Class A ERCs under this Subsection and which comply with the other requirements of these rules for banking shall be classified as Class B ERCs. If the Air Pollution Control Officer classifies an ERC as Class B, the reason why the ERC is not real and permanent shall be specified.

  4. Notwithstanding the definition of "banking" in Rule 20.1(a), emission reductions in the SIP based on projections of future emission levels not associated with reductions required by existing or future rules or regulations may be banked as Class B ERCs.

(d) Class A ERCs shall be eligible for use as emission offsets under Rule 20.1, except that Class A ERCs created due to the removal from service or curtailment in use of equipment may be used as offsets only as allowed pursuant to Rule 20.1(d)(6). Class B ERCs are ineligible for use as offsets unless reclassified to Class A ERCs pursuant to Section (e). Certificates evidencing ownership of Class B ERCs shall bear the following legend:

The emission reductions evidenced by this certificate have been conditionally placed in the emission reduction bank, and have not been finally determined to be real and permanent reductions. These reductions are ineligible for any use until they have been reclassified.

(e) An owner of a Class B ERC may apply at any time for reclassification of the ERC to Class A status. The application shall be granted if the applicant satisfies the reason(s) given by the Air Pollution Control Officer as to why the ERC was not real and permanent at the time of initial application. In determining whether the reason(s) has been satisfied, the Air Pollution Control Officer shall in addition to other relevant factors, give particular attention to:

  1. The length of time the equipment has been out of service;

  2. Shifts in economic demand within the District for the function performed by the shutdown equipment;

  3. Whether other similar sources within the District have experienced increased activity caused by the shutdown, which activity has increased emissions.

(f) If an ERC resulting from a shutdown is classified Class B in whole or in part for the reason the Air Pollution Control Officer determines a new source, which will manufacture products or process materials that will replace the products manufactured or materials processed by the source which was shutdown, will likely be located within the District, the Air Pollution Control Officer shall, upon request, remove this reason if an application for Authority to Construct any such new source within the District has not been filed within a period of one year following the date the District enters the ERC in the register.

(g) Prior to reclassification of a Class B ERC to a Class A ERC, the owner or owners of the Class B ERC shall surrender the certificate or certificates evidencing ownership to the District for cancellation and issuance of a new Class A certificate.

(h) Banking application fees, banked emission transfer application fees, reclassification application transfer fees and fees for an advisory opinion shall be paid in accordance with the labor rates specified in Rule 40.

(i) Any permit condition imposed as a requirement for issuing an ERC may not be removed unless the ERC or another equivalent ERC is cancelled, or unless the Air Pollution Control Officer determines that the condition is no longer necessary to ensure the validity of the ERC.