VENAPCD RULE 26.4 NEW SOURCE REVIEW - EMISSION BANKING

LAST REVISED 10/22/91





Rule 26.4. New Source Review - Emission Banking

(Adopted 10/22/91)

A. Applicability

This Rule provides for the banking of emission reductions of

reactive organic compounds (ROC), nitrogen oxides (NOx),

particulate matter (PM10), and sulfur oxides (SOx).

Eligibility standards and administrative practices are

included to ensure that any emission reductions intended to

be banked are real, quantifiable, permanent, enforceable,

and surplus.

B. Requirements

1. Only emission reductions which are real,

quantifiable, permanent, enforceable, and surplus shall

be eligible for banking.

2. Emission reductions, which result from emissions units

subject to a tactic on the date the application to bank

emission reduction credits is deemed complete, shall be

eligible for banking if such application is deemed

complete before the effective date of a rule

implementing the tactic. An emissions unit shall be

subject to a tactic if on the date the application to

bank is deemed complete a tactic exists for such

emissions unit, regardless of the implementation date

of the tactic.

3. Emission reductions, which result from emissions

units subject to a further study measure on the date

the application to bank emission reduction credits is

deemed complete, shall be eligible for banking if such

application is deemed complete before the adoption date

of a rule implementing the further study measure. An

emissions unit shall be subject to a further study

measure if on the date the application to bank is

deemed complete a further study measure exists for such

emissions unit, regardless of the implementation date

of the further study measure.

4. Any person who has modified or taken out of service

any permitted emissions unit for the purpose of

receiving emission reduction credits must surrender

existing permits to operate for the emissions unit

involved before a certificate of Emissions Reduction

Credit can be granted. Notwithstanding the provisions

of Rule 23 of these Rules, any modifications to the

basic emissions unit and/or control equipment involved

in a banking proposal shall be subject to the

applicable requirements of Rule 10 of these Rules,

regardless of whether modifications were made to the

basic emissions unit or control equipment or both.

C. Emission Reduction Discounts

1. Emission reductions which result from the shutdown of

an emissions unit, or a reduction in throughput of an

emissions unit shall be discounted by the greater of

the following:

a. The amount of the emission reduction that could

be controlled by the application of the best

available control technology applicable on the

date the application to bank emission reduction

credits is deemed complete.

b. 20 percent.

2. Emission reductions which result from the application

of control equipment, a modified emissions unit, or the

replacement of an emissions unit with a lower emitting

emissions unit shall be discounted by 10 percent.

D. Limitations on the Usage of Emission Reduction Credits

1. Emission reduction credits which result from

emissions units which are subject to a tactic on the

date the application to bank emission reduction credits

is deemed complete, and any offsets obtained with these

emission reduction credits, shall be reduced to zero

after the effective date of a rule implementing the

tactic. The emission reduction credits shall not be

reduced to zero if:

a. A rule implementing the tactic is not adopted

within 180 days of the scheduled adoption date of

the tactic as identified in the most recently

approved AQMP specifying specific due dates and

percent control, provided however that the Ventura

County Air Pollution Control Board may extend the

adoption date; or

b. The APCO determines that the proposed emission

reduction will result in an emission level below

the level specified in the AQMP for implementation

of the tactic, and the excess amount of emission

reductions meets all other eligibility

requirements. In this event only the excess

emission reduction may be permanently banked.

2. Emission reduction credits which result from

emissions units which are subject to a further study

measure on the date the application to bank emissions

reductions is deemed complete and provided such

application is deemed complete after December 19, 1989,

and any offsets obtained with these emission reduction

credits, shall be reduced by 50 percent after the

effective date of a rule implementing the further study

measure. If a further study measure is identified in

any state or local rule or regulation which was adopted

before the date the application to bank emission

reduction credits is deemed complete, or identified as

a control measure for adoption in any state or local

implementation plan which was adopted before the date

the application to bank emission reduction credits is

deemed complete, any emission reduction credits

identified in the previous sentence shall be reduced to

zero after the effective date of a rule implementing

the further study measure.

3. Emission reduction credits which result from the

shutdown of an emissions unit, or a reduction in

throughput or hours of operation of an emissions unit

at a stationary source, shall not be used as offsets at

a different stationary source where the permitted

emissions would exceed the limits specified in Table D-

1, unless the applicant can establish the following:

a. The shutdown, or reduction in throughput or

hours of operation occurred after August 7, 1977,

and

b. The proposed new or modified stationary source

is a replacement for the shutdown or curtailment.

Table D-1

ROC 25.0 ton/yr

NOx 25.0 ton/yr

PM10 15.0 ton/yr

SOx 15.0 ton/yr

E. Application for and Determination of Emission Reduction

Credits

1. Any person wishing to be credited with an emission

reduction for the purpose of banking shall submit an

application to the District. An application to bank

emission reduction credits must be submitted to the

District before any emissions unit is modified to

reduce emissions. However, an application to bank

emission reduction credits may be submitted at any time

if the emission reduction results from a decrease in

throughput or a shutdown. If the emission reduction

occurs as a result of permit activity requiring an

application for an Authority to Construct, the

Authority to Construct application shall serve as the

application to bank emission reduction credits.

2. The APCO shall deny any application to bank emission

reduction credits if the applicant fails to provide

sufficient information to calculate the emission

reduction, to determine the quarterly emissions profile

of the emission reduction, to determine the location at

which the emission reduction occurred, or to determine

if the emission reduction is real, quantifiable,

permanent, enforceable, and surplus.

3. An application to bank emission reduction credits

shall be treated and processed in the same manner as an

Authority to Construct or Permit to Operate

application.

4. Based on the application evaluation, the APCO may

determine that all, part, or none of the emission

reductions can be certified as emission reduction

credits.

F. Emission Registration

1. Registration of Title

The District shall issue a certificate to the applicant

identifying the emission reduction credits, the

location at which the emission reduction occurred, the

quarterly profile of the emission reduction credit, and

any emission reduction credits that could be subject to

reductions pursuant to subsections D.1 and D.2. In

cases involving an appeal of the APCO's decision,

issuance of the certificate shall be subject to the

outcome of the appeal.

2. Transfer by Registered Owner

Transfer of the whole or any portion of the emission

reduction credit shall be in writing signed by the

transferor, in any form authorized by law. Upon filing

such deed or other instrument in the District's office

and payment of the fee required by Rule 42, the

transfer shall be complete and the title so transferred

shall vest in the transferee. Copies of the modified

certificates shall be mailed to the parties involved in

the transfer.

3. Temporary Transfer

Notwithstanding the provisions of subsection F.2, the

APCO may develop procedures for the temporary transfer

of emission reduction credits between sources.

G. Existing Emission Reduction Credits

Existing emission reduction credits shall be considered to

be emission reduction credits pursuant to this Rule with the

following conditions:

1. ROC and NOx credit balances shall be discounted by 25

percent and this reduction shall be deposited into the

community bank. Any ROC or NOx emission reduction

credits which are temporarily transferred to another

stationary source on October 22, 1991, shall be

discounted pursuant to this subsection upon their

return to the bank.

2. Particulate matter balances shall be recalculated as

the PM-10 fraction of the particulate matter balances.

3. Carbon monoxide balances shall be eliminated.

4. SOx balances shall remain unchanged.

5. Any limitations on the use of existing emission

reduction credits that applied to the emission

reduction credit under Rule 26 as it existed prior to

October 22, 1991, shall continue to apply to the use of

the emission reduction credit. These limitations shall

be described on the reissued certificates of emission

reduction credit.

6. All balances shall be expressed on tons per year

basis and all references to pounds per hour shall be

deleted.

7. A quarterly emissions profile shall be determined for

all existing emission reduction credits based on the

best information available.