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Generation and Registration

How Can I Generate ERCs?
Emission reductions that qualify as emission reduction credits (ERCs) may be achieved by a number of means, including but not limited to installation of control equipment beyond what is necessary to comply with existing rules, changes in process inputs, formulations, products or product mix, fuels, or raw materials, reductions in actual emission rates, reductions in operating hours, production curtailment or reduction in throughput, shutdown of emitting sources or facilities in certain circumstances, or any other enforceable method as approved by the Division.

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How Should I Calculate ERCs?
The following methods are acceptable for calculating the quantity of emission reductions:

  • AP-42 Compilation of Air Pollutant Emission Factors;
  • Stack Test Data;
  • Continuous Emissions Monitoring System (CEMS) Data; and
  • Other DAQ approved methods.

Quantification of ERCs:
For purposes of calculating the amount of emission reduction that can be quantified as an emission reduction credit, the following procedures shall be followed:

  1. The source's average actual annual emissions before the emission reduction shall be calculated in tons per year. In calculating average actual annual emissions before the emission reduction, data from the 24-month period immediately preceding the reduction in emissions shall be used. The Director may allow the use of a different time period, not to exceed seven years immediately preceding the reduction in emissions if the owner or operator of the source documents that such period is more representative of normal source operation.
  2. The emission reduction credit generated by the emission reduction shall be calculated by subtracting the allowable annual emissions rate following the reduction from the average actual annual emissions prior to the reduction.

Monitoring:
The Director may require the owner or operator of a source whose emissions are being reduced to create an ERC to verify the reduction in emissions with a source test, continuous emission monitoring, or other methods that measure the actual emissions or may require the use of parametric monitoring to show that the source or its control device is being operated in the manner that it is designed or is permitted.

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What Pollutants Can Be Registered?
Pollutants that may be used for the creation, banking, transfer, and use of ERCs include emissions of nitrogen oxides (NOx), sulfur dioxide (SO2), volatile organic compounds (VOC), and particulate matter with a diameter less than 2.5 microns (PM2.5).

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How Are ERCs Registered?

Application to submit reductions into the ERC Registry:
Facilities must submit an Application To Create And Bank Emission Reduction Credits in the ERC Registry. Data cannot be added to the ERC Registry until the appropriate permits have been modified through the normal permit review process. The reduction becomes permanent when the facility generating the emission credits receives its air permit. In most cases the facility will need to obtain a permit modification to make the emissions reductions permanent. If the source will be adding one or more control devices to reduce emissions, a source modification is required. If the facility does not have such a permit, it will need to apply to modify the current operating permit. Refer to the DAQ application forms web page for guidance and forms regarding submittal of air permit applications. If there is a shutdown of an emitting source(s) or facility, the owner of the facility must obtain a permit rescission from the Division before the reduction can be added to the ERC Registry.

ERC approval processing schedule:
Approval time for the issuance of the certificate of ERC may take up to 90 days, depending on the level of review required and completeness of the application. Facilities may submit concurrent applications. For example, a facility may wish to submit emissions reductions for inclusion in the ERC Registry and at the same time apply to have a portion of those emission credits withdrawn from the ERC Registry for internal use. Likewise, a facility may have already agreed to sell a portion of the emission credits they are generating so the facility using those credits may wish to submit the application to use the emission credits at the same time the generating facility applies to have them added to the ERC Registry. If a situation like this occurs, DAQ recommends that the application to use the emission credits reference the pending application to submit the emission reductions. Since the emission credits are not truly available until the modification creating the permanence of the emission reductions is issued, the permit action that results in withdrawal of the credits may need to be placed on hold until the first permit is issued.

The processing schedule will be as follows:

  1. The Division will send written acknowledgement of receipt of the request to create and bank emission credits within 10 days of receipt of the request;
  2. The Division will review all request to create and bank emission credits within 30 days to determine whether the application is complete or incomplete for processing purposes. If the application is incomplete the Division will notify the applicant of the deficiency. The applicant shall have 90 days to submit the requested information. If the applicant fails to provide the requested information within 90 days, the Division may return the application;
  3. The Director will either approve or disapprove the request within 90 days after receipt of a complete application requesting the banking of emission reduction credits. Upon approval the Director will issue a certificate of ERC.

Permit review to submit reductions into the ERC Registry:
Upon receipt of a complete ERC Registry application and issuance of the appropriate permit, DAQ will:

  1. Review each ERC Registry application and determine whether the emission reduction meets the criteria for inclusion in the ERC Registry;
  2. Enter data for each verified emission credit into the ERC Registry (the ERC will be registered for use only after the reduction has occurred); and issue the source a certificate of ERC. The certificate of ERC issued by the Director will contain the following information:
    1. the pollutant reduced (NOx, SO2, VOC, PM2.5);
    2. the amount of the credit, in tons per year;
    3. the date the reduction occurred;
    4. company name, the street address and county of the facility where the reduction occurred; and
    5. the date of issuance of the certificate.

Submission of confidential records:
All information submitted to the DAQ will be made available to the public unless it is submitted under a claim of confidentiality. Claims of confidentiality must be made at the time the information is submitted to the DAQ, and must follow the requirements set out in 15A NCAC 2Q .0107 and under G.S. 143-215.3C. Failure to follow these requirements will result in a denial of the claim of confidentiality.

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Are Mobile Sources Eligible To Register ERCs?
No. At the present time, the registration of emission reductions that qualify as ERCs is limited to stationary point sources.

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Is There An Effected Date For Registering ERCs?

Eligibility of ERCs:
To be approved by the Director as an ERC, a reduction in emissions shall be real, permanent, quantifiable, enforceable, and surplus and shall have occurred:

Ozone nonattainment areas:

  1. After December 31, 2002, for the Charlotte, Gastonia, Rock Hill areas; Raleigh, Durham, Chapel Hill areas; Haywood, Swain (Great Smoky Mountain National Park) areas; Rocky Mount areas, and
  2. After December 31, 2000, for the Greensboro, Winston-Salem, High Point areas; Hickory, Morganton, Lenoir areas; and Fayetteville areas.

PM2.5 nonattainment areas:

  1. After December 31, 2002, for the Hickory-Morganton-Lenoir areas and the Greensboro, Winston-Salem, High Point areas.

Ineligible of ERCs:
The following shall not be eligible for ERCs:

  1. Sources covered under a special order or variance until compliance with the emission standards that are the subject of the special order or variance is achieved;
  2. Sources that have operated less than 24 months; or emission allocations and allowances used in the nitrogen oxide budget trading program under 15A NCAC 2D .1419.

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When Can I Add My Data To The ERC Registry?

The ERC Registry was created January 2005. All ERCs created on or after this date may be submitted for inclusion in the ERC Registry.

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