MOJAQMD RULE 1305 EMISSIONS OFFSETS

LAST REVISED 03/25/96

RULE 1305 

EMISSIONS OFFSETS

(Adopted: 06/21/80; Amended: 10/27/93; Amended: 03/25/96)

(A) General 

1. Purpose 

(a) This Rule provides the procedures and formulas to determine the eligibility of, calculate the 

amount of, and determine the use of Offsets required pursuant to the provisions of District Rule 

1303(B). 

2. Calculation of Amount of Offsets Necessary 

(a) Necessary Offsets shall be calculated based upon the nature of the Facility or Modification and 

the applicable Offset ratios. 

(b) The APCO shall first determine the type of Facility or Modification and the base quantity of 

Offsets required as follows: 

(i) For a new Major Facility the base quantity of Offsets shall be equal to the total Proposed 

Emissions, calculated pursuant to Section (E) below, for the Facility on a pollutant category 

specific basis. 

(ii) For emissions increases from a Modification to a previously existing non-major Facility, 

the base quantity of Offsets shall be determined as follows: 

a. For a Major Modification to an existing non-major Facility the base quantity of 

Offsets shall be equal to either of the following: 

i. The Facility's Proposed Emissions, on a pollutant category specific basis, 

when the Facility is located in a Federal nonattainment area; or 

ii. The amount of the Facility's Proposed Emissions, on a pollutant category 

specific basis, which exceeds the threshold amounts as set forth in District Rule 

1303(B) when the Facility is located in a Federal attainment or unclassified 

area. 

b. For a Modification to a previously non-major Facility which subsequently results 

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in the Facility becoming a Major Facility, the base quantity of Offsets shall be equal 

to either of the following: 

i. The Facility's Proposed Emissions when the Facility is located in a Federal 

nonattainment area; or 

ii. The amount of the Facility's Proposed Emissions, on a pollutant category 

specific basis, which exceeds the threshold amounts as set forth in District Rule 

1303(B) when the Facility is located in a Federal attainment or unclassified 

area. 

c. For a non-major Facility which becomes a Major Facility due to the relaxation of a 

Federal requirement or a Federally Enforceable requirement, the base quantity of 

Offsets shall be equal to either of the following: 

i. The Facility's Proposed Emissions when the Facility is located in a Federal 

nonattainment area; or 

ii. The amount of the Facility's Proposed Emissions, on a pollutant category 

specific basis, which exceeds the threshold amounts as set forth in District Rule 

1303(B) when the Facility is located in a Federal attainment or unclassified 

area. 

(iii) For emissions increases from a Modification to a Major Facility the base quantity of 

Offsets shall be determined as follows: 

a. When the Modification is a Major Modification to a Major Facility within a 

nonattainment area, the base quantity of Offsets shall be the amount equal to the

difference between the Facility's Proposed Emissions and the HAE unless the 

Facility's HPE has been completely offset in prior permitting actions pursuant to this 

Regulation; or 

b. The amount equal to the difference between the Facility's Proposed Emissions, as 

modified, and the HPE. 

(c) Additional Requirements for Seasonal Sources 

(i) The base quantity of Offsets for new or modified Seasonal Sources shall be determined 

on a quarterly basis. 

(ii) Seasonal emissions used for Offsets shall generally occur during the same consecutive 

monthly period as the new or modified Facility operates. 

3. After determining the base quantity of Offsets, the APCO shall apply the appropriate Offset ratio 

as set forth in subsection (C) below, dependant upon the location of the Offsets and the location of 

the proposed new or modified Facility or Emissions Unit. 

4. If eligible interpollutant Offsets are being used the APCO shall apply the appropriate ratio. 

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(B) Eligibility of Offsets 

1. Credits for emissions reductions may be used as Offsets when: 

(a) Such credits have been calculated and issued by the District pursuant to the provisions in 

Regulation XIV. 

(b) Such credits have been calculated and issued in another air district under a program developed 

pursuant to Health & Safety Code §§40700-40713 so long as the source of such credits is 

contained within the same air basin as the District. 

(c) Such credits have been calculated and issued in another air district under a program developed 

pursuant to Health & Safety Code §§40709-40713 and the transfer of such credits complies with 

the requirements of Health & Safety Code §40709.6 . 

2. AERs Generated by Simultaneous Reductions at a Facility 

(a) AERs generated from simultaneous reductions occurring at the same Facility may be used as 

Offsets when: 

(i) The AERs have been calculated, adjusted and approved pursuant to the provisions of 

District Rule 1404(A); and 

(ii) Such AERs are real, enforceable, surplus, permanent and quantifiable; and 

(iii) The owner and/or operator of the Emissions Units involved has obtained appropriate 

permits and/or submitted other enforceable documents as follows: 

a. If the AERs are the result of a Modification or limitation of the use of existing 

equipment, the owner and/or operator has been issued revised PTOs containing 

Federally Enforceable conditions reflecting the Modification(s) and/or limitation(s). 

b. If the AERs are the result of a shutdown of Permit Unit(s), the owner and/or 

operator has surrendered the relevant permits and those permits have been voided. 

i. The Permit Unit(s) for which the permits were surrendered will not be 

repermitted within the District, unless their emissions are completely Offset 

pursuant to the provisions of this Regulation. 

c. If the AERs are the result of a shutdown or Modification of Emission Unit(s) which 

did not have a District permit, owner and/or operator has obtained valid District PTO

(s) or has provided a contract, enforceable by the District, which contains enforceable 

limitations on the Emissions Unit(s). 

d. If the AERs are the result of the application of a more efficient control technology 

to an Emissions Unit, the owner and/or operator has a valid District PTO for both the

underlying Emissions Unit and the new technology. 

(b) AERs generated from Federally Enforceable reductions in a Facility's Potential to Emit may be 

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used as Offsets if the HPE for the Facility or Emissions Unit which is proposed for a Federally 

Enforceable reduction in its Potential to Emit was completely offset in a prior permitting action 

pursuant to this Regulation. 

(i) AERs generated under subsection (B)(2)(b) above are not eligible for banking pursuant 

to the provisions of District Regulation XVI. 

3. Mobile Source Emissions Reductions 

(a) Mobile Source emissions reductions may be used as Offsets when: 

(i) The applicant demonstrates sufficient control over the Mobile Sources to ensure the 

claimed reductions are real, enforceable, surplus, permanent and quantifiable; and 

(ii) Such Mobile Source emissions reductions are consistent with Mobile Source emissions 

reduction as guidelines issued by CARB; and 

(iii) The specific proposed Mobile Source emissions reductions are approved prior to the 

issuance of the New Source Review document and any ATC(s) by the APCO in 

consultation with CARB; and 

(iv) The specific proposed Mobile Source emissions reductions are approved prior to the 

issuance of the New Source Review document and any ATC(s) by USEPA. 

4. Offsets from Other Air Districts and Within the Air Basin 

(a) Emissions reductions occurring within the air basin but outside the District may be used as 

Offsets upon approval of the APCO, in consultation with CARB and the USEPA, on a case-bycase basis. 

(b) Such emissions reductions may only be used as Offsets if: 

(i) The emissions reductions are obtained in a nonattainment area which has a greater or 

equal nonattainment classification than the area where the Offsets are to be used; and 

(ii) The emissions from the other nonattainment area contribute to a violation of the 

Ambient Air Quality Standards in the area where the Offsets are to be used. 

(c) Such emissions reductions shall comply with the requirements of subsection (B)(1)(b) above. 

5. Offsets from Other Air Districts and Outside the Air Basin 

(a) Emissions reductions from outside the air basin may be allowed to be used as Offsets upon 

approval of the APCO, in consultation with CARB and USEPA, on a case-by-case basis. 

(b) Such emissions reductions may only be used as Offsets if: 

(i) The emissions reductions are obtained in a nonattainment area which has a greater or 

equal nonattainment classification than the area where the Offsets are to be used; and 

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(ii) The emissions from the other nonattainment area contribute to a violation of the 

Ambient Air Quality Standards in the area where the Offsets are to be used. 

(c) Such emissions reductions shall comply with the requirements of subsection (B)(1)(c) above. 

6. Interpollutant Offsets 

(a) Emissions reductions of one type of Air Pollutant may be used as Offsets for another type of 

Air Pollutant upon approval of the APCO, in consultation with CARB and the approval of 

USEPA, on a case-by-case basis as long as the following apply: 

(i) The trade must be technically justified; and 

(ii) The applicant must demonstrate, to the satisfaction of the APCO, that the combined 

effect of the Offsets and emissions increases from the new or modified Facility will not 

cause or contribute to a violation of an Ambient Air Quality Standard. 

(b) The APCO shall, based upon an air quality analysis, determine the amount of Offsets 

necessary, as appropriate. 

(c) Interpollutant trades between PM10 and PM10 precursors may be allowed on a case by case 

basis. PM10 emissions shall not be allowed to Offset nitrogen oxide or reactive organic 

compounds emissions within any ozone nonattainment area. 

(C) Use of Offsets 

1. Offsets for Net Emissions Increases of Nonattinment Air Pollutants shall be provided on a 

pollutant category specific basis, calculated as provided in section (B) above and multiplied by the 

appropriate Offset ratio listed in the following table: 

TABLE OF OFFSET RATIOS

POLLUTANT OFFSET RATIO

(Within a Federal Ozone 

Attainment or Unclassified 

Area)

OFFSET RATIO (Within 

a Federal Ozone 

Nonattainment Area)

OFFSET 

RATIO (Within a 

Federal PM10

Nonattainment 

Area)

Carbon Monoxide (CO) 1.0 to 1.0 1.0 to 1.0 1.0 to 1.0

Hydrogen Sulfide (H2S) 1.0 to 1.0 1.0 to 1.0 1.0 to 1.0

Lead (Pb) 1.0 to 1.0 1.0 to 1.0 1.0 to 1.0

PM10 1.0 to 1.0 1.0 to 1.0 1.0 to 1.0

Oxides of Nitrogen (NOx) 1.0 to 1.0 1.3 to 1.0 1.0 to 1.0

Oxides of Sulfur (SOx) 1.0 to 1.0 1.0 to 1.0 1.0 to 1.0

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1. If a Facility is located within more than one Federal nonattainment area, the largest applicable 

Offset ratio for each Nonattainment Air Pollutant shall apply. 

2. The ratio for Offsets obtained from outside the District for any Nonattainment Air Pollutant shall 

be equal to the offset ratio which would have applied had such Offsets been obtained within the 

District. 

3. Offsets shall be obtained from a Facility (or combination of Facilities) located within the same 

federal nonattainment, attainment or unclassified area as that where the Offsets are to be used. 

Such Offsets may also be obtained in an area with a federal designation (in the case of attainment 

or unclassified areas) or classification (in the case of nonattainment areas) which is greater than or 

equal to the designation or classification of the area where the Offsets are to be used so long as the 

emissions from the other area cause or contribute to a violation of the Ambient Air Quality 

Standards in the area in which the offsets are to be used. 

4. The APCO shall adjust any Offsets proposed to be used to reflect any emissions reductions in 

excess of RACT in effect at the time such Offsets are used if such reductions have not already 

been reflected in the calculations required pursuant to District Rules 1304(C)(2) or 1404(A)(3). 

(D) Modeling for Offset Purposes 

1. Offsets shall not be required for increases in attainment Air Pollutants if the applicant 

demonstrates to the satisfaction of the APCO, through an impact analysis, that the ambient air 

quality standards are not violated in the areas to be affected, and such emissions will not cause or 

contribute to a violation of Ambient Air Quality Standards. 

(E) Calculation of Terms Used in Rule 1305

1. Unless otherwise specified in this subsection all terms requiring calculations shall be calculated 

pursuant to the provisions of District Rule 1304. 

2. Proposed Emissions 

(a) For a new or modified Facility or Emissions Unit(s), the Proposed Emissions shall be equal to 

the Potential to Emit for that Facility or Emissions Unit as defined by District Rule 1301(VV) as 

calculated pursuant to (E)(3) below. 

3. Potential to Emit 

(a) The Potential to Emit for a Facility for purposes of determining base quantity of Offsets shall 

be calculated as follows: 

(i) The sum of the Potentials to Emit for all existing Permit Units; and 

Reactive Organic 

Compounds (ROC)

1.0 to 1.0 1.3 to 1.0 1.0 to 1.0

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(ii) The emissions increases from proposed new or modified Permit Units; and 

(iii) The emissions from all Cargo Carriers; all Fugitive Emissions; and Nonpermitted 

Equipment which are directly associated with the operation of the Facility. 

(iv) Any Emission Reduction Credits issued and banked pursuant to the provisions of 

District Regulation XIV shall be included in the calculations of a Facility's Potential to 

Emit. 

[SIP: Submitted as amended 03/25/96 on _________; Submitted as amended 10/27/93 on 03/29/94; Conditional Approval 47 

FR 25013, 06/09/82] 

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