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 eligibi lity 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 F acility 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 pol lutant category specific basis. (ii) For emissions increases from a Modification to a previously existing non-ma jor 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 basi s, 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 R ule 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 Page 1 of 7 MOJAQMD 1305 EMISSIONS OFFSETS

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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 Federa**  **l 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 R**  **ule 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 quanti**  **ty of Offsets shall be equal to either of the following:**  **i. The Facility's Proposed Emissions when the Facility is located in a Federa l**  **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 R ule**  **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 t** **he Facility's HPE has been completely offset in prior permitting acti**  **ons pursuant to this Regulation; or**  **b. The amount equal to the difference between the Facility's Proposed Emissi ons, 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 de termined**  **on a quarterly basis. (ii) Seasonal emissions used for Offsets shall generally occur during the same cons**  **ecutive monthly period as the new or modified Facility operates.**  **3. After determining the base quantity of Offsets, the APCO shall apply the appro priate Offset ratio**  **as set forth in subsection (C) below, dependant upon the location of the Offsets and t he 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. Page**  **2 of**  **7 MOJAQMD 1305 EMISSIONS OFFSETS** 

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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 pr ogram 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 pr ogram 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 m ay 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 appropr iate 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 voi ded. i. The Permit Unit(s) for which the permits were surrendered will not be repermitted within the District, unless their emissions are completely O ffset 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 Distri ct PTO (s) or has provided a contract, enforceable by the District, which contains enf orceable limitations on the Emissions Unit(s). d. If the AERs are the result of the application of a more efficient control te chnology 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 Page 3 of 7 MOJAQMD 1305 EMISSIONS OFFSETS

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...**used as Offsets if the HPE for the Facility or Emissions Unit which is prop osed for a Federally** 

**Enforceable reduction in its Potential to Emit was completely offset in a pr ior permitting action**  **pursuant to this Regulation. (i) AERs generated under subsection (B)(2)(b) above are not eligible for banki**  **ng 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 e nsure the**  **claimed reductions are real, enforceable, surplus, permanent and quantifiable ; and**  **(ii) Such Mobile Source emissions reductions are consistent with Mobile Sourc e emissions**  **reduction as guidelines issued by CARB; and (iii) The specific proposed Mobile Source emissions reductions are appr**  **oved 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 Distric**  **t may be used as Offsets upon approval of the APCO, in consultation with CARB and the USEPA, on a case-b**  **y 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 grea** **ter 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 grea ter or**  **equal nonattainment classification than the area where the Offsets are to be used; and**  **Page 4**  **of 7**  **MOJAQMD 1305 EMISSIONS OFFSETS**

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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 Facili ty 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 Off sets necessary, as appropriate. (c) Interpollutant trades between PM 10 and PM 10 precursors may be allowed on a case by case basis. PM 10 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 sha ll be provided on a pollutant category specific basis, calculated as provided in section (B) ab ove 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 PM 10 Nonattainment Area) Carbon Monoxide (CO) 1.0 to 1.0 1.0 to 1.0 1.0 to 1.0 Hydrogen Sulfide (H 2 S) 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 PM 10 1.0 to 1.0 1.0 to 1.0 1.0 to 1.0 Oxides of Nitrogen (NO x ) 1.0 to 1.0 1.3 to 1.0 1.0 to 1.0 Oxides of Sulfur (SO x ) 1.0 to 1.0 1.0 to 1.0 1.0 to 1.0 Page 5 of 7 MOJAQMD 1305 EMISSIONS OFFSETS

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...1. If a Facility is located within more than one Federal nonattainment area, the la rgest applicable Offset ratio for each Nonattainment Air Pollutant shall apply. 2. The ratio for Offsets obtained from outside the District for any Nonattainme nt Air Pollutant shall be equal to the offset ratio which would have applied had such Offsets been obtained wi thin the District. 3. Offsets shall be obtained from a Facility (or combination of Facilitie s) located within the same federal nonattainment, attainment or unclassified area as that where the Offs ets are to be used. Such Offsets may also be obtained in an area with a federal designation (in the ca se 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 Q uality 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 emiss ions 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 w ill 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 calcul ations 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 s hall be equal to the Potential to Emit for that Facility or Emissions Unit as defined by Distri ct 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 Page 6 of 7 MOJAQMD 1305 EMISSIONS OFFSETS

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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 N onpermitted 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 _________; S ubmitted as amended 10/27/93 on 03/29/94; Condition al Approval 47 FR 25013, 06/09/82] Page 7 of 7 MOJAQMD 1305 EMISSIONS OFFSETS

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