Beginning in the year 2000, total utility 502 emissions are limited to 8.9 million tons and total industrial S02 emissions are limited to 5.6 million tons. Title IV is implemented through a two-phase process. Under Phase 1, owners l operators of 110 facilities listed in the law are required to reduce emissions by about 3.5 million tons annually by Jan. 1, 1995. The mechanism for achieving the reductions is a comprehensive permit and emission allowance system. An allowance is a limited authorization to emit a ton of S02.
Facilities receive allowances based on specific formulas contained in the law.
These allowances may be traded or banked for future use or sale. Allowance sales and auctions are to be held to ensure liquidity in the allowance market. However, current indications suggest that complying with Title IV will be considerably less expensive than the costs estimated by the utility industry or government during the legislative debate on these provisions. In March 1995, the Chicago Board of Trade held its third annual allowance auction. The program is strictly voluntary and facilities choosing to enter must comply with monitoring, enforcement, and other CAA requirements similar to those for utility participants.