Code of Massachusetts Regulations › 310 CMR - DEPARTMENT OF ENVIRONMENTAL PROTECTION › Title 310 CMR 7.00 - Air Pollution Control › Appendix B - U EMISSION BANKING, TRADING, AND AVERAGING

Current through Register 1525, July 5, 2024
(1)
Introduction
.
				310 CMR
				7.00:
Appendix B
(1) through (6)
				establishes principles and procedures which can be utilized by facilities to
				comply with the requirements of
				310 CMR
				7.18,
				310
				CMR 7.19 and
				310 CMR
				7.00:
Appendix A
.
				310 CMR
				7.00:
Appendix B
contains provisions
				to allow emission averaging or "bubbles" and provisions to allow for the
				creation and use of emission reduction credits to be "banked", used or traded
				among facilities.
(2)
Definitions
. The definitions found
				in
				310 CMR
				7.00 apply to
				310 CMR
				7.00:
Appendix B
. The following words
				and phrases shall have the following meanings as they appear in
				310 CMR
				7.00:
Appendix B
. Where a term is
				defined in the
				310 CMR
				7.00 definitions section and the definition also
				appears in
				310 CMR
				7.00:
Appendix B
, the definition in
				310 CMR
				7.00:
Appendix B
controls.
Actual Emissions
means, the average
				rate, in tons per year, at which a unit actually emitted the pollutant during
				the two-year period which precedes the date of application and which is
				representative of normal production rates or activity levels. The Department
				shall allow the use of a different two year consecutive time period, within
				five years immediately prior to the date of application, upon a determination
				that the alternative two year period is more representative of normal source
				operation. Actual emissions shall be calculated using the eligible source's
				actual operating hours, production rates, and types of materials processed,
				stored, or combusted during the selected time period.
Allowable Emissions
means the
				emissions rate of a source calculated using either the production or activity
				rates associated with the maximum rated capacity of the source, and the hours
				of operation or the permitted hours of operation or capacity provided that such
				permit is federally enforceable and so as not to exceed the following:
(a) Any applicable standards set forth in 40 CFR Part 60 (NSPS)
				or 61 (NESHAPS);
(b) Any applicable Massachusetts SIP emissions limitation
				including a limitation with a future compliance date; or
(c) Any emissions rate specified as a federally enforceable
				permit condition, including a limitation with a future compliance date.
Area Source
means stationary and
				non-road sources of emissions who are too small and/or too numerous to be
				individually included in a stationary source emission inventory examples being
				home heating furnaces, aircraft, commercial vessels, gas stations and lawn
				mowers.
Baseline
means the emission level set
				for an eligible source and calculated in accordance with methods described in
				310 CMR
				7.00:
Appendix B
(3)(c), which
				reflects the lower of actual emissions, or allowable emissions and which serves
				as the level below which emission reductions are considered surplus and can be
				eligible for approval by the Department as Emission Reduction Credits (ERC). As
				future allowable emission rates or emission standards become effective, the
				lowest of future allowable emissions, allowable emissions or actual emissions
				will be the baseline below which reductions must be made to be considered
				surplus.
Bubble
means an alternative emission
				control strategy where two or more existing emission points are regarded as
				being placed under a hypothetical bubble, which is then regarded as a single
				emission source.
Curtailment
means a permanent
				reduction in hours of operation or process rate, said reduction approved in a
				permit issued by the Department.
Direct Determination
means a
				calculation or measurement based on source specific information rather than
				from estimates of emission and control efficiencies.
Eligible Source
means any stationary,
				area or mobile source of VOC, NOx or CO emissions which is eligible to
				participate in emissions banking and trading at any point in time.
Emission Estimation
means calculation
				of emissions using estimated emission factors and assumptions of control
				efficiency not based in whole or in part on actual measurement or detailed
				records for an emission unit.
Emission Limiting
means a program or
				strategies that directly specify limits on total mass emission, emission
				related parameters (
e.g.
, emission rates per unit of product)
				or levels of emission reductions that are required to be met by eligible
				sources.
Emission Reduction Credit (ERC)
means
				the actual air pollutant reductions from an emitting source that have been
				certified by the Department as enforceable, permanent, quantifiable, real, and
				surplus in accordance with the requirements of
				310 CMR
				7.00:
Appendix B
.
Enforceable
means those limitations
				and conditions which are enforceable by the Department of Environmental
				Protection and the EPA. Examples of such enforceable mechanisms include, but
				are not limited to the following:
(a) Conditions in pre-construction permits issued pursuant to
				40 CFR
				52.21 (federal delegated PSD programs);
				or
(b) Limitations developed pursuant to 40 CFR Parts 60 (NSPS)
				and 61 (NESHAPS); or (c) Requirements contained in the EPA-approved
				Massachusetts State Implementation Plan (SIP), or source-specific SIP revisions
				that are approved by EPA; or
(d) Conditions in pre-construction "plan approvals" issued by
				the Commonwealth of Massachusetts, provided that those pre-construction "plan
				approval" regulations have been approved by the EPA in the
Federal
				Register
as meeting the requirements of
				40 CFR
				51.160. (e) Permits issued pursuant to
				generic bubble regulations that have been approved by EPA as adhering to the
				December 4, 1986, Emissions Trading Policy Statement.
(f) Information contained in a Department-issued Emission
				Reduction Credit approval for retrospectively approved ERCs, as to by what
				means the ERCs were created.
Future Allowable
means the maximum
				emission rate, process rate or activity level assumed in the most recent
				Department adopted State Implementation Plan for Ozone or State Implementation
				Plan for Carbon Monoxide. An example might be the future allowable (1994)
				emission rate for Leather Coating operations at 27.4 pounds of VOC per gallon
				of solid applied [310
				CMR 7.18(22)] which when
				applied to the two year average capacity utilization factor and two year
				average hours of operation for an eligible source, would result in the estimate
				of baseline starting on the rule effective date in 1994. Prior to this
				effective date, credit is calculated using a baseline that includes the lower
				of actual or allowable emissions at the time of application.
Irreversible Process Change
means a
				process modification or equipment substitution that completely and irreversibly
				eliminates key emitting properties of the emission unit. For example,
				elimination of solvent use in a process line.
Mass ERC Bank
means the Massachusetts
				registry for ERCs quantified by mass (
e.g
. tons). ERCs from
				this bank may be used either for compliance pursuant to 310 CMR
7.00:
				Appendix B
(3) or for "discrete" offsets pursuant to
				310 CMR
				7.00:
Appendix B
(3) and
				310 CMR
				7.00:
Appendix A
.
NEPOOL Marginal Emission Rate or Successor
				Organization Rate
means the corresponding calendar year NO
				emission rate determined by NEPOOL or a successor organization through accepted
				modeling or data gathering techniques reviewed and approved by the
				Department.
Netting
means the mechanism used to
				secure an exemption of modifications at existing stationary sources from
				preconstruction permit requirements under
				310 CMR
				7.00 Appendix A (Emission Offsets and Nonattainment
				Review) and/or
				40 CFR
				52.21 (Prevention of Significant
				Deterioration) regulations which apply when there is a significant net
				emissions increase.
Non-inventoried Emission Source
				Category
means air pollutants emitted into the ambient air from
				any source category which has not been included in the Department's 1990
				emission inventories.
Offset
means the use of an Emission
				Reduction Credit to compensate for emission increases of a nonattainment
				pollutant from a new major stationary or modified major stationary source
				subject to the requirements of
				310 CMR
				7.00:
Appendix A
.
Permanent
means that emission
				reductions implemented for the purpose of generating Emission Reduction Credit
				must be assured for the life of the corresponding Emission Reduction Credit
				through a federally enforceable mechanism.
Program Baseline
means the level of
				emissions, or emission related parameters for each eligible source or group of
				sources from which the program results (
e.g.
quantifiable
				emission reductions) shall be determined. For purposes of
				310 CMR
				7.00:
Appendix B
, the program
				baseline shall be the 1990 Base Year Emission Inventory of Volatile Organic
				Compound, Oxides of Nitrogen and Carbon Monoxide.
Quantifiable
means that the amount,
				rate, and characteristics of an emission reduction can be measured through a
				replicable method acceptable to the Department of Environmental Protection and
				the EPA.
Rate ERC Bank
means the Massachusetts
				registry of ERC that have been certified at a continuous rate (i.e. tons per
				year). ERCs from the Rate ERC Bank may be used for the purposes of offsets
				pursuant to
				310 CMR
				7.00:
Appendix B
(3) and
				310 CMR
				7.00:
Appendix A
.
Real
means the reduction in actual
				emissions released into the air.
Remaining Useful Life
means the length
				of time for which the equipment that is being shut down would have continued to
				operate had the owner/operator chosen not to shut down the equipment and apply
				for certification of credits at that time. Remaining useful life shall be ten
				years except in those cases where the Department determines a shorter period is
				appropriate, or the applicant demonstrates to the Department's satisfaction
				that a period of longer than ten years is warranted. The Department will use
				the following criteria for making the determination including, but not limited
				to: the age of the equipment; the type of equipment; maintenance history;
				operating history; and industry norms. In any case, remaining useful life shall
				not exceed 20 years.
Replicable
means methods which are
				sufficiently clear and unambiguous such that the same or equivalent results
				would be obtained by the application of the methods by different users.
Shutdown
means the earlier of (1) the
				date that the Department verifies that the source is shutdown or 2) the date
				that operations and emissions from an emitting unit ceased and the associated
				emission units have been removed or rendered inoperable.
State Implementation Plan (SIP)
means
				the most recently prepared plan or revision thereof required by the Clean Air
				Act,
				42
				USC Section 7410, which has been either
				adopted by the Department and submitted to the United States Environmental
				Protection Agency (EPA) for approval or approved by the United States
				Environmental Protection Agency (EPA), whichever is more stringent.
Surplus
means, emission reductions
				beyond an established source baseline which, as such, are not required by the
				Department adopted SIP, relied upon in any applicable attainment demonstration,
				or credited in any RFP or milestone demonstration.
Transfer
means the conveyance of
				ownership of an Emission Reduction Credit from one entity to another.
Use
for the purposes of
				310 CMR
				7.00:
Appendix B
, the term "use"
				shall mean to employ for emission averaging or emission trading an ERC such
				that the person who owns or controls the ERC has received a plan approval from
				the Department which factors the ERC into the emissions from the facility for
				purposes of compliance with emission limitations or emission offset
				requirements.
(3)
Emission Reduction Credit Banking and
				Trading
.
(a)
Introduction and statement of
				purpose
. The goal of the program, defined by
				310 CMR
				7.00:
Appendix B
(3), is to encourage
				the creation and trading of surplus emission reductions as Emission Reduction
				Credits (ERC) to be used for purposes of offsets, netting and cost effective
				compliance without interfering with any applicable requirements concerning
				attainment, reasonable further progress or any other applicable air pollution
				control requirement.
(b)
Applicability
.
1. Entry into this program is voluntary.
2.
				310 CMR
				7.00:
Appendix B
(3) applies to the
				owner/operator of eligible sources
including stationary sources, area sources and mobile sources
				applying for certification of surplus emission reductions as emission reduction
				credits (ERC).
3. Nothing in
				310 CMR
				7.00:
Appendix B
shall require that
				ERCs be listed in either the Rate ERC Bank or the Mass ERC Bank if the ERCs are
				being transferred to other facilities operated or owned, in whole or part, by
				the creator of the ERCs, provided that the requirements of
				310 CMR
				7.00:
Appendix B
(3)(e) are met prior
				to use of the ERCs. 4. Nothing in
				310 CMR
				7.00:
Appendix B
shall require that
				emission reductions, created for the purpose of offsets, be submitted for
				approval through the emission banking program if the emission reductions are
				used by the facility or within facilities owned by the same economic entity
				which created the emission reductions and provided that the requirements of
				310 CMR
				7.00:
Appendix A
are met.
(c)
Generation of Emission Reduction
				Credit
.
1. General Principles which apply to generation of Emission
				Reduction Credits (ERC). a. Emission reductions within Massachusetts shall be
				recognized as ERCs only after the approval of the Department has been obtained
				in accordance with
				310 CMR
				7.00:
Appendix B
(3).
b. Emission reductions generated for the purpose of creating
				ERCs must meet, at minimum, all of the following principles, to receive
				approval as emission reduction credits.
i. The reductions must have occurred after December 31,
				1990.
ii. The reductions must be real reductions of emissions of:
				Volatile Organic Compounds (VOC), Oxides of Nitrogen (NOx), or Carbon Monoxide
				(CO);
iii. The reductions must be surplus in that they are reductions
				in emissions below the baseline established for the eligible source.
iv. The reductions must be permanent and the amount and
				duration of the reduction must be documented; and,
v. The reductions must be quantifiable, with a replicable basis
				for calculating the amount of reduction as well as reliable methods for
				assessing compliance with the emission rates after the reduction has been made,
				and the reductions must be enforceable.
c. Emission reductions cannot be recognized as ERCs if said
				reductions are required by Federal or Department permits, plan approvals,
				agreements, administrative or judicial orders, or other enforcement actions or
				regulations.
d. Emission reductions can only be eligible for certification
				pursuant to
				310 CMR
				7.00:
Appendix B
(3) if said
				reductions occur from emissions sources within the geographical boundaries of
				Massachusetts. ERCs generated by sources outside of the Commonwealth may be
				used by facilities within the Commonwealth pursuant to
				310 CMR
				7.00:
Appendix B
(3)(f).
e. Emission reductions eligible for credit are those emissions
				reductions below baseline for the eligible source.
f. Emission reductions considered eligible for consideration as
				ERCs include:
i. Shutdown or curtailment provided that the applicant can
				demonstrate to the satisfaction of the Department that demand for the services
				or product will not or cannot shift to other similar sources in the State
				resulting in no net decrease in emissions from the source category. Where
				emission reductions from shutdowns of electric generating facilities will be
				used exclusively as offsets for new facilities pursuant to
				310 CMR
				7.00:
Appendix A
, the ERC will not be
				adjusted for shifting demand. If such reductions are to be deposited in the
				Mass ERC Bank, credit will be available only to the extent that the emission
				rate from the unit being shut down or curtailed is greater than the applicable
				NEPOOL marginal emission rate or successor organization rate.
ii. Control of an emission unit beyond that required by
				Massachusetts Air Pollution Regulations or federal law and regulations.
iii. Seasonal Controls with the recognition that VOC and NOx
				emission reductions created by the application of seasonal controls will be
				subject to use restrictions as defined in
				310 CMR
				7.00:
Appendix B
(3)(e)8.
iv. Early implementation of future emission controls provided
				that the reductions commence before promulgation of the regulations
				establishing the new emission controls. These reductions are surplus only up to
				the effective date for compliance with the program or emission controls. Credit
				will cease to accrue upon the effective date of the new emission
				controls.
v. Emission reductions which result from application of mobile
				and area source controls provided that the reductions meet all other
				requirements of
				310 CMR
				7.00:
Appendix B
including provisions
				for establishment of baseline and
replicable quantification as well as compliance monitoring
				methods.
g. Emission reductions are not eligible for consideration as an
				ERCs if said reductions are generated by an un-inventoried area source category
				(
e.g.
, small bakeries) or if said reductions are generated by
				biogenic sources (
e.g.
, trees).
2.
Calculation of Credit
.
a. Credit shall be calculated by first calculating baseline
				emissions, second calculating the post reduction emissions, and third
				multiplying the difference between the baseline emissions and post reduction
				emissions by the applicable compliance assurance factor. The ERC amount is the
				result of complete application of these
three
steps.
b. Baseline emissions will be expressed in tons of pollutant
				emitted per day or per year, whichever is more appropriate and shall be further
				defined as ozone or nonozone (October 1 - April 30) season.
Step 1:
c. Baseline emissions will be established for each stationary
				source according to the following formula:
baseline = ER x (CU x H)
Where:
ER equals the lower of the actual or allowable emission
				rate
ER shall be expressed as mass of emission per unit of
				production or thruput (
e.g.
, pounds of VOC per gallon of
				solids applied or pounds of NOx per million Btu)
CU equals the
actual
average hourly
				capacity utilization (
e.g.
, expressed in terms of millions of
				Btu per hour or numbers of gallons of solids applied in an hour).
H equals the
actual
number of hours of
				operation per day.
ERC, CU and H are based on average historical values for the
				factors for two representative years within the five years immediately prior to
				the date of application. d. Baseline emissions will be established for each
				area source measure according to the following formula:
baseline = ER x ACT
Where:
ER equals the emission rate as determined by the Department and
				EPA in the most recent emission inventory using EPA approved methods and
				emission factors including AP-42 and Volume IV for Area Source, or the EPA
				Off-road Study for off-road sources. Assumptions shall be consistent with the
				most recent adopted periodic emission inventory prepared by the
				Department.
ER must be the lower of actual, or allowable emission rate and
				shall be expressed as mass of emission per unit of production or thruput
				(
e.g
., pounds per 1000 gallons burned or pounds per capita, as
				is appropriate)
ACT equals the actual average activity factor expressed in a
				manner so as to be consistent with the units required by the emission rate such
				as number of gallons burned, or number of persons affected.
e. Baseline emissions will be established for each Mobile
				Source by methods approved or published by EPA or the Department, including but
				not limited to:
i. Interim guidelines on the Generation of Mobile Source ERC,
				58 FR 11134.
ii. Guidance for Implementation of Accelerated Retirement of
				Vehicle programs, U.S. EPA, February 1993.
iii. Program for Generation of Emission Credits by Urban Buses,
				U.S. EPA, January 1993.
3.
Calculation of post-reduction
				emissions
.
Step 2:
a. Creditable, workable and replicable methods must be used to
				quantify postreduction emissions reflecting the real emission reduction below
				baseline emissions. The post-reduction emissions shall be calculated using
				methods as or more accurate than those used to calculate baseline
				emissions.
b. Post-reduction emissions for DSM shall be determined after
				implementation of these DSM measure(s) and based on review of historical
				records covering a period of no less than one year collected since
				implementation, and shall be calculated in conformance with guidance provided
				and approved by the Massachusetts DPU.
4.
Calculation of the Emission Reduction
				Credit
.
a.
Step 3
: The emission reduction is
				calculated by first subtracting postreduction emissions from baseline
				emissions.
b. The emission reduction will be certified by the Department
				as an emission reduction credit after application of a compliance assurance
				multiplier to the resulting difference between baseline emissions and
				post-reduction emissions. The applicable compliance assurance multiplier will
				be determined by the Department within the ranges provided in the table below.
				Actual ERC adjustment will be set for individual circumstances and conditions
				within these ranges.
Method of Compliance
							 Assurance
Compliance Assurance
							 Multiplier
Irreversible process change
Compliance Assessment by Direct Determination:
Continuous Emission Monitoring System
							 (CEMS)
1.0
installed pursuant to 40 CFR part 75
1.0
Mass Balance Reconciliation
0.85 - 0.99
CEMS other than 40 CFR part 75
0.80 - 0.95
Compliance Assessment by Testing: Periodic Stack Test
							 / Emission Test Testing of Capture Efficiency and control
0.80 - 0.90
Emission Determinations using estimates of capture
							 and control and/or emission factors
0.50 - 0.80
i. The resulting amount of credit will be rounded to the
				nearest ton.
ii. Once the three step calculation has been completed, and the
				result rounded to the nearest ton, the resulting ERCs shall not be subject to
				adjustment of value.
c. ERCs certified from discrete, retrospective reductions shall
				be expressed in total tons and will be placed in the Mass ERC Bank. ERCs from
				the Mass ERC Bank may be used as offsets pursuant to
				310 CMR
				7.00:
Appendix A
with approval of the
				Department.
d. ERCs certified from either shutdowns or enforceable
				prospective over-control of emissions shall be expressed in tons per year, and
				will be placed in the Rate ERC Bank. In the event the owner of ERCs from a
				shutdown wishes to transfer the ERCs to the Mass ERC Bank, the Department will
				assign the ERCs from the shutdown a "remaining useful life" in years, which
				will be used to transfer the ERCs from the Rate ERC Bank to the Mass ERC Bank.
				If the ERC transferred are from shutdown of an electric generating facility,
				the Department will also subtract the NEPOOL marginal emission rate or
				successor organization rate replacement power in effect at the time of original
				certification of the ERCs.
(d)
Procedure For Certification of Emission
				Reductions as ERC
.
1. An application for certification of ERCs may be submitted in
				advance of the time when the reduction is actually made (prospective
				certification) or after the reduction has been made (retrospective
				certification).
2. Unapprovable sources of generation and quantities.
a. ERCs may not be generated from non-inventoried sources. In
				other words, only sources accounted for in SIP and RFP planning (inventoried
				sources) may be used to generate credits.
b. ERCs can be approved only where the emission reduction, as
				calculated under
				310 CMR
				7.00
Appendix B
(3)(c)4.a., is greater
				than 5 tons per year for deposit in the Rate ERC Bank, or greater than 5 tons
				for the Mass ERC Bank.
3. For emission reductions implemented prior to January 1,
				1994, an Emission Reduction Credit Application must be submitted to the
				Department by September 30, 1994.
4. For emission reductions implemented after January 1, 1994,
				an Emission Reduction Credit Application must be submitted to the Department
				within six months of:
a. the end date of the period being evaluated for a
				retrospective discrete emission reductions.
b. the approval date of a federally enforceable mechanism for
				prospective emission reductions other than
				310 CMR
				7.00
Appendix B
(3).
5. Application Procedures.
a. Any person who owns or operates an emission unit at which an
				eligible emission reduction has occurred or will occur may submit an Emission
				Reduction Credit (ERC) application in accordance with the requirements of
				310 CMR
				7.00:
Appendix B
.
b. The ERC application shall be submitted on a standard form
				supplied by the Department with documentation provided by the applicant as to
				the calculation method for baseline and the post-reduction emissions as
				required by
				310 CMR
				7.00:
Appendix B
(3) as well as a
				proposed method for determining and assuring compliance.
c. ERC applications shall express emission reductions in tons,
				or in tons per year if for offsets, and indicate what portions of the
				reductions were made during the period May 1 - September 30 (ozone
				season).
d. ERC applications shall contain sufficient information to
				allow the Department to evaluate each emission reduction consistent with the
				requirements of
				310 CMR
				7.00:
Appendix B
(3).
e. The ERC application shall be signed by a responsible
				official.
f. The ERC application shall comply with provisions of
				310 CMR 4.00
et
				seq
. for fees and permit procedures.
6. ERC approvals will be emission-limiting, either
				prospectively or retrospectively, as applicable. An ERC approval will be issued
				pursuant to
				310 CMR
				7.00:
Appendix B
(3). To be made
				federally enforceable, it must contain the specific quantifiable emission
				limits reflecting the change in emission rate, operating conditions and other
				measures taken to generate the ERCs. All emissions limitations, controls, and
				other requirements imposed by such approvals must be at least as stringent as
				all other applicable limitations and requirements contained in the SIP,
				enforceable under the SIP, or otherwise federally enforceable. All limitations,
				controls, and other requirements imposed by such approvals must be permanent,
				quantifiable, and enforceable as a practical matter.
a. In order to confirm emission reductions claimed in
				conjunction with an application for a prospective Emission Reduction Credit,
				the Department will require sources to implement compliance assurance methods
				such as monitoring, recordkeeping and reporting as part of the ERC
				certification approval.
b. The Department may also require the applicant to conduct
				source testing utilizing Department or EPA approved test methods, including but
				not limited to those methods referenced in 40 CFR Part 60 Appendix A, or
				310 CMR
				7.18(2), or
				310
				CMR 7.19(13), as appropriate
				for the source.
c. In addition, the Department may require regular submittal of
				information which the Department determines is necessary to maintain the
				integrity of the ERC.
7. A person having ownership of ERCs has the exclusive right to
				possess and dispose of the ERCs subject to the applicable restrictions
				contained in the certification approval and
				310 CMR
				7.00:
Appendix B
(3).
8. ERCs in the Rate ERC Bank shall revert to the state to be
				retired for the benefit of the environment if they have not been used by
				midnight of the date ten years from the date of Department approval. ERCs in
				the Mass ERC Bank shall not expire or cease to exist after a set period of
				time, even if not traded or used.
(e)
Withdrawal, Transfer, and Use of Emission
				Reduction Credits
.
1. The Department must issue a federally enforceable approval
				to a person seeking to use ERCs prior to the use of any ERCs. This includes
				approvals to construct or operate issued to stationary sources and a practical
				equivalent to be issued to persons who have applied to use ERCs in area and
				mobile source situations.
2. Persons seeking to use ERCs must obtain an amount of credit
				equal to five percent more than the amount needed for the offset or compliance
				calculation. This five percent increment shall be held by the applicant and not
				used or sold until such time that the Department determines whether or not the
				excess credit can be released for use. Such a determination shall be made by
				the Department on or about January 1, 1999. If the Department determines it
				cannot release said ERCs for use, the ERCs will by operation of law be retired
				for the benefit of the environment.
3. ERCs may not be used to meet the requirements of, or result
				in violation of federal New Source Performance Standards (NSPS), National
				Emission Standards for Hazardous Air Pollutants (NESHAPS), the requirements for
				Lowest Achievable Emission Rate (LAER), the requirements for Best Available
				Control Technology (BACT), Maximum Achievable Control Technology (MACT), Title
				IV, section 183(e) and 183(f) of the Clean Air Act, cause a violation of a
				National Ambient Air Quality Standard for criteria pollutants, cause a
				violation of a PSD increment or create a nuisance condition. ERCs may not be
				used to stay below an applicability threshold of the Clean Air Act or
				310 CMR
				7.00
et seq
.
4. ERCs may not be used to comply with performance standards
				established by regulation, such as, operating procedure requirements
				(
e.g.
covers on degreasers, operating within a specific
				temperature range) or to comply with requirements for record keeping, reporting
				or facility testing as may be required by the Department.
5. Where ERCs are used for netting under
				310 CMR
				7.00: Appendix A, the ERCs must meet the criteria in
				310 CMR
				7.00:
Appendix A
Net
				Emissions Increase
(a) through (g), as applicable.
6. Certified ERCs can be traded between emission sectors
				(
e.g
., from mobile sources to stationary sources) provided
				that credit generated by stationary source reductions may under no
				circumstances be used to comply with any mobile source requirement.
7. ERCs generated through emission reductions of one pollutant
				can not be used for trading or averaging with another pollutant.
8. ERCs generated by the control of ozone precursors (VOC and
				NOx) during the period May
				1st through September
				30th, can be used at any time during the calendar
				year. ERCs generated by control of ozone precursors during the period October
				1st through April 30th,
				can only be used in the same season as generated (October
				1st through April
				30th).
9. ERCs generated by the use of seasonal control of carbon
				monoxide during the period November 1st through
				February 28th, can be used at any time during the
				calendar year. ERCs generated through use of seasonal control of carbon
				monoxide during the period March 1st through October
				31st can only be used in the in the same season as
				generated (March 1st through October
				31st).
10. ERCs approved from shutdown or curtailment of an emission
				unit where the emitting operations are based on manufacturing activity and the
				operations, and jobs associated with the emitting activity are shifted outside
				of Massachusetts, are eligible for use only in Massachusetts.
				310 CMR
				7.00:
Appendix B
(3)(e)11. does not
				apply to electric generating facilities.
11. ERCs generated by shutdowns are presumptively available
				only for offsets pursuant to
				310 CMR
				7.00:
Appendix A
. If at any time
				prior to use ofERCs as offsets an owner of said ERCs wishes to use them for
				compliance purposes, the Department will assign a "remaining useful life" to
				said ERCs which will be used to transfer the ERCs from the Rate ERC Bank to the
				Mass ERC Bank. If the ERCs were generated by an electric generating facility
				shutdown, the Department will also subtract the NEPOOL marginal emission rate
				or successor organization rate in effect at the time of original ERC
				certification. Offset credits generated outside of the Commonwealth of
				Massachusetts are not eligible for conversion to mass-based credits.
12. ERCs from the Rate ERC Bank used as offsets pursuant to a
				310 CMR
				7.00:
Appendix A
approval, must be
				retired at the approved annual offset rate regardless of the facility's annual
				actual emissions. In addition, ERCs from the Mass ERC Bank used as offsets
				pursuant to a
				310 CMR
				7.00:
Appendix A
approval, must be
				obtained for the current year of operation plus four subsequent years of
				operation; and five years of ERCs, available for use in each of those five
				years, must be held at all times for the approval to remain valid. These ERCs
				will be retired on December 31st of each year,
				beginning with the first calendar year or any portion thereof, in which the
				facility operates.
13. ERCs utilized as offsets are considered "used" commencing
				with startup of a facility; ERCs with an expiration date prior to actual
				startup of a source needing offsets will not be acceptable as offsets for the
				facility.
14.
Conversions to Allowances
.
				(Reserved)
(f)
Interstate Trading of ERCs
.
1. Federally enforceable emission reductions generated by
				facilities outside the Commonwealth may be used in the Commonwealth, and ERC
				generated in the Commonwealth may be used in other states or jurisdictions,
				provided that the State within which the other facility is located has executed
				a Memorandum of Understanding concerning emission trading with the
				Commonwealth.
2. Said Memoranda of Understanding will include at a
				minimum:
a. the requirement that creditable emission reductions be real,
				surplus, permanent, quantifiable and federally enforceable;
b. discounts as appropriate to make ERCs generated outside of
				the Commonwealth equivalent with ERCs generated in the Commonwealth;
c. restrictions on allowable directionality oftrades if
				necessary;
d. state-specific notification or other requirements, as
				necessary;
e. ERC lifetimes and expiration dates, if applicable;
f. ozone season definition and restrictions;
g. the requirement that any ERC generated outside of the
				Commonwealth can be used in the Commonwealth only in compliance with
				310 CMR
				7.00:
Appendix B
(3)(e), except where
				specifically stated otherwise; and
h. averments of cooperation on enforcement and
				reporting.
3. Interstate emission reduction credit trades must comply with
				the specific requirements of the applicable Memorandum of Understanding.
(g)
Emission Reduction Credit Registry
.
1. Upon satisfaction of all applicable requirements of
				310 CMR
				7.00:
Appendix B
, approved emission
				reduction credits shall be registered in an Emission Reduction Credit Registry
				operated or overseen by the Department. Such registry shall include:
a. Name of generator and contact person;
b. Pollutant associated with the ERCs;
c. Amount of ERC expressed in tons, or in tons per year if
				banked in Rate ERC Bank;
d. Any seasonal use restrictions on the ERCs;
e. Whether the ERCs may be used or are reserved as part of a 5%
				set aside pursuant to
				310 CMR
				7.00:
Appendix B
(3)(e)2.
2. ERCs shall be tracked within the Emission Reduction Credit
				Registry by assigning a serial number to each ton of ERC, or ton per year if
				banked for use as offsets. The serial number will provide information about the
				type of pollutant, type of ERC (rate/mass), seasonality and first year
				available for use.
3. Information related to emission reduction credits maintained
				in the Emission Reduction Credit Registry shall be available for public
				review.
(h)
Program review
.
1. The Department shall maintain records of ERCs and shall
				account for unused ERCs as "emitted" within the context of RFP and periodic
				emission inventory reports.
2. The Department shall conduct a review of the emission
				trading program beginning in 1995 and every three years thereafter. This review
				shall evaluate the handling of applications for ERC approval and use, and the
				legitimacy of approved ERCs, and may include review of ERCs creation and use
				protocols, and compliance assessment of sources using ERCs.
3. The program review shall also include assessment of the
				impact of the program on Reasonable Further Progress, attainment or maintenance
				of the National Ambient Air Quality Standards, and ascertain if there is any
				significant effect from interstate trades pursuant to
				310 CMR
				7.00:
Appendix B
(3)(f).
4. Should a review reveal the need to make program revisions,
				the Department shall, within six months of the review findings, propose the
				appropriate program revisions.
5. The results of Department reviews and the findings shall be
				reported in the context of required RFP and periodic inventory reports (every
				three years).
6. Program Baseline for this program is the most recent
				revision of the 1990 Base Year Emission Inventory of Volatile Organic Compound,
				Oxides of Nitrogen and Carbon Monoxide and the State Implementation Strategy
				Plan submittal of November 15, 1993 which describes programs and strategies to
				be used by the Commonwealth to attain and maintain NAAQS for ozone and carbon
				monoxide. Source baseline as described in previous sections is defined within
				the context of the program baseline (the lower of actual, allowable or future
				allowable emissions) so as to avoid interference with attainment and
				maintenance of NAAQS.
(4)
Emission Averaging (Bubble)
.
(a)
Introduction
.
1. The purpose of
				310 CMR
				7.00
Appendix
B(4) is to specify
				requirements by which one or more facilities operated or controlled by the same
				economic entity can comply with either
				310 CMR
				7.18 or
				7.19,
				respectively, using emissions averaging, herein referred to as a bubble, under
				either
				310 CMR
				7.18(2)(b)  or
				7.19(14).
2. In an emissions bubble, a person who operates or controls
				one or more facilities with more than one emission unit subject to regulation
				by
				310 CMR
				7.00, may apply to the Department to meet the
				requirements of either
				310 CMR
				7.18 or
				7.19
				through a mix of control techniques. The emissions of the various emission
				units are averaged over a 24 hour period, except as provided for in
				310 CMR
				7.00
Appendix
B(4)(e)5.
(b)
Applicability
.
1. 310 CMR
Appendix
B(4) applies to any person
				who operates or controls a facility(ies) subject to either
				310 CMR
				7.18(3) through (6), (10) through (12), (14) through (16),
				(21) through (26), (30)(c)7., (31) or
				310
				CMR 7.19(4), (5), (7), (8),
				(12), that set an emission limitation in
				either pounds of VOC per gallon of solids applied or pounds of
				NOx per million Btu of heat input, respectively, and who
				chooses to comply by emission averaging.
2. For bubbles to comply with
				310 CMR
				7.18, emission units subject to emissions
				standards other than pounds of VOC per gallon of solids applied
				(
e.g.
such as pounds of VOC per pound of solids applied,
				pounds of VOC per 1000 square feet covered, metric units,
etc.
) may be averaged with other emission units subject to an
				emission limitation in the same units of measure.
3. For bubbles under
				310
				CMR 7.19,
				310
				CMR 7.19(14)(a), through (c)
				describe which emissions units can be averaged together to comply with
				310
				CMR 7.19 and under what replicable and
				equivalent methods.
4. A bubble can not be used to comply with work practice
				requirements of either
				310 CMR
				7.18 or
				7.19.
5. For purposes of
				310 CMR
				7.00
Appendix
B(4), emission bubbles
				are only allowed for the purpose of compliance at a single facility or multiple
				facilities which are operated by or under the control of the same economic
				entity.
6. Nothing in
				310 CMR
				7.00
Appendix
B(4) relieves a
				facility from having to comply with other requirements of
				310 CMR
				7.00 as may be applicable.
7. For facilities that have bubbles that were approved by the
				Department under
				310 CMR
				7.18(2)(b)  and for which
				the application was received prior to May 25, 1988, the approved bubble
				conditions, recordkeeping and reporting requirements shall remain in force and
				no revision of said bubble approvals is required by
				310 CMR
				7.00:
Appendix B(4)
, unless and until
				the facility seeks to have the existing bubble approval modified. At that time,
				the request to modify the bubble shall be subject to
				310 CMR
				7.00:
Appendix B(4)
. However, with
				respect to those bubbles that were approved by the Department under
				310 CMR
				7.18(2)(b)  and for which
				the application was received prior to May 25, 1988, modification of said
				bubbles solely to incorporate a more stringent Reasonably Available Control
				Technology adopted pursuant to
				310 CMR
				7.18 shall not make the facility subject to
				310 CMR
				7.00:
Appendix B(4)
.
(c)
General Bubble Requirements
.
1. Compliance with emission requirements, through use of a
				bubble, will be approved by the Department providing that:
a. The bubble has been approved by the Department in accordance
				with
				310 CMR
				7.00
Appendix
B(4).
b. At no time may the use of a bubble result in a violation of
				a National Ambient Air Quality Standard for nitrogen dioxide (NO ), particulate
				matter or carbon monoxide (CO) as determined by modelling.
c. At no time may the use of a bubble result in total VOC or NO
				emissions at a facility exceeding the applicable emission limitations in
				310 CMR
				7.18 or
				7.19
				averaged over a 24 hour period (except as provided for in
				310 CMR
				7.00
Appendix
B(4)(e)5.) for emission
				units in the bubble.
d. At no time may use of a bubble result in total VOC emissions
				exceeding a monthly facility emission baseline as calculated under
				310 CMR
				7.00:
Appendix
B(4)(e)2. At no time
				may use of a bubble with an averaging time longer than 24 hours result in NO
				emissions exceeding the daily cap as calculated in
				310 CMR
				7.00 Appendix B(4)(e)5.
e. Organic compounds, that are specifically excluded from the
				definition of VOC in
				310 CMR
				7.00, shall not be used to emission average.
f. At no time may use of a bubble under
				310 CMR
				7.00
Appendix
B(4) be used to meet
				the requirements of, or result in an increase in emissions for any emission
				unit above a New Source Performance Standard (NSPS), National Emission Standard
				for Hazardous Air Pollutants (NESHAP), the requirement for Best Available
				Control Technology (BACT), the requirement for Lowest Achievable Emission Rate
				(LAER) or Maximum Achievable Control Technology (MACT).
g. Emission reductions used in a bubble must be real in that
				the emission reductions must be from an emission unit which actually operated
				within the two year time period immediately preceding the application for the
				bubble.
h. Emission reductions used in a bubble must be permanent and
				the amount and duration of the reduction must be documented.
i. Emission reductions used in the bubble must be quantifiable
				with a replicable method for calculating the amount of reduction, as well as, a
				replicable method for assessing compliance with the emission rates after the
				reduction has been made.
j. Emission limitations must be federally enforceable and will
				be documented in the facility's emission control plan approval issued by the
				Department.
(d)
Application for a Bubble
.
1. Application for approval of an emission bubble shall be made
				as part of the submittal to the Department of an emission control plan pursuant
				to either
				310 CMR
				7.18(20)  or
				310
				CMR 7.19(3)  and shall
				include:
a. Identification of all emission units to be included in the
				bubble, and
b. Demonstration of how compliance will be met and maintained,
				and
c. Demonstration that all emission units included in the bubble
				are operated by or under the control of the same economic entity, and
d. Demonstration that the bubble will not increase emissions of
				an emission unit included in the bubble above the following standards as
				applicable:
i. A Best Available Control Technology (BACT) determination
				pursuant to
				310 CMR
				7.02(3), or
				40 CFR
				52.21, or
ii. A Lowest Achievable Emission Rate (LAER) determination
				pursuant to
				310 CMR
				7.00
Appendix
A, or
iii. A Federal New Source Performance Standard (NSPS [40 CFR
				Part 60]), or iv. A National Emission Standard for Hazardous Air Pollutants
				(NESHAP [ 40 CFR Part 61 ]), or
v. A Maximum Achievable Control Technology (MACT) determination
				pursuant to 40 CFR Part 63 .
e. For bubbles to comply with
				310
				CMR 7.19, evidence that the bubble will not
				cause an exceedance of the National Ambient Air Quality Standard for nitrogen
				dioxide (NO2) or carbon monoxide (CO).
f. For facilities wishing to bubble either VOC or NO emissions,
				documentation that the bubble will result in total VOC or
				NOx emissions, respectively, in compliance with the
				applicable emission limitation on a 24-hour basis as calculated under
				310 CMR
				7.00:
Appendix
B(4)(e)1. Exceptions
				to this averaging period may be granted by the Department as provided for in
				310 CMR
				7.00
Appendix
B(4)(e)5. For VOC
				bubbles, the person must document that the bubble will result in total VOC
				emissions below the emissions baseline on a monthly basis.
g. Documentation that emission reductions used in the bubble
				are real, quantifiable, permanent and federally enforceable.
2. After approval of
				310 CMR
				7.00 Appendix B(4) by EPA into the Massachusetts SIP,
				certain applications to bubble will still require EPA approval. Persons wishing
				to include mobile and area sources in a bubble are required to have the
				approval of the EPA prior to inclusion of those sources in the bubble.
3. Sources subject to enforcement action require the approval
				of EPA prior to use of a bubble to comply with
				310 CMR
				7.18 or
				7.19.
				If EPA does not object to the use of a bubble by any facility subject to
				enforcement action during the public comment period, then this will be taken as
				EPA approval to bubble.
(e)
Bubble Calculation
.
1. In order to comply with a bubble for VOC or NO, the combined
				actual emissions (AcE) over a daily (or other period as allowed by
				310 CMR
				7.00
Appendix
B(4)(e)5.) from all
				emission units in the bubble must be less than or equal to the allowable
				emission total (AlE) as determined by the following equations:
AcE = (Ac1 x B1)
				+ (Ac2 x B2) + (...) +
				(Acn x Bn)
AlE = (A1 x B1) +
				(A2 x B2) + (...) +
				(An x Bn) + ERC
Where:
AcE = the combined actual emissions from the facility in pounds
				per day.
AlE = the allowable emissions from the facility in pounds per
				day.
Ac1,
				Ac2,...Acn = the actual emission
				rate of each emission unit
(e.g.
for VOC; pounds of VOC per
				gallon of solids applied; for NOx, pounds of
				NOx per million Btu heat input) included in the bubble.
				Where a single CEMS is used to determine the emission rate of more than one
				emission unit, this will be a combined emission rate.
A1,
				A2,...An = the most stringent
				applicable emission limitation for each unit of production
(e.g.
for vOC; pounds of VOC per gallon of solids applied; and for
				NOx, pounds of NOx per million
				Btu heat input).
B1,B2,...Bn
				= the actual number of production units processed each day (e.g. for VOC:
				gallons of solids applied; for NOx; million Btu heat
				input per day).
ERC = the daily quantity of federally enforceable emission
				reduction credits (ERCs) from sources of either VOC or
				NOx emissions, certified by the Department under
				310 CMR
				7.00 Appendix B(3).
2. In addition to
				310 CMR
				7.00
Appendix
B(4)(e)1., in order to
				comply with a bubble for VOC the total combined actual emissions, over a
				calendar month, from all emission units in the bubble must be less than the
				baseline emissions determined by the following equation:
BE = (ER x CU x H) + (ERC x D)
Where:
BE = the baseline emissions from the facility in pounds per
				month. Baseline emissions for a bubble is the sum of the baseline emissions for
				all emission units in the bubble.
ER = Emission rate specified in terms of mass emission per unit
				of production or throughput (
e.g.
pounds of VOC per gallon of
				solids applied) representative of the 1990 emission rate, the future allowable
				emission rate as determined by the SIP,
				310 CMR
				7.18 or other federally enforceable emission
				rate, whichever is lowest.
CU = Average hourly capacity utilization (e.g. gallons of
				solids applied per hour).
H = average number of hours of operation per month.
D = Number of days per month that the ERC generating facility
				operates.
ERC = the daily quantity of federally enforceable ERCs from
				emission units emitting VOC certified by the Department under
				310 CMR
				7.00 Appendix B(3).
3. In order to determine the average hourly Capacity
				Utilization (CU) and average number of hours of operation per month (H) in
				310 CMR
				7.00
Appendix
B(4)(e)2., the facility
				shall average the CU rate and monthly H over the two calendar year period
				immediately preceding the date of the application for a bubble. Documentation
				in sufficient detail to enable Department staff to replicate the determination
				of CU and H must be submitted with the application.
4. Should it be determined that the two year historical
				production information required to determine CU and H is not representative of
				normal historical production for the facility, the applicant may submit
				suitable and sufficient documentation to demonstrate to the Department that two
				alternative consecutive years within the five year period preceding the
				application should be used to determine CU and H for the facility. The
				Department shall have final approval of the use of alternative historical
				production information.
5. Should it be determined for a NOx
				bubble that a 24 hour averaging period is insufficient to respond to the
				production demands at a specific facility, a facility operator or controller
				may submit suitable and sufficient documentation to demonstrate to the
				Department that an averaging period of up to and including 30 days for the
				bubble is more feasible given the production process and product requirements
				of the specific facility. Applications for a bubble with an averaging period of
				greater than 24 hours shall include a commitment from the facility to maintain
				a daily "cap" on maximum total emissions. The cap shall be determined according
				to the following equation:
Cap = (A1 x EI2 x
				H) + (A2  X EI 2 X H) +
				(....)
+ (AN  x EIn  x
				H) + ERC
Where:
Cap = The emission cap for the facility in pounds per day. The
				emission cap for a bubble is the sum of the emission caps for all emission
				units in the bubble.
A 1, A
				2,...AN  = The emission rate for
				each emission unit specified in terms of mass emission per unit of production
				(e.g. pounds of NOx per million Btu) representative of
				the 1990 emission rate, the future allowable emission rate as determined by the
				SIP,
				310
				CMR 7.19 or other federally enforceable
				emission rate, whichever is lowest.
EI1, EI2,
				...EIn = The maximum energy input capacity for each
				emission unit in million Btu per hour.
H = 24 hours per day.
ERC = the daily quantity of federally enforceable ERCs from
				emission units emitting NOx certified by the Department
				under
				310 CMR
				7.00 Appendix B(3).
(f)
Department Review of a Request to
				Bubble
. The following conditions apply to bubble
				applications;
1. The Department shall review each application for a bubble in
				a complete submittal of an emission control plan pursuant to
				310 CMR
				7.18(20)  and
				7.19(3).
2. An approved emissions bubble shall be in effect for a period
				of no more than five years from the date of Department final approval. However,
				for facilities subject to
				310 CMR
				7.00 Appendix C, with five year terms or less, the
				expiration date of the bubble shall be identical with the expiration date of
				the operating permit. At least nine months prior to the expiration of the
				bubble, the facility must reapply for permission to bubble. The Department
				shall review the bubble for compliance and may either renew the bubble or allow
				the bubble to expire. Should the bubble expire, the facility that held the
				bubble shall return to complying with applicable regulations based on
				continuous compliance for each regulated emission unit which was formerly in
				the bubble. Bubbles that do not already contain an emissions cap will not be
				required to take one as part of the renewal. For facilities with existing caps,
				new caps will not be recalculated.
3. The emission limitations in a bubble approval may be
				specific for each emission unit or may be expressed as a multi-emission unit
				average.
(g)
Compliance Determination
.
1. The Department shall determine compliance with the terms and
				conditions of the bubble through any means the Department judges to be adequate
				based upon the criteria listed below:
a. The provisions and emission limitations of any approved
				bubble shall be incorporated in the approval of the emission control plan
				submitted under
				310 CMR
				7.18(20)  or
				7.19(3).
b. Said emission control plan approval shall include, but not
				be limited to source specific emission limitation (
e.g.
pounds
				of VOC per gallon of solids applied; pounds of NOx per
				million Btu heat input) and emission cap (
e.g.
pounds of VOC
				per month; pounds of NOx per day) limits where
				applicable, record keeping requirements and test methods used to determine
				compliance.
c. Compliance with this approval shall be determined utilizing
				Department and EPA approved test methods and/or continuous emissions monitoring
				system, including but not limited to those methods referenced in
				310 CMR 7.13,
				7.14,
				7.18(2),
				7.19(13)
				 as appropriate for the facility and
				emissions units.
d. In order for a facility to demonstrate compliance with the
				emission limitations of a bubble it is required that records shall be
				maintained. Records shall be kept on a daily basis for each emissions unit in
				the bubble and shall be specific enough to demonstrate compliance with the
				emission limits of the bubble for the facility as a whole. Record keeping shall
				include, but not be limited to:
i. Process information and identification of equipment;
ii. For surface coating operations, coating formulation
				information including the name of the coating, the color of the coating, the
				identification number for the coating as it relates to coating consumption
				information, the density of the coating, the total VOC contained in the coating
				by weight percent, the solids content of the coating as a volume percent, the
				percent by weight of exempt solvents as identified in the definition of VOC at
				310 CMR
				7.00 and the formulation of the diluents used or mixed
				in the coating (pounds VOC per gallon of diluent);
iii. For surface coating, daily coating/diluent consumption
				rate for each emissions unit in the bubble. Daily total of solvents used in
				clean-up.
iv. For bubbles to comply with
				310
				CMR 7.19, comply with the recordkeeping
				requirements contained in
				310
				CMR 7.19(13)(d).
v. Daily emissions or emission rates calculated in a manner to
				be consistent with the compliance averaging period approved for the
				facility.
vi. Any other information determined to be necessary by the
				Department to demonstrate compliance.
2. Records shall be kept at the facility and maintained for a
				five-year period. The records must be accessible for review by the Department
				or EPA.
3. Persons holding an approved bubble plan must submit to the
				appropriate regional office of the Department quarterly (January - March, April
				- June, July - September, October - December) summary calculations based on
				daily emission calculations of 1) actual emissions, 2) allowable emissions, 3)
				whether actual emission exceeded allowable emissions over the reporting period,
				and 4) whether the facility was in compliance with the emission baseline cap
				for each day/month. Said submittal must be made 30 days after the end of the
				quarter for which the report is being prepared.
4. Any exceedance of the bubble emissions limitations must be
				recorded and reported to include the date of exceedance and quantity of excess
				emissions and reported to the Department by the 30th
				of the month following the close of the calendar quarter in which the
				exceedance occurred.
(5)
Enforcement
.
(a) The Department shall enforce the provisions of
				310 CMR
				7.00:
Appendix B
under applicable law
				and regulations.
(b) For purposes of
				310 CMR
				7.00:
Appendix B
(3), a violation of
				the emission limitation provisions of any permit issued or modified to reflect
				the creation of an emission reduction credit shall be enforced at the point of
				ERC creation.
(6)
Public Participation
. The
				following conditions apply to applications under
				310 CMR
				7.00:
Appendix
B:
(a) For persons applying under
				310 CMR
				7.00:
Appendix
B(4) to comply with
				either
				310 CMR
				7.18 or
				7.19,
				the ECP approved by the Department must be approved by EPA as a SIP revision if
				EPA has not approved
				310 CMR
				7.00
Appendix
B(4) as a part of the
				Massachusetts SIP.
(b) For persons applying for Emission Reduction Credit under
				310 CMR
				7.00:
Appendix
B(3), the approval
				issued by the Department must be approved by EPA as a SIP revision if EPA has
				not approved
				310 CMR
				7.00:
Appendix
B(3) as a part of the
				Massachusetts SIP.
(c) The Department shall notify all applicants as to any
				administrative or technical deficiencies in the application or information
				submitted.
(d) For each Emission Reduction Credit (ERC) application
				submitted pursuant to
				310 CMR
				7.00:
Appendix B
(3) or (4), the
				Department shall:
1. Make a proposed decision as to whether the application
				should be approved, approved with conditions, or a decision that the
				application should be disapproved.
2. Provide a 30-day comment period for submittal of public
				comment.
3. Post on a public website identified by the Department (which
				may be the Department's own website), for the duration of the public comment
				period, the following:
a. A notice of availability of the Department's proposed
				decision to approve or deny the ERC application and information on how to
				submit public comment;
b. The Department's proposed decision to approve or deny the
				ERC application; and c. Information on how to access the administrative record
				for the Department's proposed decision on whether to approve or deny the ERC
				application.
4. Send a copy of the notice required under
				310 CMR
				7.00:
Appendix B
(6)(d)3.a. to
				EPA.
5. Consider all public comments in making a final decision
				whether or not to approve the application. The Department shall make all
				comments available for public inspection in the same location(s) where the
				Department made available information relating to the proposed approval under
				310 CMR
				7.00:
Appendix
B(3) or (4).
6. Make a final decision as to whether the plan approval
				application should be approved, approved with conditions, or
				disapproved.
7. Notify the applicant and the EPA in writing of the final
				decision and make such notification available for public inspection at the same
				location where the Department made available information and public comments
				relating to the source.
(7)
Greenhouse Gas Credit Banking and
				Trading
.
(a)
Introduction and statement of
				purpose
. The goal of the program set forth in
				310 CMR
				7.00:
Appendix B
(7) is to reduce,
				avoid or sequester emissions of greenhouse gas (GHG) in order for affected
				facilities as defined in
				310 CMR
				7.29 ("affected facilities") to use GHG
				Credits for compliance with the applicable provisions of
				310 CMR
				7.29(5)(a)5. (b)
Definitions
. The definitions in
				310 CMR
				7.00 apply to
				310 CMR
				7.00:
Appendix B
(7). However, the
				following terms have the following meanings when they appear in
				310 CMR
				7.00:
Appendix B
(7). Where a term
				defined in
				310 CMR
				7.00 definitions also appears in
				310 CMR
				7.00:
Appendix B
(7)(b), the
				definition in
				310 CMR
				7.00:
Appendix B
(7)(b)
				controls.
Additional
means GHG emission
				reductions, avoided emissions, or sequestered emissions that are not required
				by local, state or federal law or regulation, or as part of a local, state or
				federal permit, plan, or plan approval, agreement, administrative or judicial
				order, or as part of an enforcement action (including such laws, regulations,
				permits, plans, plan approvals, agreements, orders or actions taken to reduce
				other pollutants) at the time of submittal of a certification application. A
				requirement to obtain a permit or plan approval under local, state, or federal
				law solely for the purpose of constructing, installing, or operating a
				voluntary emission reduction, avoided emission, or sequestered emission project
				shall not be considered when determining whether or not such project is
				additional.
Afforestation
means the conversion of
				land that has been in a non-forested state for at least the ten years prior to
				the filing of an initial application for GHG Credit certification to a forested
				state.
Avoided Emissions
means emissions of a
				GHG that do not occur and which would have otherwise occurred if not for
				specific projects undertaken.
Cancel, Cancelled, or Cancellation
means transferring an allowance or credit to a cancellation account, or
				otherwise terminating such allowance or credit in a manner consistent with its
				program of origin, to prevent subsequent use in a regulatory or voluntary
				program, or use for any purpose other than compliance with the CO emissions
				standards of
				310 CMR
				7.29.
Cancellation Account
means the account
				established in a Kyoto Protocol signatory country for purposes of canceling
				allowances. Such account will not be established by the Department.
Carbon Dioxide Equivalent or CO
means
				the weight of a quantity of a GHG multiplied by its Global Warming
				Potential.
Certification
means the process of
				reviewing and conditionally approving a quantity of emission reductions,
				avoided emissions or sequestered emissions as GHG Credits.
Clean Development Mechanism
, or
CDM
, means a mechanism, created under the Kyoto
				Protocol, that allows for the creation and use of CDM CERs to demonstrate
				compliance with emissions targets established by the Kyoto Protocol.
Clean Development Mechanism Certified Emissions
				Reduction
, or
CDM CER
, means a greenhouse
				gas emissions offset currency created for projects that reduce, avoid, or
				sequester emissions of greenhouse gases in developing countries. CDM CERs are
				issued by the Executive Board of the Clean Development Mechanism, and are
				usable for meeting country-specific greenhouse gas emissions targets
				established by the Kyoto Protocol.
Coastal Waters
means the waters within
				the 12-mile limit pursuant to the Tariff Act of 1930
				19
				USC §
									1401.
Energy Conservation Measure
means an
				action that reduces demand for electricity. An Energy Conservation Measure
				means the installation or implementation of one or more of the following
				measures:
(a) the design, acquisition, and installation of projects which
				result in energy savings, or (b) the modification of maintenance and operating
				procedures in a building or facility which result in energy savings, or
(c) the installation, replacement, or modification of
				equipment, fixtures, or materials in a building or facility which reduce energy
				consumption, and include, but are not limited to, modifications to windows and
				doors; caulking and weather-stripping, insulation; automatic energy control
				systems; hot water systems; equipment required to operate steam, hydraulic, and
				ventilation systems; plant and distribution system modifications including
				replacement of burners, furnaces or boilers; devices for modifying fuel
				openings; electrical or mechanical furnace ignition stems; utility plant system
				conversions; replacement or modification of lighting fixtures; and energy
				recovery systems.
Energy Conservation Measures do not include reductions in
				labor, load shifting, or measures that do not reduce energy use
				directly.
Enforceable
means enforceable by the
				Department.
European Union Emissions Trading
				Scheme
or
EU ETS
means a multi-country,
				multi-sector greenhouse gas emission trading scheme implemented in 2005 by the
				European Commission to control emissions of greenhouse gases.
European Union Emissions Trading Scheme Phase II
				Allowance
or
EU ETS Phase II Allowance
means an allowance that can be used during the second trading period of the EU
				ETS, which lasts from 2008-2012, and can be used to demonstrate compliance with
				emission reduction targets established by the European Commission.
GHG Credit
means a credit based on an
				amount of emission reductions, avoided emissions or sequestered emissions of a
				GHG. One GHG Credit has an assigned value of one ton of carbon dioxide
				equivalent. GHG Credits shall be expressed in whole tons. When certifying or
				verifying GHG Credits, the number of GHG Credits is rounded down for decimals
				less than 0.5 and rounded up for decimals of 0.5 or greater.
GHG Expendable Trust
means the trust
				established pursuant to
				801
				CMR 50.00 for the purpose of providing a separate
				segregated interest-bearing account for the receipt of payments made pursuant
				to
				310 CMR
				7.00:
Appendix B
(7)(d)5.
GHG Registry
means the database of
				Massachusetts GHG Credits that have been certified, verified, voided or
				used.
Global Warming Potential or GWP
means
				the ratio of the global heat trapping effect, direct and indirect, of one mass
				unit of a gas to that of the same mass unit of carbon dioxide over 100 years.
				In implementing
				310 CMR
				7.00:
Appendix B
(7), the Department
				shall utilize the GHG GWPs, as published by the Intergovernmental Panel on
				Climate Change (IPCC), at the time of submittal of a certification
				application.
Greenhouse Gas or GHG
means any of the
				gases for which a GWP is listed by the Intergovernmental Panel on Climate
				Change.
Kyoto Protocol
means an international
				commitment, adopted in Kyoto on December 11 1997, to stabilize greenhouse gas
				emissions.
Leakage
means displacement of reduced,
				avoided, or sequestered GHG emissions to an area or location outside of the
				boundary of a project which reduced, avoided or sequestered the GHG
				emissions.
Permanent
means that GHG emission
				reductions, avoided emissions, or sequestered emissions implemented for the
				purpose of generating GHG Credits must be assured for the life of the
				corresponding GHG Credits.
Phase II of the EU ETS
means the
				second trading period of the EU ETS, which lasts from 20082012.
Real
means actual.
Renewable Energy Generation Measure
means an energy supply-side measure using sources that are essentially
				inexhaustible or regenerative. Renewable sources of energy include, but are not
				limited to, wood, geothermal, wind, photovoltaic and solar thermal
				energy.
Sequestered Emissions
means carbon
				that has successfully been captured and securely stored that would have
				otherwise been emitted to or remained in the atmosphere.
Verifiable
means that emission
				reductions, avoided emissions or sequestered emissions can be determined
				through replicable (as defined in
				310 CMR
				7.00:
Appendix B
(2)) methods which
				are acceptable to the Department.
Verification
means the process of
				determining the extent to which certified GHG emission reductions, avoided
				emissions or sequestered emissions actually occurred.
(c)
Applicability
.
1. Entry into this GHG Banking and Trading Program is
				voluntary.
2.
				310 CMR
				7.00:
Appendix B
(7) applies to
				affected facilities and any other person
applying for certification or verification of GHG
				Credits.
3. GHG Credits certified or verified under
				310 CMR
				7.00:
Appendix B
(7) may only be used
				to satisfy the requirements of
				310 CMR
				7.29(5)(a)5., except as
				provided in 310 CMR 7:00:
Appendix B
(7)(h).
4. Applications for certification or verification of GHG
				Credits pursuant to
				310 CMR
				7.00:
Appendix B
(7)(e) may be
				submitted by any person.
5. Applications to verify and use EU ETS Phase II Allowances
				and CDM CERs pursuant to
				310 CMR
				7.00:
Appendix B
(7)(i) may be
				submitted only by affected facilities.
(d)
Creation of GHG Credits
.
1. GHG Credits may be created by projects which reduce
				emissions, avoid emissions, or sequester emissions. Examples include, but are
				not limited to: landfill gas combustion; sulfur hexafluoride
				(SF6) capture; afforestation; natural gas, oil and
				propane end-use efficiency; methane capture from farming operations;
				stationary, area and mobile source projects; renewable energy projects; and
				energy conservation measures.
2. The following are not eligible for certification as GHG
				Credits: nuclear power generation, under-water and under-ground sequestration,
				and over-compliance with the cap and rate limitations in
				310 CMR
				7.29 by affected facilities.
3. Except as allowed pursuant to
				310 CMR
				7.00:
Appendix B
(7)(d)4, emission
				reduction, avoided emission or sequestered emission projects shall be located
				within the geographic limits of:
a. Connecticut, Delaware, Maine, Massachusetts, Maryland, New
				Hampshire, New Jersey, New York, Rhode Island, Vermont, or the coastal waters
				thereof; or, b. The United States, or the coastal waters thereof, not including
				those regions specified in
				310 CMR
				7.00:
Appendix B
(7)(d)3.a.
4.
Offset Trigger Price
.
a. The Department shall establish an offset trigger price for
				2006, 2007, and 2008. The offset trigger price for calendar year 2006 shall be
				$6.50 per ton of CO. For each calendar year after 2006, until such time as the
				offset trigger price is exceeded, the Department shall publish the new offset
				trigger price by January 31st, which shall be equal
				to the previous year's offset trigger price adjusted up or down according to
				the previous year's Consumer Price Index.
b. By February 15, 2007, the Department shall determine whether
				the offset trigger price for the previous calendar year was exceeded, or
				whether there are insufficient GHG Credits available for purchase at or below
				the offset trigger price for the previous calendar year in the geographic
				region specified in
				310 CMR
				7.00:
Appendix B
(7)(d)3. In
				determining whether the offset trigger price for the previous calendar year was
				exceeded, the Department may consider the average calendar year price of GHG
				Credits or of applied-for GHG Credits for the previous year, or any other
				relevant information.
c. Notwithstanding
				310 CMR
				7.00:
Appendix B
(7)(d)3., if the
				Department determines by February 15, 2007 that the offset trigger price for
				the previous calendar year was exceeded, or that there are insufficient GHG
				Credits available for purchase at or below the offset trigger price for the
				previous calendar year in the geographic region specified in
				310 CMR
				7.00:
Appendix B
(7)(d)3., then, for
				all subsequent years, applicants may apply for certification and verification
				of projects that occur anywhere on Earth, and certification and verification of
				greenhouse gas allowances and credits from any allowance or credit
				system.
d. By June 1, 2008, the Department shall determine whether
				there are insufficient GHG Credits available for purchase at or below the
				offset trigger price in the geographic regions specified in
				310 CMR
				7.00:
Appendix B
(7)(d)3. In
				determining whether there are insufficient GHG Credits available for purchase
				at or below the offset trigger price, the Department may consider the average
				price of GHG Credits or applied-for GHG Credits, or any other relevant
				information. Notwithstanding
				310 CMR
				7.00:
Appendix B
(7)(d)3., if the
				Department determines by June 1, 2008 that there are insufficient GHG Credits
				available for purchase at or below the offset trigger price in the geographic
				regions specified in
				310 CMR
				7.00:
Appendix B
(7)(d)3., then,
				pursuant to
				310 CMR
				7.00:
Appendix B
(7)(i), affected
				facilities may apply to verify and use EU ETS Phase II Allowances and CDM CERs
				that are eligible for use under Phase II of the EU ETS.
5.
Trust Trigger Price
.
a. The Department shall establish a trust trigger price for
				2006, 2007, and 2008. The trust trigger price for calendar year 2006 shall be
				$10.00 per ton of CO. For each calendar year after 2006, the Department shall
				publish the new trust trigger price by January 31st,
				which shall be equal to the previous year's trust trigger price adjusted up or
				down according to the previous year's Consumer Price Index plus 2%.
b. By February 15, 2007, the Department shall determine whether
				the trust trigger price for the previous calendar year was exceeded. In making
				this determination, the Department may consider the average calendar year price
				of GHG Credits, of applied-for GHG Credits, or of projects funded or credits or
				allowances purchased by the GHG Expendable Trust for the previous year, or any
				other relevant information.
c. Notwithstanding
				310 CMR
				7.00:
Appendix B
(7)(d)3. and 4., if
				the Department determines by February 15, 2007 that the trust trigger price for
				the previous calendar year was exceeded, then, to demonstrate compliance with
				310 CMR
				7.29(5)(a)5., affected
				facilities may pay into the GHG Expendable Trust at the price established
				pursuant to
				310 CMR
				7.00:
Appendix B
(7)(d)5.a. to offset
				all or a portion of emissions above the historical actual emissions or excess
				emissions pursuant to
				310 CMR
				7.29(5)(a)5.c. and d., so
				that a combination of GHG Credits and payments into the GHG Expendable Trust
				equals emissions above historical actual emissions plus excess
				emissions.
6. Notwithstanding
				310 CMR
				7.00:
Appendix B
(7)(d)3., 4., and 5.,
				if, at any time prior to September 1, 2009, the Commissioner determines that
				the price of GHG Credits or of applied-for GHG Credits substantially exceeds
				either of the price thresholds established in
				310 CMR
				7.00:
Appendix B
(7)(d)4. or 5., or if
				insufficient GHG Credits are available, then the Commissioner may, after public
				notice in the Environmental Monitor, and an opportunity for public comment:
				expand the geographic scope; allow payments into the GHG Expendable Trust at
				the rate set forth in
				310 CMR
				7.00:
Appendix B
(7)(d)5; or reduce
				the annual average CO tonnage requirements for certification of projects under
				310 CMR
				7.00:
Appendix B
(7)(e)3. If the
				geographic scope is expanded pursuant to
				310 CMR
				7.00:
Appendix B
(7)(d)6., then
				applicants for projects that occur outside of the geographic limits of the
				United States or the coastal waters thereof shall follow the procedures in
				310 CMR
				7.00:
Appendix B
(7)(i). This
				provision shall have no effect on and after September 1, 2009.
7. In order to be certified or verified as GHG Credits pursuant
				to
				310 CMR
				7.00:
Appendix B
(7), emission
				reductions, avoided emissions, or sequestered emissions shall be real,
				additional, verifiable, permanent, and enforceable and occur on or after
				January 1, 2006.
8. In the case of sequestered emissions, in order for a GHG
				Credit to be permanent, the owner shall, at a minimum, place the land within
				the sequestration project boundary under a legally binding instrument,
				acceptable to the Department, such that the sequestered emissions remain
				captured and securely stored in perpetuity.
9. In order to be certified or verified as GHG Credits pursuant
				to
				310 CMR
				7.00:
Appendix B
(7), emission
				reductions, avoided emissions, or sequestered emissions shall be generated only
				by projects built and generating energy (in the case of certain avoided
				emissions), or built and in use, or installed and operational (in the case of
				emission reductions or sequestered emissions) on or after January 1,
				2006.
10. Except as provided in
				310 CMR
				7.00:
Appendix B
(7)(h), GHG Credits
				may be created for emissions reduced, avoided, or sequestered up to and
				including December 31, 2008, provided administratively complete applications
				for certification and verification are submitted to the Department no later
				than March 31, 2009. The Department shall have sole discretion to determine
				whether applications for certification and verification of GHG Credits are
				administratively complete.
(e)
Procedure For Certification and Verification of
				Emission Reductions, Avoided Emissions, or Sequestered Emissions that Occur
				Within the Geographic Limits of the United States and the Coastal Waters
				Thereof as GHG Credits
.
1. An application for certification of GHG Credits may be
				submitted to the Department in advance of the time when the emission reduction,
				avoided emission, or sequestered emission actually occurs (prospective
				certification) or after the emission reduction, avoided emission, or
				sequestered emission has actually occurred (retrospective
				certification).
2. In order for GHG Credits to be eligible for verification, an
				application for verification of GHG Credits shall be submitted to the
				Department within two calendar years after the end of the calendar year in
				which the emission reduction, avoided emission, or sequestered emission
				actually occurred. Applicants may apply for verification a maximum of two times
				per calendar year per approved certification.
3. For project-based emission reductions, avoided emissions, or
				sequestered emissions located within the geographic scope set forth in
				310 CMR
				7.00:
Appendix B
(7)(d)3.a., only
				those projects which generate an annual average over the period applied for of
				5,000 or more tons CO2e, as calculated under
				310 CMR
				7.00:
Appendix B
(7)(d), are eligible
				to be certified as GHG Credits. For project-based emission reductions, avoided
				emissions, or sequestered emissions located within the geographic scope set
				forth in
				310 CMR
				7.00:
Appendix B
(7)(d)3.b., only
				those projects which generate an annual average over the period applied for of
				20,000 or more tons CO2e, as calculated under
				310 CMR
				7.00:
Appendix B
(7)(d), are eligible
				to be certified as GHG Credits.
4. Application Procedures for projects.
a. Applications are required for certification and verification
				of GHG Credits from emissions reduction, avoided emission and sequestration
				projects.
b. The GHG Credit application shall be submitted on a form
				supplied by the Department and shall include but not be limited to: a complete
				description of the project; a quantification protocol that details the
				calculation method for the quantification of pre- and post-project emissions
				for emission reductions, quantity of avoided emissions, or quantity of
				sequestered emissions; and a proposed method for determining, monitoring and
				assuring compliance.
c. GHG Credit applications shall express emission reductions,
				avoided emissions, and or sequestered emissions in whole tons of
				CO2e. When certifying or verifying GHG Credits, the
				number of GHG Credits is rounded down for decimals less than 0.5 and rounded up
				for decimals of 0.5 or greater.
d. GHG Credit applications shall contain sufficient information
				to allow the Department to evaluate each emission reduction, avoided emission
				or sequestered emission consistent with the requirements of
				310 CMR
				7.00:
Appendix B
(7). Where
				applicable, the applicant shall specify the best management practice used to
				determine an emissions baseline.
e. GHG Credit applications shall be submitted by and bear the
				signature of a responsible official having the legal authority to bind the
				applicant.
f. GHG Credit applications shall comply with provisions of
				310 CMR 4.00
et
				seq
. for fees and permit procedures as applicable.
g. Concurrent participation in other registries and
				certification programs.
i. If an applicant has submitted information relative to the
				emission reductions, avoided emissions, or sequestered emissions for which the
				applicant is seeking certification under
				310 CMR
				7.00:
Appendix B
(7) to any other
				certification system, registry or inventory, then the applicant shall submit a
				copy of such information with its application for certification of GHG Credit
				in Massachusetts. The applicant shall state the status of its submittal to such
				other certification system, registry or inventory.
ii. If an applicant for GHG Credit fails to comply with
				310 CMR
				7.00:
Appendix B
(7)(e)4.g.i., then
				the Department may deny any GHG Credit applied for and void any GHG Credits
				that may have been approved. GHG Credits shall be voided in cases where the GHG
				Credit is found to have been used for a purpose other than those specified in
				310 CMR
				7.00:
Appendix B
(7).
h. GHG Credit certification and verification applications shall
				contain a description of potential project leakage, and describe how such
				leakage was or will be monitored and avoided. The Department shall void GHG
				Credits to the extent of any leakage that has been identified.
i. GHG Credit applications shall document the negotiated or
				anticipated price per ton of GHG Credit applied for.
6. Conditions of GHG Credit Certification and Verification
				Approvals.
a. The Department may approve, approve with conditions, or deny
				GHG Credit applications.
b. The Department may require applicants to implement
				compliance assurance methods such as testing, monitoring, recordkeeping and
				reporting as part of the GHG Credit certification and verification
				approval.
c. The Department may consider scientific uncertainty and the
				extent to which a project may be harmful to the environment or public health
				when certifying or verifying GHG Credits.
(f) Public participation procedures for certification and
				verification applications pursuant to 310 CMR 7:00:
Appendix
				B
(7).
1. The Department shall publish, at the applicant's expense, a
				notice of public comment on a proposed approval, conditional approval, or
				disapproval. The Department will allow a 30-day public comment period following
				publication of the notice, and may hold a public hearing. After the close of
				the public comment period, the Department will issue a final decision.
2.
				310 CMR
				7.00:
Appendix B
(7)(f) shall apply to
				applications for certification and
verification pursuant to
				310 CMR
				7.00:
Appendix B
(7), instead of the
				procedures under
				310 CMR
				7.00:
Appendix B
(6).
3. The public participation procedures of
				310 CMR
				7.00:
Appendix B
(7)(f) and
				310 CMR
				7.00:
Appendix B
(6) shall not apply
				to applications for use pursuant to
				310 CMR
				7.00:
Appendix B
(7)(I)5.
(g)
Use and Purchase of GHG Credits
.
1. To the extent that affected facilities use GHG Credits to
				comply with
				310 CMR
				7.29(5)(a)5., only GHG
				Credits verified under
				310 CMR
				7.00:
Appendix B
(7) may be
				used.
2. GHG Credits that have been used to satisfy any GHG liability
				or requirement other than
				310 CMR
				7.29, with the exception of requirements to
				disclose environmental and other attributes of electricity generation, shall
				not be eligible for use to comply with the requirements of
				310 CMR
				7.29.
3. Any person who purchases a GHG Credit from any source shall
				report the price paid per GHG Credit to the Department within 30 days of
				purchase.
5. Nothing in
				310 CMR
				7.00:
Appendix B
(7) or
				310 CMR
				7.29(5)(a)5. shall be
				construed to limit the authority of the Department to terminate, void, or limit
				GHG Credits that have been certified or verified.
6. If the Department determines that any emission reductions,
				avoided emissions, or sequestered emissions used to generate GHG Credits are
				not real, additional, verifiable, permanent, or enforceable as defined in
				310 CMR
				7.00:
Appendix B
(7)(b), such GHG
				Credits shall become void.
7. Any affected facility using voided GHG Credits shall replace
				the voided GHG Credits with an equivalent amount of valid GHG Credits and shall
				demonstrate compliance with this provision within one year of the date that the
				Department determines that such GHG Credits are void.
8. Violations of the requirements, for purposes of
				310 CMR
				7.00:
Appendix B
(7), may be enforced
				against the affected facility, any person who applied for certification or
				verification of GHG Credits, or any combination thereof. Nothing in
				310 CMR
				7.00:
Appendix B
(7) shall limit the
				ability of the Department to take enforcement action for violations of
				310 CMR
				7.29 or
				310 CMR
				7.00:
Appendix B
(7).
(h)
Exchange of GHG Credits for CO Budget Trading
				Program CO Allowances
.
1.
Eligibility
. GHG Credits shall be
				eligible for exchange with CO Budget Trading Program CO2
				Allowances provided:
a. The project from which the GHG Credits were derived is not
				an offset project type listed under
				310 CMR
				7.70(10)(c)1.a.
b. The GHG Credits were not created from allowances or credits
				from another carbon constraining program.
c. An administratively complete application for certification
				of GHG Credits was submitted to the Department no later than January 25, 2008.
				The Department shall have sole discretion to determine whether an application
				for certification of GHG Credits is administratively complete.
2.
Verification Deadline
. GHG Credits
				may be created for emissions reduced, avoided, or sequestered up to and
				including December 31, 2012, provided:
a. The GHG Credits meet the requirements of
				310 CMR
				7.00:
Appendix B
(7)(h)1.; and
b. An administratively complete application for verification is
				submitted to the Department no later than March 31, 2013. The Department shall
				have sole discretion to determine whether an application for verification of
				GHG Credits is administratively complete.
3.
Exchange
.
a. At any time after January 1, 2009 and prior to December 1,
				2013, any person may apply to the Department for CO Budget Trading Program CO
				Allowances in exchange for GHG Credits that meet the requirements of
				310 CMR
				7.00:
Appendix B
(7)(h)1. and 2. and
				which have been verified by the Department pursuant to
				310 CMR
				7.00:
Appendix B
(7)(e) and
				(f).
b. The Department shall exchange one CO Budget Trading Program
				CO allowance set aside pursuant to
				310 CMR
				7.70(5)(c)1.a. for every two
				GHG Credits provided to the Department pursuant to
				310 CMR
				7.00:
Appendix B
(7)(h)3.a.
c. The Department shall retire all GHG Credits exchanged for CO
				Budget Trading Program CO Allowances.
(i)
Procedures for Verification and Use of EU ETS
				Phase II Allowances and CDM CERs that are Eligible for Use Under Phase II of
				the EU ETS
.
1.
Eligibility
. Provided the
				geographic scope is expanded beyond the United States and its coastal waters
				pursuant to
				310 CMR
				7.00:
Appendix B
(7)(d)4. or 6., the
				following are eligible to be used to demonstrate compliance with the CO
				emissions standards of
				310 CMR
				7.29(5)(a)5. provided they
				have been verified.
a. EU ETS Phase II allowances; and,
b. CDM CERs provided that:
i. The CDM CERs are acceptable and valid for use in Phase II of
				the European Union Emissions Trading Scheme at the time of application for
				verification;
ii. The CDM CERs were not created for a project type listed
				under
				310 CMR
				7.00:
Appendix B
(7)(d)2.; and
iii. The CDM CERs are permanent.
2. For purposes of
				310 CMR
				7.00:
Appendix B
(7), EU ETS Phase II
				Allowances and CDM CERs that are eligible for use under Phase II of the EU ETS
				are presumed to be certified GHG emission reductions, avoided emissions, or
				sequestered emissions.
3. Applications for verification shall be submitted in a form
				determined by the Department and shall include but not be limited to:
a. Name of the allowances and credits;
b. Name of the regulatory scheme and issuing body of the
				allowances or credits;
c. Where applicable, the type of project for which the CDM CERs
				were created;
d. Serial numbers of the allowances and credits;
e. Total tons of CO2e represented by the
				allowances and credits;
f. Demonstration that the CDM CERs are acceptable and valid for
				use with Phase II of the EU ETS at the time of application for
				verification;
g. Identification of the owner of the allowances and
				credits;
h. Certification by the relevant regulatory body that the
				allowances and credits have been issued;
i. The price paid, or to be paid, for such allowances or
				credits.
4. Applications for verification shall be for not less than
				20,000 tons CO, or 18,144 metric tons CO2e.
5. Applications to use verified EU ETS Phase II Allowances and
				verified eligible CDM CERs for compliance with the CO emission standards in
				310 CMR
				7.29(5)(a)5., shall be
				submitted in a form determined by the Department and shall include but not be
				limited to a demonstration and certification that the allowances or credits
				were cancelled to prevent their use for any other regulatory or voluntary
				purposes other than for compliance with
				310 CMR
				7.29(5)(a)5.
a. This demonstration shall include but not be limited
				to:
i. Evidence that the allowance or credit was actually
				purchased;
ii. A legal document or other written statement issued by the
				relevant regulatory body that the allowances and credits have been cancelled;
				and,
iii. Evidence that the allowance or credit has not and cannot
				be used for any other regulatory or voluntary program.
b. The certification statement shall be signed under the pains
				and penalties of perjury by a Responsible Official of the affected facility and
				the entity that cancelled the allowance or credit (if not the affected
				facility).
6.
Application Deadlines
.
a. Administratively complete applications submitted pursuant to
				310 CMR
				7.00:
Appendix B
(7)(i)3. shall be
				submitted to the Department no later than March 31, 2009.
b. Administratively complete applications submitted pursuant to
				310 CMR
				7.00:
Appendix B
(7)(i)5. shall be
				submitted to the Department no later than June 30, 2009. c. The Department
				shall have sole discretion to determine whether applications submitted pursuant
				to
				310 CMR
				7.00:
Appendix B
(7)(i)3. or 5. are
				administratively complete.
7. The Department will make a finding regarding the
				administrative completeness for applications submitted pursuant to
				310 CMR
				7.00:
Appendix B
(7)(i) within 15
				business days of submittal, and will make a consistency determination within 30
				days of its finding that an application is administratively complete.
8. The Department may approve, approve with conditions, or deny
				applications submitted pursuant to
				310 CMR
				7.00:
Appendix B
(7)(i)3. or 5.
9. Verified cancelled allowances or credits are not GHG Credits
				under
				310 CMR
				7.00:
Appendix B
(7) and cannot be
				transferred, exchanged pursuant to
				310 CMR
				7.00:
Appendix B
(7)(h), or used for
				any purpose other than compliance with the CO2 emissions
				standards of
				310 CMR
				7.29, or by any entity other than the
				affected facility that submitted an application pursuant to
				310 CMR
				7.00:
Appendix B
(7)(i)3. and
				5.