alternatives to bart -trading- lily wong usepa – region 9 september 1, 2005
TRANSCRIPT
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ALTERNATIVES TO BARTALTERNATIVES TO BART-TRADING--TRADING-
Lily WongLily Wong
USEPA – Region 9USEPA – Region 9
September 1, 2005September 1, 2005
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Alternatives to BART - TradingAlternatives to BART - Trading
• Presentation Objective
• Background
• Proposed Rule - 309 and 308
• Approvability of 309/308 Trading Programs
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Alternatives to BART - TradingAlternatives to BART - Trading
Objective:
Provide overview of EPA requirements for alternatives to source-by-source BART, focusing on the trading program requirements
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Alternative to BART - TradingAlternative to BART - Trading
BACKGROUND
• Where this discussion fits in process
• Primary elements of WRAP S02 program
• Structure & relationship of 308 & 309
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Source-by-source BART vs. Source-by-source BART vs. Trading / AlternativeTrading / Alternative
ID BART eligible sources
Analyze &Decide
source-by-sourceBART
[308(e)(1)]
trading or alternative to BART
[308(e)(2)]
BART determinationDecide 309 or 308
Demonstrate trading/alternative achievesgreater reasonable progress
Determine sourcessubject to BART
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This PresentationThis Presentation
309 TradingProgram Requirements[40 CFR 51.309(d)(4)]
308(e)(2) TradingProgram Requirements
[40 CFR 51.308(e)(2)(vi)]
or
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Primary Elements of 309Primary Elements of 309SO2 Backstop Trading ProgramSO2 Backstop Trading Program
• Regional SO2 milestones (emissions cap)
• If milestones not met voluntarily, triggers implementation of trading program
• “Pre-trigger” and “post-trigger” phases
• Backstop trading program is fully adopted
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309 Proposed Rules309 Proposed Rules
• Reinstates essential elements of Annex
- SO2 pre-trigger phase requirements
- Process for implementing SO2 trading program
- Minimum requirements for the SO2 trading program
- Include some provisions unique to Western Backstop SO2 Trading Program
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308 Proposed Rules308 Proposed Rules
• Applies to all states
• States can choose trading/alternative measure to BART [40 CFR 51.308(e)(2)]
• If alternative is cap & trade program, rule identifies essential elements of the cap and trade program which must be met
[40 CFR 51.308(e)(2)(vi)]
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309 Program: 309 Program: Cross-references 308(e)(2)(vi)Cross-references 308(e)(2)(vi)
309 Western Backstop SO2 Trading Program
• Because backstop is cap & trade program, 309 rule at 40 CFR 51.309(d)(4)(v) requires compliance with 40 CFR 51.308(e)(2)(vi)
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309
TRADING PROGRAM
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40 CFR 51.309(d)(4)40 CFR 51.309(d)(4)
• Milestone
Milestones consistent with GCVTC goals
• Documentation of emission calculation methods
Document base year calculation methods and any changes in methodology
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40 CFR 51.309(d)(4)40 CFR 51.309(d)(4)
• Pre-trigger Monitoring, Recordkeeping, Reporting- MRR sufficient to determine if milestone
achieved- Incl. 10 yr record retention
• Criteria & Procedures- Annual comparison of emissions to milestone
conducted within specified timeframes- Conduct program assessments in 2013 and
2018
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40 CFR 51.309(d)(4)40 CFR 51.309(d)(4)
• Market Trading Program- Timeline to activate program if milestone
exceeded
- Source compliance as soon as practicable
- Program must be sufficient to achieve milestones
- Be consistent with 40 CFR 51.308(e)(2)(vi)
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40 CFR 51.309(d)(4)40 CFR 51.309(d)(4)
• Provisions for 2018 Milestone- Until 2nd planning period SIP is approved, emissions
are prohibited from exceeding 2018 milestone
- 2nd planning period SIP shall not be less stringent than 2018 milestone, unless milestone replaced by different program that meets BART & reasonable progress, and is EPA approved
- Framework (incl. financial penalties for excess emissions) to ensure 2018 milestone will be met
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40 CFR 51.309(d)(4)40 CFR 51.309(d)(4)
• Provisions for stationary source NOx and PM
- Plans must contain necessary long term strategies and BART requirements for stationary sources of NOx and PM
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308
TRADING PROGRAM
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40 CFR 51.308(e)(2)(vi)40 CFR 51.308(e)(2)(vi)
If states choose cap and trade program in lieu of BART:
Program must meet criteria in 40 CFR
51.308(e)(2)(vi) – essential elements of cap and trade programs
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40 CFR 51.308(e)(2)(vi)40 CFR 51.308(e)(2)(vi)
• Applicability- Define sources subject to program- Address emission shifts from sources within
program to sources outside program
• Allowances- Total tonnage value of allowances allocated
do not exceed emissions cap
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40 CFR 51.308(e)(2)(vi)40 CFR 51.308(e)(2)(vi)
• Monitoring- Consistent & accurate emissions
measurements (“a ton is a ton”)
- Those selling allowances:Boilers, combustion turbines, cement kilns: Part 75
Others source types: Part 75 equivalent (same precision, reliability, accessibility, timeliness)
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40 CFR 51.308(e)(2)(vi)40 CFR 51.308(e)(2)(vi)
• Recordkeeping- Ensure enforceability- Those selling allowances: Meet Part 75
• Reporting- Timely reporting with sufficient frequency to
ensure enforceability, provide for audits- Sources selling allowances: comply with Part
75 or submit to TSA if EPA is not TSA
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40 CFR 51.308(e)(2)(vi)40 CFR 51.308(e)(2)(vi)
• Tracking System- Publicly available, secure, centralized- Tracking in consistent manner
• Authorized Account Representative- Designate one individual authorized to represent
source
• Allowance Transfer- Uniform procedures for timely transfer & recording of
allowances
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40 CFR 51.308(e)(2)(vi)40 CFR 51.308(e)(2)(vi)
• Compliance- Prohibit source from emitting more emissions
than source’s allowance holdings
• Penalty- Mandatory allowance deduction for excess
emissions- Allowance deduction shall be at least 3 to 1
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40 CFR 51.308(e)(2)(vi)40 CFR 51.308(e)(2)(vi)
• Banking- If banking is allowed, specify any restrictions
• Program Assessment- Periodic program assessment to determine if
program is accomplishing goals, and determine if program modifications are needed
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APPROVABILITY OF
TRADING PROGRAM
AS ALTERNATIVE
TO BART
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Approvability of Trading ProgramApprovability of Trading Programas Alternative to BARTas Alternative to BART
• Address specific 308 or 309 trading provisions
• Demonstrate trading program achieves greater reasonable progress than source-by-source BART
• Trading program must include all necessary provisions to ensure emission reduction targets will be achieved
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Approvability of Trading ProgramApprovability of Trading Programas Alternative to BARTas Alternative to BART
• Trading program must be enforceable
- Clearly written; explicit language to implement intent
- If trading program is regional, participating states must have essentially the same program to ensure program is practicably enforceable
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Alternative to BART - TradingAlternative to BART - Trading
• Questions?
• Contact:- Lily Wong, EPA Region 9
(415) [email protected]
- Laurel Dygowski, EPA Region 8(303) [email protected]