[50 Pa.B. 6212]
[Saturday, November 7, 2020]
[Continued from previous Web Page] § 145.375. Recordkeeping and reporting.
(a) General provisions. The CO2 authorized account representative shall comply with the recordkeeping and reporting requirements in this section, the applicable recordkeeping and reporting requirements under 40 CFR 75.73 (relating to recordkeeping and reporting) and with the requirements of § 145.311(e) (relating to authorization and responsibilities of the CO2 authorized account representative).
(b) Monitoring plans. The owner or operator of a CO2 budget unit shall submit a monitoring plan in the manner prescribed in 40 CFR 75.62 (relating to monitoring plan submittals).
(c) Certification applications. The CO2 authorized account representative shall submit an application to the Department within 45 days after completing all CO2 monitoring system initial certification or recertification tests required under § 145.372 (relating to initial certification and recertification procedures) including the information required under 40 CFR 75.63 (relating to initial certification or recertification application) and 40 CFR 75.53(g) and (h) (relating to monitoring plan).
(d) Quarterly reports. The CO2 authorized account representative shall submit quarterly reports, as follows:
(1) The CO2 mass emissions data for the CO2 budget unit, in an electronic format prescribed by the Administrator unless otherwise prescribed by the Administrator or the Department for each calendar quarter beginning with one of the following:
(i) For a unit that commenced commercial operation before January 1, 2022, the calendar quarter covering January 1, 2022, through March 31, 2022.
(ii) For a unit that commenced commercial operation on or after January 1, 2022, the calendar quarter corresponding to, the earlier of the date of provisional certification or the applicable deadline for initial certification under § 145.371(2) (relating to general monitoring requirements).
(2) The CO2 authorized account representative shall submit each quarterly report to the Administrator and the Department or its agent within 30 days following the end of the calendar quarter covered by the report. Quarterly reports shall be submitted in the manner specified in 40 CFR Part 75, Subpart H (relating to NOx mass emissions provisions) and 40 CFR 75.64 (relating to quarterly reports).
(i) Quarterly reports shall be submitted for each CO2 budget unit, or group of units using a common stack, and shall include all the data and information required in 40 CFR Part 75, Subpart G (relating to reporting requirements) except for opacity, heat input, NOx and SO2 provisions.
(3) The CO2 authorized account representative shall submit to the Administrator or the Department a compliance certification in support of each quarterly report based on reasonable inquiry of those persons with primary responsibility for ensuring that all the unit's emissions are correctly and fully monitored. The certification shall state that the following conditions have been met:
(i) The monitoring data submitted were recorded in accordance with the applicable requirements of this subchapter and 40 CFR Part 75 (relating to continuous emission monitoring), including the quality assurance procedures and specifications.
(ii) For a unit with add-on CO2 emissions controls and for all hours where data are substituted in accordance with 40 CFR 75.34(a)(1) (relating to units with add-on emission controls), the add-on emissions controls were operating within the range of parameters listed in the quality assurance/quality control program under 40 CFR Part 75, Appendix B (relating to quality assurance and quality control procedures) and the substitute values do not systematically underestimate CO2 emissions.
(iii) The CO2 concentration values substituted for missing data under 40 CFR Part 75, Subpart D (relating to missing data substitution procedures) do not systematically underestimate CO2 emissions.
§ 145.376. Petitions.
(a) Except as provided in subsection (c), the CO2 authorized account representative of a CO2 budget unit that is subject to an acid rain emissions limitation may submit a petition to the Administrator under 40 CFR 75.66 (relating to petitions to the administrator) and to the Department requesting approval to apply an alternative to any requirement of 40 CFR Part 75 (relating to continuous emission monitoring).
(b) Application of an alternative to any requirement of 40 CFR Part 75 is in accordance with this subchapter only to the extent that the petition is approved in writing by the Administrator and subsequently approved in writing by the Department.
(c) The CO2 authorized account representative of a CO2 budget unit that is not subject to an acid rain emissions limitation may submit a petition to the Administrator under 40 CFR 75.66 and to the Department requesting approval to apply an alternative to any requirement of 40 CFR Part 75. Application of an alternative to any requirement of 40 CFR Part 75 is in accordance with this subchapter only to the extent that the petition is approved in writing by the Administrator and subsequently approved in writing by the Department.
(d) In the event that the Administrator declines to review a petition under subsection (c), the CO2 authorized account representative of a CO2 budget unit that is not subject to an acid rain emissions limitation may submit a petition to the Department requesting approval to apply an alternative to any requirement of §§ 145.371—145.377 (relating to monitoring, reporting and recordkeeping requirements)). That petition shall contain all of the relevant information specified in 40 CFR 75.66. Application of an alternative to any requirement of §§ 145.371—145.377 is in accordance with §§ 145.371—145.377 only to the extent that the petition is approved in writing by the Department.
(e) The CO2 authorized account representative of a CO2 budget unit that is subject to an acid rain emissions limitation may submit a petition to the Administrator under 40 CFR 75.66 and to the Department requesting approval to apply an alternative to a requirement concerning any additional CEMS required under the common stack provisions of 40 CFR 75.72 (relating to determination of NOx mass emissions for common stack and multiple stack configurations) or a CO2 concentration CEMS used under 40 CFR 75.71(a)(2) (relating to specific provisions for monitoring NOx and heat input for the purpose of calculating NOx mass emissions). Application of an alternative to any requirement is in accordance with §§ 145.371—145.377 only to the extent the petition is approved in writing by the Administrator and subsequently approved in writing by the Department.
§ 145.377. CO2 budget units that co-fire eligible biomass.
(a) The CO2 authorized account representative of a CO2 budget unit that co-fires eligible biomass as a compliance mechanism under this subchapter shall report the following information to the Department or its agent for each calendar quarter:
(1) For each shipment of solid eligible biomass fuel fired at the CO2 budget unit:
(i) The total eligible biomass fuel input, on an as-fired basis, in pounds.
(ii) The moisture content, on an as-fired basis, as a fraction by weight.
(2) For each distinct type of gaseous eligible biomass fuel fired at the CO2 budget unit:
(i) The density of the biogas, on an as-fired basis, in pounds per standard cubic foot.
(ii) The moisture content of the biogas, on an as-fired basis, as a fraction by total weight.
(iii) The total eligible biomass fuel input, in standard cubic feet.
(3) For each distinct type of eligible biomass fuel fired at the CO2 budget unit:
(i) The dry basis carbon content of the fuel type, as a fraction by dry weight.
(ii) The dry basis higher heating value, in MMBtu per dry pound.
(iii) The total dry basis eligible biomass fuel input, in pounds, calculated in accordance with subsection (b).
(iv) The total eligible biomass fuel heat input, in MMBtu, calculated in accordance with subsection (d)(1).
(v) A chemical analysis, including heating value and carbon content.
(4) The total amount of CO2 emitted from the CO2 budget unit due to firing eligible biomass fuel, in tons, calculated in accordance with subsection (c).
(5) The total amount of heat input to the CO2 budget unit due to firing eligible biomass fuel, in MMBtu, calculated in accordance with subsection (d)(2).
(6) A description and documentation of the monitoring technology employed, and a description and documentation of the fuel sampling methodology employed, including sampling frequency and carbon ash testing.
(b) An owner or operator of a CO2 budget unit shall calculate and submit to the Department or its agent on a quarterly basis the total dry weight for each distinct type of eligible biomass fired by the CO2 budget unit during the reporting quarter. The total dry weight shall be determined for each fuel type as follows:
(1) For solid fuel types:
Where:
Fj = Total eligible biomass dry basis fuel input (lbs) for fuel type j.
Fi = Eligible biomass as fired fuel input (lbs) for fired shipment i.
Mi = Moisture content (fraction) for fired shipment i.
i = Fired fuel shipment.
j = Fuel type.
m = Number of shipments.
(2) For gaseous fuel types:
Fj = Dj × Vj × (1—Mj)
Where:
Fj = Total eligible biomass dry basis fuel input (lbs) for fuel type j.
Dj = Density of biogas (lbs/scf) for fuel type j.
Vj = Total volume (scf) for fuel type j.
Mj = Moisture content (fraction) for fuel type j.
j = Fuel type.
(c) CO2 emissions due to firing of eligible biomass shall be determined as follows:
(1) For any full calendar quarter during which no fuel other than eligible biomass is combusted at the CO2 budget unit, as measured and recorded in accordance with §§ 145.371—145.376 (relating to monitoring, reporting and recordkeeping requirements) or for any full calendar quarter during which fuels other than eligible biomass are combusted at the CO2 budget unit, as determined using the following equation:
Where:
CO2 tons = CO2 emissions due to firing of eligible biomass for the reporting quarter.
Fj = Total eligible biomass dry basis fuel input (lbs) for fuel type j, as calculated in subsection (b).
Cj = Carbon fraction (dry basis) for fuel type j.
Oj = Oxidation factor for eligible biomass fuel type j, derived for solid fuels based on the ash content of the eligible biomass fired and the carbon content of this ash, as determined under subsection (a)(3)(v); for gaseous eligible biomass fuels, a default oxidation factor of 0.995 may be used.
44/12 = The number of tons of carbon dioxide that are created when 1 ton of carbon is combusted.
0.0005 = The number of short tons which is equal to 1 pound.
j = Fuel type.
n = Number of distinct fuel types.
(d) Heat input due to firing of eligible biomass for each quarter shall be determined as follows:
(1) For each distinct fuel type:
Hj = Fj × HHVj
Where:
Hj = Heat input (MMBtu) for fuel type j.
Fj = Total eligible biomass dry basis fuel input (lbs) for fuel type j, as calculated in subsection (b).
HHVj = Higher heating value (MMBtu/lb), dry basis, for fuel type j, as determined through chemical analysis.
j = Fuel type.
(2) For all fuel types:
Where:
Hj = Heat input (MMBtu) for fuel type j.
j = Fuel type.
n = Number of distinct fuel types.
AUCTION OF CO2 CCR AND ECR ALLOWANCES Sec.
145.381. Purpose. 145.382. General requirements. § 145.381. Purpose.
The following requirements shall apply to each allowance auction. The Department or its agent may specify additional information in the auction notice for each auction. This additional information may include the time and location of the auction, auction rules, registration deadlines and any additional information deemed necessary or useful.
§ 145.382. General requirements.
(a) In the auction notice for each auction, the Department or its agent shall include the following:
(1) The number of CO2 allowances offered for sale at the auction, not including any CO2 CCR allowances.
(2) The number of CO2 CCR allowances that will be offered for sale at the auction if the condition in subsection (b)(1) is met.
(3) The minimum reserve price for the auction.
(4) The CCR trigger price for the auction. The CCR trigger price in calendar year 2022 shall be $13.91. Each calendar year after 2022, the CCR trigger price shall be 1.07 multiplied by the CCR trigger price from the previous calendar year, rounded to the nearest whole cent, as shown in Table 1.
Table 1. CO2 CCR Trigger Price
2023 2024 2025 2026 2027 2028 2029 2030 $14.88 $15.92 $17.03 $18.22 $19.50 $20.87 $22.33 $23.89 (5) The maximum number of CO2 allowances that may be withheld from sale at the auction if the condition in subsection (d)(1) is met.
(6) The ECR trigger price for the auction. The ECR trigger price in calendar year 2022 shall be $6.42. Each calendar year after 2022, the ECR trigger price shall be 1.07 multiplied by the ECR trigger price from the previous calendar year, rounded to the nearest whole cent, as shown in Table 2.
Table 2. CO2 ECR Trigger Price
2023 2024 2025 2026 2027 2028 2029 2030 $ 6.87 $ 7.35 $ 7.86 $ 8.41 $ 9.00 $ 9.63 $10.30 $11.02
(b) For the sale of CO2 CCR allowances, the Department or its agent will do the following:
(1) CO2 CCR allowances will only be sold at an auction in which the total demand for allowances, above the CCR trigger price, exceeds the number of CO2 allowances available for purchase at the auction, not including any CO2 CCR allowances.
(2) If the condition in subsection (b)(1) is met at an auction, then the number of CO2 CCR allowances offered for sale by the Department or its agent at the auction will be equal to the number of CO2 CCR allowances in the air pollution reduction account at the time of the auction.
(3) After all of the CO2 CCR allowances in the air pollution reduction account have been sold in a given calendar year, no additional CO2 CCR allowances will be sold at any auction for the remainder of that calendar year, even if the condition in subsection (b)(1) is met at an auction.
(4) At an auction in which CO2 CCR allowances are sold, the reserve price for the auction shall be the CCR trigger price.
(5) If the condition in subsection (b)(1) is not satisfied, no CO2 CCR allowances will be offered for sale at the auction and the reserve price for the auction will be equal to the minimum reserve price.
(c) The Department or its agent will implement the reserve price in the following manner:
(1) No CO2 allowances will be sold at any auction for a price below the reserve price for that auction.
(2) If the total demand for CO2 allowances at an auction is less than or equal to the total number of CO2 allowances made available for sale in that auction, then the auction clearing price for the auction shall be the reserve price.
(d) For the withholding of CO2 ECR allowances from an auction, the Department or its agent will do the following:
(1) CO2 ECR allowances will only be withheld from an auction if the demand for allowances would result in an auction clearing price that is less than the ECR trigger price prior to the withholding from the auction of any ECR allowances.
(2) If the condition in subsection (d)(1) is met at an auction, then the maximum number of CO2 ECR allowances that may be withheld from that auction will be equal to the quantity in § 145.342(e)(1) (relating to CO2 allowance allocations) minus the total quantity of CO2 ECR allowances that have been withheld from any prior auction in that calendar year. The Department will transfer any CO2 ECR allowances withheld from an auction into the Pennsylvania ECR Account.
CO2 EMISSIONS OFFSET PROJECTS Sec.
145.391. Purpose. 145.392. Definitions. 145.393. General requirements. 145.394. Application process. 145.395. CO2 emissions offset project standards. 145.396. Accreditation of independent verifiers. 145.397. Award and recordation of CO2 offset allowances. § 145.391. Purpose.
The Department may award CO2 offset allowances to sponsors of CO2 emissions offset projects that have reduced or avoided atmospheric loading of CO2, CO2e or sequestered carbon as demonstrated in accordance with the applicable provisions of §§ 145.391—145.397 (relating to CO2 emissions offset projects). The requirements of §§ 145.391—145.397 seek to ensure that CO2 offset allowances awarded represent CO2 equivalent emission reductions or carbon sequestration that are real, additional, verifiable, enforceable and permanent within the framework of a standards-based approach. Subject to the relevant compliance deduction limitations of § 145.355(a)(3) (relating to compliance), CO2 offset allowances may be used by any CO2 budget source for com- pliance purposes.
§ 145.392. Definitions.
The following words and terms, when used in §§ 145.391—145.397 (relating to CO2 emissions offset projects), have the following meanings, unless the context clearly indicates otherwise:
AEPS—Alternative energy portfolio standards—Standards establishing that a certain amount of energy sold from alternative energy sources, as defined under section 2 of the Alternative Energy Portfolio Standards Act (73 P.S. § 1648.2), is included as part of the sources of electric generation by electric utilities within this Commonwealth.
Anaerobic digester—A device that promotes the decomposition of organic material to simple organics and gaseous biogas products, in the absence of elemental oxygen, usually accomplished by means of controlling temperature and volume, and that includes a methane recovery system.
Anaerobic digestion—The decomposition of organic material including manure brought about through the action of microorganisms in the absence of elemental oxygen.
Anaerobic storage—Storage of organic material in an oxygen-free environment, or under oxygen-free conditions, including holding tanks, ponds and lagoons.
Biogas—Gas resulting from the decomposition of organic matter under anaerobic conditions, the principle constituents of which are methane and carbon dioxide.
Conflict of interest—A situation that may arise with respect to an individual in relation to any specific project sponsor, CO2 emissions offset project or category of offset projects, such that the individual's other activities or relationships with other persons or organizations render or may render the individual incapable of providing an impartial certification opinion, or otherwise compromise the individual's objectivity in performing certification functions.
Forest offset project—An offset project involving reforestation, improved forest management or avoided conversion.
Forest offset project data report—The report prepared by a project sponsor each year that provides the information and documentation required by §§ 145.391—145.397 or the forest offset protocol.
Forest offset protocol—The protocol titled ''Regional Greenhouse Gas Initiative Offset Protocol U.S. Forest Projects,'' published by the participating states on June 12, 2013.
Independent verifier—An individual that has been approved by the Department or its agent to conduct verification activities.
Intentional reversal—Any reversal caused by a forest owner's negligence, gross negligence or willful intent, including harvesting, development and harm to the area within the offset project boundary.
Market penetration rate—A measure of the diffusion of a technology, product or practice in a defined market, as represented by the percentage of annual sales for a product or practice, or as a percentage of the existing installed stock for a product or category of products, or as the percentage of existing installed stock that utilizes a practice.
Offset project—
(i) All equipment, materials, items or actions directly related to the reduction of CO2e emissions or the sequestration of carbon specified in a consistency application submitted under § 145.394 (relating to application process).
(ii) This term does not include equipment, materials, items or actions unrelated to an offset project reduction of CO2e emissions or the sequestration of carbon but occurring at a location where an offset project occurs, unless specified in § 145.395 (relating to CO2 emissions offset project standards).
Project commencement—
(i) For an offset project involving physical construction, other work at an offset project site or installation of equipment or materials, the date of the beginning of the activity.
(ii) For an offset project that involves the implementation of a management activity or protocol, the date on which the activity is first implemented or the protocol is first utilized.
(iii) For an offset project involving reforestation, improved forest management or avoided conversion, the date specified in section 3.2 of the forest offset protocol.
Project sponsor—The sponsor of an offset project under §§ 145.391—145.397.
Regional-type anaerobic digester—An anaerobic digester using feedstock from more than one agricultural operation or importing feedstock from more than one agricultural operation.
Reporting period—The period of time covered by a forest offset project data report. The first reporting period for a forest offset project in an initial crediting period may consist of 6 to 24 consecutive months; all subsequent reporting periods in an initial crediting and all reporting periods in any renewed crediting period must consist of 12 consecutive months.
Reversal—A greenhouse gas emission reduction or greenhouse gas removal enhancement for which CO2 offset allowances have been issued that is subsequently released or emitted back into the atmosphere due to any intentional or unintentional circumstance.
System benefit fund—Any fund collected directly from retail electricity or natural gas ratepayers.
Total solids—The total of all solids in a sample, including the total suspended solids, total dissolved solids and volatile suspended solids.
Unintentional reversal—Any reversal, including, wildfires, insects or disease that is not the result of the forest owner's negligence, gross negligence or willful intent.
Verification—The confirmation by an independent verifier that certain parts of a CO2 emissions offset project consistency application and measurement, monitoring or verification report conforms to the requirements of §§ 145.391—145.397.
Volatile solids—The fraction of total solids that is comprised primarily of organic matter as defined in EPA Method Number 160.4, Methods for the Chemical Analysis of Water and Wastes (MCAWW) (EPA/600/4-79/020).
§ 145.393. General requirements.
(a) Eligibility. To qualify for the award of CO2 offset allowances, offset projects shall satisfy all the applicable requirements of §§ 145.391—145.397 (relating to CO2 emissions offset projects).
(1) Offset project types. The following types of offset projects are eligible for the award of CO2 offset allowances:
(i) Landfill methane capture and destruction.
(ii) Sequestration of carbon due to reforestation, improved forest management or avoided conversion.
(iii) Avoided methane emissions from agricultural manure management operations.
(2) Offset project locations. To qualify for the award of CO2 offset allowances, an offset project must be located in:
(i) This Commonwealth.
(ii) Partly in this Commonwealth and partly in one or more other participating states, provided that more of the CO2e emissions reduction or carbon sequestration due to the offset project is projected to occur in this Commonwealth than in any other participating state.
(b) Project sponsor. Any person may act as the sponsor of an offset project, provided that person meets the requirements under § 145.394 (relating to application process).
(c) General additionality requirements. Except as provided under § 145.395 (relating to CO2 emissions offset project standards), the Department will not award CO2 offset allowances to an offset project that meets the following:
(1) An offset project that is required under any local, state or Federal law, regulation, or administrative or judicial order. If an offset project receives a consistency determination under § 145.394 and is later required by local, state or Federal law, regulation, or administrative or judicial order, then the offset project will remain eligible for the award of CO2 offset allowances until the end of its current allocation period but its eligibility will not be extended for an additional allocation period.
(2) An offset project that includes an electric generation component, unless the project sponsor transfers legal rights to any and all attribute credits, other than the CO2 offset allowances awarded under § 145.397 (relating to award and recordation of CO2 offset allowances), generated from the operation of the offset project that may be used for compliance with AEPS or a regulatory requirement, to the Department or its agent.
(3) An offset project that receives funding or other incentives from any system benefit fund or other incentives provided through revenue from the auction or sale of CO2 allowances in the air pollution reduction account under § 145.342(a) (relating to CO2 allowance allocations).
(4) An offset project that is awarded credits or allowances under any other mandatory or voluntary greenhouse gas program, except as described in § 145.395(b)(10).
(d) Maximum allocation periods for offset projects.
(1) Maximum allocation periods. Except as provided in subsection (d)(2), the Department may award CO2 offset allowances under § 145.397 for an initial 10-year allocation period. At the end of the initial 10-year allocation period, the Department may award CO2 offset allowances for a second 10-year allocation period, provided the project sponsor has submitted a consistency application under § 145.394 prior to the expiration of the initial allocation period, and the Department has issued a consistency determination under § 145.394(e)(2).
(2) Maximum allocation period for sequestration of carbon due to reforestation, improved forest management or avoided conversion. The Department may award CO2 offset allowances under § 145.397 for any project involving reforestation, improved forest management or avoided conversion for an initial 25-year allocation period. At the end of the initial 25-year allocation period, or any subsequent crediting period, the Department may award CO2 offset allowances for a subsequent 25-year allocation period, provided the project sponsor has submitted a consistency application for the offset project under § 145.394 prior to the expiration of the initial allocation period, and the Department has issued a consistency determination under § 145.394(e)(2).
(e) Offset project audit. A project sponsor shall provide in writing, an access agreement to the Departmentgranting the Department or its agent access to the physical location of the offset project to inspect for compliance with §§ 145.391—145.397.
(f) Ineligibility due to noncompliance.
(1) If at any time the Department determines that a project sponsor has not complied with the requirements of §§ 145.391—145.397, then the Department may revoke and retire any and all CO2 offset allowances in the project sponsor's account.
(2) If at any time the Department determines that an offset project does not comply with the requirements of §§ 145.391—145.397, then the Department may revoke any approvals it has issued relative to the offset project.
§ 145.394. Application process.
(a) Establishment of general account. The sponsor of an offset project must establish a general account under § 145.352(b) (relating to establishment of accounts). All submissions to the Department required for the award of CO2 offset allowances under §§ 145.391—145.397 (relating to CO2 emissions offset projects) must be from the CO2 authorized account representative for the general account of the project sponsor.
(b) Consistency application deadlines. A consistency application for an offset project shall be submitted, in a format prescribed by the Department and consistent with the requirements of this section by the following deadlines:
(1) For an offset project not involving reforestation, improved forest management or avoided conversion, by the date that is 6 months after the offset project is commenced.
(2) For an offset project involving reforestation, improved forest management or avoided conversion the consistency application, by the date that is one year after the offset project is commenced, except as provided under § 145.395(b)(9) (relating to CO2 emissions offset project standards).
(3) The Department will deny any consistency application that fails to meet the deadlines in subsection (b).
(c) Consistency application contents. For an offset project, the consistency application must include the following:
(1) The project's sponsor's name, address, e-mail address, telephone number, facsimile transmission number and account number.
(2) The offset project description as required by the relevant provisions under § 145.395.
(3) A demonstration that the offset project meets all applicable requirements in §§ 145.391—145.397.
(4) The emissions baseline determination as required by the relevant provisions under § 145.395.
(5) An explanation of how the projected reduction or avoidance of atmospheric loading of CO2 or CO2e or the sequestration of carbon is to be quantified, monitored and verified as required by the relevant provisions under § 145.395.
(6) A completed consistency application agreement signed by the project sponsor that reads as follows:
''The undersigned project sponsor recognizes and accepts that the application for, and the receipt of, CO2 offset allowances under the CO2 Budget Trading Program is predicated on the project sponsor following all the requirements of §§ 145.391—145.397. The undersigned project sponsor holds the legal rights to the offset project or has been granted the right to act on behalf of a party that holds the legal rights to the offset project. I understand that eligibility for the award of CO2 offset allowances under §§ 145.391—145.397 is contingent on meeting the requirements of §§ 145.391—145.397. I authorize the Department or its agent to audit this offset project for purposes of verifying that the offset project, including the monitoring and verification plan, has been implemented as described in this application. I understand that this right to audit shall include the right to enter the physical location of the offset project. I submit to the legal jurisdiction of the Commonwealth of Pennsylvania.''
(7) A statement and certification report signed by the offset project sponsor certifying that all offset projects for which the sponsor has received CO2 offset allowances under §§ 145.391—145.397, under the sponsor's ownership or control or under the ownership or control of any entity which controls, is controlled by, or has common control with the sponsor are in compliance with all applicable requirements of the CO2 Budget Trading Program in all participating states.
(8) A verification report and certification statement signed by an independent verifier accredited under § 145.396 (relating to accreditation of independent verifiers) that expresses that the independent verifier has reviewed the entire application and evaluated the following in relation to the applicable requirements at § 145.393 (relating to general requirements) and § 145.395, and any applicable guidance issued by the Department:
(i) The adequacy and validity of information supplied by the project sponsor to demonstrate that the offset project meets the applicable eligibility requirements of §§ 145.393 and 145.395.
(ii) The adequacy and validity of information supplied by the project sponsor to demonstrate baseline emissions under the applicable requirements under § 145.395.
(iii) The adequacy of the monitoring and verification plan submitted under the applicable requirements under § 145.395.
(iv) Any other evaluations and statements as may be required by the Department.
(9) Disclosure of any voluntary or mandatory programs, other than the CO2 Budget Trading Program, to which greenhouse gas emissions data related to the offset project has been or will be reported.
(d) The Department will not accept as submitted a consistency application for an offset project if a consistency application has already been submitted for the same project, or any portion of the same project, in another participating state, unless the consistency application was rejected by another participating state solely because more of the CO2e emissions reduction or carbon sequestration resulting from the offset project is projected to occur in this Commonwealth than in any other participating state.
(e) Department action on consistency applications.
(1) Completeness determination. Within 30 days following receipt of the consistency application submitted under subsection (b), the Department will notify the project sponsor whether the consistency application is complete. A complete consistency application is one that is in a form prescribed by the Department and is determined by the Department to contain all applicable information and documentation required by §§ 145.391—145.397. In no event will a completeness determination prevent the Department from requesting additional information to make a consistency determination under subsection (e)(2).
(2) Consistency determination. Within 90 days of making the completeness determination under subsection (e)(1), the Department will issue a determination as to whether the offset project is consistent with the requirements of § 145.393 and this section and the requirements of the applicable offset project standard of § 145.395. For any offset project found to lack consistency with these requirements, the Department will inform the project sponsor of the offset project's deficiencies.
§ 145.395. CO2 emissions offset project standards.
(a) Landfill methane capture and destruction. To qualify for the award of CO2 offset allowances under §§ 145.391—145.397 (relating to CO2 emissions offset projects), an offset project that captures and destroys methane from a landfill shall meet the requirements of this subsection and all other applicable requirements of §§ 145.391—145.397.
(1) Eligibility. An offset project shall occur at a landfill that is not subject to the New Source Performance Standards for municipal solid waste landfills, 40 CFR Part 60, Subpart Cc and Subpart WWW (relating to emission guidelines and compliance times for municipal solid waste landfills; and standards of performance for municipal solid waste landfills).
(2) Offset project description. The project sponsor shall provide a detailed narrative of the offset project actions to be taken, including documentation that the offset project meets the eligibility requirements of subsection (a)(1). The project narrative shall include the following:
(i) Identification of the owner or operator of the offset project.
(ii) Location and specifications of the landfill where the offset project will occur, including waste in place.
(iii) Identification of the owner or operator of the landfill where the offset project will occur.
(iv) Specifications of the equipment to be installed and a technical schematic of the offset project.
(3) Emissions baseline determination. The emissions baseline shall represent the potential fugitive landfill emissions of CH4, in tons of CO2e, as represented by the CH4 collected and metered for thermal destruction as part of the offset project and calculated as follows:
Emissions (tons CO2e) = (V × M × (1 − OX) × GWP)/2000
Where:
V = volume of CH4 collected (ft3).
M = Mass of CH4 per cubic foot (0.04246 lbs/ft3 default value at 1 atmosphere, 20°C).
OX = Oxidation factor (0.10), representing estimated portion of collected CH4 that would have eventually oxidized to CO2 if not collected.
GWP = CO2e global warming potential of CH4 (28).
(4) Calculating emissions reductions. Emissions reductions shall be determined based on potential fugitive CH4 emissions that would have occurred at the landfill if metered CH4 collected from the landfill for thermal destruction as part of the offset project was not collected and destroyed. CO2e emissions reductions shall be calculated as follows:
Emissions (tons CO2e) = (V × M × (1 − OX) × Cef × GWP)/2000
Where:
V = Volume of CH4 collected (ft3).
M = Mass of CH4 per cubic foot (0.04246 lbs/ft3 default value at 1 atmosphere and 20°C).
OX = Oxidation factor (0.10), representing estimated portion of collected CH4 that would have eventually oxidized to CO2 if not collected.
Cef = Combustion efficiency of methane control technology (0.98).
GWP = CO2e global warming potential of CH4 (28).
(5) Monitoring and verification requirements. An offset project shall employ a landfill gas collection system that provides continuous metering and data computation of landfill gas volumetric flow rate and CH4 concentration. Annual monitoring and verification reports shall include monthly volumetric flow rate and CH4 concentration data, including documentation that the CH4 was actually supplied to the combustion source. Monitoring and verification is also subject to the following:
(i) As part of the consistency application, the project sponsor shall submit a monitoring and verification plan that includes a quality assurance and quality control program associated with equipment used to determine landfill gas volumetric flow rate and CH4 composition. The monitoring and verification plan shall also include provisions for ensuring that measuring and monitoring equipment is maintained, operated and calibrated based on manufacturer recommendations, as well as provisions for the retention of maintenance records for audit purposes. The monitoring and verification plan shall be certified by an independent verifier accredited under § 145.396 (relating to accreditation of independent verifiers).
(ii) The project sponsor shall annually verify landfill gas CH4 composition through landfill gas sampling and independent laboratory analysis using applicable EPA laboratory test methods.
(b) Sequestration of carbon due to reforestation, improved forest management or avoided conversion. To qualify for the award of CO2 offset allowances under §§ 145.391—145.397, an offset project that involves reforestation, improved forest management, or avoided conversion shall meet all requirements of this subsection and the forest offset protocol, and all other applicable requirements of §§ 145.391—145.397.
(1) Eligibility. A forest offset project shall satisfy all eligibility requirements of the forest offset protocol and this subsection.
(2) Offset project description. The project sponsor shall provide a detailed narrative of the offset project actions to be taken, including documentation that the offset project meets the eligibility requirements of subsection (b)(1). The offset project description must include all information identified in sections 8.1 and 9.1 of the forest offset protocol, and any other information deemed necessary by the Department.
(3) Carbon sequestration baseline determination. Baseline onsite carbon stocks shall be determined as required by sections 6.1.1, 6.1.2, 6.2.1, 6.2.2, 6.2.3, 6.3.1 and 6.3.2 of the forest offset protocol, as applicable.
(4) Calculating carbon sequestered. Net greenhouse gas reductions and greenhouse gas removal enhancements shall be calculated as required by section 6 of the forest offset protocol. The project's risk reversal rating shall be calculated using the forest offset protocol Determination of a Forest Project's Reversal Risk Rating assessment worksheet.
(5) Monitoring and verification requirements. Monitoring and verification are subject to the following:
(i) Monitoring and verification reports shall include all forest offset project data reports submitted to the Department, including any additional data required by section 9.2.2 of the forest offset protocol.
(ii) The consistency application shall include a monitoring and verification plan certified by an independent verifier accredited under § 145.396 and shall consist of a forest carbon inventory program, as required by section 8.1 of the forest offset protocol.
(iii) Monitoring and verification reports shall be submitted not less than every 6 years, except that the first monitoring and verification report for reforestation projects must be submitted within 12 years of project commencement.
(6) Forest Offset Project Data Reports. A project sponsor shall submit a forest offset project data report to the Department for each reporting period. Each forest offset project data report must cover a single reporting period. Reporting periods must be contiguous and there must be no gaps in reporting once the first reporting period has commenced.
(7) Prior to the award of CO2 offset allowances under § 145.397 (relating to award and recordation of CO2 offset allowances), or to any surrender of allowances under § 145.395(b)(8)(ii)(C) (relating to CO2 emissions offset project standards), any quantity expressed in metric tons, or metric tons of CO2e, shall be converted to tons using the conversion factor specified in § 145.302 (relating to definitions).
(8) Carbon sequestration permanence. The project sponsor shall meet the following requirements to address reversals of sequestered carbon.
(i) Unintentional reversals. The project sponsor shall address an unintentional reversal of sequestered carbon as follows:
(A) Notify the Department of the reversal and provide an explanation for the nature of the unintentional reversal within 30 calendar days of its discovery.
(B) Submit to the Department a verified estimate of current carbon stocks within the offset project boundary within 1 year of the discovery of the unintentional reversal.
(ii) Intentional reversals. The project sponsor shall address an intentional reversal of sequestered carbon as follows:
(A) Notify the Department in writing of the intentional reversal and provide a written description and explanation of the intentional reversal within 30 calendar days of the intentional reversal.
(B) Submit to the Department a verified estimate of current carbon stocks within the offset project boundary within 1 year of the occurrence of an intentional reversal.
(C) If an intentional reversal occurs, and CO2 offset allowances have been awarded to the offset project, the forest owner must surrender to the Department or its agent for retirement a quantity of CO2 allowances corresponding to the quantity of CO2e tons reversed within 6 months of notification by the Department.
(I) The Department will provide notification after the project sponsor has submitted a verified estimate of carbon stocks to the Department, or if the project sponsor fails to submit verified estimate of carbon stocks after 1 year has elapsed since the occurrence of the intentional reversal.
(II) If the forest owner does not surrender valid CO2 allowances to the Department within 6 months of notification by the Department, the forest owner will be subject to enforcement action and each CO2e equivalent ton of carbon sequestration intentionally reversed will constitute a separate violation of this subchapter and the act.
(D) Project Termination Requirements.
(I) The project sponsor must surrender to the Department or its agent for retirement a quantity of CO2 allowances in the amount calculated under project termination provisions in the forest offset protocol within 6 months of project termination.
(II) If the project sponsor does not surrender to the Department or its agent a quantity of CO2 allowances in the amount calculated under project termination provisions in the forest offset protocol within 6 months of project termination, the project sponsor will be subject to enforcement action and each CO2 offset allowance not surrendered will constitute a separate violation of this subchapter and the act.
(iii) Disposition of Forest Sequestration Projects After a Reversal. The Department will terminate a forest offset project if a reversal lowers the forest offset project's actual standing live carbon stocks below its project baseline standing live carbon stocks.
(9) Timing of forest offset projects. The Department may award CO2 offset allowances under § 145.397 only for forest offset projects that are initially commenced on or after January 1, 2014.
(10) Projects that Have Been Awarded Credits by a Voluntary Greenhouse Gas Reduction Program. The provisions of §§ 145.393(c)(4) and 145.394(b)(2) (relating to general requirements; and application process) shall not apply to forest projects that have been awarded credits under a voluntary greenhouse gas reduction program. For those projects, the number of CO2 offset allowances will be calculated under the requirements of this subsection, without regard to quantity of credits that were awarded to the project under the voluntary program, provided that the project satisfies the following:
(i) All other general requirements of §§ 145.391—145.397, including all specific requirements of this subsection, for all reporting periods for which the project has been awarded credits under a voluntary greenhouse gas program and also intends to be awarded CO2 offset allowances under § 145.397.
(ii) At the time of submittal of the consistency application for the project, the project sponsor submits forest offset data reports and a monitoring and verification report covering all reporting periods for which the project has been awarded credits under a voluntary greenhouse gas program and also intends to be awarded CO2 offset allowances under § 145.397. Forest offset data reports and monitoring and verification reports must meet all requirements of subsections (b)(5) and (6).
(iii) The voluntary greenhouse gas program has published information to allow the Department to verify the information included in the consistency application and the consistency application includes information sufficient to allow the Department to determine the following:
(A) The offset project has met all legal and contractual requirements to allow it to terminate its relationship with the voluntary greenhouse gas program and the termination has been completed.
(B) The project sponsor or voluntary greenhouse gas program has cancelled or retired all credits that were awarded for carbon sequestration that occurred during the time periods for which the project intends to be awarded CO2 offset allowances under § 145.397, and the credits were cancelled or retired for the sole purpose of allowing the project to be awarded CO2 offset allowances under § 145.397.
(c) Avoided methane emissions from agricultural manure management operations. To qualify for the award of CO2 offset allowances under §§ 145.391—145.397, an offset project that captures and destroys methane from animal manure and organic food waste using anaerobic digesters shall meet the requirements of this subsection and all other applicable requirements of §§ 145.391—145.397.
(1) Eligibility. To be eligible for CO2 offset allowances, an offset project under this subsection shall:
(i) Consist of the destruction of that portion of methane generated by an anaerobic digester that would have been generated in the absence of the offset project through the uncontrolled anaerobic storage of manure or organic food waste.
(ii) Employ only manure-based anaerobic digester systems using livestock manure as the majority of digester feedstock, defined as more than 50% of the mass input into the digester on an annual basis. Organic food waste used by an anaerobic digester shall only be that which would have been stored in anaerobic conditions in the absence of the offset project.
(2) Exceptions to the general requirements. The provisions of § 145.393(c)(2) and (3) shall not apply to an agricultural manure management offset project that meets the following:
(i) The offset project is located in a participating state that has a market penetration rate for anaerobic digester projects of 5% or less. The market penetration determination shall utilize the most recent market data available at the time of submission of the consistency application under § 145.394 and shall be determined as follows:
MP (%) = MGAD / MG STATE
Where:
MGAD = Average annual manure generation for the number of dairy cows and swine serving all anaerobic digester projects in the applicable state at the time of submission of a consistency application under § 145.394.
MG STATE = Average annual manure production of all dairy cows and swine in the participating state at the time of submission of a consistency application under § 145.394.
(ii) The offset project is located at a farm with 4,000 or less head of dairy cows, or a farm with equivalent animal units, assuming an average live weight for dairy cows in pounds per cow of 1,400 pounds, or, if the project is a regional-type anaerobic digester, total annual manure input to the digester is designed to be less than the average annual manure produced by a farm with 4,000 or less head of dairy cows, or a farm with equivalent animal units, assuming an average live weight for dairy cows in pounds per cow of 1,400 pounds.
(3) Offset project description. The project sponsor shall provide a detailed narrative of the offset project actions to be taken, including documentation that the offset project meets the eligibility requirements of subsection (c)(1). The offset project narrative shall include the following:
(i) Identification of the owner or operator of the offset project.
(ii) Location and specifications of the facility where the offset project will occur.
(iii) Identification of the owner or operator of the facility where the offset project will occur.
(iv) Specifications of the equipment to be installed and a technical schematic of the offset project.
(v) Location and specifications of the facilities from which anaerobic digester influent will be received, if different from the facility where the offset project will occur.
(4) Emissions baseline determination. The emissions baseline shall represent the potential emissions of the CH4 that would have been produced in a baseline scenario under uncontrolled anaerobic storage conditions and released directly to the atmosphere in the absence of the offset project.
(i) Baseline CH4 emissions shall be calculated as follows:
Eb = (Vm × M)/2000 × GWP
Where:
Eb = Potential CO2e emissions due to calculated CH4 production under site-specific anaerobic storage and weather conditions (tons).
Vm = Volume of CH4 produced each month from decomposition of volatile solids in a baseline uncontrolled anaerobic storage scenario under site-specific storage and weather conditions for the facility at which the manure or organic food waste is generated (ft3).
M = Mass of CH4 per cubic foot (0.04246 lb/ft3 default value at one atmosphere and 20°C).
GWP = Global warming potential of CH4 (28).
(ii) The estimated amount of volatile solids decomposed each month under the uncontrolled anaerobic storage baseline scenario in kilograms (kg) shall be calculated as follows:
VSdec = VSavail × f
Where:
VS = Volatile solids as determined from the equation:
VS = Mm × TS% × VS%
Where:
Mm = Mass of manure or organic food waste produced per month (kg).
TS% = Concentration (%) of total solids in manure or organic food waste as determined through EPA 160.3 testing method (EPA Method Number 160.3, Methods for the Chemical Analysis of Water and Wastes (EPA/600/4-79/020)).
VS% = Concentration (%) of volatile solids in total solids as determined through EPA 160.4 testing method (EPA Method Number 160.4, Methods for the Chemical Analysis of Water and Wastes (EPA/600/4-79/020)).
VSavail = Volatile solids available for decomposition in manure or organic food waste storage each month as determined from the equation:
VSavail = VSp + 1/2 VSin − VSout
Where:
VSp = Volatile solids present in manure or organic food waste storage at beginning of month (left over from previous month) (kg).
VSin = Volatile solids added to manure or organic food waste storage during the course of the month (kg). The factor of 1/2 is multiplied by this number to represent the average mass of volatile solids available for decomposition for the entire duration of the month.
VSout = Volatile solids removed from the manure or organic food waste storage for land application or export (assumed value based on standard farm practice).
f = van't Hoff-Arrhenius factor for the specific month as determined using the equation below. Using a base temperature of 30°C, the equation is as follows:
f = exp{[E(T2 − T1)]/[(GC × T1 × T2)]}
Where:
f = Conversion efficiency of VS to CH4 per month.
E = Activation energy constant (15,175 cal/mol).
T2 = Average monthly ambient temperature for facility where manure or organic food waste is generated (converted from degrees Celsius to degrees Kelvin) as determined from the nearest National Weather Service certified weather station (if reported temperature °C > 5 °C; if reported temperature °C < 5 °C, then f = 0.104).
T1 = 303.15 (30°C converted to °K).
GC = Ideal gas constant (1.987 cal/K mol).
(iii) The volume of CH4 produced in cubic feet (ft3) from decomposition of volatile solids shall be calculated as follows:
Vm = (VSdec × Bo) × 35.3147
Where:
Vm = Volume of CH4 (ft3).
VSdec = Volatile solids decomposed (kg).
Bo = Manure or organic food waste type-specific maximum methane generation constant (m3 CH4/kg VS decomposed). For dairy cow manure, Bo = 0.24 m3 CH4/kg VS decomposed. The methane generation constant for other types of manure shall be those cited at the EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990—2010, Annex 3, Table A 180 (EPA, February 2017), unless the project sponsor proposes an alternate methane generation constant and that alternate is approved by the Department. If the project sponsor proposes to use a methane generation constant other than the ones found in the previously-cited reference, the project sponsor must provide justification and documentation to the Department.
(5) Calculating emissions reductions. Emissions reductions shall be calculated as follows:
ERt = Eb − Ep
Where:
ERt = CO2e emissions reductions due to project activities (tons).
Eb = Potential CO2e emissions due to calculated CH4 production under site-specific anaerobic storage and weather conditions (tons).
Ep = CO2e emissions due to project activities additional to baseline (tons), including manure transportation, flaring, venting and effluent management.
(6) Transport CO2 emissions. Emissions reductions may not exceed the potential emissions of the anaerobic digester, as represented by the annual volume of CH4 produced by the anaerobic digester, as monitored under subsection (c)(5). CO2 emissions due to transportation of manure and organic food waste from the site where the manure and organic food waste was generated to the anaerobic digester shall be subtracted from the emissions calculated under subsection (c)(4)(i)—(iii). Transport CO2 emissions shall be determined through one of the following methods:
(i) Documentation of transport fuel use for all shipments of manure and organic food waste from off-site to the anaerobic digester during each reporting year and a log of transport miles for each shipment. Off-site is defined as a location that is not contiguous with the property where the anaerobic digester is located. CO2 emissions shall be determined through the application of an emissions factor for the fuel type used. If this option is chosen, the following emissions factors shall be applied as appropriate:
(A) Diesel fuel: 22.912 lbs. CO2/gallon.
(B) Gasoline: 19.878 lbs. CO2/gallon.
(C) Other fuel: submitted emissions factor approved by the Department.
(ii) Documentation of total tons of manure and organic food waste transported from off-site for input into the anaerobic digester during each reporting year, as monitored under subsection (c)(7)(i), and a log of transport miles and fuel type used for each shipment. CO2 emissions shall be determined through the application of a ton-mile transport emission factor for the fuel type used. If this option is chosen, the following emissions factors shall be applied as appropriate for each ton of manure delivered and multiplied by the number of miles transported:
(A) Diesel fuel: 0.131 lb. CO2 per ton-mile.
(B) Gasoline: 0.133 lb. CO2 per ton-mile.
(C) Other fuel: submitted emissions factor approved by the Department.
(7) Monitoring and verification requirements. An offset project shall employ a system that provides metering of biogas volumetric flow rate and determination of CH4 concentration. Annual monitoring and verification reports shall include monthly biogas volumetric flow rate and CH4 concentration determination. Monitoring and verification shall also meet the following:
(i) If the offset project is a regional-type anaerobic digester, manure and organic food waste from each distinct source supplying to the anaerobic digester shall be sampled monthly to determine the amount of volatile solids present. Any emissions reduction will be calculated according to mass of manure and organic food waste in kilograms (kg) being digested and percentage of volatile solids present before anaerobic digestion, consistent with the requirements under subsection (c)(4) and subsection (c)(7)(iii) and apportioned accordingly among sources. The project sponsor shall provide supporting material and receipts tracking the monthly receipt of manure and organic food waste in kilograms (kg) used to supply the anaerobic digester from each supplier.
(ii) If the offset project includes the anaerobic digestion of organic food waste eligible under subsection (c)(1)(ii), organic food waste shall be sampled monthly to determine the amount of volatile solids present before anaerobic digestion, consistent with the requirements at sub- section (c)(4) and subsection (c)(7)(iii), and apportioned accordingly.
(iii) The project sponsor shall submit a monitoring and verification plan as part of the consistency application that includes a quality assurance and quality control program associated with equipment used to determine biogas volumetric flow rate and CH4 composition. The monitoring and verification plan shall be specified in accordance with the applicable monitoring requirements listed in Table 3. The monitoring and verification plan shall also include provisions for ensuring that measuring and monitoring equipment is maintained, operated and calibrated based on manufacturer's recommendations, as well as provisions for the retention of maintenance records for audit purposes. The monitoring and verification plan shall be certified by an independent verifier accredited under § 145.396.
Table 3. Monitoring requirements
Parameter
Measurement Unit
Frequency of Sampling
Sampling Methods
Influent flow (mass) into the digester Kilograms (kg) per month (wet mass) Monthly total into the digester In descending order of preference:
1) Recorded mass
2) Digester influent pump flow
3) Livestock population and application of American Society of Agricultural and Biological Engineers (ASABE) standard (ASAE D384.2, March 2005)
Influent total solids concentration (TS) Percent (of sample) Monthly, depending upon recorded variations EPA Method Number 160.3, Methods for the Chemical Analysis of Water and Wastes (EPA/600/4-79/020) Influent volatile solids (VS) concentration Percent (of TS) Monthly, depending upon recorded variations EPA Method Number 160.4, Methods for the Chemical Analysis of Water and Wastes (EPA/600/4-79/020) Average monthly ambient temperature Temperature °C Monthly (based on farm averages) Closest National Weather Service—certified weather station Volume of biogas produced by digester Standard cubic feet (scf) Continuous, totalized monthly Flow meter Methane composition of biogas produced by digester Percent (of sample) Quarterly Bag sampling and third party laboratory analysis using applicable EPA test methods
§ 145.396. Accreditation of independent verifiers.
(a) Standards for accreditation. An independent verifier may be accredited by the Department to provide verification services as required of a project sponsor under this subchapter, provided that an independent verifier meets all the requirements of this section.
(1) Verifier minimum requirements. Each accredited independent verifier shall demonstrate knowledge of the following:
(i) Utilizing engineering principles.
(ii) Quantifying greenhouse gas emissions.
(iii) Developing and evaluating air emissions inventories.
(iv) Auditing and accounting principles.
(v) Information management systems.
(vi) The requirements of this subchapter.
(vii) Such other qualifications as may be required by the Department to provide competent verification services as required for individual offset categories under § 145.395 (relating to CO2 emissions offset project standards).
(2) Organizational qualifications. An accredited independent verifier shall demonstrate that they meet the following:
(i) No direct or indirect financial relationship, beyond a contract for provision of verification services, with any offset project developer or project sponsor.
(ii) Employ staff with professional licenses, knowledge and experience appropriate to the specific category of offset projects under § 145.395 that they seek to verify.
(iii) Hold a minimum of $1 million of professional liability insurance. If the insurance is in the name of a related entity, the verifier shall disclose the financial relationship between the verifier and the related entity, and provide documentation supporting the description of the relationship.
(iv) Implementation of an adequate management protocol to identify potential conflicts of interest with regard to an offset project, offset project developer or project sponsor, or any other party with a direct or indirect financial interest in an offset project that is seeking or has been granted approval of a consistency application under § 145.394(e) (relating to application process), and remedy any conflicts of interest prior to providing verification services.
(3) Pre-qualification of verifiers. The Department may require prospective verifiers to successfully complete a training course, workshop or test developed by the Department or its agent, prior to submitting an application for accreditation.
(b) Application for accreditation. An application for accreditation shall not contain any proprietary information and shall include the following:
(1) The applicant's name, address, e-mail address, telephone number and facsimile transmission number.
(2) Documentation that the applicant has at least 2 years of experience in each of the knowledge areas specified at subsection (a)(1)(i)—(v), and as may be required under subsection (a)(1)(vii).
(3) Documentation that the applicant has successfully completed the requirements at subsection (a)(3), as applicable.
(4) A sample of at least one work product that provides supporting evidence that the applicant meets the requirements at subsections (a)(1) and (2). The work product shall have been produced, in whole or part, by the applicant and shall consist of a final report or other material provided to a client under contract in previous work. For a work product that was jointly produced by the applicant and another entity, the role of the applicant in the work product shall be clearly explained.
(5) Documentation that the applicant holds professional liability insurance as required under subsection (a)(2)(iii).
(6) Documentation that the applicant has implemented an adequate management protocol to address and remedy any conflict of interest issues that may arise, as required under subsection (a)(2)(iv).
(c) Department action on applications for accreditation. The Department will approve or deny a complete application for accreditation within 45 days after submission. Upon approval of an application for accreditation, the independent verifier shall be accredited for a period of 3 years from the date of application approval.
(d) Reciprocity. Independent verifiers accredited in other participating states may be deemed to be accredited in this Commonwealth, at the discretion of the Department.
(e) Conduct of an accredited verifier.
(1) Prior to engaging in verification services for an offset project sponsor, the accredited verifier shall disclose all relevant information to the Department to allow for an evaluation of potential conflict of interest with respect to an offset project, offset project developer or project sponsor. The accredited verifier shall disclose information concerning its ownership, past and current clients, related entities, as well as any other facts or circumstances that have the potential to create a conflict of interest.
(2) An accredited verifier shall have an ongoing obligation to disclose to the Department any facts or circumstances that may give rise to a conflict of interest with respect to an offset project, offset project developer or project sponsor.
(3) The Department may reject a verification report and certification statement from an accredited verifier, submitted as part of a consistency application required under § 145.394(b) or submitted as part of a monitoring and verification report submitted under § 145.397(b) (relating to award and recordation of CO2 offset allowances), if the Department determines that the accredited verifier has a conflict of interest related to the offset project, offset project developer or project sponsor.
(4) The Department may revoke the accreditation of a verifier at any time for the following:
(i) Failure to fully disclose any issues that may lead to a conflict of interest situation with respect to an offset project, offset project developer or project sponsor.
(ii) The verifier is no longer qualified due to changes in staffing or other criteria.
(iii) Negligence or neglect of responsibilities pursuant to the requirements of this subchapter.
(iv) Intentional misrepresentation of data or other intentional fraud.
§ 145.397. Award and Recordation of CO2 offset allowances.
(a) Award of CO2 offset allowances. Following the issu- ance of a consistency determination under § 145.394(e)(2) (relating to application process) and the approval of a monitoring and verification report under the provisions of subsection (f), the Department will award one CO2 offset allowance for each ton of demonstrated reduction in CO2 or CO2e emissions or sequestration of CO2.
(b) Recordation of CO2 offset allowances. After CO2 offset allowances are awarded under subsection (a)(1), the Department will record the CO2 offset allowances in the project sponsor's general account.
(c) Deadlines for submittal of monitoring and verification reports.
(1) For an offset project undertaken prior to January 1, 2022, the project sponsor shall submit the monitoring and verification report covering the pre-2022 period by June 30, 2022.
(2) For an offset project undertaken on or after January 1, 2022, the project sponsor shall submit the monitoring and verification report within 6 months following the completion of the last calendar year during which the offset project achieved CO2e reductions or sequestration of CO2 for which the project sponsor seeks the award of CO2 offset allowances.
(d) Contents of monitoring and verification reports. For an offset project, the monitoring and verification report must include the following:
(1) The project sponsor's name, address, e-mail address, telephone number, facsimile transmission number and account number.
(2) The CO2 emissions reduction or CO2 sequestration determination as required by the relevant provisions of § 145.395 (relating to CO2 emissions offset project standards), including a demonstration that the project sponsor complied with the required quantification, monitoring and verification procedures under § 145.395, as well as those outlined in the consistency application approved under § 145.394(e)(2).
(3) A signed certification statement that reads ''The undersigned project sponsor hereby confirms and attests that the offset project upon which this monitoring and verification report is based is in full compliance with all of the requirements of §§ 145.391—145.397. The project sponsor holds the legal rights to the offset project or has been granted the right to act on behalf of a party that holds the legal rights to the offset project. I understand that eligibility for the award of CO2 offset allowances under §§ 145.391—145.397 is contingent on meeting the requirements of §§ 145.391—145.397. I authorize the Department or its agent to audit this offset project for purposes of verifying that the offset project, including the monitoring and verification plan, has been implemented as described in the consistency application that was the subject of a consistency determination by the Department. I understand that this right to audit shall include the right to enter the physical location of the offset project and to make available to the Department or its agent any and all documentation relating to the offset project at the Department's request. I submit to the legal jurisdiction of the Commonwealth of Pennsylvania.''
(4) A certification signed by the project sponsor certifying that all offset projects for which the sponsor has received CO2 offset allowances under this subchapter or similar provisions in the rules of other participating states, under the sponsor's ownership or control or under the ownership or control of any entity which controls, is controlled by, or has common control with the sponsor are in compliance with all applicable requirements of the CO2 Budget Trading Program in all participating states.
(5) A verification report and certification statement signed by an independent verifier accredited under § 145.396 (relating to accreditation of independent verifiers) that documents that the independent verifier has reviewed the monitoring and verification report and evaluated the following in relation to the applicable requirements at § 145.395, and any applicable guidance issued by the Department:
(i) The adequacy and validity of information supplied by the project sponsor to determine CO2 emissions reductions or CO2 sequestration under the applicable requirements at § 145.395.
(ii) The adequacy and consistency of methods used to quantify, monitor and verify CO2 emissions reductions and CO2 sequestration in accordance with the applicable requirements at § 145.395 and as outlined in the consistency application approved under § 145.394(e)(2).
(iii) The adequacy and validity of information supplied by the project sponsor to demonstrate that the offset project meets the applicable eligibility requirements under § 145.395.
(iv) Other evaluations and verification reviews as may be required by the Department.
(6) Disclosure of any voluntary or mandatory programs, other than the CO2 Budget Trading Program, to which greenhouse gas emissions data related to the offset project has been or will be reported.
(e) Prohibition against filing monitoring and verification reports in more than one participating state. The Department will only accept a monitoring and verification report for an offset project that has received a consistency determination under § 145.394(e)(2) and will not accept a monitoring and verification report for an offset project that has received a consistency determination in other participating states.
(f) Department action on monitoring and verification reports.
(1) A complete monitoring and verification report is one that is in an approved form and is determined by the Department to be complete for the purpose of commencing review of the monitoring and verification report. In no event shall a completeness determination prevent the Department from requesting additional information needed by the Department to approve or deny a monitoring and verification report.
(2) Within 45 days following receipt of a complete report, the Department will approve or deny a complete monitoring and verification report, in a format approved by the Department, filed with the Department under subsections (c) and (d).
CO2 ALLOWANCE AUCTIONS Sec.
145.401. Auction of CO2 allowances. 145.402. Auction format. 145.403. Auction timing and CO2 allowance submission schedule. 145.404. Auction notice. 145.405. Auction participant requirements. 145.406. Auction participant qualification. 145.407. Submission of financial security. 145.408. Bid submittal requirements. 145.409. Approval of auction results. § 145.401. Auction of CO2 allowances.
(a) Except as provided under subsection (b), the Department will participate in a multistate CO2 allowance auction in coordination with other participating states based on the following:
(1) A multistate auction capability and process is in place for the participating states.
(2) The multistate auction can provide benefits to this Commonwealth that meet or exceed the benefits conferred on Pennsylvania through its own Pennsylvania-run auction process.
(3) The multistate auction process is consistent with the process described in §§ 145.401—145.409 (relating to CO2 allowance auctions).
(4) The multistate auction process includes monitoring of each CO2 allowance auction by an independent monitor to identify any collusion, market power or price manipulation.
(b) Should the Department find that the conditions in subsection (a) are no longer met, the Department may determine to conduct a Pennsylvania-run auction in accordance with §§ 145.341—145.343 (relating to Pennsylvania CO2 Budget Trading Program base budget; CO2 allowance allocations; and distribution of CO2 allowances in the air pollution reduction account) and 145.401—145.409.
(c) The Department may delegate the implementation and administrative support functions for any CO2 allowance auction conducted under §§ 145.401—145.409 to an agent qualified to conduct auctions, including a regional entity, provided that the agent shall perform all functions under the direction and oversight of the Department.
(d) The Department will retain its authority to enforce compliance with all sections of this subchapter and will retain control over the proceeds associated with the sale of Pennsylvania CO2 allowances, whether sold in a multistate or Pennsylvania CO2 allowance auction and will credit the proceeds to the Clean Air Fund established under the act.
§ 145.402. Auction format.
(a) The format of a CO2 allowance auction will be one or more of the following:
(1) Uniform-price sealed-bid.
(2) Discriminatory-price sealed-bid.
(3) Ascending price, multiple-round.
(4) Descending price, multiple-round.
(b) CO2 allowances will be auctioned in lots of 1,000 CO2 allowances, unless the volume of CO2 allowances auctioned requires an individual lot size smaller than 1,000.
(c) The Department will establish a reserve price for each CO2 allowance auction, which will be either the minimum reserve price or the CCR trigger price, as specified under § 145.382 (relating to general requirements), Table 1 (relating to CO2 CCR trigger price) and §§ 145.381 and 145.382 (relating to purpose; and general requirements).
§ 145.403. Auction timing and CO2 allowance submission schedule.
(a) A CO2 allowance auction will be held no less frequently than annually, and as frequently as the Department determines is necessary and practical to ensure the availability of CO2 allowances to CO2 budget units and CO2 budget sources and to support the effective functioning of the CO2 allowance market.
(b) Prior to the end of each control period or interim control period, the Department will make available for sale by auction, all CO2 allowances held in the air pollution reduction account that are designated for the allocation years associated with that control period or interim control period. This will not include CO2 allowances set aside in the waste coal set-aside account under § 145.342(i) (relating to CO2 allowance allocations), the strategic use set-aside account under § 145.342(j) or the cogeneration set-aside account under § 145.342(k).
(c) The number of CO2 allowances to be made available for sale in an auction will be disclosed in the notice of CO2 allowance auction issued under § 145.404 (relating to auction notice).
(d) An auction of CO2 allowances will include a CO2 cost containment reserve and a CCR trigger price, as provided under § 145.342.
§ 145.404. Auction notice.
(a) A notice of each CO2 allowance auction will be provided no later than 45 days prior to the date upon which the auction will be conducted.
(b) In addition to the information specified under § 145.382(a) (relating to general requirements), the notice of a CO2 allowance auction will include the following:
(1) The date, time and location of the CO2 allowance auction.
(2) The format for the CO2 allowance auction.
(3) The categories of bidders who will be eligible to bid.
(4) The number and allocation years of Pennsylvania CO2 allowances to be auctioned.
(5) The minimum reserve price.
(6) All information regarding the CO2 cost containment reserve, required to be in the notice under § 145.382(a).
(7) The procedures for conducting the CO2 allowance auction, including the required bid submission format and process, and information regarding financial settling of CO2 allowance payments.
(8) All CO2 allowance auction participation requirements.
(9) The amount and type of financial security required and instructions for submitting acceptable financial surety.
(10) Participation limits, including bidding limits that may apply to an individual bidder or a group of related bidders.
(11) Application instructions for applying to participate in the CO2 allowance auction.
(12) Identification of a Pennsylvania auction contact person for further information.
(13) Other pertinent rules or procedures of the auction as may be required to ensure a transparent, fair and competitive auction.
§ 145.405. Auction participant requirements.
(a) To be classified by the Department as a bidder eligible to participate in a specific CO2 allowance auction, a qualified participant must meet the following:
(1) Be a member of a category of those eligible to participate in the specified CO2 allowance auction as indicated by the notice of CO2 allowance auction issued under § 145.404(b) (relating to auction notice).
(2) Open and maintain a compliance account or general account, established under § 145.351 (relating to CO2 allowance tracking system (COATS) accounts).
(3) Submit financial security, such as a bond, cash, certified funds or an irrevocable stand-by letter of credit, in a manner and form acceptable to the Department, as specified in the notice of CO2 allowance auction issued under § 145.404(b).
(b) The Department will announce the categories of parties that are eligible to participate in a specific CO2 allowance auction as part of the notice of the CO2 allowance auction, provided that an owner or operator of a CO2 budget unit located in this Commonwealth is always eligible to participate in a CO2 allowance auction.
(c) For a CO2 allowance auction, the following categories of parties may be eligible to participate:
(1) The owner or operator of a CO2 budget unit located in this Commonwealth.
(2) The owner or operator of a CO2 budget unit located in a participating state.
(3) A broker.
(4) An environmental organization.
(5) A financial or investment institution.
(6) Any other market participant, as may be specified in the notice of the CO2 allowance auction.
§ 145.406. Auction participant qualification.
(a) A person who intends to participate in a CO2 allowance auction shall submit a qualification application to the Department, in the form and manner specified in the notice of the CO2 allowance auction.
(b) The deadline for submitting a qualification application will be established in the notice of the CO2 allowance auction.
(c) As part of a qualification application, an applicant shall provide information and documentation relating to the ability and authority of the applicant to execute bids and honor contractual obligations, including the following:
(1) Identification by the applicant of either a compliance account or general account established under § 145.351 (relating to CO2 allowance tracking system (COATS) accounts) and identification of the CO2 authorized account representative for the compliance account or general account.
(2) Information and documentation regarding the corporate identity, ownership, affiliations and capital structure of the entity represented by the applicant.
(3) Identification of any indictment or felony conviction of the applicant or any member, director, principal, partner or officer of the entity represented by the applicant or any affiliate or related entity.
(4) Identification of any previous or pending investigation of the applicant or the entity represented by the applicant or any affiliate or related entity, with respect to any alleged violation of any rule, regulation or law associated with any commodity market or exchange.
(5) Other information and declarations as the Department determines may be required of an applicant to ensure the integrity of the CO2 allowance auction process.
(d) The Department will determine whether a qualification application is complete, or incomplete, or otherwise deficient. If the Department determines that an application is incomplete or otherwise deficient, the applicant will be given 10 business days to provide additional information to the Department to complete the application or remedy any application deficiency.
(e) The Department will review a complete qualification application, make a determination as to whether the applicant is qualified to participate in the CO2 allowance auction and notify the applicant in writing not later than 15 days before the CO2 allowance auction.
(f) The Department may deny qualification to an applicant based on information submitted in a qualification application to ensure the integrity of the CO2 allowance auction process in accordance with the requirements and procedures for auctions established under §§ 145.405, 145.407 and 145.408 (relating to auction participant requirements; submission of financial security; and bid submittal requirements).
(g) The Department may revoke the qualification status of a qualified participant, if the participant fails to comply with the applicable requirements of this subchapter, or if the Department determines that they have knowingly provided false or misleading information or withheld pertinent information from the qualification application submitted under subsection (a). The Department may also prohibit the qualified participant from participating in a future CO2 allowance auction where the Department determines that the prior conduct could compromise the integrity of a subsequent CO2 allowance auction.
(h) A qualified participant will remain qualified to participate in future CO2 allowance auctions after the Department's qualification determination, provided that there has been no material change to the information supplied to the Department in the qualification application submitted under subsection (a). If there is a material change to the information in the qualification application submitted under subsection (a), the qualification status will expire as of the date of the change, pending the submission of a new qualification application under subsection (a) and a determination by the Department that the applicant is qualified to participate in a CO2 allowance auction.
(i) Prior to each CO2 allowance auction, a qualified participant who intends to participate in the auction shall notify the Department, through a notice of intent to bid, that they intend to participate in the upcoming CO2 allowance auction. The notice shall be submitted to the Department by the same date as that required for submitting a qualification application established in the notice of the CO2 allowance auction.
(j) As part of a notice of intent to bid submitted to the Department under subsection (i), a qualified participant shall notify the Department whether there has been a material change to the information supplied in the qualification application submitted under subsection (a).
§ 145.407. Submission of financial security.
(a) To participate in a CO2 allowance auction, a qualified participant shall provide financial security to the Department, including a bond, cash, certified funds or an irrevocable stand-by letter of credit, in a form and manner prescribed by the Department in the notice of the CO2 allowance auction.
(b) The Department will approve the qualified participant to participate as a bidder in the specified CO2 allowance auction after the Department has approved the financial security submitted under subsection (a). The eligibility to bid in any auction shall be limited to the level of financial security provided.
(c) A qualified participant who submits financial security may request return of the financial security at any time prior to or following a CO2 allowance auction, subject to the following limitations:
(1) A request for the return of financial security prior to a CO2 allowance auction will result in the Department revoking approval to participate in the CO2 allowance auction, as of the date of the request.
(2) The Department will not return the financial security if the Department has a current or pending claim to the financial security as a result of the failure of the bidder to abide by the requirements of this subchapter or to pay the full amount of a submitted bid when payment is due.
§ 145.408. Bid submittal requirements.
(a) A bidder shall submit a bid, in a form and manner prescribed by the Department, in an amount that does not exceed the amount of financial security provided to the Department.
(b) A bidder, including any affiliate or agent of the bidder, or any combination of bidders with related beneficial interests, shall purchase no more than 25% of the CO2 allowances offered for sale in a CO2 allowance auction. The limitation, which will not be increased by CCR allowances, will be published in the auction notice under § 145.404(b) (relating to auction notice).
(c) A bidder shall not use or employ any manipulative, misleading or deceptive practice in connection with its prequalification application or purchase of CO2 allowances from the Department, including, any practice that contravenes or violates any applicable Federal or participating state law, rules or regulation.
(d) A bid submitted at a CO2 allowance auction is a binding offer for the purchase of CO2 allowances.
§ 145.409. Approval of auction results.
(a) An independent monitor, such as a certified public accounting firm or similar entity, shall observe the conduct and outcome of each auction and issue a report to the Department in accordance with professional auditing standards addressing whether the auction was conducted in accordance with the procedures and requirements under §§ 145.341—145.343 and 145.401—145.409 (relating to CO2 allowance allocations; and CO2 allowance auctions) and whether there was any indication of collusive behavior among auction participants or attempts at market manipulation that impacted the results of the auction.
(b) The independent monitor shall monitor allowance market data and information known to the Department, including CO2 allowance transactions and associated pricing reported in COATS, and other relevant data and information to ensure fair competition, efficient pricing and protection against collusive or manipulative behavior in the CO2 allowance auctions and the CO2 Budget Trading Program.
(c) The Department may approve the outcome of a CO2 allowance auction following the completion of the auction, based on an evaluation of the report from the independent monitor.
(d) Upon receipt and approval by the Department of the report and upon payment in full by successful bidders, the Department or its agent shall transfer and record the corresponding CO2 allowances to the compliance or general account of each successful bidder.
(e) After the Department has approved the results of a CO2 allowance auction, the Department will make available the auction clearing price and the number of CO2 allowances sold in the auction.
[Pa.B. Doc. No. 20-1541. Filed for public inspection November 6, 2020, 9:00 a.m.]
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