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PA Bulletin, Doc. No. 08-2069


Nutrient and Sediment Reduction Credit Trading Program; Nutrient Trading Program Activities and NPDES Permits

[38 Pa.B. 6336]
[Saturday, November 15, 2008]

   The Department of Environmental Protection (Department) hereby provides notice of the following actions regarding the Nutrient and Sediment Reduction Credit Trading Program (Trading Program). These actions were taken in relation to the Final Trading of Nutrient and Sediment Reduction Credits--Policy and Guidelines (Policy) (DEP ID No. 392-0900-001) (see 36 Pa.B. 7999 (December 30, 2006)). The Policy called for a transparent system of credit reviews and approvals.

   Trading is a market-based program that provides incentives for entities to create nutrient reduction credits by going beyond statutory, regulatory or voluntary obligations and goals by removing nutrients from a watershed. The credits can be traded to help others more cost-effectively meet their obligations or goals. The primary purpose of the Trading Program is to provide for more efficient ways for National Pollutant Discharge Elimination System (NPDES) permittees to meet their effluent limits for nutrients and sediment. Currently, the focus of the program is on the Chesapeake Bay Watershed.

   The actions described in this notice relate to: (1) submitted proposals; (2) approved proposals; and (3) registered credits, through October 28, 2008.


   Before a credit can be used by an NPDES permittee, a three-step process is followed. First, the credit or offset proposal must be approved, second, it must be verified and third, it must be registered.

   Approval is also known as certification, which is a written approval by the Department for the use of proposed or implemented activities to generate credits (in some cases the person generating the credits is not permitted to transfer them to another person, in which case they are called ''offsets''). Certifications are based on at least: (1) a credit or offset proposal to be submitted describing the qualifying activities that will reduce the nutrient loadings delivered to the applicable watershed; (2) the calculation to quantify the pounds of reductions expected; and (3) a verification plan that, when implemented, ensures that the qualifying nutrient reduction activities have taken place. All of the proposals, certifications and registrations described in this notice apply to the Chesapeake Bay Watershed.

   Once the credits or offsets are certified, they must be verified. Verification means implementation of the verification plan contained in a certified credit or offset proposal as required by the Department. Verification plans require annual submittal of documentation to the Department that demonstrates that the qualifying nutrient reduction activities have taken place for the applicable compliance year.

   The credits or offsets also need to be registered by the Department before they can be used in an NPDES permit. Registration occurs only after credits or offsets have been certified and verified, and a trading contract for credits has been submitted to the Department. For the Chesapeake Bay Watershed, the Department will register credits on an annual basis for use during the compliance year in which the qualifying nutrient reduction activities have taken place and will provide such credits with an annual registry number for reporting and tracking purposes.

   The Department has received 63 proposals that have been submitted for review to generate nutrient reduction credits in the Chesapeake Bay Watershed. Of those, 36 have been approved, 14 are in review, one has been withdrawn and the remaining need additional clarification prior to certification.

Proposals under Review

   The following proposals are being reviewed by the Department. Comments will be received on these projects for 30 days.

Proposal Applicant Proposal Description
1.  Chesapeake Nutrient Management Environmental Planners Nitrogen and Phosphorus credits generated by exporting poultry manure from Lancaster to location outside of the watershed.
2.  Chesapeake Nutrient Management Environmental Planners Nitrogen and Phosphorus credits generated by exporting poultry manure from Lancaster to location outside of the watershed.

   Correction: At 38 Pa.B. 5502 (October 4, 2008), a proposal applicant was incorrectly referenced. It was stated that Bedford County Conservation District submitted a proposal for nitrogen credits generated by implementation of no-till. It should have been noticed that Capital RC&D submitted a proposal for nitrogen credits generated by the implementation of no-till in Bedford County.


   There are no new certifications.

Verifications and Registrations

   To date, there are no verifications and registrations

   For further information about the previous information or the Department's Nutrient Trading Program, contact Ann Smith, Water Planning Office, P. O. Box 2063, Harrisburg, PA 17105-2063, (717) 787-4726, annsmith@state. or visit the Department's web site at www.depweb. (DEP Keywords: ''Nutrient Trading'').

Acting Secretary

[Pa.B. Doc. No. 08-2069. Filed for public inspection November 14, 2008, 9:00 a.m.]

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