§ 130.456. Surplus reductions and surplus trading.
(a) The Department will issue surplus reduction certificates which establish and quantify, to the nearest pound of VOC reduced, surplus reductions achieved by a responsible ACP party operating under an ACP. The surplus reductions can be bought from, sold to or transferred to a responsible ACP party operating under an ACP, as provided in this section. Surplus reductions will be calculated by the Department at the end of each compliance period within the time specified in the approved ACP. Surplus reduction certificates do not constitute instruments, securities or other form of property.
(b) The issuance, use and trading of all surplus reductions shall be subject to the following provisions:
(1) For the purposes of this section, VOC reductions from sources of VOCs other than consumer products subject to the VOC standards specified in § 130.211 (relating to table of standards) may not be used to generate surplus reductions.
(2) Surplus reductions are valid only when generated by a responsible ACP party, and only while that responsible ACP party is operating under an approved ACP.
(3) Surplus reductions are valid only after the Department has issued an ACP agreement under this section.
(4) Surplus reductions issued by the Department may be used by the responsible ACP party who generated the surplus until the reductions expire or are traded or until the ACP is canceled under this section.
(5) Surplus reductions cannot be applied retroactively to a compliance period prior to the compliance period in which the reductions were generated.
(6) Except as provided in this section, only small or one-product businesses selling products under an approved ACP may purchase surplus reductions. An increase in the size of a small business or one-product business shall have no effect on surplus reductions purchased by that business prior to the date of the increase.
(7) While valid, surplus reductions can be used only for one of the following purposes:
(i) To adjust the ACP emissions of either the responsible ACP party who generated the reductions or the responsible ACP party to which the reductions were traded, provided the surplus reductions are not to be used by a responsible ACP party to further lower its ACP emissions when its ACP emissions are equal to or less than the ACP limit during the applicable compliance period.
(ii) To be traded for the purpose of reconciling another responsible ACP party’s shortfalls, provided the reconciliation is part of the reconciliation of shortfalls plan approved by the Department under this section.
(8) A valid surplus reduction shall be in effect starting 5 days after the date of issuance by the Department, for a continuous period equal to the number of days in the compliance period during which the surplus reduction was generated. The surplus reduction shall then expire at the end of its effective period.
(9) At least 5 working days prior to the effective date of transfer of surplus reductions, both the responsible ACP party which is selling surplus reductions and the responsible ACP party which is buying the surplus reductions shall, either together or separately, notify the Department in writing of the transfer. The notification shall include the following:
(i) The date the transfer is to become effective.
(ii) The date the surplus reductions being traded are due to expire.
(iii) The amount (in pounds of VOCs) of surplus reductions that are being transferred.
(iv) The total purchase price paid by the buyer for the surplus reductions.
(v) The contact persons, names of the companies, street and mail addresses and phone numbers of the responsible ACP parties involved in the trading of the surplus reductions.
(vi) A copy of the Department-issued surplus reductions certificate, signed by both the seller and buyer of the certificate, showing transfer of all or a specified portion of the surplus reductions. The copy shall show the amount of remaining nontraded surplus reductions, if applicable, and shall show their expiration date. The copy shall indicate that both the buyer and seller of the surplus reductions fully understand the conditions and limitations placed upon the transfer of the surplus reductions and accept full responsibility for the appropriate use of the surplus reductions as provided in this section.
(10) Surplus reduction credits shall only be traded between ACPs for consumer products.
Cross References This section cited in 25 Pa. Code § 130.211 (relating to table of standards); 25 Pa. Code § 130.373 (relating to additional labeling requirements for aerosol adhesive; adhesive remover, electrical cleaner, electronic cleaner, energized electrical cleaner and contact adhesive products); 25 Pa. Code § 130.464 (relating to treatment of information).
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