§ 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 paragraph (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 Department granting 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.
Cross References This section cited in 25 Pa. Code § 145.302 (relating to definitions); 25 Pa. Code § 145.391 (relating to purpose); 25 Pa. Code § 145.392 (relating to definitions); 25 Pa. Code § 145.394 (relating to application process); 25 Pa. Code § 145.395 (relating to CO2 emissions offset project standards); and 25 Pa. Code § 145.397 (relating to award and recordation of CO2 offset allowances).
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