Emissions Offsets

Section 203.1810  Emissions Offsets a)         The general requirements for emissions offsets are: 1)         The owner or operator of a new major stationary source or major modification shall provide emissions offsets equal to or greater than the allowable emissions from the source or the increase in emissions from the modification sufficient to allow the Agency to determine that the source or modification will not interfere with reasonable further progress as set forth in section 173 of the CAA (42 U.S.C. 7503). A)        Emissions offsets are required for the following pollutants for which the area is designated nonattainment or precursors to such pollutant as follows: i)          For a new major stationary source, each regulated NSR pollutant for which the stationary source is major. ii)         For a major modification, each regulated NSR pollutant for which the modification is major. B)        The total tonnage of increased emissions, in tpy, resulting from a major modification that must be offset shall be determined by summing the difference between the allowable emissions after the modification, as defined under Section 203.1050, and the actual emissions before the modification, as defined under Section 203.1040, for each emissions unit. C)        The Agency shall allow the use of all or some portion of the available growth margin to satisfy this subsection if the owner or operator can present evidence that the possible sources of emissions offsets were investigated, none were available at that time and the new or modified major stationary source is located in a zone (within the nonattainment area) identified by the USEPA, in consultation with the Secretary of Housing and Urban Development, as a zone to which economic development should be targeted. b)         The ratios for emissions offsets in ozone nonattainment areas are: 1)         For new major stationary sources or major modifications in ozone nonattainment areas, the ratio of total emissions reductions provided by emission offsets for VOM or NO X to total increased emissions of such pollutants shall be at least as follows: A)        1.1 to 1 in areas classified as marginal; B)        1.15 to 1 in areas classified as moderate; C)        1.2 to 1 in areas classified as serious; D)        1.3 to 1 in areas classified as severe; and E)        1.5 to 1 in areas classified as extreme. 2)         The offset requirement provided in subsection (b)(1)(E) shall not be applicable in extreme areas to a modification of an existing stationary source: A)        If such modification consists of installation of equipment required to comply with the SIP or the CAA; or B)        If the owner or operator of the stationary source elects to offset the increase by a greater reduction in emissions of such pollutant from other discrete operations, units, or activities within the source at an internal offset ratio of at least 1.3 to 1. c)         The enforceability requirements for emissions offsets are: 1)         All emissions reductions relied upon as emissions offsets shall be federally enforceable. 2)         Except as provided in this subsection, emissions offsets shall be enforceable by the Agency and under the CAA. If emissions reductions are to be obtained in a state that neighbors Illinois, the emissions reductions committed to shall be enforceable by the neighboring state and/or local agencies and under the CAA. 3)         Except as provided in this subsection, emissions offsets shall be accomplished prior to initial start-up of the new major stationary source or major modification.  Where the new major stationary source or the major modification is a replacement for an existing stationary source or emissions unit that is being shut down in order to provide necessary offsets, the Agency shall allow up to 180 days for shakedown of the new major stationary source or major modification before the existing stationary source or emissions unit is required to cease operation. d)         Sources providing emissions reductions to meet the requirements of this Section shall meet the following location requirements. 1)         The emissions reductions shall be achieved in the same nonattainment area as the increase being offset, except as provided in subsection (d)(2) . 2)         An owner or operator may obtain the necessary emissions reductions from another nonattainment area where such other area has an equal or higher nonattainment classification than the area in which the new or modified major stationary source is located and the emissions from such other area contribute to a violation of the NAAQS in the nonattainment area in which the new or modified major stationary source is located. e)         Pollutants for emission offsets shall be determined as follows: 1) Emission reductions shall be for the pollutant for which emission offsets are required, e.g., reductions in CO emissions cannot be used as emission offsets for increases in emissions of SO 2 reductions. 2)         Replacement of one VOM with another of lesser reactivity does not constitute an emissions reduction. f)         Emissions reductions from shutdowns or curtailments shall be credited as follows: 1)         Emissions reductions achieved by shutting down an existing emissions unit or curtailing production or operating hours shall be credited for offsets if they meet the following requirements: A)        Such reductions are surplus, permanent, quantifiable and federally enforceable; and B)        The shutdown or curtailment occurred after the last day of the base year for the SIP planning process.  For this Subpart, the Agency shall consider a prior shutdown or curtailment to have occurred after the last day of the base year if the projected emissions inventory used to develop the attainment demonstration explicitly includes the emissions from such previously shutdown or curtailed emissions units.  However, in no event may credit be given for shutdowns that occurred before August 7, 1977. 2)         Emissions reductions achieved by shutting down an existing emissions unit or curtailing production or operating hours and that do not meet the requirements in subsection (f)(1)(B) shall be credited only if: A)        The shutdown or curtailment occurred on or after the date the application for a construction permit is filed; or B)        The applicant can establish that the proposed new emissions unit is a replacement for the shutdown or curtailed emissions unit, and the emissions reductions achieved by the shutdown or curtailment met the requirements of subsection (f)(1)(A). g)         The determination of emissions reductions for offsets shall be made as follows: 1)         Credit for emissions reductions used as offsets shall be determined as follows: A)        The baseline for determining credit for emissions reductions is the emissions limit under the applicable SIP in effect at the time the application for a construction permit is filed, except that the offset baseline shall be the actual emissions of the source from which offset credit is obtained where: i)          The demonstration of reasonable further progress and attainment of ambient air quality standards is based upon the actual emissions of sources located within the designated nonattainment area; or ii)         The applicable SIP does not contain an emissions limitation for that source or source category. B)        Where the emissions limit under the applicable SIP allows greater emissions than the potential to emit of the source, emissions offset credit will be allowed only for control below the potential to emit. C)        For an existing fuel combustion source, credit shall be based on the allowable emissions under the applicable SIP for the type of fuel being burned at the time the application for a construction permit is filed.  If the emissions offset is to be produced by a switch to a cleaner fuel at some future date, offset credit shall be subject to the following limitations: i)          Emissions offset credit based on the allowable (or actual) emissions for the fuels involved is allowed only if the permit is conditioned to require the use of a specified alternative control measure which would achieve the same degree of emissions reduction should the source switch back to a dirtier fuel at some later date. ii)         Emissions offset credit shall be allowed only if the owner or operator provides evidence that long-term supplies of the cleaner fuel are available. 2)         Emissions reductions shall not be credited for offsets to the extent they have been previously relied on by the Agency in issuing any permit pursuant to 35 Ill. Adm. Code 201.142 or 201.143 or this Part or for demonstrating attainment or reasonable further progress. 3)         Emissions reductions otherwise required by the CAA (42 U.S.C. 7401 et seq.) shall not be creditable as emission reductions for purposes of any such offset requirement.  Incidental emission reductions which are not otherwise required by the CAA shall be creditable as emission reductions for such purposes if such emissions reductions meet the requirements of this Section.