NJDEP has proposed new rules that would establish an open market emissions trading program in which sources of volatile organic compounds ("VOCs") and oxides of nitrogen ("NOx") could buy or sell credits for discrete emissions reductions ("DERs"). VOCs and NOx are major precursors to the formation of ground-level ozone, a pollutant believed to cause respiratory problems.
Through this proposed program, a source of VOCs or NOx voluntarily could reduce its emissions of VOCs or NOx and then sell credits for that reduction, called DERs, to another facility (discrete emission reductions are not to be confused with a declaration of environmental restrictions). The purchasing facility could use the DERs to establish its compliance with VOC or NOx emissions limitations without installing additional pollution control equipment or making process changes to reduce its emissions.
A DER represents one-tenth of one ton of emission reductions. In general, DERs are measured based upon the source's reduction of its actual emissions below the lower of either its baseline emission rate, or its actual emission rate during a baseline period. The generator must record the DERs with the NJDEP-established registry prior to offering them for sale. Prior to use, a licensed professional engineer, certified public accountant or an agent of the United States Environmental Protection Agency must verify that the DERs were generated in compliance with the program.
Once the validity of the DERs is verified, the purchaser may use the DERs if the following conditions are satisfied: the DERs must be purchased before the period in which they will be used; the DERs must be used within the same air quality control region as they were generated; and the DERs may be used in an ozone season only if generated during the season. A purchaser may use only 90% of the DERs it acquires; 10% of the DERs can not be used and must be "retired" for the benefit of the environment. As such, every use of DERs results in a reduction of emissions. A DER user may not use NOx DERs to comply with VOC requirements nor VOC DERs to comply with NOx requirements.
If enacted, the proposed emissions trading program will provide businesses with an innovative and flexible means of complying with VOC and NOx emissions standards, potentially establish a new source of income for facilities that can reduce their emissions, and improve air quality by reducing emissions that are precursors to ground-level ozone.
