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Virginia Administrative Code
Title 9. Environment
Agency 5. State Air Pollution Control Board
Chapter 140. Regulation for Emissions Trading Programs
11/24/2020

9VAC5-140-6260. Compliance.

A. CO2 allowances that meet the following criteria are available to be deducted for a CO2 budget source to comply with the CO2 requirements of 9VAC5-140-6050 C for a control period or an interim control period.

1. The CO2 allowances are of allocation years that fall within a prior control period, the same control period, or the same interim control period for which the allowances will be deducted.

2. The CO2 allowances are held in the CO2 budget source's compliance account as of the CO2 allowance transfer deadline for that control period or interim control period or are transferred into the compliance account by a CO2 allowance transfer correctly submitted for recordation under 9VAC5-140-6300 by the CO2 allowance transfer deadline for that control period or interim control period.

3. For CO2 offset allowances generated by other participating states, the number of CO2 offset allowances that are available to be deducted in order for a CO2 budget source to comply with the CO2 requirements of 9VAC5-140-6050 C for a control period or an interim control period shall not exceed 3.3% of the CO2 budget source's CO2 emissions for that control period, or may not exceed 3.3% of 0.50 times the CO2 budget source's CO2 emissions for an interim control period, as determined in accordance with this article and Article 8 (9VAC5-140-6330 et seq.) of this part.

4. The CO2 allowances are not necessary for deductions for excess emissions for a prior control period under subsection D of this section.

B. Following the recordation, in accordance with 9VAC5-140-6310, of CO2 allowance transfers submitted for recordation in the CO2 budget source's compliance account by the CO2 allowance transfer deadline for a control period or an interim control period, the department or its agent will deduct CO2 allowances available under subsection A of this section to cover the source's CO2 emissions, as determined in accordance with Article 8 (9VAC5-140-6330 et seq.) of this part, for the control period or interim control period, as follows:

1. Until the amount of CO2 allowances deducted equals the number of tons of total CO2 emissions, or 0.50 times the number of tons of total CO2 emissions for an interim control period, determined in accordance with Article 8 (9VAC5-140-6330 et seq.) of this part, from all CO2 budget units at the CO2 budget source for the control period or interim control period; or

2. If there are insufficient CO2 allowances to complete the deductions in subdivision 1 of this subsection, until no more CO2 allowances available under subsection A of this section remain in the compliance account.

C. Identification of available CO2 allowances by serial number and default compliance deductions shall be managed as follows:

1. The CO2 authorized account representative for a source's compliance account may request that specific CO2 allowances, identified by serial number, in the compliance account be deducted for emissions or excess emissions for a control period or interim control period in accordance with subsection B or D of this section. Such identification shall be made in the compliance certification report submitted in accordance with 9VAC5-140-6170.

2. The department or its agent will deduct CO2 allowances for an interim control period or a control period from the CO2 budget source's compliance account, in the absence of an identification or in the case of a partial identification of available CO2 allowances by serial number under subdivision 1 of this subsection, as follows: Any CO2 allowances that are available for deduction under subdivision 1 of this subsection. CO2 allowances shall be deducted in chronological order (i.e., CO2 allowances from earlier allocation years shall be deducted before CO2 allowances from later allocation years). In the event that some, but not all, CO2 allowances from a particular allocation year are to be deducted, CO2 allowances shall be deducted by serial number, with lower serial number allowances deducted before higher serial number allowances.

D. Deductions for excess emissions shall be managed as follows.

1. After making the deductions for compliance under subsection B of this section, the department or its agent will deduct from the CO2 budget source's compliance account a number of CO2 allowances equal to three times the number of the source's excess emissions. In the event that a source has insufficient CO2 allowances to cover three times the number of the source's excess emissions, the source shall be required to immediately transfer sufficient allowances into its compliance account.

2. Any CO2 allowance deduction required under subdivision 1 of this subsection shall not affect the liability of the owners and operators of the CO2 budget source or the CO2 budget units at the source for any fine, penalty, or assessment, or their obligation to comply with any other remedy, for the same violation, as ordered under applicable state law. The following guidelines will be followed in assessing fines, penalties, or other obligations:

a. For purposes of determining the number of days of violation, if a CO2 budget source has excess emissions for a control period, each day in the control period constitutes a day in violation unless the owners and operators of the unit demonstrate that a lesser number of days should be considered.

b. Each ton of excess emissions is a separate violation.

c. For purposes of determining the number of days of violation, if a CO2 budget source has excess interim emissions for an interim control period, each day in the interim control period constitutes a day in violation unless the owners and operators of the unit demonstrate that a lesser number of days should be considered.

d. Each ton of excess interim emissions is a separate violation.

3. The propriety of the department's determination that a CO2 budget source had excess emissions and the concomitant deduction of CO2 allowances from that CO2 budget source's account may be later challenged in the context of the initial administrative enforcement, or any civil or criminal judicial action arising from or encompassing that excess emissions violation. The commencement or pendency of any administrative enforcement, or civil or criminal judicial action arising from or encompassing that excess emissions violation will not act to prevent the department or its agent from initially deducting the CO2 allowances resulting from the department's original determination that the relevant CO2 budget source has had excess emissions. Should the department's determination of the existence or extent of the CO2 budget source's excess emissions be revised either by a settlement or final conclusion of any administrative or judicial action, the department will act as follows:

a. In any instance where the department's determination of the extent of excess emissions was too low, the department will take further action under subdivisions 1 and 2 of this subsection to address the expanded violation.

b. In any instance where the department's determination of the extent of excess emissions was too high, the department will distribute to the relevant CO2 budget source a number of CO2 allowances equaling the number of CO2 allowances deducted which are attributable to the difference between the original and final quantity of excess emissions. Should such CO2 budget source's compliance account no longer exist, the CO2 allowances will be provided to a general account selected by the owner or operator of the CO2 budget source from which they were originally deducted.

E. The department or its agent will record in the appropriate compliance account all deductions from such an account pursuant to subsections B and D of this section.

F. Action by the department on submissions shall be as follows:

1. The department may review and conduct independent audits concerning any submission under the CO2 Budget Trading Program and make appropriate adjustments of the information in the submissions.

2. The department may deduct CO2 allowances from or transfer CO2 allowances to a source's compliance account based on information in the submissions, as adjusted under subdivision 1 of this subsection.

Statutory Authority

§§ 10.1-1308 and 10.1-1322.3 of the Code of Virginia; §§ 108, 109, 110, and 302 of the Clean Air Act; 40 CFR Part 51.

Historical Notes

Derived from Volume 35, Issue 20, eff. June 26, 2019; amended, Virginia Register Volume 36, Issue 25, eff. July 10, 2020.

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