Section 2120. Offsets

A. Owners shall comply with the offset requirements of this article by obtaining emission reductions from the same source or other sources in the same nonattainment area, except that for ozone precursor pollutants the board may allow the owner to obtain such emission reductions in another nonattainment area if (i) the other area has an equal or higher nonattainment classification than the area in which the source is located and (ii) emissions from such other area contribute to a violation of the ambient air quality standard in the nonattainment area in which the source is located. By the time a new or modified source begins operation, such emission reductions shall (i) be in effect, (ii) be state and federally enforceable and (iii) assure that the total tonnage of increased emissions of the air pollutant from the new or modified source shall be offset by an equal or greater reduction, as applicable, in the actual emissions of such air pollutant from the same or other sources in the nonattainment area.

B. The (i) ratio of total emission reductions of volatile organic compounds to total increased emissions of volatile organic compounds or (ii) the ratio of total emission reductions of nitrogen oxides to total increased emissions of nitrogen oxides in ozone nonattainment areas designated in 9VAC5-20-204 shall be at least the following:

1. Nonattainment areas classified as marginal	1.1 to one.
2. Nonattainment areas classified as moderate	1.15 to one.
3. Nonattainment areas classified as serious	1.2 to one.
4. Nonattainment areas classified as severe	1.3 to one.
5. Nonattainment areas with any other classification or no classification	1 to one.

The ratio of total actual emissions reductions of the nonattainment pollutant to the emissions increase shall be at least 1 to one unless an alternative ratio is provided above for the applicable nonattainment area designated in 9VAC5-20-204.

C. Emission reductions otherwise required by these regulations shall not be creditable as emissions reductions for purposes of any such offset requirement. Incidental emission reductions which are not otherwise required by these regulations shall be creditable as emission reductions for such purposes if such emission reductions meet the requirements of subsection A of this section.

D. The board will allow an owner to offset by alternative or innovative means emission increases from rocket engine and motor firing, and cleaning related to such firing, at an existing or modified major source that tests rocket engines or motors under the following conditions:

1. Any modification proposed is solely for the purpose of expanding the testing of rocket engines or motors at an existing source that is permitted to test such engines on November 15, 1990.

2. The source demonstrates to the satisfaction of the board that it has used all reasonable means to obtain and utilize offsets, as determined on an annual basis, for the emissions increases beyond allowable levels, that all available offsets are being used, and that sufficient offsets are not available to the source.

3. The source has obtained a written finding from the U.S. Department of Defense, U.S. Department of Transportation, National Aeronautics and Space Administration or other appropriate federal agency, that the testing of rocket motors or engines at the facility is required for a program essential to the national security.

4. The owner will comply with an alternative measure, imposed by the board, designed to offset any emission increases beyond permitted levels not directly offset by the source. In lieu of imposing any alternative offset measures, the board may impose an emissions fee to be paid to the board which shall be an amount no greater than 1.5 times the average cost of stationary source control measures adopted in that nonattainment area during the previous three years. The board will utilize the fees in a manner that maximizes the emissions reductions in that nonattainment area.

E. For sources subject to the provisions of this article, the baseline for determining credit for emissions reduction is the emissions limit under the applicable implementation plan in effect at the time the application to construct is filed, except that the offset baseline shall be the actual emissions of the source from which offset credit is obtained where:

1. The demonstration of reasonable further progress and attainment of ambient air quality standards is based upon the actual emissions of sources located within a designated nonattainment area; or

2. The applicable implementation plan does not contain an emissions limitation for that source or source category.

F. Where the emissions limit under the applicable implementation plan allows greater emissions than the potential to emit of the source, emissions offset credit will be allowed only for control below this potential.

G. For an existing fuel combustion source, credit shall be based on the allowable emissions under the applicable implementation plan for the type of fuel being burned at the time the application to construct is filed. If the owner of the existing source commits to switch to a cleaner fuel at some future date, emissions offset credit based on the allowable (or actual) emissions for the fuels involved is not acceptable, unless 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. The board will ensure that adequate long-term supplies of the new fuel are available before granting emissions offset credit for fuel switches.

H. Emissions reductions achieved by shutting down an existing source or curtailing production or operating hours below baseline levels may be generally credited if such reductions are permanent, quantifiable, and federally and state enforceable. In addition, the shutdown or curtailment is creditable only if it occurred on or after January 1, 1991.

I. No emissions credit may be allowed for replacing one volatile organic compound with another of lesser reactivity.

J. Where this article does not adequately address a particular issue, the provisions of Appendix S to 40 CFR Part 51 shall be followed to the extent that they do not conflict with this section. The provisions of Appendix S to 40 CFR Parts 51 apply only to the extent that they are incorporated by reference in 9VAC5-20-21.

K. Credit for an emissions reduction can be claimed to the extent that the board has not relied on it in issuing any permit under this chapter or has not relied on it in demonstrating attainment or reasonable further progress.

L. The total tonnage of increased emissions, in tons per year, resulting from a major modification that shall be offset in accordance with § 173 of the federal Clean Air Act shall be determined by summing the difference between the allowable emissions after the modification and the actual emissions before the modification for each emissions unit.

M. In meeting the emissions offset requirements of this section, the emissions offsets obtained shall be for the same regulated NSR pollutant unless interprecursor offsetting is permitted for a particular pollutant as specified in this subsection. The offset requirements in this section for direct PM_2.5 emissions or emissions of precursors of PM_2.5 may be satisfied by offsetting reductions in direct PM_2.5 emissions or emissions of any PM_2.5 precursor identified under subdivision c of the definition of "regulated NSR pollutant" if such offsets comply with the interprecursor trading hierarchy and ratio established in accordance with subsections N through P of this section for a particular nonattainment area.

N. The board may allow the offset requirement in subsection M of this section for direct PM_2.5 emissions or precursors of PM_2.5 to be satisfied by offsetting reductions in direct PM_2.5 emissions or emissions of any PM_2.5 precursor using a ratio approved by the board for the nonattainment area after public review and comment as provided in subsections O and P of this section. Prior to making a final determination on the interpollutant trading ratios for a nonattainment area, the board shall submit the interpollutant trading ratios and supporting information to the EPA Regional Office for approval.

O. Prior to the decision of the board, the offsetting ratio will be subject to a public comment period of at least 30 days. The board will notify the public, by notice on the department web page "Public Notices for Air Regulations," of the opportunity for public comment on the offsetting ratio and supporting information as available for public inspection under the provisions of subsection P of this section. The notification shall be published at least 30 days prior to the close of the public comment period.

P. Information on the offsetting ratio and supporting information, as well as the preliminary determination of the board, shall be available for public inspection during the entire public comment period on the department web page "Public Notices for Air Regulations."

Historical Notes

Derived from Volume 15, Issue 11, eff. April 1, 1999; amended, Virginia Register Volume 18, Issue 14, eff. May 1, 2002; Volume 22, Issue 23, eff. September 1, 2006; Volume 27, Issue 23, eff. August 17, 2011.

Statutory Authority

§ 10.1-1308 of the Code of Virginia; Clean Air Act (§§ 110, 112, 165, 173, and 182 and Title V); 40 CFR Parts 51, 61, 63, 70 and 72.