Interchangeable Emission Reduction Credit

Interchangeable Emission Reduction Credits (IERCs) are credits that can be used in lieu of complying with the specific emission standards of certain rules. Unlike traditional emission reductions credits (ERCs), IERCs may not be used for New Source Review offsets, IERCs have a limited life (5 years), and IERCs must be used at the same location where the emission reduction occurred.

IERCs are banked in accordance with District Regulation 2, Rule 9. IERCs may only be banked for emission reductions of nitrogen oxides (NOx). Typically, IERCs are banked in one-year increments, or credit generation periods (CGPs). An applicant may bank emission reductions from up to three CGPs in a single banking application.

Once banked, IERCs may be used as part of an Alternative Compliance Plan (ACP) to assist the facility in meeting the emission standards of certain rules. A facility must obtain District approval for an ACP, via a formal application review process, prior to using IERCs. The first ACP review process for a facility includes a mandatory 30-day public comment period, prior to approval of the ACP. A facility must renew their ACP on an annual basis.

IERCs may be used to meet a District NOx emission standard that was not in effect at the time the IERC Rule (Regulation 2 Rule 9) was adopted (April 7, 1999), provided that the NOx emission standard has not been submitted for inclusion into the State Implementation Plan (SIP). Currently, the only rules for which IERCs may be used are:

Regulation 9 Rule 10, Nitrogen Oxides and Carbon Monoxide from Boilers, Steam Generators and Process Heaters in Petroleum Refineries

Regulation 9 Rule 11, Nitrogen Oxides and Carbon Monoxide from Utility Electric Power Generating Boilers

As new NOx rules are developed or existing NOx rules are revised to make more stringent, a facility may opt to use IERCs to help comply with those new or revised NOx emission standards (provided that the District does not submit the emission standards for inclusion in the SIP).