1 / 26

CAIR-CAMR: Annual Reconciliation

CAIR-CAMR: Annual Reconciliation. EPA Region 7 Workshop Kansas City August 16, 2007 Mary Shellabarger. Where do Allowances Come From?. CAIR NOx and CAMR Region-wide cap divided into State budgets Distributed within State based on SIP/SP or FIP/FP Plus opt-in allocations (CAIR only)

salena
Download Presentation

CAIR-CAMR: Annual Reconciliation

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. CAIR-CAMR:Annual Reconciliation EPA Region 7 Workshop Kansas City August 16, 2007 Mary Shellabarger

  2. Where do Allowances Come From? • CAIR NOx and CAMR • Region-wide cap divided into State budgets • Distributed within State based on SIP/SP or FIP/FP • Plus opt-in allocations (CAIR only) • Plus CSP (CAIR NOx Annual only) • CAIR SO2 • Utilizes already existing Acid Rain allowances • Plus opt-in allocations

  3. State Budgets: Initial Allocations • Most sources receive a set amount of allowances for each control period (ozone season/calendar year) at least three years in advance • determined by a methodology specific to each SIP/State Plan or FIP/Federal Plan • total of initial allocations must be within State trading budget • initial allocation period varies by SIP/SP, FIP/FP

  4. State Budgets: Set-Aside Allocations • Sources may receive allowances from State set-aside accounts • new units • energy efficiency • timing determined by effective rule • usually once a year within control period

  5. Compliance Supplement Pool • Sources may receive CSP allowances in the NOx annual program only • One time allocation of total of 200,000 allowances distributed among States • Allocations will be made at end of 2009 • Determined by SIP/FIP • Early reductions in 2007 or 2008 • Electric reliability concerns

  6. Opt-In Allocations under CAIR • Not all States adopting opt-in provisions • Opt-in is program specific • Opt-in sources will receive allowances each year • determined by opt-in methodology • takes into account previous year’s operations

  7. Allowances • Specific to each program in CAIR/CAMR • Identified by 12 digit serial number • first four digits are the compliance use date (aka “vintage”) • last eight digits are sequential • cannot use allowance for compliance prior to its vintage year • Reported in blocks • example: 201000123400 - 201000123499 • represents block of 100 allowances

  8. Private Allowance Transfers • Negotiate the trade of allowances • Transferor (seller) notifies EPA of transfer • Log on to CAMD Business System (CBS) and perform transfer instantaneously • e-mail confirmation to both parties • Fill out and mail a paper form to EPA • written confirmation to both parties via US mail

  9. Annual Reconciliation • Annual process of deducting allowances to account for the control period emissions • Separate process for each program* • CAIR NOx annual • CAIR NOx ozone • CAMR • *CAIR SO2 combined with Acid Rain

  10. Annual Reconciliation -- Eligible Allowances • Allowances used for compliance • only allowances of a “vintage” for the current year or an earlier year may be used • Allowance transfer freeze • the date after which allowances that may be used for compliance cannot be transferred into or out of a unit or overdraft account

  11. Annual Reconciliation Deadlines • Ozone Season program: • Nov 30 allowance transfer freeze • final allowance transfers must be complete • Annual programs: • March 1 allowance transfer freeze • final allowance transfers must be complete

  12. Process at EPA • A few days before the allowance transfer freeze, EPA compares preliminary emissions data with allowance account holdings • EPA makes courtesy calls to alert DR of potential problem • Emissions data received from sources and quality-assured • Final allowance transfers received from sources and processed

  13. Process, cont. • Emissions and allowances compared by Allowance Management System and deductions are processed • Currently we do this on one day for everyone • New reporting system will allow us to do this on a source-by-source basis when emissions data are received • Excess emissions penalties calculated (if necessary)

  14. Deductions for CAIR NOx and CAMR • Emissions determined at monitoring level • Unit or stack • Conventional rounding to whole number • Emissions summed to source total • Source emissions total compared to allowance holdings in source account • Deductions made at 1 : 1 ratio • One allowance per ton (NOx) or ounce (Hg)

  15. CAIR NOx and CAMR: Excess Emissions • When there are not enough allowances to cover emissions in the source account • Allowances are deducted from following year’s allocation at 3:1 rate • 3 allowances for each ton (NOx) or ounce (Hg) of excess • Other enforcement action possible

  16. CAIR SO2Annual Reconciliation EPA Region 7 Workshop Kansas City August 16, 2007 Mary Shellabarger

  17. Deductions for CAIR SO2 • Compliance is determined in 2 steps to meet the continuing requirements of title IV and new requirements of CAIR. • Step 1: all Acid Rain deductions are made • Step 2: any additional deductions to complete CAIR compliance are done

  18. Deductions for CAIR SO2, cont. • “CAIR SO2 Allowance” definition specifies different values based upon vintage years • Retirement ratios do not apply to title IV sources outside the CAIR region. Vintage year…Authorizes…Implementing a ratio of… Pre-2010 SO2 allowance 1.00 tons of SO2 emissions 2010 – 2014 SO2 allowance 0.50 tons of SO2 emissions 2.00 - to - 1 2015 and Beyond SO2 allowance 0.35 tons of SO2 emissions 2.86 - to - 1

  19. Deductions for CAIR SO2: Example 1 • Source W has 100 tons of SO2 emissions in 2012 • It is holding 70 vintage 2009 allowances and 70 vintage 2012 allowances • For Acid Rain: • 70 vintage 2009 allowances and 30 vintage 2012 allowances are deducted: compliance complete • For CAIR: • the tonnage equivalent of the above deductions is 85 tons • ( 70 1-to-1 and 30 2-to-1= 70+15=85) • 30 more vintage 2012 allowances are deducted at 2-to-1 (a tonnage equivalent 15 tons) = 100 tons accounted for: compliance complete

  20. Deductions for CAIR SO2: Example 2 • Source W has 100 tons of SO2 emissions in 2012 • It is holding 70 vintage 2009 allowances and 50 vintage 2012 allowances • For Acid Rain: • 70 vintage 2009 allowances and 30 vintage 2012 allowances are deducted: compliance complete • For CAIR: • the tonnage equivalent of the above deductions is 85 tons (70 1-to-1 and 30 2-to-1= 70+15=85) • the remaining 20 vintage 2012 allowances are deducted at 2-to-1 (a tonnage equivalent 10 tons) = 95 tons accounted for = 5 tons excess emissions

  21. Deductions for CAIR SO2 Example 2: Excess Emissions • Allowances are deducted at 3 times: • (CAIR excess emissions – Acid Rain allowance penalty) • from following year’s allocation, utilizing tonnage equivalent • 3 x (CAIR excess emissions – Acid Rain allowance penalty) • 3 x (5 – 0) = 15 ton penalty • Penalty deduction is made from 2013 allocation • Each 2013 allowance is worth 0.5 tons • Penalty is 2 x 15 tons = 30 vintage 2013 allowances • Other enforcement action possible

  22. Deductions for CAIR SO2: Example 3 • Source W has 100 tons of SO2 emissions in 2012 • It is holding 70 vintage 2009 allowances and no other compliance allowances • For Acid Rain: • 70 vintage 2009 allowances are deducted • source has 30 tons of excess emissions • Allowances are deducted from following year’s allocation at 1:1 rate -- plus monetary penalty • 30 allowances deducted from 2013 allocation

  23. Deductions for CAIR SO2: Example 3, cont. • For CAIR: • the tonnage equivalent of the Acid Rain deductions is 70 tons (70 1-to-1) • Source has 30 tons excess emissions for CAIR • Allowances are deducted at 3 times: • (CAIR excess emissions – Acid Rain allowance penalty) • from following year’s allocation, utilizing tonnage equivalent • 3 x (30 tons CAIR excess emissions – 30 allowance Acid Rain penalty) = 0 deduction

  24. Deductions for CAIR SO2: Example 4 • Source W has 100 tons of SO2 emissions in 2012 • It is holding 70 vintage 2009 allowances and 10 vintage 2010 allowances • For Acid Rain: • 70 vintage 2009 and 10 vintage 2010 allowances are deducted • source has 20 tons excess emissions for Acid Rain • Allowances are deducted from following year’s allocation at 1:1 rate -- plus monetary penalty • 20 allowances deducted from 2013 allocation

  25. Deductions for CAIR SO2: Example 4, cont. • For CAIR: • the tonnage equivalent of the Acid Rain deductions is 75 tons (70 1-to-1 and 10 2-to1 = 70 + 5 = 75) • Source has 25 tons excess emissions for CAIR • Allowances are deducted at 3 times: • (CAIR excess emissions – Acid Rain allowance penalty) • from following year’s allocation, utilizing tonnage equivalent • 3 x (25 tons CAIR excess emissions – 20 allowance Acid Rain penalty) = 3 x 5 = 15 tondeduction • Penalty deduction is made from 2013 allocation • Each 2013 allowance is worth 0.5 tons • Penalty is 2 x 15 tons = 30 vintage 2013 allowances

  26. Conclusions • Understand allowance management and CAIR SO2 compliance ratios • Don’t get caught short of allowances • Use our on-line systems to facilitate compliance • www.epa.gov/airmarkets

More Related