South Coast AQMD RECLAIM Exit and New Source Review Changes
The South Coast AQMD is ending the NOx RECLAIM program, which will result in big changes to permitting requirements for new and modified sources. The new rules passed over the last few years that apply to boilers, heaters, engines, and other combustion equipment were the first step of this process. The next step are the upcoming changes to their New Source Review (NSR) rules. SCAQMD has set a goal of ending NOx RECLAIM by January 1, 2026. This will change the types of projects that trigger NSR for some facilities and will mean that operators can no longer use RECLAIM Trading Credits (RTCs) to mitigate emission increases. These changes could make it much more challenging to permit new or modified equipment.
SCAQMD is still conducting workshops for their NSR rules update so we don’t yet know exactly what the new requirements will entail, but the progress so far gives us the broad outlines of how it will work:
Are you a RECLAIM Facility?
For RECLAIM facilities that are not required to have a Federal Title V permit, the biggest change will be the loss of RTCs. In general projects that were previously offset with RTCs must now be offset with Emission Reduction Credits (ERCs). In contrast to RTCs, ERCs are surrendered one time when a new or modified source is constructed and must be sufficient to fully offset the increase from the source. Once ERCs are surrendered, there are no ongoing requirements to hold them for future years.
Right now, we don’t know what the rules will be for issuing ERCs, how they can be generated, or how long they will remain valid if they are not used immediately. This uncertainty raises significant questions about whether facilities will be able to secure needed credits and SCAQMD staff have already projected a shortfall in ERC supply compared to the expected demand.
Are you a Major Source with a Federal Title V Permit?
For major sources with a Federal Title V permit, the changes will be even more dramatic. Any increase in VOC or NOx emissions will be treated as a Federal Major Modification that triggers BACT, offsets, public notice, and other NSR requirements. Under Federal NSR applicability calculations, a modification of an existing piece of equipment may trigger Federal Major Modification requirements, even if the potential to emit of the equipment is not increased. In addition Federal NSR sets more stringent requirements for ERCs, so it is likely that some credits valid at smaller facilities will not be valid for use at Title V facilities.
Whether your facility is only in RECLAIM, or is in both RECLAIM and Title V, permitting in SCAQMD is about to change. If you are planning a project in the near future, pay attention to the rulemaking and its potential impact to your project and permitting schedule.
You can sign up for notifications of upcoming rulemaking workshops here: http://www.aqmd.gov/sign-up.
If you would like to learn more about how the potential rule changes may affect you or need assistance with SCAQMD permitting, contact:
Ben Ellenberger (email@example.com; 805-764-6007), or
Mike Waller (firstname.lastname@example.org; 805-764-6011)