Emission Reduction Credits (ERC) Strategy Update

DEVELOPMENT OF A NEW ERC STRATEGY

Recognizing the constraints to economic development in the Baton Rouge area brought by a dearth of available offsets for new projects, stakeholders of the Baton Rouge Clean Air Coalition (BRCAC) (including the Capital Region Planning Commission (CRPC), the Baton Rouge Chamber, and DEQ) formulated a strategy designed to generate more emission reduction credits (ERCs) that would be available at lower costs. Funds provided by CRPC for this effort were augmented by a 20% match from the Baton Rouge Area Chamber, which recognized the potential of the Center for promoting local economic development.

This strategy essentially involved opening up eligibility for emission reduction credits to mobile sources.  This proposal was well-received by all stakeholders and work began on further defining particulars of the strategy.  The strategy and its development are described in detail in the 2014, 2015, and 2016 Baton Rouge Advance Program Update Reports.   The initial rulemaking to implement this strategy (a revision to DEQ’s banking rule) was proposed in September, 2016 and re-proposed with substantive revisions in February of 2017.  The rule, AQ365S, became final in May of 2017. 

Implementing this new ERC strategy will help mitigate air quality and economic development constraints of the former “point source only” banking system and provide a number of valuable benefits for the Baton Rouge area such as:

  • Allow for continued economic and transportation development (increased availability and lower costs for ERCs, which have been scarce and costly)
  • New ERC projects can start reducing emissions and improving air quality in a relatively short period of time (which is a goal of EPA’s Advance Program in which we participate)
  • Provide for overall ratcheting down of emissions in the nonattainment area through the emission offsets required for permits for new sources of pollutants
  • Reduce emissions from important ozone precursor sources not regulated by DEQ (e.g. on-road and off-road mobiles sources)
  • Facilitate overall emissions reductions in pursuit of attainment and maintenance of ozone and PM2.5  NAAQS
  • Provide funding opportunities for those with emission reduction projects they would like to pursue, but have no funding
  • Substantially further interest in clean diesel

Any organization can generate emission reduction credits through funding or implementing projects that reduce certain air pollutants. These credits can then be used as required offsets for permitting of new projects, or they may be sold or traded. Through this strategy, local air quality will be improved due to reduced emissions, and economic development will be facilitated due to the greater availability and reduced costs of emission reduction credits.  

Read more by visiting laerc.com.