Md. Code Regs. 26.11.32.21 - Surplus Reductions and Surplus Trading
A. Surplus Reductions.
(1) The Department shall issue surplus
reduction certificates that establish and quantify, to the nearest pound of VOC
reduced, surplus reductions achieved by a responsible ACP party operating under
an ACP.
(2) The surplus reductions
can be bought from, sold to, or transferred to a responsible ACP party
operating under an ACP.
(3) A
surplus reduction shall be calculated by the Department at the end of each
compliance period within the time specified in the approved ACP.
(4) Surplus reduction certificates are not
instruments, securities, or other form of property.
B. Surplus Reduction Requirements.
(1) The issuance, use, and trading of surplus
reductions are subject to the provisions of this section.
(2) VOC reductions from sources of VOCs other
than consumer products subject to the VOC standards specified in Regulation
.04B of this chapter may not be used to generate surplus reductions.
(3) A surplus reduction is valid only when
generated by a responsible ACP party and only while that responsible ACP party
is operating under an approved ACP.
(4) A surplus reduction is valid only after
the Department has issued an ACP agreement.
(5) A surplus reduction issued by the
Department may be used by the responsible ACP party who generated the surplus
reduction until the reductions expire or are traded, or until the ACP is
canceled under Regulation .25 of this chapter.
(6) A surplus reduction may not be applied
retroactively to a compliance period before the compliance period in which the
reductions were generated.
(7)
Except as provided in §B(8) of this regulation, only small or one-product
businesses selling products under an approved ACP may purchase surplus
reductions. An increase in the size of a small business or one-product business
has no effect on surplus reductions purchased by that business before the date
of the increase.
(8) Valid surplus
reductions can be used only for the following purposes:
(a) To adjust either the ACP emissions of
either the responsible ACP party who generated the reductions or the
responsible ACP party to which the reductions were traded, if the surplus
reductions are not to be used by a responsible ACP party to further lower its
ACP emissions when its ACP emissions are equal to or less than the ACP limit
during the applicable compliance period; or
(b) To be traded for the purpose of
reconciling another responsible ACP party's shortfalls, if the reconciliation
is part of the reconciliation of shortfalls plan approved by the Department
under Regulation .17C(2)(j) of this chapter.
(9) A valid surplus reduction shall be in
effect starting 5 days after the date of issuance by the Department and for a
continuous period equal to the number of days in the compliance period during
which the surplus reduction was generated. The surplus reduction shall then
expire at the end of its effective period.
(10) At least 5 working days before the
effective date of transfer of surplus reductions, both the responsible ACP
party which is selling surplus reductions and the responsible ACP party which
is buying the surplus reductions shall, either together or separately, submit
to the Department a written notification of the transfer as described in
Regulation .26 of this chapter.
(11) Surplus reduction credits shall be
traded only between ACP product or products for consumer products.
C. The written notification of
transfer of surplus reductions shall include all of the following:
(1) The date the transfer is to become
effective;
(2) The date the surplus
reductions being traded are due to expire;
(3) The amount, expressed as pounds of VOCs,
of surplus reductions that are being transferred;
(4) The total purchase price paid by the
buyer for the surplus reductions;
(5) The contact persons, names of the
companies, street and mail addresses, and phone numbers of the responsible ACP
parties involved in the trading of the surplus reductions;
(6) A copy of the Department-issued surplus
reductions certificate, that:
(a) Is signed
by both the seller and buyer of the certificate, showing transfer of all or a
specified portion of the surplus reductions;
(b) States, if applicable, the amount of
remaining non-traded surplus reductions and their expiration date;
and
(c) Indicates that both the
buyer and seller of the surplus reductions fully understand the conditions and
limitations placed upon the transfer of the surplus reductions and accept full
responsibility for the appropriate use of the surplus reductions as provided in
this regulation.
Notes
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