1. (a) For sources and modifications subject to this part, the baseline for determining credit for emissions reductions is the emissions limit under the applicable State Implementation Plan in effect at the time the application to construct is filed, except that the offset baseline shall be the actual emissions of the source from which offset credit is obtained where:

   1. (1) The demonstration of reasonable further progress and attainment of ambient air quality standards is based upon the actual emissions of sources located within a designated nonattainment area for which the preconstruction review program was adopted; or
   2. (2) The applicable State Implementation Plan does not contain an emissions limitation for that source or source category.
2. (b) Where the emissions limit under the applicable State Implementation Plan allows greater emissions than the potential to emit of the source, emissions offset credit will be allowed only for control below this potential.

3. (c)

   1. (1) For an existing fuel combustion source, credit shall be based on the allowable emissions under the applicable State Implementation Plan for the type of fuel being burned at the time the application to construct is filed.

   2. (2)

      1. (A) If the existing source commits to switch to a cleaner fuel at some future date, emissions offset credit based on the allowable (or actual) emissions for the fuels involved is not acceptable, unless the permit is conditioned to require the use of a specified alternative control measure which would achieve the same degree of emissions reduction should the source switch back to a dirtier fuel at some later date.
      2. (B) The reviewing authority should ensure that adequate long-term supplies of the new fuel are available before granting emissions offset credit for fuel switches.

4. (d) Emissions reductions achieved by shutting down an existing source or curtailing production or operating hours:

   1. (1)

      1. (A) May be generally credited for offsets if they meet the requirements in subdivisions (d)(1)(B) and (C) of this section.
      2. (B) Such reductions are:

5. (i) Surplus;

   1. (ii) Permanent;

      1. (iii) Quantifiable; and

         1. (iv) Federally enforceable.

      2. (C)

         1. (i) The shutdown or curtailment occurred after the last day of the base year for the SIP planning process.
         2. (ii) For purposes of this subdivision (d)(1)(C), a reviewing authority may choose to consider a prior shutdown or curtailment to have occurred after the last day of the base year if the projected emissions inventory used to develop the attainment demonstration explicitly includes the emissions from such previously shutdown or curtailed emission units.
         3. (iii) However, in no event may credit be given for shutdowns that occurred before August 7, 1977; and

   2. (2) That do not meet the requirements in subdivision (d)(1)(C) of this section may be generally credited only if:

      1. (A) The shutdown or curtailment occurred on or after the date the construction permit application is filed; or
      2. (B) The applicant can establish that the proposed new emissions unit is a replacement for the shutdown or curtailed emissions unit, and the emissions reductions achieved by the shutdown or curtailment met the requirements of subdivision (d)(1)(B) of this section.
6. (e) No emissions credit may be allowed for replacing one (1) hydrocarbon compound with another of lesser reactivity, except for those compounds listed in Table 1 of the Environmental Protection Agency’s "Recommended Policy on Control of Volatile Organic Compounds" (42 FR 35314, July 8, 1977).
7. (f) All emission reductions claimed as offset credit shall be federally enforceable.
8. (g) Procedures relating to the permissible location of offsetting emissions are found in 8 CAR § 43-204.

9. (h) Credit for an emissions reduction can be claimed to the extent that the reviewing authority has not relied on it in issuing any permit under regulations approved pursuant to 40 C.F.R. pt. 51, Subpart I, or the state has not relied on it in demonstration attainment or reasonable further progress.

   1. (i) [Reserved].
10. (j) [Reserved].
11. (k) The total tonnage of increased emissions, in tons per year, resulting from a major modification that must be offset in accordance with Section 173 of the Clean Air Act shall be determined by summing the difference between the allowable emissions after the modification (as defined by Subpart 1 of this part) and the actual emissions before the modification (as defined in Subpart 1 of this part) for each emissions unit.

Codification Notes: The Clean Air Act, Pub. L. No. 101-549, is codified at 42 U.S.C. § 7401 et seq.