1. A. The Department shall administer the Limited Industrial Exemption in accordance with the procedures of this regulation.

2. B. A CO₂ budget source is exempt from the requirements of Regulation .03K of this chapter if it meets the following criteria:

   1. (1) Obtains from the Department a condition in its CO₂ budget permit that limits the CO₂ budget source's annual electrical output to the electric grid in the PJM region to not more than 10 percent of its annual gross generation;

   2. (2) Submits a request for and receives the Department's approval of a climate action plan which requires reduction of CO₂e emissions through reasonably available reduction practices not limited to the following:

      1. (a) Energy efficiency;
      2. (b) Fuel switching;
      3. (c) Alternative transportation options; and
      4. (d) Modification to manufacturing processes; and
   3. (3) Receives written notice of the Department's approval of the exemption based on the criteria in §B(1) and (2) of this regulation.

3. C. Once the Department approves the CO₂ budget source's exemption and notifies the CO₂ budget source of its approval, the exemption shall become effective as follows:

   1. (1) For a CO₂ budget source that commenced operation before January 1, 2009, retroactively on the January 1 that began a control period; or
   2. (2) For a CO₂ budget source that commenced operation after January 1, 2009, the January 1 of the calendar year that the CO₂ budget source commenced operation.

4. D. An exempt CO₂ budget source shall:

   1. (1) Comply with the CO₂ budget permit condition issued pursuant to §B(1) of this regulation;
   2. (2) Comply with the terms of the climate action plan approved pursuant to §B(2) of this regulation;

   3. (3) Beginning the April 1 of the year after the Department approved the CO₂ budget source's exemption, report annually to the Department the following:

      1. (a) Its annual gross electricity generation; and
      2. (b) The amount of electricity that it supplied to the electric grid in the PJM region during the calendar year;
   4. (4) Report reductions achieved by the approved climate action plan; and
   5. (5) Retain all reports required by this regulation at the CO₂ budget source for a period of 10 years from the date the reports are created.
5. E. A CO₂ budget source's exemption pursuant to §B of this regulation shall no longer apply if the CO₂ budget source fails to comply with any of the requirements of §D of this regulation.
6. F. On or after January 1, 2027, the Department may reallocate any CO₂ allowances previously allocated for retirement on behalf of CO₂ budget sources eligible for the Limited Industrial Exemption to the Consumer Energy Efficiency Account..

Authority: Environment Article, §§1-101, 1-404, 2-103, and 2-1002(g), Annotated Code of Maryland

Effective date: July 17, 2008 (35:14 Md. R. 1247)

Chapter revised effective May 18, 2009 (36:10 Md. R. 717)

Regulation .02 amended effective January 6, 2014 (40:26 Md. R. 2165)

Regulation .03 amended effective January 21, 2013 (40:1 Md. R. 22); January 6, 2014 (40:26 Md. R. 2165); December 31, 2018 (45:26 Md. R. 1249); March 30, 2026 (53:6 Md. R. 292)

Regulation .04A amended effective December 31, 2018 (45:26 Md. R. 1249)

Regulation .05A amended as an emergency provision effective December 28, 2009 (37:4 Md. R. 336); amended permanently effective May 3, 2010 (37:9 Md. R. 674); August 6, 2012 (39:15 Md. R. 964)

Regulation .05A amended effective January 6, 2014 (40:26 Md. R. 2165)

Regulation .05C repealed effective January 6, 2014 (40:26 Md. R. 2165)

Regulation .06 amended effective March 30, 2026 (53:6 Md. R. 292)

Regulation .06B amended effective January 21, 2013 (40:1 Md. R. 22); December 31, 2018 (45:26 Md. R. 1249)

Regulation .06D amended effective December 31, 2018 (45:26 Md. R. 1249)

Regulation .06G amended effective August 6, 2012 (39:15 Md. R. 964); January 21, 2013 (40:1 Md. R. 22); December 31, 2018 (45:26 Md. R. 1249)

Regulation .07 amended effective January 21, 2013 (40:1 Md. R. 22); December 31, 2018 (45:26 Md. R. 1249)

Regulation .07H amended effective January 6, 2014 (40:26 Md. R. 2165)

Regulation .07J adopted effective March 30, 2026 (53:6 Md. R. 292

Regulation .07N amended effective August 6, 2012 (39:15 Md. R. 964)

Regulation .08 amended as an emergency provision effective February 1, 2011 (38:4 Md. R. 263); amended permanently effective May 16, 2011 (38:10 Md. R. 617)

Regulation .08A amended effective January 21, 2013 (40:1 Md. R. 22)

Regulation .08C amended effective August 6, 2012 (39:15 Md. R. 964); January 21, 2013 (40:1 Md. R. 22)

Regulation .08D adopted effective February 12, 2018 (45:3 Md. R. 157)

Regulation .09 amended effective February 12, 2018 (45:3 Md. R. 157)

Regulation .09B amended effective January 21, 2013 (40:1 Md. R. 22)

Regulation .09H amended effective August 6, 2012 (39:15 Md. R. 964); January 21, 2013 (40:1 Md. R. 22)

Regulation .10 amended effective March 30, 2026 (53:6 Md. R. 292)

Regulation .11 D, E amended effective March 30, 2026 (53:6 Md. R. 292)

Regulation .11H amended effective December 31, 2018 (45:26 Md. R. 1249)