1. (1) A proposed new facility which is subject to this Subpart must offset its potential to emit for each nonattainment contaminant for which it equals or exceeds the major facility threshold.

2. (2) A proposed modification to an existing non-major facility must offset its project emission potential for each nonattainment contaminant for which the project emission potential equals or exceeds the major facility threshold.

   (b) Offset ratio.

3. (1) An emission offset of VOC or NO_x as ozone precursors must exceed the corresponding facility potential to emit or project emission potential (subsequent to application of LAER), as appropriate, by the applicable offset ratio specified in Subpart 231-13 of this Part. A greater offset ratio may be required, on a case-by-case basis, to provide an acceptable contribution demonstration as set forth in this section.
4. (2) An emission offset of PM-10 must at least equal (offset ratio of one to one or greater) the corresponding facility potential to emit or project emission potential (subsequent to application of LAER), as appropriate, by the applicable offset ratio specified in Subpart 231-13 of this Part. A greater offset ratio may be required to provide a net air quality benefit as set forth in this section.

5. (3) An emission offset of PM-2.5 (including applicable precursors) must at least equal (offset ratio of one to one or greater) the corresponding facility potential to emit or project emission potential of the same pollutant (subsequent to application of LAER), as appropriate, by the applicable offset ratio specified in Subpart 231-13 of this Part. A greater offset ratio may be required to provide a net air quality benefit as set forth in this section.

   (c) Use of an ERC as part of an emission offset.

   An ERC must meet the following conditions to be used as part of an emission offset:

6. (1) for NO_x, PM-10, or VOC emissions, ERCs must have physically occurred on or after November 15, 1990 but need not be contemporaneous;
7. (2) for PM-2.5 (including applicable precursors) ERCs must have physically occurred on or after April 5, 2005 but need not be contemporaneous;

8. (3) an ERC, or portion thereof, must be included as a condition in the permit for the proposed new or modified facility for which the reduction is used.

   (d) Net air quality benefit and emission offset location for PM-10, or PM-2.5 (including applicable precursors).

   An emission offset of PM-10, or PM-2.5 (including applicable precursors) must meet the following:

9. (1) Contribution demonstration. An emission offset may be obtained from the same nonattainment area in which a proposed new or modified facility is to be located. An emission offset may also be obtained from other nonattainment areas of equal or higher classification if emissions from such other areas contribute to a violation of the NAAQS for PM-10 or PM-2.5, as applicable, in the nonattainment area where the proposed new or modified facility is to be located. These other areas must be determined in accordance with department approved modeling procedures.

10. (2) Net air quality benefit demonstration. As part of a permit application, the applicant must submit an air quality impact evaluation for PM-10 and PM-2.5, as applicable, in accordance with department approved modeling procedures. The ambient air quality impact analysis must demonstrate that:

    1. (i) the net impact of the proposed emissions increase and the emission offset provides for a net benefit, on balance, in the area affected by the proposed new or modified facility; and
    2. (ii) for PM-10 and PM-2.5, the net impact in no case exceeds an applicable significant impact level of section 231-12.6 of this Part.

11. (3) Interstate offsets. An emission offset of PM-10 or PM-2.5 (including applicable precursors), may be obtained from areas of equal or higher classification located in another state, in accordance with department approved modeling procedures, provided that an interstate reciprocal trading agreement is in place and the requirements of paragraphs (1) and (2) of this subdivision are met.

    (e) Ozone nonattainment and emission offset location.

    The department approved modeling procedures must be used by an applicant to find default acceptable VOC or NO_x offset source locations within New York State or to perform a case specific contribution demonstration. An emission offset of VOC or NO_x is subject to the following:

12. (1) Proposed new or modified facility located in an ozone nonattainment area.

    1. (i) Intrastate offset sources. An emission offset of VOC or NO_x must be obtained from:

       1. (a) the same ozone nonattainment area; or
       2. (b) other ozone nonattainment areas of equal or higher classification, if emissions from such other areas contribute to a violation of the NAAQS for ozone in the nonattainment area where the proposed new or modified facility is to be located.
    2. (ii) Interstate offset sources. An emission offset may be obtained from ozone nonattainment areas of equal or higher classification in another state, if emissions from such other areas contribute to a violation of the NAAQS for ozone in the nonattainment area where the proposed new or modified facility is to be located and an interstate reciprocal trading agreement is in place. The department approved modeling procedures may be used by an applicant to perform a case specific contribution demonstration.
13. (2) Proposed new or modified facility located in an attainment area of the state within the ozone transport region. An emission offset of VOC or NO_x may be obtained from any location within the ozone transport region within New York State. Such an offset may also be obtained from another state in the ozone transport region, provided that an interstate reciprocal trading agreement is in place.

(a) Emission offset applicability.