The baseline for determining credit for emission offsets is the emission limit in effect at the time the application to construct is filed, except that the offset baseline is the actual emission of the unit from which offset credit is obtained if the demonstration of reasonable further progress and attainment of ambient air quality standards is based upon the actual emission of sources located within a designated nonattainment area or if there is no applicable emission limit.

1. (1) All offsets must be for the same regulated NSR pollutant, result in a net positive air quality benefit in the affected area, and be approved by the department before issuance of the permit, even though they need not be in effect until the source commences operation. The offset ratio of total actual emissions reductions to the emissions increase must be at least one-to-one unless an alternative ratio is provided in accordance with the offset requirements in 40 C.F.R. § 51.165(a)(9)(ii) to 51.165(a)(9)(iv), inclusive (July 1, 2024);
2. (2) External offsets or those emission limitations from sources not owned, operated, or controlled by an applicant for a permit must be made through a revision of the permit conditions of the participating source or sources. At no time may the baseline be exceeded;
3. (3) The permissible location of offsetting emissions must be in accordance with 40 C.F.R. Part 51, Appendix S, section IV.D (July 1, 2024);
4. (4) For an existing fuel combustion unit, credit is based on the emission limit for the type of fuel being burned at the time the application to construct is filed. If the existing source agrees to switch to a cleaner fuel at some future date, emission offset credits based on the allowable or actual emissions for the fuels involved may be allowed only if permit conditions specify an alternative control measure that would achieve the same degree of emission reduction if the source switched back to the dirtier fuel at some later date;
5. (5) Emission reductions achieved by shutting down an existing unit or curtailing production or operating hours below baseline levels may be credited if the reductions are permanent, quantifiable, federally enforceable, and the area has a federally approved attainment plan. In addition, the shutdown or curtailed production must have occurred after August 7, 1977, or less than one year before the date of submitting the permit application, whichever is earlier. Emission reductions may be credited in the absence of a federally approved attainment plan if the shutdown or curtailment occurred on or after the date the application is filed for a new unit, or if the applicant can establish that the proposed new unit is a replacement for the shutdown or curtailed unit, and the shutdown or curtailment occurred after August 7, 1977, or less than one year before the date of submitting the permit application, whichever is earlier;
6. (6) Except as set forth in 40 C.F.R. § 51.165(a)(3)(ii)(D) (July 1, 2024), emission offset credit is not allowed for replacing one hydrocarbon compound with another of lesser reactivity;
7. (7) Credit for emissions reduction may be claimed to the extent that the department has not relied on it in issuing a permit or in its demonstration of attainment or reasonable further progress;
8. (8) If the emissions limit allows greater emissions than the potential to emit of the unit, the emission offset credit is allowed only for the control below the potential to emit of the unit; and
9. (9) All emission reductions claimed as offset credit must be federally enforceable.

In determining credit for emission offsets, the following criteria must be met:

Source: 7 SDR 4, effective July 27, 1980; transferred from §§ 44:10:01:15 and 44:10:01:17, effective July 1, 1981; 8 SDR 71, effective December 21, 1981; 12 SDR 183, effective May 21, 1986; 13 SDR 129, 13 SDR 141, effective July 1, 1987; 17 SDR 170, effective May 13, 1991; transferred from §§ 74:26:01:15, 74:26:01:16.01, and 74:26:01:17, 19 SDR 157, effective April 22, 1993; 21 SDR 119, effective January 5, 1995; 30 SDR 26, effective September 1, 2003; 31 SDR 101, effective January 2, 2005; 36 SDR 207, effective June 28, 2010; 39 SDR 219, effective June 25, 2013; 42 SDR 52, effective October 13, 2015; 44 SDR 43, effective September 13, 2017; 46 SDR 64, effective November 25, 2019 ; 52 SDR 27, effective September 17, 2025 .

General Authority: SDCL 34A-1-6 , 34A-1-21 .

Law Implemented: SDCL 34A-1-21 , 34A-1-22 .

Prior versions effective: 2019-11-25, 2017-09-13, 2015-10-13, 2013-06-25.