NY.gov Portal State Agency Listing Search all of NY.gov
D E C banner
D E C banner

Disclaimer

The New York State Department of Environmental Conservation has added a link to a translation service developed by Microsoft Inc., entitled Bing Translator, as a convenience to visitors to the DEC website who speak languages other than English.

Additional information can be found at DEC's Language Assistance Page.

Subpart 242-6: CO2 Allowance Tracking System

(Statutory authority: Environmental Conservation Law, §§ Environmental Conservation Law, §§ 1-0101, 1-0303, 3-0301, 11-0303, 11-0305, 11-0535, 13-0105, 15-0109, 15-1903, 16-0111, 17-0303, 19-0103, 19-0105, 19-0107, 19-0301, 19-0303, 19-0305, 24-0103, 25-0102, 34-0108, 49-0309, 71-2103, 71-2105; Energy Law, §§ 3-101, 3-103; Public Authorities Law, §§ 1850, 1851, 1854, 1855)

[Filed 11/27/13. Effective 1/1/14.]

[This is page 1 of 1 of this Subpart. A complete list of Subparts in this regulation appears in the Chapter 3 contents page. A list of sections in this Subpart appears below.]

For administrative information about this posting, contact: Division of Air Resources. The Bureau of Air Quality Planning at (518) 402-8396 is the contact for technical questions pertaining to this rule.

Contents:

Sec.

§242-6.1 CO2 allowance tracking system accounts

(a) Nature and function of compliance accounts. Consistent with section 242-6.2(a) of this Subpart, the department or its agent will establish one compliance account for each CO2 budget source. Deductions or transfers of CO2 allowances pursuant to sections 242-4.2 of this Part, sections 242-6.5, 242-6.7 of this Subpart, or Subpart 242-7 of this Part will be recorded in the compliance accounts in accordance with this Subpart.

(b) Nature and function of general accounts. Consistent with section 242-6.2(b) of this Subpart, the department or its agent will establish, upon request, a general account for any person. Transfers of CO2 allowances pursuant to Subpart 242-7 of this Part will be recorded in the general account in accordance with this Subpart.

§242-6.2 Establishment of accounts

(a) Compliance accounts. Upon receipt of a complete account certificate of representation under section 242-2.4 of this Part, the department or its agent will establish a compliance account for each CO2 budget source for which the account certificate of representation was submitted.

(b) General accounts.

(1) Application for general account. Any person may apply to open a general account for the purpose of holding and transferring CO2 allowances. An application for a general account may designate one and only one CO2 authorized account representative and one and only one alternate CO2 authorized account representative who may act on behalf of the CO2 authorized account representative. The agreement by which the alternate CO2 authorized account representative is selected shall include a procedure for authorizing the alternate CO2 authorized account representative to act in lieu of the CO2 authorized account representative. A complete application for a general account shall be submitted to the department or its agent and shall include the following elements in a format prescribed by the department or its agent:

(i) name, address, e-mail address, and telephone number of the CO2 authorized account representative and any alternate CO2 authorized account representative;

(ii) at the option of the CO2 authorized account representative, organization name and type of organization;

(iii) a list of all persons subject to a binding agreement for the CO2 authorized account representative or any alternate CO2 authorized account representative to represent their ownership interest with respect to the CO2 allowances held in the general account;

(iv) the following certification statement by the CO2 authorized account representative and any alternate CO2 authorized account representative: "I certify that I was selected as the CO2 authorized account representative or the CO2 alternate authorized account representative, as applicable, by an agreement that is binding on all persons who have an ownership interest with respect to CO2 allowances held in the general account. I certify that I have all the necessary authority to carry out my duties and responsibilities under the CO2 Budget Trading Program on behalf of such persons and that each such person shall be fully bound by my representations, actions, inactions, or submissions and by any order or decision issued to me by the department or its agent or a court regarding the general account.";

(v) the signature of the CO2 authorized account representative and any alternate CO2 authorized account representative and the dates signed; and

(vi) unless otherwise required by the department or its agent, documents of agreement referred to in the application for a general account shall not be submitted to the department or its agent. Neither the department nor its agent shall be under any obligation to review or evaluate the sufficiency of such documents, if submitted.

(2) Authorization of CO2 authorized account representative.

(i) Upon receipt by the department or its agent of a complete application for a general account under paragraph (1) of this subdivision:

(a) the department or its agent will establish a general account for the person or persons for whom the application is submitted;

(b) the CO2 authorized account representative and any alternate CO2 authorized account representative for the general account shall represent and, by his or her representations, actions, inactions, or submissions, legally bind each person who has an ownership interest with respect to CO2 allowances held in the general account in all matters pertaining to the CO2 Budget Trading Program, notwithstanding any agreement between the CO2 authorized account representative or any alternate CO2 authorized account representative and such person. Any such person shall be bound by any order or decision issued to the CO2 authorized account representative or any alternate CO2 authorized account representative by the department or its agent or a court regarding the general account; and

(c) any representation, action, inaction, or submission by any alternate CO2 authorized account representative shall be deemed to be a representation, action, inaction, or submission by the CO2 authorized account representative.

(ii) Each submission concerning the general account shall be submitted, signed, and certified by the CO2 authorized account representative or any alternate CO2 authorized account representative for the persons having an ownership interest with respect to CO2 allowances held in the general account. Each such submission shall include the following certification statement by the CO2 authorized account representative or any alternate CO2 authorized account representative: "I am authorized to make this submission on behalf of the persons having an ownership interest with respect to the CO2 allowances held in the general account. I certify under penalty of law that I have personally examined, and am familiar with, the statements and information submitted in this document and all its attachments. Based on my inquiry of those individuals with primary responsibility for obtaining the information, I certify that the statements and information are to the best of my knowledge and belief true, accurate, and complete. I am aware that there are significant penalties for submitting false statements and information or omitting required statements and information, including the possibility of fine or imprisonment."

(iii) The department or its agent will accept or act on a submission concerning the general account only if the submission has been made, signed, and certified in accordance with subparagraph (ii) of this paragraph.

(3) Changing CO2 authorized account representative and alternate CO2 authorized account representative; changes in persons with ownership interest.

(i) The CO2 authorized account representative for a general account may be changed at any time upon receipt by the department or its agent of a superseding complete application for a general account under paragraph (1) of this subdivision. Notwithstanding any such change, all representations, actions, inactions, and submissions by the previous CO2 authorized account representative, or the previous alternate CO2 authorized account representative, prior to the time and date when the department or its agent receives the superseding application for a general account shall be binding on the new CO2 authorized account representative and the persons with an ownership interest with respect to the CO2 allowances in the general account.

(ii) The alternate CO2 authorized account representative for a general account may be changed at any time upon receipt by the department or its agent of a superseding complete application for a general account under paragraph (1) of this subdivision. Notwithstanding any such change, all representations, actions, inactions, and submissions by the previous CO2 authorized account representative, or the previous alternate CO2 authorized account representative prior to the time and date when the department or its agent receives the superseding application for a general account shall be binding on the new alternate CO2 authorized account representative and the persons with an ownership interest with respect to the CO2 allowances in the general account.

(iii) In the event a new person having an ownership interest with respect to CO2 allowances in the general account is not included in the list of such persons in the application for a general account, such new person shall be deemed to be subject to and bound by the application for a general account, the representations, actions, inactions, and submissions of the CO2 authorized account representative and any alternate CO2 authorized account representative, and the decisions, orders, actions, and inactions of the department or its agent, as if the new person were included in such list.

(iv) Within 30 days following any change in the persons having an ownership interest with respect to CO2 allowances in the general account, including the addition or deletion of persons, the CO2 authorized account representative or any alternate CO2 authorized account representative shall submit a revision to the application for a general account amending the list of persons having an ownership interest with respect to the CO2 allowances in the general account to include the change.

(4) Objections concerning CO2 authorized account representative.

(i) Once a complete application for a general account under paragraph (1) of this subdivision has been submitted and received, the department or its agent will rely on the application unless and until a superseding complete application for a general account under paragraph (1) of this subdivision is received by the department or its agent.

(ii) Except as provided in subparagraphs (3)(i) and (ii) of this subdivision, no objection or other communication submitted to the department or its agent concerning the authorization, or any representation, action, inaction, or submission of the CO2 authorized account representative or any alternate CO2 authorized account representative for a general account shall affect any representation, action, inaction, or submission of the CO2 authorized account representative or any alternate CO2 authorized account representative or the finality of any decision or order by the department or its agent under the CO2 Budget Trading Program.

(iii) Neither the department nor its agent will adjudicate any private legal dispute concerning the authorization or any representation, action, inaction, or submission of the CO2 authorized account representative or any alternate CO2 authorized account representative for a general account, including private legal disputes concerning the proceeds of CO2 allowance transfers.

(5) Delegation by CO2 authorized account representative and alternate CO2 authorized account representative.

(i) A CO2 authorized account representative may delegate, to one or more natural persons, his or her authority to make an electronic submission to the department or its agent provided for under this Subpart and Subpart 242-7 of this Part.

(ii) An alternate CO2 authorized account representative may delegate, to one or more natural persons, his or her authority to make an electronic submission to the department or its agent provided for under this Subpart and Subpart 242-7 of this Part.

(iii) In order to delegate authority to make an electronic submission to the department or its agent in accordance with subparagraphs (i) and (ii) of this paragraph, the CO2 authorized account representative or alternate CO2 authorized account representative, as appropriate, must submit to the department or its agent a notice of delegation, in a format prescribed by the department that includes the following elements:

(a) the name, address, e-mail address, and telephone number of such CO2 authorized account representative or alternate CO2 authorized account representative;

(b) the name, address, e-mail address, and telephone number of each such natural person, herein referred to as "electronic submission agent";

(c) for each such natural person, a list of the type of electronic submissions under clause (a) or (b) of this subparagraph for which authority is delegated to him or her; and

(d) the following certification statements by such CO2 authorized account representative or alternate CO2 authorized account representative:

(1) "I agree that any electronic submission to the department or its agent that is by a natural person identified in this notice of delegation and of a type listed for such electronic submission agent in this notice of delegation and that is made when I am a CO2 authorized account representative or alternate CO2 authorized account representative, as appropriate, and before this notice of delegation is superseded by another notice of delegation under Subparagraph 242-6.2(b)(5)(iv) shall be deemed to be an electronic submission by me."

(2) "Until this notice of delegation is superseded by another notice of delegation under Subparagraph 242-6.2(b)(5)(iv), I agree to maintain an e-mail account and to notify the department or its agent immediately of any change in my e-mail address unless all delegation authority by me under paragraph 242-6.2(b)(5) is terminated."

(iv) A notice of delegation submitted under subparagraph (iii) of this paragraph shall be effective, with regard to the CO2 authorized account representative or alternate CO2 authorized account representative identified in such notice, upon receipt of such notice by the department or its agent and until receipt by the department or its agent of a superseding notice of delegation by such CO2 authorized account representative or alternate CO2 authorized account representative as appropriate. The superseding notice of delegation may replace any previously identified electronic submission agent, add a new electronic submission agent, or eliminate entirely any delegation of authority.

(v) Any electronic submission covered by the certification in subclause (iii)(d)(1) of this paragraph and made in accordance with a notice of delegation effective under subparagraph (iv) of this paragraph shall be deemed to be an electronic submission by the CO2 authorized account representative or alternate CO2 authorized account representative submitting such notice of delegation.

(c) Account identification. The department or its agent will assign a unique identifying number to each account established under subdivision (a) or (b) of this section.

§242-6.3 CO2 allowance tracking system responsibilities of CO2 authorized account representative

Following the establishment of a CO2 allowance tracking system account, all submissions to the department or its agent pertaining to the account, including, but not limited to, submissions concerning the deduction or transfer of CO2 allowances in the account, shall be made only by the CO2 authorized account representative for the account.

§242-6.4 Recordation of CO2 allowance allocations

(a) By January 1 of each allocation year, the department or its agent will record the CO2 allowances for that allocation year in the energy efficiency and clean energy technology account, the voluntary renewable energy market and eligible biomass set-aside account, and the long term contract set-aside account. For allocation year 2014, the department shall deduct the amount of allocation year 2014 CO2 allowances held in general and compliance accounts as of January 1, 2014 from the amount of 2014 allocation year CO2 allowances to be recorded in the energy efficiency and clean energy technology account.

(b) Serial numbers for allocated CO2 allowances. When allocating CO2 allowances to and recording them in an account, the department or its agent will assign each CO2 allowance a unique identification number that will include digits identifying the year for which the CO2 allowance is allocated.

§242-6.5 Compliance

(a) Allowances available for compliance deduction. CO2 allowances that meet the following criteria are available to be deducted in order for a CO2 budget source to comply with the CO2 requirements of section 242-1.5(c) of this Part for a control period or an interim control period.

(1) The CO2 allowances, other than CO2 offset allowances, are of allocation years that fall within a prior control period, the same control period or the same interim control period for which the allowances will be deducted.

(2) The CO2 allowances are held in the CO2 budget source's compliance account as of the CO2 allowance transfer deadline for that control period or interim control period or are transferred into the compliance account by a CO2 allowance transfer correctly submitted for recordation under section 242-7.1 of this Part by the CO2 allowance transfer deadline for that control period or interim control period.

(3) For CO2 offset allowances, the number of CO2 offset allowances that are available to be deducted in order for a CO2 budget source to comply with the CO2 requirements under section 242-1.5(c) of this Part for a control period or an interim control period may not exceed 3.3 percent of the CO2 budget source's CO2 emissions for that control period, or of 0.50 times the CO2 budget source's CO2 emissions for an interim control period, as determined in accordance with this Subpart and Subpart 242-8 of this Part.

(4) The CO2 allowances are not necessary for deductions for excess emissions for a prior control period under subdivision (d) of this section.

(b) Deductions for compliance. Following the recordation, in accordance with section 242-7.2 of this Part, of CO2 allowance transfers submitted for recordation in the CO2 budget source's compliance account by the CO2 allowance transfer deadline for a control period or interim control period, the department or its agent will deduct CO2 allowances available under subdivision (a) of this section to cover the source's CO2 emissions (as determined in accordance with Subpart 242-8 of this Part) for the control period or interim control period, as follows:

(1) until the amount of CO2 allowances deducted equals the number of tons of total CO2 emissions less the CO2 allowances deducted to meet the requirements of paragraph 242-1.5(c)(2) with respect to the previous two interim control periods, or 0.50 times the number of tons of total CO2 emissions for an interim control period, less any CO2 emissions attributable to the burning of eligible biomass, determined in accordance with Subpart 242-8 of this Part from all CO2 budget units at the CO2 budget source for the control period or interim control period; or

(2) if there are insufficient CO2 allowances to complete the deductions in paragraph (1) of this subdivision, until no more CO2 allowances available under subdivision (a) of this section remain in the compliance account.

(c) Identification of available CO2 allowances by serial number; default compliance deductions.

(1) The CO2 authorized account representative for a source's compliance account may request that specific CO2 allowances, identified by serial number, in the compliance account be deducted for emissions or excess emissions for a control period or interim control period in accordance with subdivision (b), or (d) of this section. Such identification shall be made in the compliance certification report submitted in accordance with section 242-4.1 of this Part.

(2) The department or its agent will deduct CO2 allowances for a control period or interim control period from the CO2 budget source's compliance account, in the absence of an identification or in the case of a partial identification of available CO2 allowances by serial number under paragraph (1) of this subdivision, in the following order:

(i) first, subject to the relevant compliance deduction limitations under paragraphs (a)(3) and (d)(1) of this section, CO2 offset allowances. CO2 offset allowances shall be deducted in chronological order (i.e., CO2 offset allowances from earlier allocation years shall be deducted before CO2 offset allowances from later allocation years). In the event that some, but not all CO2 offset allowances from a particular allocation year are to be deducted, CO2 allowances shall be deducted by serial number, with lower serial numbered allowances deducted before higher serial numbered allowances.

(ii) second, any CO2 allowances, other than CO2 offset allowances, which are available for deduction under subdivision (a) of this section. CO2 allowances shall be deducted in chronological order (i.e., CO2 allowances from earlier allocation years shall be deducted before CO2 allowances from later allocation years). In the event that some, but not all CO2 allowances from a particular allocation year are to be deducted, CO2 allowances shall be deducted by serial number, with lower serial numbered allowances deducted before higher serial numbered allowances.

(d) Deductions for excess emissions.

(1) After making the deductions for compliance under subdivision (b) of this section, the department or its agent will deduct from the CO2 budget source's compliance account a number of CO2 allowances, from allocation years that occur after the control period in which the source has excess emissions, equal to three times the number of the source's excess emissions. In the event that a source has insufficient CO2 allowances to cover three times the number of the source's excess emissions, the source shall be required to immediately transfer sufficient allowances into its compliance account. No CO2 offset allowances may be deducted to account for the source's excess emissions.

(2) Any CO2 allowance deduction required under paragraph (1) of this subdivision shall not affect the liability of the owners and operators of the CO2 budget source or the CO2 units at the source for any fine, penalty, or assessment, or their obligation to comply with any other remedy, for the same violation, as ordered under applicable State law. The following guidelines will be followed in assessing fines, penalties or other obligations.

(i) For purposes of determining the number of days of violation, if a CO2 budget source has excess emissions for a control period, each day in the control period constitutes a day in violation unless the owners and operators of the unit demonstrate that a lesser number of days should be considered.

(ii) Each ton of excess emissions is a separate violation.

(iii) For the purposes of determining the number of days of violation, if a CO2 budget source has excess interim emissions for an interim control period, each day in the interim control period constitutes a day in violation unless the owners and operators of the unit demonstrate that a lesser number of days should be considered.

(iv) Each ton of excess interim emissions is a separate violation.

(3) The propriety of the department's determination that a CO2 budget source had excess emissions and the concomitant deduction of CO2 allowances from that CO2 budget source's account may be later challenged in the context of the initial administrative enforcement, or any civil or criminal judicial action arising from or encompassing that excess emissions violation. The commencement or pendency of any administrative enforcement, or civil or criminal judicial action arising from or encompassing that excess emissions violation will not act to prevent the department or its agent from initially deducting the CO2 allowances resulting from the department's original determination that the relevant CO2 budget source has had excess emissions. Should the department's determination of the existence or extent of the CO2 budget source's excess emissions be revised either by a settlement or final conclusion of any administrative or judicial action, the department will act as follows.

(i) In any instance where the department's determination of the extent of excess emissions was too low, the department will take further action under paragraphs (1) and (2) of this subdivision to address the expanded violation.

(ii) In any instance where the department's determination of the extent of excess emissions was too high, the department will distribute to the relevant CO2 budget source a number of CO2 allowances equaling the number of CO2 allowances deducted which are attributable to the difference between the original and final quantity of excess emissions. Should such CO2 budget source's compliance account no longer exist, the CO2 allowances will be provided to a general account selected by the owner or operator of the CO2 budget source from which they were originally deducted.

(e) The department or its agent will record in the appropriate compliance account all deductions from such an account pursuant to subdivisions (b) and (d) of this section.

(f) Action by the department on submissions.

(1) The department may review and conduct independent audits concerning any submission under the CO2 Budget Trading Program and make appropriate adjustments of the information in the submissions.

(2) The department may deduct CO2 allowances from or transfer CO2 allowances to a source's compliance account based on information in the submissions, as adjusted under Paragraph (f)(1) of this Section.

§242-6.6 Banking

Each CO2 allowance that is held in a compliance account or a general account will remain in such account unless and until the CO2 allowance is deducted or transferred under section 242-4.2 of this Part, and sections 242-6.5, 242-6.7 of this Subpart, or Subpart 242-7 of this Part.

§242-6.7 Account error

The department or its agent may, at its sole discretion and on his or her own motion, correct any error in any CO2 allowance tracking system account. Within 10 business days of making such correction, the department or its agent will notify the CO2 authorized account representative for the account.

§242-6.8 Closing of general accounts

(a) A CO2 authorized account representative of a general account may instruct the department or its agent to close the account by submitting a statement requesting deletion of the account from the CO2 allowance tracking system and by correctly submitting for recordation under section 242-7.1 of this Part a CO2 allowance transfer of all CO2 allowances in the account to one or more other CO2 allowance tracking system accounts.

(b) If a general account shows no activity for a period of six years or more and does not contain any CO2 allowances, the department or its agent may notify the CO2 authorized account representative for the account that the account will be closed in the CO2 allowance tracking system 20 business days after the notice is sent. The account will be closed after the 20-day period unless, before the end of the 20-day period, the department or its agent receives a correctly submitted transfer of CO2 allowances into the account under section 242-7.1 of this Part or a statement submitted by the CO2 authorized account representative demonstrating to the satisfaction of the department or its agent good cause as to why the account should not be closed. The department or its agent will have sole discretion to determine if the owner or operator of the unit demonstrated that the account should not be closed.