EMISSIONS

Emission Reduction Credits

Market Overview

Emission Reduction Credits (“ERCs”) or Offsets are created through process change, installation of control equipment, or the curtailment or shutdown of a facility or equipment.   ERCs are often required for new or expanding sources to offset their potential emission increases.  ERC offset requirements vary by state and attainment classification.

Each state and/or region has very specific requirements for the creation and use of the ERCs. In order to be recognized by the State government, emission reduction credits need to be recognized as real, permanent, surplus, and enforceable.  ERCs are usually classified as tons per year or pounds per day and are sold in perpetuity.  Companies that plan to build a new facility or  expand onto an existing project may be required to obtain ERCs, if they are located in an area that exceeds the National Ambient Air Quality Standards.  These Non-Attainment areas are given a classification based on the severity of pollution level and air quality standard they exceed.   Types of ERC pollutant types also vary by state and region, common types include PM10, VOC, SOx, NOx, and CO.  The ERC market widely varies by state and/or region; active trading programs include: