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Emission Reduction Credits - Texas

The Texas Commission on Environmental Quality’s (TCEQ) Emission Banking and Trading Program (EBTP) was established in 1993.  This program provides a market-based framework for trading reductions in volatile organic compound (VOC), oxides of nitrogen (NOx) and certain other criteria pollutant emissions from stationary sources.

Emission Reduction Credits (ERCs) are just one form of creditable reduction available for certification through the EBTP. An ERC is a permanent reduction in VOC or NOx emissions, expressed in tons per year.   ERCs are only within the same non-attainment area in which they were generated and must be used within five years of certification.  Traditionally, ERCs have been used as an alternative means of compliance with the Houston/Galveston mass cap and trade program and as offsets for New Source Review.

The Houston-Galveston area is treated as a “severe” nonattainment, so any new source of emissions must buy Emissions Reduction Credits (ERCs) to offset emissions. New sources must offset their emissions with a 1.3:1.0 offset ratio. Meaning, for every 1 ton of new emissions, the new source must acquire 1.3 tons of ERCs.  ERCs must be used within the nonattainment area in which they were created.

In severe nonattainment areas like Houston-Gavelston, sources which emit over 25 tons per year of VOC or NOx are able to create or bank ERCs. For more information on Texas ERCs, please contact us at 646.346.6899 or ebs@bgcpartners.com.