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RECLAIM Facility Emissions
Frequently Asked Questions - Part I

Introduction: (skip)

RECLAIM is a market trading program where participating facilities are required to meet targets for annual emission reductions of Nitrogen Oxides (NOx) and  Sulfur Oxides (SOx).  Some of the program's key features are discussed below:

  1. RTCs: RECLAIM Trading Credits are a limited authorization to emit a fixed amount of NOx or SOx.  RTCs are issued in one-pound denominations and have a term of one year.  RTCs can only be used to reconcile with emissions during their term and cannot be carried over to the next year.  An Allocation is the total number of RTCs a RECLAIM facility holds for a specific compliance year.
  2. RTCs Trading Market: Sources can buy or sell RTCs on the open market.  There is a financial incentive to reduce air pollution since facilities that surpass their reduction targets can sell their surplus credits on the open market.  Likewise, facilities with high emission control costs can opt to finance lower emission controls at other facilities by purchasing future RTCs from these facilities that have surplus RTCs resulting from the installation of control equipment.
  3. Compliance: At the end of the reconciliation period for each quarter, a RECLAIM facility must have sufficient RTCs in its Allocation account to offset emissions and any other requirements in Regulation  XX - Regional Clean Air Air Incentives Market (RECLAIM).

How Facilities Operate In RECLAIM:

The RECLAIM program comprises two compliance year cycles.  Facilities operating under the first compliance year cycle, otherwise known as Cycle 1 facilities, are required to measure and report emissions on a compliance year period from January 1 through December 31.  Cycle 2 facilities must measure and report emissions on a compliance year period from July 1 through June 30 of the following year.  At the start of the program each RECLAIM facility was given RTCs Allocation for each compliance year that are valid for the same compliance period for which the facility is designated.  At the end of each quarterly reconciliation period, facilities are required by Rule 2004 - Requirements, to have at least as many RTCs in their Allocation account as the accumulated emissions from the start of the compliance year to the end of each quarter.

While the expiration date of the RTCs may coincide with the operating cycle for which facilities are assigned to under RECLAIM, facilities may still acquire and use RTCs from either cycle.  For example, during the compliance year from January through December of 2004, a Cycle 1 facility may use RTCs expiring in December 2004 to offset emissions for the entire period.  However, the same facility may purchase and use Cycle 2 facility RTCs expiring in June 2004 to offset emissions for the first six months from January through June of 2004.  Similarly, the facility may also use RTCs expiring in June 2005 to offset emissions for the last six months of the compliance year, from July through December of 2004.  Any unused RTCs expiring in June 2005 may be carried over to offset emissions that occur during the first six months of the following compliance year, from January through June of 2005.

How Facilities Report Their Emissions:

Following the end of each of the first three quarters, facilities are allowed a 30- day reconciliation period to purchase additional RTCs and to report emissions to the AQMD by submitting a Quarterly Certification of Emissions Report (QCER). 

Sixty days following the end of the compliance year, facilities are required to submit an Annual Permit Emissions Program (APEP) report to certify emissions for the fourth quarter and also for the year.  Corrections to any QCER are allowed any time before the end of the reconciliation period for the last quarter of the compliance year, provided that the emissions were inaccurately certified due to an error caused by conditions beyond the reasonable control of the Facility Permit holder.  If the corrected emissions are found to be greater than the previously certified emissions and the correction is made pursuant to Rule 2004, facilities are allowed an additional 30 days from the date that the corrected emission certification is submitted to acquire any RTCs necessary to reconcile the additional emissions.  However, this additional period may not extend beyond the end of the reconciliation period for the last quarter of the same compliance year.

How the AQMD Determines Whether Facilities Are Meeting Their Goals:

The AQMD maintains the RTC Listing, which is the official record showing the amount of RTCs held by facilities.  The RTC Listing is maintained as a checking account to track RTC issuances, trades and uses.

Upon receiving the APEP report at the end of each compliance year, the AQMD deducts the certified emissions from the RTC Listing.  The AQMD may also audit the emissions reported by the facility for accuracy.  Upon completion of the audit, the RTC Listing is updated to reflect differences, if any, between the reported and audited emissions.

If a facility fails to reconcile its emissions, paragraph (b)(1) of AQMD Rule 2010 - Administrative Remedies and Sanctions, requires that the RTC holdings for the compliance year subsequent to the determination of the violation be reduced by the same amount the Allocation was exceeded.  This deduction of the RTC holdings is also recorded in the RTC Listing.

This summary information is provided for your convenience.  Please consult the applicable rule/regulation.

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