print logo
Main Content Anchor

Emission Reduction Credits Program (ERC)

Emission Reduction Credits (ERCs) can be banked for later use as emission offsets if actual (not potential) emissions are reduced from stationary sources, mobile sources or transportation sources. ERCs resulting from the modification or shutdown of existing stationary sources are evaluated under Rule 204 – Emission Reduction Credits. ERCs for mobile and transportation source control programs are evaluated under Rule 206 – Mobile and Transportation Source Emission Reduction Credits. If emission reductions meet the criteria to be certified as ERCs, the SacMetro AQMD issues a certificate to the applicant/owner showing the owner's name, the location where the emission reductions were generated, and the amount of ERCs, in pounds per calendar quarter, for each criteria pollutant.

Once banked, ERCs are held by the owners and can be traded on the open market. The SacMetro AQMD maintains a registry of all ERC certificates that have been issued and all transactions that have taken place, but does not set the price of credits or arrange transactions between buyers and sellers of ERCs.

ERC Application and Certification Process

The process for obtaining ERCs begins when an applicant submits a complete application for ERCs, in accordance with section C of the List and Criteria, and pays an initial deposit of processing fees, based on ten hours of staff time at the current hourly rate (see section 315 of Rule 301 – Permit Fees - Stationary Source). Then staff:

  • Reviews the application for completeness.
  • Performs an engineering evaluation to determine the quantity of actual emission reductions and determine compliance with all applicable rules and regulations.
  • Makes a preliminary written decision as to whether the emission reductions should be certified as emission reduction credits.
  • Issues a 30-day preliminary notice to the public, EPA, and ARB for comments on the application and evaluation.
  • Issues a notice of a final decision whether to approve the application.
  • Issues a final invoice to the applicant for the balance of the processing fees and public notification fees (see sections 315 and 317 of Rule 301 – Permit Fees - Stationary Source

If the application is approved, staff issues an ERC certificate to the applicant after the balance of the fees has been paid.

ERC Applications Under Review

ERC applications currently under review are listed on the Public Notices page.


 

ERC Transactions

 

Transfers of ERCs are arranged directly between transferors (sellers) and transferees (buyers). The quantity of ERCs shown on a certificate can be transferred in full or in part. 

Note: Possession of an ERC certificate does not guarantee that the holder is the rightful owner or that the credits are valid.  Buyers should contact the AQMD prior to entering into any agreement to purchase ERCs.

To facilitate this process, the SacMetro AQMD maintains a current list of active (unused) ERC certificates and a contact list for the ERC certificate owners. In addition, the California Air Resources Board publishes an annual summary of ERC transactions in the state, showing the amount and price of credits for each transaction.

An owner of an ERC certificate can also request that the ERC amounts be split among two or more new certificates.

A request to transfer ownership or to split an ERC certificate must be submitted in writing to the SacMetro AQMD . The written request must include:

  • A clear explanation of the action to be taken with each certificate. For example, if credits are being transferred from a seller to a buyer, specify the amount of credits to be transferred to the buyer and any remaining amount to be returned to the seller. If a certificate is being split into two or more new certificates, specify the amount of credits to be listed on each ERC certificate.
  • A written document, signed by the transferor within the previous 30 days, authorizing the transfer of the ERCs (not required for splits).
  • The original certificate, signed by the transferor (or owner for splits).
  • Payment of a processing fee, based on one hour of staff time at the current hourly rate (see section 315 of Rule 301 – Permit Fees - Stationary Source).

Inter-District ERC Transfers

 

In specific cases, ERCs banked in the SacMetro AQMD may be transferred for use as emission offsets for a stationary source in another district. Such transfers are governed by the requirements of California Health and Safety Code section 40709.6 and must be approved by the governing boards of both districts. The governing board of the SacMetro AQMD has delegated authority to the Air Pollution Control Officer to approve inter-district transfers up to 25 tons per year per pollutant.

Please contact the SacMetro AQMD for further information on inter-district ERC transfers.

Supporting Page
Back to Top