California Code of Regulations, Article 1, Section 2754.3 - Evaporative Emission Reduction Credits-Zero-Emission Generator Credits Averaging, Banking, and Trading Provisions | California Code of Regulations

(a) Applicability.

(1) The requirements of this section 2754.3 are applicable to manufacturers of all zero-emission generators subject to the regulatory requirements of this Article that are produced in the model years 2022 through 2026. Participation in this program is voluntary, but if a manufacturer elects to participate, it must do so in compliance with the provisions set forth in this section 2754.3.

(2) The requirements of this section 2754.3 are applicable to manufacturers of zero-emission generators which are certified for emission credits under title 13, California Code of Regulations, section 2408.2 which may also be certified for evaporative emission credits. Participation in this program is voluntary, but if a manufacturer elects to participate, it must do so in compliance with the provisions set forth in this section 2754.3.

(b) General provisions.

(1) Zero-emission generator evaporative credits may only be used to offset emissions for an evaporative family which is exclusively used in generators.

(2) A manufacturer of engine families certified for zero-emission generator credits under section 2408.2 may generate zero-emission generator evaporative credits.

(A) A manufacturer of zero-emission generator engine families certified for zero-emission generator credits under section 2408.2, shall earn zero-emission generator evaporative credits in accordance with Table 1 of this section 2754.3 for averaging, banking, or trading, or a combination thereof.

(B) Manufacturers must demonstrate compliance under the averaging, banking, and trading provisions of this section 2754.3 for a particular model year within 270 days after the end of the model year.

Table 1. Minimum Requirements for Zero-Emission Generator Credit Eligibility.

*Product Type*	*Useful Life*	*Energy and Power Requirements*	*Credit Eligibility*
Level 1 zero-emission generator	5 years	Supply: 2.5 kWh over 8 hours	0.5 g organic material hydrocarbon equivalent·day-1
Surge capability: 3,000 watts for 10 seconds	or
0.5 g organic material hydrocarbon equivalent·test-1
Level 2 zero-emission generator	5 Years	Supply: 6 kWh over 8 hours	0.5 g organic material hydrocarbon equivalent·day-1
Surge capability: 3,000 watts for 10 seconds	or
0.5 g organic material hydrocarbon equivalent·test-1
Level 3 zero-emission generator	5 Years	Supply: 12 kWh over 8 hours	0.6 g organic material hydrocarbon equivalent·day-1
Surge capability: 5,000 watts for 10 seconds	or
0.6 g organic material hydrocarbon equivalent·test-1
Level 4 zero-emission generator	5 Years	Supply: 25 kWh over 8 hours	0.6 g organic material hydrocarbon equivalent·day-1
Surge capability: 5,000 watts for 10 seconds	or
0.6 g organic material hydrocarbon equivalent·test-1

(c) Averaging.

(1) One hundred percent of negative credits from evaporative families with EMELs above the applicable emission standard may be offset by positive zero-emission generator evaporative credits, as allowed under the provisions of this section 2754.3. Averaging of credits in this manner is used to determine compliance under subsection 2754.1(f)(2).

(2) Subject to the limitations above, zero-emission generator evaporative credits used in averaging for a given model year may be obtained from zero-emission generator evaporative credits banked in previous model years, or zero-emission generator evaporative credits of previous model years obtained through trading.

(d) Banking.

(1) Beginning with model year 2022, a manufacturer of zero-emission generators that meets the zero-emission generator evaporative credit requirements may bank credits for that evaporative family in the model year of certification for use in future years for the purposes of averaging and trading.

(2) A manufacturer of evaporative families certified for zero-emission generator credits under this section 2754.3 may bank zero-emission generator evaporative credits only after the end of the model year and after CARB has reviewed the manufacturer's end-of-year reports. During the model year, and before submittal of the end-of-year report, credits originally designated in the certification process for banking will be considered reserved, and may be re-designated for trading in the end-of-year report and final report.

(3) Zero-emission generator evaporative credits may be banked for up to five years.

(4) Any previously banked zero-emission generator evaporative credits and any new zero-emission generator evaporative credits earned can be used for up to five years. In the sixth year, any unused zero-emission generator evaporative credits will expire. (For example, if a 2022 model year zero-emission generator family earns zero-emission generator evaporative emission credits, those zero-emission generator evaporative emission credits may be used or banked until the 2027 model year. Any remaining banked zero-emission generator evaporative emission credits earned within the 2022 model year will be invalid for use in the 2028 model year.)

(e) Trading.

(1) A Holder may exchange zero-emission generator evaporative credits with other Holders in trading.

(2) Zero-emission generator evaporative credits banked in previous years may be used for trading.

(3) Traded zero-emission generator evaporative credits can be used for averaging or banking for up to five years from the time of zero-emission generator evaporative credit generation.

(f) Credit calculation and manufacturer compliance with emission standards. For each evaporative family, zero-emission generator evaporative credits are to be calculated according to the following equation and rounded to the nearest gram. Consistent units are to be used throughout the equation.

Zero-emission generator evaporative credits = Credit eligibility as specified in Table 1 of this section x Sales

Where:

Sales must be the same as calculated in certification under section 2408.2.

(g) Certification using zero-emission generator evaporative credits.

(1) In the application for certification of an evaporative family, a manufacturer using zero-emission generator evaporative credits must do all of the following:

(A) Submit a statement that the evaporative family for which certification is requested will not, to the best of the manufacturer's belief, cause the manufacturer to be in noncompliance, under subsection 2754.1(f), when accounting for the total amount of credits used for all of the manufacturer's applicable evaporative families;

(B) Indicate the projected number of zero-emission generator evaporative credits generated/required for this evaporative family, the projected applicable eligible sales volume, and the values required to calculate zero-emission generator evaporative credits as given in subsection 2754.3(f);

(C) Submit calculations in accordance with subsection 2754.3(f) of the projected zero-emission generator evaporative credits based on sales projections for each evaporative family; and

(D) Specify the recipient (manufacturer/evaporative family or reserved) and quantity of the zero-emission generator evaporative credits used (whether they are banked, traded, or to be used to offset a deficit).

(2) The manufacturer of zero-emission generator evaporative families certified for zero-emission generator credits under section 2754.3 may supply the information required in subsections 2754.3(g)(1)(B), 2754.3(g)(1)(C), and 2754.3(g)(1)(D), by use of an electronic spreadsheet detailing the manufacturer's annual production plans, and the zero-emission generator evaporative credits generated by each zero-emission generator evaporative family.

(3) All Executive Orders issued are conditional upon manufacturer compliance with the provisions of this section 2754.3 both during and after the model year of production.

(4) Failure to comply with all provisions of this section 2754.3 will be considered to be a failure to satisfy the conditions upon which the Executive Order was issued, and the Executive Order may, after considering relevant factors, including, as appropriate, factors in Health and Safety code section 43024(b), be determined to be void ab initio.

(5) The manufacturer bears the burden of establishing to the satisfaction of the Executive Officer that the conditions upon which the Executive Order was issued were satisfied or waived.

(h) Maintenance of records.

(1) The manufacturer of zero-emission generator evaporative families certified for zero-emission generator credits under section 2754.3 must establish, maintain, and retain the following adequately organized and indexed records for each such evaporative family:

(A) CARB evaporative family identification code,

(B) The zero-emission generator level, according to Table 1 in this section, 2754.3,

(C) Projected sales volume for the model year,

(D) Records appropriate to establish the quantities of equipment that constitute eligible sales for each zero-emission generator level, and

(2) Any manufacturer of zero-emission generator evaporative families certified for zero-emission generator credits under this section 2754.3 participating in trading reserved zero-emission generator evaporative credits must maintain the following records on a quarterly basis for each such evaporative family:

(A) The evaporative family name,

(B) The actual quarterly and cumulative applicable sales,

(C) The values required to calculate zero-emission generator evaporative credits as given in subsection 2754.3(f),

(D) The resulting number of zero-emission generator evaporative credits generated, and

(E) How and where zero-emission generator evaporative credit surpluses are dispersed.

(3) The manufacturer must retain all records required to be maintained under this section 2754.3 for a period of eight years from the due date for the end-of-year report. Records may be retained as hard copy or reduced to digital media, depending on the manufacturer's record retention procedure.

(4) Nothing in this section 2754.3 limits the Executive Officer's discretion in requiring the manufacturer to retain additional records or submit information not specifically required by this section 2754.3.

(5) Pursuant to a request made by the Executive Officer, the manufacturer must submit to the Executive Officer within 30 days of the date of such request the information that the manufacturer is required to retain as noted in this subsection, 2754.3(h).

(6) The Executive Officer may, after considering relevant factors, including, as appropriate, factors in Health and Safety code section 43024(b), void ab initio the Executive Order for an engine or evaporative family for which the Holder fails to retain the records required in this section 2754.3 or to provide such information to the Executive Officer upon request. No new Executive Orders will be issued to the Holder until the requested records are made available and/or a plan that describes the records to be retained as required by this section is approved by the Executive Officer.

(i) End-of-year and final reports.

(1) End-of-year and final reports must indicate the zero-emission generator evaporative family, the actual sales volume, a description of the method used to determine the sales volume, the values required to calculate zero-emission generator evaporative credits as given in subsection 2754.3(f), and the number of zero-emission generator evaporative credits generated/required. Manufacturers of zero-emission generator evaporative families certified for zero-emission generator credits under section 2754.3 must also submit a description of how and where zero-emission generator evaporative credit surpluses were dispersed (or are to be banked) and/or how and through what means credit deficits were met. Copies of contracts related to zero-emission generator evaporative credit trading must be included or supplied by the broker, if applicable. The report must include a calculation of zero-emission generator evaporative credit balances to show that the zero-emission generator evaporative credit summation is equal to or greater than zero.

(2) The calculation of eligible sales must be the same as defined in section 2408.2.

(3) End-of-year report and final report submissions.

(A) Unless otherwise approved or directed by the Executive Officer, end-of-year reports must be submitted within 90 days after the end of the model year to: Chief, Emissions Certification and Compliance Division, California Air Resources Board, 4001 Iowa Street, Riverside, CA 92507.

(B) Unless otherwise approved or directed by the Executive Officer, final reports must be submitted within 270 days after the end of the model year to: Chief, Emission Certification and Compliance Division, California Air Resources Board, 4001 Iowa Street, Riverside, CA 92507.

(4) A manufacturer generating zero-emission generator evaporative credits only for banking who fails to submit end-of-year reports in the applicable specified time period (90 days after the end of the model year) may not use the zero-emission generator evaporative credits until such reports are received and reviewed by CARB. Use of projected zero-emission generator evaporative credits pending CARB review is not permitted in these circumstances.

(5) Errors discovered by either CARB or the manufacturer in the end-of-year report, including errors in zero-emission equipment evaporative credit calculation, must be corrected in the final report.

(6) If CARB or the manufacturer determines that a reporting error occurred in an end-of-year or final report previously submitted to CARB under this section 2754.3, the manufacturer's zero-emission generator evaporative credits and credit calculations must be recalculated. Erroneous zero-emission generator evaporative credits will be void except as provided in subsection 2754.3(g).

(7) If within 270 days after the end of the model year, a CARB review reveals a reporting error in the manufacturer's favor (that is, resulting in an increased zero-emission generator evaporative credit balance), or if the manufacturer discovers such an error within 270 days after the end of the model year, CARB will restore the zero-emission generator evaporative credits for use by the manufacturer.