California Code of Regulations
Title 13 - Motor Vehicles
Division 3 - Air Resources Board
Chapter 9 - Off-Road Vehicles and Engines Pollution Control Devices
Article 1 - Small Off-Road Engines
Section 2408.2 - Emission Reduction Credits-Zero-Emission Generator Credits Averaging, Banking, and Trading Provisions

Universal Citation: 13 CA Code of Regs 2408.2

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

(a) Applicability. The requirements of this section 2408.2 are applicable to all zero-emission generators as defined in section 2401 produced in the 2022 through 2026 model years. 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 2408.2. The provisions of this section 2408.2 are limited to HC+NOx (or NMHC+NOx, as applicable) emissions.

(b) General provisions.

(1) Zero-emission generator credits may be used to offset emissions for any engine family comprised of generator engines.

(2) A manufacturer must only include in its calculation of zero-emission generator credit generation zero-emission generators that are sold and used in California.

(3) For an engine family using zero-emission generator credits to compensate for negative certification emission credits, a manufacturer may, at its option, include its entire production of that engine family in its calculation of credit usage for a given model year.

(4) A manufacturer of zero-emission generators that wishes to generate zero-emission generator credits must certify zero-emission generators at a family emission limit (FEL) of zero grams per kilowatt-hour.

(A) A manufacturer of zero-emission generators that certifies an engine family as a zero-emission generator engine family may generate positive zero-emission generator credits for averaging, banking, or trading, or a combination thereof.

(B) Except as noted in section 2408.2(b)(4)(C), an engine family certified as a zero-emission generator engine family must meet the durability requirements listed in Table 1 of this section 2408.2.

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

*Product Type*	*Durability Period*	*Energy and Power Requirements*	*Credit Eligibility*
Level 1 zero-emission generator	500 hours	Supply: 2.5 kWh over 8 hours	Exhaust 1,500 g HC+NOx
Surge capability: 3,000 watts for 10 seconds
Level 2 zero-emission generator	500 hours	Supply: 6 kWh over 8 hours	Exhaust 2,200 g HC+NOx
Surge capability: 3,000 watts for 10 seconds
Level 3 zero-emission generator	500 hours	Supply: 12 kWh over 8 hours	Exhaust 3,200 g HC+NOx
Surge capability: 5,000 watts for 10 seconds
Level 4 zero-emission generator	500 hours	Supply: 25 kWh over 8 hours	Exhaust 4,700 g HC+NOx
Surge capability: 5,000 watts for 10 seconds

(C) A small off-road equipment family that is certified as a zero-emission generator family, but cannot achieve the full durability period, may generate 75 percent of the zero-emission generator credits if the zero-emission generator can meet a minimum of 75 percent up to 99 percent of the durability period. The amount of zero-emission generator credits would be calculated as 75 percent of the amount of credits designated in Table 1 of this section.

(D) Minimum requirements for zero-emission generators.

1. A small off-road equipment family must meet all of the requirements of this subsection to be eligible for certification as a zero-emission generator family.

a. A zero-emission generator must have a device capable of providing 120-Volt nominal alternating current power as well as at least one NEMA 5-15 receptacle.

b. A zero-emission generator shall contain a zero-emission power generation device, an energy storage device, or any combination of both of these devices.

c. A zero-emission generator must meet the minimum specifications indicated in Table 1 of this section 2408.2.

2. Durability testing must be performed in an equipment configuration that is representative of actual operation of the equipment by the ultimate purchaser (e.g., using standard battery package cycling, non-azimuth tracking solar array, commercially available hydrogen (H2) fuel sources).

3. The minimum durability period is based on the use cycle for a corresponding generator engine duty cycle tested with an electrical load bank using a five-mode duty cycle (with no idle mode) as described in Appendix II to the "California Exhaust Emission Standards and Test Procedures for New 2013 and Later Small Off-Road Engines; Engine-Testing Procedures (Part 1054)," adopted October 25, 2012, and amended January 1, 2023. An electrical load bank shall be used to apply a load to the zero-emission generator for testing to demonstrate compliance with the requirements of this section.

(E) In order to generate zero-emission generator credits, manufacturers of zero-emission generators must provide the ultimate purchaser with all equipment and accessories necessary to meet the requirements set forth in Table 1 of this section 2408.2, including any energy storage devices such as batteries. For zero-emission generators that use fuel such as compressed H2, the fuel is not required to be provided as part of the package provided to an ultimate purchaser.

(F) A manufacturer of zero-emission generators must include in the certification application, a description of the operational sequence over one deployment of the zero-emission generator. The operational sequence should include, as applicable, the discharge profile, power production profile, and the storage profile of any available storage.

(G) Manufacturers must demonstrate compliance under the averaging, banking, and trading provisions of this section 2408.2 for a particular model year within 270 days after the end of the model year.

(1) One hundred percent of negative credits from engine families with FELs above the applicable emission standard may be offset by positive zero-emission generator credits, as allowed under the provisions of this section 2408.2.

(2) Subject to the limitations above, zero-emission generator credits used in averaging for a given model year may be obtained from zero-emission generator credits banked in previous model years, or zero-emission generator 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 credit requirements may bank credits generated by that engine family in the model year of certification for use in future years for the purposes of averaging and trading.

(2) A manufacturer of zero-emission generators may bank zero-emission generator 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 credits may be banked for up to five years.

(4) Unused zero-emission generator credits after five years will expire and may no longer be used toward offsetting negative certification emission credits from other eligible engine families.

(e) Trading.

(1) A manufacturer may exchange zero-emission generator credits with other manufacturers in trading.

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

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

(f) Credit calculation and manufacturer compliance with emission standards. For each engine family, HC+NOx zero-emission generator 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 credits = Credit eligibility as specified in Table 1 of this section x Sales

Where:

Sales = eligible sales as defined in section 2401. Annual sales projections are used to project credit availability for initial certification. Actual sales volume is used in determining actual credits for end-of-year compliance determination.

(g) Certification using zero-emission generator credits.

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

(A) Submit a statement that the equipment for which certification is requested will not cause the manufacturer to be in noncompliance, under subsection 2408(f), when accounting for the total amount of credits used for all of the manufacturer's applicable engine families;

(B) Indicate the projected number of zero-emission generator credits generated/required for this engine family, the projected applicable eligible sales volume, and the values required to calculate zero-emission generator credits as given in subsection 2408.2(f);

(C) Submit calculations in accordance with subsection 2408.2(f) of the projected zero-emission generator credits based on production projections for each engine family; and

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

(2) The manufacturer of zero-emission generators may supply the information required in subsections 2408.2(g)(1)(C) and 2408.2(g)(1)(D), by use of an electronic spreadsheet detailing the manufacturer's annual production plans, and the zero-emission generator credits generated by each zero-emission generator family.

(3) All Executive Orders issued are conditional upon manufacturer compliance with the provisions of this section 2408.2 both during and after the model year of production.

(4) Failure to comply with all provisions of this section 2408.2 will be considered to be a failure to satisfy the conditions upon which the Executive Order was issued, and the Executive Order, after considering relevant factors, including, as appropriate, factors in Health and Safety code section 43024(b), may 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 generators must establish, maintain, and retain the following adequately organized and indexed records for each engine family:

(A) CARB engine family identification code,

(B) The zero-emission generator level, according to Table 1 in this section, 2408.2.

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

(2) Any manufacturer of zero-emission generators participating in trading reserved zero-emission generator credits must maintain the following records on a quarterly basis for each such engine family:

(A) The engine family,

(B) The actual quarterly and cumulative applicable production/sales volume,

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

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

(3) The manufacturer must retain all records required to be maintained under this section 2408.2 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 2408.2 limits the Executive Officer's discretion in requiring the manufacturer to retain additional records or submit information not specifically required by this section 2408.2.

(5) Pursuant to a request made by the Executive Officer, the manufacturer must submit to the Executive Officer within 30 days after the date of such request the information that the manufacturer is required to retain.

(6) The Executive Officer, after considering relevant factors, including, as appropriate, factors in Health and Safety code section 43024(b), may void ab initio the Executive Order for an engine family for which the manufacturer fails to retain the records required in this section 2408.2 or to provide such information to the Executive Officer upon request.

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

(1) End-of-year and final reports must indicate the engine family, the actual sales volume, the values required to calculate zero-emission generator credits as given in subsection 2408.2(f), and the number of zero-emission generator credits generated/required. Manufacturers of zero-emission generators must also submit how and where zero-emission generator 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 credit trading must be included or supplied by the broker, if applicable. The report must include a calculation of zero-emission generator credit balances to show that the zero-emission generator credit summation is equal to or greater than zero.

(2) The calculation of eligible sales, as defined in section 2401, for end-of-year and final reports, must be based on the location of the point of first retail sale, also called the final product purchase location. Upon advance written request, the Executive Officer will consider other methods to track equipment and batteries (if sold separately) for credit calculation purposes, such as shipments to distributors of products intended for sale in California, that provide high levels of confidence that eligible sales are accurately counted.

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

(A) 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 by the Executive Officer, final reports must be submitted within 270 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.

(4) A manufacturer of zero-emission generators that generates zero-emission generator credits only for banking and that 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 credits until such reports are received and reviewed by CARB. Use of projected zero-emission equipment 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 Generator 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 2408.2, the manufacturer's zero-emission generator credits and credit calculations must be recalculated. Erroneous zero-emission generator credits will be void except as provided in subsection 2408.2(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 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 credits for use by the manufacturer.

1. New section filed 9-14-2022; operative 1-1-2023 (Register 2022, No. 37).

Note: Authority cited: Sections 39600, 39601, 43013, 43018, 43101, 43102 and 43104, Health and Safety Code. Reference: Sections 43013, 43017, 43018, 43024, 43101, 43102, 43104, 43150, 43151, 43152, 43153, 43154, 43205.5, 43210, 43210.5, 43211 and 43212, Health and Safety Code.

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