2007 APR Table of Contents

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Emissions Reduction Market System

Annual Performance Review Report - 2007

5  Alternative ATU Generation

5.1  Summary of Emissions Reduction Generator (ERG) Proposals

An emissions reduction generator (ERG) is a source that has achieved reductions in VOM emissions but is not a participating source in ERMS.  The reductions must be certified in a permit and a participating source, new participating source or general participant must propose the reductions.

There were no new ERG proposals during 2007.  In previous years, nine ERGs were approved.  Table 5-1 shows the ERGs that received ATUs in 2007.

All ERG proposals to date have been shutdowns for which facilities have forfeited their permits to operate the affected units in order to receive ATUs.  It is possible for sources to apply to become ERGs using other methods, but all must show actual reductions in VOM emissions.  Any source wishing to get ATUs on a continuing basis must modify its permit to incorporate the limits, thus ensuring that actual reductions are achieved.  Sources wishing only to get a single issuance of ATUs must prove actual VOM reductions for that season.

Table 5-1:  ERGs Receiving ATUs

ATUs for ERGs equates to 2.7 percent of the total allotment to all sources in the ERMS program.

All of the ATUs allocated for ERGS in 2007, with the exception of General Mills, went into general participating accounts.  One general participant, Pactiv, traded 323 ATUs to a new participating source, Prairie Packaging.  All of these ATUs were retired by Prairie Packaging.  A total of 2,432 ATUs expired from these accounts after the 2007 season.  This is the first year that ERG ATUs were used for compensation.  The 323 ATUs retired are a small percentage of the allocation and the number of ATUs that expired so ATUs generated from ERGs did not play a big role in increasing emissions.

5.2  Summary of Inter-Sector Proposals

The FReMCo Group in Burlington, Ontario, Canada on behalf of ICI Paints submitted another inter-sector proposal in the fall of 2007.  This proposal was similar to their proposal for the 2006 season.  ICI Paints manufactures and sells paints and coatings for consumer and commercial applications.  All paints and coatings sold by ICI Paints in Illinois are certified by the applicant to meet or exceed the federal standard.

ICI Paints proposed to reduce VOM emissions from certain paints and coatings by selling products in Illinois certified to meet the standards of California.  ICI proposed quantification methods and recordkeeping in its application.  This proposal included additional sales locations than the 2006 proposal.

The source was given 1627 ATUs for their reductions.  As per the company’s wishes, these ATUs were immediately retired for air quality benefit.

5.3  Findings

• ATU generation from ERGs played an extremely minor role in market performance during the 2007 season
• ATU generation from inter-sectors did not play a role in market performance during the 2007 season since all ATUs generated were immediately retired for air quality benefit.