MassDEP Proposes Structure to Recognize International Greenhouse Gas Reduction Credits
Beveridge & Diamond, P.C. - Massachusetts Environmental, Land Use & Real Estate Alert, February 2008
MassDEP has proposed a rule change that would clarify the types of international greenhouse gas (GHG) reduction projects that will qualify for GHG credits in the MassDEP GHG credit program. The primary effect of the proposal will be to establish a structure for the recognition of internationally certified GHG reduction credits, thereby positioning MassDEP to expand the scope of the program beyond the domestic borders to increase the supply of GHG credits and reduce the burdensome process of individual credit proposal certification by MassDEP.
MassDEP rules currently require the largest fossil fuel fired power plants located in Massachusetts to meet annual carbon dioxide limits, either by achieving GHG emissions reductions or by using credits from qualifying projects to offset GHG emissions. These credits can be purchased, banked and traded under the current program, with many restrictions - including a limitation of qualifying projects to those located within the United States and its coastal waters.
The current state GHG rules allow MassDEP to opt to consider international GHG reduction projects, but this expansion has not yet occurred. Instead, the pending rule amendment proposes to first install the framework for a future geographic expansion, calling for the potential recognition of two internationally sanctioned GHG credit programs, the European Union’s Phase II Allowances, and the Clean Development Mechanism Certified Emissions Reductions (to the extent they are Phase II eligible). Use of these credits will require a verification process to ensure the credits are not used more than once.
MassDEP will hold a public hearing on this proposal on March 6, 2008, and has requested written comments by no later than March 18, 2008. The Agency has also asked for comments on the following specific questions:
- Whether MassDEP should broaden or further constrain the eligibility of the Clean Development Mechanism reduction credits; and
- The manner by which MassDEP should evaluate applications for use of either of the two international credits to ensure that these currencies are cancelled or otherwise terminated in a manner that prevents double counting.
For further information on this proposal, please contact Stephen Richmond at srichmond@bdlaw.com.
