PROPOSAL:

Adopt Proposed Amended Rule 1612 - Credits for Clean On-Road Vehicles, and Proposed Amended Rule 1620 - Credits for Clean Off-Road Mobile Equipment

SYNOPSIS:

Proposed amendments respond to ARB concerns. These amendments include: (1) clarifying what actions may be taken in Rules 1612 and 1620 to implement projects that reduce emissions through the use of engine conversion kits, (2) eliminating the provision in Rule 1612 that allows the generation of credits for high-mileage fleet applications, and (3) specifying the maximum baseline emission levels in Rule 1620 that are allowable for internal combustion engines. Other minor modifications to both rules update rule references for rule language consistency.

COMMITTEE:

Mobile Source, May 15, 1998, Reviewed

RECOMMENDED ACTION:

Adopt the attached resolution:

1. certifying the Notice of Exemption for both Proposed Amended Rule 1612 - Credits for Clean On-Road Vehicles, and Proposed Amended Rule 1620 - Credits for Clean Off-Road Mobile Equipment; and

2. amending Rule 1612 - Credits for Clean On-Road Vehicles, and Proposed Amended Rule 1620 - Credits for Clean Off-Road Mobile Equipment.

Barry R. Wallerstein, D.Env.
Acting Executive Officer

The proposed amendments respond to ARB concerns regarding mobile source emission reduction credits (MSERCs) calculated pursuant to Rules 1612 and 1620, and are based on comments provided by ARB, which require clarifying language in Rules 1612 and 1620 that the AQMD will use in administering these rules, ensuring that MSERCs are properly quantified and based on emission reductions that are surplus to those in existing regulations.

Proposal

Rule 1612 subparagraph (d)(1)(G) and paragraph (g)(4) currently allow for a fleet vehicle operator to generate MSERCs by operating any low- or zero-emission vehicle in a high-mileage fleet. ARB’s concerns are that this provision (1) could result in the double counting of emission reductions resulting from both this Rule 1612 provision and ARB’s low-emission vehicle regulations for new vehicles, and (2) is inconsistent with the ARB regulation "Interchangeable Air Pollution Emission Reduction Credits" (Subchapter 5.5, Chapter 1, Division 3, Title 17, California Code of Regulations). Therefore, to resolve these discrepancies subparagraph (d)(1)(G) and paragraph (g)(4) are removed.

Rule 1612(d)(1)(E) currently allows a vehicle operator to generate MSERCs for the "operation of vehicles which emit at levels corresponding to one or more applicable optional emission standards, as demonstrated according to ARB certification test methods by the vehicle operator and as approved by the Executive Officer or designee in consultation with the ARB." ARB maintains that the AQMD shall issue credits for vehicles only after their certification by ARB to meet an optional emission standard, and specifies what actions may be taken to implement such projects pending ARB action. Therefore, subparagraph (d)(1)(E) is deleted and subparagraph (d)(1)(C) is modified to specify that, in such projects, MSERCs may be issued only after ARB approves the certification of the engine conversion kits, while the MSERC application may be processed concurrently with ARB certification action.

Rule 1612 subparagraph (d)(1)(D) allows the generation of MSERCs for the operation of zero-emission vehicles (ZEVs), provided that these vehicles are not used by the manufacturer to comply with ARB’s Low-Emission Vehicle Regulation. Additional clarifying language is being proposed, at the request of ARB, to prevent the generation of MSERCs for the operation of ZEVs that are used to comply with ZEV production commitments contained in the 1996 Memorandum of Agreement between ARB and seven major auto manufacturers that are subject to the 1998-through-2002 model-year percentage ZEV requirements.

Currently, Rule 1620 paragraph (d)(1) allows the generation of credit for equipment using retrofit kits that are not certified to optional emission standards. Subparagraph (e)(1)(F) allows the equipment operator to submit emission test results for existing off-road equipment which has been retrofitted with non-certified conversion kits. However, ARB requires that once it has adopted certification procedures for alternative-fuel or add-on hardware conversion (retrofit) kits for off-road equipment, the AQMD shall issue MSERCs for existing equipment only when it is retrofitted with a conversion kit that is ARB-certified to an optional standard. It also specifies what actions may be taken to implement such projects pending ARB action.

Therefore, paragraph (d)(1) is modified to specify that existing equipment using only retrofit kits certified to optional emission standards shall be eligible for MSERC generation, once the ARB has approved applicable certification procedures for off-road equipment conversion kits. Also, subparagraph (e)(1)(F) is deleted; and paragraph (e)(2) is added to specify that MSERC applications may be processed concurrently with pending ARB certification of an applicable retrofit kit. Paragraph (f)(4) is modified to clarify MSERC issuance conditions.

Currently, Rule 1620 paragraph (d)(6) allows the equipment operator the option of using actual emissions from fleet vehicles if the operator elects to proceed with vehicle emissions testing to demonstrate actual baseline emission levels of existing equipment. In order to address ARB’s concern regarding potential double counting of emission reductions, paragraphs (c)(1) and (d)(6) are modified to specify maximum baseline emission levels allowable for internal combustion engines that are acceptable to ARB.

A public workshop was held on May 27, 1998 to solicit public comments regarding the proposed amendments to Rules 1612 and 1620. A summary of public comments and staff responses is included as Attachment E.

AQMP & Legal Mandates

The proposed amendments provide greater specificity for the bases of the credit generation and MSERC calculations. Therefore, the proposed amendments to Rules 1612 and 1620 provide no possibility for an adverse effect on air quality or emissions limitations, and are consistent with the AQMP. These credit programs are voluntary programs and do not impose or make more stringent emission limits or standards on sources, nor do they impose new or more stringent monitoring, reporting or recordkeeping requirements.

CEQA & Socioeconomic Analysis

The AQMD has reviewed the proposed project pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15002(k) - Three Step Process, to determine which type of CEQA document to prepare for the proposed action. The AQMD has determined that the proposed amendments to Rules 1612 and 1620 are exempt from CEQA pursuant to CEQA Guidelines Section 15061 - Review for Exemption, since the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. A Notice of Exemption will be sent to the county clerks upon approval by the Governing Board. Since the proposed amendments are administrative in nature, they do not result in any adverse socioeconomic impacts. This Board Letter serves as the staff report for this proposal.

Attachments

A. Resolution
B. Notice of Exemption from CEQA
C. Proposed Amended Rule 1612
D. Proposed Amended Rule 1620
E. Public Comments

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