BOARD MEETING DATE: June 4, 2010
AGENDA NO. 36
PROPOSAL:
Amend Regulation XXVII - Climate Change
SYNOPSIS:
The proposed amendments include adding a greenhouse gas reduction protocol for boiler and process heater efficiency improvements. The proposed amendments would also no longer require CARB approval of protocols, as they are not providing review of voluntary greenhouse gas protocols.
COMMITTEE:
Administrative Committee, March 12, 2010 and Climate Change Committee, April 7, 2010, Reviewed
RECOMMENDED ACTIONS:
Adopt the attached resolution:
Certifying the Final Subsequent Environmental Assessment (EA) for Rule 2700 – General, Rule 2701 – SoCal Climate Solutions Exchange, and Rule 2702 – Greenhouse Gas Reduction Program; and
Amending Rule 2700 – General, Rule 2701 – SoCal Climate Solutions Exchange, and Rule 2702 – Greenhouse Gas Reduction Program.
Barry R. Wallerstein, D.Env.
Executive Officer
Background
In December 2008, the Board adopted Rules 2700 – General, and 2701 - SoCal Climate Solutions Exchange. Rule 2700 includes definitions and a table for conversion to carbon dioxide equivalents (CO2e). Rule 2701 sets up the procedures for persons to generate greenhouse gas (GHG) emission reductions that follow pre-approved protocols.
In February 2009, the Board adopted Rule 2702 – Greenhouse Gas Reduction Program. Rule 2702 includes mechanisms to recognize and quantify voluntary reductions, which follow protocols that have been pre-approved by the Board and have concurrence by CARB’s Board or Executive Officer. Currently, there are three project protocols in these rules including forest and urban forest projects, and manure management.
CARB recently adopted a resolution regarding the adoption of GHG accounting protocols that distinguishes between the offset certification programs that were developed for the voluntary market, and the program that must be developed to certify offsets to be used under CARB’s proposed cap-and-trade rule. This resolution withdrew CARB approval of voluntary protocols but would not impact the use of these protocols for voluntary purposes. Protocols in Rules 2701 and 2702 are voluntary protocols which no longer have CARB’s approval.
Proposal
Proposed amendments would: 1) change Rule 2700 so protocols can be added without CARB approval; 2) update the forest, urban forest projects and manure management protocols to the latest versions; 3) limit forestry projects to include only reforestation and forestry maintenance projects without harvesting; and 4) add a boiler and process heater (B/PH) efficiency protocol to the approved protocol list.
CARB recently adopted a resolution that withdrew CARB approval of voluntary protocols but would not impact the use of these protocols for voluntary purposes. Protocols in Rules 2701 and 2702 are voluntary protocols which no longer have CARB’s approval.
Rules 2701 and 2702 currently include a list of three pre-approved project protocols. These include forest and urban forest projects, and manure management. The Forest Project Protocol was updated in October 2009. The Urban Forest Project Protocol was updated in March 2010. The Manure Management Project Protocol was updated in November 2009. For Regulation XXVII, staff is recommending the use of the Forest Project Protocol be limited to forestry projects involving reforestation and/or maintenance without the use of harvesting. Allowing harvesting makes carbon accounting within these projects more difficult and brings into question the permanence of these projects.
The purpose of the proposed B/PH efficiency protocol is to establish a method to quantify reductions in GHG emissions and co-benefits resulting from an improvement in the efficiency of a B/PH. Options to improve efficiency for existing boilers include an economizer or oxygen (O2) trim system. Co-benefit reductions (i.e., NOx, PM) would not generate credits, but could be used for CEQA mitigation. Boilers and process heaters under this protocol include those units used in medical facilities, educational institutions, office buildings, hotels, and industrial facilities. The draft protocol was reviewed by the CAPCOA Engineering Managers Committee and their suggestions as well as suggestions made at working group meetings were incorporated.
Public Process
Staff held a public meeting on February 3, 2010, where the proposed B/PH efficiency protocol was discussed. Approximately 30 participants joined the meeting either in person or by conference call. On March 26, 2010, staff held another public meeting where the proposed changes to Regulation XXVII and B/PH efficiency protocol were discussed. Approximately 20 participants joined the March 26th meeting either in person or by conference call. At each meeting, there were representatives from several equipment manufacturers, the Gas Company, Western States Petroleum Association, Metropolitan Water, and Orange County Sanitation District. Major comments related to the proposed boiler protocol raised at the meetings, one written comment received on February 19, 2010, as well as staff’s responses are summarized in the Final Staff Report.
CEQA and Socioeconomic Impacts
Pursuant to the California Environmental Quality Act (CEQA) and AQMD Rule 110, a Draft Subsequent Environmental Assessment (EA) was prepared on April 9, 2010, that analyzed potential adverse environmental impacts associated with PARs 2700, 2701 and 2702. A previously certified Final Program EA (PEA) for Rule 2702 from February 2009 was recently re-circulated with the intent to rely on the analysis from this previous document for the currently proposed amendments to Rules 2700, 2701 and 2702 (CEQA Guidelines §15753). However, the notice of reliance was subsequently withdrawn. The previously certified 2009 Final PEA analyzed potential adverse impacts from greenhouse gas (GHG) reduction projects undertaken by the AQMD pursuant to the approved forest, urban forestry and manure management protocols that were included in Rule 2702, as well as concepts for a boiler efficiency protocol that was not yet completed at the time Rule 2701 was amended and Rule 2702 was adopted. However, the potential impact of the boiler protocol use under Rule 2701 was not analyzed. Therefore, the focus of the analysis in the Draft Subsequent EA is on potentially significant adverse impacts of amending Rule 2701 to add the finalized boiler efficiency protocol along with the analysis of the previously identified impacts from the boiler protocol concepts presented in the previously certified 2009 Final PEA for Rule 2702. The Draft Subsequent Environmental Assessment (EA) was circulated for public review for 30 days, which ended on May 12, 2010. One comment letter was received and has been responded to in the Final Subsequent EA.
The proposed amended rules represent a voluntary program. Businesses and individuals will not participate in the proposed program if there is no perceived benefit. As such, no negative socioeconomic impacts are expected. Since the rules do not significantly affect air quality or emissions limitations, the law does not require a socioeconomic assessment.
AQMP and Legal Mandates
The proposed amended rules and introduction of a new protocol are not the result of a control measure of the 2007 AQMP and there are no legal mandates to implement the program. The PARs are intended to create a mechanism to quantify high quality additional (surplus) reductions of GHG, per the Governing Board’s direction.
Resource Impacts
Current AQMD resources are sufficient to implement and enforce proposed amended Rules 2700, 2701, and 2702.
Attachments (EXE, 1,236k)
Summary of Proposal
Key Issues and Responses
Rule Development Process
Key Contacts List
Resolution
Rule Language - 2700, 2701 & 2702
Boiler Protocol
Boiler Protocol Project Form
Final Staff Report
Final Subsequent Environmental Assessment