N.J. Admin. Code § 7:27C-10.3

Current through Register Vol. 56, No. 23, December 2, 2024

Section 7:27C-10.3 - General requirements

(a) The following types of offset projects are eligible for the award of CO[2] offset allowances, provided they have otherwise satisfied all the applicable requirements of this subchapter:

1. Landfill methane capture and destruction;

2. Sequestration of carbon due to reforestation, improved forest management, or avoided conversion; and

3. Avoided methane emissions from agricultural manure management operations.

(b) To qualify for the award of COoffset allowances, an offset project must be located:

1. In New Jersey;

2. Partly in New Jersey and partly in one or more other participating states, provided that more of the CO[2] -equivalent emissions reduction or carbon sequestration due to the offset project is projected to occur in New Jersey than in any other participating state; or

3. In any state or United States jurisdiction with a cooperating regulatory agency.

(c) Any person meeting the requirements of N.J.A.C. 7:27C-10.4may act as the project sponsor.

(d) Except as provided with respect to specific offset project standards at N.J.A.C. 7:27C-10.5, 10.6, and 10.7, the Department will not award CO[2] offset allowances to:

1. An offset project that is required pursuant to any local, state, or Federal law, rule, regulation, or administrative or judicial order. If an offset project has been issued a consistency determination under N.J.A.C. 7:27C-10.4 and is later required by local, state, or Federal law, rule, regulation, or administrative or judicial order, then the offset project will remain eligible for the award of CO[2] offset allowances until the end of its current allocation period, described at (e) and (f) below, but its eligibility will not be extended for an additional allocation period;

2. An offset project that includes an electric generation component, unless the project sponsor transfers legal rights to any and all attribute credits (other than the CO[2] offset allowances awarded under N.J.A.C. 7:27C-10.9) generated from the operation of the offset project that may be used for compliance with a renewable portfolio standard or other regulatory requirement, to the Department;

3. An offset project that receives funding or other incentives from any system benefit fund, or funds, or other incentives provided through revenue from the auction or sale of CO[2] allowances in the consumer benefit account pursuant to N.J.A.C. 7:27C-5.4(a) or (b); and

4. An offset project that is awarded allowances or credits under any other mandatory or voluntary greenhouse gas program, except as described at N.J.A.C. 7:27C-10.6(p).

(e) Except as provided in (f) below, the Department may award CO[2] offset allowances under N.J.A.C. 7:27C-10.9for an initial 10-year allocation period. At the end of the initial 10-year allocation period, the Department may award CO[2] offset allowances under N.J.A.C. 7:27C-10.9for a second 10-year allocation period, provided the offset sponsor has submitted a consistency application pursuant to N.J.A.C. 7:27C-10.4prior to the expiration of the initial allocation period, and the Department has issued a consistency determination pursuant to N.J.A.C. 7:27C-10.4(i).

(f) The Department may award CO[2] offset allowances under N.J.A.C. 7:27C-10.9for any forest offset project for an initial 25-year allocation period. At the end of the initial 25-year allocation period or any subsequent 25-year allocation period, the Department may award CO[2] offset allowances under N.J.A.C. 7:27C-10.9for a subsequent 25-year allocation period, provided the offset sponsor has submitted a consistency application for the offset project pursuant to N.J.A.C. 7:27C-10.4prior to the expiration of the initial or subsequent allocation period, as appropriate, and the Department has issued a consistency determination pursuant to N.J.A.C. 7:27C-10.4(i).

(g) The Department will award CO[2] offset allowances under N.J.A.C. 7:27C-10.9only for a forest offset project that is initially commenced on or after January 1, 2014, or, for an offset project other than a forest offset project, that is initially commenced on or after December 20, 2005.

(h) A project sponsor shall provide the Department, in writing, an access agreement granting the Department, or, as appropriate, the cooperating regulatory agency, access to the physical location of the offset project to inspect for compliance with this subchapter.

(i) If, at any time, the Department determines that a project sponsor has not complied with the requirements of this subchapter, the Department may revoke and retire any and all CO[2] offset allowances in the project sponsor's account. If, at any time, the Department determines that an offset project does not comply with the requirements of this subchapter, then the Department may revoke any approvals it has issued relative to the offset project.

N.J. Admin. Code § 7:27C-10.3

Adopted by 51 N.J.R. 992(a), effective 6/17/2019