Interchangeable Emission Reduction Credit Bank Status

Learn about Interchangeable Emission Reduction Credit program including how to bank and use those credits.

Interchangeable Emission Reduction Credits

Per District Regulation 2, Rule 9, Interchangeable Emission Reduction Credits (IERCs) can be used in lieu of complying with certain emissions standards contained in other District rules. IERCs cannot be used in lieu of compliance with Best Available Control Technology (BACT) or Offset requirements or any other federally enforceable emission limit such as New Source Performance Standards (NSPS), National Emission Standards for Hazardous Air Pollutants (NESHAP), or Maximum Achievable Control Technology (MACT) standards.

IERCs are only valid for five years, and must be used at the same location where the original emission reductions occurred. IERCs can only be used at the same facility in which the IERC is generated, as part of an Alternative Compliance Plan (ACP) to comply with a NOx emission standard of a rule in Regulation 9, or permit condition that is based on such a rule. Credits (in tons) are banked in one-year increments, and up to three years of emission reductions can be banked under a single IERC banking application.

How to Bank Interchangeable Emission Reduction Credits

IERCs are banked in discreet credit generation periods up to one year in duration. An IERC banking application maybe submitted before an emission reduction occurs, or after the reduction has occurred. The initial credit generation period shall not be more than 30 months prior to the submittal of the first complete IERC banking application for a particular emission reduction activity.

Submit a banking application that includes:

  • 1. An Application for Emission Reduction Credits (Banking) form. Form P-401 ;
  • 2. A CEQA Environmental Information Form Appendix H;
  • 3. Payment of applicable fees. See Air District Regulation 3 in the Banking section.
  • 4. A cover letter indicating the sources that generated or will generate the IERCs, and how the emission reductions are achieved.
  • 5. Documentation to verify emissions reductions (such as emission monitoring data, source test results, operating logs, material purchase records, product throughputs and fuel use records).

How to Use Interchangeable Emission Reduction Credits

To use IERCs, you must submit a proposed ACP. That plan must be approved by the Air District prior to using the IERCs. ACPs are valid for one year and must be renewed annually.

Submit a proposed ACP that includes:

  • 1. A cover letter and project description indicating that you are requesting an IERC ACP.
  • 2. A CEQA Environmental Information Form Appendix H.
  • 3. Payment of applicable fees. See Air District Regulation 3 in the Banking section.
  • 4. Calculations of projected IERC use indicating how actual emissions will be determined to quantify the amount of IERCs needed during the ACP period.

View the Interchangeable Emission Reduction Credits (IERCs) at the Air District.

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Bhagavan Krishnaswamy
Supervising AQ Engineer, Engineering


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Last Updated: 4/15/2024