REPORT:

Rule 2202 Emissions Equivalency Task Force Status Report

SYNOPSIS:

This is the second in a series of reports on the efforts of the Rule 2202 - On-Road Motor Vehicle Mitigation Options Emissions Equivalency Task Force. This Task Force is charged with the task of evaluating and recommending methods to make up the emissions shortfall caused by the permanent exemption of worksites with fewer than 250 employees from Rule 2202 compliance. This item was not reviewed by the Mobile Source Committee since there was no November committee meeting.

COMMITTEE:

Not Applicable

RECOMMENDED ACTION:

Receive and file.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

On June 19, 1998, Senate Bill 432 (Lewis) was signed into law and took effect immediately as an urgency measure. The legislation set the compliance threshold of Rule 2202 - On-Road Motor Vehicle Mitigation Options to 250 employees per worksite on a permanent basis. Accordingly, worksites that have between 100 and 249 employees are no longer regulated by Rule 2202. This represents 64% of the worksites that would have been regulated at the 100 employee threshold.

Although these worksites are exempt from Rule 2202, the adopted 1997 Air Quality Management Plan (AQMP) includes the mobile source emissions from worksites with 100 or more employees as part of the South Coast Air Basin attainment goals. During 1997, the exemption of the smaller worksites resulted in a shortfall of emissions reductions that were offset by purchasing credits with Rule 2202 Air Quality Investment Program monies. However, for 1998 and beyond, other measures will be necessary to address potential shortfalls.

Staff requested input from interested parties to review possible sources of mobile source emissions to offset the shortfall in emission reductions from 1998 and beyond. To facilitate this process, the Rule 2202 Emissions Equivalency Task Force was formed to investigate and make recommendations to the Governing Board regarding the best approaches for achieving the requisite emission reductions.

The Task Force has met a total of five times and has made significant progress toward identifying the extent of the shortfall created by SB836 and potential sources of emission reductions to make up for the shortfall.

Four sensitivity runs were completed to help place a range on the potential emissions shortfall by 2010. Interim years are interpolated based on the AVR average annual compounded growth rate between 1997 and 2010 (Table 1).

Scenario 1 Uses the SB 836 methodology and a 1.25 base AVR for 1997. This option is the worst-case scenario assuming that the AVR will revert back to the 1.13 baseline by the year 2000 and continue at that state until 2010.

Scenario 2 Applies the 1.25 base AVR for 1997 and the AQMP methodology with the assumption that a 50% decrease in the base AVR will occur by 2010. The 50% decrease is assumed between the 1997 base AVR and the 1.13 worst-case scenario.

Scenario 3 Uses a 1.25 base AVR and the AQMP methodology with the assumption that a 75% decrease in the base AVR will occur by 2010. The 75% decrease is assumed between the 1997 base AVR and the 1.13 worst-case scenario.

Scenario 4 Uses the 1.25 base AVR and the methodology used to develop the AQMP. This worst-case scenario assumes the average AVR will decrease to 1.13 by 2010.

Potential Emission Reduction Sources

Potential emission reduction sources have been identified throughout the task force meetings. The most viable options are as follows:

MSRC Program - MSRC staff provided emission reduction information to the task force for 1996-97 and 1997-98 program years. In addition to these two years of reporting, future years' emission reductions could also be applied toward the SB 836 shortfall. Since many of the projects identified were for heavy-duty vehicles with average life usage of 10 to 12 years, it is anticipated that the emissions reductions available from this program will continue to increase. At present, staff believes that the MSRC program will be able to cover the entire projected shortfall in NOx emissions as a result of SB 836 (Table 2).

The Chairman of the MSRC and several committee members have participated in the task force and have expressed willingness to cooperate with the District on this issue. Further work will be required to develop emission reduction targets for future years and contractual and monitoring and reporting issues.

Air Quality Investment Program (AQIP) Bank - The AQIP purchases emission reductions with funds paid by employers who choose AQIP as their preferred method to comply with R2202. Once the District receives the funds, emission reductions are purchased quarterly, based on a competitive proposal process. Due to economies of scale the District has been able to purchase emission reductions in excess of the amounts required to meet the quarterly targets. The AQIP bank has covered the 1997 shortfall. The current year, 1998 bank has the following excess emissions for purchases made through the 2nd quarter 1998 (Table 3).

The AQIP will face new challenges in future years as changes affecting the car scrappers will probably result in increasing the cost of purchasing credits. While the AQIP bank can currently cover the SB 836 shortfall, it is uncertain if this trend will continue.

ARB LEV II Program - ARB approved the LEV II program at its November 5, 1998 meeting. Based on ARB reports, the District will be able to use the excess CO emissions reductions sometime between 2000 and 2004 from ARB's mobile source control program, once attainment is achieved for CO. The District is anticipating CO attainment by no later than 2002 (Table 4).

Donation of Emission Reduction Credits (ERC) - Allow companies to donate ERCs for a limited specified time while they are not being utilized. ERCs can be used towards the shortfall since they are credits and not accounted for in the AQMP.

Further Study

Recently CARB was the recipient of $25 million to reduce emissions from heavy-duty diesel engines. CARB will distribute these funds among the various air agencies in the state. Early discussions with CARB staff have indicated that the emissions reductions (or a portion thereof) resulting from the expenditure of these funds will be credited to the air districts. At this time, it is premature to estimate any emissions reductions from this funding since staff is unsure of the AQMD’s share or how the dollars will be used. Staff will continue to follow this item as a potential source of additional emission reductions.

The concept of calculating the reductions of VOC from heavy-duty CNG engines was discussed as a potential source of emission reductions. Currently, ARB does not have an approved methodology to calculate VOC reduction from CNG engines. Staff will continue to work with ARB in this area. Until this issue is resolved with ARB, emission reductions from conversion of heavy-duty CNG vehicles are not available for consideration to reduce the shortfall.

Revisions to R2202 were also discussed. Concepts that were put forward included providing a definition for "good faith effort" and reintroducing parking cash-out as a control measure. A subcommittee has been working on these two issues. The outcome of these efforts will be forwarded to the AQMP working group for consideration of inclusion in the 2000 AQMP.

Summary

The Task Force will meet again in January 1999. It is anticipated that staff will forward the Task Force recommendations to the Governing Board early next year. Additional efforts will be made to identify the necessary emission reductions.

ATTACHMENT 1

Table 1
Shortfall Estimates
Emissions Equivalency Task Force tons/day

Table 2
Emissions Reductions Summary
MSRC Programs
tons/day

*Emission reductions will increase over time.

Table 3
Emissions Reductions Summary
AQIP Bank
1^st - 2^nd QT 1998 Purchases
tons/day

Table 4
ARB - LEV II Program
CO Emissions Reductions
tons/day

Table 5
Potential Shortfall Emissions Reduction Sources
tons/day

*Emission reductions will increase over time.

**Depending on funding

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