4 The record articles

How does the Highly Reactive Volatile Organic Compound Emissions Cap and Trade (HECT) program affect Houston?

Posted: February 25th, 2020

Authors: Tanner H. 

This is the third blog in a series where I will discuss Texas Emissions Banking and Trading (EBT) programs specifically in the Houston-Galveston-Brazoria (HGB) region.  In this edition, I will explain the purpose and requirements of the mandatory Highly Reactive Volatile Organic Compound Emissions Cap and Trade (HECT) program.  The HECT program is a market-based cap and trade program whose requirements began on December 13, 2002 and was designed to mimic the framework of the Mass Emission Cap and Trade (MECT) program.

The HECT program implements an annual highly reactive volatile organic compound (HRVOC) emissions cap for all facilities that have the potential to emit HRVOCs from vent gas streams, flares, and cooling tower heat exchange systems, except as listed as exempt in 30 Texas Administrative Code (TAC) §101.392.  The purpose of the HECT program is to help the HGB region meet the National Ambient Air Quality Standards (NAAQS) for ozone.  The Texas Commission on Environmental Quality (TCEQ) limits HRVOC emissions by allocating HRVOC allowances to each facility based on their emissions history and according to equations defined in 30 TAC §101.394.

Affected facilities must report their HRVOC emissions through the State of Texas Environmental Electronic Reporting System (STEERS) no later than March 31st after each control period.  Control periods run from January 1st through December 31st of each calendar year.  If the reported value is greater than the facility’s HRVOC allowances, the difference plus a 10% penalty of the difference will be deducted from the facility’s allowances in the next control period.  For example, if a facility has 10 tons of allowances for a reporting period in which they report 11 tons of emissions, the facility will have a penalty of 1.1 tons applied against their allowances in the following control period.

When a facility is at a deficit (i.e., when emissions are higher than allowances), the facility must purchase additional allowances to cover the remaining balance.  Facilities who have a surplus of allowances can either sell them to companies who are at a deficit or bank them as vintage allowances to use in the next control period.  Vintage credits expire after one control period of not being used.

Stay tuned for the next edition of ALL4’s 4 The Record where I will discuss how to navigate the cap and trade world in the HGB region.  If you missed the first or second blog in this series, be sure to read, Did you know there are 5 emissions trading programs in Texas?! and How Does the Texas Mass Emission Cap and Trade (MECT) Program Affect Houston?.  The first blog gives a broad overlook of the different EBT programs in the HGB region and the second gives an explanation of the regulations of the MECT program.  If you have any questions regarding this blog, please reach out to me at thenson@all4inc.com or 281-937-7553 x308.

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