- Ceramics & Refractories/Insulation
- Combustion & Burners
- Heat Treating
- Heat & Corrosion Resistant Materials/Composites
- Induction Heat Treating
- Industrial Gases & Atmospheres
- Materials Characterization & Testing
- Process Control & Instrumentation
- Sintering/Powder Metallurgy
- Vacuum/Surface Treatments
The California Air Resources Board’s (ARB) draft list of “covered entities” contains approximately 400 qualifying GHG generators. It is populated primarily by companies in the food (canning, drying, brewing, dairy, baked goods), pulp/paper, petroleum extraction and refining, industrial gas, chemical, pharmaceutical, glass, cement, nonferrous metal and power generation industries … plus a catch-all category called “Electricity Importer.”
There are only three ways an included entity can escape from the program: (1) improve fuel efficiency, (2) reduce production or (3) shut down operations. Only option 3 takes effect immediately. The other two options take effect the year after the entity has emitted less than the 25,000 MT/year threshold for an entire three-year compliance period.
Regulated entities can only emit GHG if they are in possession of a “compliance instrument,” of which there are two types – allowances and offsets.
An allowance is a tradable authorization to emit 1 metric ton of CO2 equivalent. Initially, allowances are issued by ARB to generators at no cost, according to the baseline GHG emission levels they reported in previous years. Later, ARB will auction off the available allowances to the highest bidder. The minimum bid is currently set at $10 per MT.
An offset credit is a tradable instrument that represents a reduction or removal of 1 metric ton of GHG. Offset credits may be sold by one generator to another. According to the regulation, such reductions must be “real, additional, quantifiable, permanent, verifiable and enforceable.”
In the context of offsets, the term “real” means resulting from a demonstrable action called an “offset project” (e.g., changing from a high-carbon to a lower-carbon fuel); “additional” means beyond compliance; “quantifiable” means accurately and reproducibly measurable; “permanent” means irreversible (i.e. not simply due to a temporary reduction in production); “verifiable” means the offset project is documented sufficiently so that it can be reviewed objectively by a third-party verifier; “enforceable” means subject to action by the ARB if any provision of the law is violated.