40 CFR §1036.701

1. (a)You may average, bank, and trade (ABT) emission credits for purposes of certification as described in this subpart and in subpart B of this part to show compliance with the standards of §§ 1036.104. Participation in this program is voluntary. Note that certification to NOX standards in § 1036.104 is based on a family emission limit (FEL) the NHTSA fuel efficiency program under 49 CFR part 535 is based on a Family Certification Level (FCL). This part refers to “FEL/FCL” to simultaneously refer to FELs for NOX and FCLs for NHTSA. Note also that subpart B of this part requires you to assign an FCL to all engine families, whether or not they participate in the ABT provisions of this subpart.
2. (b)The definitions of subpart I of this part apply to this subpart in addition to the following definitions:
   1. (1)Actual emission credits means emission credits you have generated that we have verified by reviewing your final report.
   2. (2)Averaging set means a set of engines in which emission credits may be exchanged. See § 1036.740.
   3. (3)Broker means any entity that facilitates a trade of emission credits between a buyer and seller.
   4. (4)Buyer means the entity that receives emission credits as a result of a trade.
   5. (5)Reserved emission credits means emission credits you have generated that we have not yet verified by reviewing your final report.
   6. (6)Seller means the entity that provides emission credits during a trade.
   7. (7)Standard means the emission standard that applies under subpart B of this part for engines not participating in the ABT program of this subpart.
   8. (8)Trade means to exchange emission credits, either as a buyer or seller.
3. (c)Emission credits may be exchanged only within an averaging set, except as specified in § 1036.740.
4. (d)You may not use emission credits generated under this subpart to offset any emissions that exceed an FEL/FCL or standard. This paragraph (d) applies for all testing, including certification testing, in-use testing, selective enforcement audits, and other production-line testing. However, if emissions from an engine exceed an FEL/FCL or standard (for example, during a selective enforcement audit), you may use emission credits to recertify the engine family with a higher FEL/FCL that applies only to future production.
5. (e)You may use either of the following approaches to retire or forego emission credits:
   1. (1)You may retire emission credits generated from any number of your engines. This may be considered donating emission credits to the environment. Identify any such credits in the reports described in § 1036.730. Engines must comply with the applicable FELs even if you donate or sell the corresponding emission credits. Donated credits may no longer be used by anyone to demonstrate compliance with any EPA emission standards.
   2. (2)You may certify an engine family using an FEL/FCL below the emission standard as described in this part and choose not to generate emission credits for that family. If you do this, you do not need to calculate emission credits for those engine families, and you do not need to submit or keep the associated records described in this subpart for that family.
6. (f)Emission credits may be used in the model year they are generated. Surplus emission credits may be banked for future model years. Surplus emission credits may sometimes be used for past model years, as described in § 1036.745.
7. (g)You may increase or decrease an FEL/FCL during the model year by amending your application for certification under § 1036.225. The new FEL/FCL may apply only to engines you have not already introduced into commerce.
8. (h)-(j) [Reserved]
9. (k)Engine families you certify with a nonconformance penalty under 40 CFR part 86, subpart L, may not generate emission credits.