The following restrictions apply for using emission credits:

(a) Averaging sets. Except as specified in paragraph (c) of this section, emission credits may be exchanged only within the following averaging sets:

(1) Engines subject to spark-ignition standards.

(2) Light heavy-duty engines subject to compression-ignition standards.

(3) Medium heavy-duty engines subject to compression-ignition standards.

(4) Heavy heavy-duty engines.

(b) Applying credits to prior year deficits. Where your credit balance for the previous year is negative, you may apply credits to that credit deficit only after meeting your credit obligations for the current year.

(c) Credits from hybrid engines and other advanced technologies. Credits you generate under §1036.615 may be used for any of the averaging sets identified in paragraph (a) of this section; you may also use those credits to demonstrate compliance with the CO2 emission standards in 40 CFR 86.1819 and 40 CFR part 1037. Similarly, you may use Phase 1 advanced-technology credits generated under 40 CFR 86.1819-14(k)(7) or 40 CFR 1037.615 to demonstrate compliance with the CO2 standards in this part. In the case of engines subject to spark-ignition standards and compression-ignition light heavy-duty engines, you may not use more than 60,000 Mg of credits from other averaging sets in any model year.

(1) The maximum amount of CO2 credits you may bring into the following service class groups is 60,000 Mg per model year:

(i) Engines subject to spark-ignition standards, light heavy-duty compression-ignition engines, and light heavy-duty vehicles. This group comprises the averaging sets listed in paragraphs (a)(1) and (2) of this section and the averaging set listed in 40 CFR 1037.740(a)(1).

(ii) Medium heavy-duty engines subject to compression-ignition standards and medium heavy-duty vehicles. This group comprises the averaging sets listed in paragraph (a)(3) of this section and 40 CFR 1037.740(a)(2).

(iii) Heavy heavy-duty engines subject to compression-ignition standards and heavy heavy-duty vehicles. This group comprises the averaging sets listed in paragraph (a)(4) of this section and 40 CFR 1037.740(a)(3).

(2) Paragraph (c)(1) of this section does not limit the advanced-technology credits that can be used within a service class group if they were generated in that same service class group.

(d) Credit life. Credits may be used only for five model years after the year in which they are generated. For example, credits you generate in model year 2018 may be used to demonstrate compliance with emission standards only through model year 2023.

(e) Other restrictions. Other sections of this part specify additional restrictions for using emission credits under certain special provisions.