How do air credits work?

According to the San Joaquin Valley Air District, Hydrogen Energy California (HECA) bought $16.1 million worth of Emission Reduction Credits or ERCs. But what are these ERCs?
According to the San Joaquin Valley Air District, Hydrogen Energy California (HECA) bought $16.1 million worth of Emission Reduction Credits or ERCs. The project bought these to make up for an estimated 500 tons of pollutants HECA plans to release in the air annually.

But what are these ERCs?

Emission Reduction Credits are something a valley company can earn if it "dramatically reduces air emissions."

Once a company earns a credit it can sell it to another company.

Under this policy, the air district says, the polluting company is punished by having to pay, and the clean company is rewarded by receiving the payment.

Dave Warner of the San Joaquin Valley Air District said the credit system was created to allow for economic growth in areas like the valley where the air quality is very poor. Without the credits, Warner said, very few new business would be able to operate in the San Joaquin Valley.

Where did HECA buy the credits?

NOx

HECA purchased a set of NOx credits from the Bakersfield-based, Big West oil refinery on Rosedale Highway, (acquired by Alon Bakersfield Refining in 2010). Big West earned these credits by shutting down its catalytic cracker, fluid cooker, and CO boiler in 1983.

HECA purchased another set of NOx credits from GIC Financial Serivces, originally from Kingsburg-based Guardian Industries Corp. GIC earned these credits by installing an SCR, scrubber, and converting from fuel oil to natural gas in 2008.

SOx

HECA purchased a set of SOx credits from Bakersfield-based, Big West oil refinery on Rosedale Highway, (acquired by Alon Bakersfield Refining in 2010). Big West earned these credits by shutting down a tail gas incinerator in 1992.

HECA purchased another set of SOX credits from GIC Financial Services. Guardian earned these credits by installing an SCR and scrubber and also by concerting from fuel oil to natural gas.

VOC

HECA purchased VOC credits from Aer Glan Energy, originally from Bakersfield-based Frito-Lay, Inc. Frito-Lay earned these credits by shutting Continental Carbon Corporation in 1981.

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