A RGGI CO2 offset allowance represents a project-based greenhouse gas reduction outside of the capped sector (the electric sector). At this time, the RGGI participating states limit the award offset allowances to five project categories, each of which is designed to reduce or sequester emissions of carbon dioxide (CO2), methane, or sulfur hexafluoride (SF6) within the 10-state region.
Offsets are an important component of each state’s CO2 Budget Trading Program. By recognizing CO2-equivalent emissions reductions and carbon sequestration outside the capped sector, offsets provide compliance flexibility and create opportunities for low-cost emissions reductions across sectors.
To implement their offset programs, the RGGI participating states cooperatively developed prescriptive requirements for each of the five offset categories. These requirements ensure that awarded CO2 offset allowances represent CO2-equivalent emissions reductions or carbon sequestration that is real, additional, verifiable, enforceable, and permanent. All offset projects must be located within one of the RGGI participating states.
CO2 offset allowances may be used to satisfy a limited portion of a regulated power plant's compliance obligation. Initially, the use of CO2 offset allowances is constrained to 3.3 percent of a power plant's total compliance obligation during a control period, though this may be expanded to 5 percent and 10 percent if certain CO2 allowance price thresholds are reached.
This section of the website is designed to act as a resource for general information on RGGI’s offset programs and as a portal for offset project sponsors to access the instructions and materials needed to submit relevant project and accreditation applications.
- General information on RGGI’s offset program, including project categories, standards, and tracking system, is available through links on the left side of this page.
- Project sponsors and verifiers should consult links to “Application Process for Project Sponsors” and “Accreditation Process for Project Verifiers” to learn about relevant application processes. Specific eligibility and prescriptive requirements for each of five project categories are included in each state's Regulations.
Standards for RGGI Offset Projects
The offset programs of RGGI participating states rely upon prescriptive, category-specific requirements to determine eligibility for offset projects to receive awards of RGGI CO2 offset allowances.
These requirements were developed to ensure that offset projects represent CO2 equivalent emission reductions that are real, additional, verifiable, enforceable, and permanent. At this time, five project categories for CO2 offset allowances may be eligible for the award of CO2 offset allowances:
- Landfill methane capture and destruction
- Reduction in emissions of sulfur hexafluoride (SF6) in the electric power sector
- Sequestration of carbon due to afforestation
- Building sector End-use energy efficiency
- Avoided methane emissions from agricultural manure management operations
Proposed offset projects must complete a Consistency Application to demonstrate that projects meet the relevant category-specific requirements. In addition, projects that have been deemed consistent must supply ongoing monitoring and verification reports in order to receive awards of RGGI offset allowances.
Among key components of RGGI’s offset program are provisions that address project “additionality.” Broadly, additionality attempts to address whether incremental greenhouse gas emissions reductions will be achieved from an offset project that would not otherwise have occurred in the absence of the RGGI offsets component.
Additionality is the key criteria for ensuring that offsets projects result in “real” emissions reductions in the context of a cap-and-trade program. Since offset allowances allow an additional ton of CO2 emitted for each ton reduced, projects must provide assurance that they are achieving emissions reductions that would not otherwise have occurred in the absence of RGGI’s offset provisions.
Application Process for Project Sponsors
Applying to a RGGI participating state for the award of CO2 offset allowances involves a three-step process:
- First, the project sponsor should open a general account in RGGI COATS and obtain an offsets project ID. For information about establishing a RGGI COATS general account and offset project ID code, consult the RGGI COATS User’s Guide.
- Second, the project sponsor must submit a Consistency Application to the applicable state regulatory agency where the offset project is located to allow the state to evaluate whether the project is eligible in accordance with state regulations.
- Third, the project sponsor must submit to the same state a periodic Monitoring and Verification Report for an approved project that demonstrates the CO2-equivalent emissions reductions or carbon sequestration achieved by the project during the reporting period.
- The Project Sponsor identified in the Consistency Application must be the same as the Authorized Account Representative for the RGGI COATS general account.
- Both submittals must include a signed verification statement and verification report from an accredited independent verifier accredited by Delaware.
Key Deadlines and Requirements
Offset applications must be submitted to the appropriate regulatory agency in the RGGI state where the project is located.
Key eligibility dates and application submittal requirements for offset projects are as follows:
- For offset projects commenced between December 20, 2005 and January 1, 2009, the Consistency Application must be submitted by June 30, 2009.
- For offset projects commenced after January 1, 2009, the Consistency Application must be submitted within six months after the project is commenced.
- For an offset project located in one participating state, the Consistency Application must be filed with the appropriate regulatory agency in that State.
- For an offset project located in more than one participating state, the Consistency Application must be filed in the participating state where the majority of the CO2-equivalent emissions reduction or carbon sequestration due to the offset project is expected to occur.
Project sponsors should consult the relevant state's regulations for detailed eligibility requirements.
A completeness determination will be made within 30 days of project application submission; a consistency determination will be made within 90 days.
Project sponsors should consult the relevant state’s regulations for more information on the approval process.
Offset Registry and Tracking System
The RGGI participating states have developed an offsets module for the RGGI CO2 Allowance Tracking System (COATS). While individual states may require state-specific application procedures, COATS is used for all project registration, tracking of offset project submissions and project status, and the award of CO2 offset allowances.
The offsets module in RGGI COATS:
- Enables offset project sponsors to register offset projects and electronically submit of Consistency Applications and Monitoring and Verification Reports. (Please note: Project sponsors must open a COATS general account in order to complete the application process).
- Enables the public to view, customize and download reports on offset project documentation submitted to RGGI participating states and the award of CO2 offset allowances.
To view the offsets report please click here.
To open a COATS account, please visit the COATS platform.
For more information on RGGI COATS, please visit: Emissions and Allowance Tracking.
Accreditation Process for Project Verifiers
Consistency Applications and Monitoring and Verification Reports must include a signed verification statement and verification report from a state-accredited independent verifier.
Each independent verifier must be accredited by the RGGI participating state in which the offset project is located, although a RGGI participating state may acknowledge accreditation by another RGGI participating state.
Pre-engagement COI Filing
Prior to engaging with an offset project sponsor to provide verification services, an accredited verifier must submit a pre-engagement conflict of interest (COI) disclosure filing to the appropriate regulatory agency in the state where the offset project is located. This filing is required for disclosure of potential relationships or other issues that could lead to a COI situation between the verifier and the offset project sponsor or a related party.
The links below lead to the following:
Independent Verifier Accreditation and Submittal Materials
For information regarding Offsets in Delaware contact:
712 Grantham Lane
New Castle, Delaware 19720
Phone (302) 323-4542
FAX: (302) 323-4598
Last Revised: 12/15/10