Mobile Emission Reduction Credit (MERC)

A Mobile Emission Reduction Credit (MERC) is an emission reduction credit generated within the transportation sector. The term “Mobile Sources” refers to motor vehicles, engines, and equipment that move, or can be moved, from place to place. Mobile sources include vehicles that operate on roads and highways ("on-road" or "highway" vehicles), as well as nonroad vehicles, engines, and equipment. Examples of mobile sources are passenger cars, light trucks, large trucks, buses, motorcycles, earth-moving equipment, nonroad recreational vehicles (such as dirt bikes and snowmobiles), farm and construction equipment, cranes, lawn and garden power tools, marine engines, ships, railroad locomotives, and airplanes. In California, mobile sources account for about 60 percent of all ozone forming emissions and for over 90 percent of all carbon monoxide (CO) emissions from all sources.

Background

Government agencies worldwide have struggled with finding new and innovative approaches to address the growing problem of air pollution and global warming. Experts in the field have recognized the importance of developing solutions to reduce greenhouse gas (GHG) emissions. Most proposed strategies to mitigate global climate change focus on reducing the dominant source of GHG emissions to the atmosphere - combustion of fossil fuels, which releases carbon dioxide. Carbon dioxide emissions represent about 84 percent of total U.S. GHG emissions. In the United States, most carbon dioxide (98 percent) is emitted as a result of the combustion of fossil fuels; consequently, carbon dioxide emissions and energy use are highly correlated.

General Emission Reduction Strategies

The two main approaches that have been developed to address this problem include a command-and-control regulatory system and Emissions credit trading. Three broad types of Emissions credit trading programs have emerged: reduction credit, averaging, and cap-and-trade programs. In such programs, a central authority, such as an air pollution control district or a government agency, sets limits or "caps" on certain pollutants. Companies or fleets of vehicles that intend to exceed these limits may buy emission reduction credits (ERCs) from entities that are able to remain below the designated limits. This transfer is usually referred to as a trade.

International Approach to Emission Reduction Credits

Emission trading is contemplated on an international level. The Kyoto Protocol is an agreement made under the United Nations Framework Convention on Climate Change (UNFCCC). The Kyoto Protocol binds ratifying nations to a similar system, with the UNFCCC setting caps for each nation, and utilizes a Clean Development Mechanism (CDM) system. The primary reduction strategy under the Kyoto Protocol is a trading system that essentially makes carbon credits a commodity like oil or gas.

United States Approach to Emission Reduction Credits

The United States (which did not ratify the Kyoto Protocol) has the most experience with domestic emissions trading markets. The Clean Air Act (1970) is a federal law that requires the United States Environmental Protection Agency (EPA) to develop and enforce regulations to protect the general public from exposure to airborne contaminants that are known to be hazardous to human health. The Clean Air Act (1990) or Clean Air Act amendments of 1990 authorized the use of market-based approaches such as emission trading to assist states in attaining and maintaining air quality for all criteria pollutants. EPA's subsequent interpretive rulings expressly allow owners of new sources to obtain emission credits from other companies that operate facilities located in the same air quality control region. To implement an emissions offset program, many states have developed regulations allowing sources to register their emissions reduction credits as ERCs that can be sold to companies required to offset emissions from new or modified sources. Brokerage companies typically handle sales between companies having surplus ERCs and those wanting to acquire such credits.

All commonly accepted ERCs in the United States must meet each of five criteria before they can be certified by the relevant regulatory authority as an ERC. Namely, the emission reduction must be real, permanent over the period of credit generation, quantifiable, enforceable, and surplus to emission reductions that are already needed to comply with an existing requirement (local, state, or Federal) or air quality plan. These criteria are intended to ensure that the emission reduction is a permanent reduction from the emissions that would otherwise be allowed to offset the permanent increase in emissions from the new or expanding source.

Steps to Create a MERC

The steps involved to create a MERC are as follows:

1. Identifying an emissions reduction technology for a pollutant
2. Identifying a mobile source
3. Utilize a Portable Emissions Measurement System to measure emissions of the pollutant and take first measurements of the pollutant from the mobile source
4. Analyze the measurements to develop a baseline emissions amount
5. Apply the emissions reduction technology to the mobile source to provide a modified mobile source
6. Connect the Portable Emissions Measurement System to the modified mobile source and take second measurements of the modified mobile source
7. Analyze the second measurements to develop a modified emissions amount
8. Quantify the mobile emissions reduction produced by the emissions reduction technology
9. Convert the mobile emissions reduction into a tradable commodity

Monetization of a MERC

The process of converting the mobile emissions reduction into a tradable commodity consists of converting the reduction or a portion of the reduction of emissions into at least one tradable credit, and marketing and monetizing the credit. This is followed by receiving information to identify a customer account, assigning the mobile emissions reduction to the customer account, calculating a MERC from the mobile emissions reduction, and crediting the MERC to the customer account. What follows is the exchanging the of MERC in the customer account for monetary assets this includes the following steps:

1. Debiting the MERC from the customer account
2. Receiving information to identify a second customer or purchaser
3. Calculating an emissions amount of the pollutant for the purchaser
4. Assigning a liability value to the emissions amount for the purchaser
5. Accepting payment from the purchaser
6. Using the payment to purchase at least one MERC for the purchaser
7. Crediting the MERC as assets against the liability value assigned to the second customer for the emissions amount, whereby the emissions amount and the liability value in the second customer account is reduced accordingly

Target Pollutants of Mobile Emission Reduction Credits

At present, the pollutant may be selected from a group consisting of nitrogen oxides (NOx), carbon monoxides (CO), carbon dioxides (CO2), hydrocarbons (HC), sulfur oxides (SOx), particulate matter (PM) and volatile organic compounds (VOCs). The emissions reduction technology may be selected from a group consisting of alternative fuels, vehicle repairs, vehicle replacements, vehicle retrofits and hybrid engines. The mobile source may be selected from a group consisting of passenger cars, light trucks, large trucks, buses, motorcycles, off-road recreational vehicles, farm equipment, construction equipment, lawn and garden equipment, marine engines, aircraft, locomotives and water vessels.

From http://en.wikipedia.org/

Idle reduction

Idle reduction is type of automobile emissions control aimed at reducing the amount of energy wasted by an idling vehicle. When a vehicle's engine is not being used to move the vehicle, it can be shut off entirely—thereby conserving fuel and reducing emissions—while other functions like accessories and lighting are powered by an electrical source other than the alternator. Each year, long-duration idling of truck and locomotive engines emits 11 million tons of carbon dioxide, 200,000 tons of oxides of nitrogen, and 5,000 tons of particulate matter into the air.

Idle reduction is particularly significant for vehicles in heavy traffic and trucks at the estimated 5,000 truck stops in the US. Many hybrid electric vehicles employ idle reduction to achieve better fuel economy in traffic. America's fleet of around 500,000 long-haul trucks consumes over a billion gallons (3.8×109 l; 830 million imp gal) of diesel fuel per year. Services such as IdleAire and Shorepower provide power at truck stops to resting truckers who would otherwise need to continue idling during mandatory breaks. Because the United States Department of Transportation mandates that truckers rest for 10 hours after driving for 11 hours, truckers might park at truck stops for several hours. Often they idle their engines during this rest time to provide their sleeper compartments with air conditioning or heating or to run electrical appliances such as refrigerators or televisions. There are other technologies that can reduce the use of fuel to heat or cool the cab when the vehicle is traditionally idling overnight. These can be battery or fuel powered but in either case, use less fuel, do no harm to the vehicle's engine, and add far fewer or even no additional emissions into the atmosphere.

From http://en.wikipedia.org/

FutureGen

FutureGen is a US government project announced by President George W. Bush in 2003; its initial plan involved the construction of a near zero-emissions coal-fueled power plant to produce hydrogen and electricity while using carbon capture and storage.

In December 2007, Mattoon Township, Coles County, Illinois northwest of Mattoon, Illinois was chosen as the site for the plant from among four finalists in Illinois and Texas. On January 29, 2008, the Department of Energy announced a restructuring of the FutureGen project, which was claimed necessary due to rising costs. In June 2008, the government announced a call for proposals to elicit commercial involvement in the restructuring.

Original project

The original incarnation of FutureGen was as a public-private partnership to build the world's first near zero-emissions coal-fueled power plant. The 275-megawatt plant would be intended to prove the feasibility of producing electricity and hydrogen from coal while capturing and permanently storing carbon dioxide underground. The Alliance intended to build the plant in Mattoon Township, Coles County, Illinois northwest of Mattoon, Illinois, subject to necessary approvals (issuing a “Record of Decision”) by the Department of Energy (DOE) as part of the National Environmental Policy Act (NEPA) process.

FutureGen was to be designed, developed and operated by the FutureGen Industrial Alliance, a non-profit consortium of coal mining and electric utility companies formed to partner with the DOE on the FutureGen project. The project was still in the development stage when its funding was cancelled in January 2008. The Alliance decision of the location of the host site, subject to DOE's completing NEPA environmental reviews, was announced in December 2007 after a two-year bidding and review process. Construction was scheduled to begin in 2009, with full-scale plant operations to begin in 2012.

The estimated gross project cost, including construction and operations, and excluding offsetting revenue, was $1.8 billion. The project was governed by a legally binding cooperative agreement between DOE and the Alliance. Under the agreement, DOE was to provide 74% of the project’s cost, with private industry contributing the other 26%. The DOE also planned to solicit the financial support and participation of international governments in the FutureGen project, since by 2020 more than 60% of man-made greenhouse gas emissions are expected to come from developing countries. Foreign financial support was to offset a portion of DOE’s cost-share. As of January 2008, the foreign governments of China, India, Australia, South Korea, and Japan had expressed interest in participating and sharing the cost of the project.

FutureGen was to sequester carbon dioxide emissions at a rate of one million metric tons per year for four years, which is the scale a Massachusetts Institute of Technology (MIT) report cites as appropriate for proving sequestration. The MIT report also states that “the priority objective with respect to coal should be the successful large-scale demonstration of the technical, economic, and environmental performance of the technologies that make up all of the major components of a large-scale integrated CCS system — capture, transportation and storage.” An injection field test similar to this was done in Norway.

In March 2009 Washington Post reported that U.S. Secretary of Energy Steven Chu expressed support for continuing the project using stimulus funds (after some changes that have not yet been specified) and making it a part of a larger portfolio of research plants developed in collaboration with other countries.

From http://en.wikipedia.org/

Emisstar

Emisstar LLC is an environmental consulting practice focused on mobile emissions technology, policy, and implementation. Considering business and public health, the company focuses on reducing and controlling air pollutants from mobile sources using technology and minding relevant policy impacts and implications. Headquartered in Austin, Texas, but with offices in New Hampshire, New York and California, the firm's services range in scope from regional to national, offering clients in both the public and private sectors with in-depth of knowledge clean air markets and insight into many levels of emissions-related areas of industry and government.

Practice areas and services

Emisstar offers services that aim to reduce emissions through grant programs, project management, applied technology while also finding opportunities for diversification, penetration, and expansion in clean air markets. The company's practice areas, as listed on their website:

Sustainable Transportation Services: Creating multi-phase plans for transportation and logistics oriented businesses that reduce an organization's carbon footprint and emissions such as greenhouse gases while using technologies that increase efficiency while creating fuel savings encompasses Emisstar's Sustainable Transportation Services. Emisstar helps clients obtain U.S. Environmental Protection Agency SmartWay certification through the implementation of the program's Action Plan, including model calculations and guide development.

Strategic Advisory Services: Emisstar constantly monitors clean air markets, to identify and predict opportunities for market penetration, development and expansion. By assessing the impact of emissions-related legal regulations, Emisstar can relay the relevant impacts to paying clientele.

Advanced Vehicle Technology: Harnessing available and original technology, Emisstar provides emissions solutions and technology demonstrations for onroad, nonroad, marine and locomotive vehicles and equipment including exhaust aftertreatment retrofits and idle reduction in addition to biodiesel and alternative fuels.

Environmental Compliance Services: Emisstar helps clients meet environmental regulatory compliance standards as set by organizations like the California Air Resources Board (CARB), the EPA and the Mine Safety and Health Administration (MSHA).

Incentive Program Guidance: Guiding clients through the constantly-changing rules of State and Federal incentive guidance grant programs (such as the Texas Emissions Reductions Program

) represents a significant portion of the company's services. Emisstar helps clients receive grant funding for vehicle and equipment upgrades, retrofits, and replacements, as well as renewable and clean energy projects.

Project Management: With special concentration on vehicular retrofits, Emisstar puts into effect extensive projects utilizing relationships with dealers and lawmakers with the company's own technical know-how.

Testing Services: Emisstar provides engine and chassis tests through a network of U.S. laboratory-based facilities as well as on-board, Portable Emissions Measurement System (PEMS) to evaluate environmental performance through measured emissions. These tests can help evaluate the environmental performance of alternative and biodisel fuels, renewable energy and emission-reducing technologies and provide independent third-party verification of vehicle and greenhouse gas emissions.

Projects and Areas of Focus

NYMTC: The New York Metropolitan Transportation Council commissioned Emisstar to create a plan that would reduce diesel particulate matter and nitrogen oxide emissions in the New York City area. Emisstar recommended several measures, including fleet modernization and retrofits, idle reduction support, and use of biodiesel fuel in conjunction with diesel particulate filters while also suggesting funding options.

TERP: The Texas Emissions Reduction Program (TERP) seeks to reduce nitrogen oxide emissions in non-attainment areas through upgrades, retrofits, or replacement of dirty diesel equipment. Emisstar helps clients apply for TERP grants after assessing fleets, performing emissions calculations, and preparing applications while offering guidance through the program's required scrappage and reimbursement phases.

New York City Best Available Technology Project Recognized as the first official implementation of the best technology practices stipulated under New York Local Law 77, Emisstar retrofitted nonroad, heavy duty construction equipment at the Croton Water Treatment Project in the Bronx, New York. This project implements Diesel Particulate Filters, Active and Passive Diesel Particulate Filters, and Selective Catalytic Reduction technologies.

Clean Diesel Technology Nonroad Field Demonstration Program In a partnership with Southern Research Institute (SRI), Emisstar implemented a diesel retrofit project for the New York Metropolitan Area (NYMA) using CARB and EPA verfified particulate matter and nitrogen-oxides emission control technologies. Emisstar evaluated and ranked these technologies through in-use emissions testing of nonroad equipment.

From http://en.wikipedia.org/