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Chicago Emissions Reduction Market System |
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Chicago Emissions Reduction Market System (ERMS) aim to reduce volatile organic material emissions inside the Chicago area. Trading units are allotted for monetary use.
The Chicago Emissions Reduction Market System (ERMS) is a 'cap and trade' system that participating entities must hold trading units for their actual volatile organic material (VOM) emissions. Participating entities are issued trading units based on initial apportioning that is set during issuance of the sources' Clean Air Act Permit Program (CAAPP) permit.
Excess allotment trading units (ATUs) may be banked for use in the next season or sold to other sources. This arrangement encourages entities with lower emissions to further reduce VOM emissions-thus earning revenues. Entities with higher emissions may purchase excess ATUs as required.
Applicable areas
The ERMS is applicable only to stationary sources situated in Chicago area. Sources are compulsorily required to be located in the Chicago ozone nonattainment area including Grundy County and Oswego Township in Kendall County. They must obtain a CAAPP permit, on which allotments will be determined. Each source must have a baseline VOM emission of 10 tons /seasons.
Ozone season
A principal characteristic of ERMS is the ozone season. Ozone season refers to a time period between May 1 and September 30 every year. This time period is also known as 'seasonal allotment period'. Entities affected by ERMS are compulsorily required to hold trading units for actual volatile organic material emissions. Complying with ERMS guidelines thus compels companies to use material that emits lower carbon equivalents and scheduling maintenance gaps in the ozone season. A few particular components of production may be shifted outside the area.
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