Code of Federal Regulations Title 40. Protection of Environment § 40.1036.740 Restrictions 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:

(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 1037.104(d)(7)1037.615to demonstrate compliance with the CO₂standards 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.

(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.