Pennsylvania is working to address water quality issues across the Commonwealth and as part of the Chesapeake Bay Watershed. The Nutrient Trading Program (Program) is one part of the Bay restoration strategy being implemented.
The primary purpose of the Program is to provide a more cost-efficient way for National Pollutant Discharge Elimination System (NPDES) permittees in the Chesapeake Bay Watershed to meet their effluent cap load limits for nutrients.
DEP issued an interim Final Trading Policy in October of 2005, which was finalized in November of 2006. This policy was the basis for the development of the Nutrient Credit Trading Program.
On October 9, 2010, DEP published its nutrient trading program regulations
(25 Pa. Code § 96.8), entitled "Use of offsets and tradable credits from pollution reduction activities in the Chesapeake Bay Watershed," in the Pennsylvania Bulletin
(40 Pa. B. 5790). Requirements for generating credits were updated effective October 1, 2015 in the
Phase 2 Watershed Implementation Plan Nutrient Trading Supplement (PDF). Details of what requirements must be met to generate credits can be found on the
Credit Generation Requirements page.
The Program involves three steps: certification, verification, and registration.
Certification means approval has been given by DEP for a pollutant reduction activity to generate credits. The approved credit generator may or may not generate credits during a compliance year. Generated credits must be verified by DEP before they may be sold and registered to an NPDES permit.
Verification means approval has been given by DEP that a generator has used their approved verification plan to demonstrate that a pollutant reduction activity generated credits during the compliance year. Verified credits may be sold.
Registration means approval has been given by DEP for a sale of credits upon review of an agreement between a buyer and seller. Registered credits may be applied to meet NPDES permit cap load requirements or resold.
Trades can take place through direct communication between credit buyers and credit generators, or the participating parties may use PENNVEST nutrient credit auctions to buy or sell credits. Credits bought/sold through PENNVEST auctions must still go through all three steps in the DEP Nutrient Trading Program. Details on how to participate in these auctions can be found on the
PENNVEST IHS Markit Auction website.