A company wishing to install a new source of air emissions in any county designated as non-attainment for ozone or particulate matter may not generate new emissions of the precursors of ozone or particulate matter (as applicable) unless those emissions are offset by a withdrawal from the emissions offset bank, through the clearinghouse established by the Ohio EPA for that purpose. The precursors of ozone are nitrogen oxides (NOx) and volatile organic compounds (VOC), and the precursors of particulate matter (when defined as "pm2.5," or the fraction smaller than 2.5 microns) are both the "primary" stack and fugitive emissions issuing directly from the source as particulate, and the gas or vapor species that give rise to "secondary" particulate matter as a result of condensation or chemical reaction in the atmosphere downwind of the source.

Emission reduction credit (ERC) can be generated when a facility or emission unit shuts down or a facility implements pollution controls beyond state and federal air pollution regulations. The facility must submit emission reduction information to Ohio EPA, known as an ERC generation notification, for Ohio EPA to review and verify the emission reduction is in compliance with OAC Chapter 3745-31. After Ohio EPA verifies the emission reduction is in compliance, the facility's ERC will be registered in Ohio EPA's registry or 'bank'. The available ERCs will be posted on the Ohio EPA website so that other companies who want to build in nonattainment areas can find out what and where ERCs are available.

The Emission offset ratios are as follows:

Nonattainment classification	Offset Ratio
Basic	A minimum of greater than 1:1
Marginal	A minimum of greater than 1.1:1.0
Moderate	A minimum of greater than 1.15:1.0
Serious	A minimum of greater than 1.2:1.0
Severe	A minimum of greater than 1.3:1.0
Extreme	A minimum of greater than 1.5:1.0
Downright Grotesque	A minimum of greater than 2:1

Regulatory Basis

Emission Offsets are governed by the New Source Review Regulations (NSR) in the 1977 Clean Air Act Amendments. Under NSR, any facility defined as a 'major' source under rule 3745-31-01 of the Ohio Administrative Code (OAC) that wants to build or construct a major modification in a nonattainment area must obtain emission offsets. The facility subject to major NSR must 'offset' the intended increase of air emissions by purchasing or otherwise internally or externally acquiring Emission Reduction Credits (ERCs) from within the same or adjacent nonattainment area. OAC 3745-31-21 to 27 are the applicable Ohio rules.