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Chesapeake Bay TMDL

Trading and Offsets in the Chesapeake Bay Watershed

Overview

EPA expects that new or increased loadings of nitrogen, phosphorus and sediment in the Bay watershed will be offset by reductions and credits generated by other sources.

In Section 10 of the Chesapeake Bay TMDL document, EPA explains how Bay jurisdictions may accommodate new or increased loadings of nitrogen, phosphorus and sediment. The Bay jurisdictions include Delaware, Maryland, New York, Pennsylvania, Virginia, West Virginia and the District of Columbia. New or increased loadings may be accommodated either through a specific TMDL allocation or by offsetting those loadings with quantifiable and accountable reductions.

Appendix S of the Chesapeake Bay TMDL document discusses a number of definitions and common elements that EPA expects the jurisdictions to include and implement in their offset programs. EPA also anticipates using these definitions and elements in reviewing the jurisdictions' trading programs.

Beyond permitting and nonpoint source controls, water quality trading is one approach that jurisdictions may use to achieve the load reduction requirements. Water quality trading is a market-based approach providing economic incentives for voluntary pollutant reductions from point and nonpoint sources of pollution to improve and preserve water quality.

Trading can provide greater efficiency in achieving water quality goals in watersheds. Trading can allow one source to meet its regulatory obligations by using pollutant reductions created by another source with lower pollution controls.

EPA supports implementation of the Bay TMDL through water quality trading programs established and implemented in a manner consistent with the Clean Water Act, and its implementing regulations. Trading programs must also be consistent with EPA's 2003 Water Quality Trading Policy and the 2007 Water Quality Trading Toolkit for National Pollutant Discharge Elimination System Permit Writers.

EPA does not support any trading activity that would delay or weaken Bay TMDL implementation or that is inconsistent with the assumptions and requirements of the TMDL. Additionally, EPA does not support trading that would cause the combined point source and nonpoint source loadings covered by a trade to exceed the applicable TMDL loading cap.

For more information:

Water Quality Trading Toolkit for Permit Writers Updated June 2009

Jurisdiction Programs

In addition to state-specific Bay TMDL information available through EPA, the Bay jurisdictions iwth trading and/or offset programs in place have individual websites as indicated below. The Bay jurisdictions include Delaware, Maryland, New York, Pennsylvania, Virginia, West Virginia and the District of Columbia. Read EPA's assessments of the jurisdictions' trading and offset programs on the Sector-Specific EPA Oversight in the Chesapeake Bay Watershed page.