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The MDE has released a Policy for Nutrient Cap Management and Trading (Policy). It’s a highly anticipated policy, that will help Maryland local governments and their wastewater community to address one of the most pressing issues - reconciling nutrient reductions with planned growth.
Maryland has already made significant progress in reducing nutrient pollution. Through the Bay Restoration Fund (BRF), the State’s major wastewater treatment plants are upgrading to enhanced nutrient removal (ENR) and best management practices (BMP) are being employed to reduce nonpoint source pollution. This has removed millions of pounds of nutrients from the Bay and its tributaries, and brought us closer to our goals. After the nutrient reductions are achieved, however, they must be maintained or water quality in the Bay will decline again.
The Bay States, including Maryland, face development pressure due to population and economic growth. Development results in increased sewage flows and runoff from impervious surfaces. Maryland has developed this Policy for Nutrient Cap Management and Trading as one tool for accommodating growth while maintaining the nutrient caps.
Maryland’s approach is unique. In Maryland, upgrade of major WWTPs is required and the BRF was instituted to fully fund these upgrades. Trading is not available as a substitute for the upgrades. Nutrient reductions achieved through the upgrades must be maintained to meet Bay water quality goals. The Policy addresses both the need to achieve early nutrient load reductions from point sources through ENR upgrades and the need to address new or increased point source nutrient loads associated with a growing population. Most states with nutrient trading allow trading in lieu of upgrading a WWTP.
The policy for point nutrient cap management/trading was developed through a public process. To obtain broad public input, a preliminary discussion draft Approach for Managing Nutrient Caps for Point Sources in Maryland’s Chesapeake Bay Watershed was presented to stakeholders on April 17, 2006. Following the initial meeting, MDE conducted “listening sessions” and accepted public comments through October 11, 2007. Among the stakeholders who participated in discussions leading to the establishment of this Policy were the Maryland Association of Municipal Wastewater Agencies (MAMWA), the Waterkeepers Alliance, the Maryland State Builders Association and the National Association of Homebuilders, the Chesapeake Bay Foundation, representatives from the Maryland’s Tributary teams, and the Maryland Departments of Agriculture (MDA), Natural Resources (DNR) and Planning (MDP). Phase I of the Policy reflects the Department’s concerted effort to address the many diverse comments, views and suggestions received during public outreach.
The Policy is being issued in two phases. Phase I outlines an approach for trading between point sources and trading involving the removal of onsite sewage disposal systems (OSDSs) commonly known as septic systems. It establishes definitions, key principles, and fundamentals that are applicable to trading programs involving both point sources and nonpoint sources. During Phase I MDE proposes to manage the nutrient caps by creating options for trading/offsetting nutrient loads from new or expanding dischargers. The next phase, Phase II of the Policy will address point source to nonpoint trading/offsets. The MDA Nutrient Trading Advisory Committee is currently developing Phase II.
The Policy is intended to supplement existing requirements. Nothing in the Policy reduces or replaces existing regulatory requirements. The Policy does not preclude the development of specific trading policies/guidelines for pollutants other than nutrients (nitrogen and phosphorus).
The key goals and purposes of the Policy are to: offset new or increased discharges in order to maintain levels of water quality that support all designated uses; establish economic incentives for reductions from all sources within a watershed; achieve greater environmental benefits than through the existing regulatory programs. Point sources, nonpoint sources or third parties can participate in trading to facilitate compliance with regulatory requirements and for the purpose of securing long-term improvements in water quality, subject to applicable laws.
There are a number of options outlined in the Policy for Nutrient Cap Management and Trading for point sources, including: improving treatment levels, maintaining existing flow at less than the design flow, reducing wastewater discharges, or making equivalent load reductions, i.e. offsets in other areas. A point source seller can generate credit by controlling its discharge beyond what is needed to meet its baseline through controlling its flow and/or its discharge concentrations.
Buyers are anticipated to be new and expanding point sources that need to acquire credits to achieve their baselines once they have met their minimum requirements outlined in the Policy. Third parties, with the approval of MDE, can also buy credits. A buyer compensates a seller for creating the excess load reductions that are then converted into credits by using trading ratios.
Point source trades will be implemented and enforced via permits under the National Pollution Discharge Elimination System. The permit limits will serve as the baseline for generating credits for use in trading. The permits will also provide the vehicle for enforcement of the trade condition. The use of the discharge permit program will ensure that credits are real, accountable, reliable, and enforceable. Maryland’s approach of implementing trading through permits will ensure that trades do not create local water quality impairments. Permits will contain conditions that achieve all State water quality standards for the local receiving waters and for the Chesapeake Bay. All permits are issued via public process. The Department will state in the public notice when any conditions allowing trading have been included in the draft permit. These conditions will be subject to the normal public comment process and period (usually 30 days), along with all other conditions of the permit.
Geographical boundaries for trading are based on three large watersheds or “trading regions”: Potomac; Patuxent; and Eastern Shore and Western Shore Tributary, which includes the Susquehanna watershed. Pollutant reductions for trading purposes will be calculated within these defined regions and delivery factors will apply. Interstate trading within these regions is not precluded by this Policy.
The options for offsetting new or increased loads/generating credits include, but are not limited to: upgrading an existing minor to Biological Nutrient Removal (BNR) or ENR; retiring an existing minor WWTP after connecting its flow to BNR or ENR facility; retiring existing (as of effective date of this Policy) onsite sewage disposal systems (OSDS) by connecting to an ENR facility; land treatment with nutrient management; implementing nonpoint source practices; and water reuse. ENR facilities may generate point sources discharge credits by optimizing treatment operation or maintaining existing flow at less than the design flow upon which the wasteload allocation is based.
Phase II of Maryland’s Guideline will address point source to nonpoint trading/offsets. MDA’s Nutrient Trading Advisory Committee is charged with guiding the development and implementation of the Phase II “strawman” policy. The Committee met five times from November 2007 through January 2008. Based on the discussions and comments received, MDA is developing the “strawman” guideline which was presented to the Committee in March 2008. The follow-up schedule involves a larger stakeholder input process during the spring of 2008, with the final guideline in the summer of 2008. MDA will assist with a specific initiative directed to the agricultural community to address issues of interest to farmers. Concurrently, MDA will be developing a web-based application tool to facilitate nonpoint source agricultural trading.
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