Arizona Polluters Earn Credits Swapping Dirty Nonroad Engines
Published Date: 10/8/2026
Proposed Rule
Summary
The EPA wants to approve a new rule in Maricopa County that lets owners of nonroad engines earn credits by upgrading or replacing their engines with cleaner ones. These credits can help big polluters meet air quality rules. This change encourages cleaner air and offers a smart way to reduce pollution, with comments open until November 9, 2026.
Analyzed Economic Effects
4 provisions identified: 2 benefits, 2 costs, 0 mixed.
Nonroad fleet owners can generate tradable credits
If you own or operate a captive fleet of nonroad engines in Maricopa County, a new program (MCAQD Rule 204, revised November 5, 2025, submitted November 14, 2025) would let you generate emission reduction credits (NERCs) by retrofitting or permanently replacing engines with lower-emitting models. These credits can be banked and traded to help major stationary sources meet offset requirements under the Nonattainment New Source Review (NNSR) program. The EPA is proposing to approve the rule into the Arizona SIP (except one provision) and is accepting comments through November 9, 2026.
Strict rules for qualifying and certifying credits
To get NERCs, you must follow Rule 204 application steps and use actual emissions and operating data, show reductions are real and surplus, and meet monitoring, recordkeeping, and reporting rules. You must permanently remove or render the original baseline engine unusable in the nonattainment area and any future replacement during the next 20 years must be certified to the same or more stringent emission factor.
Major stationary sources can use NERCs as offsets
If you operate a major stationary source in the Maricopa County nonattainment area, NERCs generated under Rule 204 are intended to be usable as offsets for NOX and VOC emissions increases during the NNSR preconstruction permitting process. The rule is designed to ensure NERCs meet CAA offset criteria (real, surplus, permanent, quantifiable, federally enforceable) so they can be accepted in NNSR permitting.
One permitting provision deferred until Rule 230 approval
EPA is proposing approval of Rule 204 except for section 301.2 b.(3), which references Maricopa County Rule 230 (General Permits); EPA will act on that reference when Rule 230 is acted on. Until Rule 230 is approved into the SIP, generators can use other SIP-approved permitting mechanisms listed in Rule 204 (Rule 210 or Rule 220) to make reductions permanent and enforceable.
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