MDE Finalizes Water Quality Nutrient Trading Regulations

The Maryland Department of the Environment (MDE) has finalized its water quality nutrient trading regulations after several years of work. The regulations took effect on July 16, 2018.

MACo believes nutrient credit trading is a necessary tool in order to help both the State and local governments achieve their water quality goals under their Municipal Separate Storm Sewer System (MS4) permits and the Chesapeake Bay Total Maximum Daily Load (TMDL). MACo is generally supportive of the regulations, although continues to remain concerned about the high performance level that wastewater treatment plans must achieve in order to offer credits for trading and proposed process for integrating trading into the Phase I and Phase II MS4 permits.

The regulations establish a registry and allow trades of individual or aggregated nitrogen, phosphorus, and sediment credits created by best management practices. Interjurisdictional trading and trades between sectors (i.e., wastewater treatment plants, agriculture, septics, and stormwater) are both allowed.

However, trades must occur within the same trading region. MDE has established three trading regions: (1) Potomac River Basin; (2) Patuxent River Basin; and (3) Eastern Shore and Western Shore River Basins, including the Maryland portion of the Susquehanna Basin. Additionally, trading with wastewater treatment plants is only allowed if the plants are generating outflows equal to or less than 3.0 mg/l for nitrogen or .3 mg/l for phosphorus. (This threshold is higher than the threshold a wastewater treatment plant must achieve in order to meet its Bay TMDL targets.)

At the July 23 meeting of the Water Trading Quality Advisory Committee meeting, MDE representatives discussed next steps regarding the trading regulations. The representatives stressed that the existing regulations may need to be modified over time. MDE is working to update the existing manual, web pages, and forms associated with trading by September. The online registry must also be finalized, with appropriate training offered.

Regarding MS4 permits, MDE stated that the new Phase II MS4 permit that will be effective in October of 2018 will have trading “built in” to the permit’s basic language. However, for existing Phase I permits, each permit will have to go through a modification process that includes a public hearing. Each permittee must request the modification in writing and state: (1) what percentage of their 20% impervious surface treatment goal they want to achieve through trading; and (2) why they cannot meet the 20% treatment goal without trading. In Maryland, ten counties are Phase I jurisdictions: Baltimore City and Anne Arundel, Baltimore, Carroll, Charles, Frederick, Harford, Howard, Montgomery, and Prince George’s Counties. Additionally, those counties that are required to file financial assurance plans will need to be updated to reflect how a county plans on using trading.

MDE stated that while the agency plans on doing some inspections and enforcement itself, it also plans to “partner with counties and others.”

Useful Links

Maryland Water Quality Trading Program Regulations

Prior Conduit Street Coverage of Nutrient Trading Regulations