SO2 Terms

Allowance: Equivalent to one ton of emissions, allowances are used to cover the emissions from any given source.

Banking: Banking refers to the reservation of allowances for a future year. Banked allowances maintain their value in SO2 Markets.

CAIR: The Clean Air Interstate Rule is the EPA’s newest program to reduce emissions, and calls for each state to make a program to reduce emissions.

NATS: The National Allowance Tracking System, or NATS is used to keep track of the allowances held by each individual.

SIP: The State Implementation Program (SIP) is the cornerstone of the EPA's newest program to reduce ozone emissions. It allows each state to set a standard to which they will be accountable and use a cap-and-trade market to reduce their emissions.

"True Up": The period occurring following May 31st, when all accounts are frozen by the EPA, emissions are verified, and credits equivalent to this year’s emissions are deducted from each account.

Vintage: Vintage refers to the issuing year of the allowance in question. The vintage may be “banked” or reserved for a future year if emissions have already been covered.