(October 23, 2019) – EPA held an in-person and online public listening session Oct. 21 on its recent notice on water quality trading that was published in the Federal Register in September.

The notice follows an EPA memo from February 2019 that was intended to expand trading options for states, tribes, and stakeholders to consider what approaches will be most effective for improving water quality for nutrients and other pollutants.

According to EPA, the 2003 water quality trading policy was too prescriptive and did not offer enough flexibility to be effective and implementable. The new notice seeks comment on allowing nonpoint sources, where TMDL load allocations are established, to immediately generate credits (and point sources to use these credits) for certain pollutant reduction efforts made, provided there is a reasonable assurance that overall load reductions will be met over time.

The February 2019 memo discussed six new market-based principles (outlined below) for states and stakeholders to consider.  The September 29 notice seeks comment around the principle on baselines, but also seeks input on other elements of the 2003 Trading Policy that EPA should look at. 

The six market-based principles include:

• States, tribes, and stakeholders should consider implementing water quality trading and other market-based programs on a watershed scale;
• The EPA encourages the use of adaptive management strategies for implementing market-based programs;
• Water quality credits and offsets may be banked for future use;
• The EPA encourages simplicity and flexibility in implementing baseline concepts; and
• Financing opportunities exist to assist with deployment of nonpoint source land use and practices.

EPA is seeking comment until November 18. If members would like to provide input or have questions on the proposed water quality trading policy, please contact Emily Remmel, NACWA’s Director of Regulatory Affairs.