The following restrictions apply for using emission credits:

(a) Averaging sets. Except as specified in paragraph (c) of this section, emission credits may be exchanged only within the following averaging sets based on primary intended service class:

(1) Spark-ignition HDE.

(2) Light HDE.

(3) Medium HDE.

(4) Heavy HDE.

(b) Applying credits to prior year deficits. Where your CO2 credit balance for the previous year is negative, you may apply credits to that deficit only after meeting your credit obligations for the current year.

(c) CO2 credits from hybrid engines and other advanced technologies. Phase 1 CO2 credits you generate under § 1036.615 may be used for any of the averaging sets identified in paragraph (a) of this section; you may also use those credits to demonstrate compliance with the CO2 emission standards in 40 CFR 86.1819 and 40 CFR part 1037. Similarly, you may use Phase 1 advanced-technology credits generated under 40 CFR 86.1819-14(k)(7) or 40 CFR 1037.615 to demonstrate compliance with the CO2 standards in this part. In the case of Spark-ignition HDE and Light HDE you may not use more than 60,000 Mg of credits from other averaging sets in any model year.

(1) The maximum CO2 credits you may bring into the following service class groups is 60,000 Mg per model year:

(i) Spark-ignition HDE, Light HDE, and Light HDV. This group comprises the averaging sets listed in paragraphs (a)(1) and (2) of this section and the averaging set listed in 40 CFR 1037.740(a)(1).

(ii) Medium HDE and Medium HDV. This group comprises the averaging sets listed in paragraph (a)(3) of this section and 40 CFR 1037.740(a)(2).

(iii) Heavy HDE and Heavy HDV. This group comprises the averaging sets listed in paragraph (a)(4) of this section and 40 CFR 1037.740(a)(3).

(2) Paragraph (c)(1) of this section does not limit the advanced-technology credits that can be used within a service class group if they were generated in that same service class group.

(d) NOX and CO2 credit life. NOX and CO2 credits may be used only for five model years after the year in which they are generated. For example, credits you generate in model year 2027 may be used to demonstrate compliance with emission standards only through model year 2032.

(e) Other restrictions. Other sections of this part specify additional restrictions for using emission credits under certain special provisions.