Monday, Dec 30, 2019

Buying and Selling Nutrient Credits in Virginia

Since the enactment of the Chesapeake Bay Watershed Nutrient Credit Exchange Program in 2005, developers have had the opportunity in certain circumstances to purchase nutrient credits to satisfy state and local stormwater runoff requirements.  This article gives a brief overview of nutrient credits and the implementation of nutrient credit programs.

What are “nutrient credits”?

A “nutrient credit” is a single, quantifiable, and certified unit of improvement to the environment.  Each credit represents a specific amount of absorption of nutrients within a sub-watershed.  Local governments and the Virginia Department of Environmental Quality (“DEQ”) have created nutrient credit programs.  Sellers of nutrient credits obtain certifications from DEQ to protect their lands, known as “nutrient credit banks”, from future development, and in return are able to offer credits for sale to offset the impacts development has on stormwater runoff.

How does purchasing nutrient credits help to preserve the Chesapeake Bay?

Since stormwater runoff contains high levels of phosphorus, proposed developments are required to provide stormwater absorption on the parcel being developed, which must be sufficient to absorb the stormwater runoff affecting the development.  Otherwise, stormwater runoff could flow to various ecosystems within the Chesapeake Bay Watershed, where the high level of nutrients in the stormwater could be detrimental to the ecosystems where they are ultimately absorbed.  For development sites which cannot meet the absorption requirements on-site, the purchase of nutrient credits created pursuant to an approved plan enables a developer to certify to the locality and the DEQ that it is providing alternative measures to preserve the balance of phosphorus and nitrogen within the local sub-watershed.

Where do interested parties obtain nutrient credits?

Regulators require developers to purchase nutrient credits from sellers located within the same sub-watershed as the proposed development.  The DEQ maintains a list of approved nutrient credit sellers, which is revised periodically as nutrient credit banks are created, nutrient credits within a bank are sold, and nutrient credit banks are removed for falling short of regulatory requirements.

How can Walsh, Colucci, Lubeley & Walsh help?

Whether you are intending to purchase or sell nutrient credits, wetlands credits, or stream credits, all of which follow specific regulatory frameworks, you can consult with a member of our transactional team to review the terms of the deal and for compliance with applicable regulations.