SO2 Allowance Trading Program

The SO₂ Allowance Trading Program, established under the Clean Air Act (42 U.S.C. § 7401 et seq.), creates a market for sulfur dioxide emission permits to help utilities meet national caps on acid-rain precursors. Entities receive or purchase allowances that represent one ton of SO₂, and they may trade these allowances to achieve compliance cost-effectively while the overall emissions limit remains enforced.