(1) For the purposes of this subchapter, the following requirements apply:

(a) The requirements of ARM 17.8.906, except that ARM 17.8.906(7) through (9) do not apply to offsets required under this subchapter;

(b) Emission offsets must be reductions in actual emissions for the same pollutant obtained from the same source or other sources which are located in the same general area of the proposed major stationary source or modification, and that contribute to or would contribute to the violation of the national ambient air quality standard;

(c) In meeting the emissions offset requirements in this subchapter, emissions offsets for direct PM-2.5 emissions or emissions of precursors of PM-2.5 may be satisfied by offsetting reductions in direct PM-2.5 emissions or emissions of any precursor;

(d) In the case of emission offsets involving volatile organic compounds and oxides of nitrogen, offsets will generally be acceptable if they are obtained from within the areas specified in (1)(b). If the proposed offsets would be from sources located at considerable distances from the new source, the department shall increase the ratio of the required offsets and require a showing by the applicant that nearby offsets were investigated and reasonable alternatives were not available;

(e) In the case of emission offsets involving sulfur dioxide (SO₂), particulates, and carbon monoxide, areawide mass emission offsets are not acceptable, and the applicant shall perform atmospheric simulation modeling to ensure that emission offsets provide a positive net air quality benefit. The department may exempt the applicant from the atmospheric simulation modeling requirement if the emission offsets provide a positive net air quality benefit, are obtained from an existing source on the same premises or in the immediate vicinity of the new source, and the pollutants disperse from substantially the same effective stack height; and

(f) No emissions credit shall be allowed for replacing one hydrocarbon compound with another of lesser reactivity, except for those compounds listed in Table 1 of EPA's "Recommended Policy on Control of Volatile Organic Compounds"