Nutrient credits are intended to protect lakes, rivers and streams from runoff carrying urban pollutants as well as runoff from farms and ranches carrying fertilizers and pesticides. Nutrient credits are sometimes referred to as ‘TMDL credits’, referring to the Total Maximum Daily Load rules applied by U.S. EPA under the Clean Water Act. Nutrient or TMDL credits hep ensure that discharges or runoff to rivers and streams doesn’t overwhelm the assimilative capacity of those water bodies in a way that maintains ‘balanced, indigenous populations’ of aquatic organisms.
Nutrient credits provide a cost-effective means for regulated waste water treatment plants, industrial facilities and other parties to meet nitrogen and phosphorus discharge limits under the Clean Water Act. U.S. EPA allows for nutrient credit trading in the Chesapeake Bay and Susquehanna River basin. Other programs have developed regionally, such as the Ohio River Valley nutrient trading network.