Florida's New Stormwater Pollution Credit Rules Draw Fire From Environmentalists and Industry Alike

The Florida Department of Environmental Protection is moving ahead with rules for a new market in water pollution credits after removing monitoring requirements that environmental groups considered essential, and the rules are now stalled by a legal challenge from three businesses, the Tampa Bay Times reported Friday.

The program would let private landowners and consultants build "water quality enhancement areas" that remove nitrogen and phosphorus from water, earn credits for that cleanup, and sell the credits to developers who need to offset pollution from their own projects. Audubon Florida says late changes made the program a potential loophole in the state's tougher stormwater rules. Some of the companies that would run the market say the rules are still too burdensome.

The fight matters across Florida because nutrient-laden runoff from roads, parking lots and subdivisions feeds algae blooms in waters from Tampa Bay to the Indian River Lagoon, and the credit program will help determine how much of that pollution new development must treat on its own site.

How the credit system would work

Under the state's environmental resource permit program, new development must treat stormwater to limit the nutrients that flow into lakes, rivers and estuaries. Florida law allows some of that treatment to happen off site, and the new rules, in a proposed Chapter 62-332 of the Florida Administrative Code, would set up a permit for enhancement areas and govern how credits are generated, valued, tracked and used.

The Legislature has shaped the program in stages. A 2022 law directed DEP to create a credit system that was initially limited to local governments offsetting stormwater pollution, and a 2024 law opened it to private companies, according to the Times. This year, lawmakers passed CS/CS/SB 848 unanimously in both chambers, 36-0 in the Senate and 112-0 in the House, according to the Florida Senate's bill summary.

That bill, which took effect July 1, treats enhancement credits as compensating stormwater treatment, requires each enhancement area's service area to be a single HUC 8 subbasin, and shifts legal responsibility for meeting water quality requirements from the developer who buys a credit to the company that generated it. It ordered DEP to adopt its rules by Oct. 1, 2026, and allowed the department to issue provisional permits in the meantime.

DEP's May 2026 draft barred credits for pollution reductions already required under other state programs, prohibited enhancement areas on land bought under the Florida Forever or Preservation 2000 conservation programs, and barred government entities from building enhancement areas to sell credits to third parties.

What changed, and who asked for it

Earlier drafts required a period of monitoring before credits could be released and a universal method for measuring how much pollution a project removed. According to the Times, the latest version dropped those provisions.

A Florida manager for RES, a Texas-based environmental mitigation company, had asked the state to broaden the nutrient measurement requirements and remove a mandatory year of monitoring before credits are released. DEP made both changes, and a state official's letter said they resulted from RES's public input, the Times reported. In August, industry groups had written that the rules as drafted would be financially burdensome.

The department did not adopt one industry request. A proposed credit multiplier for enhancement areas located far from the development they offset drew criticism, but the rule still requires credits to come from projects that are hydrologically connected to the development within the same watershed. The RES manager told the Times he is generally satisfied with the rules but said that requirement adds some uncertainty that could make the market more challenging.

Environmentalists object to the process and the result

Audubon Florida says the changes were made without a formal opportunity for public comment. Beth Alvi, the group's senior policy director, told the Times the program is "an untested, unfleshed-out project" and that the state sought no input on the final changes. She warned that pollution reduction in one place may not make up for pollution somewhere else, and that the credits "cannot become a loophole" in the state's stormwater requirements.

Audubon asked DEP to reconsider before a Sept. 16 meeting. About a week later, the department said it would proceed with the current version. Alvi said the agency essentially told the group to "pound sand," according to the Times.

A DEP spokesperson said every revision was informed by and directly resulted from public comments, including those from environmental and industry groups, and that the department weighed Audubon's concerns in an equitable and balanced manner.

Local stormwater managers have their own worries. Kevin Coyne, director of regulatory affairs for the Florida Stormwater Association, told the Times that distance between a pollution source and the site where it is offset could harm downstream communities. He said none of the local governments in his association has expressed interest in buying or generating credits.

The stormwater rules behind the market

The credit program grows out of Florida's broader overhaul of stormwater regulation. The 2020 Clean Waterways Act, SB 712, directed DEP and the state's five water management districts to update stormwater design criteria. The resulting rules were ratified by the Legislature in SB 7040 and took effect June 28, 2024, when DeSantis signed the bill. Sen. Gayle Harrell, the Stuart Republican who sponsored it, called stormwater "a major, major source of nutrient pollution" in the state's waterways, according to the Times.

The new nutrient performance standards apply to permit applications deemed complete after Dec. 28, 2025, 18 months after the rule took effect, according to DEP. The stricter standards apply in particular to projects that drain to impaired waters or Outstanding Florida Waters. Those tougher requirements are what make credits valuable: a developer who cannot meet the standards on a tight site could buy credits instead.

Timeline of the rulemaking

DEP's public notices and news reports show the rule's path this year:

What's next

Three businesses have filed a formal challenge arguing DEP exceeded its authority, and a state administrative law judge is expected to hear the case next month, according to the Times, which did not name the companies. The rules cannot take effect until the judge rules. The ruling will help decide when Florida's pollution credit market opens, under what safeguards, and how soon developers across the state gain a new way to meet the stricter stormwater standards.