South Coast Air Quality Management District (SCAQMD) Adopts New Zero NOx Rules

In a nine to one vote on June 7, 2024, (agenda, live Webcast) the Governing Board of the South Coast Air Quality Management District (SCAQMD) adopted significant amendments to its Rule 1146.2 which was originally established in 1988 and regulates the nitrogen oxide (NOx) emissions of large water heaters, small boilers, and process heaters. South Coast AQMD is the regulatory agency responsible for improving air quality for large areas of Los Angeles, Orange, Riverside and San Bernardino counties, including the Coachella Valley.

The revised rule mandates that all the covered equipment must emit zero NOx emissions by the given compliance dates for new construction and for equipment replacements in existing buildings. The revisions help fulfill SCAQMD’s commitment in its 2022 Air Quality Management Plan (AQMP) to introduce zero-emission technologies across all sectors to meet air pollution standards and applies to units with capacities of 75,000 Btu/hr to two million Btu/hr. Currently, electric appliances are the only commercially available technologies that meet zero NOx standards for space and water heating.

Implementation and Compliance Timeframes

The proposal takes a phased approach toward implementing the zero-NOx requirements, requiring all new buildings to comply first with later compliance dates for existing buildings and varied deadlines based on the type of facility and the availability of the zero-NOx retrofit equipment required. For example:

• Smaller units[1] for which replacement equipment is readily commercially available, new buildings must comply beginning January 1, 2026, in alignment with the primary prescriptive pathway in California Building Energy Efficiency Standards (Title 24, Part 6).
• For existing commercial and industrial buildings, a two-tiered approach requires zero-NOx emission replacements after the compliance date of January 1, 2029, and at the unit’s age. For smaller appliances the unit age is 15 years and for larger units, replacement is required when the unit reaches 25 years.
• For larger units[2] and pool heaters in new and existing commercial and industrial buildings, compliance dates are January 1, 2028, and January 1, 2031, respectively.
• High temperature units[3], such as those commonly used in dry cleaning facilities, have later compliance dates of January 1, 2029, in new buildings and out to January 1, 2033, for existing buildings.
• For existing residential buildings, new units must be zero-emissions after the effective date but are not subject to the age of the unit requirements and therefore can be replaced when the unit naturally expires.

Alignment with Actions from State and Local Agencies

The Bay Area Air Quality Management District (BAAQMD) has already adopted similar rules to eliminate NOx emissions from residential and commercial natural gas furnaces and water heaters, and the California Air Resources Board (CARB) is developing regulations for zero GHG emissions for space and water heating standards. The California Energy Commission will adopt the 2025 Building Energy Efficiency Standards (Title 24, Part 6) effective January 2026. For single-family new construction, their 2025 proposal makes heat pump space heaters and heat pump water heaters or solar water heating systems the primary prescriptive pathway in all climate zones instead of excluding certain climate zones. That strongly steers owners and developers to electric space and water heating equipment since gas equipment would require energy saving measures to offset the additional source energy usage of the gas equipment.

[1] Smaller units are those less than or equal to 400,000 Btu/hr (but excluding pool heaters and excluding water heaters covered by Rule 1121), instantaneous water heaters less than 200,000 Btu/hr

[2] Large units include water heaters greater than 400,000 Btu/hr, instantaneous water heaters greater than 200,000 Btu/hr and up to and including 2,000,000 Btu/hr

[3] High temperature units are designed to produce steam or heat water above 180 degrees Fahrenheit