You put your pitchfork away already?

This issue of Heat Pumped was written by Michael Rochmes, a clean air and green building advocate in Southern California.

Back in December, Shreyas wrote about the California Bay Area Air Quality Management District’s zero-emission space and water heating policies. Those rules were approved in 2023 and take effect in the coming years (and there’s still work to be done to make sure they are implemented in full).

After this Bay Area policy development, both the state and the South Coast Air Quality Management District (SCAQMD) began developing similar policies to phase out NOx and CO2 emitting gas furnaces and water heaters by requiring zero-emission alternatives at the time of replacement.

BAAQMD’s Southern Neighbor

It is this SCAQMD policy that I have been tracking as the volunteer Chair of the Green Buildings Committee for Los Angeles Climate Reality Project. The South Coast AQMD is the largest and oldest air district, with more than 17 million people across four counties (Los Angeles, Orange County, Riverside, and San Bernardino). 

Notoriously bad air

SCAQMD has had low-emission standards for gas furnaces and water heaters since 1978, with more stringent standards implemented in the subsequent decades. Historically, this region has had terrible air quality, and while the smog here is not nearly as bad as it has been in prior decades, our air quality remains among the worst in the nation and continues to fall short of federal standards.

Health impacts from gas appliance pollution in the region cost households and businesses $2 billion per year. This non-attainment spurred the SCAQMD to commit in 2022 to adopting zero-emission standards across a variety of sectors.

Big ambitions under attack

When SCAQMD first proposed to follow in the footsteps of the Bay Area AQMD, the zero-emission appliance rules were projected to be the largest package of emissions reductions in the agency’s history.

Unfortunately, the agency began to bow to pressure to chip away at the proposal and delay a vote.

The rulemaking process has dragged on for 18 months, with a final vote currently scheduled for May 2. At every opportunity, SCAQMD has caved to business and fossil fuel interests, until they recently revamped their plan altogether, leaving it significantly less impactful and creating a schism with Bay Area’s policy.

Significantly neutered rules

The air district’s new proposal sets manufacturer-level zero-emission sales targets that ramp up from just 30% in 2027 to 90% in 2036, never reaching 100%. Nominal per-unit mitigation fees will contribute to a heat pump incentive program targeted primarily to supporting installations of heat pumps in low-income communities. If manufacturers miss their zero-emission sales targets, they will face higher mitigation fees for every NOx emitting unit over the threshold, which will further support this incentive program, while causing the rules to fall short of already-reduced emissions reductions forecasts.

SCAQMD also changed the maximum size of furnaces covered by the rules, reducing maximum emissions reductions by 30%. They say they will address this class of larger furnaces in a separate, new rule.

Due to the 15 to 25 year lifespan of gas appliances, the rules were going to take until the 2050s to be fully implemented. And any delay locks in pollution emissions for decades.

Advocates for zero-emission appliance standards want these rules strengthened in two key ways, with no further delays to the final vote in May.

Weaker rules mean less impact

But first, let’s observe the decimation applied to the rule proposal over the past 18 months. At full implementation, NOx emissions reductions are 6.1 tons per day, compared to 10 in the original proposal, and full implementation is delayed from 2054 to 2060. In 2037, emissions reductions from the rule are just 2.1 tons per day, compared to 4.2 in the original proposal.

The main reason for adopting a manufacturer sales-target approach is to address affordability concerns. The prior proposal addressed this by including delayed implementation and alternative compliance options for more complicated or expensive installations (e.g. when construction is needed to address space constraints).

The devil is in the details

I actually like this approach, because it does give building owners the option to avoid the more costly and expensive installations, while significantly simplifying the rule. Due to the number of exceptions introduced into the prior approach, enforcement of the rules was going to be challenging.

The problem is that SCAQMD set very low targets in the first six years of the policy. This gentle glide path lets manufacturers off the hook and allows many installations of NOx-emitting gas appliances where a cost-effective clean alternative is already available.

Room for improvement

A more ambitious flight path to zero-emission appliance sales would increase the health benefits of the rule. It would also send a much stronger market signal. Higher production volume of heat pumps will bring down costs.

Manufacturers have the ability to ramp up sales of zero-emission appliances like heat pumps in the region by improving pricing, increasing availability of models that address installation challenges, increasing marketing, training installers, and lobbying for more heat pump-friendly permitting rules. The current “glide path” is too close to current sales trajectories to push manufacturers to take these steps – one reason why most manufacturers appear to be embracing this proposal.

The second area for improvement of the rule is the fees applied to NOx-emitting gas appliances, which are much too low. The district will add fees of $50 for all NOx-emitting gas water heaters covered by the rules and $100 for NOx-emitting gas furnaces. This fee is meant to partially mitigate pollution from using these appliances, but to truly mitigate this pollution, the fees should be closer to $850 for water heaters and $3,000 for furnaces. They are also too low to influence consumer behavior or meaningfully support a heat pump incentive program.

Manufacturers will also be assessed a $500 fee per unit for all appliances sold above their threshold. This will be applied after the end of the year. This fee is also too low to mitigate pollution and may not be high enough to motivate manufacturers to increase zero-emission sales. They may instead accept it as a cost of doing business and try to pass it along to consumers. Since the purpose of this fee is to enforce the sales targets, the penalty should be designed to increase quickly for manufacturers that repeatedly or flagrantly miss their targets.

It is also unfortunate that SCAQMD decided to limit the size of furnaces covered by the rule. While it is possible this will result in a stronger policy for these units, it needlessly creates additional work for the agency and all of us participating in the rulemaking process and delays regulation of these devices.

We can make these rules better

There is still time for the rules to be strengthened, and advocates for a stronger policy may have momentum. Before SCAQMD released its new plan, there was a vocal opposition, fueled by fearmongering and misinformation.

But in the most recent meeting to review the rule, supporters of a strong zero-emission policy outnumbered opponents 43 to 6, and recent comments have been more than 90% in favor of setting zero-emission sales targets.

It is apparent that SCAQMD succeeded in addressing opposition with its latest plan, but in the process sacrificed too much ambition and impact. If these rules aren’t strengthened, it will result in calls to weaken the Bay Area AQMD rules and make it harder for California to set meaningful statewide standards.

If you want to get involved in the effort to finalize strong clean appliance standards in the South Coast region, please visit SoCalCleanAir.com.

Editor’s note: I want to thank Michael for his leadership and organizing around this issue. His organization, along with many others, are helping defend clean air for Californians.

Below is the letter I sent to the SCAQMD board:

Even if you don’t live in Southern California, the outcome of these rules could have ripple effects in policy across the country. I would encourage you to send in a letter of support, encouraging SCAQMD to strengthen their rules. It only takes 30 seconds, and every letter counts. -Shreyas