AQMD ANNUAL EMISSIONS REPORTS (AER) & CTR – CALENDAR 2024

South Coast Air Quality Management District (South Coast AQMD) requires permitted facilities to report their emissions annually and pay any applicable fees based on the amount of air contaminants emitted as stated in South Coast AQMD Rule 301(e) under the Annual Emissions Reporting (AER) program. Additionally, the California Air Resources Board (CARB) amended its Regulation for the Reporting of Criteria Air Pollutants and Toxic Air Contaminants (CTR) in 2021 to include Additional Applicability Facilities in the state to be subject to reporting criteria pollutant and toxic air contaminant emissions. Per the CTR regulation, Additional Applicability Facilities are determined based on a facility’s industry code under the North American Industry Classification (NAICS) and/or Standard Industrial Classification (SIC) system, and in some cases also associated with activity and emission levels at the facility.

New for this Annual Emissions Reporting period (Data Year 2024):

  • The 2024 Annual Emissions Report (AER): applies to emissions occurring in data year 2024 (January 1, 2024 – December 31, 2024).
  • Submittal Due Date: May 1, 2025 (Thursday), at 5:00 p.m.
  • AB 2588 Quadrennial Report: For the 2024 AER, facilities in Phase 1B are required to file their Quadrennial Reports.
  • Changes to Emissions Fees for Criteria Pollutants, Ozone Depleting Compounds, and Toxic Air Contaminants: CPI increase of 3.5% for all emission fees

Facilities Reporting Pursuant to CARB’s Criteria and Toxics Reporting (CTR) Regulation

  • No changes for “Core facilities” comprised of:
    • Criteria Facilities
    • Greenhouse Gas (MRR) Facilities
    • Elevated Toxics Facilities
  • Additional Applicability Facilities Defined as CTR Phase 2 Facilities are also subject to reporting for data year 2024.
  • CTR Sector Phase 2 facilities are required to report emissions for data year 2024. CTR Sector Phase 3 facilities will be reporting 2025 emissions and are reminded to maintain proper records of all operations in 2025.
  • Abbreviated Reporting for data year 2024 is available for those facilities that are engaged exclusively in qualifying activities.
  • A new fee for abbreviated reporters has been implemented. The abbreviated reporting filing fee for data year 2024 is $53.24 per report.

New Rule 317.1: Clean Air Act Non-attainment Fees for the 8-Hour Ozone Standards was passed by the AQMD Governing Board in May 2024. All facilities subject to Rule 317.1 are required to report their baseline emissions for data year 2024. These facilities were notified in November 2024.

Rule 317.1 Facilities are required to report NOx and VOC emissions from the following sources:

  • Architectural coatings
  • Certified clean air solvents
  • Charbroilers
  • Deep Fat Fryers
  • California Air Resources Board’s Portable Equipment Registration Program (PERP)

Updates have been made to the AER WebTool to accommodate reporting of these sources.

SCAQMD to Impose Additional Fees Per Rule 317.1

According to the SCAQMD, over six hundred facilities were notified that they would be subject to additional fees pursuant to Rule 317.1– Clean Air Act Nonattainment Fees for 8-Hour Ozone Standards—a dramatic increase from the original estimate of 300 facilities. Federal law (the Clean Air Act) requires areas, like the South Coast, that do not meet National Ambient Air Quality Standards (NAAQS) for ozone, to pay fees based on a formula developed by the District.  The fees are assessed for each violation of the standard and since the South Coast Basin is in non-attainment for both the 1997 and the 2008 8-hour ozone standards, the fees double. The rule applies to all major sources—defined as  emitting 10 tons per year or more of Volatile Organic Compounds and Nitrogen Oxides. Facilities that reach the 10 ton per year level for both contaminants will pay fees for each.

During the rulemaking, which finalized in June 2024, the District heard from many industry stakeholders who argued the rule was fundamentally unfair as it punished stationary sources for the emissions of mobile sources. According to the district, even if every stationary source in the Basin were to shutter its doors, the area would still not reach attainment. The agency recently held an informational workshop to explain the implementation process. Categories such as architectural coatings, charbroilers, Clean Air Solvents and Portable Equipment, previously exempt from the Annual Emissions Reporting, will be included in the fee calculation. Rule 317.1 fees will apply even for equipment currently not paying fees under Rule 301.

Facilities may be able to avoid the fees by reducing their facility emissions by 20%. There is a process to apply for a “non-applicability” determination. The District plans to conduct a fee assessment study in 2025, issuing invoices to facilities sometime in 2026. Payments will begin in 2027 and go into perpetuity until the area reaches attainment.

New Requirements for Automotive Coatings

South Coast Air Quality Management District (SCAQMD) Rule 1151 –Motor Vehicle and Mobile Equipment Non-Assembly Line Coating Operations– was adopted in July 1988 to reduce volatile organic compound (VOC) emissions, toxic air contaminants, stratospheric ozone-depleting compounds, and global-warming compound emissions from automotive coating applications performed on non-assembly line motor vehicles, mobile equipment, and associated parts and components. The SCAQMD Board recently approved sweeping changes to the rule. While the amendments focused on the phase out of two solvents currently exempt from the definition of a VOC that have been determined to have toxic endpoints: para-chlorobenzotrifluoride (pCBtF) and tert-butyl acetate (t BAc), they also included a whole host of administrative requirements for businesses.

The rule applies to “any person” who supplies, sells, offers for sale, markets, manufactures, blends, packages, repackages, possesses, or distributes any Automotive Coating, Automotive Coating Component, or associated solvent for use within the SCAQMD, as well as any person who uses, applies, or solicits the use or application of any Automotive Coating or associated solvent within the District. In an attempt to expedite the transition away from t BAc and pCBtF, the rule allows a temporary increase in VOC limits provided that the coatings meet federal standards. The solvents can be sold through May 1, 2026 but their use is prohibited after July 1, 2027.

During public workshops numerous industry representatives characterized the reporting and recordkeeping requirements as overly burdensome for businesses. The following are some of the requirements that businesses will have to keep records on and submit to the SCAQMD:

  • Material Automotive Coating and Automotive Coating Component name and manufacturer;
  • Application method as recommended;
  • Automotive Coating category and mix ratio specific to the Automotive Coating;
  • Actual VOC and Regulatory VOC content of the Automotive Coating and Automotive Coating Component;
  • Documentation such as manufacturer specification sheets, material safety data sheets, technical data sheets, or any other air quality data sheets that demonstrate the material is intended for use as an Automotive Coating or solvent;
  • Purchase records identifying the Automotive Coating category, name, and the total volume of all Automotive Coatings and solvents used;
  • The weight percentage of volatiles, water, and exempt Compounds;
  • The density of the material (in grams per liter).

All containers will need to be labeled in order to show:

  • The applicable use category;
  • The Actual VOC and Regulatory VOC content, as supplied (in grams of VOC per liter of material and in grams of VOC per liter of material, less water and Exempt Compounds);
  • By November 2025, the date of manufacture or a code indicating the date of manufacture. The manufacturers shall file an explanation of each code with the Executive Officer.

Additional Quantity and Emissions Reports will be required for manufacturers and private labelers.  The following table summarizes existing and future requirements.

table

Zero Emissions required by Rule 1146.2–Emissions of Oxides of Nitrogen from Large Water Heaters/Small Boilers/ Process Heater

Rule 1146.2 now requires zero-emission (0 ppmv) NOx limits for new installations of applicable large water heaters, small boilers, and process heaters. The District estimates that more than one million units will be impacted by the rule, which applies to manufacturers, distributors, retailers, installers, refurbishers, and operators. According to the staff report, the average annual compliance costs of implementing Rule 1146.2 are estimated to range from $48.99 million to $96.77 million and are expected to be incurred by nearly all the industries in the South Coast AQMD jurisdiction.

The obligations are based on future effective dates depending on the commercial availability of zero-emission technologies. The rule also applies to existing units after they reach a “specific age” and contains an exemption on unit age for units installed at residential structures and small businesses. According to the District, an alternative compliance option and a low-use exemption were included to “address challenges transitioning to zero-emission technologies.” This rule does not regulate residential gas-fired tank type water heaters rated less than 75,000 Btu/hr heat input, which are regulated under Rule 1121 – Control of Nitrogen Oxides from Residential-Type, Natural Gas-Fired Water Heaters.

Zero-emission implementation dates will be required for smaller units, beginning January 1, 2026 for installations in new buildings and January 1, 2029 for units installed in existing buildings. Larger units and pool heaters will be required to transition to zero-emission units beginning January 1, 2028 for new buildings and January 1, 2031 for existing buildings. The latest zero-emission limits will be required for high temperature units, beginning January 1, 2029 for new buildings and January 1, 2033 for existing buildings.

Manufacturers of natural gas-fired units must submit an annual report for the gas units sold into or within the South Coast AQMD after the zero-emission compliance dates. Recordkeeping requirements include:

  • General recordkeeping for manufacturer and/or distributor’s written instruction, maintenance activities, building permits, and fuel use if under low-use exemption;
  • Rated heat input capacity documentation;
  • Required documents if utilizing alternative compliance options for utility upgrade;
  • Required documents if utilizing alternative compliance options for units at a property under lease;
  • Required documents if utilizing alternative compliance options for construction.

SCAQMD also announced it intends to implement similar requirements for Rules 1146 and 1146.1, which regulate boilers and process heaters with a rated heat input capacity of greater than 2 MMBtu/hr.

Rule 1111 (Natural-Gas-Fired Furnaces ) & 1121 (Residential Type, Natural-Gas-Fired Water Heaters) will impact all Southern California residents

Southern California residents in Los Angeles, San Bernardino, Riverside, and Orange counties will be impacted by new regulations from the South Coast Air Quality Management District, which will phase out natural gas water heaters and boilers. Proposed Amended Rule 1111 – Reduction of NOx Emissions from Natural Gas-Fired Furnaces (PAR 1111) and Proposed Amended Rule 1121 – Reduction of NOx Emissions from Small Natural Gas-Fired Water Heaters (PAR 1121) aim to reduce emissions of Nitrogen Oxides (NOx) by requiring low NOx equipment and ultimately Zero Emission equipment. The zero-emission NOx limits apply at natural appliance replacement, with a later implementation date for mobile homes and high-altitude commercial and residential buildings. PAR 1111 proposes to expand the applicability to furnaces with a rated heat input capacity of less than or equal to 2,000,000 Btu per hour. PAR 1111 and PAR 1121 specify certification, labeling, recordkeeping, reporting requirements, alternative compliance options, and exemptions.

According to business groups, the rules are expected to cost Southern California $490 to $970 million per year, making them the most expensive regulations ever adopted by the agency. All new and existing commercial buildings and multifamily units will be subject to the mandates. Compliance is expected by 2026 for new buildings, and a phased-in approach starting in 2029 for existing buildings.

Board members expressed concern that there had not been adequate public outreach to the millions of residents who will be impacted by the rules. Other issues were also raised such as impact on housing availability, operational costs for mountain constituents, adequate capacity for utilities to handle the load, and adequacy of the cost and economic impact analysis. After a contentious pre-hearing public meeting where dozens of businesses and residents opposed the proposals, the SCAQMD board agreed to a temporary pause until February 2025, where the rules will be officially heard for adoption.