On June 7, 2024, South Coast AQMD’s Governing Board approved updates to Rule 1146.2 that will require new and existing residential and commercial buildings to transition to zero-emission (ZE) water heaters. This change is expected to deliver the second-largest reduction in NOx emissions over the past decade. For the first time ever, natural gas-fired pool heaters, larger water heaters, small commercial water heaters, boilers, and process heaters must meet a ZE nitrogen oxides (NOx) standard when replaced. New buildings will align with existing standards that already require ZE units.

Combustion sources in residential and commercial buildings are one of many sources of NOx emissions in the region. NOx plays a key role in ozone formation, which contributes to smog in our region. Implementing the new amendments to Rule 1146.2 will reduce about 5.6 tons per day (tpd) of NOx.

This rule is part of South Coast AQMD’s 2022 Air Quality Management Plan (AQMP) which is the blueprint for improving air quality and meeting federal air pollution standards by 2037 for the South Coast Air Basin and Coachella Valley. The 2022 AQMP is the most ambitious regional plan to date and the first to rely on ZE technologies across business, industry, and residential sectors. To attain
the 2015 federal ozone standard, about 60 tpd of NOx emissions must be eliminated from sources of air pollution regulated by South Coast AQMD. The rule will achieve almost 10 percent of the needed NOx reductions to meet federal standards.

The amendments to Rule 1146.2 will impact about 1 million units across South Coast AQMD’s four-county jurisdiction, including approximately 710,000 natural gas-fired residential pool and spa heaters, which have not had the NOx limits updated since the rule’s adoption in 1998.

Exemptions are provided for units with low usage, and alternative compliance options are available for special cases such as replacing multiple units, emergency replacements, and construction delays.

The first compliance deadline for ZE units under Rule 1146.2 begins on January 1, 2026, with a phased implementation plan concluding by January 1, 2033.

To help offset some of the costs of transition, South Coast AQMD is developing a Zero-Emission Rebate Program that will assist residential and some commercial buildings to transition to zero NOx emission space and water heating, with a focus on overburdened communities. Future incentives may include other appliances such as cooking and laundry equipment.

Water heaters and boilers are regulated based on size. Residential, commercial, and light industrial use equipment, such as instantaneous residential water heaters and pool heaters rated between 75,000 Btu/hr to 2 million Btu/hr, are subject to Rule 1146.2.