AQMD ANNUAL Emissions Reports (AER) & CTR – CALENDAR 2025

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 2025):

  • The 2025 Annual Emissions Report (AER): applies to emissions occurring during calendar year 2025 (January 1, 2025 – December 31, 2025).
  • Submittal Due Date: May 1, 2026 (Friday), at 5:00 p.m.
  • AB 2588 Quadrennial Report: For the 2025 AER, facilities in Phase 2 are required to file their Quadrennial Reports.

Changes to Fees:

  • CPI increase of 3.0% for all emission fees: Criteria Pollutants, Ozone Depleting Compounds, and Toxic Air Contaminants.
  • The fee for abbreviated reporters is now fully implemented. The abbreviated reporting filing fee for data year 2025 is $109.67 per abbreviated report.
  • 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 annual emissions for data year 2025. More information regarding Rule 317.1 is available at https://www.aqmd.gov/home/rules-compliance/compliance/rule-317-1.

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 3 Facilities are required to report emissions for DY 2025.
    • All CTR Sector Phases 1, 2 and 3 facilities will be reporting 2026 emissions and are reminded to maintain proper records of all operations in 2026.
  • Abbreviated Reporting for DY 2025 is available for those facilities that are engaged exclusively in qualifying activities.
    • Abbreviated reporting for emergency engines has been expanded to include all diesel fuels including renewable diesel and biodiesel.

Effort to Ban Natural Gas Fails (SCAQMD Heater Rules)

The South Coast Air Quality Management District Board (SCAQMD) rejected a staff proposal that would have essentially banned natural gas for residential space and water heaters. The Governing Board voted 7 to 5 not to approve Proposed Amended Rules 1111 –Reduction of NOx Emissions from Natural-Gas-Fired, Fan-Type Central Furnaces and 1121–Control of Nitrogen Oxides from Residential Type, Natural-Gas-Fired Water Heaters. The agency typically tackles one rule at a time but in recent rulemakings staff has been proposing rule “bundles” which impact multiple types of equipment.

According to the staff report, the proposed rules sought to reduce emissions of Nitrogen Oxides (NOx) from space and water heating units in single and multi-unit homes, thereby impacting most if not all residents of the four county (Orange, San Bernardino, Riverside and Los Angeles) South Coast Basin region. The original proposal constituted a ban on any natural gas unit and prohibited the sale of new natural gas fired units into Southern California. Don Wagner –Supervisor from Orange County and a member of the SCAQMD Board — wrote an Opinion Editorial titled “The AQMD Is Coming For Your Gas Water Heater And Appliances” detailing concerns about far-reaching scope of the rule and expense. “If implemented, these rules would impose ruinous expenses on already stretched residents and businesses, potentially cause people to lose housing, and strain an already stretched electricity grid”—wrote Wagner. A controversy arose, generating hours of public comment at a myriad of SCAQMD meetings. According to the District, the agency received a record 20,000 written comments with environmental advocacy groups arguing that the rules were needed in order to clean the air while businesses and municipalities opposed electric mandates and increased costs.

Due to the public outcry, SCAQMD staff softened the proposed rules, so that natural gas furnaces and water heaters would not be considered illegal and could be purchased in Southern California. But manufacturers would have to pay a “mitigation” fee to the District. The fee for the NOx-emitting units included an option to pay a higher mitigation fee if manufacturers sell more low-NOx units than the targets specified in the rules. Alternatively, manufacturers that elect to sell only zero-emission space and water heating units would not be subject to a per unit mitigation fee. Various manufacturers opposed the additional fee and said that ultimately, they would have no choice but to pass the additional costs of doing business down to the consumer. Environmental groups strongly objected to what they called a “watered-down” version of the rules and advocated for complete electrification.

A coalition of businesses, which included Chambers of Commerce, various cities, as well as school Districts voiced their concerns which included:

  • The financial impact of the rule. The estimated replacement costs of $18,500-$21,500 for space heaters and $5,200- $8,200 for water heaters.
  • Requirement for electrical panel upgrades, adding significant unplanned capital expenses.
  • Disproportionate impact on small businesses and property owners already operating on narrow margins and inadequate time for businesses to plan and budget for significant investments.
  • Current supply chain constraints and workforce limitations that would create compliance challenges.
  • Infrastructure readiness and grid capacity concerns.

“As proposed under Rule 1121, if your water heater breaks after January 1, 2027, the government will force you to replace it with an electric model. These contraptions are prohibitively expensive, would require major home or business electrical upgrades, and likely impose lengthy permit wait times. Likewise, Rule 1111 targets natural gas furnaces – if your furnace fails in 2028 or beyond, you must replace it with electric technology”—observed Supervisor Wagner.

A motion was made to adopt staff’s recommendation but failed to get the requisite number of votes. Subsequently, a motion was made to refer PARs 1111 & 1121 back to the Stationary Source Committee, where alternative options could be properly vetted and deliberated. After some deliberation and opposition to reviving the rules, that motion ultimately passed. The Board Chair commented that the issue would not be taken up in 2025 but the mandates for electrification could come back in the foreseeable future.

Memorandum of Understanding for Port Indirect Source Rules

At their November regular monthly meeting, the South Coast Air Quality Management District Board ratified a “Cooperative Agreement” with the Ports of Long Beach and Los Angeles (collectively known as the San Pedro Bay Ports), in lieu of a regulation. The decision follows a multi-year process where environmental groups strongly advocated for ports to be subjected to additional emission reduction mandates from the air agency. It amounts to a pause in any new rulemaking by the District for port sources while the Cooperative Agreement is in effect. The issue was hotly debated at the public hearing during which hundreds of speakers spoke.

Environmentalists opposed the proposal on the grounds that the SCAQMD was not meeting their obligation to clean the air, and the agency was essentially “contracting away” its rulemaking authority. The Ports, labor unions, and business groups argued the added flexibility was needed to ensure the viability of the supply chain. Representatives for the ports argued that California’s air quality gains stemmed from technological leadership and broad alignment, not unilateral mandates. They believe that the ports have already reduced emissions by 91%.

According to the District’s staff reports, the ports are the busiest commercial marine ports in the Western Hemisphere, handling approximately one-third of all United States containerized waterborne cargo imports and exports and contributing significantly to the regional economy. “At the same time, port-related mobile sources are collectively the largest source of smog and particulate forming emissions in the South Coast Air Basin and result in disproportionately high air toxic impacts for port-adjacent communities”— indicated the report.

Earlier this year, the ports sought legislation (SB34 – Richardson) to reign in the authority of the SCAQMD. The bill would have required the California Air Resources Board (CARB) to establish an intermodal goods movement stakeholders group consisting of, among others, a member from each specified port District. SB 34 made it to the Governor’s desk who ultimately vetoed it arguing: “With the current federal Administration directly undermining our state and local air and climate pollution reduction strategies, it is imperative that we maintain the tools we have and encourage cooperative action at all levels to avoid the worst health and climate impacts.” While the legislation did not pass, it set the stage for the Cooperative Agreement framework. The Governor’s veto message signaled his preference for a ‘locally driven and collaborative approach toward reducing air and climate pollution” and “the type of consensus that should be supported and encouraged.”

According to the District, port related mobile sources must shift from diesel-fueled technologies to zero-emission technologies in order to meet federal air quality standards. Proposed Rule 2304 – Commercial Marine Ports (PR 2304) was an attempt to address emissions associated with the ports and the rule concept included broad requirements. As the rulemaking progressed, stakeholders identified the need for charging and fueling infrastructure as a first step to support the transition to zero-emission technologies. The Cities and Ports of Long Beach and Los Angeles submitted an initial draft Cooperative Agreement to South Coast AQMD as an alternative proposal to PR 2304.

Under the Agreement, each Port must develop a Zero Emission Infrastructure Plan for approval by their Board of Harbor Commissioners based on the following schedule:

  • Phase 1: Cargo-handling equipment for container terminals and drayage trucks by December 31, 2027;
  • Phase 2: Cargo-handling for non-container terminals, local switcher locomotives, and harbor craft by December 31, 2028; and
  • Phase 3: Ocean-going vessels by December 31, 2029.

The District agreed to pause rulemaking for five years, which is the length of the term of the agreement. The Long Beach Board of Harbor Commissioners voted unanimously to approve the cooperative agreement as did the Los Angeles Board of Harbor Commissioners. The Ports have committed to a “transparent public process” for stakeholders to review and comment on the measures. The SCAQMD plans to provide regular public briefings to the Board with updates on implementation of the Cooperative Agreement starting in April 2028, and annually thereafter.

California’s Safer Consumer Products Program Considers Addition of Microplastics

California’s Department of Toxic Substances Control (DTSC) proposes adding microplastics to the Candidate Chemicals List in the Safer Consumer Products (SCP) program. According to the agency:

“Microplastics’ are defined as solid polymeric materials to which chemical additives or other substances may have been added, which are particles having at least three dimensions that are less than 5,000 micrometers (μm). Polymers derived in nature that have not been chemically modified (other than by hydrolysis) are excluded.”

DTSC concluded that:

  • There is a high potential for animals, humans, and environmentally sensitive habitats to be exposed to microplastics.
  • Microplastics have the potential to cause or contribute to adverse impacts for sensitive populations, habitats and threatened species.
  • Microplastics exhibit one or more hazard traits and/or environmental or toxicological endpoints.

According to agency documents, regulating microplastics will prevent or reduce potential adverse health and environmental impacts to the State of California. “Because microplastics are mobile in the environment, they are found in virtually all ecosystems, as well as in drinking water, household dust and indoor air”— stated the notice of rulemaking. Adding Microplastics to the list of regulated chemicals would allow DTSC to select and regulate Priority Products containing microplastics and evaluate future regulatory actions, which would reduce microplastics in consumer products.

DTSC claims that the proposed regulation will not generate any costs for businesses because it “simply adds microplastics to the Candidate Chemicals List.” If the agency, in the future, regulates any Priority Products containing microplastics, the potential costs of compliance that may arise for impacted businesses would be assessed at that time.

SCAQMD ConductS Survey for VOC rules

The South Coast AQMD is conducting a survey for manufacturers who sell coatings, inks, and solvents that are subject to Marine Coatings (Rule 1106), Solvent Degreasers (Rule 1122), Metal Container, Closure, and Coil Coating Operations (Rule 1125), Magnet Wire Coating Operations (Rule 1126), Paper, Fabric, and Film Coating Operations (Rule 1128), Graphic Arts (Rule 1130), Screen Printing (1130.1), Consumer Paint Thinners & Multi-Purpose Solvents (Rule 1143), Metalworking Fluids and Direct Contact Lubricants (Rule 1144), Plastic, Rubber, Leather, and Glass Coatings (Rule 1145) and Polyester Resin Operations (Rule 1162). The agency already collects substantial data from manufacturers of Architectural Coatings under its Rule 314 — Fees for Architectural Coatings.

The intent of the survey is to assist SCAQMD to understand the extent to which para-chlorobenzotrifluoride (pCBtF or Oxsol 100) and tert-Butyl Acetate (tBAc) are used to formulate compliant products. The survey results will be used to assist staff in evaluating Volatile Organic Compound (VOC) content limits and proposing pCBtF and tBAc prohibition timelines. The survey was sent to coatings manufacturers in August, and no action is required for other stakeholders. District staff plan to review survey results, as well as Product Data Sheets and Safety Data Sheets to evaluate VOC levels and pCBtF/ t-BAc content. Information will be used to evaluate VOC limits and potential prohibition of the use of pCBtF and t-BAc in Southern California. At a recent public meeting, SCAQMD announced that, based on survey results, some rules are likely to be grouped together— a new trend the agency has been implementing where multiple rules are amended in one rulemaking action. Rulemaking is anticipated in 2026 through 2027.