Emissions standards remain a critical policy option that states can use to improve air quality and achieve climate goals, and since many larger sources of air pollution have been reduced significantly, regulating building emissions makes sense as a next step toward clean air objectives. It was this goal RAP had in mind in 2023 when it published a model rule for reducing emissions of nitrogen oxides (NOx) from water heaters.
Responding to states interested in extending this approach beyond water heaters, RAP and the Northeast States for Coordinated Air Use Management (NESCAUM) have worked together with consultants Energy Solutions and Dwight Alpern to produce a new appliance model rule. This model rule, published in October, presents state-level emissions standards designed to reduce nitrogen oxide (NOx) and greenhouse gas (GHG) pollution from space and water heating equipment. It establishes zero-emission heating equipment standards (ZEHES) for small water heaters, furnaces, and boilers, as well as ultra-low-NOx standards for small and large water heaters.
This model rule is intended to be part of a comprehensive regulatory and incentive-based approach to building decarbonization and can serve as a template for states to use for developing their own regulations to achieve public health and climate goals.
Why Regulate Emissions From Space and Water Heating?
California, Texas, and Utah have adopted low and ultra-low NOx standards for water heaters. And two local air emission agencies in California, the South Coast Air Quality Management District (South Coast AQMD) and the Bay Area Air Quality Management District (BAAQMD), have gone further, being the first to complete zero emission rules for water heaters and furnaces. The California Air Resources Board (CARB) and the state of Maryland are also working on zero-emission standards.
Emissions standards are an important regulatory tool for states. They’re feasible and effective ways to tackle a major source of building pollution at the time of equipment turnover, replacing fossil appliances with readily available zero-emission equipment such as heat pumps. And since building performance standards only apply to large buildings and building codes only apply to new buildings, emissions standards fill an important regulatory gap by addressing pollution from small buildings and by covering new and existing buildings. They also set a clear market signal with a clear date for a market transition to clean technologies. And finally, they can be designed and implemented equitably and affordably.
In addition, emissions standards such as the model rule can be incorporated into state plans for meeting EPA’s public health standards for various pollutants, including ozone, the fine particles known as PM2.5, or regional haze.
What’s In the Model Rule?
The model rule is designed to be adapted by states to their needs and regulatory environments. States wishing to adopt their own zero-emission appliance standards may use the model rule as a starting point in a regulatory process as their state requires.
Importantly, the model rule is not a ban, nor does it require early replacement of functioning space and water heaters. It applies to new equipment that is manufactured, distributed, or sold in a state. This approach ensures that polluting equipment will be replaced with zero-emission alternatives at the end of life. Similarly, the rule is technology-neutral; it does not mandate heat pump installations. Any technology that meets the emission requirements is allowed, including electric resistance units or other technologies that may become available. This rule covers “residential-scale” equipment, which means that any equipment in the covered size categories is covered, even if it is not installed in a residential building.
The model rule has three key provisions:
- Ultra-low NOx (10-14 nanograms per joule of energy, or ng/J) emission limits for small and large water heaters (less than 2 million British thermal units, or Btu, per hour) sold, leased or installed starting 12 months after rule promulgation.
- Zero-NOx and zero-GHG emissions limits for residential-scale water heaters (less than 75,000 Btu/hour), furnaces (less than 225,000 Btu/hour), and boilers (<300,000 Btu/hour) sold, leased, or installed starting in 2029.
- Labeling and record-keeping requirements for manufacturers, refurbishers, distributors and retailers of space and water heaters.
Source: NESCAUM; images from Flaticon.com
Because of states’ interest, the model rule covers emissions of both NOx and of combustion GHGs (carbon dioxide and methane). States have a long history of regulating NOx from various sources in buildings, both to meet air quality and ozone attainment goals and to contain environmental damage, and as such, the ultra-low-NOx equipment market is also well established for water heaters. Regulating GHGs likewise helps states achieve their emissions reduction goals and address climate change.
Direct heating (stoves or fireplaces), less common fuels such as wood or kerosene, and electric equipment are not covered by the model rule. Industrial equipment, recreational equipment, and pool heaters are also excluded, though some of these equipment types may be covered by future iterations of the model rule.
The model rule is designed to operate like a consumer product role, which states have had in place for more than 15 years. It would not require on-site inspections, but rather focuses on the ability to audit sales at the manufacturer, distributor, and retailer level. Noncompliant equipment will not be able to be sold after the compliance date occurs. Sales records would be maintained for five years and subject to periodic inspection; this or other means would be used to monitor potential violations, which may be subject to fines or penalties per piece of non-compliant equipment sold. Record-keeping and labeling requirements would apply to manufacturers, refurbishers, distributors and retailers.
Importantly for concerns about the cost of emergency replacements, homeowners would be allowed to lease non-compliant equipment for up to six months in an emergency-replacement situation before installing compliant equipment.
What’s Coming Next?
One state — Maryland, through its Department of Environment — is currently using the model rule as the starting point for its own zero-emission appliance standards rulemaking. Maryland’s rulemaking is an example of what a state can achieve when it is serious about tackling building emissions. We hope that their effort will inspire other states that may be considering building decarbonization policies to consider developing equipment emissions standards of their own.
The model rule is intended to be a living document that will be updated over time. Future iterations may expand its scope to address emissions from other types of equipment, such as commercial space and water heaters.
Reducing appliance emissions is just one in a suite of building decarbonization policy options that states can consider. A thorough discussion of the full suite of options can be found in a recent report by the Northeast Energy Efficiency Partnerships (NEEP), Setting the Table for Building Decarbonization. States that are interested in maximizing the impact of federal funding with complementary state policies can learn more from a paper co-authored by RAP and CLASP: Accelerating Heat Pump Adoption through the Inflation Reduction Act (IRA) and Complementary Policies.
Source: Northeast Energy Efficiency Partnerships
Want to Know More?
The rule comes with a technical support document, which provides background information and analysis on the development of zero-emission and ultra-low-NOx standards for space and water heaters. The technical support document and other zero-emission standards resources are available on NESCAUM’s ZEHES webpage.
NESCAUM and RAP also hosted a webinar introducing the model rule and walking through its major provisions on October 30, and the recording is available online.
If you have questions, reach out to Nancy Seidman and Raphael Breit at RAP or Emily Levin at NESCAUM.
