Clean energy journalism for a cooler tomorrow

Southern California adopts landmark rule to electrify industrial heat

The effort will slash emissions from more than 1 million boilers and water heaters over the next decade. Advocates hope other regions will follow suit.
By Maria Gallucci

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Startups like AtmosZero are developing industrial electric boilers, the likes of which could become more common in southern California. (AtmosZero)

Swimming pools and dry cleaners use them. So do aircraft-engine factories, textile mills, and facilities that make packaged snacks and bottled drinks. Wherever there’s a need for large amounts of steam or heat, industrial boilers and water heaters are likely to be found.

Usually, this ubiquitous equipment is fueled by fossil gas — and spews high levels of harmful emissions.

In Southern California, a new rule is expected to change this, driving a major shift toward electric boilers and heaters that advocates hope will serve as a template for tackling the problem nationwide. The measure comes as energy experts and climate advocates are pushing to expand electrification beyond familiar categories like cars and homes and into more obscure, though still essential, corners of the economy.

On Friday, regulators in the South Coast Air Quality Management District voted to approve a first-in-the-nation measure that aims to sharply reduce emissions of smog-forming nitrogen oxides (NOx) from more than 1 million large water heaters, small boilers, and process heaters in the area. The district includes large sections of Los Angeles, Orange, Riverside, and San Bernardino counties, and it encompasses the most ozone-polluted region in the country.

The rules are designed to ramp up over time. Starting in 2026, smaller units in new buildings must meet zero-emission limits. The last required to make the switch are existing facilities with high-temperature units, which have until 2033. The drawn-out timeline is meant, in part, to give manufacturers of electric heat pumps and thermal-storage solutions enough time to scale up their production to meet the new demand.

The measure, known as Amended Rule 1146.2, is the latest effort by the South Coast district to curb health-harming pollution from its large industrial base. Last year, regulators adopted another first-of-its-kind rule for large commercial bakeries and kitchens, which will push food manufacturers to electrify the ovens they use to bake bread, make chips, and roast nuts.

Steps taken in Southern California have spurred state policymakers to try to rein in California’s industrial emissions more broadly. Manufacturing facilities account for more than one-fifth of annual greenhouse gas emissions in California, making them the largest source after transportation. But the state hasn’t developed a comprehensive plan for cleaning up factories in the way it has for vehicles and power plants.

To that end, the California Assembly recently passed a bill to create a strategy for decarbonizing the state’s $400 billion manufacturing sector. AB 2083, which is moving forward in the state Senate, would require the California Energy Commission to assess the potential for the state’s manufacturers to slash pollution from industrial heat application and processes.

What we’re trying to do is figure out how to transform industry and drive the right types of investments … that prioritize low- and zero-emission technology,” said Evan Gillespie, a Los Angeles–based partner at Industrious Labs, which was involved in drafting the legislation along with Earthjustice.

It’s different than retiring a coal plant and replacing it with clean electricity,” he added. We really want to make sure that these [manufacturing] industries thrive in California. So we want to treat this transition as an investment in modernizing industry.”

Hot water, hold the gas 

Boilers and water heaters covered by Southern California’s new rule account for about 9 percent of all NOx emissions from stationary sources in the region. When fully implemented by 2033, the measure is expected to reduce pollution by 5.6 tons of NOx per day — the equivalent of slashing half of all smog-forming emissions from cars in the region.

The measure should also significantly reduce industrial demand for fossil gas, which emits carbon dioxide when burned. Boilers and heaters themselves can also leak methane, a potent greenhouse gas, even when not in use.

It’s one of these regulations where literally every [person] in the region is going to benefit because there’s going to be equipment cleaned up close to them,” said Adrian Martinez, an attorney for Earthjustice in Los Angeles.

Clean air advocates attend what might be "the first-ever industrial boiler rally" outside the South Coast Air Quality Management District's headquarters in Diamond Bar, California, on June 7, 2024. (Evan Gillespie/Industrious Labs)

Previously there was this notion that we’ll just incrementally clean up these large boilers, or get a cleaner-burning methane,” he said. This recognizes that that’s not good enough for what we have to achieve in our region” to meet air quality and climate goals.

Critics of Amended Rule 1146.2 have raised concerns about the upfront costs of complying with the measures, especially for smaller and family-owned enterprises. In a letter to regulators, Yoon Dong Kim, president of the Korean Dry Cleaners and Laundry Association in Southern California, said he worried the financial burden imposed by mandatory upgrades and retrofits could prove insurmountable for these small businesses,” which provide an important source of jobs and social cohesion” in underrepresented communities.

The South Coast district staff said they’ve engaged in discussions with dry-cleaning industry groups and are developing a rebate program to help lower the cost of installing new zero-emission units or upgrading electrical panels. Staff noted that, while electric heat pumps and other technologies may initially cost more to purchase than gas-burning units, the zero-emission units can ultimately save companies money over their lifetime, owing to their higher energy efficiency.

Another major worry among the rule’s skeptics has been the limited availability of zero-emission technologies, particularly for high-temperature units.

About 43 percent of industrial heat emissions come from low-temperature heat applications, or below 392 degrees Fahrenheit, for which commercial solutions are readily available, Gillespie said. Above that temperature, many technologies are still being developed or just now being deployed. Rondo Energy, for example, has deployed2-megawatt-hour heat battery” at a biodiesel plant in Pixley, California, that can store electricity at temperatures exceeding 1,800℉.

The South Coast rule includes exceptions for companies if cleaner technologies don’t mature as anticipated, or if zero-emission equipment isn’t readily available by the time those deadlines arrive. Proponents say a major goal of setting this rule is to send a signal to heat-pump manufacturers and other suppliers to start ramping up production — and to take advantage of millions of dollars in federal incentives now available for doing just that.

We really see California as a place to drive the transformation of technology … that will help decarbonize industry around the country,” Gillespie said.

Maria Gallucci is a senior reporter at Canary Media. She covers emerging clean energy technologies and efforts to electrify transportation and decarbonize heavy industry.