EPA Approves South Coast Air Quality Management District’s Warehouse Indirect Source Rule

The Warehouse ISR Rule 2305, adopted by SCAQMD in 2021, aims to reduce air pollutants such as nitrogen oxides and particulate matter by requiring warehouse operators to offset their emissions from indirect sources, such as trucks delivering goods to and from the facilities, yard trucks, transport refrigeration units, ships, and trains.

ISR Rule 2305 applies to owners and operators of warehouses located in SCAQMD’s jurisdiction with 100,000 square feet or more of indoor floor space in a single building and who operate at least 50,000 square feet of the warehouse for warehousing activities. SCAQMD includes all of Orange County, the non-desert portions of Los Angeles and San Bernardino counties, and most of Riverside County.

Under the rule, warehouse owners and operators are required to either earn points from specified emission reduction activities or pay a mitigation fee to offset their indirect emissions. The amount of points required is based on weighted annual truck trips. Reduction activities can include investing in zero-emission and/or near-zero-emission technologies, using solar power, installing onsite zero-emission charging or fueling infrastructure, or installing air filtration systems in qualified buildings such as schools. Warehouse owners and operators can also develop a custom Warehouse Actions and Investments to Reduce Emissions plan to comply with the rule. The rule has staggered implementation deadlines, but by 2025, warehouses with 100,000 square feet or more of indoor floor space in a single building will be subject to the rule.

For more information on the rule, see our previous post here.

Revision to State SIP

EPA originally proposed approving the rule as a revision to the state’s SIP in October 2023, after submission by the California Air Resources Board. The Clean Air Act requires states to develop SIPs and submit them to EPA for approval to detail how the state will implement, maintain, and enforce National Ambient Air Quality Standards and other federal air requirements. EPA ultimately approved the revision to include Rule 2305 in California’s SIP this month. EPA’s approval of the revision makes Rule 2305 federally enforceable under the Clean Air Act.

Resolved Legal Challenges

In the past year, the US District Court for the Central District of California has also resolved challenges to SCAQMD’s legal authority to enforce Rule 2305. These challenges were brought by the California Trucking Association and Airlines for America and were grounded in alleged preemption under the Clean Air Act, the Airline Deregulation Act, and the Federal Aviation Administration Authorization Act. The court ruled in favor of the agency this past January.

Stay tuned for more developments. Members of the firm’s Environmental team regularly monitor state law and administrative activity with broad implications to the regulated community and advise clients on understanding the implications of new regulations.