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Regulatory Spotlight: Proposed AQMD Rule 2305

Warehouse Indirect Source Rule – Warehouse Actions and Investments to Reduce Emissions (WAIRE) Program

The South Coast Air Quality Management District (AQMD), which has jurisdiction over Los Angeles and surrounding counties, has proposed a Facility-Based Mobile Source Measure (Rule 2305), focused on reducing emissions associated with vehicles and mobile equipment operating in and out of warehouse distribution centers. If your company owns and operates warehouse facilities in Southern California then you may be impacted by this proposed rule. Here is what you need to know:

What is the intent of the rule?

To reduce nitrogen oxide (NOx) and particulate matter (PM) emissions from the mobile sources (trucks) that serve warehouse facilities. The goal of this rule is to replace all trucks serving warehouse facilities with zero emission (ZE) and near-zero (NZE) emission trucks in order to meet state and federal air quality standards for ozone and fine particulate matter.

Who does the proposed rule apply to?

Owners and operators of warehouses located in the South Coast AQMD jurisdictions with greater than or equal to 100,000 square feet of indoor floor space in a single building. Operators who lease at least 50,000 square feet for warehousing activities in a 100,000 square foot or larger warehouse building are also subject to the rule. Warehouse owners who do not operate the facilities are mainly only subject to the reporting requirements of the rule. Warehouse Operators are responsible for most of the compliance obligations in the rule.

What are the requirements of the rule?

Warehouse operators must earn WAIRE points each calendar year. A facility’s points obligation is calculated using an equation in the rule based on the weight class of trucks that serve the facility and the number of trips they make to and from the facility. The points obligation is recalculated every year.  If a warehouse building is used by more than one operator, the points requirement is calculated separately for each operator (not the entire warehouse).

There are four ways to earn WAIRE Points to meet the compliance obligation.

  1. Complete actions/activities in the WAIRE Menu during the compliance period.  These activities include the purchase of ZE trucks and yard trucks or NZE trucks; installing and using on-site ZE/NZE emissions charging and fueling stations; installing and using on-site solar panels; or installing air filter systems in nearby residences, schools, hospitals, daycares, or Community Centers. Each action/activity has a specified point value.
  2. Apply for and receive approval for a Custom WAIRE Plan that specifies activities/actions the facility will perform to earn points. Application and content requirements for the Custom Plan are defined in the rule.  Must show that actions will reduce NOx and diesel particulate matter (DPM) emissions relative to baseline conditions.
  3. In lieu of earning points via options 1 or 2, the facility may pay a mitigation fee in the amount of $1,000 per point required.  Fees shall be paid no later than when the annual WAIRE report is due.
  4. Any combination of options 1, 2 and 3.  A fee can be paid to cover any points not earned during the compliance period through the activities in options 1 or 2.

There are also limited ways in which points can be banked and/or transferred between owned/operated facilities.

Reporting Requirements:

  1. Initial Warehouse Operations Notification (required by Warehouse Owner) due September 1, 2021.
  2. Initial Site Information Report (required by Warehouse Operator) due by July 1 of the year the facility must submit its first Annual WAIRE Report.
  3. Annual WAIRE Report (primarily required by Warehouse Operator but can be required for Warehouse Owners who earn WAIRE points) due January 31 beginning with the Initial Reporting Date in Table 1 of the rule. This report summarizes the annual points requirement for the facility and the actions taken to earn points during the year.

When do the requirements of the rule take effect?

The South Coast AQMD Governing Board is meeting on May 7, 2021 to discuss adoption of the rule.  Currently, the compliance deadlines in the proposed rule are as follows:

Warehouse Operations Notification: September 1, 2021 (all warehouse buildings ≥ 100,000 square feet)


What are the cost implications of the rule?

This rule will have significant cost implications for warehouse operators through required investments each year in order to meet compliance obligations. For example, a 500,000 square foot warehouse is determined to require 434 WAIRE points for a given year. The facility operator must: 1) make enough investments during the year to earn 434 points; 2) pay a mitigation fee of $434,000; or 3) perform some combination of the two (make investments to earn some points and pay a fee for the balance). The process repeats each year.

How APTIM Can Support Compliance Efforts

APTIM can support customers with Initial Site Reporting, compliance strategy, engineering and design, and annual compliance for investment that qualify toward WAIRE points.

  • Complete Initial Site Information Report and assessment of cost/benefit options for WAIRE points
  • Develop long-term strategy for WAIRE point investment based on site specific evaluation
  • Assist with turn-key solutions for ZE/NZE vehicles, charging and fueling needs, from design and construction to third-party financing
  • Develop Custom WAIRE Plan
  • Incorporate utility incentives to reduce the cost of WAIRE investment, where applicable
  • EPC and project management
  • Annual compliance reporting

APTIM. In Pursuit of Better.