If I Start a Yacht Charter Service, Am I Legally Required to Repower My Boat?

I am purchasing a charter yacht that I plan to put into service as a dinner cruise and harbor tour boat in Southern California. I have heard that passenger boats in California may be subject to additional pollution control regulations that could require the boat to be repowered. Can you shed some light on this?

Air pollution regulations are enacted and enforced in California at the statewide level through the Air Resources Board (whose website is arb.ca.gov) and locally through 35 regional air quality districts. Our reader will be operating his boat in Southern California, where he will be under the jurisdiction of the South Coast Air Quality Management District (aqmd.gov) or the San Diego Air Pollution Control District (sdapcd.org).

In 2007, the California Air Resources Board (CARB) enacted regulations designed to reduce emissions from diesel engines on various types of commercial vessels, including a class of vessels known as “commercial harbor craft.” This includes dinner and harbor cruise vessels, as well as ferries, excursion vessels, tugboats, supply vessels and other workboats. It also includes smaller “six-pack” charter boats.

These are California state regulations based on the commercial use of the boat. They are not federal regulations, and they are not related in any way to Coast Guard inspection or licensing.

The regulations govern the emissions from all harbor craft that operate within 24 miles of the California coast. All newly acquired vessels and replacement engines must comply with U.S. Environmental Protection Agency “Tier 2” and “Tier 3” diesel emission standards.

By itself, this is not an onerous regulation, since all new diesel engines now meet these standards. However, the regulations also affect vessels that are already in use, and compliance with these regulations can be very expensive for a small company, such as the charter business proposed by our reader.

Starting in 2009, all commercial harbor craft were required to file reports with CARB to provide information about the vessel’s operations and about its diesel engines. And, starting at the end of 2010, existing “Tier 1” and earlier propulsion engines AND auxiliary engines (generators) on these vessels must be replaced to meet the tougher standards for new vessels (although there are a few exceptions to these requirements that are discussed below).

The regulations are implemented through two compliance schedules: one for vessels with their homeports outside the South Coast Air Quality Management District (SCAQMD), and an accelerated schedule for vessels with their homeports in the SCAQMD. Both schedules are based on the engine model year and hours of operation, and are designed to replace the oldest, highest-use engines first.

The cost of replacement of two main propulsion engines and a generator on a 70-foot dinner cruise yacht can easily exceed $100,000. An expense like that may close the doors of a small business — but there are a couple of avenues for reducing the cost.

Each of the air quality districts in California manages a grant program called the Carl Moyer Program, which provides money for the replacement of older engines. The program will reimburse a boat owner for a portion of the cost of replacement (generally around 65-75 percent) if the boat has been used commercially in the past and if the owner continues to use the boat in commercial service within that district for an agreed upon number of years after the boat is repowered.

The Carl Moyer Program has two significant drawbacks. First, the funding for the program varies every year and is generally allocated on a first-come first-served basis. Second, the program is designed to encourage faster conversion to cleaner engine technology — and, as such, the money is only available to boat owners who replace the older engines several years before the deadline for replacement. Older boats that are facing a deadline in the next couple of years will not be eligible.

The regulations do include exemptions under certain circumstances. If a boat or its engines qualify for an exemption, the owner will need to comply with the reporting requirements, but the engines may not need to be replaced.

One important exemption is for engines rated at 50 hp or less. Most generators that are operated aboard a dinner cruise boat or other excursion vessel will meet this threshold, so those engines will be exempt even if the main engines must be replaced.

Another area of relief from the regulations is for historic vessels. This is an attractive option for some older boats, but it is a difficult process since the boat must be listed on the National Register of Historic Places.

The most significant exemption is based on annual hours of use, and diesel engines that log fewer than 300 hours per year are exempt. This should be a relief for six-pack charters and small harbor cruise operations, but it will be a difficult threshold for a busy dinner cruise boat or sportfishing charter boat operating in Southern California.

California air pollution regulations have been criticized for decades as being burdensome for small businesses, but the Carl Moyer Program is obviously the best option for compliance with the regulations. As noted above, it requires prompt action — even for newer boats. Contact CARB directly for more information, at (888) 442-7238 or harborcraft@arb.ca.gov.