[Federal Register Volume 74, Number 166 (Friday, August 28, 2009)]
[Proposed Rules]
[Pages 44442-44595]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-19187]



[[Page 44441]]

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Part II





Environmental Protection Agency





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40 CFR Parts 80, 85, 86, et al.



Control of Emissions From New Marine Compression-Ignition Engines at or 
Above 30 Liters per Cylinder; Proposed Rule

Federal Register / Vol. 74, No. 166 / Friday, August 28, 2009 / 
Proposed Rules

[[Page 44442]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 80, 85, 86, 94, 1027, 1033, 1039, 1042, 1043, 1045, 
1048, 1051, 1054, 1060, 1065, and 1068

[EPA-HQ-OAR-2007-0121; FRL-8926-5]
RIN 2060-AO38


Control of Emissions From New Marine Compression-Ignition Engines 
at or Above 30 Liters per Cylinder

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed Rule.

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SUMMARY: EPA is proposing emission standards for new marine diesel 
engines with per cylinder displacement at or above 30 liters (called 
Category 3 marine diesel engines) installed on U.S. vessels, under 
section 213 of the Clean Air Act (CAA or ``the Act''). The proposed 
engine standards are equivalent to the nitrogen oxides (NO<INF>X</INF>) 
limits recently adopted in the amendments to Annex VI to the 
International Convention for the Prevention of Pollution from Ships 
(MARPOL Annex VI) and are based on the position advanced by the United 
States Government as part of those international negotiations. The 
near-term standards for newly-built engines would apply beginning in 
2011. Long-term standards would begin in 2016 and are based on the 
application of high-efficiency aftertreatment technology. We are also 
proposing a change to our diesel fuel program that would forbid the 
production and sale of marine fuel oil above 1,000 ppm sulfur for use 
in the waters within the proposed U.S. ECA and internal U.S. waters and 
allow for the production and sale of 1,000 ppm sulfur fuel for use in 
Category 3 marine vessels.
    This proposal is part of a coordinated strategy to ensure that all 
ships that affect U.S. air quality meet stringent NO<INF>X</INF> and 
fuel sulfur requirements. In addition, on March 27, 2009, the U.S. 
Government forwarded a proposal to the International Maritime 
Organization (IMO) to amend MARPOL Annex VI to designate an Emission 
Control Area (ECA) off U.S. coasts. If this proposed amendment is not 
timely adopted by IMO, we intend to take supplemental action to control 
emissions from vessels affecting U.S. air quality.
    We project that in 2030 this coordinated strategy would reduce 
annual emissions of NO<INF>X</INF> and particulate matter (PM) from 
ocean-going vessels by 1.2 million and 143,000 tons, respectively. 
These reductions are estimated to annually prevent between 13,000 and 
32,000 PM-related premature deaths, between 220 and 980 ozone-related 
premature deaths, 1,500,000 work days lost, and 10,000,000 minor 
restricted-activity days. The estimated annual monetized health 
benefits of this coordinated strategy in 2030 would be between $110 and 
$280 billion, assuming a 3 percent discount rate (or between $100 and 
$260 billion assuming a 7 percent discount rate). The annual costs 
would be significantly less, at approximately $3.1 billion.
    The proposed regulations also include technical amendments to our 
motor vehicle and nonroad engine regulations. Many of these changes 
involve minor adjustments or corrections to our recently finalized rule 
for new nonroad spark-ignition engines, or adjustment to other 
regulatory provisions to align with this recent final rule.

DATES: Comments must be received September 28, 2009. Under the 
Paperwork Reduction Act, comments on the information collection 
provisions are best assured of having full effect if the Office of 
Management and Budget (OMB) receives a copy of your comments on or 
before September 28, 2009, thirty days after date of publication in the 
Federal Register.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2007-0121, by one of the following methods:
    <bullet> http://www.regulations.gov: Follow the on-line 
instructions for submitting comments.
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#adcc80ccc3c980df80c9c2cec6c8d9edc8ddcc83cac2db"><span class="__cf_email__" data-cfemail="22430f434c460f500f464d41494756624752430c454d54">[email protected]</span></a>.
    <bullet> Fax: (202) 566-9744.
    <bullet> Mail: Air Docket, Environmental Protection Agency, 
Mailcode: 6102T, 1200 Pennsylvania Ave., NW., Washington, DC 20460. In 
addition, please mail a copy of your comments on the information 
collection provisions to the Office of Information and Regulatory 
Affairs, Office of Management and Budget (OMB), Attn: Desk Officer for 
EPA, 725 17th St., NW., Washington, DC 20503.
    <bullet> Hand Delivery: EPA Docket Center, (Air Docket), U.S. 
Environmental Protection Agency, EPA West Building, 1301 Constitution 
Ave., NW., Room: 3334, Mail Code: 2822T, Washington DC. Such deliveries 
are only accepted during the Docket's normal hours of operation, and 
special arrangements should be made for deliveries of boxed 
information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2007-0121. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information 
provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Do not submit information that you 
consider to be CBI or otherwise protected through http://www.regulations.gov or e-mail. The http://www.regulations.gov Web site 
is an ``anonymous access'' system, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through http://www.regulations.gov your e-mail address will be 
automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses. For additional information about EPA's public 
docket visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm. For additional instructions on submitting 
comments, go to Section I.A of the SUPPLEMENTARY INFORMATION section of 
this document, and also go to Section X.A of the Public Participation 
section of this document.
    Docket: All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in http://www.regulations.gov or in hard copy at the EPA-HQ-OAR-2007-
0121 Docket, EPA/DC, EPA West, Room 3334, 1301 Constitution Ave., NW., 
Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 
p.m., Monday through Friday, excluding legal holidays. The telephone 
number for the Public Reading Room is (202) 566-1744, and the telephone 
number for the EPA-HQ-OAR-2007-0121 is (202) 566-1742.

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FOR FURTHER INFORMATION CONTACT: Amy Kopin, U.S. EPA, Office of 
Transportation and Air Quality, Assessment and Standards Division 
(ASD), Environmental Protection Agency, 2000 Traverwood Drive, Ann 
Arbor, MI 48105; telephone number: (734) 214-4417; fax number: (734) 
214-4050; e-mail address: <a href="/cdn-cgi/l/email-protection#551e3a253c3b7b14382c153025347b323a23"><span class="__cf_email__" data-cfemail="bbf0d4cbd2d595fad6c2fbdecbda95dcd4cd">[email protected]</span></a>, or Assessment and 
Standards Division Hotline; telephone number: (734) 214-4636.

SUPPLEMENTARY INFORMATION:

I. General Information

A. Does This Action Apply to Me?

    This action will affect companies that manufacture, sell, or import 
into the United States new marine compression-ignition engines with per 
cylinder displacement at or above 30 liters for use on vessels flagged 
or registered in the United States; companies and persons that make 
vessels that will be flagged or registered in the United States and 
that use such engines; and the owners or operators of such U.S. 
vessels. Additionally, this action may affect companies and persons 
that rebuild or maintain these engines. Finally, this action may also 
affect those that manufacture, import, distribute, sell, and dispense 
fuel for use by Category 3 marine vessels. Affected categories and 
entities include the following:

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                                                        Examples of
           Category               NAICS Code \a\    potentially affected
                                                          entities
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Industry......................  333618...........  Manufacturers of new
                                                    marine diesel
                                                    engines.
Industry......................  336611...........  Manufacturers of
                                                    marine vessels.
Industry......................  811310...........  Engine repair and
                                                    maintenance.
Industry......................  483..............  Water transportation,
                                                    freight and
                                                    passenger.
Industry......................  324110...........  Petroleum Refineries.
Industry......................  424710, 424720...  Petroleum Bulk
                                                    Stations and
                                                    Terminals; Petroleum
                                                    and Petroleum
                                                    Products
                                                    Wholesalers.
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Note:
\a\ North American Industry Classification System (NAICS).

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities that EPA is now aware 
could potentially be regulated by this action. Other types of entities 
not listed in the table could also be regulated. To determine whether 
your company is regulated by this action, you should carefully examine 
the applicability criteria in 40 CFR 80.501, 94.1, 1042.1, and 1065.1, 
and the proposed regulations. If you have questions, consult the person 
listed in the preceding FOR FURTHER INFORMATION CONTACT section.

B. What Should I Consider as I Prepare My Comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through 
http://www.regulations.gov or e-mail. Clearly mark the part or all of 
the information that you claim to be CBI. For CBI information in a disk 
or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM 
as CBI and then identify electronically within the disk or CD ROM the 
specific information that is claimed as CBI. In addition to one 
complete version of the comment that includes information claimed as 
CBI, a copy of the comment that does not contain the information 
claimed as CBI must be submitted for inclusion in the public docket. 
Information so marked will not be disclosed except in accordance with 
procedures set forth in 40 CFR part 2.
    2. Tips for Preparing Your Comments. When submitting comments, 
remember to:
    <bullet> Identify the rulemaking by docket number and other 
identifying information (subject heading, Federal Register date and 
page number).
    <bullet> Follow directions--The agency may ask you to respond to 
specific questions or organize comments by referencing a Code of 
Federal Regulations (CFR) part or section number.
    <bullet> Explain why you agree or disagree, suggest alternatives, 
and substitute language for your requested changes.
    <bullet> Describe any assumptions and provide any technical 
information and/or data that you used.
    <bullet> If you estimate potential costs or burdens, explain how 
you arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
    <bullet> Provide specific examples to illustrate your concerns, and 
suggest alternatives.
    <bullet> Explain your views as clearly as possible, avoiding the 
use of profanity or personal threats.
    <bullet> Make sure to submit your comments by the comment period 
deadline identified.

II. Additional Information About This Rulemaking

    The current emission standards for new compression-ignition marine 
engines with per cylinder displacement at or above 30 liters per 
cylinder were adopted in 2003 (see 68 FR 9746, February 28, 2003). This 
notice of proposed rulemaking relies in part on information that was 
obtained for that rule, which can be found in Public Docket EPA-HQ-OAR-
2003-0045. This docket is incorporated into the docket for this action, 
EPA-HQ-OAR-2007-0121.

Table of Contents

I. Overview
    A. What Are the Elements of EPA's Coordinated Strategy for 
Ocean-Going Vessels?
    B. Why is EPA Making this Proposal?
    C. Statutory Basis for Action
II. Air Quality, Health and Welfare Impacts
    A. Public Health Impacts
    B. Environmental Impacts
    C. Air Quality Modeling Results
    D. Emissions From Ships With Category 3 Engines
III. Engine Standards
    A. What Category 3 Marine Engines are Covered?
    B. What Standards are we Proposing for Freshly Manufactured 
Engines?
    C. Are the Standards Feasible?
IV. Fuel Standards
    A. Background
    B. Current Diesel Fuel Standards
    C. Applicability
    D. Fuel Sulfur Standards
    E. Technical Amendments to the Current Diesel Fuel Sulfur 
Program Regulations
V. Emission Control Areas for U.S. Coasts
    A. What is an ECA?
    B. U.S. Emission Control Area Designation
    C. Technological Approaches to Comply With ECA Standards
    D. ECA Designation and Foreign-Flagged Vessels
VI. Certification and Compliance Program
    A. Compliance Provisions for Category 3 Engines
    B. Compliance Provisions To Implement Annex VI NO<INF>X</INF> 
Regulation and the NO<INF>X</INF> Technical Code
    C. Changes to the Requirements Specific to Engines Below 30 
Liters per Cylinder
    D. Other Proposed Regulatory Issues
    E. Coast Guard's Marine Vessel Certification Program
VII. Costs and Economic Impacts

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    A. Estimated Fuel Costs
    B. Estimated Engine Costs
    C. Cost Effectiveness
    D. Economic Impact Analysis
VIII. Benefits
    A. Overview
    B. Quantified Human Health Impacts
    C. Monetized Benefits
    D. What Are the Limitations of the Benefits Analysis?
    E. Comparison of Costs and Benefits
IX. Alternative Program Options
    A. Mandatory Cold Ironing Requirement
    B. Earlier Adoption of CAA Tier 3 standards
    C. Standards for Existing Engines
X. Public Participation
    A. How Do I Submit Comments?
    B. How Should I Submit CBI to the Agency?
    C. Will There Be a Public Hearing?
    D. Comment Period
    E. What Should I Consider as I Prepare My Comments for EPA?
XI. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer Advancement Act
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
XII. Statutory Provisions and Legal Authority

I. Overview

    This proposal is part of a coordinated strategy to address 
emissions from ocean-going vessels and is an important step in EPA's 
ongoing National Clean Diesel Campaign (NCDC). In recent years, we have 
adopted major new programs designed to reduce emissions from new diesel 
engines, including those used in highway (66 FR 5001, January 18, 
2001), nonroad (69 FR 38957, June 29, 2004), locomotive, and marine 
applications (73 FR 25098, May 6, 2008). When fully phased in, these 
programs will significantly reduce emissions of harmful regulated 
pollutants from these categories of engines and vehicles. This Notice 
of Proposed Rulemaking (NPRM) sets out the next step in this ambitious 
effort by addressing emissions from the largest marine diesel engines, 
called Category 3 (C3) marine diesel engines. These are engines with 
per cylinder displacement at or above 30 liters per cylinder, which are 
used primarily for propulsion power on ocean-going vessels (OGV).
    Emissions from OGV remain at high levels. The Category 3 engines on 
these vessels use emission control technology that is comparable to 
that used by nonroad engines in the early 1990s, and use fuel that can 
have a sulfur content of 30,000 ppm or more. As a result, these engines 
emit high levels of pollutants that contribute to unhealthy air in many 
areas of the U.S. Nationally, in 2009, emissions from Category 3 
engines account for about 10 percent of mobile source nitrogen oxides 
(NO<INF>X</INF>) emissions, about 24 percent of mobile source diesel 
PM<INF>2.5</INF> emissions (with PM<INF>2.5</INF> referring to 
particles with a nominal mean aerodynamic diameter less than or equal 
to 2.5 [micro]m), and about 80 percent of mobile source sulfur oxides 
(SO<INF>X</INF>) emissions. As we look into the future, however, 
emissions from ocean-going vessels are expected to become a dominant 
inventory source. This will be due to both emission reductions from 
other mobile sources as new emission controls go into effect and to the 
anticipated activity growth for ocean transportation. Without new 
controls, we anticipate the contribution of ocean-going vessels to 
national emission inventories to increase to about 24 percent, 34 
percent, and 93 percent of mobile source NO<INF>X</INF>, 
PM<INF>2.5</INF>, and SO<INF>X</INF> emissions, respectively in 2020, 
growing to 40 percent, 48 percent, and 95 percent respectively in 2030. 
The coordinated emission control strategy will lead to significant 
reductions in these emissions and important benefits to public health.
    The evolution of EPA's strategy to control mobile source diesel 
emissions has followed a technology progression, beginning with the 
application of high-efficiency advanced aftertreatment approaches and 
low sulfur fuel requirements first to highway vehicles, then to nonroad 
engines and equipment, followed by locomotives and smaller marine 
diesel engines. The benefits of this approach include maximizing air 
quality benefits by focusing on the largest populations of sources with 
the shortest service lives, allowing engine manufacturers to spread 
initial research and development costs over a larger population of 
engines, and allowing manufacturers to address the challenges of 
applying advanced emission controls on smaller engines.
    EPA has been working with engine manufacturers and other industry 
stakeholders for many years to identify and resolve challenges 
associated with applying advanced diesel engine technology to Category 
3 engines to achieve significant NO<INF>X</INF> emission reductions. 
This work was fundamental in developing the emission limits for 
Category 3 engines that we are proposing in this action and informed 
the position advocated by the United States in the international 
negotiations for more stringent tiers of international engine emission 
limits.
    Our coordinated strategy to control emissions from ocean-going 
vessels consists of actions at both the national and international 
levels. It includes: (1) The engine and fuel controls we are proposing 
in this action under our Clean Air Act authority; (2) the proposal \1\ 
submitted by the United States Government (USG) to the International 
Maritime Organization (IMO) to amend Annex VI of the International 
Convention for the Prevention of Pollution from Ships (MARPOL Annex VI) 
to designate U.S. coasts as an Emission Control Area (ECA) \2\ in which 
all vessels, regardless of flag, would be required to meet the most 
stringent engine and marine fuel sulfur requirements in Annex VI; and 
(3) the new engine emission and fuel sulfur limits contained in the 
amendments to Annex VI that are applicable to all vessels regardless of 
flag and that are implemented in the U.S. through the Act to Prevent 
Pollution from Ships (APPS).
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    \1\ Proposal to Designate an Emission Control Area for Nitrogen 
Oxides, Sulphur Oxides and Particulate Matter, Submitted by the 
United States and Canada. IMO Document MEPC59/6/5, 27 March, 2009. A 
copy of this document can be found at http://www.epa.gov/otaq/regs/nonroad/marine/ci/mepc-59-eca-proposal.pdf.
    \2\ For the purpose of this proposal, the term ``ECA'' refers to 
both the ECA and internal U.S. waters. Refer to Section VI.B. for a 
discussion of the application of the fuel sulfur and engine emission 
limits to U.S. internal waters through APPS.
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    The amendments to APPS to incorporate Annex VI provide the 
authority to ensure compliance with MARPOL Annex VI by U.S. and foreign 
vessels that enter U.S. ports or operate in U.S. waters. In light of 
this, we are deciding not to revisit our existing approach with respect 
to foreign vessels in this rule. However, the MARPOL Annex VI Tier III 
NO<INF>X</INF> and stringent fuel sulfur limits are geographically 
based and would not become effective absent designation of U.S. coasts 
as an ECA. As noted above, the United States forwarded a proposal to 
IMO to amend Annex VI to designate U.S. coasts as an ECA. If this 
amendment is not adopted in a timely manner by IMO, we intend to take 
supplemental action to control emissions from vessels that affect U.S. 
air quality.
    Our coordinated strategy for ocean-going vessels would 
significantly reduce emissions from foreign and domestic

[[Page 44445]]

vessels that affect U.S. air quality, and the impacts on human health 
and welfare would be substantial. We project that by 2030 this program 
would reduce annual emissions of NO<INF>X</INF> and particulate matter 
(PM) by 1.2 million and 143,000 tons, respectively, and the magnitude 
of these reductions would continue to grow well beyond 2030.\3\ These 
reductions are estimated to annually prevent between 13,000 and 32,000 
PM-related premature deaths, between 220 and 980 ozone-related 
premature deaths, 1,500,000 work days lost, and 10,000,000 minor 
restricted-activity days. The estimated annual monetized health 
benefits of this coordinated strategy in 2030 would be between $110 and 
$280 billion, assuming a 3 percent discount rate (or between $100 and 
$260 billion assuming a 7 percent discount rate). The annual cost of 
the overall program in 2030 would be significantly less, at 
approximately $3.1 billion.
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    \3\ These emission inventory reductions include reductions from 
ships operating within the 24 nautical mile regulatory zone off the 
California Coastline, beginning with the effective date of the 
Coordinated Strategy program elements. The California regulation 
contains a provision that would sunset the requirements of the rule 
if the Federal program achieves equivalent emission reductions. See 
http://www.arb.ca.gov/regact/2008/fuelogv08/fro13.pdf at 13 CCR 
2299.2(j)(1).
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A. What Are the Elements of EPA's Coordinated Strategy for Ocean-Going 
Vessels?

    Our coordinated strategy for ocean-going vessels, including the CAA 
emission standard proposed in this action, continues EPA's program to 
progressively apply advanced aftertreatment emission control standards 
to diesel engines and reflects the evolution of this technology from 
the largest inventory source (highway engines), to land-based nonroad 
engines, to locomotives and marine diesel engines up to 30 liters per 
cylinder. The results of these forerunner programs are dramatic 
reductions in NO<INF>X</INF> and PM<INF>2.5</INF> emissions on the 
order of 80 to 90 percent, which will lead to significant improvements 
in national air quality.
    The combination of controls in the coordinated strategy for ocean-
going vessels is expected to provide significant reductions in 
PM<INF>2.5</INF>, NO<INF>X</INF>, SO<INF>X</INF>, and toxic compounds, 
both in the near term (as early as 2011) and in the long term. These 
reductions would be achieved in a manner that: (1) Is very cost 
effective compared to additional controls on portside vehicles and 
equipment and other land-based mobile sources that are already subject 
to stringent technology-forcing emission standards; (2) leverages the 
international program adopted by IMO to ensure that all ships that 
operate in areas that affect U.S. air quality are required to use 
stringent emission control technology; and (3) provides the lead time 
needed to deal with the engineering design workload that is involved in 
applying advanced high-efficiency aftertreatment technology to these 
very large engines. Overall, the coordinated strategy constitutes a 
comprehensive program that addresses the problems caused by ocean-going 
vessel emissions from both a near-term and long-term perspective. It 
does this while providing for an orderly and cost-effective 
implementation schedule for the vessel owners and manufacturers, and in 
a way that is consistent with the international requirements for these 
vessels.
    The human health and welfare impacts of emissions from ocean-going 
vessels, along with estimates of their contribution to national 
emission inventories, are described in Section II. The proposed new 
tiers of Clean Air Act engine emission standards to address these 
emissions, and our justifications for them, are discussed in Section 
III. Section IV contains proposed changes to our existing marine diesel 
fuel program. In Section V, we describe a key component of the 
coordinated strategy: the recently-submitted proposal to amend MARPOL 
Annex VI to designate U.S. coasts as an ECA, as well as the IMO 
approval process.
    In addition to the new emission limits, we are proposing several 
revisions to our Clean Air Act testing, certification, and compliance 
provisions to better ensure emissions control in use. We are also 
proposing several regulations for the purpose of implementing MARPOL 
Annex VI pursuant to the Act to Prevent Pollution From Ships (33 USC 
1901 et seq.). These revisions are described in Section VI. Sections 
VII and VIII present the estimated costs and benefits of our 
coordinated program to address OGV emissions, and Section IX presents 
the analysis of programmatic alternatives and a discussion of a 
potential Voluntary Marine Verification Program.
(1) What CAA Standards Is EPA Proposing?
    We are proposing new tiers of Category 3 marine diesel engine 
standards under our Clean Air Act authority, as well as certain 
revisions to our marine fuel program.
    Category 3 Engine Standards. Our current standards for Category 3 
engines were adopted in 2003. These Tier 1 standards are equivalent to 
the first tier of MARPOL Annex VI NO<INF>X</INF> limits and require the 
use of control technology comparable to that used by nonroad engines in 
the early 1990s. We did not adopt PM standards at that time because the 
vast majority of PM emissions from Category 3 engines are the result of 
the sulfur content of the residual fuel they use and because of 
measurement issues.\4\ The combination of the engine and fuel standards 
we are proposing in this NPRM and the USG proposal for ECA designation 
will require all vessels that operate in coastal areas that affect U.S. 
air quality to meet advanced engine standards and fuel controls.
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    \4\ As explained in the NPRM, there were no acceptable 
procedures for measuring PM from Category 3 marine engines. 
Specifically, established PM test methods showed unacceptable 
variability when sulfur levels exceed 0.8 weight percent, which was 
common at that time for both residual and distillate marine fuels 
for Category 3 engines, and no PM test method or calculation 
methodology had been developed to correct that variability for these 
engines. See 67 FR 37569, May 29, 2002.
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    We are proposing to revise our CAA engine program to include two 
additional tiers of NO<INF>X</INF> standards for new marine diesel 
engines with per cylinder displacement at or above 30 liters (Category 
3 engines) installed on vessels flagged or registered in the United 
States. The proposed near-term Tier 2 standards would apply beginning 
in 2011 and would require more efficient use of engine technologies 
being used today, including engine timing, engine cooling, and advanced 
computer controls. The proposed long-term Tier 3 standards would apply 
beginning in 2016 and would require the use of high-efficiency 
aftertreatment technology such as selective catalytic reduction.
    Because much of the operation of U.S. vessels occurs in areas that 
would have little, if any, impact on U.S. air quality, we are proposing 
that our Clean Air Act program allow the use of alternative emission 
control devices (AECDs) that would permit a ship to meet less stringent 
requirements on the open sea. The use of these devices would be subject 
to certain restrictions, including a requirement that the AECD not 
disable emission controls while operating in areas where emissions 
could reasonably be expected to adversely affect U.S. air quality, and 
that the engine is equipped with a NO<INF>X</INF> emission monitoring 
device. In addition, the engine would be required to meet the Tier 2 
NO<INF>X</INF> limits when the AECD is implemented, and an AECD would 
not be allowed on any Tier 2 or earlier engine.
    In addition to the NO<INF>X</INF> emission limits, we are proposing 
standards for emissions of hydrocarbons (HC) and carbon monoxides (CO) 
from new Category 3 engines. As explained in

[[Page 44446]]

Section III.B.1, below, we are not proposing to set a standard for PM 
emissions for Category 3 engines. However, significant PM emissions 
benefits will be achieved through the ECA fuel sulfur requirements that 
will apply to ships that operate in areas that affect U.S. air quality. 
We are also proposing to require engine manufacturers to measure and 
report PM emissions pursuant to our authority in section 208 of the 
Act.
    Fuel Sulfur Limits. EPA is in this notice proposing fuel sulfur 
limits under section 211(c) of the Clean Air Act that match the limits 
that apply under Annex VI in ECAs. First, we are proposing to forbid 
the production and sale of fuel oil with a sulfur content above 1,000 
ppm for use in the waters within the proposed ECA (as well as internal 
U.S. waters). Second, we are proposing a revision to our existing 
diesel fuel program to allow for the production and sale of 1,000 ppm 
sulfur fuel for use in Category 3 marine vessels. This would allow 
production and distribution of fuel consistent with the new sulfur 
limits that will become applicable, under Annex VI, in ECAs beginning 
in 2015. Our current diesel fuel program sets a sulfur limit of 15 ppm 
that will be fully phased-in by December 1, 2014 for nonroad, 
locomotive, and marine (NRLM) diesel fuel produced for distribution/
sale and use in the U.S. Without this proposed change to our existing 
diesel fuel regulations, fuel with a sulfur content of up to 1,000 ppm 
could be used in C3 marine vessels, but it could not be legally 
produced in the U.S. after June 1, 2014.
(2) What is the United States Government Proposal for Designation of an 
Emission Control Area?
    MARPOL Annex VI contains the international standards for air 
emissions from ships, including NO<INF>X</INF> and SO<INF>X</INF> /PM 
emissions. The Annex VI NO<INF>X</INF> and SO<INF>X</INF> /PM limits 
are set out in Table I-1. Annex VI was originally adopted by the 
Parties in 1997 but did not go into force until 2005, after it was 
ratified by fifteen countries representing at least 50 percent of the 
world's merchant shipping tonnage. The initial program consisted of 
engine NO<INF>X</INF> emission standards and fuel sulfur limits. The 
NO<INF>X</INF> standards apply to all engines above 130 kW installed on 
a ship constructed on or after January 1, 2000 and were intended to 
reduce NO<INF>X</INF> emissions by about 30 percent from uncontrolled. 
There were two fuel sulfur limits: A global limit of 45,000 ppm and a 
more stringent 15,000 ppm limit that applies in SO<INF>X</INF> Emission 
Control Areas (SECAs). This approach ensured that the cleanest fuel was 
used in areas that demonstrated a need for additional SO<INF>X</INF> 
reductions, while retaining the ability of ships to use higher sulfur 
residual fuel on the open ocean.
    Annex VI was amended in October 2008, adding two tiers of 
NO<INF>X</INF> limits (Tier II and Tier III) and two sets of fuel 
sulfur standards.\5\ These amendments will enter into force on July 1, 
2010 unless an objection is raised before January 1, 2010 by at least 
one-third of the parties to the Annex or by parties that represent at 
least 50 percent of the world's gross merchant tonnage. The most 
stringent NO<INF>X</INF> and fuel sulfur limits are regionally based 
and will apply only in designated ECAs.
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    \5\ Note that the MARPOL Annex VI standards are referred to as 
Tiers I, II, and III; EPA's Category 3 emission standards are 
referred to as Tiers 1, 2, and 3.

                                           Table I--1--Annex VI NOX Emission Standards and Fuel Sulfur Limits
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Less than 130
                                                                                                RPM              130-2000 RPM \a\         Over 2000 RPM
--------------------------------------------------------------------------------------------------------------------------------------------------------
NOX.....................................  Tier I.....................          \b\ 2004              17.0       45.0 [middot] n(-0.20)               9.8
                                          Tier II....................              2011              14.4       44.0 [middot] n(-0.23)               7.7
                                          Tier III...................              2016               3.4        9.0 [middot] n(-0.20)               2.0
--------------------------------------------------------------------------------------------------------------------------------------------------------


--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Global
                                                                  ECA
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fuel Sulfur..............................              2004  45,000 ppm \c\................                         2005  15,000 ppm \c\
                                                       2012  35,000 ppm \c\................                         2010  10,000 ppm \c\
                                                       2020  5,000 ppm c d.................                         2015  1,000 ppm \c\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ Applicable standards are calculated from n (maximum in-use engine speed in revolutions per minute (rpm)), rounded to one decimal place.
\b\ Tier 1 NOX standards apply for engines originally manufactured after 2004, and proposed to also to certain earlier engines.
\c\ Annex VI standards are in terms of percent sulfur. Global sulfur limits are 4.5%; 3.5%; 0.5%. ECA sulfur limits are 1.5%; 1.0%; 0.1%.
\d\ Subject to a feasibility review in 2018; may be delayed to 2025.

    To realize the benefits from the MARPOL Annex VI Tier III 
NO<INF>X</INF> and fuel sulfur controls, areas must be designated as 
Emission Control Areas. On March 27, 2009, the U.S. and Canadian 
governments submitted a proposal to amend MARPOL Annex VI to designate 
North American coastal waters as an ECA (referred to as the ``U.S./
Canada ECA'' or the ``North American ECA'').\6\ A description of this 
submittal and the IMO approval process is set out in Section V. ECA 
designation would ensure that ships that affect U.S. air quality meet 
stringent NO<INF>X</INF> and fuel sulfur requirements while operating 
within 200 nautical miles of U.S. coasts. We expect the U.S./Canadian 
proposal will be adopted by the Parties to MARPOL Annex VI in March 
2010. If, however, the proposed amendment is not adopted in a timely 
manner, we intend to take supplemental action to control harmful 
emissions from vessels that affect U.S. air quality.
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    \6\ Proposal to Designate an Emission Control Area for Nitrogen 
Oxides, Sulphur Oxides and Particulate Matter, Submitted by the 
United States and Canada. IMO Document MEPC59/6/5, 27 March, 2009. A 
copy of this document can be found at http://www.epa.gov/otaq/regs/nonroad/marine/ci/mepc-59-eca-proposal.pdf.
---------------------------------------------------------------------------

(3) Regulations To Implement Annex VI
    The United States became a party to MARPOL Annex VI by depositing 
its instrument of ratification with IMO on October 8, 2008. This was 
preceded by the President signing into law the Maritime Pollution 
Prevention Act of 2008 (Pub. L. 110-280) on July 21, 2008, that 
contains amendments to the Act to Prevent Pollution from Ships (33 
U.S.C. 1901 et seq.). These APPS amendments require compliance with 
Annex VI by all persons subject to the engine and

[[Page 44447]]

vessel requirements of Annex VI. The amendments also authorize the 
United States Coast Guard and EPA to enforce the provisions of Annex VI 
against domestic and foreign vessels and to develop implementing 
regulations, as necessary. In addition, APPS gives EPA sole authority 
to certify engines installed on U.S. vessels to the Annex VI 
requirements. This NPRM contains proposed regulations to implement 
several aspects of the Annex VI engine and fuel regulations, which we 
are proposing under that APPS authority. Our cost and benefit analyses 
for the coordinated strategy includes the costs for U.S. vessels of 
implementing those provisions of the MARPOL Annex VI program that are 
in addition to the ECA requirements.
(4) Technical Amendments
    The proposed regulations also include technical amendments to our 
motor vehicle and nonroad engine regulations. Many of these changes 
involve minor adjustments or corrections to our recently finalized rule 
for new nonroad spark-ignition engines, or adjustment to other 
regulatory provisions to align with this recent final rule.
(5) Summary
    The coordinated strategy emission control requirements are the 
MARPOL Annex VI global Tier II NO<INF>X</INF> standards included in the 
amendments to Annex VI and the ECA Tier 3 NO<INF>X</INF> limits and 
fuel sulfur limits that will apply when the U.S. coasts are designated 
as an ECA through an additional amendment to Annex VI. The Annex VI 
requirements, including the future ECA requirements, will be 
enforceable for U.S. and foreign vessels operating in the United States 
waters through the Act to Prevent Pollution from Ships.
    We are also adopting the engine controls for Category 3 engines on 
U.S. vessels under our Clean Air Act program, as required by Section 
213 of the Act.
    Finally, we are proposing additional requirements that are not part 
of the Annex VI program or the ECA. These are: Limits on hydrocarbon 
and carbon monoxide emissions for Category 3 engines; PM measurement 
requirement, to obtain data on PM emissions from engines operating on 
distillate fuel; and changes to our Clean Air Act diesel fuel program 
to allow production and sale of ECA-compliant fuel. We are also 
considering changes to our emission control program for smaller marine 
diesel engines to harmonize with the Annex VI NO<INF>X</INF> 
requirements, for U.S. vessels that operate internationally.

B. Why is EPA Making This Proposal?

(1) OGV Contribute to Serious Air Quality Problems
    Ocean-going vessels subject to this proposal generate significant 
emissions of PM<INF>2.5</INF>, SO<INF>X</INF>, and NO<INF>X</INF> that 
contribute to nonattainment of the National Ambient Air Quality 
Standards (NAAQS) for PM<INF>2.5</INF> and ground-level ozone (smog). 
NO<INF>X</INF> and SO<INF>X</INF> are both precursors to secondary 
PM<INF>2.5</INF> formation. Both PM<INF>2.5</INF> and NO<INF>X</INF> 
adversely affect human health. NO<INF>X</INF> is a key precursor to 
ozone as well. NO<INF>X</INF>, SO<INF>X</INF> and PM<INF>2.5</INF> 
emissions from ocean-going vessels also cause harm to public welfare, 
including contributing to deposition of nitrogen and sulfur, visibility 
impairment and other harmful environmental impacts across the U.S.
    The health and environmental effects associated with these 
emissions are a classic example of a negative externality (an activity 
that imposes uncompensated costs on others). With a negative 
externality, an activity's social cost (the costs borne to society 
imposed as a result of the activity taking place) is not taken into 
account in the total cost of producing goods and services. In this 
case, as described in this section below and in Section II, emissions 
from ocean-going vessels impose public health and environmental costs 
on society, and these added costs to society are not reflected in the 
costs of providing the transportation services. The market system 
itself cannot correct this externality because firms in the market are 
rewarded for minimizing their production costs, including the costs of 
pollution control. In addition, firms that may take steps to use 
equipment that reduces air pollution may find themselves at a 
competitive disadvantage compared to firms that do not. To correct this 
market failure and reduce the negative externality from these 
emissions, we propose to set a cap on the rate of emission production 
from these sources. EPA's coordinated strategy for ocean-going vessels 
will accomplish this since both domestic and foreign ocean-going 
vessels will be required to reduce their emissions to a technologically 
feasible limit.
    Emissions from ocean-going vessels account for substantial portions 
of the country's ambient PM<INF>2.5</INF>, SO<INF>X</INF> and 
NO<INF>X</INF> levels. We estimate that in 2009 these engines account 
for about 80 percent of mobile source sulfur dioxide (SO<INF>2</INF>) 
emissions, 10 percent of mobile source NO<INF>X</INF> emissions and 
about 24 percent of mobile source diesel PM<INF>2.5</INF> emissions. 
Emissions from ocean-going vessels are expected to dominate the mobile 
source inventory in the future, due to both the expected emission 
reductions from other mobile sources as a result of more stringent 
emission controls and due to growth in the demand for ocean 
transportation services. By 2030, the coordinated strategy would reduce 
annual SO<INF>2</INF> emissions from these diesel engines by 1.3 
million tons, annual NO<INF>X</INF> emissions by 1.2 million tons, and 
PM<INF>2.5</INF> emissions by 143,000 tons, and those reductions would 
continue to grow beyond 2030 as fleet turnover to the clean engines 
continues. While a share of these emissions occur at sea, our air 
quality modeling results described in Section II show they have a 
significant impact on ambient air quality far inland.
    Both ozone and PM<INF>2.5</INF> are associated with serious public 
health problems, including premature mortality, aggravation of 
respiratory and cardiovascular disease (as indicated by increased 
hospital admissions and emergency room visits, school absences, lost 
work days, and restricted activity days), changes in lung function and 
increased respiratory symptoms, altered respiratory defense mechanisms, 
and chronic bronchitis. Diesel exhaust is of special public health 
concern, and since 2002 EPA has classified it as likely to be 
carcinogenic to humans by inhalation at environmental exposures. Recent 
studies are showing that populations living near large diesel emission 
sources such as major roadways, rail yards, and marine ports are likely 
to experience greater diesel exhaust exposure levels than the overall 
U.S. population, putting them at greater health risks.<SUP>7 8 9</SUP>
---------------------------------------------------------------------------

    \7\ U.S. EPA. (2004). Final Regulatory Impact Analysis: Control 
of Emissions from Nonroad Diesel Engines, Chapter 3. Report No. 
EPA420-R-04-007. http://www.epa.gov/nonroad-diesel/2004fr.htm#ria.
    \8\ State of California Air Resources Board. Roseville Rail Yard 
Study. Sacramento, CA: California EPA, California Air Resources 
Board (CARB). Stationary Source Division. This document is available 
electronically at: http://www.arb.ca.gov/diesel/documents/rrstudy.htm.
    \9\ Di, P., Servin, A., Rosenkranz, K., Schwehr, B., Tran, H., 
(2006). Diesel Particulate Matter Exposure Assessment Study for the 
Ports of Los Angeles and Long Beach. Sacramento, CA: California EPA, 
California Air Resources Board (CARB). Retrieved March 19, 2009 from 
http://www.arb.ca.gov/regact/marine2005/portstudy0406.pdf.
---------------------------------------------------------------------------

    EPA recently updated its initial screening-level analysis \10\ of 
selected marine port areas to better understand the populations that 
are exposed to diesel particulate matter emissions from

[[Page 44448]]

these facilities.<SUP>11 12 13 14</SUP> This screening-level analysis 
focused on a representative selection of national marine ports.\15\ Of 
the 45 marine ports selected, the results indicate that at least 18 
million people, including a disproportionate number of low-income 
households, African-Americans, and Hispanics, live in the vicinity of 
these facilities and are being exposed to ambient diesel PM levels that 
are 2.0 [mu] g/m\3\ and 0.2 [mu] g/m\3\ above levels found in areas 
further from these facilities. Considering only ocean-going marine 
engine diesel PM emissions, the results indicate that 6.5 million 
people are exposed to ambient diesel particulate matter (DPM) levels 
that are 2.0 [mu]g/m \3\ and 0.2 [mu] g/m\3\ above levels found in 
areas further from these facilities. Because those populations exposed 
to diesel PM emissions from marine ports are more likely to be low-
income and minority residents, these populations would benefit from the 
controls being proposed in this action. The detailed findings of this 
study are available in the public docket for this rulemaking.
---------------------------------------------------------------------------

    \10\ This type of screening-level analysis is an inexact tool 
and not appropriate for regulatory decision-making; it is useful in 
beginning to understand potential impacts and for illustrative 
purposes. Additionally, the emissions inventories used as inputs for 
the analyses are not official estimates and likely underestimate 
overall emissions because they are not inclusive of all emission 
sources at the individual ports in the sample.
    \11\ ICF International. September 28, 2007. Estimation of diesel 
particulate matter concentration isopleths for marine harbor areas 
and rail yards. Memorandum to EPA under Work Assignment Number 0-3, 
Contract Number EP-C-06-094. This memo is available in Docket EPA-
HQ-OAR-2007-0121.
    \12\ ICF International. September 28, 2007. Estimation of diesel 
particulate matter population exposure near selected harbor areas 
and rail yards. Memorandum to EPA under Work Assignment Number 0-3, 
Contract Number EP-C-06-094. This memo is available in Docket EPA-
HQ-OAR-2007-0121.
    \13\ ICF International, December 10, 2008. Estimation of diesel 
particulate matter population exposure near selected harbor areas 
with revised harbor emissions. Memorandum to EPA under Work 
Assignment Number 2-9. Contract Number EP-C-06-094. This memo is 
available in Docket EPA-HQ-OAR-2007-0121.
    \14\ ICF International. December 1, 2008. Estimation of diesel 
particulate matter concentration isopleths near selected harbor 
areas with revised emissions. Memorandum to EPA under Work 
Assignment Number 1-9. Contract Number EP-C-06-094. This memo is 
available in Docket EPA-HQ-OAR-2007-0121.
    \15\ The Agency selected a representative sample from the top 
150 U.S. ports including coastal and Great Lake ports.
---------------------------------------------------------------------------

    Even outside port areas, millions of Americans continue to live in 
areas that do not meet existing air quality standards today. With 
regard to PM<INF>2.5</INF> nonattainment, in 2005 EPA designated 39 
nonattainment areas for the 1997 PM<INF>2.5</INF> NAAQS (70 FR 943, 
January 5, 2005). These areas are composed of 208 full or partial 
counties with a total population exceeding 88 million. The 1997 
PM<INF>2.5</INF> NAAQS was recently revised and the 2006 
PM<INF>2.5</INF> NAAQS became effective on December 18, 2006. As of 
December 22, 2008, there are 58 2006 PM<INF>2.5</INF> nonattainment 
areas composed of 211 full or partial counties. These numbers do not 
include individuals living in areas that may fail to maintain or 
achieve the PM<INF>2.5</INF> NAAQS in the future. Currently, ozone 
concentrations exceeding the 8-hour ozone NAAQS occur over wide 
geographic areas, including most of the nation's major population 
centers. As of December 2008, there are approximately 132 million 
people living in 57 areas (293 full or partial counties) designated as 
not in attainment with the 8-hour ozone NAAQS. These numbers do not 
include people living in areas where there is a potential that the area 
may fail to maintain or achieve the 8-hour ozone NAAQS.
    In addition to public health impacts, there are serious public 
welfare and environmental impacts associated with PM<INF>2.5</INF> and 
ozone emissions. Specifically, NO<INF>X</INF> and SO<INF>X</INF> 
emissions from diesel engines contribute to the acidification, 
nitrification, and eutrophication of water bodies. NO<INF>X</INF>, 
SO<INF>X</INF> and direct emissions of PM<INF>2.5</INF> can contribute 
to the substantial impairment of visibility in many parts of the U.S. 
where people live, work, and recreate, including national parks, 
wilderness areas, and mandatory class I Federal areas.\16\ The 
deposition of airborne particles can also reduce the aesthetic appeal 
of buildings and culturally important articles through soiling, and can 
contribute directly (or in conjunction with other pollutants) to 
structural damage by means of corrosion or erosion. Finally, ozone 
causes damage to vegetation which leads to crop and forestry economic 
losses, as well as harm to national parks, wilderness areas, and other 
natural systems.
---------------------------------------------------------------------------

    \16\ These areas are defined in section 162 of the Act as those 
national parks exceeding 6,000 acres, wilderness areas and memorial 
parks exceeding 5,000 acres, and all international parks which were 
in existence on August 7, 1977. Section 169 of the Clean Air Act 
provides additional authority to address existing visibility 
impairment and prevent future visibility impairment in the 156 
national parks, forests and wilderness areas categorized as 
mandatory class I Federal areas.
---------------------------------------------------------------------------

    While EPA has already adopted many emission control programs that 
are expected to reduce ambient PM<INF>2.5</INF> and ozone levels, 
including the Nonroad Spark Ignition Engine rule (73 FR 59034, Oct. 8, 
2008), the Locomotive and Marine Diesel Engine Rule (73 FR 25098, May 
6, 2008), the Clean Air Interstate Rule (CAIR) (70 FR 25162, May 12, 
2005) and the Clean Air Nonroad Diesel Rule (69 FR 38957, June 29, 
2004), the Heavy Duty Engine and Vehicle Standards and Highway Diesel 
Fuel Sulfur Control Requirements (66 FR 5002, Jan. 18, 2001), and the 
Tier 2 Vehicle and Gasoline Sulfur Program (65 FR 6698, Feb. 10, 2000), 
the additional PM<INF>2.5</INF>, SO<INF>X</INF> and NO<INF>X</INF> 
emission reductions resulting from the coordinated approach described 
in this action would assist states in attaining and maintaining the 
PM<INF>2.5</INF> and ozone NAAQS near term and in the decades to come.
    Air quality modeling conducted by EPA projects that in 2020 at 
least 13 counties with about 30 million people may violate the 1997 
standards for PM<INF>2.5</INF> and 50 counties with about 50 million 
people may violate the 2008 standards for ozone. These numbers likely 
underestimate the impacted population since they do not include the 
people who live in areas which do not meet the 2006 PM<INF>2.5</INF> 
NAAQS. In addition, these numbers do not include the additional 13 
million people in 12 counties who live in areas that have air quality 
measurements within 10 percent of the 1997 PM<INF>2.5</INF> NAAQS and 
the additional 80 million people in 135 counties who live in areas that 
have air quality measurements within 10% of the 2008 ozone NAAQS. The 
emission reductions resulting from this coordinated strategy would 
assist these and other states to both attain and maintain the 
PM<INF>2.5</INF> and ozone NAAQS.
    State and local governments are working to protect the health of 
their citizens and comply with requirements of the Clean Air Act. As 
part of this effort, they recognize the need to secure additional major 
reductions in diesel PM<INF>2.5</INF>, SO<INF>X</INF> and 
NO<INF>X</INF> emissions by undertaking numerous state level actions, 
while also seeking Agency action, including the setting of the CAA 
Category 3 engine standards being proposed in this NPRM and the U.S. 
proposal to IMO to amend Annex VI to designate U.S. coastal areas as an 
ECA, and related CAA certification and fuel provisions to complement 
that ECA proposal. EPA's coordinated strategy to reduce OGV emissions 
through engine emission controls and fuel sulfur limits would play a 
critical part in state efforts to attain and maintain the NAAQS through 
the next two decades.
    In addition to regulatory programs, the Agency has a number of 
innovative programs that partner government, industry, and local 
communities together to help address challenging air quality problems. 
Under the National Clean Diesel Campaign, EPA promotes a variety of 
emission reduction strategies such as retrofitting, repairing, 
replacing and repowering engines, reducing idling and switching to 
cleaner fuels.
    In 2008, Congress appropriated funding for the Diesel Emissions

[[Page 44449]]

Reduction Program (DERA) under the Energy Policy Act of 2005 (EPAct 
2005) to reduce emissions from heavy-duty diesel engines in the 
existing fleet. The EPAct 2005 directs EPA to break the funding into 
two different components: A National competition and a State allocation 
program. The National Program, with 70 percent of the funding, consists 
of three separate competitions: (1) The National Clean Diesel Funding 
Assistance Program; (2) the National Clean Diesel Emerging Technologies 
Program; and (3) the SmartWay Clean Diesel Finance Program. The State 
Clean Diesel Grant and Loan Program utilizes the remaining 30 percent 
of the funding. In the first year of the program, EPA awarded 119 
grants totaling $49.2 million for diesel emissions reduction projects 
and programs across the country for cleaner fuels, verified 
technologies and certified engine configurations.
    Through $300 million in funding provided to the DERA program under 
the American Reinvestment and Recovery Act of 2009, EPA will promote 
and preserve jobs while improving public health and achieving 
significant reductions in diesel emissions.
    Furthermore, EPA's National Clean Diesel Campaign, through its 
Clean Ports USA program, is working with port authorities, terminal 
operators, shipping, truck and rail companies to promote cleaner diesel 
technologies and strategies today through education, incentives, and 
financial assistance for diesel emissions reductions at ports. Part of 
these efforts involves clean diesel programs that can further reduce 
emissions from the existing fleet of diesel engines. Finally, many of 
the companies operating in states and communities suffering from poor 
air quality have voluntarily entered into Memoranda of Understanding 
(MOUs) designed to ensure that the cleanest technologies are used first 
in regions with the most challenging air quality issues.
    In addition to the above innovative programs, we are seeking 
comment on a Voluntary Marine Verification Program to address emissions 
from existing Category 3 engines. This voluntary program would extend 
our existing diesel retrofit verification program to these largest 
marine vessels. The concept is described in Section IX.C.3 below.
    Taken together, these voluntary approaches can augment the 
coordinated strategy and help states and communities achieve larger 
reductions sooner in the areas of our country that need them the most. 
The Agency remains committed to furthering these programs and others so 
that all of our citizens can breathe clean healthy air.
(2) Advanced Emission Technology Solutions are Available
    Air pollution from marine diesel exhaust is a challenging problem. 
However, we believe it can be addressed effectively through the use of 
existing technology to reduce engine-out emissions combined with high-
efficiency catalytic aftertreatment technologies. As discussed in 
greater detail in Section III.C, the development of these 
aftertreatment technologies for highway and nonroad diesel applications 
has advanced rapidly in recent years, so that very large emission 
reductions in NO<INF>X</INF> emissions can be achieved.
    Control of NO<INF>X</INF> emissions from Category 3 engines can be 
achieved with high-efficiency exhaust emission control technologies. 
Such technologies have already been applied to meet our light-duty 
passenger car standards and are expected to be used to meet the 
stringent NO<INF>X</INF> standards included in EPA's heavy-duty highway 
diesel, nonroad Tier 4, and locomotive and marine diesel engine 
programs. They have been in production for heavy duty trucks in Europe 
since 2005, as well as in many stationary source applications 
throughout the world. These technologies are discussed further in 
Section III.C. While these technologies can be sensitive to sulfur, 
their use will be required only in ECAs designated under MARPOL Annex 
VI, and they are expected to be able to operate on ECA fuel meeting a 
1,000 ppm fuel sulfur. With the lead time available and the assurance 
of 1,000 ppm fuel for ocean-going vessels in 2015, as would be required 
through ECA designation for U.S. coasts, we are confident the proposed 
application of advanced NO<INF>X</INF> technology to Category 3 marine 
engines will proceed at a reasonable rate of progress and will result 
in systems capable of achieving the proposed standards on the proposed 
schedule. Use of this lower sulfur fuel will also result in substantial 
PM emission reductions, since most of the PM emissions from Category 3 
engines is due to the use of high sulfur residual fuel.

C. Statutory Basis for Action

    Authority for the actions proposed in this documents is granted to 
the Environmental Protection Agency by sections 114, 203, 205, 206, 
207, 208, 211, 213, 216, and 301(a) of the Clean Air Act as amended in 
1990 (42 U.S.C. 7414, 7522, 7524, 7525, 7541, 7542, 7545, 7547, 7550 
and 7601(a)), and by sections 1901-1915 of the Act to Prevent Pollution 
from Ships (33 U.S.C. 1909 et seq.).
(1) Clean Air Act Basis for Action
    EPA is proposing the fuel requirements pursuant to its authority in 
section 211 (c) of the Clean Air Act, which allow EPA to regulate fuels 
that contribute to air pollution which endangers public health or 
welfare (42 U.S.C. 7545(c)). As discussed previously in EPA's Clean Air 
Nonroad Diesel rule (69 FR 38958) and below in Section II of this 
preamble, the combustion of high sulfur diesel fuel by nonroad, 
locomotive, and marine diesel engines contributes to air quality 
problems that endanger public health and welfare. Section II also 
discusses the significant contribution to these air quality problems by 
Category 3 marine vessels. Additional support for the procedural and 
enforcement-related aspects of the fuel controls in the proposed rule, 
including the record keeping requirements, comes from sections 114(a) 
and 301(a) of the CAA (42 U.S.C. Sections 7414 (a) and 7601 (a)).
    EPA is proposing emissions standards for new Category 3 marine 
diesel engines pursuant to its authority under section 213(a)(3) of the 
Clean Air Act, which directs the Administrator to set standards 
regulating emissions of NO<INF>X</INF>, volatile organic compounds 
(VOCs), or CO for classes or categories of engines, like marine diesel 
engines, that contribute to ozone or carbon monoxide concentrations in 
more than one nonattainment area. These ``standards shall achieve the 
greatest degree of emission reduction achievable through the 
application of technology which the Administrator determines will be 
available for the engines or vehicles, giving appropriate consideration 
to cost, lead time, noise, energy, and safety factors associated with 
the application of such technology.''
    EPA is proposing a PM measurement requirement for new Category 3 
marine diesel engines pursuant to its authority under section 208, 
which requires manufacturers and other persons subject to Title II 
requirements to ``provide information the Administrator may reasonably 
require * * * to otherwise carry out the provisions of this part* * *''
    EPA is also acting under its authority to implement and enforce the 
Category 3 marine diesel emission standards. Section 213(d) provides 
that the standards EPA adopts for marine diesel engines ``shall be 
subject to Sections 206, 207, 208, and 209'' of the Clean Air Act, with 
such modifications that the Administrator deems appropriate to the

[[Page 44450]]

regulations implementing these sections.'' In addition, the marine 
standards ``shall be enforced in the same manner as [motor vehicle] 
standards prescribed under section 202'' of the Act. Section 213(d) 
also grants EPA authority to promulgate or revise regulations as 
necessary to determine compliance with and enforce standards adopted 
under section 213.
    As required under section 213(a)(3), we believe the evidence 
provided in Section III.C of this Preamble and in Chapter 4 of draft 
Regulatory Impact Analysis (RIA) indicates that the stringent 
NO<INF>X</INF> emission standards proposed in this NPRM for newly-built 
Category 3 marine diesel engines are feasible and reflect the greatest 
degree of emission reduction achievable through the use of technology 
that will be available in the model years to which they apply. We have 
given appropriate consideration to costs in proposing these standards. 
Our review of the costs and cost-effectiveness of these standards 
indicate that they will be reasonable and comparable to the cost-
effectiveness of other mobile source emission reduction strategies that 
have been required. We have also reviewed and given appropriate 
consideration to the energy factors of this rule in terms of fuel 
efficiency as well as any safety and noise factors associated with 
these proposed standards.
    The information in Section II of this preamble and Chapter 2 of the 
draft RIA regarding air quality and public health impacts provides 
strong evidence that emissions from Category 3 marine diesel engines 
significantly and adversely impact public health or welfare. EPA has 
already found in previous rules that emissions from new marine diesel 
engines contribute to ozone and CO concentrations in more than one area 
which has failed to attain the ozone and carbon monoxide NAAQS (64 FR 
73300, December 29, 1999).
    The NO<INF>X</INF> and PM emission reductions expected to be 
achieved through the coordinated strategy would be important to states' 
efforts to attain and maintain the Ozone and the PM<INF>2.5</INF> NAAQS 
in the near term and in the decades to come, and would significantly 
reduce the risk of adverse effects to human health and welfare.
(2) APPS Basis for Action
    EPA is proposing regulations to implement MARPOL Annex VI pursuant 
to its authority in section 1903 of the Act to Prevent Pollution from 
Ships (APPS). Section 1903 gives the Administrator the authority to 
prescribe any necessary or desired regulations to carry out the 
provisions of Regulations 12 through 19 of Annex VI.
    The Act to Prevent Pollution from Ships implements and makes Annex 
VI requirements enforceable domestically. However, certain 
clarifications are necessary with respect to implementing Regulation 13 
and the requirements of the NO<INF>X</INF> Technical Code with respect 
to issuance of Engine International Air Pollution Prevention (EIAPP) 
certificates, approval of alternative compliance methods. Clarification 
is also needed with respect to the application of the Annex VI 
requirements to certain U.S. and foreign vessels that operate in U.S. 
waters.

II. Air Quality, Health and Welfare Impacts

    The proposed NO<INF>X</INF> limits combined with the ECA 
designation for U.S. coasts and related proposed fuel standards are 
expected to significantly reduce emissions of NO<INF>X</INF>, PM, and 
SO<INF>X</INF> from ocean-going vessels. Emissions of these compounds 
contribute to nonattainment of the NAAQS for PM and ozone. In addition 
to contributing to PM nonattainment, these engines are emitting diesel 
particulate matter, which is associated with a host of adverse health 
effects, including cancer. In addition to their health effects, 
emissions from these engines also contribute to welfare and 
environmental effects including deposition, visibility impairment and 
harm to ecosystems from ozone.
    This section summarizes the general health and welfare effects of 
these emissions. Interested readers are encouraged to refer to the 
draft RIA for more in-depth discussions.

A. Public Health Impacts

(1) Particulate Matter
(a) Background
    Particulate matter is a generic term for a broad class of 
chemically and physically diverse substances. It can be principally 
characterized as discrete particles that exist in the condensed (liquid 
or solid) phase spanning several orders of magnitude in size. Since 
1987, EPA has delineated that subset of inhalable particles small 
enough to penetrate to the thoracic region (including the 
tracheobronchial and alveolar regions) of the respiratory tract 
(referred to as thoracic particles). Current NAAQS use PM<INF>2.5</INF> 
as the indicator for fine particles (with PM<INF>2.5</INF> referring to 
particles with a nominal mean aerodynamic diameter less than or equal 
to 2.5 [micro]m), and use PM<INF>10</INF> as the indicator for purposes 
of regulating the coarse fraction of PM<INF>10</INF> (referred to as 
thoracic coarse particles or coarse-fraction particles; generally 
including particles with a nominal mean aerodynamic diameter greater 
than 2.5 [micro]m and less than or equal to 10 [micro]m, or 
PM<INF>10-2.5</INF>). Ultrafine particles are a subset of fine 
particles, generally less than 100 nanometers (0.1 [mu]m) in 
aerodynamic diameter.
    Fine particles are produced primarily by combustion processes and 
by transformations of gaseous emissions (e.g., SO<INF>X</INF>, 
NO<INF>X</INF> and VOC) in the atmosphere. The chemical and physical 
properties of PM<INF>2.5</INF> may vary greatly with time, region, 
meteorology, and source category. Thus, PM<INF>2.5</INF> may include a 
complex mixture of different pollutants including sulfates, nitrates, 
organic compounds, elemental carbon and metal compounds. These 
particles can remain in the atmosphere for days to weeks and travel 
hundreds to thousands of kilometers.\17\
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    \17\ U.S. EPA. (2005). Review of the National Ambient Air 
Quality Standard for Particulate Matter: Policy Assessment of 
Scientific and Technical Information, OAQPS Staff Paper. EPA-452/R-
05-005a. Retrieved March 19, 2009 from http://www.epa.gov/ttn/naaqs/standards/pm/data/pmstaffpaper_20051221.pdf.
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(b) Health Effects of PM
    Scientific studies show ambient PM is associated with a series of 
adverse health effects. These health effects are discussed in detail in 
EPA's 2004 Particulate Matter Air Quality Criteria Document (PM AQCD) 
and the 2005 PM Staff Paper.\18\ Further discussion\19\ of health 
effects associated\20\ with PM can also be found in the draft RIA for 
this rule.
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    \18\ U.S. EPA (2004). Air Quality Criteria for Particulate 
Matter. Volume I EPA600/P-99/002aF and Volume II EPA600/P-99/002bF. 
Retrieved on March 19, 2009 from Docket EPA-HQ-OAR-2003-0190 at 
http://www.regulations.gov/.
    \19\ U.S. EPA. (2005). Review of the National Ambient Air 
Quality Standard for Particulate Matter: Policy Assessment of 
Scientific and Technical Information, OAQPS Staff Paper. EPA-452/R-
05-005a. Retrieved March 19, 2009 from http://www.epa.gov/ttn/naaqs/standards/pm/data/pmstaffpaper_20051221.pdf.
    \20\ The PM NAAQS is currently under review and the EPA is 
considering all available science on PM health effects, including 
information which has been published since 2004, in the development 
of the upcoming PM Integrated Science Assessment Document (ISA). A 
first draft of the PM ISA was completed in December 2008 and was 
submitted for review by the Clean Air Scientific Advisory Committee 
(CASAC) of EPA's Science Advisory Board. Comments from the general 
public have also been requested. For more information, see http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=201805.
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    Health effects associated with short-term exposures (hours to days) 
to ambient PM include premature mortality, aggravation of 
cardiovascular and lung disease (as indicated by increased hospital 
admissions and

[[Page 44451]]

emergency department visits), increased respiratory symptoms including 
cough and difficulty breathing, decrements in lung function, altered 
heart rate rhythm, and other more subtle changes in blood markers 
related to cardiovascular health.\21\ Long-term exposure to 
PM<INF>2.5</INF> and sulfates has also been associated with mortality 
from cardiopulmonary disease and lung cancer, and effects on the 
respiratory system such as reduced lung function growth or development 
of respiratory disease. A new analysis shows an association between 
long-term PM<INF>2.5</INF> exposure and a measure of atherosclerosis 
development.<SUP>22, 23</SUP>
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    \21\ U.S. EPA. (2006). National Ambient Air Quality Standards 
for Particulate Matter; Proposed Rule. 71 FR 2620, January 17, 2006.
    \22\ K[uuml]nzli, N., Jerrett, M., Mack, W.J., et al. (2004). 
Ambient air pollution and atherosclerosis in Los Angeles. Environ 
Health Perspect.,113, 201-206
    \23\ This study is included in the 2006 Provisional Assessment 
of Recent Studies on Health Effects of Particulate Matter Exposure. 
The provisional assessment did not and could not (given a very short 
timeframe) undergo the extensive critical review by CASAC and the 
public, as did the PM AQCD. The provisional assessment found that 
the ``new'' studies expand the scientific information and provide 
important insights on the relationship between PM exposure and 
health effects of PM. The provisional assessment also found that 
``new'' studies generally strengthen the evidence that acute and 
chronic exposure to fine particles and acute exposure to thoracic 
coarse particles are associated with health effects. Further, the 
provisional science assessment found that the results reported in 
the studies did not dramatically diverge from previous findings, and 
taken in context with the findings of the AQCD, the new information 
and findings did not materially change any of the broad scientific 
conclusions regarding the health effects of PM exposure made in the 
AQCD. However, it is important to note that this assessment was 
limited to screening, surveying, and preparing a provisional 
assessment of these studies. For reasons outlined in Section I.C of 
the preamble for the final PM NAAQS rulemaking in 2006 (see 71 FR 
61148-49, October 17, 2006), EPA based its NAAQS decision on the 
science presented in the 2004 AQCD.
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    Studies examining populations exposed over the long term (one or 
more years) to different levels of air pollution, including the Harvard 
Six Cities Study and the American Cancer Society Study, show 
associations between long-term exposure to ambient PM<INF>2.5</INF> and 
both total and cardiopulmonary premature mortality.\24\ In 
addition\25\, an extension\26\ of the American Cancer Society Study 
shows an association between PM<INF>2.5</INF> and sulfate 
concentrations and lung cancer mortality.\27\
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    \24\ Dockery, D.W., Pope, C.A. III, Xu, X, et al. (1993). An 
association between air pollution and mortality in six U.S. cities. 
N Engl J Med, 329, 1753-1759. Retrieved on March 19, 2009 from 
http://content.nejm.org/cgi/content/full/329/24/1753.
    \25\ Pope, C.A., III, Thun, M.J., Namboodiri, M.M., Dockery, 
D.W., Evans, J.S., Speizer, F.E., and Heath, C.W., Jr. (1995). 
Particulate air pollution as a predictor of mortality in a 
prospective study of U.S. adults. Am. J. Respir. Crit. Care Med, 
151, 669-674.
    \26\ Krewski, D., Burnett, R.T., Goldberg, M.S., et al. (2000). 
Reanalysis of the Harvard Six Cities study and the American Cancer 
Society study of particulate air pollution and mortality. A special 
report of the Institute's Particle Epidemiology Reanalysis Project. 
Cambridge, MA: Health Effects Institute. Retrieved on March 19, 2009 
from http://es.epa.gov/ncer/science/pm/hei/Rean-ExecSumm.pdf.
    \27\ Pope, C. A., III, Burnett, R.T., Thun, M. J., Calle, E.E., 
Krewski, D., Ito, K., Thurston, G.D., (2002). Lung cancer, 
cardiopulmonary mortality, and long-term exposure to fine 
particulate air pollution. J. Am. Med. Assoc., 287, 1132-1141.
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(c) Health Effects of Diesel Particulate Matter
    Marine diesel engines emit diesel exhaust (DE), a complex mixture 
composed of carbon dioxide, oxygen, nitrogen, water vapor, carbon 
monoxide, nitrogen compounds, sulfur compounds and numerous low-
molecular-weight hydrocarbons. A number of these gaseous hydrocarbon 
components are individually known to be toxic, including aldehydes, 
benzene and 1,3-butadiene. The diesel particulate matter (DPM) present 
in DE consists of fine particles (< 2.5 [micro]m), including a subgroup 
with a large number of ultrafine particles (< 0.1 [micro]m). These 
particles have a large surface area which makes them an excellent 
medium for adsorbing organics and their small size makes them highly 
respirable. Many of the organic compounds present in the gases and on 
the particles, such as polycyclic organic matter (POM), are 
individually known to have mutagenic and carcinogenic properties. 
Diesel exhaust varies significantly in chemical composition and 
particle sizes between different engine types (heavy-duty, light-duty), 
engine operating conditions (idle, accelerate, decelerate), and fuel 
formulations (high/low sulfur fuel). Also, there are emissions 
differences between on-road and nonroad engines because the nonroad 
engines are generally of older technology. This is especially true for 
marine diesel engines.\28\
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    \28\ U.S. EPA (2002). Health Assessment Document for Diesel 
Engine Exhaust. EPA/600/8-90/057F Office of Research and 
Development, Washington DC. Retrieved on March 17, 2009 from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=29060. pp. 1-1 1-2.
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    After being emitted in the engine exhaust, diesel exhaust undergoes 
dilution as well as chemical and physical changes in the atmosphere. 
The lifetime for some of the compounds present in diesel exhaust ranges 
from hours to days.\29\
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    \29\ U.S. EPA (2002). Health Assessment Document for Diesel 
Engine Exhaust. EPA/600/8-90/057F Office of Research and 
Development, Washington DC. Retrieved on March 17, 2009 from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=29060.
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(i) Diesel Exhaust: Potential Cancer Effects
    In EPA's 2002 Diesel Health Assessment Document (Diesel HAD),\30\ 
exposure to diesel exhaust was classified as likely to be carcinogenic 
to humans by inhalation from environmental exposures, in accordance 
with the revised draft 1996/1999 EPA cancer guidelines. A number of 
other agencies (National Institute for Occupational Safety and Health, 
the International Agency for Research on Cancer, the World Health 
Organization, California EPA, and the U.S. Department of Health and 
Human Services) have made similar classifications. However, EPA also 
concluded in the Diesel HAD that it is not possible currently to 
calculate a cancer unit risk for diesel exhaust due to a variety of 
factors that limit the current studies, such as limited quantitative 
exposure histories in occupational groups investigated for lung cancer.
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    \30\ U.S. EPA (2002). Health Assessment Document for Diesel 
Engine Exhaust. EPA/600/8-90/057F Office of Research and 
Development, Washington DC. Retrieved on March 17, 2009 from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=29060. pp. 1-1 1-2.
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    For the Diesel HAD, EPA reviewed 22 epidemiologic studies on the 
subject of the carcinogenicity of workers exposed to diesel exhaust in 
various occupations, finding increased lung cancer risk, although not 
always statistically significant, in 8 out of 10 cohort studies and 10 
out of 12 case-control studies within several industries. Relative risk 
for lung cancer associated with exposure ranged from 1.2 to 1.5, 
although a few studies show relative risks as high as 2.6. 
Additionally, the Diesel HAD also relied on two independent meta-
analyses, which examined 23 and 30 occupational studies respectively, 
which found statistically significant increases in smoking-adjusted 
relative lung cancer risk associated with exposure to diesel exhaust of 
1.33 to 1.47. These meta-analyses demonstrate the effect of pooling 
many studies and in this case show the positive relationship between 
diesel exhaust exposure and lung cancer across a variety of diesel 
exhaust-exposed occupations.<SUP>31,32</SUP>
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    \31\ Bhatia, R., Lopipero, P., Smith, A. (1998). Diesel exposure 
and lung cancer. Epidemiology, 9(1), 84-91.
    \32\ Lipsett, M., Campleman, S. (1999). Occupational exposure to 
diesel exhaust and lung cancer: a meta-analysis. Am J Public Health, 
80(7), 1009-1017.
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    In the absence of a cancer unit risk, the Diesel HAD sought to 
provide additional insight into the significance of the diesel exhaust-
cancer hazard by

[[Page 44452]]

estimating possible ranges of risk that might be present in the 
population. An exploratory analysis was used to characterize a possible 
risk range by comparing a typical environmental exposure level for 
highway diesel sources to a selected range of occupational exposure 
levels. The occupationally observed risks were then proportionally 
scaled according to the exposure ratios to obtain an estimate of the 
possible environmental risk. A number of calculations are needed to 
accomplish this, and these can be seen in the EPA Diesel HAD. The 
outcome was that environmental risks from diesel exhaust exposure could 
range from a low of 10<SUP>-4</SUP> to 10<SUP>-5</SUP> to as high as 
10<SUP>-3</SUP>, reflecting the range of occupational exposures that 
could be associated with the relative and absolute risk levels observed 
in the occupational studies. Because of uncertainties, the analysis 
acknowledged that the risks could be lower than 10<SUP>-4</SUP> or 
10<SUP>-5</SUP>, and a zero risk from diesel exhaust exposure was not 
ruled out.
(ii) Diesel Exhaust: Other Health Effects
    Noncancer health effects of acute and chronic exposure to diesel 
exhaust emissions are also of concern to the EPA. EPA derived a diesel 
exhaust reference concentration (RfC) from consideration of four well-
conducted chronic rat inhalation studies showing adverse pulmonary 
effects.\33,34,35,36\ The RfC is 5 [mu]g/m \3\ for diesel exhaust as 
measured by DPM. This RfC does not consider allergenic effects such as 
those associated with asthma or immunologic effects. There is growing 
evidence, discussed in the Diesel HAD, that exposure to diesel exhaust 
can exacerbate these effects, but the exposure-response data are 
presently lacking to derive an RfC. The EPA Diesel HAD states, ``With 
DPM [diesel particulate matter] being a ubiquitous component of ambient 
PM, there is an uncertainty about the adequacy of the existing DE 
[diesel exhaust] noncancer database to identify all of the pertinent 
DE-caused noncancer health hazards.'' (p. 9-19). The Diesel HAD 
concludes ``that acute exposure to DE [diesel exhaust] has been 
associated with irritation of the eye, nose, and throat, respiratory 
symptoms (cough and phlegm), and neurophysiological symptoms such as 
headache, lightheadedness, nausea, vomiting, and numbness or tingling 
of the extremities.''\37\
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    \33\ Ishinishi, N. Kuwabara, N. Takaki, Y., et al. (1988) Long-
term inhalation experiments on diesel exhaust. In: Diesel exhaust 
and health risks. Results of the HERP studies. Ibaraki, Japan: 
Research Committee for HERP Studies; pp. 11-84.
    \34\ Henrich, U., Fuhst, R., Rittinghausen, S., et al. (1995). 
Chronic inhalation exposure of Wistar rats and two different strains 
of mice to diesel engine exhaust, carbon black, and titanium 
dioxide. Inhal Toxicol, 7, 553-556.
    \35\ Mauderly, J.L., Jones, R.K., Griffith, W.C., et al. (1987). 
Diesel exhaust is a pulmonary carcinogen in rats exposted 
chronically by inhalation. Fundam. Appl. Toxicol., 9, 208-221.
    \36\ Nikula, K.J., Snipes, M.B., Barr, E.B., et al. (1995). 
Comparative pulmonary toxicities and carcinogenicities of 
chronically inhaled diesel exhaust and carbon black in F344 rats. 
Fundam. Appl. Toxicol, 25, 80-94.
    \37\ U.S. EPA (2002). Health Assessment Document for Diesel 
Engine Exhaust. EPA/600/8-90/057F Office of Research and 
Development, Washington DC. Retrieved on March 17, 2009 from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=29060. p. 9-9.
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(iii) Ambient PM<INF>2.5</INF> Levels and Exposure to Diesel Exhaust PM
    The Diesel HAD also briefly summarizes health effects associated 
with ambient PM and discusses the EPA's annual PM<INF>2.5</INF> NAAQS 
of 15 [mu]g/m \3\. There is a much more extensive body of human data 
showing a wide spectrum of adverse health effects associated with 
exposure to ambient PM, of which diesel exhaust is an important 
component. The PM<INF>2.5</INF> NAAQS is designed to provide protection 
from the noncancer and premature mortality effects of PM<INF>2.5</INF> 
as a whole.
(iv) Diesel Exhaust PM Exposures
    Exposure of people to diesel exhaust depends on their various 
activities, the time spent in those activities, the locations where 
these activities occur, and the levels of diesel exhaust pollutants in 
those locations. The major difference between ambient levels of diesel 
particulate and exposure levels for diesel particulate is that exposure 
accounts for a person moving from location to location, proximity to 
the emission source, and whether the exposure occurs in an enclosed 
environment.
Occupational Exposures
    Occupational exposures to diesel exhaust from mobile sources, 
including marine diesel engines, can be several orders of magnitude 
greater than typical exposures in the non-occupationally exposed 
population.
    Over the years, diesel particulate exposures have been measured for 
a number of occupational groups. A wide range of exposures have been 
reported, from 2 [mu]g/m \3\ to 1,280 [mu]g/m \3\, for a variety of 
occupations. As discussed in the Diesel HAD, the National Institute of 
Occupational Safety and Health (NIOSH) has estimated a total of 
1,400,000 workers are occupationally exposed to diesel exhaust from on-
road and nonroad vehicles including marine diesel engines.
Elevated Concentrations and Ambient Exposures in Mobile Source-Impacted 
Areas
    Regions immediately downwind of marine ports may experience 
elevated ambient concentrations of directly-emitted PM<INF>2.5</INF> 
from diesel engines. Due to the unique nature of marine ports, 
emissions from a large number of diesel engines are concentrated in a 
small area.
    A 2006 study from the California Air Resources Board (CARB) 
evaluated air quality impacts of diesel engine emissions within the 
Ports of Long Beach and Los Angeles in California, one of the largest 
ports in the U.S.\38\ The port study employed the ISCST3 dispersion 
model. With local meteorological data used in the modeling, annual 
average concentrations were substantially elevated over an area 
exceeding 200,000 acres. Because the ports are located near heavily-
populated areas, the modeling indicated that over 700,000 people lived 
in areas with at least 0.3 [mu]g/m \3\ of port-related diesel PM in 
ambient air, about 360,000 people lived in areas with at least 0.6 
[mu]g/m \3\ of diesel PM, and about 50,000 people lived in areas with 
at least 1.5 [mu]g/m \3\, of ambient diesel PM directly from the port. 
This study highlights the substantial contribution ports can make to 
elevated ambient concentrations in populated areas.
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    \38\ Di, P., Servin, A., Rosenkranz, K., Schwehr, B., Tran, H., 
(2006). Diesel Particulate Matter Exposure Assessment Study for the 
Ports of Los Angeles and Long Beach. Sacramento, CA: California EPA, 
California Air Resources Board (CARB). Retrieved March 19, 2009 from 
http://www.arb.ca.gov/regact/marine2005/portstudy0406.pdf.
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    EPA recently updated its initial screening-level analysis of a 
representative selection of national marine port areas to better 
understand the populations that are exposed to DPM emissions from these 
facilities.<SUP>39, 40, 41, 42</SUP> As part of this study,

[[Page 44453]]

a computer geographic information system (GIS) was used to identify the 
locations and property boundaries of 45 marine ports.\43\ Census 
information was used to estimate the size and demographic 
characteristics of the population living in the vicinity of the ports. 
The results indicate that at least 18 million people, including a 
disproportionate number of low-income households, African-Americans, 
and Hispanics, live in the vicinity of these facilities and are being 
exposed to ambient DPM levels that are 2.0 [mu]g/m \3\ and 0.2 [mu]g/m 
\3\ above levels found in areas further from these facilities. These 
populations will benefit from the combination of the proposed CAA 
standards along with ECA designations through MARPOL Annex VI. This 
study is discussed in greater detail in Chapter 2 of the draft RIA and 
detailed findings of this study are available in the public docket for 
this rulemaking.
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    \39\ ICF International. September 28, 2007. Estimation of diesel 
particulate matter concentration isopleths for marine harbor areas 
and rail yards. Memorandum to EPA under Work Assignment Number 0-3, 
Contract Number EP-C-06-094. This memo is available in Docket EPA-
HQ-OAR-2007-0121.
    \40\ ICF International. September 28, 2007. Estimation of diesel 
particulate matter population exposure near selected harbor areas 
and rail yards. Memorandum to EPA under Work Assignment Number 0-3, 
Contract Number EP-C-06-094. This memo is available in Docket EPA-
HQ-OAR-2007-0121.
    \41\ ICF International, December 10, 2008. Estimation of diesel 
particulate matter population exposure near selected harbor areas 
with revised harbor emissions. Memorandum to EPA under Work 
Assignment Number 2-9. Contract Number EP-C-06-094. This memo is 
available in Docket EPA-HQ-OAR-2007-0121.
    \42\ ICF International. December 1, 2008. Estimation of diesel 
particulate matter concentration isopleths near selected harbor 
areas with revised emissions. Memorandum to EPA under Work 
Assignment Number 1-9. Contract Number EP-C-06-094. This memo is 
available in Docket EPA-HQ-OAR-2007-0121.
    \43\ The Agency selected a representative sample from the top 
150 U.S. ports including coastal, inland, and Great Lake ports.
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(2) Ozone
(a) Background
    Ground-level ozone pollution is typically formed by the reaction of 
VOC and NO<INF>X</INF> in the lower atmosphere in the presence of heat 
and sunlight. These pollutants, often referred to as ozone precursors, 
are emitted by many types of pollution sources, such as highway and 
nonroad motor vehicles and engines, power plants, chemical plants, 
refineries, makers of consumer and commercial products, industrial 
facilities, and smaller area sources.
    The science of ozone formation, transport, and accumulation is 
complex.\44\ Ground-level ozone is produced and destroyed in a cyclical 
set of chemical reactions, many of which are sensitive to temperature 
and sunlight. When ambient temperatures and sunlight levels remain high 
for several days and the air is relatively stagnant, ozone and its 
precursors can build up and result in more ozone than typically occurs 
on a single high-temperature day. Ozone can be transported hundreds of 
miles downwind from precursor emissions, resulting in elevated ozone 
levels even in areas with low local VOC or NO<INF>X</INF> emissions.
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    \44\ U.S. EPA. (2006). Air Quality Criteria for Ozone and 
Related Photochemical Oxidants (Final). EPA/600/R-05/004aF-cF. 
Washington, DC: U.S. EPA. Retrieved on March 19, 2009 from Docket 
EPA-HQ-OAR-2003-0190 at http://www.regulations.gov/.
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(b) Health Effects of Ozone
    The health and welfare effects of ozone are well documented and are 
assessed in EPA's 2006 Air Quality Criteria Document (ozone AQCD) and 
2007 Staff Paper.<SUP>45,46</SUP> Ozone can irritate the respiratory 
system, causing coughing, throat irritation, and/or uncomfortable 
sensation in the chest. Ozone can reduce lung function and make it more 
difficult to breathe deeply; breathing may also become more rapid and 
shallow than normal, thereby limiting a person's activity. Ozone can 
also aggravate asthma, leading to more asthma attacks that require 
medical attention and/or the use of additional medication. In addition, 
there is suggestive evidence of a contribution of ozone to 
cardiovascular-related morbidity and highly suggestive evidence that 
short-term ozone exposure directly or indirectly contributes to non-
accidental and cardiopulmonary-related mortality, but additional 
research is needed to clarify the underlying mechanisms causing these 
effects. In a recent report on the estimation of ozone-related 
premature mortality published by the National Research Council (NRC), a 
panel of experts and reviewers concluded that short-term exposure to 
ambient ozone is likely to contribute to premature deaths and that 
ozone-related mortality should be included in estimates of the health 
benefits of reducing ozone exposure.\47\ Animal toxicological evidence 
indicates that with repeated exposure, ozone can inflame and damage the 
lining of the lungs, which may lead to permanent changes in lung tissue 
and irreversible reductions in lung function. People who are more 
susceptible to effects associated with exposure to ozone can include 
children, the elderly, and individuals with respiratory disease such as 
asthma. Those with greater exposures to ozone, for instance due to time 
spent outdoors (e.g., children and outdoor workers), are of particular 
concern.
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    \45\ U.S. EPA. (2006). Air Quality Criteria for Ozone and 
Related Photochemical Oxidants (Final). EPA/600/R-05/004aF-cF. 
Washington, DC: U.S. EPA. Retrieved on March 19, 2009 from Docket 
EPA-HQ-OAR-2003-0190 at http://www.regulations.gov/.
    \46\ U.S. EPA (2007). Review of the National Ambient Air Quality 
Standards for Ozone: Policy Assessment of Scientific and Technical 
Information, OAQPS Staff Paper. EPA-452/R-07-003. Washsington, DC, 
U.S. EPA. Retrieved on March 19, 2009 from Docket EPA-HQ-OAR-2003-
0190 at http://www.regulations.gov/.
    \47\ National Research Council (NRC), 2008. Estimating Mortality 
Risk Reduction and Economic Benefits from Controlling Ozone Air 
Pollution. The National Academies Press: Washington, DC.
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    The 2006 ozone AQCD also examined relevant new scientific 
information that has emerged in the past decade, including the impact 
of ozone exposure on such health effects as changes in lung structure 
and biochemistry, inflammation of the lungs, exacerbation and causation 
of asthma, respiratory illness-related school absence, hospital 
admissions and premature mortality. Animal toxicological studies have 
suggested potential interactions between ozone and PM with increased 
responses observed to mixtures of the two pollutants compared to either 
ozone or PM alone. The respiratory morbidity observed in animal studies 
along with the evidence from epidemiologic studies supports a causal 
relationship between acute ambient ozone exposures and increased 
respiratory-related emergency room visits and hospitalizations in the 
warm season. In addition, there is suggestive evidence of a 
contribution of ozone to cardiovascular-related morbidity and non-
accidental and cardiopulmonary mortality.
(3) NO<INF>X</INF> and SO<INF>X</INF>
(a) Background
    Nitrogen dioxide (NO<INF>2</INF>) is a member of the NO<INF>X</INF> 
family of gases. Most NO<INF>2</INF> is formed in the air through the 
oxidation of nitric oxide (NO) emitted when fuel is burned at a high 
temperature. SO<INF>2</INF>, a member of the sulfur oxide 
(SO<INF>X</INF>) family of gases, is formed from burning fuels 
containing sulfur (e.g., coal or oil derived), extracting gasoline from 
oil, or extracting metals from ore.
    SO<INF>2</INF> and NO<INF>2</INF> can dissolve in water vapor and 
further oxidize to form sulfuric and nitric acid which react with 
ammonia to form sulfates and nitrates, both of which are important 
components of ambient PM. The health effects of ambient PM are 
discussed in Section II.A.1 of this preamble. NO<INF>X</INF> along with 
non-methane hydrocarbon (NMHC) are the two major precursors of ozone. 
The health effects of ozone are covered in Section II.A.2.
(b) Health Effects of NO<INF>X</INF>
    Information on the health effects of NO<INF>2</INF> can be found in 
the U.S. Environmental Protection Agency Integrated Science Assessment 
(ISA) for Nitrogen Oxides.\48\ The U.S. EPA has

[[Page 44454]]

concluded that the findings of epidemiologic, controlled human 
exposure, and animal toxicological studies provide evidence that is 
sufficient to infer a likely causal relationship between respiratory 
effects and short-term NO<INF>2</INF> exposure. The ISA concludes that 
the strongest evidence for such a relationship comes from epidemiologic 
studies of respiratory effects including symptoms, emergency department 
visits, and hospital admissions. The ISA also draws two broad 
conclusions regarding airway responsiveness following NO<INF>2</INF> 
exposure. First, the ISA concludes that NO<INF>2</INF> exposure may 
enhance the sensitivity to allergen-induced decrements in lung function 
and increase the allergen-induced airway inflammatory response at 
exposures as low as 0.26 ppm NO<INF>2</INF> for 30 minutes. Second, 
exposure to NO<INF>2</INF> has been found to enhance the inherent 
responsiveness of the airway to subsequent nonspecific challenges in 
controlled human exposure studies of asthmatic subjects. Enhanced 
airway responsiveness could have important clinical implications for 
asthmatics since transient increases in airway responsiveness following 
NO<INF>2</INF> exposure have the potential to increase symptoms and 
worsen asthma control. Together, the epidemiologic and experimental 
data sets form a plausible, consistent, and coherent description of a 
relationship between NO<INF>2</INF> exposures and an array of adverse 
health effects that range from the onset of respiratory symptoms to 
hospital admission.
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    \48\ U.S. EPA (2008). Integrated Science Assessment for Oxides 
of Nitrogen--Health Criteria (Final Report). EPA/600/R-08/071. 
Washington, DC: U.S.EPA. Retrieved on March 19, 2009 from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=194645.
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    Although the weight of evidence supporting a causal relationship is 
somewhat less certain than that associated with respiratory morbidity, 
NO<INF>2</INF> has also been linked to other health endpoints. These 
include all-cause (nonaccidental) mortality, hospital admissions or 
emergency department visits for cardiovascular disease, and decrements 
in lung function growth associated with chronic exposure.
(c) Health Effects of SO<INF>X</INF>
    Information on the health effects of SO<INF>2</INF> can be found in 
the U.S. Environmental Protection Agency Integrated Science Assessment 
for Sulfur Oxides.\49\ SO<INF>2</INF> has long been known to cause 
adverse respiratory health effects, particularly among individuals with 
asthma. Other potentially sensitive groups include children and the 
elderly. During periods of elevated ventilation, asthmatics may 
experience symptomatic bronchoconstriction within minutes of exposure. 
Following an extensive evaluation of health evidence from epidemiologic 
and laboratory studies, the EPA has concluded that there is a causal 
relationship between respiratory health effects and short-term exposure 
to SO<INF>2</INF>. Separately, based on an evaluation of the 
epidemiologic evidence of associations between short-term exposure to 
SO<INF>2</INF> and mortality, the EPA has concluded that the overall 
evidence is suggestive of a causal relationship between short-term 
exposure to SO<INF>2</INF> and mortality.
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    \49\ U.S. EPA. (2008). Integrated Science Assessment (ISA) for 
Sulfur Oxides--Health Criteria (Final Report). EPA/600/R-08/047F. 
Washington, DC: U.S. Environmental Protection Agency. Retrieved on 
March 18, 2009 from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=198843
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B. Environmental Impacts

(1) Deposition of Nitrogen and Sulfur
    Emissions of NO<INF>X</INF> and SO<INF>X</INF> from ships 
contribute to atmospheric deposition of nitrogen and sulfur in the U.S. 
Atmospheric deposition of nitrogen and sulfur contributes to 
acidification, altering biogeochemistry and affecting animal and plant 
life in terrestrial and aquatic ecosystems across the U.S. The 
sensitivity of terrestrial and aquatic ecosystems to acidification from 
nitrogen and sulfur deposition is predominantly governed by geology. 
Prolonged exposure to excess nitrogen and sulfur deposition in 
sensitive areas acidifies lakes, rivers and soils. Increased acidity in 
surface waters creates inhospitable conditions for biota and affects 
the abundance and nutritional value of preferred prey species, 
threatening biodiversity and ecosystem function. Over time, acidifying 
deposition also removes essential nutrients from forest soils, 
depleting the capacity of soils to neutralize future acid loadings and 
negatively affecting forest sustainability. Major effects include a 
decline in sensitive forest tree species, such as red spruce (Picea 
rubens) and sugar maple (Acer saccharum), and a loss of biodiversity of 
fishes, zooplankton, and macro invertebrates.
    In addition to the role nitrogen deposition plays in acidification, 
nitrogen deposition also causes ecosystem nutrient enrichment leading 
to eutrophication that alters biogeochemical cycles. Excess nitrogen 
also leads to the loss of nitrogen sensitive lichen species as they are 
outcompeted by invasive grasses as well as altering the biodiversity of 
terrestrial ecosystems, such as grasslands and meadows. Nitrogen 
deposition contributes to eutrophication of estuaries and the 
associated effects including toxic algal blooms and fish kills. For a 
broader explanation of the topics treated here, refer to the 
description in Section 2.3.1 of the draft RIA.
    There are a number of important quantified relationships between 
nitrogen deposition levels and ecological effects. Certain lichen 
species are the most sensitive terrestrial taxa to nitrogen with 
species losses occurring at just 3 kg N/ha/yr in the Pacific Northwest, 
southern California and Alaska. A United States Forest Service study 
conducted in areas within the Tongass Forest in Southeast Alaska found 
evidence of sulfur emissions impacting lichen communities.\50\ The 
authors concluded that the main source of nitrogen and sulfur found in 
lichens from Mt. Roberts (directly north of the City of Juneau in 
southeastern Alaska) is likely the burning of fossil fuels by cruise 
ships and other vehicles and equipment in Juneau.
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    \50\ Dillman, K., Geiser, L., & Brenner, G. (2007). Air Quality 
Bio-Monitoring with Lichens. The Togass National Forest. USDA Forest 
Service. Retrieved March 18, 2009 from http://gis.nacse.org/lichenair/?page=reports.
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    Lichen are an important food source for caribou. This is causing 
concern about the potential role damage to lichens may be having on the 
Southern Alaska Peninsula Caribou Herd, which is an important food 
source to local subsistence-based cultures. This herd has been 
decreasing in size, exhibiting both poor calf survival and low 
pregnancy rates, which are signs of dietary stress. Currently, there is 
a complete caribou hunting ban, including a ban on subsistence hunting.
    Across the U.S., there are many terrestrial and aquatic ecosystems 
that have been identified as particularly sensitive to nitrogen 
deposition. The most extreme effects resulting from nitrogen deposition 
on aquatic ecosystems are due to nitrogen enrichment which contributes 
to ``hypoxic'' zones devoid of life. Three hypoxia zones of special 
concern in the U.S. are the zones located in the Gulf of Mexico, the 
Chesapeake Bay in the mid-Atlantic region, and Long Island Sound in the 
northeast U.S.\51\
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    \51\ U.S. EPA. (2008). Nitrogen Dioxide/Sulfur Dioxide Secondary 
NAAQS Review: Integrated Science Assessment (ISA). Washington, DC: 
U.S. Environmental Protection Agency. Retrieved on March 18, 2009 
from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=180903
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(2) Deposition of Particulate Matter and Air Toxics
    The combination of the proposed CAA NO<INF>X</INF> standards along 
with ECA designation through amendment to MARPOL Annex VI would reduce 
NO<INF>X</INF>, SO<INF>X</INF>, and PM<INF>2.5</INF> emissions from 
ships.

[[Page 44455]]

Ship emissions of PM<INF>2.5</INF> contain small amounts of metals: 
nickel, vanadium, cadmium, iron, lead, copper, zinc, 
aluminum.<SUP>52 53 54</SUP> Investigations of trace metals near 
roadways and industrial facilities indicate that a substantial burden 
of heavy metals can accumulate on vegetative surfaces. Copper, zinc, 
and nickel are directly toxic to vegetation under field conditions.\55\ 
While metals typically exhibit low solubility, limiting their 
bioavailability and direct toxicity, chemical transformations of metal 
compounds occur in the environment, particularly in the presence of 
acidic or other oxidizing species. These chemical changes influence the 
mobility and toxicity of metals in the environment. Once taken up into 
plant tissue, a metal compound can undergo chemical changes, accumulate 
and be passed along to herbivores, or can re-enter the soil and further 
cycle in the environment.
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    \52\ Agrawal H., Malloy Q.G.J., Welch W.A., Wayne Miller J., 
Cocker III D.R. (2008) In-use gaseous and particulate matter 
emissions from a modern ocean going container vessel. Atmospheric 
Environment, 42(21), 5504-5510.
    \53\ Miller, W., et al. (2008 June 10). Measuring Emissions from 
Ocean Going Vessels. Presentation presented at the Fuel, Engines, 
and Control Devices Workshop, San Pedro, California.
    \54\ Isakson J., Persson T.A., E. Selin Lindgren E. (2001) 
Identification and assessment of ship emissions and their effects in 
the harbour of Gteborg, Sweeden. Atmospheric Environment, 35(21), 
3659-3666.
    \55\ U.S. EPA. (2004). Air Quality Criteria for Particulate 
Matter (AQCD). Washington, DC: U.S. Environmental Protection Agency. 
Retrieved on March 18, 2009 from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=87903
---------------------------------------------------------------------------

    Although there has been no direct evidence of a physiological 
association between tree injury and heavy metal exposures, heavy metals 
have been implicated because of similarities between metal deposition 
patterns and forest decline.<SUP>56 57</SUP> This correlation was 
further explored in high elevation forests in the northeast U.S. and 
the data strongly imply that metal stress causes tree injury and 
contributes to forest decline in the Northeast.\58\ Contamination of 
plant leaves by heavy metals can lead to elevated soil levels. Trace 
metals absorbed into the plant frequently bind to the leaf tissue, and 
then are lost when the leaf drops. As the fallen leaves decompose, the 
heavy metals are transferred into the soil.<SUP>59 60</SUP>
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    \56\ U.S. EPA. (2004). Air Quality Criteria for Particulate 
Matter (AQCD). Washington, DC: U.S. Environmental Protection Agency. 
Retrieved on March 18, 2009 from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=87903
    \57\ Gawel, J. E.; Ahner, B. A.; Friedland, A. J.; Morel, F. M. 
M. (1996) Role for heavy metals in forest decline indicated by 
phytochelatin measurements. Nature (London), 381, 64-65.
    \58\ U.S. EPA. (2004). Air Quality Criteria for Particulate 
Matter (AQCD). Washington, DC: U.S. Environmental Protection Agency. 
Retrieved on March 18, 2009 from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=87903
    \59\ Cotrufo M.F., De Santo A.V., Alfani A., Bartoli G., De 
Cristofaro A. (1995) Effects of urban heavy metal pollution on 
organic matter decomposition in Quercus ilex L. Woods. Environmental 
Pollution, 89(1), 81-87.
    \60\ Niklinska M., Laskowski R., Maryanski M. (1998). Effect of 
heavy metals and storage time on two types of forest litter: basal 
respiration rate and exchangeable metals. Ecotoxicological 
Environmental Safety, 41, 8-18.
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    Ships also emit air toxics, including polycyclic aromatic 
hydrocarbons (PAHs), a class of polycyclic organic matter (POM) that 
contains compounds which are known or suspected carcinogens. Since the 
majority of PAHs are adsorbed onto particles less than 1.0 [mu]m in 
diameter, long range transport is possible. Particles of this size can 
remain airborne for days or even months and travel distances up to 
10,000 km before being deposited on terrestrial or aquatic 
surfaces.\61\ Atmospheric deposition of particles is believed to be the 
major source of PAHs to the sediments of Lake Michigan, Chesapeake Bay, 
Tampa Bay and other coastal areas of the U.S.<SUP>62 63 64 65 66</SUP> 
PAHs tend to accumulate in sediments and reach high enough 
concentrations in some coastal environments to pose an environmental 
health threat that includes cancer in fish populations, toxicity to 
organisms living in the sediment, and risks to those (e.g., migratory 
birds) that consume these organisms.<SUP>67 68</SUP> PAHs tend to 
accumulate in sediments and bioaccumulate in fresh water, flora and 
fauna.
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    \61\ U.S. EPA. (2004). Air Quality Criteria for Particulate 
Matter (AQCD). Washington, DC: U.S. Environmental Protection Agency. 
Retrieved on March 18, 2009 from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=87903
    \62\ Dickhut R.M., Canuel E.A., Gustafson K.E., Liu K., Arzayus 
K.M., Walker S.E., Edgecombe G., Gaylor M.O., MacDonald E.H. (2000). 
Automotive Sources of Carcinogenic Polycyclic Aromatic Hydrocarbons 
Associated with Particulate Matter in the Chesapeake Bay Region. 
Environmental Science & Technology, 34(21), 4635-4640.
    \63\ Simcik M.F., Eisenreich, S.J., Golden K.A., et al. (1996) 
Atmospheric Loading of Polycyclic Aromatic Hydrocarbons to Lake 
Michigan as Recorded in the Sediments. Environmental Science and 
Technology, 30, 3039-3046.
    \64\ Simcik M.F., Eisenreich S.J., Lioy P.J. (1999) Source 
apportionment and source/sink relationship of PAHs in the coastal 
atmosphere of Chicago and Lake Michigan. Atmospheric Environment, 
33, 5071-5079.
    \65\ Poor N., Tremblay R., Kay H., et al. (2002) Atmospheric 
concentrations and dry deposition rates of polycyclic aromatic 
hydrocarbons (PAHs) for Tampa Bay, Florida, USA. Atmospheric 
Environment, 38, 6005-6015.
    \66\ Arzavus K.M., Dickhut R.M., Canuel E.A. (2001) Fate of 
Atmospherically Deposited Polycyclic Aromatic Hydrocarbons (PAHs) in 
Chesapeake Bay. Environmental Science & Technology, 35, 2178-2183.
    \67\ Simcik M.F., Eisenreich, S.J., Golden K.A., et al. (1996) 
Atmospheric Loading of Polycyclic Aromatic Hydrocarbons to Lake 
Michigan as Recorded in the Sediments. Environmental Science and 
Technology, 30, 3039-3046.
    \68\ Simcik M.F., Eisenreich S.J., Lioy P.J. (1999) Source 
apportionment and source/sink relationship of PAHs in the coastal 
atmosphere of Chicago and Lake Michigan. Atmospheric Environment, 
33, 5071-5079.
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    The deposition of airborne particles can reduce the aesthetic 
appeal of buildings and culturally important articles through soiling, 
and can contribute directly (or in conjunction with other pollutants) 
to structural damage by means of corrosion or erosion.\69\ Particles 
affect materials principally by promoting and accelerating the 
corrosion of metals, by degrading paints, and by deteriorating building 
materials such as concrete and limestone. Particles contribute to these 
effects because of their electrolytic, hygroscopic, and acidic 
properties, and their ability to adsorb corrosive gases (principally 
sulfur dioxide). The rate of metal corrosion depends on a number of 
factors, including the deposition rate and nature of the pollutant; the 
influence of the metal protective corrosion film; the amount of 
moisture present; variability in the electrochemical reactions; the 
presence and concentration of other surface electrolytes; and the 
orientation of the metal surface.
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    \69\ U.S. EPA. (2005). Review of the National Ambient Air 
Quality Standards for Particulate Matter: Policy Assessment of 
Scientific and Technical Information, OAQPS Staff Paper. Retrieved 
on April 9, 2009 from http://www.epa.gov/ttn/naaqs/standards/pm/data/pmstaffpaper_20051221.pdf.
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(3) Impacts on Visibility
    Emissions from ships contribute to poor visibility in the U.S. 
through their primary PM<INF>2.5</INF> emissions, as well as 
NO<INF>X</INF> and SO<INF>X</INF> emissions which contribute to the 
formation of secondary PM<INF>2.5</INF>.\70\ Visibility can be defined 
as the degree to which the atmosphere is transparent to visible light. 
Airborne particles degrade visibility by scattering and absorbing 
light. Visibility is important because it has direct significance to 
people's enjoyment of daily activities in all parts of the country. 
Individuals value good visibility for the well-being it provides them 
directly where they live and work and in places where they enjoy 
recreational opportunities. Visibility is also highly valued in 
significant natural areas such as national parks and wilderness areas, 
and special emphasis is given to

[[Page 44456]]

protecting visibility in these areas. For more information on 
visibility, see the final 2004 PM AQCD as well as the 2005 PM Staff 
Paper.<SUP>71, 72</SUP>
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    \70\ U.S. EPA. (2004). Air Quality Criteria for Particulate 
Matter (AQCD). Volume I Document No. EPA600/P-99/002aF and Volume II 
Document No. EPA600/P-99/002bF. Washington, DC: U.S. Environmental 
Protection Agency. Retrieved on March 18, 2009 from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=87903
    \71\ U.S. EPA. (2004). Air Quality Criteria for Particulate 
Matter (AQCD). Volume I Document No. EPA600/P-99/002aF and Volume II 
Document No. EPA600/P-99/002bF. Washington, DC: U.S. Environmental 
Protection Agency. Retrieved on March 18, 2009 from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=87903
    \72\ U.S. EPA. (2005). Review of the National Ambient Air 
Quality Standard for Particulate Matter: Policy Assessment of 
Scientific and Technical Information, OAQPS Staff Paper. EPA-452/R-
05-005. Washington, DC: US Environmental Protection Agency.
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    EPA is pursuing a two-part strategy to address visibility. First, 
to address the welfare effects of PM on visibility, EPA has set 
secondary PM<INF>2.5</INF> standards which act in conjunction with the 
establishment of a regional haze program. In setting this secondary 
standard, EPA has concluded that PM<INF>2.5</INF> causes adverse 
effects on visibility in various locations, depending on PM 
concentrations and factors such as chemical composition and average 
relative humidity. Second, section 169 of the Clean Air Act provides 
additional authority to address existing visibility impairment and 
prevent future visibility impairment in the 156 national parks, forests 
and wilderness areas categorized as mandatory class I Federal areas (62 
FR 38680-81, July 18, 1997).\73\ In July 1999, the regional haze rule 
(64 FR 35714) was put in place to protect the visibility in mandatory 
class I Federal areas. Visibility can be said to be impaired in both 
PM<INF>2.5</INF> nonattainment areas and mandatory class I Federal 
areas.
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    \73\ These areas are defined in section 162 of the Act as those 
national parks exceeding 6,000 acres, wilderness areas and memorial 
parks exceeding 5,000 acres, and all international parks which were 
in existence on August 7, 1977.
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(4) Plant and Ecosystem Effects of Ozone
    Elevated ozone levels contribute to environmental effects, with 
impacts to plants and ecosystems being of most concern. Ozone can 
produce both acute and chronic injury in sensitive species depending on 
the concentration level and the duration of the exposure. Ozone effects 
also tend to accumulate over the growing season of the plant, so that 
even low concentrations experienced for a longer duration have the 
potential to create chronic stress on vegetation. Ozone damage to 
plants includes visible injury to leaves and a reduction in food 
production through impaired photosynthesis, both of which can lead to 
reduced crop yields, forestry production, and use of sensitive 
ornamentals in landscaping. In addition, the reduced food production in 
plants and subsequent reduced root growth and storage below ground, can 
result in other, more subtle plant and ecosystems impacts. These 
include increased susceptibility of plants to insect attack, disease, 
harsh weather, interspecies competition and overall decreased plant 
vigor. The adverse effects of ozone on forest and other natural 
vegetation can potentially lead to species shifts and loss from the 
affected ecosystems, resulting in a loss or reduction in associated 
ecosystem goods and services. Lastly, visible ozone injury to leaves 
can result in a loss of aesthetic value in areas of special scenic 
significance like national parks and wilderness areas. The final 2006 
ozone AQCD presents more detailed information on ozone effects on 
vegetation and ecosystems.

C. Air Quality Modeling Results

    Air quality modeling was performed to assess the impact of the 
combination of the proposed CAA NO<INF>X</INF> standards along with ECA 
designation through Amendment to MARPOL Annex VI. We looked at impacts 
on future ambient PM<INF>2.5</INF> and ozone levels, as well as 
nitrogen and sulfur deposition levels and visibility impairment. In 
this section, we present information on current levels of pollution as 
well as model projected levels of pollution for 2020 and 2030.\74\
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    \74\ As discussed in Section 3.7 of the draft RIA, the 
inventories used for the air quality modeling in 2020 and 2030 
differ slightly from each other. The difference between 2020 and 
2030 is small and was due to an error in calculating the 200 
nautical miles distance. In addition, as discussed in Section 3.7 of 
the draft RIA, the 2020 air quality control case does not include 
global controls for areas that are beyond 200 nautical miles but 
within the air quality modeling domain. The impact of this latter 
difference is expected to be minimal.
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    The air quality modeling uses EPA's Community Multiscale Air 
Quality (CMAQ) model. The CMAQ modeling domain is rectangular in shape 
and encompasses all of the lower 48 states, portions of Canada and 
Mexico, and areas extending into the ocean up to 1,000 nautical miles 
(nm), depending on the coast. The smallest area of ocean coverage is 
over the northeast U.S. In places like Maine and Cape Cod, the 
easternmost points of the contiguous U.S., the distance to the edge of 
the CMAQ modeling domain is approximately 150 nm. The rest of the U.S. 
shoreline has at least 200 nm between the shoreline and boundary of the 
air quality modeling. The CMAQ modeling domain is described in more 
detail in Section 2.4.5.2 of the draft RIA. The performance of the CMAQ 
modeling was evaluated over a 2002 base case. More detail about the 
performance evaluation is contained within the Section 2.4.5.4 of the 
draft RIA. The model was able to reproduce historical concentrations of 
ozone and PM<INF>2.5</INF> over the land with low amounts of bias and 
error. While we are not able to evaluate the model's performance over 
the ocean, there is no evidence to suggest that model performance is 
unsatisfactory over the ocean.
(1) Particulate Matter
    The vast majority of PM emissions from Category 3 engines are the 
result of the sulfur content of the residual fuel they use (67 FR 
37569, May 29, 2002).\75\ Although this proposed rule would not set PM 
standards, ECA designation would require the use of fuel meeting the 
most stringent MARPOL Annex VI fuel sulfur limits, yielding significant 
PM and SO<INF>X</INF> reductions.
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    \75\ As explained in the NPRM, there were no acceptable 
procedures for measuring PM from Category 3 marine engines. 
Specifically, established PM test methods showed unacceptable 
variability when sulfur levels exceed 0.8 weight percent, which was 
common at that time for both residual and distillate marine fuels 
for Category 3 engines, and no PM test method or calculation 
methodology had been developed to correct that variability for these 
engines.
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(a) Current Levels
    PM<INF>2.5</INF> concentrations exceeding the level of the 
PM<INF>2.5</INF> NAAQS occur in many parts of the country. In 2005, EPA 
designated 39 nonattainment areas for the 1997 PM<INF>2.5</INF> NAAQS 
(70 FR 943, January 5, 2005). These areas are composed of 208 full or 
partial counties with a total population exceeding 88 million. The 1997 
PM<INF>2.5</INF> NAAQS was recently revised and the 2006 24-hour 
PM<INF>2.5</INF> NAAQS became effective on December 18, 2006. Area 
designations for the 2006 24-hour PM<INF>2.5</INF> NAAQS are expected 
to be promulgated in 2009 and become effective 90 days after 
publication in the Federal Register.
(b) Projected Levels
    A number of state governments have told EPA that they need the 
reductions the coordinated strategy will provide in order to meet and 
maintain the PM<INF>2.5</INF> NAAQS.\76\ Most areas designated as not 
attaining the 1997 PM<INF>2.5</INF> NAAQS will need to attain the 1997 
standards in the 2010 to 2015 time frame, and then maintain them 
thereafter. The 2006 24-hour PM<INF>2.5</INF> nonattainment areas will 
be required to attain the 2006 24-hour PM<INF>2.5</INF> NAAQS in the 
2014 to 2019 time frame and then be required to maintain the 2006 24-
hour PM<INF>2.5</INF> NAAQS

[[Page 44457]]

thereafter. The fuel sulfur emission standards will become effective in 
2010 and 2015, and the NO<INF>X</INF> engine emission standards will 
become effective in 2016. Therefore, the coordinated strategy emission 
reductions will be useful to states in attaining or maintaining the 
PM<INF>2.5</INF> NAAQS.
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    \76\ See the Advanced Notice of Proposed Rule Making at Docket 
Number: EPA-HQ-OAR-2007-0121.
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    EPA has already adopted many emission control programs that are 
expected to reduce ambient PM<INF>2.5</INF> levels and which will 
assist in reducing the number of areas that fail to achieve the 
PM<INF>2.5</INF> NAAQS. Even so, our air quality modeling for this 
proposal projects that in 2020, with all current controls but excluding 
the reductions expected to occur as a result of the coordinated 
strategy, that at least 13 counties with a population of almost 30 
million may not attain the 1997 annual PM<INF>2.5</INF> standard of 15 
[micro]g/m \3\.\77\ These numbers do not account for additional areas 
that have air quality measurements above the 2006 24-hour standard of 
35 [micro]g/m\3\. The numbers also do not account for those areas that 
are close to (e.g., within 10 percent of) the 1997 or 2006 
PM<INF>2.5</INF> standard. These areas, although not violating the 
standards, will also benefit from the additional reductions from this 
rule ensuring long term maintenance of the PM<INF>2.5</INF> NAAQS.
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    \77\ See Section 2.4.1.2.2 of the draft RIA, specifically Table 
2-9, for more detail.
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    Air quality analysis modeling the expected impacts of the 
coordinated strategy shows that in 2020 and 2030 all of the modeled 
counties would experience decreases in their annual PM<INF>2.5</INF> 
design values. For areas with current annual PM<INF>2.5</INF> design 
values greater than 15 [micro]g/m\3\, the modeled future-year, 
population-weighted annual PM<INF>2.5</INF> design values are expected 
to decrease on average by 0.8 [micro]g/m\3\ in 2020 and by 1.7 
[micro]g/m\3\ in 2030.\78\ The maximum decrease for annual 
PM<INF>2.5</INF> design values are projected to be in Miami, FL, with a 
3.1 [micro]g/m\3\ decrease for 2020 and a 6.0 [micro]g/m\3\ decrease 
for 2030. The air quality modeling methodology and the projected 
reductions are discussed in more detail in Chapter 2 of the draft RIA.
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    \78\ Note that the 2030 projections are based on a 100 nm ECA so 
are an underestimate of likely changes to PM<INF>2.5</INF> design 
values. Additional detail on the air quality modeling is included in 
Chapter 2 of the draft RIA.
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(2) Ozone
(a) Current Levels
    The U.S. EPA has recently amended the ozone NAAQS (73 FR 16436, 
March 27, 2008). That final 2008 ozone NAAQS rule set forth revisions 
to the previous 1997 NAAQS for ozone to provide increased protection of 
public health and welfare. As of March 4, 2009, there are 57 areas 
designated as nonattainment for the 1997 8-hour ozone NAAQS, comprising 
293 full or partial counties with a total population of approximately 
132 million people. These numbers do not include the people living in 
areas where there is a future risk of failing to maintain or attain the 
1997 8-hour ozone NAAQS. The numbers above likely underestimate the 
number of counties that are not meeting the ozone NAAQS because the 
nonattainment areas associated with the more stringent 2008 8-hour 
ozone NAAQS have not yet been designated. Table II-1 provides an 
estimate, based on 2005-07 air quality data, of the counties with 
design values greater than the 2008 8-hour ozone NAAQS of 0.075 ppm.

   Table II-1--Counties With Design Values Greater Than the 2008 Ozone
                NAAQS Based on 2005-2007 Air Quality Data
------------------------------------------------------------------------
                                             Number of
                                             counties     Population \a\
------------------------------------------------------------------------
1997 Ozone Standard: counties within the             293     131,977,890
 57 areas currently designated as
 nonattainment (as of 4/3/09)...........
2008 Ozone Standard: additional counties             227      41,285,262
 that would not meet the 2008 NAAQS \b\.
                                         -------------------------------
    Total...............................             520     173,263,152
------------------------------------------------------------------------
Notes:
\a\ Population numbers are from 2000 census data.
\b\ Attainment designations for the 2008 ozone NAAQS have not yet been
  made. Nonattainment for the 2008 Ozone NAAQS will be based on three
  years of air quality data from later years. Also, the county numbers
  in this row include only the counties with monitors violating the 2008
  Ozone NAAQS. The numbers in this table may be an underestimate of the
  number of counties and populations that will eventually be included in
  areas with multiple counties designated nonattainment.

(b) Projected Levels (Including Ozone Welfare)
    States with 8-hour ozone nonattainment areas are required to take 
action to bring those areas into compliance in the future. Based on the 
final rule designating and classifying 8-hour ozone nonattainment areas 
for the 1997 standard (69 FR 23951, April 30, 2004), most 8-hour ozone 
nonattainment areas will be required to attain the ozone NAAQS in the 
2007 to 2013 time frame and then maintain the NAAQS thereafter. Many of 
these nonattainment areas will need to adopt additional emission 
reduction programs, and the NO<INF>X</INF> and VOC reductions that 
would result from the combination of the proposed CAA NO<INF>X</INF> 
standards along with ECA designation through amendment to MARPOL Annex 
VI would be particularly important for these states. In addition, EPA's 
revision of the ozone NAAQS was completed with the final rule published 
on March 27, 2008. The ozone NAAQS revision in 2008 started the process 
for nonattainment areas to be designated under that standard. While EPA 
is not relying on the 2008 standard for purposes of justifying this 
rule, the emission reductions from this rulemaking will also be helpful 
to states for the more stringent ozone NAAQS.
    EPA has already adopted many emission control programs that are 
expected to reduce ambient ozone levels and assist in reducing the 
number of areas that fail to achieve the ozone NAAQS. Even so, our air 
quality modeling projects that in 2020, with all current controls but 
excluding the reductions achieved through the coordinated strategy, up 
to 50 counties with a population of almost 50 million may not attain 
the 2008 ozone standard of 0.075 ppm. These numbers do not account for 
those areas that are close to (e.g., within 10 percent of) the 2008 
ozone standard. These areas, although not violating the standards, will 
also benefit from the additional reductions from this rule ensuring 
long-term maintenance of the ozone NAAQS.

[[Page 44458]]

    These air quality modeling results suggest that the proposed 
emission reductions would improve both the average and population-
weighted average ozone concentrations for the U.S. in 2020 and 2030. In 
addition, the air quality modeling shows that on average the 
coordinated program described in this action would help bring counties 
closer to ozone attainment as well as assist counties whose ozone 
concentrations are within 10 percent below the standard. For example, 
in projected nonattainment counties, on a population-weighted basis, 
the 8-hour ozone design value will on average decrease by 0.5 ppb in 
2020 and 1.6 ppb in 2030.\79\ The air quality modeling methodology and 
the projected reductions are discussed in more detail in Chapter 2 of 
the draft RIA.
---------------------------------------------------------------------------

    \79\ Note that the 2030 projections are based on a 100 nm ECA so 
are an underestimate of likely changes to ozone design values. 
Additional detail on the air quality modeling is included in Chapter 
2 of the draft RIA.
---------------------------------------------------------------------------

    It should be noted that even though our air quality modeling 
predicts important reductions in nationwide ozone levels, four counties 
(of 661 that have monitored data) are expected to experience an 
increase in their ozone design values in 2030. There are two counties 
in southern California, Orange County and San Bernardino County, and 
two counties in Washington, Clallam County and Clark County, which 
would experience 8-hour ozone design value increases due to the 
NO<INF>X</INF> disbenefits which occur in these VOC-limited ozone 
nonattainment areas. Briefly, NO<INF>X</INF> reductions at certain 
times and in some areas can lead to increased ozone levels. The air 
quality modeling methodology (Section 2.4.5), the projected reductions 
(Section 2.4), and the limited NO<INF>X</INF> disbenefits (Section 
2.4.2.2.2), are discussed in more detail in Chapter 2 of the draft RIA.
(c) Case Study of Shipping Emissions and Ozone Impacts on Forests
    The section below attempts to estimate the impacts of the 
coordinated strategy on ecological impacts through a case study.
    Assessing the impact of ground-level ozone on forests in the 
eastern United States involves understanding the risk/effect of tree 
species to ozone ambient concentrations and accounting for the 
prevalence of those species within the forest. As a way to quantify the 
risk/effect of particular plants to ground-level ozone, scientists have 
developed ozone-exposure/tree-response functions by exposing tree 
seedlings to different ozone levels and measuring reductions in growth 
as ``biomass loss''.\80\
---------------------------------------------------------------------------

    \80\ Chappelka, AH, Samuelson, LJ. (1998). Ambient ozone effects 
on forest trees of the Eastern United States: a review. New 
Phytologist, 139, 91-108.
---------------------------------------------------------------------------

    With knowledge of the distribution of sensitive species and the 
level of ozone at particular locations, it is possible to estimate a 
``biomass loss'' for each species across their range. EPA performed an 
analysis for 2020 in which we examined biomass loss with and without 
ship emissions to determine the benefit of reducing these emissions on 
sensitive tree species in the eastern half of the U.S.\81\ The biomass 
loss attributable to shipping appears to range from 0-6.5% depending on 
the particular species. The most sensitive species in the U.S. to ozone 
related biomass loss is black cherry (Prunus serotina); the area of its 
range with more than 10% total biomass loss in 2020 decreased by 8.5% 
in the case in which emissions from ships were removed. Likewise, 
yellow-poplar (Liriodendron tulipifera), eastern white pine (Pinus 
strobus), aspen (Populus spp.), and ponderosa pine (Pinus ponderosa) 
saw areas with more then 2% biomass loss reduced by 2.1% to 3.8% in 
2020. This 2% level of biomass loss is important, because a consensus 
workshop on ozone effects reported that a 2% annual biomass loss causes 
harm due to the potential for compounding effects over multiple years 
as short-term negative effects on seedlings affect long-term forest 
health.<SUP>82, 83</SUP>
---------------------------------------------------------------------------

    \81\ Note that while the coordinated strategy does not eliminate 
ship emissions, it will be directionally helpful in reducing ship 
emissions.
    \82\ Prasad, A.M, Iverson L.R. (2003). Little's range and FIA 
importance value database for 135 eastern US tree species. 
Northeastern Research Station, USDA Forest Service, Delaware, Ohio. 
[online] Retrieved on March 19, 2009 from http://www.fs.fed.us/ne/delaware/4153/global/littlefia/index.html.
    \83\ Heck W.W., Cowling E.B. (1997) The need for a Long Term 
Cumulative Secondary Ozone Standard--an Ecological Perspective. Air 
and Waste Management Association, EM, 23-33.
---------------------------------------------------------------------------

(3) Nitrogen and Sulfur Deposition
(a) Current Levels
    Modeling conducted by the EPA for the coordinated strategy shows 
that in 2020 ships would add significant amounts to sulfur deposition 
in sensitive ecological areas across the U.S., ranging from 10% to more 
than 25% of total sulfur deposition along the entire Atlantic, Gulf of 
Mexico, and Pacific coastal areas of the U.S. This same level of impact 
would extend inland for hundreds of kilometers, affecting thousands of 
sensitive ecological areas. This deposition would contribute to the 
serious problem acidification causes in terrestrial and aquatic 
ecosystems.
    Nitrogen deposition contributes to both acidification and nutrient 
enrichment. In 2020, ships would contribute a significant percentage of 
the annual U.S. total nitrogen deposition to many terrestrial and 
aquatic areas within the U.S. that are potentially sensitive to excess 
nitrogen. The contribution from ships would range from about 9% to more 
than 25% along the entire U.S. Atlantic, Pacific and Gulf of Mexico 
coastal regions. See the draft RIA for more information and detailed 
maps on sulfur and nitrogen deposition.
(b) Projected Levels
    The emissions reductions that would result from the combination of 
the proposed CAA NO<INF>X</INF> standards along with ECA designation 
through amendment to MARPOL Annex VI and related proposed fuel 
standards would significantly reduce the annual total sulfur and 
nitrogen deposition occurring in sensitive U.S. ecosystems including 
forests, wetlands, lakes, streams, and estuaries. For sulfur 
deposition, adopting the coordinated strategy would result in 
reductions ranging from 5% to 20% along the entire Atlantic and Gulf 
coasts with higher levels of reduction, exceeding 25%, occurring in the 
near-land coastal waters of the U.S. In a few land areas on the 
Atlantic and Gulf coasts, such as the southern parts of the States of 
Louisiana, Texas, and Florida, 2020 sulfur deposition reductions would 
be much higher, i.e., over 30%. Along the Pacific Coast, sulfur 
deposition reductions would exceed 25% in the entire Southern 
California area, and the Pacific Northwest. For a map of 2020 sulfur 
reductions and additional information on these impacts see Section 
2.4.3 of the draft RIA.
    Overall, nitrogen deposition reductions in 2020 resulting from the 
coordinated strategy described in this action are less than sulfur 
deposition reductions. Nitrogen deposition reductions would range from 
3% to 7% along the entire Atlantic, Pacific and Gulf Coasts. As with 
sulfur deposition reductions, a few areas such as the southern parts of 
the States of Louisiana, Texas, and Florida would experience larger 
reductions of nitrogen up to 9%. The Pacific coastal waters would see 
higher nitrogen reductions, exceeding 20% in some instances. See 
Section 2.4.3 of the draft RIA for a map and additional information on 
nitrogen deposition impacts.

[[Page 44459]]

(4) Visibility
(a) Current Levels
    As of March 12, 2008, over 88 million people live in nonattainment 
areas for the 1997 PM<INF>2.5</INF> NAAQS. These populations, as well 
as large numbers of individuals who travel to these areas, are likely 
to experience visibility impairment. In addition, while visibility 
trends have improved in mandatory class I Federal areas, the most 
recent data show that these areas continue to suffer from visibility 
impairment. In summary, visibility impairment is experienced throughout 
the U.S., in multi-state regions, urban areas, and remote mandatory 
class I Federal areas.
(b) Projected Levels
    The air quality modeling conducted for the coordinated strategy 
also was used to project visibility conditions in 133 mandatory class I 
Federal areas across the U.S. in 2020 and 2030. The results indicate 
that improvements in visibility due to OGV emissions reductions would 
occur in all 133 class I Federal areas in the future, although all 
areas would continue to have annual average deciview levels above 
background in 2020 and 2030.\84\ The average visibility on the 20 
percent worst days at these scenic locales is projected to improve by 
0.21 deciviews, or 1.2 percent.
---------------------------------------------------------------------------

    \84\ The level of visibility impairment in an area is based on 
the light-extinction coefficient and a unit less visibility index, 
called a ``deciview'', which is used in the valuation of visibility. 
The deciview metric provides a scale for perceived visual changes 
over the entire range of conditions, from clear to hazy. Under many 
scenic conditions, the average person can generally perceive a 
change of one deciview. The higher the deciview value, the worse the 
visibility. Thus, an improvement in visibility is a decrease in 
deciview value.
---------------------------------------------------------------------------

    The greatest improvements in visibilities would occur in coastal 
areas. For instance, the Agua Tibia Wilderness area (near Los Angeles) 
would see a 9% improvement (2.17 DV) in 2020 as a result of the 
emission reductions from the coordinated strategy. National parks and 
national wilderness areas in other parts of the country would also see 
improvements. For example, the Cape Romain National Wildlife Refuge 
(South Carolina) would have a 5% improvement in visibility (1.16 DV) 
and Acadia National Park (Maine) would have a 4% improvement (0.76 DV) 
with a 200 nm ECA. Other areas would experience important benefits as 
well due to the contribution of OGVs to visibility impairment. For 
example, in 2002, about 3% of visibility impairment in southern 
Florida's Everglades National Park was due to international shipping 
(0.61 DV), and this will double to 6% (1.35 DV) by 2020. Even in inland 
class I Federal areas, international shipping activity is contributing 
to visibility degradation. In 2020, about 2.5% (0.28 DV) of visibility 
degradation in the Grand Canyon National Park located in the state of 
Arizona will be from international shipping, while almost 6% (0.81 DV) 
of visibility degradation in the State of Washington's North Cascades 
National Park would be from international shipping emissions. For the 
table which contains the full visibility results over the 133 analyzed 
areas see Section 2.2.4.2 of the draft RIA.

D. Emissions From Ships With Category 3 Engines

(1) Overview
    This section describes the contribution of Category 3 vessels to 
national emission inventories of NO<INF>X</INF>, PM<INF>2.5</INF>, and 
SO<INF>2</INF>. A Category 3 vessel has a Category 3 propulsion engine. 
Emissions from a Category 3 vessel include the emissions from both the 
propulsion and auxiliary engines on that vessel. Propulsion and 
auxiliary engine emissions were estimated separately to account for 
differences in emission factors, engine size and load, and activity.
    We estimate that in 2009, Category 3 vessels will contribute almost 
913,000 tons (10 percent) to the national mobile source NO<INF>X</INF> 
inventory, about 71,000 tons (24 percent) to the mobile source diesel 
PM<INF>2.5</INF> inventory, and nearly 597,000 tons (80 percent) to the 
mobile source SO<INF>2</INF> inventory. Expressed as a percentage of 
all anthropogenic emissions, Category 3 vessels contribute 6 percent to 
the national NO<INF>X</INF> inventory, 3 percent to the national 
PM<INF>2.5</INF> inventory, and 11 percent to the total SO<INF>2</INF> 
inventory in 2009. In 2030, absent the strategy discussed in this 
proposal, these vessels will contribute about 2.1 million tons (40 
percent) to the mobile source NO<INF>X</INF> inventory, 168,000 tons 
(75 percent) to the mobile source diesel PM<INF>2.5</INF> inventory, 
and about 1.4 million tons (95 percent) to the mobile source 
SO<INF>2</INF> inventory. Expressed as a percentage of all 
anthropogenic emissions, Category 3 vessels will contribute 19 percent 
to the national NO<INF>X</INF> inventory, 5 percent to the national 
PM<INF>2.5</INF> inventory, and 15 percent to the total SO<INF>2</INF> 
inventory in 2030. Under this strategy, by 2030, annual NO<INF>X</INF> 
emissions from these vessels would be reduced by 1.2 million tons, 
PM<INF>2.5</INF> emissions by 143,000 tons, and SO<INF>2</INF> 
emissions by 1.3 million tons.\85\
---------------------------------------------------------------------------

    \85\ These emission inventory reductions include reductions from 
ships operating within the 24 nautical mile regulatory zone off the 
California Coastline, beginning with the effective date of the 
Coordinated Strategy program elements. The California regulation 
contains a provision that would sunset the requirements of the rule 
if the Federal program achieves equivalent emission reductions. See 
http://www.arb.ca.gov/regact/2008/fuelogv08/fro13.pdf at 13 CCR 
2299.2(j)(1).
---------------------------------------------------------------------------

    Each sub-section below discusses one of the three affected 
pollutants, including expected emission reductions that would result 
from the combination of the proposed CAA NO<INF>X</INF> standards along 
with the ECA designation through amendment to MARPOL Annex VI and 
related proposed fuel standards. Table II-2 summarizes the impacts of 
these reductions for 2020 and 2030. Table II-3 provides the estimated 
2030 NO<INF>X</INF> emission reductions (and PM reductions) for the 
coordinated strategy compared to the Locomotive and Marine rule, Clean 
Air Nonroad Diesel (CAND) program, and the Heavy-Duty Highway rule. 
Further details on our inventory estimates are available in Chapter 3 
of the draft RIA.
    As described in Chapter 3 of the draft RIA, the ocean-going vessel 
emission inventories presented in this section are estimated by 
combining two sets of emissions inventories, one for U.S. port areas 
and one for operation on the open ocean. With regard to operation on 
the open ocean, it was necessary to specify an outer boundary of the 
modeling domain; otherwise, emissions from ships operating as far away 
as Asia or Europe would be included in the U.S. emission inventory. For 
simplicity, we set the outer boundary for inventory modeling roughly 
equivalent to the U.S. Exclusive Economic Zone (EEZ). It consists of 
the area that extends 200 nautical miles (nm) from the official U.S. 
baseline, which is recognized as the low-water line along the coast as 
marked on the official U.S. nautical charts in accordance with the 
articles of the Law of the Sea. The U.S. region was then clipped to the 
boundaries of the U.S. EEZ. While this area will exclude emissions that 
occur outside the 200 nm boundary but that are transported to the U.S. 
landmass, it has the advantage of corresponding to an area in which the 
United States has a clear environmental interest. This area also 
corresponds well to the CMAQ modeling domain for most coasts.

[[Page 44460]]



 Table II-2--Estimated National (50 State) Reductions in Emissions From
                Category 3 Commercial Marine Vessels \a\
------------------------------------------------------------------------
    Pollutant [short tons]          2020                  2030
------------------------------------------------------------------------
NOX:
    NOX Emissions without           1,361,000                  2,059,000
     Coordinated Strategy....
    NOX Emissions with                952,000                    878,000
     Coordinated Strategy....
    NOX Reductions Resulting          409,000                  1,181,000
     from Coordinated
     Strategy................
Direct PM2.5:
    PM2.5 Emissions without           110,000                    168,000
     Coordinated Strategy....
    PM2.5 Emissions with               16,000                     25,000
     Coordinated Strategy....
    PM2.5 Reductions                   94,000                    143,000
     Resulting from
     Coordinated Strategy....
SO2:
    SO2 Emissions without             928,000                  1,410,000
     Coordinated Strategy....
    SO2 Emissions with                 51,000                     78,000
     Coordinated Strategy....
    SO2 Reductions Resulting          877,000                  1,332,000
     from Coordinated
     Strategy................
------------------------------------------------------------------------
Notes:
\a\ Emissions are included within 200 nautical miles of the U.S.
  coastline.


   Table II-3--Projected 2030 Emissions Reductions From Recent Mobile
                      Source Rules (Short Tons) \a\
------------------------------------------------------------------------
                  Rule                          NOX            PM2.5
------------------------------------------------------------------------
Category 3 Marine Proposal..............       1,181,000         143,000
Locomotive and Marine...................         795,000          27,000
Clean Air Nonroad Diesel................         738,000         129,000
Heavy-Duty Highway......................       2,600,000         109,000
------------------------------------------------------------------------
Notes:
\a\ Locomotive and Marine Rule (73 FR 25098, May 6, 2008); Clean Air
  Nonroad Diesel Rule (69 FR 38957, June 29, 2004); Heavy-Duty Highway
  Rule (66 FR 5001, January 18, 2001).

(2) NO<INF>X</INF> Emission Reductions
    In 2009, annual emissions from Category 3 commercial \86\ marine 
vessels will total about 913,000 tons. Earlier Tier 1 NO<INF>X</INF> 
engine standards became effective in 2000, but the reductions due to 
the Tier 1 standards are offset by the growth in this sector, resulting 
in increased NO<INF>X</INF> emissions of 1.4 million tons and 2.1 
million tons in 2020 and 2030, respectively.
---------------------------------------------------------------------------

    \86\ These engines are included within EPA's commercial marine 
category to differentiate them from recreational marine engines.
---------------------------------------------------------------------------

    As shown in Table II-2, the coordinated strategy would reduce 
annual NO<INF>X</INF> emissions from the current national inventory 
baseline by 409,000 tons in 2020 and 1,181,000 tons in 2030.
    As shown in Table II-3, the 2030 NO<INF>X</INF> reductions for the 
coordinated strategy would exceed those for the other two nonroad 
rules.
(3) PM<INF>2.5</INF> Emissions Reductions
    In 2009, annual emissions from Category 3 commercial marine vessels 
will total about 71,000 tons. By 2030, these engines, absent the 
coordinated strategy, would contribute about 168,000 tons.
    As shown in Table II-2, the coordinated strategy would reduce 
annual PM<INF>2.5</INF> emissions by 94,000 tons in 2020 and 143,000 
tons in 2030. As seen in Table II-3, the 2030 PM<INF>2.5</INF> emission 
reduction would be larger than any of the reductions achieved with 
other recent rules.
(4) SO<INF>2</INF> Emissions Reductions
    In 2009, annual emissions from Category 3 commercial marine vessels 
will total about 597,000 tons. By 2030, these engines, absent the 
coordinated strategy, would contribute about 1.4 million tons.
    As shown in Table II-2 the coordinated strategy would reduce annual 
SO<INF>2</INF> emissions by 877,000 tons in 2020 and 1.3 million tons 
in 2030.

III. Engine Standards

    This section details the emission standards, implementation dates, 
and other major requirements being proposed under the Clean Air Act. A 
detailed discussion of the technological feasibility of the proposed 
NO<INF>X</INF> standards follows the description of the proposed 
program.
    Other elements of our coordinated strategy to control emissions 
from OGV are discussed in subsequent sections. Provisions related to 
our Clean Air Act fuel controls are described in Section IV. Section V 
summarizes the U.S. and Canada's recent proposal to amend MARPOL Annex 
VI to designate much of the U.S. and Canadian coasts as an Emission 
Control Area.\87\ Finally, provisions revising our Clean Air Act test 
procedures and related certification requirements, provisions to 
implement MARPOL Annex VI through APPS, and various changes we are 
considering to our Categories 1 and 2 (marine diesel engines with per 
cylinder displacement less than 30 liters per cylinder) marine diesel 
engine program are described in Section VI.
---------------------------------------------------------------------------

    \87\ The ECA proposal and associated Technical Support Document 
can be found at http://www.epa.gov/otaq/oceanvessels.htm
---------------------------------------------------------------------------

A. What Category 3 Marine Engines are Covered?

    Consistent with our existing marine diesel emission control 
program, the proposed engine emission standards would apply to any new 
marine diesel engine with per cylinder displacement at or above 30 
liters installed on a vessel flagged or registered in the United 
States.
    With regard to marine diesel engines on foreign vessels that enter 
U.S. ports, we are proposing to retain our current approach and not 
apply this Clean Air Act program to those engines. This is appropriate 
because engines on foreign vessels are subject to the same 
NO<INF>X</INF> limits through MARPOL Annex VI, and the United States 
can enforce compliance pursuant to Annex VI and the recent amendments 
to the Act to Prevent Pollution from Ships (33 USC

[[Page 44461]]

1901 et seq.). At the same time, however, the effectiveness of this 
approach is contingent on the designation of U.S. coasts as an ECA 
pursuant to MARPOL Annex VI, since the Annex VI Tier III NO<INF>X</INF> 
limits are geographic in scope and apply only in designated ECAs. We 
anticipate that MARPOL Annex VI will be amended to include the U.S. and 
Canadian government proposal. If, however, the proposed amendment is 
not adopted in a timely manner by IMO, we intend to take supplemental 
action to control harmful emissions from all vessels affecting U.S. air 
quality. Section V contains a description of the ECA designation 
process and further discussion of the application of the Act to engines 
on foreign vessels if ECA designation is delayed or not approved.
    The combination of this Clean Air Act program, MARPOL Annex VI, and 
APPS will apply comparable emission standards to the vast majority of 
vessels entering U.S. ports or operating in U.S. waters.\88\ Most 
significantly, these vessels will be required to meet the 
NO<INF>X</INF> limits described below. As is described later in this 
Section III and in Section VI, there would be some minor differences 
between the proposed Clean Air Act program and the requirements that 
apply under MARPOL Annex VI. Nevertheless, with respect to U.S. air 
quality, these differences would have a negligible effect on emissions 
from foreign vessels.
---------------------------------------------------------------------------

    \88\ Certain foreign public vessels such as military vessels and 
foreign vessels in innocent passage may be exempt.
---------------------------------------------------------------------------

    Although we are not proposing standards for existing engines on 
vessels already in the U.S. fleet, we are seeking comment on a 
programmatic alternative that would help reduce emissions from those 
engines. This Voluntary Marine Verification Program is described in 
Section IX.

B. What Standards are we Proposing for Freshly Manufactured Engines?

    This subsection details the emission standards (and implementation 
dates) we are proposing for freshly manufactured (i.e., new) Category 3 
engines on U.S. vessels. As described in Section III.C, we believe the 
proposed standards will be challenging to manufacturers, yet ultimately 
feasible and cost-effective within the proposed lead time. These 
standards, along with other parts of our program, are the outcome of 
our work with stakeholders to resolve the challenges associated with 
applying advanced diesel engine technology to Category 3 engines to 
achieve significant NO<INF>X</INF> reductions.
(1) NO<INF>X</INF> Standards
    We are proposing new NO<INF>X</INF> emission standards for Category 
3 marine diesel engines. Our existing Tier 1 NO<INF>X</INF> standards 
for Category 3 engines are dependent on the rated speed of the engine 
for speeds between 130 revolutions per minute (rpm) and 2000 rpm. Fixed 
standards apply for lower and higher speeds. Thus, the standards are 
expressed as an equation that applies for speeds between 130 rpm and 
2000 rpm, along with fixed values that are calculated from the equation 
for 130 rpm and 2000 rpm that apply for lower and higher speeds. This 
was done to account for the fact that brake-specific NO<INF>X</INF> 
emissions are inherently higher for lower speed engines (and lower for 
higher speed engines). Note that this same approach is used by the IMO 
for the same technical reasons. We are proposing to continue this 
approach for Tier 2 and Tier 3, as shown in Table III-1.

                  Table III-1--Proposed NOX Emission Standards for Category 3 Engines (g/kW-hr)
----------------------------------------------------------------------------------------------------------------
                                                                   Less than 130   130-2000 RPM
                                                                        RPM             \a\        Over 2000 RPM
----------------------------------------------------------------------------------------------------------------
Tier 1..........................................        \b\ 2004            17.0   45.0 [middot]             9.8
                                                                                        n(-0.20)
Tier 2..........................................            2011            14.4   44.0 [middot]             7.7
                                                                                        n(-0.23)
Tier 3..........................................            2016             3.4    9.0 [middot]             2.0
                                                                                        n(-0.20)
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Applicable standards are calculated from n (maximum in-use engine speed in RPM), rounded to one decimal
  place.
\b\ Tier 1 NOX standards apply for engines originally manufactured after 2004, and proposed to also to certain
  earlier engines.

    Our analysis, which is described in the draft RIA, shows that these 
standards will give the greatest degree of emission control achievable 
considering compliance costs, lead time, and other relevant factors. 
The technological bases are also discussed briefly below.
    Note that other important provisions related to compliance with 
these standards are described in Section VI. This includes provisions 
to ensure effective control of NO<INF>X</INF> emissions over a broad 
range of operating conditions.
(a) Tier 2 NO<INF>X</INF> Limits
    We are proposing new Tier 2 NO<INF>X</INF> emission standards for 
Category 3 marine diesel engines. In-cylinder emission control 
technology for Category 3 marine engines has progressed substantially 
in recent years. Significant reductions can be achieved in the near 
term with little or no impact on overall vessel performance. These 
technologies include traditional engine-out controls such as 
electronically-controlled high-pressure common-rail fuel systems, 
turbocharger optimization, compression-ratio changes, and 
electronically-controlled exhaust valves. We are setting a near-term 
NO<INF>X</INF> emission standard requiring a reduction of approximately 
20 percent below the current Tier 1 standard beginning 2011.
(b) Tier 3 NO<INF>X</INF> Limits
    While the Tier 2 standards will achieve modest reductions quickly, 
the proposed Tier 3 standards are intended to achieve much greater 
emission reductions through the use of advanced aftertreatment such as 
selective catalytic reduction (SCR). These standards would achieve 
reductions of about 80 percent from the current Tier 1 standards. As 
explained in Section IX.B below regarding regulatory alternatives, we 
evaluated the possibility of requiring the Tier 3 limits on an earlier 
schedule than 2016. However, we found that a schedule requiring Tier 3 
limits prior to 2016 had significant feasibility issues, and are 
therefore proposing the 2016 implementation date for Tier 3 standards. 
Under the proposed approach, manufacturers of Category 3 engines will 
have about the same amount of lead time allowed manufacturers for 
smaller marine engines and locomotives.

[[Page 44462]]

(2) PM and SO<INF>X</INF> Standards
    We are not proposing new engine standards for PM or SO<INF>X</INF> 
emissions. We intend to rely instead on the use of cleaner fuels as 
described in Section IV and V. SO<INF>X</INF> emissions and the 
majority of the direct PM emissions from Category 3 marine engines 
operated on residual fuels are a direct result of fuel quality, most 
notably the sulfur in the fuel, and engine-based PM controls are not 
currently feasible for engines using these fuels. Other components of 
residual fuel, such as ash and heavy metals, also contribute directly 
to PM.
    Using cleaner distillate fuel is the most effective means to 
achieve significant PM and SO<INF>X</INF> reductions for Category 3 
engines. We are proposing substantial reductions in the sulfur content 
of fuel purchased in the U.S. for use in an ECA. This complements Annex 
VI which requires that fuels used in ECAs around the world have sulfur 
levels below 1,000 ppm. This sulfur limit is expected to necessitate 
the use of distillate fuel which will result not only in reductions in 
sulfate PM emissions, but also reductions in organic PM and metallic 
ash particles in the exhaust.
    Even though the sulfur limit is much lower than current levels, it 
is not clear if this fuel sulfur level would be low enough to allow 
Category 3 engines to be equipped with the catalytic PM filters similar 
to those being used by trucks today. If we were to require technology 
that needs lower sulfur fuel, such as 15 ppm, ship operators would need 
to have access to this fuel around the world. Operating on higher 
sulfur fuel, such as for outside of our waters, could otherwise result 
in damage to the PM control equipment. At this time, it is not clear if 
15 ppm sulfur fuel could be made available around the world. In any 
case, the 1,000 ppm sulfur fuel requirement alone will eliminate 85 
percent of PM emissions from ships operating in ECAs.
    To further our understanding of PM emissions from ships, we are 
proposing to require engine manufacturers to measure and report PM 
emissions even though we are not proposing a PM standard. The 
information gathered will help support our efforts as we continue to 
evaluate the feasibility of achieving further PM reductions through 
engine-based controls. It will also help us to better characterize the 
PM emission rates associated with operating Category 3 engines on 
distillate fuel. If we determine that further PM reductions are 
feasible or that a specific PM limit is necessary to ensure anticipated 
reductions in PM emissions from ships, we may propose PM standards for 
Category 3 engines in the future.
(3) HC and CO Standards
    We are proposing HC and CO standards of 2.0 g/kW-hr and 5.0 g/kW-
hr, respectively. Emission control technologies for C3 marine engines 
have been concentrated on reducing NO<INF>X</INF> and PM emissions, but 
these emission standards will prevent increases in emissions of HC and 
CO that might otherwise occur as a result of use of certain 
technologies for controlling NO<INF>X</INF>, such as those that 
significantly degrade combustion efficiency.
(4) CO<INF>2</INF> Standards
    We are not proposing to adopt CO<INF>2</INF> standards for marine 
diesel engines at this time. Marine diesel engines are included in 
other ongoing Agency actions, including our Advance Notice of Proposed 
Rulemaking (ANPRM) for mobile sources (73 FR 44353, July 30, 2008) and 
our Greenhouse Gas Reporting Rule (74 FR 16448, April 10, 2009). In 
addition, EPA is participating in the U.S. Government delegation to 
IMO, which is currently engaged in negotiations for an international 
program to address greenhouse emissions from ships.

C. Are the Standards Feasible?

    We have analyzed a variety of technologies available for 
NO<INF>X</INF> reduction in the Category 3 marine sector. As described 
in more detail in our draft RIA, we are projecting that marine diesel 
engine manufacturers will choose to use in-cylinder, or engine design-
based emission control technologies to achieve the 15 to 20 percent 
NO<INF>X</INF> reductions required to meet the proposed Tier 2 
standard. To achieve the 80 percent NO<INF>X</INF> reductions required 
to meet the proposed Tier 3 standard, we believe many manufacturers 
will choose SCR exhaust aftertreatment technology. In addition, 
manufacturers may choose a combination of other in-cylinder 
technologies, such fuel-water emulsification, direct water injection, 
intake air humidification, or exhaust gas recirculation (EGR) to reduce 
NO<INF>X</INF> emissions and meet the proposed standards. These ``in-
cylinder'' approaches could be calibrated and applied in one manner to 
achieve Tier 3 NO<INF>X</INF> levels when operating with an ECA, and 
then adjusted, or re-calibrated, in another manner to achieve Tier 2 
NO<INF>X</INF> levels when operating outside an ECA.
    The in-cylinder, or engine-out, NO<INF>X</INF> emissions of a 
diesel engine can be controlled by utilizing engine design and 
calibration parameters (e.g., fuel delivery and valve timing) to limit 
the formation of NO<INF>X</INF>. NO<INF>X</INF> formation rate has a 
strong exponential relationship to combustion temperature. Therefore, 
high temperatures result in high NO<INF>X</INF> formation 
rates.<SUP>89 90</SUP> Any changes to engine design and calibration 
which can reduce the peak temperature realized during combustion will 
also reduce NO<INF>X</INF> emissions. Many of the approaches and 
technologies for reducing in-cylinder NO<INF>X</INF> emissions are 
discussed in our draft RIA.
---------------------------------------------------------------------------

    \89\ Flynn, P., et al, ``Minimum Engine Flame Temperature 
Impacts on Diesel and Spark-Ignition Engine NO<INF>X</INF> 
Production'', SAE 2000-01-1177, 2000.
    \90\ Heywood, John B., ``Internal Combustion Engine 
Fundamentals'', McGraw-Hill, 1988.
---------------------------------------------------------------------------

    SCR is a commonly-used technology for meeting stricter 
NO<INF>X</INF> emissions standards in diesel applications worldwide. 
Stationary power plants fueled with coal, diesel and natural gas have 
used SCR for three decades as a means of controlling NO<INF>X</INF> 
emissions, and European heavy-duty truck manufacturers are currently 
using this technology to meet Euro 5 emissions limits. To a lesser 
extent, SCR has been introduced on diesel engines in the U.S. market, 
but the applications have been limited to marine ferryboat and 
stationary electrical power generation demonstration projects in 
California and several of the Northeast states. SCR systems are 
currently being designed and developed for use on ocean-going vessels 
worldwide, and we project that SCR will continue to be a viable 
technology for control of Category 3 NO<INF>X</INF> emissions. A more 
detailed discussion of SCR technology can be found in our draft RIA.

IV. Fuel Standards

A. Background

    EPA is proposing emissions standards for Category 3 (C3) engines 
that are consistent with those recently adopted as amendments to MARPOL 
Annex VI. As amended, Annex VI includes revised fuel sulfur standards 
for use in engines onboard ships, and it also set more stringent fuel 
sulfur limits for ``any fuel oil used onboard ships * * * operating 
within an Emission Control Area'' (Annex VI, Regulation 14).
    Under the Annex, the process by which an Emission Control Area 
(ECA) is to be designated is through amendment of the Annex. The U.S. 
and Canadian governments have submitted a proposal to amend MARPOL 
Annex VI to designate an ECA to include much of the U.S. and Canadian 
coastlines. Specifically, the proposed ECA would

[[Page 44463]]

include the entire coastline for the contiguous 48 states, Southeastern 
Alaska, and the Main Hawaiian Islands, extending to a distance of 200 
nautical miles from the coastline. We anticipate that this amendment 
will be considered at the next Marine Environment Protection Committee 
(MEPC 59) which is scheduled for July 2009. We expect that the 
amendment will be adopted in March 2010, at MEPC 60. This approval date 
is roughly three months after the intended date for promulgation of the 
final rule.
    EPA is in this notice proposing fuel sulfur limits under section 
211(c) of the Clean Air Act that match the limits that apply under 
Annex VI in ECAs. The adoption of such standards would: (1) Forbid the 
production and sale of fuel oil above 1,000 ppm sulfur for use in the 
waters within the proposed ECA (as well as internal U.S. waters); \91\ 
and (2) allow for the production and sale of up to 1,000 ppm sulfur 
fuel for use in C3 marine vessels.\92\
---------------------------------------------------------------------------

    \91\ For the purposes of this proposal, the term ``ECA'' as it 
is used in this Section IV refers to both the area of the proposed 
ECA and internal U.S. waters. Though the outer limits of the 
proposed sulfur limitation are the same as for the proposed ECA, the 
sulfur limitation in this proposal is not dependent on MEPC approval 
of the ECA.
    \92\ For the purpose of the discussion in this section, 
``Category 3 vessel'' refers to a commercial vessel with a Category 
3 propulsion engine; ``Category 2 vessel'' refers to a commercial or 
recreational vessel with a Category 2 propulsion engine; and 
``Category 1 vessel'' refers to a commercial or recreational vessel 
with only Category 1 or smaller engines. The proposed fuel 
provisions here apply to all of the engines on a given vessel.
---------------------------------------------------------------------------

    The majority of vessels with a C3 propulsion engine operate on 
high-sulfur, heavy fuel oil (HFO) (also known as residual, or bunker, 
fuel). Due to their use of heavy fuel, these marine diesel engines have 
very high PM and SO<INF>2</INF> emissions. Sulfur in the fuel is 
emitted from engines primarily as SO<INF>2</INF>; however a small 
fraction is emitted as sulfur trioxide (SO<INF>3</INF>) which 
immediately forms sulfate and is emitted as PM by the engine. In 
addition, much of the SO<INF>2</INF> emitted from the engine reacts in 
the atmosphere to form secondary PM. Reductions in residual fuel sulfur 
levels would lead to significant sulfate PM and SO<INF>2</INF> emission 
reductions which would provide dramatic environmental and public health 
benefits. However, in most cases, fuels that meet the long-term fuel 
sulfur standards will likely be distillate fuels, rather than HFO. In 
addition to reductions in sulfate PM, switching from HFO to distillate 
fuel may reduce black carbon emissions, fine particle counts, organic 
carbon, and metallic ash particles.
    HFO sold for use by these vessels is currently not subject to any 
EPA sulfur limits (as it is not regulated by our current sulfur 
program) and generally has very high levels of sulfur. The proposed 
modifications to our existing diesel fuel program will prohibit the 
production and sale of this fuel for use in an ECA. Instead, fuel sold 
for use in an ECA would not be allowed to exceed a sulfur content of 
1,000 ppm. In a complementary fashion, the amendment to MARPOL Annex VI 
designating the U.S. ECA will ensure that fuel used in an ECA, 
including fuel purchased in another country but used within the U.S. 
ECA, also meets a 1,000 ppm sulfur limit. Under our proposed 
regulations, fuel sold for use by C3 vessels in the U.S. ECA will be 
allowed to have a sulfur content as high as this 1,000 ppm sulfur 
limit, while fuel sold for use in Category 1 (C1; marine diesel engines 
up to 7 liters per cylinder displacement) and Category 2 (C2; marine 
diesel engines from 7 to 30 liters per cylinder) vessels would continue 
to be subject to the nonroad, locomotive, and marine \93\ (NRLM) diesel 
fuel sulfur requirements. In the event that the U.S. ECA is not 
approved in a timely manner, we will revisit the standards being 
proposed here in that context.
---------------------------------------------------------------------------

    \93\ For the purposes of this proposal (and the proposed 40 CFR 
Part 80 regulations), the term ``marine'' as it is used here refers 
to Category 1 and 2 marine diesel engines unless otherwise stated.
---------------------------------------------------------------------------

B. Current Diesel Fuel Standards

    The Nonroad Diesel program (finalized on June 29, 2004 (69 FR 
38958)) reduces the sulfur content of NRLM diesel fuel from 
uncontrolled levels down to a maximum sulfur level of 15 ppm. Refiners 
and importers are required to produce or import all NRLM diesel fuel at 
a sulfur level of 15 ppm or less by June 1, 2014. The main compliance 
mechanism of the diesel sulfur program is the Designate and Track (D&T) 
provisions, which allows NRLM diesel fuel to be distinguished from 
similar products (e.g., heating oil) and yet provides a means for 
diesel fuel to be fungibly transported through the fuel production and 
distribution system. Under D&T, refiners and importers are required to 
designate the type and sulfur level of each batch of fuel produced or 
imported. As this fuel is transferred through the distribution system, 
product transfer documents (PTDs) must be exchanged each time the batch 
changes custody. Along with PTDs, other required elements of D&T 
include quarterly and annual reporting, fuel pump labeling, and 
recordkeeping.
    The Nonroad Diesel program also contains certain provisions to ease 
refiners' transition to the lower sulfur standards and to enable the 
efficient distribution of all diesel fuels. These provisions, as 
discussed more below in Section IV.B.2, include special provisions for 
qualified small refiners, transmix processors, and entities in the fuel 
distribution system.
(1) Scope of the Nonroad Diesel Fuel Program
    The sulfur standards finalized by the Nonroad Diesel rule apply to 
all the diesel fuel that is produced and sold for use in NRLM diesel 
applications (all fuel used in NRLM diesel engines, except for fuels 
heavier than a No. 2 distillate used in Category 2 and 3 marine engines 
\94\ and any fuel that is exempted for national security or other 
reasons). While the Nonroad Diesel rule did not set sulfur standards 
for other distillate fuels (such as jet fuel, heating oil, kerosene, 
and No. 4 fuel oil), it did implement provisions to prevent the 
inappropriate use of heating oil and other higher sulfur distillate 
fuels in NRLM and locomotive and marine (LM) diesel applications. Sale 
of distillate fuels for use in nonroad, locomotive, or marine diesel 
engines will generally be prohibited unless the fuel meets the diesel 
fuel sulfur standards of 40 CFR Part 80.\95\ The regulated fuels under 
our diesel fuel sulfur program include those fuels listed in the 
regulations at 40 CFR 80.2(qqq).
---------------------------------------------------------------------------

    \94\ Category 3 marine engines frequently are designed to use 
residual fuels and include special fuel handling equipment to use 
the residual fuel.
    \95\ For the purposes of the diesel sulfur program, the term 
heating oil basically refers to any No. 1 or No. 2 distillate other 
than jet fuel, kerosene, and diesel fuel used in highway or NRLM 
applications. For example, heating oil includes fuel which is 
suitable for use in furnaces and similar applications and is 
commonly or commercially known or sold as heating oil, fuel oil, or 
other similar trade names.
---------------------------------------------------------------------------

    The current sulfur standards do not apply to: (1) No. 1 distillate 
fuel used to power aircraft; (2) Number 4, 5, and 6 fuels (e.g., 
residual fuels or residual fuel blends, intermediate fuel oil (IFO) 
Heavy Fuel Oil Grades 30 and higher), used for stationary source 
purposes; (3) any distillate fuel with a T-90 distillation point 
greater than 700 [deg]F, when used in Category 2 or 3 marine diesel 
engines (this includes Number 4, 5, and 6 fuels (e.g., IFO Heavy Fuel 
Oil Grades 30 and higher), including fuels meeting the American Society 
for Testing and Materials (ASTM) specifications DMB, DMC, and RMA-10 
and heavier); and (4) any fuel for which a national security or 
research and development exemption has been approved or fuel that is 
exported from

[[Page 44464]]

the U.S. The criterion that any distillate fuel with a T-90 greater 
than 700 [deg]F will not be subject to the sulfur standards when used 
in Category 2 or 3 marine engines was intended to exclude fuels heavier 
than No. 2 distillate, including blends containing residual fuel. In 
addition, residual fuel is not subject to the sulfur standards.
    While many marine diesel engines use No. 2 distillate, ASTM 
specifications for marine fuels identify four kinds of marine 
distillate fuels: DMX, DMA, DMB, and DMC. DMX is a special light 
distillate intended mainly for use in emergency engines. DMA (also 
called marine gas oil, or ``MGO'') is a general purpose marine 
distillate that contains no trace of residual fuel. These fuels can be 
used in all marine diesel engines but are primarily used by Category 1 
engines. DMX and DMA fuels intended for use in any marine diesel engine 
are subject to EPA's fuel sulfur standards.
    DMB, also called marine diesel oil, is not typically used with 
Category 1 engines, but is used for Category 2 and 3 engines. DMB is 
allowed to have a trace of residual fuel, which can be high in sulfur. 
This contamination with residual fuel usually occurs due to the 
distribution process, when distillate is brought on board a vessel via 
a barge that has previously contained residual fuel, or using the same 
supply lines as are used for residual fuel. DMB is produced when fuels 
such as DMA are brought on board the vessel in this manner. EPA's 
sulfur standards do apply to the distillate that is used to produce the 
DMB, for example the DMA distillate, up to the point that it becomes 
DMB. However, DMB itself is not subject to the EPA sulfur standards 
when it is used in Category 2 or 3 engines.
    DMC is a grade of marine fuel that may contain some residual fuel 
and is often a residual fuel blend. This fuel is similar to No. 4 
diesel, and can be used in Category 2 and Category 3 marine diesel 
engines. DMC is produced by blending a distillate fuel with residual 
fuel, for example at a location downstream in the distribution system. 
EPA's sulfur standards apply to the distillate that is used to produce 
the DMC, up to the point that it is blended with the residual fuel to 
produce DMC. However, DMC itself is not subject to the EPA sulfur 
standards when it is used in Category 2 or 3 marine engines.
    Residual fuel is not covered by the sulfur content standards as it 
is not a distillate fuel. Residual fuel is typically designated by the 
prefix RM (e.g., RMA, RMB, etc.). These fuels are also identified by 
their nominal viscosity (e.g., RMA10, RMG35, etc.). Most residual fuels 
require treatment by an onboard purifier-clarifier centrifuge system, 
although RMA and RMB do not require this.
    The distillation criterion adopted by EPA, T-90 greater than 700 
[deg]F, was designed to identify those fuels that are not subject to 
the sulfur standards when used in Category 2 or 3 marine diesel 
engines. It is intended to exclude DMB, DMC, and other heavy 
distillates or blends, when used in Category 2 or 3 marine diesel 
engines. We are not proposing to amend this provision in this action. 
However, under this proposal, all of these fuels, and any other diesel 
fuels or fuel oils, would be subject to a 1,000 ppm sulfur limit if 
they are produced or sold for use in an ECA.
(2) Flexibilities
    Compliance flexibilities were provided in the nonroad diesel sulfur 
regulations for qualified small refiners (69 FR 39047; Section IV.B.1) 
and for transmix processors (69 FR 39045; Section IV.A.3.d). Small 
refiners were provided, among other flexibility options, additional 
time for compliance with the 15 ppm NRLM standard, until June 1, 2014. 
Transmix processors, who distill off-specification interface mixtures 
of petroleum products from pipeline systems into gasoline and 
distillate fuel, have a simple refinery configuration that does not 
make it cost-effective for them to install and operate a hydrotreater 
to reduce distillate fuel sulfur content. As a result, transmix 
processors were provided with the flexibility to continue to produce 
all of their NRLM diesel fuel to meet the 500 ppm sulfur standard until 
June 1, 2014, and all of their LM diesel fuel to meet a 500 ppm sulfur 
limit indefinitely. The latter flexibility also allows for an outlet 
for off-spec fuel that may be produced in the distribution system.
    The D&T provisions, first established to distinguish highway from 
nonroad 500 ppm fuel, were thus continued beyond 2014 to ensure that 
500 ppm NRLM could be distinguished from similar fuel (e.g., heating 
oil that has a sulfur level of 500 ppm). In 2014 and beyond, D&T is 
essential to ensure that heating oil is not being inappropriately 
shifted downstream of the refiner into the NRLM and LM diesel fuel 
markets, circumventing the NRLM standards (as mentioned above in 
Section IV.B.1). Provisions in the Nonroad Diesel rule to ensure that 
heating oil is not used in NRLM applications include the use of a fuel 
marker to distinguish heating oil from NRLM and LM diesel fuel, dye 
solvent yellow 124, which is added to heating oil at the terminal 
level. The D&T provisions also provided parties in the diesel fuel 
industry with inherent flexibility. D&T maximizes the efficiency of the 
distribution system by allowing for fungible distribution of physically 
similar products, and minimizing the need for product segregation. 
Under D&T, diesel fuel with similar sulfur levels can be fungibly 
shipped up to the point of distribution from a terminal (where off-
highway diesel fuels must be dyed red, pursuant to Internal Revenue 
Service (IRS) requirements, to indicate its tax exempt status).
(3) Northeast/Mid-Atlantic Area
    In the Northeast, heating oil is distributed in significant 
quantities. Discussions with terminal operators in the Northeast (and 
other representatives of heating oil users and distributors) during the 
development of the Nonroad Diesel rule revealed concerns that the 
heating oil marker requirement would represent a significant burden on 
terminal operators and users of heating oil given the large volume of 
heating oil used in the Northeast. These parties suggested that if EPA 
prohibited the sale and use of diesel fuel produced by those utilizing 
the flexibilities described above, this area could be exempted from the 
marker requirement.
    Thus, the Northeast/Mid-Atlantic (NE/MA) area was developed (69 FR 
39063, Section IV.D.1.b.ii; see also 40 CFR 80.510(g) for the specific 
states and counties that comprise the NE/MA area). As there would be no 
way to distinguish heating oil from 500 ppm NRLM and 500 ppm LM diesel 
fuel in 2014 and beyond without the fuel marker, these fuel types are 
not allowed to be produced/imported, distributed and/or sold in the NE/
MA area during this time period (500 ppm NRLM diesel fuel may not be 
produced/imported, distributed and/or sold in the NE/MA area after 
2012).
    Similarly, high sulfur NRLM (HSNRLM) produced through the use of 
credits is not allowed in Alaska. However, EPA-approved small refiners 
in Alaska may produce HSNRLM diesel fuel. To receive this approval, a 
small refiner must provide EPA with a compliance plan showing how their 
HSNRLM diesel fuel will be segregated from all other distillate fuels 
through its distribution to end-users.
(4) Nonroad Diesel Program Transition Schedule
    The transition to lower sulfur diesel fuel for NRLM equipment is 
depicted in Figure VI-1 below. The transition for urban (areas served 
by the Federal Aid

[[Page 44465]]

Highway System) and rural Alaska are shown below in Figure VI-2.

                                                        Highway and Nonroad Diesel Fuel Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
                   Who                             Covered fuel            2006     2007     2008     2009     2010     2011     2012     2013     2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Highway diesel fuel.........        80% 15 ppm/20% 500 ppm
                                                      100% 15 ppm (including small refiner fuel)
                                          --------------------------------------------------------------------------------------------------------------
Large Refiners/Importers.................                    NR                       500      500      500       15       15       15       15       15
Large Refiners/Importers.................                    LM                       500      500      500      500      500       15       15       15
                                            NRLM w/credits (not in NE/MA or AK)        HS       HS       HS      500      500      500      500       15
Small Refiners...........................  NRLM (not in NE/MA, w/approval in AK)       HS       HS       HS      500      500      500      500       15
Transmix Processor & In-use..............         NR (not in NE/MA or AK)              HS       HS       HS      500      500      500      500       15
Transmix Processor & In-use..............         LM (not in NE/MA or AK)              HS       HS       HS      500      500      500      500      500
2006 dates for HW diesel fuel: June 1 for refiners/importers, September 1 for downstream parties, and October 15 for retailers and wholesale purchaser-
 consumers.
2010 dates for HW diesel fuel: As of the following dates, all HW diesel fuel must meet the 15 ppm standard--June 1 for refiners/importers, October 1 for
 downstream parties, and December 1 for retailers and wholesale purchaser-consumers (WPCs).
2007 dates for NRLM diesel fuel: June 1 for refiners, downstream requirements for NE/MA area* only (August 1 for terminals, October 1 for retailers/
 WPCs, and December 1 for in-use).
2010+ dates for NRLM diesel fuel: June 1 for refiners, August 1 for terminals, October 1 for retailers/WPCs, and December 1 for in-use.
** Anti-downgrading provisions begin October 15, 2006 **
*NOTE--No small refiner or credit NRLM can be used in the NE/MA area. Thus, the large refiner NRLM standard is also the in-use standard in the NE/MA
 area.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Figure IV-1 Highway, Nonroad, Locomotive, and Marine Diesel Fuel Sulfur Standards


------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Urban AK (areas served by the FAHS)
HW--
    <bullet> pre-2006: HS/uncontrolled.
    <bullet> 2006: 6/1/06--refiners to 15; 9/1/06--pipelines & terminals
     to 15; 10/15/06--retail & WPC to 15.
NRLM--
    <bullet> pre-2007: HS/uncontrolled.
    <bullet> 2007: 6/1/07--refiners to 500; 8/1/07--pipelines &
     terminals to 500; 10/1/07--retail & WPC to 500; 12/1/07--in-use,
     farm & construction tanks to 500 (note--urban AK is on same
     downstream schedule as NE/MA).
    <bullet> 2010: 6/1/10--refiners to 15 NR; 8/1/10--pipelines &
     terminals to 15 NR; 10/1/10--retail & WPC to 15 NR; 12/1/10--in-
     use, farm & construction tanks to 15 NR.
    <bullet> 2012: 6/1/12--refiners to 15 LM; 8/1/12--pipelines &
     terminals to 15 LM; 10/1/12--retail & WPC to 15 LM; 12/1/12--in-
     use, farm & construction tanks to 15 LM.
**Urban AK is on the same schedule as the main HW & NR diesel programs
 (except they're on the same downstream schedule as the NE/MA for NRLM
 in 2007); permanently exempt from dye & marker requirements **.
Rural AK
HW--
    <bullet> pre-2010: HS/uncontrolled.
    <bullet> 2010: 6/1/10--refiners to 15 HW; 8/1/10--pipelines &
     terminals to 15 HW; 10/1/10--retail & WPC to 15 HW; 12/1/10--in-
     use, farm & construction tanks to 15 HW.
NRLM--
    <bullet> pre-2010: HS/uncontrolled.
    <bullet> 2010: 6/1/10--refiners to 15 NRLM; 8/1/10--pipelines &
     terminals to 15 NRLM; 10/1/10--retail & WPC to 15 NRLM; 12/1/10--in-
     use, farm & construction tanks to 15 NRLM.
** Downstream transition dates are same for HW & NRLM in rural AK;
 permanent exemption from dye & marker requirements **.
General Note--credit & transmix fuel cannot be used in any area of AK;
 small refiner fuel can be used with approval (and only if properly
 labeled and segregated).
------------------------------------------------------------------------
Figure IV-2 Highway, Nonroad, Locomotive, and Marine Diesel Fuel Sulfur
  Standards for Alaska

C. Applicability

    Assuming adoption of an amendment to MARPOL Annex VI establishing a 
U.S. ECA, the fuel used in that ECA cannot exceed 1,000 ppm sulfur 
beginning January 1, 2015.\96\ As mentioned above, we are proposing to 
incorporate a similar 1,000 ppm sulfur limit into our CAA regulations 
at 40 CFR Part 80 through both a prohibition on the production and sale 
of fuel oil above 1,000 ppm sulfur for use in any marine vessels (C1, 
C2, and C3) in the area of the U.S. ECA, and an allowance for the 
production and use of 1,000 ppm sulfur fuel to be used in any engine on 
C3 marine vessels. We are proposing that fuel produced and sold for use 
in any engine on C1 and C2 marine vessels would continue to be subject 
to the existing diesel sulfur requirements which are more stringent 
than those being proposed in this action for C3 marine vessels; 
however, we request comment on whether engines on C2 marine vessels 
should also be allowed to use 1,000 ppm ECA fuel similar to those on C3 
marine vessels.
---------------------------------------------------------------------------

    \96\ Annex VI, Regulation 14 (located in the rulemaking docket, 
EPA-HQ-OAR-2007-0121-0107).
---------------------------------------------------------------------------

    Discussions with stakeholders in the diesel fuel production and 
distribution industry have indicated that they anticipate that most (if 
not all) fuel oil that could meet a 1,000 ppm sulfur standard would be 
considered a distillate or diesel fuel, because at a

[[Page 44466]]

1,000 ppm sulfur level it is nearly impossible for fuel to have a T-90 
distillation point at or above 700 [deg]F (i.e., be considered residual 
fuel). As discussed in Section IV.B.1, fuel with a T-90 less than 700 
[deg]F would be required to meet the standards of our existing diesel 
sulfur program which, in 2014 and beyond, is 15 ppm. We believe that 
because of the limits on the sulfur content of fuel used in ECAs, the 
existing diesel fuel sulfur program should be revised to allow for the 
production, distribution, purchase, and use of 1,000 ppm sulfur fuel 
oil for use in engines on C3 marine vessels. Therefore, we are 
proposing a new 1,000 ppm sulfur category for fuel oil produced and 
purchased for use in any engine on a C3 marine vessels (called ``ECA 
marine fuel''). This proposed fuel sulfur requirement would largely 
supplement the existing diesel fuel sulfur requirements and would 
harmonize EPA's diesel sulfur program with the requirements of Annex 
VI. Under this proposed action, owners of Category 3 marine vessels 
would be able to purchase and use 1,000 ppm sulfur fuel, which will 
allow those vessels to comply with the sulfur limits in the U.S. ECA 
(and any other ECA worldwide) and in U.S. internal waters.

D. Fuel Sulfur Standards

    As discussed above in Section IV.C, in addition to the prohibition 
on the sale of fuel greater than 1,000 ppm sulfur for use in any marine 
vessel operating within the U.S. ECA, we are also proposing the 
allowance of the production, distribution, and sale of 1,000 ppm sulfur 
ECA marine fuel, which we discuss more in this section.
    Prior to this action and, pending the establishment of the North 
American ECA, the kind of fuel produced and sold for use by C3 marine 
vessels had uncontrolled sulfur levels as it was not subject to the 
NRLM sulfur limits. This was reflected in the regulations by exempting 
these kinds of fuel from the definition of NRLM diesel fuel and the 
NRLM sulfur limits (40 CFR 80.2(nnn)). The combined effect of Annex VI 
and these regulations is to require that any fuel sold for use in any 
engine on a C3 marine vessel operating in an ECA be 1,000 ppm sulfur or 
lower. Fuel oil used or sold for use in C3 marine vessels in an ECA 
will therefore go from uncontrolled, high sulfur levels to no higher 
than 1,000 ppm sulfur. Under Annex VI, fuel with sulfur levels greater 
than 1,000 ppm cannot be used in a marine vessel operating in an ECA, 
no matter where the fuel is purchased. Consistent with this, the 
proposed section 211(c) controls would prohibit the production and sale 
of any fuel for use in the U.S. ECA that is above 1,000 ppm sulfur.
    The requirements for 1,000 ppm sulfur fuel oil apply to the North 
Sea, the Baltic Sea, and any other ECAs established around the world, 
so this fuel will be produced by refiners in other countries. Under 
EPA's current NRLM program, this 1,000 ppm sulfur fuel would be subject 
to the 15 ppm NRLM sulfur limit in 2014 and later. If EPA were to 
require that fuel produced, distributed, and sold for use for C3 
vessels in the U.S. ECA meet the 15 ppm sulfur standard after 2014, we 
believe that C3 vessel owners would simply purchase 1,000 ppm sulfur 
fuel elsewhere to be used here in the U.S. ECA. This could be an 
extremely inefficient process for ship owners. It would also mean a 
loss of sales for U.S. refiners of fuel that these C3 vessel owners 
purchase. These impacts would add to the costs and burdens of the 
program with no corresponding environmental benefit. Therefore, we 
believe that it is reasonable to allow U.S. refiners and importers to 
produce 1,000 ppm sulfur fuel for use by C3 vessels. Thus, we are 
proposing and requesting comment on a new fuel sulfur standard of 1,000 
ppm for fuel produced, distributed, and sold for use in C3 marine 
vessels. While we would expect use of this fuel to be concentrated in 
the area of the U.S. ECA (and any other ECA) and U.S. internal waters, 
we are allowing its use by C3 marine vessels in all locations, to 
encourage its general use. We are proposing that after 2014, no fuel 
above 15 ppm could be used in C1 or C2 vessels; however, we request 
comment on whether or not C2 vessels should be treated similarly to C3 
vessels.
    We note that the combination of the Annex VI ECA provisions and the 
modifications proposed in this action for the diesel sulfur program 
will achieve very significant benefits compared to the existing 
program. The production and use of 1,000 ppm ECA marine fuel, as well 
as 15 ppm NRLM diesel fuel, will replace much higher sulfur fuel usage, 
and there is no additional benefit to be gained by requiring the sale 
of 15 ppm sulfur diesel fuel for use by C3 vessels as a practical 
matter because we believe C3 vessels will simply purchase 1,000 ppm 
sulfur fuel elsewhere. In order to incorporate these modifications into 
our existing program under the Clean Air Act, we need to create a new 
fuel designation for allowable fuel under our program.
(1) Proposed Amendments to the Existing Diesel Fuel Sulfur Program
    We are proposing to prohibit the production, distribution, and sale 
or offer for sale of any fuel for use in any marine diesel vessels (C1, 
C2, and C3) operating in the U.S. ECA that is greater than 1,000 ppm 
sulfur. We are also proposing and requesting comment on allowing a 
sulfur limitation of 1,000 ppm for fuel produced, distributed, and sold 
or offered for sale for use in C3 marine vessels. To simplify the 
existing diesel fuel sulfur program, we are also proposing to eliminate 
the 500 ppm LM diesel fuel standard once the 1,000 ppm standard becomes 
effective. Under the existing diesel sulfur program, 500 ppm LM diesel 
fuel can be produced by transmix processors indefinitely, and can only 
be used by locomotives and marine vessels that do not require 15 ppm. 
The original intent of allowing for this fuel was to serve as an outlet 
for interface and downgraded diesel fuel post-2014 that would otherwise 
not meet the 15 ppm sulfur standard. However, we believe that the 1,000 
ppm sulfur ECA marine fuel could now serve as this outlet. We believe 
that transmix generated near the coasts would have ready access to 
marine applications, and transmix generated in the mid-continent could 
be shipped via rail to markets on the coasts, and we request comment on 
this.
    Elimination of the 500 ppm LM diesel fuel standard would simplify 
the diesel sulfur program such that sulfur could serve as the 
distinguishing factor for fuels available for use after 2014 (the 
designated products under the diesel fuel program would thus be: 15 ppm 
motor vehicle, nonroad, locomotive, and marine (MVNRLM) diesel fuel, 
heating oil, and 1,000 ppm ECA marine fuel). With this proposed 
approach, beginning in 2014, only 15 ppm NRLM diesel fuel could be used 
in locomotive and C1/C2 marine diesel applications (and 1,000 ppm ECA 
marine fuel could be used in any engine on C3 marine vessels). Further, 
this would help to streamline the D&T program as there would no longer 
be a need for a fuel marker to distinguish 500 ppm LM diesel fuel from 
heating oil. Below, we discuss the aspects of D&T that we are proposing 
to change, which we believe will greatly simplify the diesel sulfur 
program.
(a) Compliance and Implementation
(i) Northeast/Mid-Atlantic Area and the Fuel Marker
    With the proposed elimination of the 500 ppm LM designation in 
2014, parties in the fuel production and distribution industry would 
still be

[[Page 44467]]

required to register and designate their products and adhere to PTD, 
fuel pump labeling, and recordkeeping requirements. But we believe that 
the tracking portion of D&T can be simplified. Currently, annual 
reporting is required under Sec.  80.601 for D&T through June 30, 2015 
(the final annual report is due August 31, 2015). This final reporting 
period is to ensure that heating oil is not being inappropriately 
shifted into the 500 ppm LM diesel fuel pool. However, with the 
proposed elimination of this fuel designation, we request comment on 
ending D&T annual reporting in 2014, rather than 2015. Under such a 
scenario, the final annual reporting period would instead be July 1, 
2013 through May 31, 2014, with the report due to EPA on August 31, 
2014.
    We believe that the proposed elimination of the 500 ppm LM diesel 
fuel designation would also, beginning June 1, 2014, negate the need 
for the heating oil marker and the NE/MA area. After 2014, the heating 
oil marker requirement in the existing diesel sulfur program is for the 
sole purpose of distinguishing heating oil from 500 ppm LM diesel fuel, 
to prevent heating oil from swelling the 500 ppm LM diesel fuel pool. 
Also, as there is no marker requirement for heating oil in the NE/MA 
area, the diesel sulfur program currently does not allow for 500 ppm LM 
diesel fuel to be produced, distributed, or purchased for use in the 
NE/MA area after 2012. However, if 500 ppm LM diesel fuel did not 
exist, there would no longer be a need for the heating oil marker; fuel 
designations and sulfur level could serve as the distinguishing factor 
between the available fuels (15 ppm MVNRLM diesel fuel, 1,000 ppm ECA 
marine fuel, and heating oil). Further, there would not be a need for 
the NE/MA area if there were no heating oil marker.
(ii) PTDs and Labeling
    We are proposing new PTD language for the 1,000 ppm ECA marine fuel 
designation at draft regulation Sec.  80.590. As stated in draft 
regulation Sec.  80.590(a)(7)(vii), we are proposing that the following 
statement be added to PTDs accompanying 1,000 ppm sulfur ECA marine 
fuel: ``1,000 ppm sulfur (maximum) ECA Marine Fuel. For use in Category 
3 marine vessels only. Not for use in engines not installed on C3 
marine vessels.''
    Appendix V of Annex VI also includes language that is required on 
bunker delivery notes. Compliance requirements of this action, such as 
PTDs, are not intended to supplant or replace requirements of Annex VI 
(and we encourage regulated entities to consult Annex VI to ensure that 
they are fully aware of all requirements that must be met in addition 
to EPA's requirements). However, if a party's bunker delivery note also 
contains the information required under our regulations for PTDs, we 
would consider the bunker delivery note to also suffice as a PTD.
    We are also proposing new pump labeling language for the 1,000 ppm 
sulfur ECA marine fuel designation at regulation Sec.  80.574. Diesel 
fuel pump labels required under the existing diesel sulfur regulations 
must be prominently displayed in the immediate area of each pump stand 
from which diesel fuel is offered for sale or dispensing. However, we 
understand that there may be cases where it is not feasible to affix a 
label to a fuel pump stand due to space constraints (such as diesel 
fuel pumps at marinas) or where there is no pump stand, thus the 
current regulations allow for alternative pump labels with EPA 
approval. Previously approved alternative fuel pump labels have 
included the use of permanent placards in the immediate vicinity of the 
fuel pump; we request comment on other possible alternative labeling 
schemes for situations where pump labeling may not be feasible. As 
stated in draft regulation Sec.  80.574, we are proposing to replace 
the 500 ppm LM diesel fuel pump label language with the following fuel 
pump label language for 1,000 ppm sulfur ECA marine fuel: ``1,000 ppm 
SULFUR ECA MARINE FUEL (1,000 ppm Sulfur Maximum). For use in Category 
3 marine vessels only. WARNING--Federal law prohibits use in any engine 
that is not installed on a C3 marine vessel; use of fuel oil with a 
sulfur content greater than 1,000 ppm in the U.S. Emission Control Area 
and all U.S. internal waters is illegal.'' We also request comment on 
whether or not fuel pumps are (or can be) used to fuel C3 marine 
vessels; and if they are not used, if PTDs or some other documentation 
is a more appropriate mechanism to convey the fuel sulfur level to a C3 
marine vessel operator.
    Under this program, we are also proposing to eliminate MVNRLM 
diesel fuel labeling requirements from EPA's regulations. In 2014 and 
beyond, EPA will not require ``visible evidence'' of red dye in off-
road fuels; however this requirement still exists in IRS's taxation 
regulations to denote that off-road fuels are untaxed. EPA's required 
label for 15 ppm NRLM diesel fuel (instead of one 15 ppm MVNRLM diesel 
fuel label) is mainly to denote that 15 ppm NRLM will be dyed red, 
while 15 ppm MV diesel fuel will not. Further, after October 1, 2014, 
all MVNRLM diesel fuel available for purchase and/or distribution will 
be 15 ppm. We believe that it is not appropriate for EPA to retain a 
labeling requirement for MVNRLM diesel fuel given the fact that the red 
dye provision is no longer EPA's requirement. Please note, however, 
that if MVNRLM labeling requirements were removed from EPA's 
regulations, marketers and wholesale purchaser-consumers would still be 
free to continue to label their pump stands to help with consumer 
awareness. Labeling will continue to be required for heating oil and, 
as proposed above, for ECA marine fuel.
    Additionally, if labeling requirements for MVNRLM diesel fuel were 
to be removed from EPA's regulations, EPA would consult with IRS 
regarding handling labels in IRS's regulations at Title 26 of the Code 
of Federal Regulations.
(b) Timing of the Standard
    Currently, all refiners and importers are required to produce all 
of their NRLM diesel fuel to meet the 15 ppm standard beginning June 1, 
2014. To allow transition time for the distribution system, terminals 
are allowed until August 1, 2014 to begin dispensing 15 ppm NRLM diesel 
fuel, retailers and wholesale purchaser-consumers are allowed until 
October 1, 2014, and end-users are allowed until December 1, 2014. To 
be consistent with the existing diesel program, we are proposing to 
allow refiners to begin producing 1,000 ppm sulfur ECA marine fuel 
beginning June 1, 2014, and downstream parties would follow the current 
NRLM transition schedule (August, October, and December). We believe 
that following the same transition schedule as the existing diesel 
sulfur program would best facilitate the availability of 1,000 ppm ECA 
marine fuel for purchase and use by the Annex VI January 1, 2015 date. 
We request comment on the concept of a transition period of June 1-
December 1, 2014 for the 1,000 ppm sulfur standard.
(2) Alternative Options
    We have identified two potential alternatives to the proposed 
changes to the existing diesel fuel sulfur program, above. We request 
comment on any related aspects of these alternative options, as well as 
any additional alternative options.
(a) Creation of Expanded NE/MA Area
    While the proposal of a 1,000 ppm sulfur standard is to incorporate 
the benefits of this more stringent standard for fuel used in engines 
on C3 marine vessels into our current diesel program

[[Page 44468]]

and harmonize the current program with Annex VI, our intent is to do so 
with the least amount of impact on the existing diesel sulfur program, 
so we believe that this rulemaking also presents us with an opportunity 
to simplify the designate and track requirements.
    We request comment on an alternative to the proposed general 
program: to expand the NE/MA area to cover all coastlines that border 
the proposed U.S. ECA. This alternative would keep the requirements of 
the diesel sulfur program largely the same as the existing program. 
Further, this option would allow for 500 ppm LM diesel fuel to continue 
to be utilized by the locomotive industry (and the marine industry) in 
the mid-continent (outside the expanded NE/MA area) and to serve as an 
outlet for off-spec and transmix diesel fuel. As discussed above in 
Section IV.B.3, under our current diesel fuel sulfur program, 500 ppm 
LM diesel fuel cannot be used in the NE/MA area (or Alaska) after 2012. 
Under the ``expanded NE/MA'' area option, designate and track would be 
simplified in the expanded NE/MA area as the only distillate fuels 
available would be 15 ppm MVNRLM diesel fuel, heating oil, and 1,000 
ppm ECA marine fuel. The reduction in types of fuel available for use 
in this area would also allow for sulfur level to serve as the 
distinguishing factor, and no additional markers or dyes would be 
necessary to differentiate fuels in this area.
    The creation of an expanded NE/MA area, however, would mean that an 
additional mechanism to distinguish 500 ppm LM diesel fuel from 1,000 
ppm ECA marine fuel would still be needed in non-NE/MA areas.
    We request comment on the creation of an expanded NE/MA area.
(b) Retention of 500 ppm LM Diesel Fuel Standard
    Another alternative to the option of replacing the 500 ppm LM 
diesel fuel standard with the 1,000 ppm sulfur standard would be to 
retain the 500 ppm LM diesel fuel standard such that both 500 ppm LM 
diesel fuel and 1,000 ppm ECA marine fuel would be available. Under 
such an option, sulfur would not be able to serve as the distinguishing 
factor to maintain segregation of 1,000 ppm fuel from other EPA 
distillate categories. The fuel marker would still be needed to 
distinguish 500 ppm LM from heating oil.
    This option would allow for 500 ppm LM diesel fuel to still be 
utilized by the locomotive and marine industries (for those engines not 
requiring 15 ppm sulfur diesel fuel) and also serve as an outlet for 
off-spec and transmix diesel fuel. However, this option would not serve 
to streamline D&T, and 500 ppm LM diesel fuel would not necessarily be 
needed along the coastlines (as 1,000 ppm sulfur fuel would be 
available for use by C3 marine vessels). We request comment on the 
option of retaining the 500 ppm LM diesel fuel standard nationwide 
along with the proposed 1,000 ppm ECA marine fuel sulfur standard.
    We request comment on the proposed program and alternative options, 
the proposed prohibition on the sale of fuel above 1,000 ppm sulfur for 
use in all marine vessels operating in the U.S. ECA and U.S. internal 
waters, and any related compliance aspects.

E. Technical Amendments to the Current Diesel Fuel Sulfur Program 
Regulations

    Following publication of the technical amendments to the Highway 
and Nonroad Diesel Regulations (71 FR 25706, May 1, 2006), we 
discovered additional errors and clarifications within the diesel 
regulations at 40 CFR part 80, Subpart I that we are addressing in this 
action. These items are merely typographical/printing errors and 
grammar corrections. A list of the changes that we propose making to 
Subpart I is below in Table IV-1. We welcome comments on any of these 
proposed amendments to the regulations.

   Table IV-1--Proposed Technical Amendments to the Diesel Fuel Sulfur
                               Regulations
------------------------------------------------------------------------
                  Section                       Description of change
------------------------------------------------------------------------
80.525(a)-(d).............................  Removal of the term ``motor
                                             vehicle'' from this
                                             section.
80.551(f).................................  Correction of printing
                                             error.
80.561....................................  Correction of typographical
                                             error in title.
80.593....................................  Correction of typographical
                                             error in introductory text.
80.599(e)(4)..............................  Correction of printing error
                                             in definition of terms
                                             ``<greek-i>1MV15I'' and
                                             ``NPMV15I''.
80.600(a)(12).............................  Amended to correct date
                                             (``May 31, 2014'' instead
                                             of ``June 1, 2014'').
80.600(i).................................  Amended to remove duplicate
                                             sentence.
80.601(b)(3)(x)...........................  Amending to correct dates
                                             (``August 31'' instead of
                                             ``August 1'').
80.612(b).................................  Amended to fix typographical
                                             error in paragraph.
------------------------------------------------------------------------

V. Emission Control Areas for U.S. Coasts

    The proposed Clean Air Act standards described above are part of a 
coordinated strategy for ensuring that all ships that affect U.S. air 
quality will be required to meet stringent NO<INF>X</INF> and fuel 
sulfur requirements. Another component of this strategy consists of 
pursuing ECA designation for U.S. and Canadian coasts in accordance 
with Annex VI of MARPOL. ECA designation will ensure that all ships, 
foreign-flagged and domestic, are required to meet stringent 
NO<INF>X</INF> and fuel sulfur requirements while operating within 200 
nautical miles of most U.S. coasts. This section describes what an ECA 
is, the process for obtaining ECA designation at the International 
Maritime Organization, and summarizes the U.S. and Canadian proposal 
for an amendment to MARPOL Annex VI designating most U.S. and Canadian 
coasts as an ECA (referred to as the ``U.S./Canada ECA'' or the ``North 
American ECA''), submitted to IMO on March 27, 2009.\97\ We also 
discuss how emissions from foreign OGV may be covered should approval 
of the U.S. ECA be delayed.
---------------------------------------------------------------------------

    \97\ Proposal to Designate an Emission Control Area for Nitrogen 
Oxides, Sulphur Oxides and Particulate Matter, Submitted by the 
United States and Canada. IMO Document MEPC59/6/5, 27 March, 2009. A 
copy of this document can be found at http://www.epa.gov/otaq/regs/nonroad/marine/ci/mepc-59-eca-proposal.pdf
---------------------------------------------------------------------------

A. What is an ECA?

(1) What Emissions Standards Apply in an ECA?
    MARPOL Annex VI contains international standards to control air 
emissions from ships. The NO<INF>X</INF> and SO<INF>X</INF>/PM programs 
each contain two sets of standards. The global standards for the sulfur 
content of fuel and NO<INF>X</INF> emissions from engines apply to 
ships at all times. In recognition that some areas may require further 
control, Annex VI also contains more stringent NO<INF>X</INF> and 
SO<INF>X</INF>/PM geographic-based standards that apply to ships 
operating in designated Emission Control Areas.

[[Page 44469]]

    The current global fuel sulfur (S) limit is 45,000 ppm\98\ S and 
will tighten to 35,000 ppm S in 2012. Depending on a 2018 fuel 
availability review, the MARPOL Annex VI global fuel sulfur limit will 
be further reduced to 5,000 ppm S as early as 2020. In contrast, ships 
operating in designated ECAs are subject to a fuel sulfur limit of 
15,000 ppm S. The ECA limit is reduced to 10,000 ppm S in March 2010 
and 1,000 ppm S in 2015. In addition, Tier 3 NO<INF>X</INF> standards 
will apply to new engines operating in ECAs beginning in 2016. These 
Tier 3 NO<INF>X</INF> standards represent an 80% reduction in 
NO<INF>X</INF> beyond current Tier 1 standards and are anticipated to 
require the use of aftertreatment technology such as SCR. We are 
proposing to adopt similar Tier 3 standards as part of our Clean Air 
Act program (see Section III).
---------------------------------------------------------------------------

    \98\ Note that MARPOL Annex VI expresses these standards in 
units of % (m/m) sulfur. 10,000 ppm S equals 1 percent S.
---------------------------------------------------------------------------

    There are currently two ECAs in effect today, exclusively 
controlling SO<INF>X</INF>; thus they are called Sulfur Emission 
Control Areas, or SECAs. The first SECA was designated to control the 
emissions of SO<INF>X</INF> in the Baltic Sea area and entered into 
force in May 2005. The second SECA was designated to control the 
emissions of SO<INF>X</INF> in the North Sea area and entered into 
force in November 2006.
(2) What is the Process for Obtaining ECA Designation?
    A proposal to amend Annex VI to designate an ECA can be submitted 
by a party to Annex VI. A party is a country that ratified Annex VI. 
The proposal for amendment must be approved by the Parties to MARPOL 
Annex VI; this would take place at a meeting of the Marine Environment 
Protection Committee (MEPC). The U.S. deposited its Instrument of 
Ratification with the IMO on October 8, 2008. Annex VI entered into 
force for the U.S. on January 8, 2009, making the U.S. eligible to 
apply for an ECA.
    The criteria and procedures for ECA designation are set out in 
Appendix III to MARPOL Annex VI. A proposal to designate an ECA must 
demonstrate a need to prevent, reduce, and control emissions of 
SO<INF>X</INF>, PM, and/or NO<INF>X</INF> from ships operating in that 
area. The specific criteria are summarized below:
    <bullet> A delineation of the proposed area of application;
    <bullet> A description of the areas at risk on land and at sea, 
from the impacts of ship emissions;
    <bullet> An assessment of the contribution of ships to ambient 
concentrations of air pollution or to
    <bullet> Adverse environmental impacts;
    <bullet> Relevant information pertaining to the meteorological 
conditions in the proposed area of
    <bullet> Application to the human populations and environmental 
areas at risk;
    <bullet> Description of ship traffic in the proposed ECA;
    <bullet> Description of the control measures taken by the proposing 
Party or Parties;
    <bullet> Relative costs of reducing emissions from ships compared 
with land-based controls; and
    <bullet> An assessment of the economic impacts on shipping engaged 
in international trade.
    An amendment to designate an ECA must be adopted by the Parties to 
Annex VI, as an amendment to Annex VI. Assuming the USG proposal to 
amend Annex VI is considered at MEPC 59, the earliest possible adoption 
date is the following MEPC meeting, MEPC 60, which is anticipated to 
take place in March 2010. Given the MARPOL amendment acceptance process 
and the lead time specified in the regulations, an ECA adopted on this 
timeline could be expected to enter into force as early as August 2012.

B. U.S. Emission Control Area Designation

    EPA worked with the U.S. Coast Guard, State Department, the 
National Oceanic and Atmospheric Administration and other agencies to 
develop the analysis supporting ECA designation for U.S. coasts 
contained in the U.S. and Canadian submittal to IMO. In addition, we 
collaborated with Environment Canada. As a result, the proposal for ECA 
designation that was submitted to IMO was for a combined U.S./Canada 
ECA submission. This approach has several advantages. First, the 
emission reductions within a Canadian ECA will lead to air quality 
improvements in the U.S. Second, a joint ECA helps minimize any 
competitive issues between U.S. and Canadian ports, such as in the 
Puget Sound area, that could arise from ECA standards. Third, IMO 
encourages a joint submittal where there is a common interest in 
emission reductions on neighboring waters.
(1) What Areas Would Be Covered in a U.S./Canada ECA?
    The area included in the U.S. and Canadian submittal to IMO for ECA 
designation generally extends 200 nautical miles from the coastal 
baseline, except where this distance goes beyond the Exclusive Economic 
Zones (EEZ) of the U.S. and Canada, in which case the ECA would be 
limited by the boundary of the applicable EEZ. This area would include 
the Pacific Coast, the Atlantic/Gulf Coast and the Southeastern 
Hawaiian Islands. On the Pacific Coast, the ECA would be bounded in the 
north such that it includes the approaches into Anchorage, Alaska, but 
not the Aleutian Islands or points north. It would continue 
contiguously to the south including the Pacific coasts of Canada and 
the U.S., with its southernmost boundary at the point where California 
meets the border with Mexico. In the Atlantic/Gulf Coast, the ECA would 
be bounded in the west by the border of Texas with Mexico and continue 
contiguously to the east around the peninsula of Florida and north up 
the Atlantic coasts of the U.S. and Canada and would be bounded in the 
north by the 60th North parallel. The Southeastern Hawaiian Islands 
that were included in the ECA submittal are Hawaii, Maui, Oahu, 
Molokai, Niihau, Kauai, Lanai, and Kahoolawe.

[[Page 44470]]

[GRAPHIC] [TIFF OMITTED] TP28AU09.000

    Not included in the ECA submittal were the Pacific U.S. 
territories, smaller Hawaiian Islands, the U.S. territories of Puerto 
Rico and the U.S. Virgin Islands, Western Alaska including the Aleutian 
Islands, and the U.S. and Canadian Arctic. The U.S. and Canada did not 
make a determination or imply that these areas suffer no adverse impact 
from shipping. Further information must be gathered to properly assess 
these areas. If further information supports the need for expansion of 
the ECA to other U.S. or Canada areas, we would submit a future, 
supplemental

[[Page 44471]]

proposal for ECA designation of these areas.
(2) What Analyses Were Performed in Support of a U.S./Canada ECA?
    We performed a comprehensive analysis to estimate the degree of 
human health risk and environmental degradation that is posed by air 
emissions from ships operating in their ports and along our coasts. To 
evaluate the risk to human populations, state-of-the-art assessment 
tools were used to apply widely accepted methods with advanced computer 
modeling techniques. The analyses incorporated detailed ship traffic 
data, the most recent emissions estimates, detailed observed 
meteorological data, current scientific understanding of exhaust plume 
behavior (both physical dispersion and photochemical reaction) and the 
latest epidemiologic databases of health effects attributable to 
pollutant exposure levels to estimate the current impacts of shipping 
on human health and the environment. In addition, sulfate and nitrate 
deposition modeling was performed to assess the impacts of nitrogen 
nutrient loading and acidification on U.S. ecosystems.
    Two contrasting future scenarios were evaluated: one in which ships 
continue to operate with current emissions performance while operating 
in the specified area, and one in which ships comply with ECA 
standards. The analysis demonstrated that ECA designation for U.S. 
coasts could save thousands of lives each year, relieve millions of 
acute respiratory symptoms, and benefit many of the most sensitive 
ecosystems. This analysis is consistent with, and incorporated in, the 
benefits estimates presented in Section VIII.

C. Technological Approaches To Comply With ECA Standards

    When operating within the ECA, all ships would have to comply with 
the 0.1% fuel sulfur limit and vessels built after December 31, 2015 
would have to comply with the Tier 3 NO<INF>X</INF> limits described 
above. This section describes how ships would comply with these 
requirements.
(1) How Will Ships Comply With the ECA NO<INF>X</INF> Standards?
    Ships constructed beginning in 2016 will have to comply with the 
MARPOL Annex VI Tier III NO<INF>X</INF> limits. These are equivalent to 
the Tier 3 NO<INF>X</INF> limits we are proposing in this action under 
our Clean Air Act authority. These standards are geographic in nature, 
in that they apply to any vessel built beginning in 2016 while it is 
operating in an ECA. Once a U.S./Canada ECA is designated through 
amendment to MARPOL Annex VI, the requirements will be enforceable for 
most vessels through the Act to Prevent Pollution from Ships (see 
Section VI.B).
    As explained in Section III, we anticipate that SCR would be the 
most likely approach to meet these NO<INF>X</INF> limits. When 
operating in the ECA, SCR units would be active, meaning that urea 
would be injected into the exhaust to facilitate catalytic reduction of 
NO<INF>X</INF> emissions. When outside of the ECA, the unit would 
likely be inactive, meaning that urea would not be injected into the 
exhaust. When the SCR unit is inactive, the exhaust flow could either 
continue to pass through the SCR unit or be diverted around the 
catalyst.
    Under the MARPOL NO<INF>X</INF> Technical Code, a means for 
monitoring the use of urea must be provided which must include 
``sufficient information to allow a ready means of demonstrating that 
the consumption of such additional substances is consistent with 
achieving compliance with the applicable NO<INF>X</INF> limit.'' In 
addition, where an NO<INF>X</INF> reducing device, such as SCR, is 
used, one of the options for providing verification of compliance with 
the NO<INF>X</INF> standard is through direct measurement and 
monitoring of NO<INF>X</INF> emissions.
    When operating in an ECA, as discussed below, it is anticipated 
that vessels will operate on lower sulfur fuel than outside the ECA. 
Therefore, lower sulfur fuel will primarily be used when the SCR unit 
is active. However, ship operators may use an exhaust gas scrubber as 
an alternative to lower sulfur fuel to meet the SO<INF>X</INF>/PM ECA 
requirement. In this case, the SCR unit would likely be optimized for 
operation on higher sulfur fuel, with the SO<INF>X</INF> scrubber 
situated downstream of the SCR unit.
(2) How Will Ships Comply With the ECA Fuel Sulfur Standards?
    As discussed above, the MARPOL Annex VI fuel sulfur limit for ships 
operating in an ECA is 15,000 ppm today and reduces to 10,000 ppm in 
March 2010 and further to 1,000 ppm in 2015. We anticipate that the 
1,000 ppm fuel sulfur limit, beginning in 2015, will likely result in 
the use of distillate fuel for operation in ECAs. This would require 
the vessel to switch from a higher sulfur fuel to 1,000 ppm S fuel 
before entering the ECA. The practical implications of fuel switching 
are discussed below. As an alternative to operating on lower sulfur 
fuel, an exhaust gas cleaning device may be used to remove sulfur from 
the exhaust. These devices, which are colloquially known as 
SO<INF>X</INF> scrubbers, are also discussed below.
(a) Fuel Switching
    Currently, the majority of ocean-going vessels use residual fuel 
(also called HFO or IFO) in their main propulsion engines, as this fuel 
is relatively inexpensive and has a good energy density. This fuel is 
relatively dense (`heavy') and is created as a refining by-product from 
typical petroleum distillation. Residual fuels typically are composed 
of heavy, residuum hydrocarbons and can contain various contaminants 
such as heavy metals, water and sulfur compounds. It is these sulfur 
compounds that cause the SO<INF>X</INF> emissions when the fuel is 
combusted. If the vessel does not employ the use of a sulfur scrubber 
or other technology, it will most likely operate on a marine distillate 
fuel while in an ECA in order to meet the sulfur emission requirements.
    The sulfur in marine fuel is primarily emitted as SO<INF>2</INF>; 
however, a small fraction (about 2 percent) is converted to 
SO<INF>3</INF>. SO<INF>3</INF> almost immediately forms sulfate and is 
emitted as direct PM by the engine. Consequently, emissions of 
SO<INF>2</INF> and sulfate PM are very high for engines operating on 
residual fuel. Switching from high sulfur residual fuel to lower sulfur 
distillate fuel results in large reductions in SO<INF>2</INF> and 
sulfate PM emissions. In addition to high sulfur levels, residual fuel 
contains relatively high concentrations of low volatility, high 
molecular weight organic compounds and metals. Organic compounds that 
contribute to PM can be present either as a nucleation aerosol or as a 
material adsorbed on the surfaces of agglomerated elemental carbon soot 
particles and metallic ash particles. The sulfuric acid aerosol in the 
exhaust provides a nucleus for agglomeration of organic compounds. 
Operation on higher volatility distillate fuel reduces both nucleation 
and adsorption of organic compounds into particulate matter. Therefore, 
in addition to direct sulfate PM reductions, switching from residual 
fuel to distillate fuel reduces organic PM and metallic ash particles 
in the exhaust.
    In the majority of vessels which operate on residual fuel, marine 
distillate fuel is still used for operation during routine maintenance, 
prior to and immediately after engine shut-down, or in emergencies. 
Standard procedures today have been established to ensure that this 
operational fuel switchover is performed safely and efficiently. 
Mainly, in order for the vessel to completely switch between residual 
and distillate fuel, the fuel

[[Page 44472]]

pumps and wetted lines will need to be completely purged by the new 
fuel to ensure that the ship is burning the correct fuel for the area. 
This purging will vary from ship to ship due to engine capacity, 
design, operation, and efficiency. Provided the ship has separate 
service tanks for distillate and residual fuel (most, if not all, 
vessels do), fuel switching time should be limited only by maximum 
allowable rate of fuel temperature change. Additionally, for a longer 
operation period such as would occur while in an ECA, we investigated 
several other fuel switching topics to ensure that vessels would not 
have long-term issues from operating on the marine distillate fuels.
    Marine distillate fuels are similar in composition and structure to 
other petroleum-based middle distillate fuels such as diesel and No. 2 
heating oil, but they have a much lower allowable sulfur content than 
residual fuels. This lower sulfur content means that by combusting 
marine distillate fuel in their propulsion engines, vessels operating 
within the ECA would meet the stricter SO<INF>X</INF> requirements. 
However, sulfur content is not the only difference between the marine 
residual and distillate fuels; they also have different densities, 
viscosities, and other specification limits.
    The maritime industry has analyzed the differences between residual 
and distillate fuel compositions to address any potential issues that 
could arise from switching operation of a C3 engine from residual fuel 
to distillate fuel. The results from this research has evolved into 
routine operational switching procedures that ensure a safe and 
efficient way for the C3 engines to switch operation between the 
residual and distillate fuels. A brief summary of the fuel differences, 
as well as any potential issues and their usual solutions, is presented 
below.
(i) Fuel Density
    Due to its chemical composition, residual fuel has a slightly 
higher density than marine distillates. Using a less dense fuel could 
affect the ballast of a ship at sea and would have to require 
compensation. Therefore, when beginning to operate on the distillate 
fuel, the vessel operator would have to pay attention to the vessel's 
ballast and may have to compensate for any changes that may occur. We 
anticipate that these procedures would be similar to operating the 
vessel with partially-full fuel tanks.
    Another consideration when switching to a lower density fuel is the 
change in volumetric energy content. Distillate fuel has a lower energy 
density content on a per gallon basis when compared to the residual 
fuel; however, per ton, distillate fuel's energy density is larger than 
the residual fuel. This means that when switching from residual fuel to 
distillate fuel, if the vessel's tanks are volumetrically limited 
(i.e., the tanks can only hold a set quantity of fuel gallons), the 
distance a vessel can travel on the distillate fuel may be slightly 
shorter than the distance the vessel could travel on the residual fuel 
due to the lower volumetric energy content of distillate fuel, which 
could require compensation. This distance reduction would be 
approximately 5% and would only be of concern while the vessel was 
operating on the distillate fuel (i.e., while in the U.S. ECA) as the 
majority of the time the vessel will be operating on the residual fuel. 
However, if the vessel is limited by weight, the higher energy content 
per ton of fuel would provide an operational advantage.
(ii) Kinematic Viscosity
    Residual fuel's kinematic viscosity is much higher than marine 
distillate fuel's viscosity. Viscosity is the `thickness' of the fuel. 
If this parameter is lowered from the typical value used within a pump, 
some issues could arise. If a distillate fuel is used in a system that 
typically operates on residual fuel, the decrease in viscosity could 
cause problems with high-pressure fuel injection pumps due to the 
increased potential for internal leakage of the thinner fuel through 
the clearances in the pumping elements. Internal leakage is part of the 
design of a fuel pump and is used in part to lubricate the pumping 
elements. However, if this leakage rate is too high, the fuel pump 
could produce less than optimal fuel injection pressures. If the 
distillate fuel's lower viscosity becomes an issue, it is possible to 
cool the fuel and increase the viscosity above 2 centistokes, which is 
how most vessels operate today during routine fuel switchovers.
(iii) Flash Point
    Flash point is the temperature at which the vapors off the fuel 
ignite with an outside ignition source. This can be a safety concern if 
the owner/operator uses an onroad diesel fuel rather than a designated 
`marine distillate' fuel for operation because marine fuels have a 
specified minimum flash point of 60 [deg]F (15.6 [deg]C) to ensure 
onboard safety, whereas onroad diesel has a minimum specified flash 
point of 52 [deg]F (11.1 [deg]C). However, since most distillate fuels 
are created in the same fashion, typical flash points of onroad diesel 
are above 60 [deg]F (15.6 [deg]C), and would meet the marine fuel 
specification for this property. If the flash point of the fuel being 
used on-board the vessel becomes a concern, the operator/bunker 
supplier would have to ensure that the vessel is obtaining fuel with a 
minimum flash point of 60 [deg]F (15.6 [deg]C) via the bunker delivery 
note or through fuel testing.
(iv) Lubricity
    Lubricity is the ability of the fuel to lubricate the engine/pump 
during operation. Fuels with higher viscosity and high sulfur content 
tend to have very good lubricity without the use of specific lubricity-
improving additives. Refining processes that lower fuel sulfur levels 
and their viscosities can also remove some of the naturally-occurring 
lubricating compounds. Severe hydrotreating of fuel to obtain ultra-low 
sulfur levels can result in poor fuel lubricity. Therefore, refineries 
commonly add lubricity improvers to ultra-low sulfur diesel. This will 
most likely become a concern when very low levels of sulfur are present 
in the fuel and/or the fuel has been hydrotreated to reduce sulfur, 
e.g., if ultra-low sulfur highway diesel (ULSD) is used in the engine. 
Several groups have conducted studies on this subject, and for some 
systems where fuel lubricity has become an issue, lubricity additives 
can be utilized or the owner/operator can install a lubricating system 
for the fuel pump.
(v) Lube Oil
    Lube oils are used to neutralize acids formed in combustion, most 
commonly sulfuric acids created from sulfur in the fuel. The quantity 
of acid-neutralizing additives in lube oil should match the total 
sulfur content of the fuel. If excessive amounts of these additives are 
used, they may create deposits on engine components. Marine engine 
manufacturers have recommended that lube oil only needs to be adjusted 
if the fuel is switched for more than one week, but the oil feed rate 
may need to be reduced as well as engine operating power. Additional 
research has been conducted in this area and several oil companies have 
been working to create a lubricating oil that would be compatible with 
several different types of fuel.
(vi) Asphaltenes
    Asphaltenes are heavy, non-volatile, aromatic compounds which are 
contained naturally in some types of crude oil. Asphaltenes may 
precipitate out of the fuel solution when a fuel rich in carbon 
disulfide, such as residual fuel, is mixed with a lighter hydrocarbon 
fuel, such as n-pentane or

[[Page 44473]]

n-heptane found in some distillate fuels. When these heavy aromatic 
compounds fall out of the fuel solution, they can clog filters, create 
deposition along the fuel lines/combustion chamber, seize the fuel 
injection pump, or cause other system troubles. This risk can be 
minimized through onboard test kits and by purchasing distillate and 
residual fuel from the same refiner. However, according to the 
California Air Resources Board, the formation of asphaltenes is not 
seen as an issue based on data from previous maritime rules.
    As can be seen, if vessel operators choose to operate on marine 
distillate fuel while in the ECA, some prudence is required. However, 
as described above, any issues that could arise with switching between 
residual and distillate fuel are minimal and can be addressed through 
changes to operating procedures. To conduct a successful switchover 
between the residual and marine distillate fuels, vessel operators will 
need to keep the above issues in mind and follow the engine 
manufacturer's standard fuel switching procedure.
(b) SO<INF>X</INF> Scrubber
    Annex VI allows for alternative compliance strategies in including 
the use of exhaust gas cleaning systems (EGCS). EGCS systems used today 
for sulfur control are commonly known as SO<INF>X</INF> scrubbers. This 
section describes the technological feasibility of scrubbers and how 
scrubbers may be used to achieve equivalent emission reductions as fuel 
switching.
    SO<INF>X</INF> scrubbers are capable of removing up to 95 percent 
of SO<INF>X</INF> from ship exhaust using the ability of seawater to 
absorb SO<INF>X</INF>. SO<INF>X</INF> scrubbers have been widely used 
in stationary source applications, where they are a well-established 
SO<INF>X</INF> reduction technology. In these applications, lime or 
caustic soda are typically used to neutralize the sulfuric acid in the 
washwater. While SO<INF>X</INF> scrubbers are not widely used on ocean-
going vessels, there have been prototype installations to demonstrate 
their viability in this application such as the Krystallon systems 
installed on the P&O ferry Pride of Kent and the Holland America Line 
cruise ship the ms Zaandam. These demonstrations have shown scrubbers 
can replace and fit into the space occupied by the exhaust silencer 
units and can work well in marine applications.
    There are two main scrubber technologies. The first is an open-loop 
design which uses seawater as exhaust washwater and discharges the 
treated washwater back to the sea. Such open-loop designs are also 
referred to as seawater scrubbers. In a seawater scrubber, the exhaust 
gases are brought into contact with seawater, either through spraying 
seawater into the exhaust stream or routing the exhaust gases through a 
water bath. The SO<INF>2</INF> in the exhaust reacts with oxygen to 
produce sulfur trioxide which then reacts with water to form sulfuric 
acid. The sulfuric acid in the water then reacts with carbonate and 
other salts in the seawater to form sulfates which may be removed from 
the exhaust. The washwater is then treated to remove solids and raise 
the pH prior to discharge back to the sea. The solids are collected as 
sludge and held for proper disposal ashore.
    A second type of SO<INF>X</INF> scrubber which uses a closed-loop 
design is also feasible for use on marine vessels. In a closed loop 
system, fresh water is used as washwater, and caustic soda is injected 
into the washwater to neutralize the sulfur in the exhaust. A small 
portion of the washwater is bled off and treated to remove sludge, 
which is held and disposed of at port, as with the open-loop design. 
The treated effluent is held onboard or discharged at open sea. 
Additional fresh water is added to the system as needed. While this 
design is not completely closed-loop, it can be operated in zero 
discharge mode for periods of time.
    Exhaust gas scrubbers can achieve reductions in particulate matter 
as well. By removing sulfur from the exhaust, the scrubber removes most 
of the direct sulfate PM. Sulfates are a large portion of the PM from 
ships operating on high sulfur fuels. By reducing the SO<INF>X</INF> 
emissions, the scrubber will also control much of the secondary PM 
formed in the atmosphere from SO<INF>X</INF> emissions. However, simply 
mixing alkaline water in the exhaust does not necessarily remove much 
of the carbonaceous PM, ash, or metals in the exhaust. While 
SO<INF>2</INF> associates with the washwater, particles can only be 
washed out of the exhaust through direct contact with the water. In 
simple scrubber designs, much of the mass of particles can reside in 
gas bubbles and escape out the exhaust.
    Manufacturers have been improving their scrubber designs to address 
carbonaceous soot and other fine particles. Finer water sprays, longer 
mixing times, and turbulent action would be expected to directionally 
reduce PM emissions through contact impactions. One scrubber design 
uses an electric charge on the water to attract particles in the 
exhaust to the water. In another design, demisters are used that help 
effectively wash out PM from the exhaust stream. In either of these 
designs, however, the systems would be effective at removing 
SO<INF>2</INF> from the exhaust even if the additional hardware needed 
for non-sulfate PM reduction were not used.
    Annex VI does not present specific exhaust gas limits that are 
deemed to be equivalent to the primary standard of operating on lower 
sulfur fuel. Prior to the recent amendments to Annex VI, Regulation 13 
included a limit of 6 g/kW-hr SO<INF>2</INF> as an alternative to the 
15,000 ppm sulfur limit for sulfur emission control areas. Under the 
amended requirements, the specific SO<INF>2</INF> limit was removed and 
more general language on alternative approaches was included. 
Specifically, Regulation 4 of MARPOL Annex VI now states ``The 
Administration of a Party may allow any fitting, material, appliance or 
apparatus to be fitted in a ship or other procedures, alternative fuel 
oils, or compliance methods used as a alternative to that required by 
this Annex if such fitting, material, appliance or apparatus or other 
procedures, alternative fuel oils, or compliance methods are at least 
as effective in terms of emissions reductions as that required by this 
Annex, including any of the standards set forth in regulations 13 and 
14.''
    IMO is developing guidelines for the use of exhaust gas cleaning 
devices such as SO<INF>X</INF> scrubbers as an alternative to operating 
on lower sulfur fuel.\99\ These draft guidelines include a table of 
SO<INF>2</INF> limits intended to correspond with various fuel sulfur 
levels. Based on the methodology that was used to determine the 
SO<INF>2</INF> limit of 6.0 g/kW-hr for existing ECAs, the 
corresponding limit is 0.4 g/kW-hr SO<INF>2</INF> for a 1,000 ppm fuel 
sulfur limit. This limit is based on an assumed fuel consumption rate 
of 200 g/kW-hr and the assumption that all sulfur in the fuel is 
converted to SO<INF>2</INF> in the exhaust. The draft IMO guidelines 
also allow for an alternative approach of basing the limit on a ratio 
of SO<INF>2</INF> to CO<INF>2</INF>. This has the advantage of being 
easier to measure during in-use monitoring. In addition, this ratio 
holds more constant at lower loads than a brake-specific limit, which 
would approach infinity as power approaches zero. For the existing 
15,000 ppm fuel sulfur limit in ECAs, a SO<INF>2</INF> (ppm)/
CO<INF>2</INF>(%) limit of 65 was developed. The equivalent limit for a

[[Page 44474]]

1,000 ppm fuel sulfur level is 4.0 SO<INF>2</INF> (ppm)/
CO<INF>2</INF>(%).
---------------------------------------------------------------------------

    \99\ ``Proposed amendments for resolution MEPC.170(57)--
Guidelines for Exhaust Gas Cleaning Systems,'' Submitted by the 
Institute of Marine Engineering, Science and Technology, to the 59th 
session of the Marine Environment Protection Committee, 
International Maritime Organization, MEPC 59/10/5, April 10, 2009.
---------------------------------------------------------------------------

    Scrubbers are effective at reducing SO<INF>2</INF> emissions and 
sulfate PM emissions from the exhaust. However, as discussed above, the 
effectiveness of the scrubber at removing PM emissions other than 
sulfates is dependent on the scrubber design. In addition to sulfate PM 
reductions, switching from residual fuel to distillate fuel results in 
reductions in organic PM and metallic ash particles in the exhaust. As 
such, consideration should be given to non-sulfate PM when making the 
determination that using a given ECGS design is ``at least as 
effective'' as operating on lower sulfur fuel to control PM emissions.
    We would not consider an exhaust gas scrubber to be an acceptable 
control strategy for reducing NO<INF>X</INF> emissions. In a typical 
diesel exhaust gas mixture, NO<INF>X</INF> is composed of roughly 5-10% 
NO<INF>2</INF>, with the majority of the remainder in the form of NO. 
NO<INF>2</INF> is soluble in water, and therefore may be removed by the 
water in the scrubber. It is possible to treat the exhaust upstream of 
the scrubber to convert more of the NO<INF>X</INF> to NO<INF>2</INF>, 
thereby facilitating the use of a scrubber to remove NO<INF>2</INF>. 
However, we are concerned that this would add to nitrogen loading of 
the water in which the ship is operating. As discussed in Section 
II.B.1, nitrogen loading can lead to serious water quality impacts. The 
issue of NO<INF>X</INF> scrubbing is addressed in the draft IMO EGCS 
guidelines by limiting the amount of NO<INF>X</INF> that may be removed 
by the scrubber.
    Water-soluble components of the exhaust gas such as SO<INF>2</INF>, 
SO<INF>3</INF>, and NO<INF>2</INF> form sulfates and nitrates that are 
dissolved into the discharge water. Scrubber washwater also includes 
suspended solids, heavy metals, hydrocarbons and polycyclic aromatic 
hydrocarbons (PAH). Before the scrubber water is discharged, there are 
several approaches that may be used to process the scrubber water to 
remove solid particles. Heavier particles may be trapped in a settling 
or sludge tank for disposal. The removal process may include cyclone 
technology similar to that used to separate water from residual fuel 
prior to delivery to the engine. However, depending on particle size 
distribution and particle density, settling tanks and hydrodynamic 
separation may not effectively remove all suspended solids. Other 
approaches include filtration and flocculation techniques. 
Flocculation, which is used in many waste water treatment plants, 
refers to adding a chemical agent to the water that will cause the fine 
particles to aggregate so that they may be filtered out. Sludge 
separated from the scrubber water would be stored on board until it is 
disposed of at proper facilities.
    The draft IMO guidelines for the use of exhaust gas cleaning 
devices such as SO<INF>X</INF> scrubbers include recommended monitoring 
and water discharge practices. The washwater should be continuously 
monitored for pH, PAHs and turbidity. Further, the IMO guidance include 
specifications for these same items, as well as nitrate content when 
washwater is discharged in ports, harbors or estuaries. Finally, the 
IMO guidance recommends that washwater residue (sludge) be delivered 
ashore to adequate reception facilities and not discharged to the sea 
or burned on board. Also note that any discharges directly into waters 
of the United States may be subject to the Clean Water Act or other 
U.S. regulation.

D. ECA Designation and Foreign-Flagged Vessels

    In our previous marine diesel engine rulemakings, EPA did not 
extend our Clean Air Act standards to engines on vessels flagged by 
other countries. In our 2003 rule, many states and localities expressed 
concern about the high levels of emissions from ocean-going vessels. We 
examined our position and concluded that no change was necessary at 
that time because the Tier 1 standards we adopted for Category 3 
engines on U.S. vessels were the same as those contained in MARPOL 
Annex VI. We indicated we would re-examine this issue in our current 
rulemaking and would also review the progress made by the international 
community toward the adoption of new more stringent international 
standards that reflect the application of advanced emission control 
technologies.
    We received comments from a broad range of interested parties on 
the Advance Notice of Proposed Rulemaking (ANPRM) for this rulemaking. 
Generally, these commenters remain concerned about the contribution of 
ocean-going vessels to their air quality. Many took the position that 
EPA should cover engines on foreign-flagged OGV under Clean Air Act 
section 213 since they account for the vast majority of OGV emissions 
in the United States and because of their perception, at the time these 
comments were submitted, that the international process to set 
stringent standards was stalled.
    In this section, we provide background on EPA's past statements 
with regard to the application of our Clean Air Act section 213 
standards to engines on foreign-flagged vessels, and summarize comments 
we received on this issue in response to our ANPRM. Because the 
NO<INF>X</INF> standards adopted in the amendments to Annex VI are 
comparable in stringency and timing to our proposed CAA NO<INF>X</INF> 
standards, we do not believe it is necessary to extend our Clean Air 
Act Tier 2 and 3 standards to engines on foreign-flagged vessels at 
this time. Therefore, this proposal does not seek to resolve the issue 
of whether section 213 of the Act allows us to set standards for 
engines on foreign-flagged vessels. However, as further explained 
below, our decision rests on the timely adoption of an amendment to 
Annex VI designating the U.S. coastal waters as an ECA, since the most 
stringent of the NO<INF>X</INF> standards will be applicable in such 
areas. If the amendment designating a U.S. ECA is not timely adopted by 
the Parties to IMO, we will revisit this issue.
    We request comments on all aspects of this discussion.
(1) What Is EPA's Current Approach for Engines on Foreign-Flagged 
Vessels?
    Section 213 of the Clean Air Act (42 U.S.C. 7547) authorizes 
regulation of ``new nonroad engine[s]'' and ``new nonroad vehicle[s].'' 
Because Title II of the Clean Air Act does not define either ``new 
nonroad engine'' or ``new nonroad vehicle,'' our early interpretations 
of these terms with regard to our other nonroad programs were 
reasonably modeled after the statutory definitions of ``new motor 
vehicle engine'' and ``new motor vehicle'' found in section 216(3) of 
the CAA.\100\ Those early interpretations focused on engines and 
vehicles freshly built or imported.
---------------------------------------------------------------------------

    \100\ Proposed Rule, 56 FR 45,866 at 45867 (1991); Final Rule 59 
FR 86969, 86971 (1994); see Engine Manufacturers Assoc. v. EPA, 88 
F.3d 1075, 1087 (D.C.Cir. 1996).
---------------------------------------------------------------------------

    Similarly, in our first phase of marine diesel emission standards 
(our 1999 rule), we modeled our definitions of ``new'' marine engine 
and vessel after the existing ``new nonroad engine'' and ``new nonroad 
vehicle'' regulatory definitions.\101\ We also referred to Department 
of the Treasury rulings on the meaning of ``import'' for customs 
purposes.\102\ Specifically, Treasury rulings for marine engines and 
vessels include as imports only those marine engines and vessels 
intended to remain in the United States permanently. Because engines on 
foreign-flagged

[[Page 44475]]

vessels were only entering U.S. ports temporarily, with no intention to 
remain permanently, we declined to treat those engines and vessels as 
imported and, thus, we determined that these engines are not ``new'' 
marine engines or vessels for purposes of section 213 of the CAA. 
Therefore, in that first rulemaking for diesel marine engines, we did 
not apply the CAA program to engines on foreign-flagged vessels.
---------------------------------------------------------------------------

    \101\ Control of Emissions of Air Pollution From New Marine 
Compression-Ignition Engines at or Above 37 kW; Final Rule, 64 FR 
73300 (December 29, 1999).
    \102\ Control of Emissions of Air Pollution From New Marine 
Compression-Ignition Engines at or Above 37 kW; Final Rule, 64 FR 
73300 (December 29, 1999) at 73302, discussing American Customs 
Brokerage Co., Inc., a/c Astral Corp. v. United States, 375 F.Supp. 
1360, 1366 (Cust.Ct. 1974).
---------------------------------------------------------------------------

    In our subsequent rulemaking to establish Clean Air Act emission 
standards for Category 3 engines,\103\ we re-examined this background 
to re-consider the issue of whether engines on foreign-flagged vessels 
should be included within the scope of our Clean Air Act standards. 
Because the NO<INF>X</INF> standards we adopted in that rule were near-
term standards that were equivalent to the then-MARPOL Annex I 
NO<INF>X</INF> standards, and because we adopted a regulatory deadline 
to consider an additional tier of NO<INF>X</INF> standards (which are 
the subject of the current rulemaking), we deferred making a decision 
on whether we have the discretion to set standards for such engines 
until the present rulemaking. We decided that even if we have the 
discretion to interpret ``new marine engine'' to include engines on 
foreign-flagged vessels, it would be appropriate not to exercise such 
discretion at that time since the near-term standards that we would be 
adopting in that rule already applied to foreign-flagged vessels 
through Annex VI. We explained that foreign-flagged vessels were 
expected to comply with the current MARPOL standards whether or not 
they were also subject to the equivalent Clean Air Act standards and, 
consequently, no significant emission reductions would be achieved by 
treating foreign-flagged vessels as ``new'' for purposes of the near-
term standards in that final rule. However, we also indicated that we 
would consider, in the subsequent rulemaking, whether we need to 
resolve under what circumstances we may or should define new nonroad 
engine and vessel to include foreign-flagged engines and vessels. As 
part of that determination, we indicated we would also assess the 
progress made by the international community toward adopting new more 
stringent international consensus standards that reflect advanced 
emission-control technologies.
---------------------------------------------------------------------------

    \103\ Control of Emissions of Air Pollution From New Marine 
Compression-Ignition Engines at or Above 30 Liters/Cylinder; Final 
Rule, 68 FR 9746 at 9759 (February 28, 2003).
---------------------------------------------------------------------------

    Accordingly, we raised this issue in our 2007 ANPRM,\104\ 
indicating that we would evaluate whether we should re-define new 
nonroad engines and vessels to include foreign-flagged engines and 
vessels. Likewise, we indicated that as part of that evaluation, we 
would also assess the progress made by the international community 
toward the adoption of new more stringent international standards that 
reflect advanced emission-control technologies.
---------------------------------------------------------------------------

    \104\ Control of Emissions From New Marine Compression-Ignition 
Engines at or Above 30 Liters per Cylinder: Advanced Notice of 
Proposed Rulemaking, 72 FR 69522 at 69545 (December 7, 2007).
---------------------------------------------------------------------------

(2) Is EPA Proposing To Change the Current Approach to Engines on 
Foreign-Flagged Vessels?
    Since the ANPRM was published, the International Maritime 
Organization adopted amendments to MARPOL Annex VI. These amendments, 
adopted in October 2008, contain stringent new tiers of NO<INF>X</INF> 
emission limits for marine diesel engines as well as new fuel sulfur 
limits.\105\ These requirements are applicable in the United States to 
both domestic and foreign-flagged vessels through operation of the Act 
to Prevent Pollution from Ships (APPS), as amended in 2008.\106\ 
Amendments to the Act to Prevent Pollution from Ships were adopted in 
2008 specifically to provide the statutory mechanism to enforce the 
Annex VI requirements on domestic and foreign-flagged vessels and to 
enforce the ECA requirements once a U.S. ECA is designated under Annex 
VI.
---------------------------------------------------------------------------

    \105\ Resolution MEPC.176(58), ``Amendments to the Annex of the 
Protocol of 1997 to Amend the International Convention for the 
Prevention of Pollution from Ships, 1973, As Modified by the 
Protocol of 1978 Relating Thereto,'' MEPC 58/23/Add.1 Annex 13, 
October 10, 2008.
    \106\ 33 U.S.C. 1901-1912.
---------------------------------------------------------------------------

    The most stringent of the new Annex VI standards requires engines 
to meet Tier III NO<INF>X</INF> standards. Under the Annex, these 
requirements would apply in designated ECAs. At the time the amendments 
were adopted, countries were invited to propose areas for ECA 
designation so that the full benefit of these technology-forcing 
standards could be realized by areas that demonstrate a need for them. 
As explained above, the United States and Canada recently submitted a 
proposal to amend MARPOL Annex VI to designate U.S. and Canadian 
coastal areas as an ECA. Due to the human health and welfare needs for 
these controls as documented in the ECA application, we expect that the 
Parties to Annex VI will adopt this amendment at the 60th Session of 
the Marine Environment Protection Committee (MEPC), to be held in March 
2010. Once the ECA is adopted by the Parties and enters into force, 
U.S.- and foreign-flagged ships will be subject to the stringent 
provisions of MARPOL Annex VI within the ECA. Since the ECA was 
developed to protect air quality in port and inland areas, these 
requirements will also apply in U.S. internal waters. The U.S. will 
enforce these requirements pursuant to APPS.
    More specifically, under the recently-adopted NO<INF>X</INF> 
amendments to Annex VI, in 2016, the engines on new ships operating in 
ECAs must meet Tier III NO<INF>X</INF> standards requiring advanced-
technology engines designed to cut emissions of ozone-forming 
NO<INF>X</INF> by roughly 80%. These MARPOL Annex VI Tier III 
NO<INF>X</INF> standards are comparable to the CAA Tier III 
NO<INF>X</INF> standards we are proposing in this Federal Register 
notice and are more fully described in Section III. When operating 
outside a designated ECA, the engines must meet the global Tier II 
NO<INF>X</INF> standard, which otherwise applies to engines on ships 
beginning in 2011 and will require a 20% reduction from the current 
Tier I levels. Thus, assuming the U.S. ECA is adopted, NO<INF>X</INF> 
standards comparable to those we are proposing in this NPRM under 
section 213(a)(3) of the CAA will be applicable to engines on foreign-
flagged vessels operating in all U.S. waters and will be enforced under 
the authority of APPS.
    Because we expect the proposed amendment to Annex VI designating a 
North American ECA will be adopted in a timely manner, the result of 
the combined CAA program and the ECA designation will be the 
application of comparable NO<INF>X</INF> standards to domestic- and 
foreign-flagged vessels which will be enforceable under a combination 
of the Act and APPS. As a result, it would not be necessary to resolve 
the issue of whether we have the authority to impose section 213 CAA 
standards on foreign-flagged vessels. For this reason, we are not 
proposing to change our current approach with regard to the application 
of the Clean Air Act marine diesel engine standards to engines on 
foreign-flagged vessels. The conditions that led us to this conclusion 
in 2003 are the same today, assuming approval of the North American 
ECA. Because this decision not to address our authority to regulate 
foreign-flagged vessels at this time is predicated upon timely approval 
of the U.S.-Canada proposal to amend Annex VI to designate the North 
American ECA, we will revisit this approach if the ECA is not adopted 
as expected.

[[Page 44476]]

(3) What Comments Did EPA Receive on This Issue?
    EPA received a number of comments in response to the ANPRM on the 
issue of whether EPA should or could address emissions from engines on 
foreign-flagged vessels. Most commenters express a need to include 
engines on foreign-flagged vessels given the significant contribution 
of such vessels' emissions to the air pollution problem we are 
addressing.\107\ Most of these same commenters also express the 
position that EPA has the authority to include engines on foreign-
flagged vessels as part of its section 213 emission reduction 
program.\108\ Other comments take the position that EPA not only has 
the authority to cover such engines and their emissions, but EPA has an 
obligation to do so.\109\ In contrast, EPA also received comments 
opposing the view that EPA has such authority and encouraging EPA to 
work with international bodies to resolve concerns about such 
emissions.\110\ A brief summary of these positions follows.
---------------------------------------------------------------------------

    \107\ See, e.g., South Coast Air Quality Management District 
(SCAQMD), EPA-HQ-OAR-2007-0121, Document No. 0084.1 (March 6, 2008); 
Clean Air Task Force (CATF), EPA-HQ-2007-0121, Document No. 0086.1 
(March 6, 2008); Environmental Defense Fund (EDF), EPA-HQ-2007-0121, 
Document No. 0097.1 (March 6, 2008); Earthjustice, EPA-HQ-OAR-2007-
0121, Document No. 0093.1 (March 6, 2008); Environmental Law & 
Policy Clinic at Harvard Law School (HLS), EPA-HQ-OAR-2007-0121, 
Document No. 0082.1 (March 6, 2008).
    \108\ See, e.g., South Coast Air Quality Management District 
(SCAQMD), EPA-HQ-OAR-2007-0121, Document No. 0084.1 (March 6, 2008); 
Clean Air Task Force (CATF), EPA-HQ-2007-0121, Document No. 0086.1 
(March 6, 2008).
    \109\ See, e.g., Environmental Law & Policy Clinic at Harvard 
Law School (HLS), EPA-HQ-OAR-2007-0121, Document No. 0082.1 (March 
6, 2008).
    \110\ See, e.g., American Petroleum Institute (API), EPA-HQ-OAR-
2007-0121, Document No. 0098.2 (March 6, 2008) and American 
Petroleum Institute (API), EPA-HQ-OAR-2007-0121, Document No. 0098.6 
(March 6, 2008).
---------------------------------------------------------------------------

    Generally, environmental non-governmental organizations and state 
air quality control authorities commenting on the ANPRM support the 
view that EPA should include engines on foreign-flagged vessels in its 
Clean Air Act emission reduction program. They state that ``there is no 
legal impediment to regulating the emissions of foreign-flagged ships 
operating in U.S. waters. U.S. courts have long held that U.S. laws 
apply only within the territorial jurisdiction of the U.S., at least in 
the absence of evidence of contrary Congressional intent.'' \111\
---------------------------------------------------------------------------

    \111\ Clean Air Task Force (CATF), EPA-HQ-2007-0121, Document 
No. 0086.1 (March 6, 2008) at 25.
---------------------------------------------------------------------------

    South Coast Air Quality Management District (SCAQMD) takes the 
position that a U.S. statute is presumed to apply to a foreign-flagged 
vessel in United States waters unless the statute sought to regulate 
``matters that involve only the internal order and discipline of the 
vessel'' or ``only the internal operations of the ship.'' \112\ Because 
the United States has a vital interest in reducing pollutants from all 
visiting ships and because ``the `physical structure' of a ship is not 
a matter that `concerns only the internal operations of the ship,' '' 
SCAQMD believes that section 213 of the CAA should be presumed to apply 
to engines on foreign-flagged vessels. Moreover, SCAQMD comments that, 
even if a clear statement of intent to cover engines on foreign-flagged 
vessels were required, sections 213(a)(3) and (4) unequivocally apply 
``to all such nonroad engines, without qualifications.'' \113\
---------------------------------------------------------------------------

    \112\ South Coast Air Quality Management District (SCAQMD), EPA-
HQ-OAR-2007-0121, Document No. 0084.1 (March 6, 2008) at 6 and 7, 
quoting Spector v. Norwegian Cruise Line Ltd., 545 U.S. 119, 131 
(2005) (emphasis added by commenter).
    \113\ South Coast Air Quality Management District (SCAQMD), EPA-
HQ-OAR-2007-0121, Document No. 0084.1 (March 6, 2008) at 8.
---------------------------------------------------------------------------

    Similarly, the Environmental Law & Policy Clinic at Harvard Law 
School (HLS) identifies examples of agencies applying statutory 
requirements to foreign-flagged vessels, even if significant 
modifications to the vessel may be required and ``when the governing 
statute does not explicitly direct or otherwise authorize the agency to 
exempt [such vessels].'' \114\
---------------------------------------------------------------------------

    \114\ See, Environmental Law & Policy Clinic at Harvard Law 
School (HLS), EPA-HQ-OAR-2007-0121, Document No. 0082.1 (March 6, 
2008) at 3 and 4.
---------------------------------------------------------------------------

    On interpretation of the term ``new nonroad engine,'' commenters 
supporting regulation of emissions from foreign-flagged vessels believe 
that section 213 provides broad authority to regulate any emissions 
from new nonroad engines and vehicles, and although the statute does 
not define what a ``new nonroad engine'' is, neither does the statute 
distinguish ``between U.S.-flagged and foreign-flagged ships for 
purposes of emission standards.'' \115\ Thus, the ambiguity, if any, 
should be resolved in favor of regulating such engines.
---------------------------------------------------------------------------

    \115\ Clean Air Task Force (CATF), EPA-HQ-2007-0121.1, Document 
No. 0086.1 (March 6, 2008) at 25.
---------------------------------------------------------------------------

    In that vein, SCAQMD would identify any engine or vessel 
constructed after the effective date of an EPA rule as ``new'' and 
subject to the applicable standard ``regardless of whether those 
vessels are foreign-flagged'' and regardless of whether the engine or 
vessel is imported. Further, SCAQMD stated that: ``While it might not 
be known with certainty for some ships at the time they are built 
whether they are going to travel to U.S. ports, in most cases it is 
likely that this would be known, and the shipbuilder could always 
preserve the ship's ability to do so by meeting EPA's standards.'' 
\116\
---------------------------------------------------------------------------

    \116\ South Coast Air Quality Management District (SCAQMD), EPA-
HQ-OAR-2007-0121, Document No. 0084.1 (March 6, 2008) at 5.
---------------------------------------------------------------------------

    SCAQMD also addresses an EPA position in an earlier rulemaking 
regarding EPA's interpretation of ``new'' to include ``import'' as that 
term is interpreted under U.S. customs laws, and whether engines on 
foreign-flagged vessels visiting the U.S. are therefore imported. In 
that context, SCAQMD states: ``the fact that a vessel is not imported 
does not mean it is not `new' within the ordinary meaning of the term. 
* * * The inclusion of the term `imported' was to cover vessels that 
otherwise would not be considered `new,' in order to prevent 
circumvention. Thus, the definition of `imported' does not limit EPA's 
ability to apply its rules to vessels that are in fact `new,' even 
though foreign-flagged. We believe the ordinary meaning of `new' is 
sufficient to cover this concept.'' \117\ HLS similarly comments that: 
``Section 213 can reasonably be interpreted to exclude cars and trucks 
that have neither been manufactured in nor imported into the United 
States because those excluded cars and trucks do not pollute air in the 
U.S. Neither Section 213 nor Section 216, however, authorizes EPA to 
exclude marine vessels that do use and pollute U.S. ports, whether 
those vessels can somehow be deemed `imported' or `not imported.' '' 
\118\
---------------------------------------------------------------------------

    \117\ South Coast Air Quality Management District (SCAQMD), EPA-
HQ-OAR-2007-0121, Document No. 0084.1 (March 6, 2008) at 6.
    \118\ Environmental Law & Policy Clinic at Harvard Law School 
(HLS), EPA-HQ-OAR-2007-0121, Document No. 0082.1 (March 6, 2008) at 
5 (emphasis included with comment).
---------------------------------------------------------------------------

    In contrast, Clean Air Task Force (CATF) believes it would be 
``reasonable for the Agency to continue to interpret `new nonroad 
engine' as including `imported' nonroad engines,'' but that EPA is not 
obligated to ``defer to interpretations of that term under U.S. customs 
laws, in view of the dramatically different purposes of such laws.'' 
\119\ CATF explains that ``[w]hile the purpose of application of the 
customs laws to `imports' is to impose a duty on merchandise that is 
brought into the country on a permanent basis, the purpose of the 
application of the Clean Air Act to `imports' is far different: that 
is, to reduce pollution

[[Page 44477]]

from sources operating within the United States, including its 
territorial waters and ports. Therefore, it is reasonable to conclude 
that under the Act, whether a vessel is operating in U.S. waters 
permanently, or whether it is flying a U.S. flag of registry, should 
not be conditions for regulating its emissions.'' \120\
---------------------------------------------------------------------------

    \119\ Clean Air Task Force (CATF), EPA-HQ-2007-0121, Document 
No. 0086.1 (March 6, 2008) at 25.
    \120\ Clean Air Task Force (CATF), EPA-HQ-2007-0121, Document 
No. 0086.1 (March 6, 2008) at 25-26.
---------------------------------------------------------------------------

    Some commenters, however, take the opposite position. API comments 
that ``EPA's authority to regulate non-U.S. vessels/engines that are 
temporarily in U.S waters turns on whether such vessels/engines are 
`imported' under the CAA,'' that EPA appropriately relied in the past 
on the customs law's interpretation of ``import,'' and that ``Congress 
did not intend to grant authority to EPA to regulate non-U.S. flagged 
vessels that are only in U.S. waters temporarily.'' \121\
---------------------------------------------------------------------------

    \121\ American Petroleum Institute (API), EPA-HQ-OAR-2007-0121, 
Document No. 0098.6 (March 6, 2008) at 2-3.
---------------------------------------------------------------------------

    EPA appreciates all of the comments we received on this. Although 
we continue to believe it is reasonable not to amend our current 
definition of new engine, we intend to revisit that issue without delay 
if the U.S. ECA is not timely considered and adopted.

VI. Certification and Compliance Program

    This section describes the regulatory changes proposed for the CAA 
Category 3 engine compliance program. In general, these changes are 
being proposed to ensure that the benefits of the standards are 
realized in-use and throughout the useful life of these engines, and to 
incorporate lessons learned over the last few years from the existing 
test and compliance program.
    The most obvious change is that we are proposing to apply the plain 
language regulations of 40 CFR 1042 to Category 3 engines. These part 
1042 regulations were adopted in 2008 for Category 1 and Category 2 
engines (73 FR 25098, May 6, 2008). They were structured to contain the 
provisions that are specific to marine engines and vessels in part 
1042, and apply the parts 1065 and 1068 for other provisions not 
specific to marine engines. This approach is not intended to 
significantly change the compliance program from the program currently 
applicable to Category 3 engines under 40 CFR part 94, except as 
specifically noted in this notice (and we are not reopening for comment 
the substance of any part of the program that remains unchanged 
substantively). As proposed, these plain language regulations would 
supersede the regulations in part 94 for Category 3 engines beginning 
with the 2011 model year.
    The changes from the existing programs are described below along 
with other notable aspects of the compliance program. These changes are 
necessary to implement the new standards as well as to implement the 
Annex VI program as required under the amendments to the Act to Prevent 
Pollution from Ships.
    Finally, we are also including several proposed changes and 
clarifications to the compliance program that are not specific to 
Category 3 engines. Some of these would apply only for marine diesel 
engines below 30 liters per cylinder displacement.

A. Compliance Provisions for Category 3 Engines

    In general, we are proposing to retain the certification and 
compliance provisions finalized with the Tier 1 standards for Category 
3 engines. These include testing, durability, labeling, maintenance, 
prohibited acts, etc. However, we believe additional testing and 
compliance provisions will be necessary for new standards requiring 
more advanced technology and more sophisticated emission control 
systems. These changes, as well as other modifications to our 
certification and compliance provisions for Category 3 engines, are 
discussed below.
    Our certification process is similar to the process specified in 
the Annex VI NO<INF>X</INF> Technical Code (NTC) for pre-certification. 
However, the Clean Air Act specifies certain requirements for our 
certification program that are different from the NTC requirements. The 
EPA approach differs most significantly from the NTC in three areas. 
First, the NTC allows but does not require certification of engines 
before installation (known as pre-certification under the NTC), while 
EPA does require it. Second, we include various provisions to hold the 
engine manufacturer responsible for the durability of emission 
controls, while the NTC holds the engine manufacturer liable only 
before the engine is placed into service. Finally, we specify broader 
temperature ranges and allow manufacturers less discretion in setting 
engine parameters for testing, with the goal of adopting test 
procedures that represent a wide range of normal in-use operation. We 
believe the regulations in this final rule are sufficiently consistent 
with NTC that manufacturers can continue to use a single harmonized 
compliance strategy to certify under both systems.
(1) Testing
    We are proposing to largely continue the testing requirements that 
currently apply for Category 3 engines with a few exceptions.
(a) General Test Procedures
    We are proposing to apply the general engine testing procedures of 
40 CFR part 1065 to Category 3 engines. This is part of our ongoing 
initiative to update the content, organization and writing style of our 
regulations. For each engine sector for which we have recently 
promulgated standards (such as smaller marine diesel engines), we refer 
to one common set of test procedures in part 1065. This is because we 
recognized that a single set of test procedures would allow for 
improvements to occur simultaneously across engine sectors. A single 
set of test procedures is easier to understand than trying to 
understand many different sets of procedures, and it is easier to move 
toward international test procedure harmonization if we only have one 
set of test procedures.
    These procedures replace those currently published in parts 92 and 
94 and are fundamentally similar to those procedures. The primary 
differences are related to tighter tolerances to reduce test-to-test 
variability. In most cases, a manufacturer should be able to comply 
with 1065 using its current test equipment. Nevertheless, full 
compliance with part 1065 would take some effort on the part of 
manufacturers. As such, we are proposing some flexibility to make a 
gradual transition from the part 92 and 94 procedures. For several 
years, manufacturers would be able to optionally use the part 1065 
procedures. Part 1065 procedures would generally be required for any 
new testing by 2016 (except as noted below). This is very similar to 
the allowance already provided with respect to Category 1 and Category 
2 engines.
    We are also proposing to allow Category 3 manufacturers to submit 
data collected using the test equipment and procedures specified in the 
NO<INF>X</INF> Technical Code, even after 2016. The procedures in 1065 
would still be the official test procedures, however, and manufacturers 
would be liable with respect to any test results from 1065 testing. 
Thus, we do not believe this allowance would have any effect on the 
stringency of the standards, or how manufacturers design and produce 
their engines.
(b) Test Fuel
    Appropriate test procedures need to represent in-use operating 
conditions as

[[Page 44478]]

much as possible, including specification of test fuels consistent with 
the fuels that compliant engines will use over their lifetimes. Our 
current regulations allow Category 3 engine testing using distillate 
fuel, even though many vessels with these engines currently use less 
expensive residual fuel. This provision is consistent with the 
specifications of the NO<INF>X</INF> Technical Code. We are proposing 
to continue this approach for Tier 2 and Tier 3. Our primary reason for 
continuing this approach is that we expect these Category 3 engines 
will generally be required to use distillate fuels in areas that will 
affect U.S. air quality for most of their operational lives. (We expect 
this because we expect IMO to approve our proposal to amend Annex VI to 
designate the U.S. coastal waters as an ECA.) However, since these 
engines will not be required to use low-sulfur or ultra low-sulfur 
fuel, we are also proposing to add an explicit requirement that a high-
sulfur distillate test fuel be used for both Tier 2 and Tier 3 testing. 
Our testing regulations (40 CFR 1065.703) are being revised to specify 
that high-sulfur diesel test fuels contain 800 to 2500 ppm sulfur. This 
would be lower than the current specification of 2000 to 4000 ppm. This 
will allow manufacturers to test with fuels near the ultimate in-use 
limit of 1000 ppm. We request comment on applying this approach to 
Category 1 and/or Category 2 engines on Category 3 vessels. Commenters 
supporting this approach should address how such engines could meet the 
applicable PM requirements. For example, should EPA allow these engines 
to show compliance using emission credits? Would this require us to set 
a higher Family Emission Limit cap for engines using this allowance? 
See also Section VI.C.1 for further discussion of these engines.
(c) Testing Catalyst-Equipped Engines
    In our existing programs that require compliance with catalyst-
based engines (such as the Category 1 & 2 engine program), we require 
manufacturers to test prototype engines equipped with prototype 
catalyst systems. However, it is not clear that this approach would be 
practical for Category 3 engines. These are problematic because of 
their size and because they tend to be a least partially custom built. 
Requiring a manufacturer to construct a full-scale catalyst system for 
each certification test would be extremely expensive.
    We are proposing an optional special certification procedure to 
address this concern. The provisions are in Sec.  1042.655 of the 
proposed regulations. The emission-data engine must be tested in the 
specified manner to verify that the engine-out emissions comply with 
the Tier 2 standards. The catalyst material must be tested under 
conditions that accurately represent actual engine conditions for the 
test points. This catalyst testing may be performed on a benchscale. 
Manufacturers must include a detailed engineering analysis describing 
how the test data collected for the engine and catalyst material 
demonstrate that all engines in the family will meet all applicable 
emission standards. Manufacturers must verify their design by testing a 
complete production engine and catalysts in its final assembled 
configuration.
(d) Testing Production Engines
    Under the current regulations, manufacturers must test a sample of 
their Category 1 and Category 2 engines during production. We are now 
proposing similar provisions for Category 3 engines. While in the past 
we did not believe that such testing was necessary, circumstances have 
changed in two important ways. First, relatively inexpensive portable 
test systems have recently become available. This greatly reduces the 
cost of testing an engine in a ship. Second, the need to verify that 
production engines actually comply with the emission standards 
increases as standards become more stringent and emission control 
technologies become more complicated.
    Specifically, we are proposing that every new Tier 2 or later 
Category 3 engine be tested during the vessel's sea trial to show 
compliance with the applicable NO<INF>X</INF> standard. Any engine that 
fails to comply with the standard would need to be repaired and 
retested. Since we are not proposing PM standards for Category 3 
engines, and because PM measurement is more difficult than measuring 
only gaseous emission, we would not require PM measurement during 
testing after installation, provided PM emissions were measured during 
certification.
    One concern that manufacturers have raised in the past is that it 
can be difficult to achieve the exact test points in use. Therefore, we 
are proposing to allow manufacturers flexibility with respect to test 
points when testing production engines, consistent with the equivalent 
allowance under the NO<INF>X</INF> Technical Code. Where manufacturers 
are unable to duplicate the certification test points during production 
testing, we are proposing to allow them to comply with an alternate 
``at-sea standard'' that is 10 percent higher than the otherwise 
applicable standard. This is specified in Sec.  1042.104(g).
    Since we are proposing to require testing of every production 
engine, we are also proposing to exclude Category 3 engines from 
selective enforcement audits under 40 CFR part 1068.
(e) PM Measurement
    We are proposing to require manufacturers to measure PM emissions 
along with NO<INF>X</INF>, HC, and CO during certification testing to 
report these results along with the other test data. This is similar to 
our recently proposed requirement for manufacturers to measure and 
report certain greenhouse gas emissions for a variety of nonroad engine 
sectors.\122\ Manufacturers should be able to collect these data using 
stand-alone partial flow PM measurement systems. In recent years, 
several vendors have developed such systems to be compliant with the 
requirements of 1065.
---------------------------------------------------------------------------

    \122\ 74 FR 16448, April 10, 2009.
---------------------------------------------------------------------------

    It is worth noting that in the past, there has been some concern 
regarding the use of older PM measurement procedures with high sulfur 
fuels. The primary issue of concern was variability of the PM 
measurement, which was strongly influenced by the amount of water bound 
to sulfur. However, we believe improvements in PM measurement 
procedures, such as those specified in 40 CFR 1065, have addressed 
these issues of measurement variability. The U.S. Government recently 
submitted proposed procedures for PM measurement to IMO.\123\
---------------------------------------------------------------------------

    \123\ ``Measurement Method For Particulate Matter Emitted From 
Marine Engines,'' Submitted by the United States to the 
International Maritime Organization Intersessional [sic] Meeting Of 
the BLG Working Group On Air Pollution, 5 October 2007.
---------------------------------------------------------------------------

(2) Low Power Operation and Mode Caps
    Emission control performance can vary with the power at which the 
engine operates. This is potentially important because Category 3 
engines can operate at relatively low power levels when they are 
operating in port areas. Ship pilots generally operate engines at 
reduced power for several miles to approach a port, with even lower 
power levels very close to shore. The International Organization for 
Standardization (ISO) E3 and E2 test cycles, which are used for 
emission testing of propulsion marine engines, are heavily weighted 
towards high power. In the absence of other requirements, it would be 
possible for manufacturers to meet the cycle-weighted average emission 
standards without significantly reducing emissions at low-power modes. 
This could be especially problematic for Tier

[[Page 44479]]

3 engines relying on urea-SCR for NO<INF>X</INF> control, since the 
effectiveness of the control is directly affected by the amount of urea 
that is injected and there would be an obvious economic incentive for 
manufacturers and operators to minimize the amount of urea injected.
    We are addressing these concerns in two ways. First, we are 
applying mode caps for NO<INF>X</INF> emissions that will ensure that 
manufacturers design their emission controls to be fully effective at 
25 percent power. This would require that manufacturers meet the 
applicable NO<INF>X</INF> standard at each individual test point, and 
not merely as a weighted average of the test points. The caps would 
only apply for NO<INF>X</INF> emissions, and manufacturers would not be 
required to meet the HC and CO standards at each test point. For HC and 
CO, manufacturers would only be required to meet the applicable 
standards as a weighted average of the test points
    The other concern is related to power levels other than the test 
points. To address this, we will continue to rely on our prohibition of 
defeat devices to ensure effective control for lower powers. Most 
significantly, this would prohibit manufacturers from turning off the 
urea supply to SCR systems at these points, unless the exhaust gas 
temperature was too cool for the SCR catalyst to function properly. 
(Urea at these low temperatures does not react with NO<INF>X</INF> 
molecules and can lead to high emissions of ammonia.)
(3) On-Off Technologies
    One of the features of the SCR technologies that are projected to 
be used to meet the Tier 3 NO<INF>X</INF> standards is that they are 
not integral to the engine and the engine can be operated without them. 
They will also require the operator to supply the proper reductant. 
Thus, these technologies are potentially ``on-off'' technologies. 
Switching to distillate fuel instead of residual fuel to reduce 
SO<INF>X</INF> and PM emissions can be thought of in the same way.
    The increased operating costs of such controls associated with urea 
(or other reductants) or with distillate usage suggest that it may be 
reasonable to allow these systems to be turned off while a ship is 
operated on the open ocean, far away from sensitive areas that are 
affected by ship emissions. This is the basis of the MARPOL Annex VI 
ECA approach, with one set of limits that would apply when ships are 
operated in sensitive areas and another that would apply when ships are 
operated outside those limits.
    We are proposing a new regulatory provision in Sec.  1042.115(g) to 
address the use of on-off technologies on Category 3 engines subject to 
the Tier 3 standards. This provision would require the manufacturer to 
obtain EPA approval to design the engines to have on-off features. It 
would also require the engine's onboard computer to record the on-off 
operation (including geographic position and time) and require that the 
engine comply fully with the Tier 2 standards when the Tier 3 controls 
are turned off. We request comment on applying this approach to 
Category 1 and/or Category 2 engines on Category 3 vessels.
    At this time, our goal is to require manufacturers to comply with 
the Tier 3 standards in all areas that will ultimately be included in 
any Emission Control Area, which should include all areas for which EPA 
has determined that Category 3 engines significantly affect U.S. air 
quality. As discussed in Section V.A, we have not yet determined the 
extent to which Category 3 engines affect air quality in the U.S. 
territories, areas of Alaska west of Kodiak, or the smallest Hawaiian 
islands. Therefore, we are proposing to include an interim provision to 
exclude those areas with respect to the Tier 3 standards at this time. 
We will revisit this should our review of available modeling results or 
other information indicate that compliance with the Tier 3 standards 
should be required for some or all of these areas.
(4) NO<INF>X</INF> Monitoring
    We are proposing that Category 3 engines equipped with on-off 
controls must be equipped to continuously monitor NO<INF>X</INF> 
concentrations in the exhaust. Engine manufacturers would be required 
to include systems to automatically alert operators of any operation 
with the emission controls on where NO<INF>X</INF> concentrations 
indicate malfunctioning emission controls. We would also require the 
engine to record in nonvolatile computer memory any such operation. 
However, we would not require monitoring NO<INF>X</INF> concentrations 
during operation for which the emission controls are allowed to be 
turned off, provided the record indicated that the controls were turned 
off. Where the NO<INF>X</INF> monitor system indicates a malfunction, 
operators would be required to investigate the cause and make any 
necessary adjustments or repairs.
    We are proposing to define as a malfunction of the emission 
controls any condition that would cause an engine to fail to comply 
with the applicable NO<INF>X</INF> standard (See Section VI.A.1.d for a 
discussion of standards that would apply for installed engines at sea). 
Such malfunctions could include maladjustment of the engine or 
controls, inadequate reductant, or emission controls turned off 
completely. We recognize that it is not possible to perfectly correlate 
a measured NO<INF>X</INF> concentration with an equivalent cycle-
weighted emission result. Therefore, the proposed requirement would 
allow engine manufacturers to exercise good engineering judgment in 
using measured NO<INF>X</INF> concentrations to monitor the emission 
performance of the engine. We request comment on the need for less 
subjective approaches. For example, should we establish caps for 
concentrations based on the concentrations measured during 
certification?
(5) Parameter Adjustment
    Given the broad range of ignition properties for in-use residual 
fuels, we expect that our current in-use adjustment allowance for 
Category 3 engines would result in a broad range of adjustment. We are 
therefore considering a requirement for operators to perform a simple 
field measurement test to confirm emissions after parameter adjustments 
or maintenance operations, using onboard emission measurement systems 
with electronic-logging equipment. We expect this issue will be equally 
important for more advanced engines that rely on water injection or 
aftertreatment for emission reductions. Onboard verification systems 
could add significant assurance that engines have properly operating 
emission controls.
    We envision a simpler measurement system than the type specified in 
Chapter 6 of the NO<INF>X</INF> Technical Code. As we described in the 
2003 final rule, we believe that onboard emission equipment that is 
relatively inexpensive and easy-to-use could verify that an engine is 
properly adjusted and is operating within the engine manufacturer's 
specifications. Note that Annex VI includes specifications allowing 
operators to choose to verify emissions through onboard testing, which 
suggests that Annex VI also envisioned that onboard measurement systems 
could be of value to operators. We request comment on requiring onboard 
verification systems on ships with Category 3 marine engines and on a 
description of such a system. In particular, we request comment on 
whether the continuous NO<INF>X</INF> monitoring system described in 
the previous subsection would be sufficient to address these concerns.

[[Page 44480]]

(6) In-Use Liability
    Under the existing Tier 1 program for Category 3 engines, owners 
and operators are required to maintain, adjust, and operate the engines 
in such a way as to ensure proper function of the emission controls. 
These requirements, which are described in 40 CFR 94.1004, are being 
continued in the regulations in part 1042 (See Sec.  1042.660 of the 
proposed regulations for these requirements). Specifically, these 
provisions require that all maintenance, repair, adjustment, and 
alteration of the engine be performed using good engineering judgment 
so that the engine continues to meet the emission standards. Each two-
hour period of operation of an engine in a condition not complying with 
this requirement would be considered a separate violation. Owners will 
also continue to be required to keep certain records onboard the vessel 
and report annually to EPA whether or not the vessel has complied with 
these and other requirements.
(7) Replacement Engines
    The existing provisions of Sec.  1042.615 provide an exemption that 
allows manufacturers to produce new uncertified engines when they are 
needed to replace equivalent existing engines that fail prematurely. 
For many engine sectors, this practice is common, but represents a very 
small faction of a manufacturer's total engine production. However, 
since we do not believe this practice is either common or necessary for 
Category 3 engines, we are proposing to not allow this exemption for 
Category 3 engines.

B. Compliance Provisions To Implement Annex VI NO<INF>X</INF> 
Regulation and the NO<INF>X</INF> Technical Code

    In addition to the Clean Air Act provisions being proposed in this 
action, we are also proposing new regulations to implement certain 
provisions of the Act to Prevent Pollution from Ships. These 
regulations are proposed as a new part 1043 of title 40.
    The Act to Prevent Pollution from Ships establishes a general 
requirement for vessels operating in the exclusive economic zone and 
navigable waters of the United States to comply with MARPOL Annex VI. 
It also gives EPA and the Administrator the authority to further 
implement MARPOL Annex VI. Many of the requirements relating to 
NO<INF>X</INF> emissions and fuel sulfur limits can be implemented 
without the need for further elaboration in that the Annex, along with 
the NO<INF>X</INF> Technical Code, provides instructions on how to 
demonstrate compliance with those requirements. However, APPS 
authorizes the Administrator to prescribe any necessary or desired 
additional regulations to assist in carrying out the provisions of 
Regulations 12 through 19 of Annex VI (see 33 USC 1903(c)(2)). 
Specifically, the regulations being proposed in this NPRM in part 1043 
of title 40 are intended to assist in the implementation of the engine 
and fuel requirements contained in Regulation 13, 14, and 18 of MARPOL 
Annex VI.. They address such issues as how to obtain an Engine 
International Air Pollution Prevention (EIAPP) certificate (which is 
equivalent in many ways to a Clean Air Act certificate of conformity), 
exemptions for vessels used exclusively in domestic service, and 
requirements for vessels not registered by a country that is a Party to 
Annex VI.
    In contrast to the compliance program for Category 3 engines 
described in Section VI.A, the 1043 regulations described in this 
section would apply to all marine diesel engines above 130 kW. 
Similarly, the MARPOL Annex VI fuel requirements apply to all fuel oil 
used onboard a vessel, defined as any fuel delivered to and intended 
for combustion purpose for propulsion or operation on board a ship, 
including distillate and residual fuels.
(1) EIAPP Certificates
    In general, an engine can be dual-certified under EPA's Clean Air 
Act marine diesel engine program and the MARPOL Annex VI/APPS program. 
However, we propose to require that engine manufacturers submit 
separate applications for the 1042 and EIAPP certificates. The proposed 
regulations in part 1043 specify the process that would apply. The 
process for obtaining the EIAPP is very similar to the process for 
obtaining a certificate of conformity under part 1042, and although 
there are differences between the programs, manufacturers should be 
able to comply with both programs with very little additional work. The 
primary differences are that, to certify to the MARPOL Annex VI 
standards, the manufacturer must include a copy of the Technical File 
and onboard NO<INF>X</INF> verification procedures (as specified in 
Section 2.4 of the NO<INF>X</INF> Technical Code) and is not required 
to provide information about useful life, emission labels, 
deterioration factors, or PM emissions.\124\ Currently engine 
manufacturers will be able to apply for both certifications using the 
certification templates and test data.
---------------------------------------------------------------------------

    \124\ See 68 FR 9746, February 28, 2003, at 9774-5 for a 
discussion of these differences as they relate to Category 3 marine 
diesel engines.
---------------------------------------------------------------------------

    Consistent with our 1042 program, our proposed 1043 program would 
require that each engine installed or intended to be installed on a 
U.S.-flagged vessel have an EIAPP before it is introduced into U.S. 
commerce. The proposed regulations would create a presumption that all 
marine engines manufactured, sold, or distributed in U.S. commerce 
would be considered to be intended to be installed on a U.S.-flagged 
vessel, although this presumption could be rebutted by clear and 
convincing evidence to the contrary (evidence that the engine is 
intended for export, for example).
(2) Approved Methods
    The 2008 amendments to MARPOL Annex VI added a new provision to the 
engine standards in Regulation 13 that extends the Tier I 
NO<INF>X</INF> limits to certain engines installed on ships constructed 
on or after January 1, 1990 through December 31, 1999. Specifically, 
engines with power output greater than 5,000 kW and with per cylinder 
displacement at or above 90 liters installed on such ships would be 
required to meet the Tier I NO<INF>X</INF> limits if a certified 
Approved Method is available. An Approved Method may be certified by 
the Administration of any flag state, but once one is registered with 
the IMO the owner of such an engine must either install the Approved 
Method or demonstrate compliance with the Annex VI Tier I limits 
through some other method. We are proposing to include a regulatory 
section codifying this requirement. These regulations are contained in 
Sec.  1043.50.
(3) Other Annex VI Compliance Requirements
    Engine manufacturers, vessel manufacturers, vessel owners, and fuel 
providers, fuel distributors, and other directly regulated stakeholders 
are required to comply with all aspects of Regulations 13, 14, and 18 
of Annex VI as well as the NO<INF>X</INF> Technical Code. These include 
requirements for engine operation, fuel use, fuel oil quality, and 
various recordkeeping requirements (e.g., record book of engine 
parameters, engine technical file, fuel switching procedures, bunker 
delivery notes and associated fuel samples, and fuel sampling 
procedures). While certification, compliance, and verification 
procedures are set out in the Annex and related documents, we 
nonetheless seek comment on whether additional regulatory provision 
under APPS would be necessary or helpful.

[[Page 44481]]

For example, the contents of a bunker delivery note are set out in 
Appendix V to MARPOL Annex VI and Sec.  1043.80. Are there aspects of 
these criteria that should be further clarified, or are there 
parameters required in Regulation 18 that should also be included on 
the bunker delivery note? Similarly, the process for verifying the 
sulfur content of fuel oil samples is set out in Appendix VI to the 
amended Annex VI. Is there any aspect of this procedure that requires 
further clarification? Commenters supporting the inclusion of 
additional language related to these or other requirements are 
encouraged to include specific recommendations.
(4) Non-Party Vessels
    The proposed regulations specify that vessels flagged by a country 
that is not a party to MARPOL (known as non-Party vessels) must comply 
with Regulations 13, 14, and 18 of Annex VI when operating in U.S. 
waters. This requirement would fulfill the requirement of 33 U.S.C. 
1902(e), which requires the adoption of regulations for non-Party 
vessels such that they are not treated more favorably than vessels of 
countries that are party to the MARPOL Protocol. However, since such 
vessels cannot get EIAPP certificates, this proposed provision requires 
non-party vessels to obtain equivalent documentation of compliance with 
the NO<INF>X</INF> standards of Annex VI. We request comment on this 
provision.
(5) Internal Waters
    APPS applies Annex VI requirements, including amendments to Annex 
VI (such as ECA designations) that are binding on the United States, to 
all persons in navigable waters of the U.S., including internal waters. 
However, our recent proposal for ECA designation that was submitted to 
IMO, although intended to protect air quality in U.S. ports and 
internal areas, does not explicitly state that it applies to internal 
waters. Therefore, we are proposing regulatory text under the authority 
of APPS, in order to avoid confusion on whether vessels must meet ECA 
requirements in internal waters. The text clarifies that the ECA 
requirements generally apply to internal waters, such as the 
Mississippi River and the Great Lakes, that can be accessed by ocean-
going vessels. Vessel emissions in these waters affect U.S. air quality 
to an equal, if not greater extent that emissions taking place in 
coastal waters. Specifically, the proposed rule would require 
compliance with the fuel sulfur requirements and the NO<INF>X</INF> 
emission standards of Regulations 13, 14, and 18 in internal waters. 
However, the ECA requirements do not apply in internal waters, such as 
those in northwestern Alaska, that are not shoreward of an ECA 
designated under Annex VI; rather the non-ECA requirements of Annex VI 
apply for these waters.
(6) Exemptions and Exclusions
    Under MARPOL Annex VI and APPS, certain vessels are excluded from 
some or all of the requirements. Consistent with Annex VI and APPS, the 
regulations in 1043 would exclude public vessels and engines intended 
to be used solely for emergencies. For the purpose of this provision, 
the term ``public vessels'' includes all warships and naval auxiliary 
vessels, as well as any other vessels owned or operated by a sovereign 
country engaged in noncommercial service. Consistent with the 
provisions in APPS, we are not proposing to apply the Annex VI 
requirements to U.S.-flagged public vessels. It should be noted, 
however, that not all public vessels are exempt from our Clean Air Act 
engine and fuel requirements. Only public vessels covered by a national 
security exemption under Sec.  94.908 or Sec.  1042.635 are exempt from 
the Clean Air Act program.
    The category of emergency engines includes engines that power 
equipment such as pumps that are intended to be used solely for 
emergencies and engines installed in lifeboats intended to be used 
solely in emergencies. It should be noted that the emergency engine 
provisions in the Annex and part 1043 are similar but not identical to 
the emergency engine provisions in our Clean Air Act program or the 
process of obtaining our CAA exemptions. In particular, the emergency 
engine exemption from the CAA requirements applies only with respect to 
the catalyst-based Tier 4 standards.
    We are exempting from the MARPOL Annex VI NO<INF>X</INF> standards 
engines installed on vessels registered or flagged in the United States 
provided the vessel remains within the EEZ of the United States. These 
engines would still be required to meet stringent emission standards 
since they are covered by our Clean Air Act program. In addition, the 
fuels used by these vessels are also covered by our Clean Air Act 
program, which has more stringent fuel requirements than Annex VI. 
Therefore, we are also proposing that as long as the operators of these 
domestic vessels comply with these more stringent Clean Air Act fuel 
requirements, they will be deemed to be in compliance with the Annex VI 
requirements. The combination of these proposed provisions would mean 
that a fishing vessel that operates out of a U.S. port and that never 
leaves U.S. waters would not be required to have an EIAPP for all 
engines above 130 kW, a record book of engine parameters and a 
technical file for each engines, and vessels over 400 gross tons would 
not be required to maintain bunker delivery notes (vessels under 400 
gross tons are not required by Regulation 18 of MARPOL Annex VI to have 
bunker delivery notes). Instead, the engines on that vessel would be 
required to be in compliance with our marine diesel engine standards 
and be required to comply with manufacture requirements with regard to 
the fueling of those engines. We are also proposing to explicitly 
preclude these engines from being certified to use residual fuel if 
they are exempt from the part 1043 requirements. Thus, these engines 
would be required to always use cleaner fuels than are required by 
Annex VI. U.S. vessels that operate or may operate in waters that are 
under the jurisdiction of another country are not exempt from these 
provisions, and the owner of any such vessel may be required by that 
country to show compliance with Annex VI. Therefore, the owner should 
be sure to maintain the appropriate paperwork for that engine and have 
the appropriate engine certification. It should be noted that engines 
that must show compliance with the Annex VI standards are not exempt 
from EPA's standards for Category 1 or Category 2 engines. We are 
requesting comment on this overall approach for domestic vessels. In 
particular, we are requesting comment on whether we should extend this 
exemption to U.S. vessels that sometimes leave the EEZ of the United 
States, but that never enter waters under the jurisdiction of another 
country.
    Finally, spark-ignition, non-reciprocating engines, and engines 
that do not use liquid fuel are not included in Regulation 13 of the 
Annex VI program and therefore we are not proposing that they be 
covered by the proposed APPS regulations with respect to NO<INF>X</INF> 
emissions. However, the MARPOL Annex VI fuel requirements do apply for 
these vessels. These engines are generally subject to separate Clean 
Air Act requirements and therefore will generally be in compliance with 
the fuel sulfur limits.

C. Changes to the Requirements Specific to Engines Below 30 Liters per 
Cylinder

    The amendments to MARPOL Annex VI were adopted in October of 2008, 
after we finalized our Clean Air Act Tier 3 and Tier 4 standards for 
Category 1 and Category 2 engines (May 6, 2008, 73 FR 25097). While 
these two programs are very similar, there are a few

[[Page 44482]]

differences between them with regard to their engine requirements. We 
continue to believe that our Tier 3 and Tier 4 standards will yield the 
greatest degree of emission reduction that is technologically feasible, 
taking into account costs, safety, and other factors for those engines. 
However, we are considering changes to our CAA program to facilitate 
compliance with both programs. We seek comment on these potential 
changes, described below.
    In addition, some of the provisions described in Section VI.D may 
also apply to Category 1 and Category 2 marine diesel engines, 
regarding non-diesel engines and technical amendments to our current 
program.
(1) MARPOL Annex VI and EPA's Standards for Category 1 and Category 2 
Engines
    As discussed throughout this notice, we are proposing to adopt the 
new Annex VI NO<INF>X</INF> limits under our CAA program for Category 3 
engines. Specifically, we are proposing to adopt the Tier II and Tier 
III standards as our Tier 2 and Tier 3 standards for engines above 30 
liters per cylinder. The new Annex VI NO<INF>X</INF> limits are shown 
in Table III-1 in Section III.B.1 above.
    With regard to Category 1 and Category 2 marine diesel engines, the 
Annex VI standards are different from our Clean Air Act program in 
several ways. First, with regard to the NO<INF>X</INF> limits, EPA's 
Tier 2 NO<INF>X</INF> limits, which are similar in stringency to the 
Annex VI Tier II limits, have been in effect since 2004-2007, depending 
on engine size. EPA has intermediary Tier 3 NO<INF>X</INF> limits, 
which begin in 2012-2014, depending on engine size, and are more 
stringent than the Annex VI Tier II standards that apply beginning in 
2011. Also, while EPA's Tier 4 NO<INF>X</INF> limits for Category 1 and 
Category 2 engines are similar in stringency to the Annex VI Tier III 
NO<INF>X</INF> limit, they apply only to engines above 600 kW.\125\
---------------------------------------------------------------------------

    \125\ We continue to believe it is not appropriate to adopt SCR-
forcing Tier 4 standards for engines below 600 kW in our national 
program, for the reasons described in our 2008 Final Rule (May 6, 
2008, 73 FR 25097) . Specifically, there are significant challenges 
regarding the ability of manufacturers of the small vessels that use 
these engines for propulsion to incorporate SCR systems into their 
vessel designs. These concerns are not as significant for auxiliary 
engines used on OGV.
---------------------------------------------------------------------------

    Second, in addition to NO<INF>X</INF>, EPA's marine diesel engine 
program includes limits for PM, HC, and CO emissions. Annex VI, in 
contrast, addresses marine diesel PM emissions through fuel standards 
(see Section III.B.2 above for an explanation for why this is 
appropriate for Category 3 engines). EPA's Tier 4 PM standards for 
Category 1 and Category 2 engines are expected to be met through PM 
aftertreatment technology, which will require the use of ultra-low 
sulfur diesel fuel. Owners of vessels that operate internationally, 
including ocean-going vessels, were concerned with the availability of 
this ultra-low sulfur fuel, i.e., 15 ppm sulfur fuel, outside of the 
United States. In response to concerns with fuel availability, we 
created a provision that would exempt Category 1 and Category 2 engines 
installed on certain OGV from the Tier 4 standards. This permanent 
exemption from the Tier 4 standards is available to owners that can 
demonstrate their vessel will operate primarily outside the United 
States, as evidenced by obtaining and maintaining certification for the 
International Convention for the Safety of Life at Sea (SOLAS) for the 
vessel. The exempted engines are required to meet EPA's Tier 3 
standards, which consist of interim NO<INF>X</INF> and PM standards. 
Note that we indicated we do not expect to issue any permanent 
exemptions until 2021; prior to that time, it is our expectation that 
fleets would use their existing pre-Tier 4 vessels for operations where 
ULSD may not be available.
    Third, and finally, EPA's marine diesel engine compliance 
requirements are slightly different from the MARPOL Annex VI program, 
regarding engine durability, test fuels (in EPA's program, an engine 
must be certified on the fuel type it will use in operation; see 40 CFR 
1042.104 and 501), and some testing parameters. However, the programs 
are sufficiently consistent that engine manufacturers can use a single 
harmonized compliance strategy to certify under both systems.
(2) Tier 4 Compliance Option for Category 1 and 2 Engines on U.S. 
Vessels That Operate Internationally
    Engines on U.S. vessels that comply with EPA's Tier 2 or Tier 3 
standards will be in compliance with the Annex VI Tier I and Tier II 
NO<INF>X</INF> limits, since EPA's limits are similar in stringency or 
are slightly more stringent.
    Beginning in 2016, however, some engines in U.S. vessels that 
operate internationally could be out of compliance with the MARPOL 
NO<INF>X</INF> limits, even though they comply with EPA's CAA program. 
This would occur in two situations. If an owner obtained a permanent 
exemption from the EPA's Tier 4 standards for engines above 600 kW, as 
described above, those engines would not meet the Annex VI Tier III 
NO<INF>X</INF> limits. If the vessel has engines below 600 kW, which 
are only subject to EPA's Tier 3 standards for NO<INF>X</INF> and PM, 
then those engines would also not meet the Annex VI Tier III 
NO<INF>X</INF> limits. If a vessel is found to be in non-compliance 
with Annex VI, it can be detained in a foreign port until the 
deficiency is corrected.
    Therefore, as a result of the new situation brought about by the 
Annex VI amendments, we are considering revising our program for 
Category 1 and 2 engines. To avoid U.S. vessels being found in non-
compliance with the Annex VI NO<INF>X</INF> limits in foreign ports, we 
are considering rescinding the permanent exemption for EPA's Tier 4 
standards for Category 1 and 2 engines and, instead, adopting a 
compliance flexibility that would give owners the choice between 
complying with EPA's Tier 4 NO<INF>X</INF> and PM standards or the 
MARPOL Annex VI Tier III NO<INF>X</INF> standards for all engines 
installed on a vessel. This flexibility would ensure that owners of OGV 
that will operate in any ECA are in compliance with MARPOL Annex VI, 
while allowing owners of vessels that never operate in waters under the 
jurisdiction of another country to comply with the U.S. program 
instead.
    This compliance option would be available beginning in 2016. The 
flexibility would be limited to vessels that are operated primarily 
outside of the United States, as evidenced by the vessel obtaining and 
maintaining SOLAS certification and appropriate EIAPP certification 
demonstrating compliance with Annex VI. U.S. vessels that are Jones Act 
vessels and/or that are used primarily between U.S. ports would not be 
eligible for this compliance flexibility given they do not have the 
concerns causing the need for an exemption from our CAA Tier 4 
standards (i.e., availability of 15 ppm sulfur fuel). The exercise of 
the compliance flexibility would take the form of a formal election to 
comply with the Annex VI Tier III NO<INF>X</INF> limits in lieu of 
EPA's Tier 4 marine diesel engine emission limits. This formal election 
would be deposited with EPA and would be necessary so the engine 
manufacturer can provide an Annex VI-compliant engine to the vessel 
builder in lieu of a CAA Tier 4 engine.
    This compliance option could yield additional NO<INF>X</INF> 
emission benefits to U.S. air quality over the current permanent 
exemption approach. Under the current program, exempted engines would 
meet only the Tier 3 standards. For engines up to 3,300 kW, this is 
about a 20 percent reduction from Tier 1 (for larger engines, the Tier 
3 NO<INF>X</INF> limit is the same as the Tier 2 limit because the Tier 
4 standards begin earlier, in 2014). Under the revised

[[Page 44483]]

approach, all vessels would need to meet aftertreatment-forcing 
NO<INF>X</INF> limits when operating in ECAs. The choice of either the 
EPA Tier 4 limits or the Annex VI Tier III limits is expected to yield 
similar NO<INF>X</INF> benefits. While the Annex VI Tier III 
NO<INF>X</INF> limits are slightly less stringent (an 80 percent 
reduction from Tier 1 compared to an 85 percent reduction from EPA's 
Tier 4 standard), the Annex VI program covers more engines (those 130-
600 kW). Applying either of these programs could represent a 
significant NO<INF>X</INF> reduction over the Tier 3 limits that would 
otherwise apply.
    The main difference between the two programs is that the Annex VI 
program does not include PM standards. This means that instead of 
meeting EPA's Tier 3 PM standards (which are about a 45 percent 
reduction from the Tier 2 PM limit), the engines that exercise the 
Annex VI Tier III option would be unconstrained for PM. However, this 
will be offset by the greater reductions in NO<INF>X</INF> (and 
associated indirect PM) emissions that would be achieved through the 
application of SCR-forcing standards to all engines above 130 kW 
installed on the vessel.
    Owners of qualified vessels that operate in ECAs would be expected 
to choose the Annex VI Tier III option to ensure that their engines 
below 600 kW are in compliance in those areas. Owners of vessels that 
never operate in any ECA, including the North American ECA, may also 
choose that option if they are concerned with availability of ultra-low 
sulfur diesel fuel that would be required for EPA's Tier 4 PM controls.
    Annex VI Tier III engines that are used in this program would be 
required to be certified by EPA, although we would accept test data 
obtained for compliance with the IMO program for this program.
    We are also seeking comment on whether we should consider such a 
compliance option to replace our temporary exemption program for 
Category 1 and 2 engines. The temporary exemption was designed to 
address the case in which a U.S. vessel is contracted to operate 
overseas for an extended period of time in an area in which 15 ppm fuel 
is not available. Owners of vessels that obtain this exemption can 
disable the Tier 4 controls on Category 1 and Category 2 engines. The 
exemption is temporary in that the controls must be re-enabled before 
the vessel is returned to service in the United States. It should be 
noted that while the compliance flexibility described above would 
ensure that the vessel achieves the Annex VI Tier III standards while 
operating in another country, it also means that the vessel would not 
achieve EPA's Tier 4 PM requirements when it is returned to service in 
the United States.
(3) On/Off Technology for Category 1 and 2 Engines
    As described in Section VI.A.3 above, we are proposing to allow the 
use of auxiliary emission control devices (AECDs) that would allow 
modulation of emission control equipment on Category 3 engines outside 
of specific geographic areas. These AECDs would be subject to certain 
restrictions: (1) The AECD would be available for the Tier 3 standards 
only; (2) the AECD would modulate emission controls only while 
operating in areas where emissions could reasonably be expected to not 
adversely affect U.S. air quality; and (3) and an engine equipped with 
an AECD must also be equipped with a NO<INF>X</INF> emission monitoring 
device.
    Ocean-going vessels with Category 3 propulsion engines have several 
smaller Category 1 and Category 2 engines to provide auxiliary power. 
In addition, while most U.S. vessels with Category 1 or Category 2 
propulsion engines operate primarily or exclusively on our inland 
waterways, in our commercial ports, or in areas close to our 
coastlines, there are Category 1 and 2 vessels that operate more like 
ocean-going vessels.
    Our current program for Category 1 and Category 2 engines does not 
allow the use of AECDs on these engines. Instead, it requires the 
NO<INF>X</INF> and PM aftertreatment devices on these engines to be 
functional at all times unless the owner of the vessel has obtained 
from EPA either a temporary or permanent exemption from the Tier 4 
standards.
    Most U.S. vessels with Category 1 or Category 2 propulsion engines 
do not operate outside of our inland and coastal water systems, and 
therefore would not benefit from a provision that would allow AECDs. 
Additionally, we are concerned that use of this technology/strategy 
could have detrimental air quality impacts if operated inappropriately 
in or around U.S. waters. However, we are seeking comment as to whether 
we should consider allowing such an AECD provision to apply to other 
categories of marine diesel engines.
    First, we seek comment on whether the application of this provision 
should be limited to Category 1 and Category 2 engines used as 
auxiliary engines on ocean-going vessels with Category 3 propulsion 
engines, to Category 1 and Category 2 engines installed on vessels that 
operate primarily outside the United States, or to some other group of 
vessels.
    Second, if we allowed AECDs on engine categories with a PM emission 
standard, we seek comment on whether they should be limited to 
NO<INF>X</INF> emissions only.
    Third, we request comment on the NO<INF>X</INF> (and potentially 
PM) levels that would need to be achieved while then AECD is in 
operation: the Annex VI Tier II NO<INF>X</INF> limits or EPA's Tier 3 
NO<INF>X</INF> and PM limits.
    Finally, we seek comment on whether an AECD provision should be 
used instead of the temporary exemption program for Category 1 and 2 
engines. In this case, instead of extending the compliance flexibility 
to these vessels as described in Section VI.C.1, owners of a vessel 
that is contracted to operate outside the United States for an extended 
period of time could purchase and use engines equipped with on/off 
features, provided the emission control devices were operational when 
the vessel is operating in areas that affect U.S. air quality. We seek 
comment on whether the AECD approach is more useful for these vessels 
or the compliance flexibility described above.

D. Other Proposed Regulatory Issues

    In addition to the changes described in Sections VI.A and VI.C, we 
are also proposing changes that would apply to Category 1 marine 
engines in general, and/or to other types of engines.
(1) Non-Diesel Engines
    Most of the preceding discussions have focused on conventional 
diesel engines using either diesel fuel or residual fuels. It is 
important to highlight two other types of engines being affected by 
this proposal: engines using other fuels and gas turbine engines.
(a) Engines Not Using Diesel Fuel
    For all categories of marine engines, our existing standards apply 
to all engines meeting the definition of compression-ignition, 
regardless of the fuel type. For example, compression-ignition Category 
3 engines that burn natural gas are currently subject to our Tier 1 
standards and would be subject to our proposed Tier 2 and Tier 3 
standards. We are proposing to continue to apply this approach for all 
marine engines subject to our standards.
    The testing regulations in part 1065 include test fuel 
specifications for diesel fuel, residual fuel, and natural gas (as well 
as for gasoline and liquefied petroleum gas, which would not typically 
be used in a compression-ignition engine). To certify an engine for a 
different fuel type, a manufacturer would need to obtain EPA approval 
to

[[Page 44484]]

use an alternate fuel which it recommends for testing. All other 
aspects of certification would be the same.
(b) Gas Turbine Engines
    Gas turbine engines are internal combustion engines that can 
operate using a variety of fuels (such as diesel fuel or natural gas) 
but do not operate on a compression-ignition or other reciprocating 
engine cycle. Power is extracted from the combustion gas using a 
rotating turbine rather than reciprocating pistons. The primary type of 
U.S.-flagged vessels that use gas turbine engines are naval combat 
ships. While a small number have been used in commercial ships, we are 
not aware of any current sales for commercial applications. They can 
range in size from those equivalent in power to mid-size Category 1 
engines to those that produce the same power as Category 3 engines. 
None of these engines are currently subject to our standards because 
they do not meet the definition of compression-ignition engines in our 
existing regulations.
    To date, this omission has not been a concern because only a small 
number of turbine-powered vessels have been produced and nearly all of 
them would have been eligible for a national security exemption. 
However, we are concerned that this exclusion may become a loophole in 
the future for operators hoping to avoid using engines with advanced 
catalytic emission controls. To a lesser degree, we also have concerns 
about the possibility of other non-reciprocating engines being 
excluded. We are proposing to close this potential loophole by revising 
the regulations to treat new gas turbine engines (as well as other non-
reciprocating engines) as compression-ignition engines and applying our 
standards for new Category 1 and Category 2 engines (including 
NO<INF>X</INF>, HC, CO, and PM standards) to gas turbine engines.
    To incorporate this approach in our marine emission control 
program, we are proposing a change to our definitions of Category 1 and 
Category 2 to include gas turbine engines. Since turbine engines have 
no cylinders, we need to address how to apply any regulatory provisions 
that depend on a specified value for per-cylinder displacement. A 
reasonable approach would be to apply the standards based on equivalent 
power ratings, to the extent possible. Specifically, we are proposing 
to redefine ``Category 1'' to include gas turbines with rated power up 
to 2250 kW and to redefine ``Category 2'' to include all gas turbines 
with higher power ratings. This would mean we would not consider any 
gas turbines as ``Category 3'' engines. The largest gas turbine engines 
would be considered to be Category 2 engines, even those that had rated 
power more typical of Category 3 diesel engines.
    We are aware that some companies are manufacturing new high-
performance recreational vessels using gas turbine engines. In at least 
some cases, the engines are modified from surplus military aircraft 
engines. We have not yet determined whether such recreational engines 
should be held to the same standards as conventional diesel engines. It 
is also important to note that under our current regulations, diesel 
engines meeting the definition of ``recreational marine engine'' in 
Sec.  1042.901 are not subject to catalyst forcing standards. This 
approach was applied because of factors such as the usage patterns for 
recreational diesel engines. We would expect these same factors to 
apply for recreational gas turbine engines. Thus, we are not as 
concerned about a potential gas turbine loophole for recreational 
engines as for commercial engines. We also do not have enough 
information at this time to know how feasible it would be for gas 
turbine engine manufacturers to comply with the standards for 
recreational diesel engines, or to accurately assess the environmental 
impact of these vessels. Nevertheless, it is clear that the 
environmental impact of such small numbers of these engines cannot be 
large. Thus, at this time, we are not proposing to apply this 
regulatory change to recreational gas turbine engines (i.e., that is 
gas turbine engines installed on recreational vessels). Nevertheless, 
we will continue to investigate these engines and may subject them to 
standards in the near future.
    Our diesel engine program contains a national security exemption 
that automatically exempt vessels ``used or owned by an agency of the 
Federal government responsible for national defense, where the vessel 
has armor, permanently attached weaponry, specialized electronic 
warfare systems, unique stealth performance requirements, and/or unique 
combat maneuverability requirements.'' Since it is not our intent to 
prohibit naval vessels from using turbine engines, we are proposing to 
revise this provision to automatically exempt military vessels owned by 
an agency of the Federal government responsible for national defense 
powered by gas turbine engines.
    We are confident that gas turbine engines could use the same type 
of aftertreatment as is projected for diesel engines. The basic 
reactions through which SCR reduces NO<INF>X</INF> emissions can occur 
under a wide range of conditions, and exhaust from gas turbine engines 
is fundamentally similar to exhaust from diesel engines. Moreover, 
since gas turbines operate at lower air/fuel ratios and have lower 
exhaust volumes, they can actually use smaller less expensive catalysts 
than diesel engines of the same rated power. Viewed another way, 
however, this requirement can be considered to be feasible based on the 
fact that the only circumstance in which a vessel would actually need a 
gas turbine engine would be for military purposes where our national 
security exemption provisions would apply. For all other vessels, it is 
entirely feasible for the vessel to be powered by a diesel engine. In 
fact, that is what is being done today.
    This program for gas turbine engines would apply to freshly 
manufactured engines only. We are not proposing to apply our marine 
remanufacture program to gas turbine engines. Because there are so few 
engines in the fleet, it is not possible to know what common rebuilding 
process are or whether and how those practices would return an existing 
engine to as-new condition. We may review this approach in the future 
if there is an increase in the number of gas turbines in the fleet.
(2) Technical Amendments
    The proposed regulations include technical amendments to our motor 
vehicle and nonroad engine regulations. These changes are generally 
corrections and clarifications. A large number of these changes are the 
removal of obsolete highway engine text that applied only for past 
model years. Many others are changes to the text of part 1042 to make 
it more consistent with the language of our other recently corrected 
nonroad parts. The last large category of changes includes those 
related to the test procedures in part 1065. See the memorandum in the 
docket entitled ``Technical Amendments to EPA Regulations'' for a full 
description of these changes.\126\
---------------------------------------------------------------------------

    \126\ See ``Proposed Technical Amendments to EPA Regulations,'' 
EPA memorandum from Alan Stout, in the docket for this proposed 
rule, Docket No.: EPA-HQ-OAR-2007-0121.
---------------------------------------------------------------------------

(3) Locomotives Operating Outside of the United States
    Locomotive manufacturers have raised an issue similar to the issue 
of on-off technologies discussed in Section VI.A.3. They have objected 
in the past to EPA's refusal to certify engine designs that increase 
NO<INF>X</INF> emissions when the locomotive is operating in

[[Page 44485]]

Mexico, even though the engine design would reverse the adjustment to 
allow the locomotive to conform to NO<INF>X</INF> emissions standards 
when it returns to the United States. Engine manufacturers have wanted 
to use such engine designs to improve fuel consumption by readjusting 
injection timing while the locomotive is operating in Mexico.
    In our recent locomotive rulemaking, we responded to these 
manufacturer concerns by noting that we have ``prohibited such AECDs 
because of concerns over their potential adverse impacts on U.S. air 
quality,'' recognizing that ``emissions that occur outside the 
territorial boundaries of the U.S. can impact air quality within the 
U.S.'' Since we also committed to reconsider the issue more broadly in 
this current rulemaking, we are requesting comment on whether we should 
allow manufacturers to certify such engine designs.
    In particular, we are requesting comment on what conditions we 
should set if we allow such designs. For example, should we approve the 
design only if it was calibrated to remain in the low-NO<INF>X</INF> 
mode until it was at least 200 miles away from the U.S. border? Should 
we allow such designs if they would conflict with Mexican law? Should 
we also consider operation in Canada or Central American countries? 
Commenters should also address the degree to which such designs would 
be tamper-proof and whether special recordkeeping or reporting 
requirements should be included. Finally, commenters should also 
address how EPA should respond if such a locomotive was found to be 
operating in the U.S. in the high-NO<INF>X</INF> configuration and such 
high-NO<INF>X</INF> operation was not caused by tampering. Should it be 
treated merely as a defect that must be reported, or should it be 
treated as different violation, e.g., introduction into commerce of an 
engine not in substantial conformance to its certificate?
(4) Stockpiling of Model Year 2009 Highway Engines
    EPA is also proposing to add language in part 85, applicable to 
heavy-duty motor vehicles and heavy-duty engines used in motor 
vehicles, which codifies that the ``stockpiling'' of engines to avoid 
compliance with later, more stringent emission standards is considered 
a circumvention of the Clean Air Act and is prohibited. The proposed 
provisions are consistent with existing stockpiling provisions for 
nonroad engines and equipment in part 1068 and are intended to codify 
the prohibition for heavy-duty motor vehicles and heavy-duty engines. 
Stockpiling of engines is the practice of keeping in inventory more 
engines than a manufacturer normally keeps in inventory, in particular 
when those engines do not meet the more stringent standards. EPA 
believes this prohibition is necessary to ensure that engine and 
vehicle manufacturers comply with the same compliance ``clock'' while 
allowing for minimum but necessary flexibility during the transition of 
model years. We recognize there will be the need for some market 
transition when standards change but believe this regulatory 
clarification will help provide guidance to the vehicle and engine 
manufacturers.
    EPA is proposing to add this language to clarify EPA's longstanding 
policy that considers stockpiling to be a circumvention of the Act, 
including the terms of section 203(a)(1). During and after the 
transition to the 2007 heavy-duty diesel emission standards EPA met 
with several manufacturers to understand their production plans and 
their concerns regarding all manufacturers' timely compliance with the 
new emission standards. EPA has begun to have similar discussions with 
and inquiries from manufacturers for the transition to the 2010 model 
year.\127\ The Agency has also been conducting some analysis of market 
practices. Given this experience EPA believes it appropriate to clearly 
set forth the stockpiling prohibition.
---------------------------------------------------------------------------

    \127\ For example, EPA received a request for guidance from 
Volvo on April 13, 2009 seeking clarification on the transition to 
the 2010 model year standards for both vehicle and engine 
manufacturers. Docket No.: EPA-HQ-OAR-2007-0121.
---------------------------------------------------------------------------

    Therefore, for example, an engine manufacturer who sells engines to 
a vehicle manufacturer cannot sell engines in a current model year for 
the purpose of having them installed in a future model year's vehicles 
when the engine sale is beyond that required to meet normal production 
lead time requirements. Likewise, a vehicle manufacturer cannot order 
or install engines from a prior model year when the number of such 
engines exceeds that needed to meet normal inventory requirements. This 
will prevent vehicle manufacturers from avoiding compliance with 
emission requirements which would otherwise apply during the model year 
of the vehicle. Other indicators that illegal stockpiling may have 
occurred include build up of excessive inventory or volume of engines 
prior to a future model year that is inconsistent with historic 
production volumes, actions to create a market for the sale of engines 
meeting earlier standards in a future year, and the sale of previous 
model year engines representing a disproportionate amount of total 
sales in the subsequent model year. If emissions standards for the 
engine do not change in a given model year, a manufacturer may continue 
to install engines from a previous model year without restriction.
    EPA will also consider many factors in assessing whether an engine 
manufacturer has caused or aided in the prohibited act of stockpiling. 
For example, contractual (or otherwise established) business 
relationships of those persons involved in producing and/or selling new 
engines and vehicles could be evidence of the ability of the person to 
cause a violation. In addition, we would consider the particular 
efforts or influence of the alleged violator contributing to, leading 
to, or resulting in the prohibited act. On the other hand, we would 
also consider a person's efforts to prevent such a violation as 
evidence that they did not cause the violation.

E. Coast Guard's Marine Vessel Certification Program

    The U.S. Department of Transportation Maritime Administration 
(MARAD) oversees the Maritime Security Program (MSP) established by the 
Maritime Security Act of 1996 and reauthorized by the Maritime Security 
Act of 2003 (MSA). The MSA requires that the Secretary of 
Transportation, in consultation with the Secretary of Defense, 
establish a fleet of active, commercially viable and militarily useful 
vessels to meet national defense and other security requirements and 
maintain a U.S. presence in international commercial shipping. The 
fleet consists of privately-owned, U.S.-flagged vessels known as the 
Maritime Security Fleet (MSF). 46 U.S.C. 53102 outlines that vessels 
complying with applicable international agreements and associated 
guidelines are eligible for a certificate of inspection from Coast 
Guard, and thus inclusion in the MSF.
    The requirements of the MSP may have created confusion for owners 
of non-U.S.-flagged vessels regarding their obligation to also comply 
with EPA's domestic marine diesel engine emission standards at the time 
they re-flag for inclusion in the MSF. We want to remind vessel owners 
that the MSA does not preempt the Clean Air Act or alleviate their 
obligation to comply with EPA's marine diesel engine program, or any 
other EPA requirements that apply to marine vessels. Each U.S.-flagged 
vessel must comply with all of EPA's domestic standards, regardless of 
whether the vessel was flagged in the

[[Page 44486]]

U.S. upon original delivery into service. Specifically, model year 2004 
and later marine diesel engines installed on these vessels must be 
covered by a certificate of conformity issued under 40 CFR Part 94 or 
40 CFR Part 1042, unless covered by a specific exemption or exclusion 
in those regulations.
    Owners that wish to re-flag a vessel for U.S. service in the MSF 
should contact EPA to determine the specific compliance requirements 
that must be met.

VII. Costs and Economic Impacts

    In this section, we present the projected cost impacts and cost 
effectiveness of the coordinated emission control strategy for ocean-
going vessels. We also present our analysis of the economic impacts of 
the coordinated strategy, which consists of the estimated social costs 
of the program and how those costs will likely be shared across 
stakeholders. The projected benefits and benefit-cost analysis of the 
coordinated strategy are presented in Section VIII.
    We estimate the costs of the coordinated strategy to be about $1.85 
billion in 2020, increasing to $3.11 billion in 2030.\128\ Of the 2020 
costs, nearly 89 percent or $1.64 billion are attributable to the ECA 
fuel sulfur provisions. The total operational costs are estimated to be 
$1.82 billion in 2020. The costs to apply engine controls to U.S.-
flagged vessels are expected to be $31.9 million in 2020, increasing to 
$47.4 million in 2030 as more ships are built to comply with Clean Air 
Act (CAA) Tier 3 NO<INF>X</INF> limits. All costs are presented in 2006 
U.S. dollars.
---------------------------------------------------------------------------

    \128\ These total estimated costs are slightly different than 
those reported in the ECA proposal, because the ECA proposal did not 
include costs associated with the Annex VI existing engine program, 
Tier II, or the costs associated with existing vessel modifications 
that may be required to accommodate the use of lower sulfur fuel. 
Further, the cost totals presented in the ECA package included 
Canadian cost estimates.
---------------------------------------------------------------------------

    When attributed by pollutant, at a net present value of 3 percent 
from 2010 through 2040, the NO<INF>X</INF> controls are expected to 
cost about $510 per ton of NO<INF>X</INF> reduced, SO<INF>X</INF> 
controls are expected to cost about $930 per ton of SO<INF>X</INF> 
reduced, and the PM controls are expected to cost about $7,950 per ton 
of PM reduced ($500, $920, and $7,850 per ton of NO<INF>X</INF>, 
SO<INF>X</INF>, and PM respectively, at a net present value of 7 
percent over the same period.) These costs are comparable to our other 
recently-adopted mobile source programs, and are one of the most cost-
effective programs in terms of NO<INF>X</INF> and PM when compared to 
recent mobile and stationary programs. The coordinated strategy also 
provides very cost-effective SO<INF>X</INF> reductions comparable to 
the Heavy-Duty Nonroad diesel rulemaking.
    The social costs of the proposed program are estimated to be 
approximately $3.1 billion in 2030. The impact of these costs on 
society is estimated to be minimal. For example, we estimate the cost 
of shipping a 20-foot container on the Pacific route, with 1,700 nm of 
operation in the ECA, would increase by about $18, or less than 3 
percent. Similarly, the price of a seven-day Alaska cruise that 
operates mainly in the ECA is expected to increase by about $7 per day.
    The estimated costs presented in this section are for the entire 
coordinated strategy, including those requirements that are the subject 
of this proposal and those that are associated with the proposed ECA 
designation. Table VII-1 sets out the different components of the 
coordinated strategy and our ECA designation package, for 2020. The 
costs of the coordinated strategy consists of the costs associated with 
the MARPOL Annex VI global standards that we are implementing through 
APPS, some of which we are also adding to our CAA emission control 
program for U.S. vessels (Tier 2 and Tier 3 NO<INF>X</INF> emission 
control hardware for U.S. vessels; operating costs for the Tier 2 
NO<INF>X</INF> requirements; controls for existing vessels; certain 
compliance requirements). Also included are the costs associated with 
the U.S. portion of the ECA package (Tier 3 hardware and operating 
costs; fuel sulfur hardware and operating costs). The costs associated 
with the Canadian portion of the ECA package are not included in the 
costs of the coordinated strategy.
    Note that, with regard to hardware costs, the coordinated strategy 
includes the entire cost for new U.S. vessels to comply with the Tier 3 
NO<INF>X</INF> standards and ECA fuel limits, even though some of the 
benefits from using these emission control systems will occur outside 
the United States. Conversely, we do not include any new vessel Tier 3 
or fuel hardware costs for foreign vessels that operate in U.S. waters 
even though a significant share of the benefits of the coordinated 
strategy will arise from foreign vessels that comply with the ECA 
engine and fuel sulfur limits while operating within the U.S. ECA. An 
alternative approach would be to allocate a portion of hardware costs 
of complying with the Tier 3 NO<INF>X</INF> standards and the fuel 
sulfur limits to the coordinated strategy. For example, analysis of 
MARAD port entrance data shows that about 30 percent of the vessels 
that enter U.S. ports account for about 75 percent of the vessel 
entrances. This suggests it may be reasonable to allocate the hardware 
costs for 30 percent of the new foreign vessels to the coordinated 
strategy. Similarly, it may be reasonable to discount the share of 
estimated hardware costs included in the coordinated strategy costs for 
those U.S. vessels that do not operate primarily between two U.S. 
ports. We request comment on the allocation of hardware costs and on 
whether the U.S. should adopt the alternative approach described above 
or some other method to allocate these costs.
    The regulatory changes proposed for Category 1 and 2 engines are 
not included in this cost analysis as they are intended to be 
compliance flexibilities and not result in increased compliance costs. 
Similarly, the technical amendments proposed for other engines, would 
not have significant economic impacts and are therefore not addressed 
here. Finally, compliance costs for gas turbine engines are not 
addressed separately because they would be similar to those for diesel 
marine engines.

[[Page 44487]]

[GRAPHIC] [TIFF OMITTED] TP28AU09.001


[[Page 44488]]


    This cost analysis relies on a number of assumptions about the 
prices of various engine and fuel hardware components, as well as fuel 
consumption, the number of affected vessels, and their operation. We 
seek comment on all aspects of this analysis, including all of these 
assumptions and the methodology we used to estimate the costs of the 
program.

A. Estimated Fuel Costs

    Although the ECA fuel sulfur limits are not part of this proposal, 
they are part of the coordinated strategy and we are including them in 
this cost analysis. However, we consider the costs and benefits of ECA 
designation in this proposal, as they are part of our coordinated 
strategy for ocean-going vessels.
    Current regulations impose a sulfur limitation of 15 ppm for 
distillate fuels produced at refineries in the U.S. The coordinated 
strategy would impose no additional costs for refiners in the U.S. and 
would actually allow additional flexibility. Specifically, we are 
proposing to allow distillate fuel to have up to 1,000 ppm sulfur for 
use in OGVs. The ECA fuel requirements will impose a cost to the ship 
owners. This section presents estimates of the cost of compliance with 
the 1,000 ppm sulfur limit in the U.S. ECA.
    Distillate fuel will likely be used to meet the 1,000 ppm fuel 
sulfur limit, beginning in 2015. As such, the primary cost of the fuel 
sulfur limit for ship owners will be that associated with switching 
from heavy fuel oil to higher-cost distillate fuel. Some engines 
already operate on distillate fuel and would not be affected by fuel 
switching costs. However, distillate fuel costs may be affected by the 
need to further refine the distillate fuel to meet the 1,000 ppm sulfur 
limit.
    To investigate these effects, studies were performed on the impact 
of a North American ECA on global fuel production and costs, to inform 
the application for such ECA.\129\ These studies were performed prior 
to the ECA being defined; thus, we picked a maximum distance boundary 
to ensure a conservative cost analysis. Specifically, we used the total 
fuel consumption in the U.S. and Canada exclusive economic zones.\130\ 
As a result, the modeled fuel volumes are higher than would be affected 
by the proposed ECA. The studies are relevant to this regulation as 
well, since they estimate the cost of 1,000 ppm sulfur fuel for ships 
operating in such ECA zones.
---------------------------------------------------------------------------

    \129\ Research Triangle Institute, 2009. ``Global Trade and 
Fuels Assessment-- Future Trends and Effects of Designating 
Requiring Clean Fuels in the Marine Sector''. Prepared for U.S. 
Environmental Protection Agency. Research Triangle Park, NC.
    \130\ In this analysis, the U.S. included the lower 48 
contiguous states and southeastern Alaska.
---------------------------------------------------------------------------

    To assess the effect on the refining industry of the imposition of 
a 1,000 ppm sulfur limit on fuels operating in the ECA, we needed to 
first understand and characterize the fuels market. Research Triangle 
Institute (RTI) was contracted to conduct a fuels study using an 
activity-based economic approach. The study established baseline bunker 
fuel demand, projected a growth rate for bunker fuel demand, and 
established future bunker fuel demand volumes.\131\ These volumes then 
became the input to the World Oil Refining Logistics and Demand (WORLD) 
model to evaluate the effect of an ECA on fuel cost.
---------------------------------------------------------------------------

    \131\ Research Triangle Institute, 2009. ``Global Trade and 
Fuels Assessment-- Future Trends and Effects of Designating 
Requiring Clean Fuels in the Marine Sector''. Prepared for U.S. 
Environmental Protection Agency. Research Triangle Park, NC.
---------------------------------------------------------------------------

    The WORLD model was run by Ensys Energy & Systems, the owner and 
developer of the refinery model. The WORLD model is the only such model 
currently developed for this purpose and was developed by a team of 
international petroleum consultants. It has been widely used by 
industries, government agencies, and Organization of the Petroleum 
Exporting Countries (OPEC) over the past 13 years, including the Cross 
Government/Industry Scientific Group of Experts, established to 
evaluate the effects of the different fuel options proposed under the 
revision of MARPOL Annex VI. The model incorporates crude sources, 
global regions, refinery operations, and world economics. The results 
of the WORLD model have been comparable to other independent 
predictions of global fuel, air pollutant emissions and economic 
predictions.
    The WORLD model was run for 2020, in which the control case 
included a fuel sulfur level of 1,000 ppm in the U.S. The baseline case 
was modeled as ``business as usual'' in which ships continue to use the 
same fuel as today. Because of the recent increases and fluctuations in 
oil prices, we had additional WORLD model runs conducted. For these 
runs, we used new reference case and high oil price estimates that were 
recently released by the U.S. Energy Information Administration (EIA). 
In addition to increased oil price estimates, the updated model 
accounts for increases in natural gas costs, capital costs for refinery 
upgrades, and product distribution costs.
    Because only a small portion of global marine fuel is consumed in 
the ECA, the overall impact on global fuel production is small. Global 
fuel use in 2020 by ships is projected to be 500 million metric tonnes/
yr. Of this amount, 90 million metric tonnes of fuel is used for U.S./
Canadian trade, or about 18 percent of total global fuel use. In the 
proposed ECA, less than 20 million metric tonnes of fuel will be 
consumed in 2020, which is less than 4 percent of total global marine 
fuel use. Of the amount of fuel to be consumed in the proposed ECA in 
2020, about 4 million metric tonnes of distillate will be consumed in 
the Business as Usual (BAU) case, which is about 20 percent of the 
amount of total fuel to be consumed in the proposed ECA.
    There are two main components to projected increased marine fuel 
cost associated with the ECA. The first component results from shifting 
from operation on residual fuel to operation on higher cost distillate 
fuel. This is the dominant cost component. However, there is also a 
small cost associated with desulfurizing the distillate to meet the 
1,000 ppm sulfur standard in the ECA. Based on the WORLD modeling, the 
average increase in costs associated with switching from marine 
residual to distillate will be $145 per metric tonne.\132\ This is the 
cost increase that will be borne by the shipping companies purchasing 
the fuel. Of this amount, $6 per metric tonne is the increase in costs 
associated with distillate desulfurization.
---------------------------------------------------------------------------

    \132\ Note that distillate fuel has a higher energy content, on 
a per ton basis, than residual fuel. As such, there is an offsetting 
cost savings, on a per metric ton basis, for switching to distillate 
fuel. Based on a 5 percent higher energy content for distillate, the 
net equivalent cost increase is estimated as $123 for each metric 
ton of residual fuel that is being replaced by distillate fuel.
---------------------------------------------------------------------------

    Table IV- summarizes the fuel cost estimates with and without an 
ECA. In the baseline case, fuel volumes for operation are 18% marine 
gas oil (MGO), 7% marine diesel oil (MDO), and 75% IFO. Weighted 
average baseline distillate fuel cost is $462/tonne. In the ECA, all 
fuel volumes are modeled as MGO, at $468/tonne.

[[Page 44489]]



                 Table VII-2--Estimate Marine Fuel Costs
------------------------------------------------------------------------
             Fuel                   Units         Baseline       ECA
------------------------------------------------------------------------
MGO..........................  $/bbl..........       $61.75       $62.23
                               $/tonne........          464          468
MDO..........................  $/bbl..........        61.89        62.95
                               $/tonne........          458          466
IFO..........................  $/bbl..........        49.87        49.63
                               $/tonne........          322          321
------------------------------------------------------------------------

    The increased cost of distillate desulfurization is due both to 
additional coking and hydrotreating capacities at refineries. Cokers 
crack residual blends in IFO bunker fuel into distillates, using heat 
and residence time to make the conversion. The process also produces 
useful byproducts such as petroleum coke and off gas. The WORLD model 
did not use hydrocracking technology to convert residual fuels into 
distillates for either the reference or high price crude cases. Because 
of the higher capital and operating costs of hydrocrackers, the WORLD 
model favored the use of coking units. As such, the WORLD model assumed 
that cokers would convert the residual blendstocks in Intermediate Fuel 
Oil grades to distillates. The model added coking processes to 
refineries located in the U.S. and, to a lesser extent, to refiner 
regions outside of the U.S. Specifically, the model added one 
additional coking unit with a capacity of 30 thousand barrels per 
stream day (KBPSD), and one to two hydrocracking units representing 50 
and 80 KBPSD additional capacity.
    The WORLD model also added new conventional distillate 
hydrotreating capacity to lower the sulfur levels for the marine 
distillate fuel, in addition to the existing slack distillate 
hydrotreating capacity that existed in refiner regions for these fuels. 
In addition, the model used lighter crudes and adjusted operating 
parameters in refineries. This had the effect of increasing the 
projected production of lower sulfur distillate fuels in lieu of adding 
distillate hydrotreating capacity. The model elected to use lower 
sulfur crudes and used operational adjustments. Higher capital and 
operating costs of new units under the high-priced crude scenario 
favored use of existing refinery capacity made available from lower 
global refiner utilizations.

B. Estimated Engine Costs

    To quantify the cost impacts associated with the coordinated 
strategy, we estimated the hardware and operational costs to U.S.-
flagged ships, as well as affected foreign-flagged ships. The hardware 
costs are only applied to U.S.-flagged vessels, and include those 
associated with the CAA Tier 2 and Tier 3 NO<INF>X</INF> standards, the 
Annex VI existing engine program, and the use of lower sulfur fuel. 
Tier 2 hardware costs consist of changes to the engine block and the 
migration from mechanical fuel injection to common rail fuel injection 
systems. Tier 3 hardware costs include engine modifications, the 
migration from mechanical fuel injection to common rail fuel injection 
systems, and the installation of Selective Catalytic Reduction (SCR). 
Hardware costs associated with the use of lower sulfur fuel are from 
applying additional tanks and equipment to enable a vessel to switch 
from residual fuel to lower sulfur fuel. These equipment costs were 
applied to those new vessels that may need additional hardware, and 
also include the estimated cost of retrofitting the portion of the 
fleet that may require additional hardware to accommodate the use of 
lower sulfur fuel in 2015. The hardware costs also include a per engine 
cost of $10,000 associated with the proposed requirement to test each 
production engine (Sec.  1042.302). These are the sole engine hardware 
costs specifically attributable to our Clean Air Act rule. The 
programmatic changes under consideration for Category 1 and 2 engines 
(see Section VI.C, above), would not impose compliance costs but 
instead are intended to facilitate compliance with both Annex VI and 
our Clean Air Act requirements for those engines.
    Although we have developed hardware cost estimates for all ships 
that may enter U.S. ports, we do not believe that it is appropriate to 
attribute all of these costs to emissions reductions in the U.S. 
Clearly, this technology will be used globally and will result in 
emissions reductions in many other countries. At the same time, some 
amount of the hardware costs should be attributed to the emissions 
reductions achieved in the U.S. To address these considerations, we 
include the hardware costs for only U.S.-flagged vessels in our cost 
estimates, and present the hardware costs for foreign-flagged vessels 
as a separate analysis. The operational costs, which represent the 
majority of the costs to ships, are included in our cost totals for 
both U.S.- and foreign-flagged vessels.
    The operational costs were applied to both U.S.- and foreign-
flagged vessels and include additional operational costs associated 
with the applicable NO<INF>X</INF> limits and the use of lower sulfur 
fuel. The operational costs for NO<INF>X</INF> controls consist of the 
additional fuel required due to an estimated two percent fuel penalty 
associated with the use of technologies to meet CAA Tier 2 and global 
Tier II NO<INF>X</INF> standards, and the use of urea for ships 
equipped with an SCR unit to meet CAA Tier 3 and global Tier III 
NO<INF>X</INF> standards. The operational costs associated with the use 
of lower sulfur fuel include both the differential cost of using lower 
sulfur fuel that meets ECA standards instead of using marine distillate 
fuel, and the differential cost of using lower sulfur fuel that meets 
ECA standards instead of using residual fuel.
    To assess the potential cost impacts, we must understand (1) the 
makeup of the fleet of ships expected to visit the U.S. when these 
requirements go into effect, (2) the emission reduction technologies 
expected to be used, and (3) the cost of these technologies. Chapter 5 
of the draft RIA presents this analysis in greater detail. The total 
engine and vessel costs associated with the coordinated strategy are 
based on a cost per unit value applied to the number of affected 
vessels. Operational costs are based on fuel consumption values 
determined in the inventory analysis (Section 5.2). This section 
discusses a brief overview of the methodology used to develop the 
hardware and operational costs, and the methodology used to develop a 
fleet of future vessels to which these hardware and engineering costs 
were applied.
(1) Methodology
    To estimate the hardware costs to ships that may be affected by the 
coordinated strategy, we used an approach similar to that used to 
estimate the emissions inventory. Specifically, the same inputs were 
used to develop a fleet of ships by ship type

[[Page 44490]]

and engine type that may be expected to visit U.S. ports through the 
year 2040. In order to determine the cost of applying emission 
reduction technology on a per vessel basis, ICF International was 
contracted by the U.S. EPA to conduct a cost study of the various 
compliance strategies expected to be used to meet the new 
NO<INF>X</INF> standards and fuel sulfur requirements.\133\ ICF was 
instructed to develop cost estimates covering a range of vessel types 
and sizes, which could be scaled according to engine speed and power to 
arrive at an estimated cost per vessel.
---------------------------------------------------------------------------

    \133\ ICF International, ``Costs of Emission Reduction 
Technologies for Category 3 Marine Engines,'' prepared for the U.S. 
Environmental Protection Agency, December 2008. EPA Report Number: 
EPA-420-R-09-008.
---------------------------------------------------------------------------

    A series of both slow-speed and medium-speed engine configurations 
were selected and used to provide an understanding of the costs of 
applying emission control technologies associated with the coordinated 
strategy. The engine configurations were selected based on a review of 
2005 U.S. Army Corps of Engineers `Entrances and Clearances' data which 
was used to determine the characteristics of engines on those vessels 
that call on U.S. ports most frequently. This data represents a broad 
range of propulsion power for each engine type (slow and medium speed 
engines). The costs developed for these engine configurations were used 
to develop a $/kW value that could be applied to any slow or medium 
speed engine. Using the average propulsion power by ship type presented 
in the inventory analysis, the per-vessel hardware costs were then 
applied to the estimated number of applicable vessels built after the 
standards take effect.
(a) Hardware Costs
    The hardware cost estimates include variable costs (components, 
assembly, and the associated markup) and fixed costs (tooling, research 
and development, redesign efforts, and certification). Hardware costs 
associated with the Annex VI existing engine standards were applied to 
the portion of existing U.S.-flagged vessels built between 1990 and 
1999 expected to be subject to these standards (engines with a per-
cylinder displacement of at least 90 liters and a power output of over 
5,000 kW) in 2011 when the standards go into effect. These costs were 
applied over a five year period beginning in 2011 where 20 percent of 
the total subject fleet was estimated to undergo service each year. The 
existing engine program fixed costs were phased in over a five year 
period beginning in 2010 and applied on a per-vessel basis.
    Hardware costs associated with the CAA Tier 2 program were applied 
to all new U.S.-flagged vessels beginning in the year 2011 when the 
standards take effect. The fixed costs associated with Tier 2 standards 
are expected to be incurred over a five year period; however, as the 
Tier 2 standards take effect in 2011, it was assumed that manufacturers 
are nearing the end of their research and development. In order to 
capture all of these costs, all fixed costs that would have been 
incurred during that five year phase-in period were applied in the year 
2010.
    Hardware costs associated with Tier 3 were estimated for U.S. 
vessels and were applied as of 2016. Because of the global scope of the 
Tier III standards, and the fact that other ECAs exist today and more 
may exist in the future, we do not include hardware costs for Tier III 
emission controls on foreign-flagged vessels. However, for 
completeness, Section 5.2 of the draft RIA presents these hardware cost 
estimates separately. The fixed costs associated with Tier 3 were 
phased in over a five year period beginning in 2011.
    Hardware costs associated with the use of lower sulfur fuel are 
estimated separately for both new and existing vessels that may require 
additional hardware to accommodate the use of lower sulfur fuel. The 
costs expected to be incurred by U.S.-flagged vessels are included in 
the total cost of the coordinated strategy, while the cost to foreign-
flagged vessels is presented as a separate analysis. The fuel sulfur 
control related hardware costs for new vessels begin to apply in 2015, 
while all retrofit costs are expected to be incurred by 2015 and as 
such are applied in this year. The fixed costs for both new and 
existing vessels that may require additional hardware to accommodate 
the use of lower sulfur fuel are applied on a per-vessel basis and are 
phased in over a five year period beginning as of 2010.
(b) Operational Costs
    The operational costs estimated here are composed of three parts: 
(1) The estimated increase in fuel consumption expected to occur with 
the use of Tier II technologies on U.S.- and foreign-flagged vessels, 
(2) the differential cost of using lower sulfur fuel applicable for 
both U.S.- and foreign-flagged vessels, and (3) the use of urea with 
SCR as a Tier III NO<INF>X</INF> emission reduction technology on both 
U.S.- and foreign-flagged vessels. The fuel consumption values 
associated with Tier II and Tier III standards were determined in the 
inventory analysis (see Chapter 3 of the draft RIA), with an estimated 
Tier II fuel consumption penalty of 2 percent (see Chapter 4 of the 
draft RIA) The two percent fuel penalty estimate is based on the use of 
modifications to the fuel delivery system to achieve Tier II 
NO<INF>X</INF> reductions, and does not reflect the possibility that 
there may be other technologies available to manufacturers that could 
offset this fuel penalty. Additionally, Tier III will provide the 
opportunity to re-optimize engines for fuel economy when using 
aftertreatment, such as SCR, to provide NO<INF>X</INF> reductions 
similar to the compliance strategy for some heavy-duty truck 
manufacturers using urea SCR to meet our 2010 truck standard. The 
differential cost of using lower sulfur fuel is discussed above in 
Section VII.A of this Preamble. The estimated urea cost associated with 
the use of Tier III SCR is derived from a urea dosage rate that is 7.5 
percent of the fuel consumption rate.
    Operating costs per vessel vary depending on what year the vessel 
was built, e.g., vessels built as of 2016 will incur operating costs 
associated with the use of urea necessary when using SCR as a Tier III 
NO<INF>X</INF> emission control technology, while vessels built prior 
to 2016 do not use urea but will incur operating costs associated with 
the differential cost of using lower sulfur fuel. Further, we have 
assumed vessels built as of 2011 that meet Tier II standards will incur 
a 2 percent fuel consumption penalty; see Table 5-31 of the draft RIA 
for further details on fuel costs and fuel volumes. In addition, 
vessels built as of 2016 that meet Tier III NO<INF>X</INF> standards 
while traveling in an ECA are still required to at least meet Tier II 
NO<INF>X</INF> standards outside of an ECA and will continue to incur 
the associated fuel penalty. Therefore, an estimated fleet had to be 
developed over a range of years, and provide a breakout of ships by age 
in each year.
(2) Fleet Development
    There are currently no available estimates of the number of ships 
that may visit U.S. ports in the future or comprehensive engine sales 
predictions. Therefore, to develop the costs associated with the 
coordinated strategy, an approximation of the number of ships by age 
and engine type that may visit U.S. ports in the future was 
constructed. To characterize the fleet of ships visiting U.S. ports, we 
used U.S. port call data collected in 2002 for the inventory port 
analysis (see Chapter 3 of the draft RIA) which included only vessels 
with C3 engines where the engine size and type was

[[Page 44491]]

identified.\134\ We used this data with the growth rates developed in 
the inventory analysis to estimate how many ships, by ship type and 
engine type, would visit U.S. ports in future years. Due to the long 
life of these vessels, and the fact that there has been no significant 
event that would have changed the composition of the world fleet since 
this baseline data was taken, it is reasonable to use 2002 data as the 
basis for modeling the future fleet upon which to base hardware cost 
estimates. An analysis is presented in Section 5.1.2.2 of Chapter 5 of 
the draft RIA which confirms the reasonableness of this assumption 
using 2007 MARAD data. The research performed for this cost analysis 
was based on differentiating between slow-speed diesel (SSD) and 
medium-speed diesel (MSD) engines, and separate $/kW values were 
developed for each of these engine types. The separation by engine type 
was also necessary to allow for the use of the age distribution formula 
determined by the inventory analysis (see Chapter 3 of the draft RIA) 
to determine how many vessels the hardware and/or operational costs are 
applicable to in each year.
---------------------------------------------------------------------------

    \134\ In order to separate slow speed engines from medium speed 
engines where that information was not explicitly available, 2-
stroke engines were assumed to be slow speed, where 4-stroke engines 
were assumed to be medium speed.
---------------------------------------------------------------------------

    The ship type information gathered from this baseline data, for the 
purposes of both this analysis and the inventory, was categorized into 
one of the following ship types: Auto Carrier, Bulk Carrier, Container, 
General Cargo, Miscellaneous, Passenger, Refrigerated Cargo (Reefer), 
Roll-On Roll-Off (RoRo), and Tankers. Average engine and vessel 
characteristics were developed from the baseline data, and these values 
were used to represent the characteristics of new vessels used in this 
cost analysis (see Chapter 3 of the draft RIA). Estimated future fleets 
were developed by ship type and engine type through the year 2040 for 
both new and existing vessels and both U.S.- and foreign-flagged 
vessels. Hardware costs were applied on a per-vessel basis.
    Although most ships primarily operate on residual fuel, they 
typically carry some amount of distillate fuel as well. Switching to 
the use of lower sulfur distillate fuel is the compliance strategy 
assumed here to be used by both new and existing ships in 2015 when the 
new lower sulfur fuel standards go into effect. To estimate the 
potential cost of this compliance strategy, we evaluated the distillate 
storage capacity of the current existing fleet to estimate how many 
ships may require additional hardware to accommodate the use of lower 
sulfur fuel. We performed this analysis on the entire global fleet 
listed in Lloyd's database as of 2008.\135\ Of the nearly 43,000 
vessels listed, approximately 20,000 vessels had provided Lloyds with 
fuel tankage information, cruise speed, and propulsion engine power 
data. Using this information, we were able to estimate how far each 
vessel could travel on its existing distillate carrying capacity.
---------------------------------------------------------------------------

    \135\ http://www.sea-web.com
---------------------------------------------------------------------------

    In order to determine if the current distillate capacity of a 
particular ship was sufficient to call on a U.S. ECA without requiring 
additional hardware, we evaluated whether or not each ship could travel 
1,140 nm, or the distance between the Port of Los Angeles and the Port 
of Tacoma. This distance was selected because it represents one of the 
longer trips a ship could travel without stopping at another port, and 
should overestimate the number of vessels that would require such a 
modification. The resulting percentages of ships estimated to require a 
retrofit were then applied to the number of existing ships in the 2015 
fleet to estimate the total cost of this compliance strategy for 
existing ships built prior to 2015. The same percentages were also 
applied to all new ships built as of 2015 to determine the number of 
ships that may require additional hardware and estimate the cost of 
this compliance strategy for new vessels.
(3) NO<INF>X</INF> Reduction Technologies
(a) Tier 2
    Most engine manufacturers are expected to be able to meet Tier 2 
NO<INF>X</INF> standards using engine modifications. This cost estimate 
includes the hardware costs associated with the use of retarded fuel 
injection timing, higher compression ratios, and better fuel 
distribution. There are no variable costs associated with the engine 
modifications as the changes are not expected to require any additional 
hardware. Some engines may also be equipped with common-rail fuel 
systems instead of mechanical fuel injection to meet Tier 2 
NO<INF>X</INF> standards. It is expected that approximately 75 percent 
of SSD and 30 percent of MSD engines will get this modification for 
Tier 2. The Tier 2 hardware costs developed here include the costs of 
the migration of some engines to common-rail fuel systems. It was also 
estimated that these technologies may increase fuel consumption by up 
to 2 percent; this fuel penalty is included in the Tier 2 operational 
costs. Tier 2 hardware costs included in the total estimated cost of 
the coordinated strategy are only associated with U.S.-flagged vessels; 
operational costs are applied to both U.S.-and foreign-flagged vessels.
(b) Tier 3
    Tier 3 NO<INF>X</INF> standards are approximately 80 percent below 
Tier 1 NO<INF>X</INF> standards, and are likely to require exhaust 
aftertreatment such as SCR. ICF performed a detailed cost analysis for 
the U.S. EPA that included surveying engine and emission control 
technology manufacturers regarding these advanced technology strategies 
and their potential costs. Tier 3 NO<INF>X</INF> standards are 
projected to be met through the use of SCR systems. While other 
technologies such as EGR or those that include introduction of water 
into the combustion chamber either through fumigation, fuel emulsions, 
or direct water injection may also enable Tier 3 compliance, we assume 
they will only be selected if they are less costly than SCR. Therefore, 
we have based this analysis on the exclusive use of SCR.
(c) Engine Modifications
    In addition to SCR, it is expected that manufacturers will also use 
compound or two-stage turbocharging as well as electronic valving to 
enhance performance and emission reductions to meet Tier 3 
NO<INF>X</INF> standards. Engine modifications to meet Tier 3 emission 
levels will include a higher percentage of common-rail fuel injection 
coupled with two-stage turbocharging and electronic valving. Engine 
manufacturers estimate that nearly all SSD and 80 percent of MSD 
engines will use common-rail fuel injection. Two stage turbocharging 
will most likely be used on least 70 percent of all engines required to 
meet Tier 3 emission levels. Electronically- (hydraulically) actuated 
intake and exhaust valves for MSD and electronically-actuated exhaust 
valves for SSD are necessary to accommodate two-stage turbocharging. 
Additionally, the remaining SSD engines still using mechanical 
injection (approximately 25 percent mechanically-controlled, and 75 
percent electronically-controlled) are expected to migrate to common 
rail for Tier 3, while an additional 40 percent of MSD engines are 
expected to receive common rail totaling approximately 80 percent of 
all MSD engines. The engine modification variable costs were applied to 
all new U.S.-flagged vessels equipped with either SSD or MSD engines. 
Costs to foreign-flagged vessel expected to visit U.S. ports are 
presented as a separate analysis in Chapter 5 of the draft RIA, and are 
not included in the

[[Page 44492]]

total estimated cost of the coordinated strategy.
(4) SO<INF>X</INF>/PM Emission Reduction Technology
    In addition to Tier 3 NO<INF>X</INF> standards, the IMO ECA 
requirements also include lower fuel sulfur limits that will result in 
reductions in SO<INF>X</INF> and PM. Category 3 marine engines 
typically operate on heavy fuel oil with a sulfur content of 2.7 
percent, therefore significant SO<INF>X</INF> and PM reductions will be 
achieved using distillate fuels with a sulfur content of 0.1 percent. 
This cost analysis is based on the assumption that vessel operators 
will operate their engines using lower sulfur fuel in the proposed ECA. 
We believe fuel switching will be the primary compliance approach; fuel 
scrubbers would be used in the event that the operator expected to 
realize a cost savings and are not considered in this analysis. In some 
cases, additional capacity and equipment to accommodate the use of 
lower sulfur fuel may need to be installed on a vessel. The potential 
costs due to these additional modifications applied to new ships as 
well as retrofits to any existing ships are discussed here, and these 
hardware costs are included as part of the total cost of this 
coordinated program.
    Although most ships operate on heavy fuel oil, they typically carry 
small amounts of distillate fuel. Some vessel modifications and new 
operating practices may be necessary to use lower sulfur distillate 
fuels on vessels designed to operate primarily on residual fuel. 
Installation and use of a fuel cooler, associated piping, and viscosity 
meters to the fuel treatment system may be required to ensure viscosity 
matches between the fuel and injection system design. While there are 
many existing ships that already have the capacity to operate on both 
heavy fuel oil and distillate fuel and have a separate fuel tank 
systems to support each type of fuel, some ships may not have 
sufficient onboard storage capacity. If a new or segregated tank is 
desired, additional equipment for fuel delivery and control of these 
systems may be required.
(5) NO<INF>X</INF> and SO<INF>X</INF> Emission Reduction Technology 
Costs
(a) NO<INF>X</INF> Emission Reduction Technology
    The costs associated with SCR include variable and fixed costs. SCR 
hardware costs include the reactor, dosage pump, urea injectors, 
piping, bypass valve, an acoustic horn or a cleaning probe, the control 
unit and wiring, and the urea tank (the size of the tank is based on 
250 hours of normal operation when the ship is operating in the ECA and 
the SCR system is activated.) The size of the tank is dependent on the 
frequency with which the individual ship owner prefers to fill the urea 
tank. The methodology used here to estimate the capacity of the SCR 
systems is based on the power rating of the propulsion engines only. 
Auxiliary engine power represents about 20 percent of total installed 
power on a vessel; however, it would be unusual to operate both 
propulsion and auxiliary engines at 100 percent load. Typically, ships 
operate under full propulsion power only while at sea when the SCR is 
not operating; when nearing ports, the auxiliary engine is operating at 
high loads while the propulsion engine is operating at very low loads.
    In this analysis, we determined the average number of hours a ship 
would spend calling on a U.S. port: If the call was straight in and 
straight out at 200 nm, the average time spent was slightly over 35 
hours. If the distance travelled was substantial, such as from the Port 
of Los Angeles to the Port of Tacoma, or 1140 nm, the average time 
spent travelling was approximately 75 hours. Therefore, the size of the 
tanks and corresponding $/kW values estimated here to carry enough urea 
for 250 hours of continuous operation may be an overestimate. Based on 
250 hours of operation, a range of urea tank sizes from 20 m\3\ to 
approximately 256 m\3\ was determined for the six different engine 
configurations used in this analysis.
    To understand what impacts this may have on the cargo hauling 
capacity of the ship, we looked at the ISO standard containers used 
today. Currently, over two-thirds of the containers in use today are 40 
feet long, total slightly over 77 m\3\ and are the equivalent of two 
TEU.\136\ The urea tank sizes estimated here reflect a cargo 
equivalence of 0.5-2 TEUs, based on a capacity sufficient for 250 hours 
of operation. The TEU capacity of container ships, for example, 
continues to increase and can be as high as 13,000 TEUs;\137\ while not 
all ports are equipped to handle ships of this size, feeder ships 
(ships that carry containers to ocean-going vessels in smaller ports) 
have also increased in size to carry as much as 2,000 TEUs. Based on a 
rate of approximately $1,300 per TEU to ship a container from Asia to 
the U.S., a net profit margin of 10%, and an average of 16 trips per 
year, the estimated cost due to displaced cargo to call on a U.S./
Canada ECA may be $2,100.\138\ The cost\139\ analysis\140\ presented 
here does not include displaced cargo due to the variability of tank 
sizes owners choose to install.
---------------------------------------------------------------------------

    \136\ http://www.iicl.org, Institute of International Container 
Lessors.
    \137\ Kristensen, Hans Otto Holmegaard, ``Preliminary Ship 
Design of Container Ships, Bulk Carriers, Tankers, and Ro-Ro Ships. 
Assessment of Environmental Impact from Sea-Borne Transport Compared 
with Landbased Transport,'' March, 2008.
    \138\ http://people.hofstra.edu/geotrans/eng/ch2en/conc2en/maritimefreightrates.html.
    \139\ http://moneycentral.msn.com/investor/invsub/results/hilite.asp?Symbol=SSW.
    \140\ Based on a container ship carrying nearly 9,000 TEUs 
traveling from Hong Kong to the Port of Los Angeles (approximately 
6,400 nm) with a cruise speed of 25 nm/hr, the round trip time is 
nearly 21 days and this trip could be made roughly 16 times per 
year.
---------------------------------------------------------------------------

    To estimate the SCR hardware costs associated with newly built 
ships, we needed to generate an equation in terms of $/kW that could be 
applied to other engine sizes. Therefore, the $/kW values representing 
the hardware costs estimated for the six different engine types and 
sizes used in this analysis was developed using a curve fit for both 
SSD and MSD engines. The resulting $/kW values range from $40-$80 per 
kW for MSD, and $40-70 for SSD. These costs were then applied based on 
the characteristics of the average ship types described in the 
inventory section of the draft RIA (see Chapter 3) to the 
representative portion of the future fleet in order to estimate the 
total costs associated with this program. Table VII-4 presents the 
estimated costs of this technology as applied to different ship and 
engine types representing the average ship characteristics discussed in 
Section VII.A.2.
(b) Lower Sulfur Fuel Hardware Costs
    This cost analysis is based on the use of switching to lower sulfur 
fuel to meet the ECA fuel sulfur standards. The costs presented here 
may be incurred by some existing and some newly-built ships if 
additional fuel tank equipment is required to facilitate the use of 
lower sulfur fuel. Based on existing vessel fleet data, we estimate 
that approximately one-third of existing vessels may need additional 
equipment installed to accommodate additional lower sulfur fuel storage 
capacity beyond that installed on comparable new ships. In order to 
include any costs that may be incurred on new vessels that choose to 
add additional lower sulfur fuel capacity, we also estimated that one-
third of new vessels may require additional hardware. Separate $/kW 
values were developed for new and existing vessels as the existing 
vessel

[[Page 44493]]

retrofit would likely require more labor to complete installation.
    The size of the tank is dependent on the frequency with which the 
individual ship owner prefers to fill the lower sulfur fuel tank. The 
size of the tanks and corresponding $/kW value estimated here will 
carry capacity sufficient for 250 hours of propulsion and auxiliary 
engine operation. This is most likely an overestimate of the amount of 
lower sulfur fuel a ship owner would need to carry, resulting in an 
overestimate of the total cost to existing and new vessels. The tank 
sizes based on 250 hours of operation and based on the six different 
engine configuration used in this analysis range from 240 m\3\ to 
nearly 2,000 m\3\. This would be the equivalent of 6-50 TEUs. This cost 
analysis does not reflect other design options such as partitioning of 
a residual fuel tank to allow for lower sulfur fuel capacity which 
would reduce the amount of additional space required, nor does this 
analysis reflect the possibility that some ships may have already been 
designed to carry smaller amounts of distillate fuel in separate tanks 
for purposes other than continuous propulsion. The $/kW value hardware 
cost values for the six data points corresponding to the six different 
engine types and sizes used in this analysis are $2-7 for SSD and $3-8 
for MSD. A curve fit was determined for the slow-speed engine as well 
as for the medium speed engines to determine a $/kW value for each 
engine type. Table VII-3 presents the estimated costs of the 
technologies used to meet the different standards as applied to 
different ship and engine types representing the average ship 
characteristics discussed in Section VII.A.2. The estimated hardware 
costs of retrofitting existing U.S.-flagged vessels that may require 
additional hardware to accommodate the use of lower sulfur fuel is 
estimated to be $10.4 million in 2015.
---------------------------------------------------------------------------

    \141\ The values presented in Table VII-3 are provided only to 
show what the estimated costs would be for a range of vessel types 
given average characteristics (such as DWT, total main, and total 
auxiliary power) for both SSD and MSD engine types. Not all vessels 
will require all of these technologies; for example, it is estimated 
that only 30 percent of MSD will get common-rail fuel injection 
systems for Tier II.

              Table VII-3--Estimated Variable Costs of Emission Control Technology on a Per-Ship Basis--by Ship Type and Engine Type \141\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                       Lower sulfur
                                                          Average      MFI to common   EFI to common    Tier 3 (SCR   fuel hardware--  Lower Sulfur fuel
             Ship type                 Engine speed     propulsion         rail            rail         and engine      new vessels   hardware--existing
                                                        power (kW)                                    modifications)                        vessels
--------------------------------------------------------------------------------------------------------------------------------------------------------
Auto Carrier.......................  MSD                        9640         $80,500          30,400        $566,000          42,300           $56,400
Bulk Carrier.......................  MSD                        6360          67,200          24,600         479,000          36,900            48,500
Container..........................  MSD                       13878          92,300          35,400         678,000          49,200            66,600
General Cargo......................  MSD                        5159          60,400          21,700         448,000          34,900            45,600
Passenger..........................  MSD                       23762         109,600          42,800         939,000          65,400            90,400
Reefer.............................  MSD                        7360          71,900          26,600         506,000          38,500            50,900
RoRo...............................  MSD                        8561          76,700          28,700         538,000          40,500            53,800
Tanker.............................  MSD                        6697          68,800          25,300         488,000          37,400            49,300
Misc...............................  MSD                        9405          79,800          30,000         560,000          41,900            55,800
Auto Carrier.......................  SSD                       11298         152,400          55,500         819,000          48,000            64,800
Bulk Carrier.......................  SSD                        8434         132,900          48,400         669,000          42,700            57,700
Container..........................  SSD                       27454         211,600          77,200       1,521,000          63,900            86,700
General Cargo......................  SSD                        7718         127,000          46,200         630,000          41,100            55,500
Passenger..........................  SSD                       23595         201,500          73,500       1,374,000          61,200            83,000
Reefer.............................  SSD                       10449         147,200          53,600         776,000          46,500            62,900
RoRo...............................  SSD                       15702         174,300          63,500       1,034,000          53,900            72,900
Tanker.............................  SSD                        9755         142,600          51,900         739,000          45,300            61,200
Misc...............................  SSD                        4659          93,300          33,900          50,000          32,000            43,100
--------------------------------------------------------------------------------------------------------------------------------------------------------

(6) Total Costs Associated With the Coordinated Strategy
    The total hardware costs associated with the coordinated strategy 
were estimated using the number of new ships by ship type and engine 
type entering the fleet each year. Table VII-4 presents the total 
hardware costs to U.S.-flagged vessels associated with the coordinated 
strategy. These costs consist of the variable and fixed hardware costs 
associated with the Annex VI existing engine program, Tier 2 and Tier 3 
standards, and additional components that may be required to 
accommodate the use of lower sulfur fuel on both new and existing 
vessels. This table also presents the total estimated operational costs 
associated with the coordinated strategy. These costs consist of the 2 
percent fuel consumption penalty associated with Tier 2 (Annex VI Tier 
II), the use of urea on vessels equipped with SCR systems, and the 
differential cost of using lower sulfur fuel; these costs are incurred 
by both U.S.- and foreign-flagged vessels. The total estimated cost of 
the coordinated strategy is $3.41 billion in 2030. The total costs from 
2010 through 2040 are estimated to be $42.9 billion at a 3 percent 
discount rate or $22.1 at a 7 percent discount rate.

                               Table VII-4--Total Hardware and Operational Costs Associated With the Coordinated Strategy
                                                                    [Thousands of $]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                               Total operating costs        Total costs
                                                          Total hardware     Total new                   --------------------------------   associated
                          Year                               costs for        engine       Total vessel                                      with the
                                                             existing     hardware costs  hardware costs     U.S. flag     Foreign flag     coordinated
                                                              engines                                                                        strategy
--------------------------------------------------------------------------------------------------------------------------------------------------------
2010....................................................          $9,400            $319            $166              $0              $0            $485
2011....................................................         161,000           3,580             173             173           1,130           5,060

[[Page 44494]]

 
2012....................................................         153,000           3,700             179             841           5,590          10,300
2013....................................................         145,000           3,830             186          32,400         213,000         249,000
2014....................................................         137,000           3,960             192          34,400         226,000         265,000
2015....................................................         131,000           4,100          11,100         180,000       1,190,000       1,390,000
2016....................................................               0          27,300             691         189,000       1,250,000       1,470,000
2017....................................................               0          28,500             717         199,000       1,330,000       1,560,000
2018....................................................               0          29,600             745         210,000       1,410,000       1,650,000
2019....................................................               0          30,700             773         221,000       1,500,000       1,750,000
2020....................................................               0          31,900             803         233,000       1,590,000       1,860,000
2021....................................................               0          33,200             834         246,000       1,680,000       1,960,000
2022....................................................               0          34,600             866         258,000       1,770,000       2,060,000
2023....................................................               0          35,900             899         272,000       1,880,000       2,190,000
2024....................................................               0          37,400             934         286,000       1,980,000       2,300,000
2025....................................................               0          38,800             970         300,000       2,090,000       2,430,000
2026....................................................               0          40,400           1,010         315,000       2,200,000       2,560,000
2027....................................................               0          42,100           1,050         330,000       2,310,000       2,680,000
2028....................................................               0          43,700           1,090         345,000       2,430,000       2,820,000
2029....................................................               0          45,500           1,130         362,000       2,550,000       2,960,000
2030....................................................               0          47,400           1,180         378,000       2,680,000       3,110,000
2031....................................................               0          49,300           1,220         395,000       2,810,000       3,260,000
2032....................................................               0          51,300           1,270         413,000       2,950,000       3,420,000
2033....................................................               0          53,400           1,320         431,000       3,080,000       3,570,000
2034....................................................               0          55,500           1,370         451,000       3,240,000       3,750,000
2035....................................................               0          57,900           1,430         471,000       3,390,000       3,920,000
2036....................................................               0          60,200           1,490         494,000       3,560,000       4,120,000
2037....................................................               0          62,800           1,540         517,000       3,740,000       4,320,000
2038....................................................               0          65,300           1,610         541,000       3,930,000       4,540,000
2039....................................................               0          68,000           1,670         566,000       4,110,000       4,750,000
2040....................................................               0          70,800           1,740         591,000       4,310,000       4,970,000
                                                         -----------------------------------------------------------------------------------------------
    NPV @ 3%............................................         677,000         663,000          26,500       5,260,000      36,900,000      42,900,000
    NPV @ 7%............................................         610,000         346,000          16,900       2,730,000      19,000,000      22,100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

C. Cost Effectiveness

    One tool that can be used to assess the value of the coordinated 
strategy is the engineering costs incurred per ton of emissions 
reduced. This analysis involves a comparison of our proposed program to 
other measures that have been or could be implemented. As summarized in 
this section, the coordinated strategy represents a highly cost 
effective mobile source control program for reducing NO<INF>X</INF>, PM 
and SO<INF>X</INF> emissions.
    We have estimated the cost per ton based on the net present value 
of 3 percent and 7 percent of all hardware costs incurred by U.S.-
flagged vessels, all operational costs incurred by both U.S. and 
foreign-flagged vessels, and all emission reductions generated from the 
year 2010 through the year 2040. The baseline case for these estimated 
reductions is the existing set of engine standards for C3 marine diesel 
engines and fuel sulfur limits. Table VII-5 shows the annual emissions 
reductions associated with the coordinated strategy; these annual tons 
are undiscounted. A description of the methodology used to estimate 
these annual reductions can be found in Section II of this preamble and 
Chapter 3 of the draft RIA.

        Table VII-5--Estimated Emissions Reductions Associated With the Coordinated Strategy (Short Tons)
----------------------------------------------------------------------------------------------------------------
                                                                                 Reductions (tons)
                          Calendar year                          -----------------------------------------------
                                                                        NOX             SOX             PM
----------------------------------------------------------------------------------------------------------------
2010............................................................          47,000               0               0
2011............................................................          54,000               0               0
2012............................................................          70,000               0               0
2013............................................................          88,000         390,000          48,400
2014............................................................         105,000         406,000          50,400
2015............................................................         123,000         641,000          68,000
2016............................................................         150,000         668,000          70,800
2017............................................................         209,000         695,000          73,700
2018............................................................         279,000         724,000          76,800
2019............................................................         349,000         755,000          80,000
2020............................................................         409,000         877,000          94,100
2021............................................................         488,000         916,000          98,200

[[Page 44495]]

 
2022............................................................         547,000         954,000         102,000
2023............................................................         634,000         995,000         107,000
2024............................................................         714,000       1,040,000         111,000
2025............................................................         790,000       1,080,000         116,000
2026............................................................         866,000       1,130,000         121,000
2027............................................................         938,000       1,170,000         126,000
2028............................................................       1,020,000       1,220,000         131,000
2029............................................................       1,100,000       1,280,000         137,000
2030............................................................       1,180,000       1,330,000         143,000
2031............................................................       1,260,000       1,390,000         149,000
2032............................................................       1,330,000       1,450,000         155,000
2033............................................................       1,410,000       1,510,000         162,000
2034............................................................       1,500,000       1,580,000         169,000
2035............................................................       1,590,000       1,650,000         177,000
2036............................................................       1,690,000       1,720,000         184,000
2037............................................................       1,810,000       1,800,000         193,000
2038............................................................       1,920,000       1,880,000         201,000
2039............................................................       2,020,000       1,970,000         210,000
2040............................................................       2,130,000       2,050,000         220,000
                                                                 -----------------------------------------------
    NPV at 3%...................................................      14,400,000      19,100,000       2,100,000
    NPV at 7%...................................................       6,920,000      10,100,000       1,090,000
----------------------------------------------------------------------------------------------------------------

    The net estimated reductions by pollutant, using a net present 
value of 3 percent from 2010 through 2040 are 14.4 million tons of 
NO<INF>X</INF>, 19.1 million tons of SO<INF>X</INF>, and 2.1 million 
tons of PM (6.9 million, 10.1 million, and 1.1 million tons of 
NO<INF>X</INF>, SO<INF>X</INF>, and PM, respectively, at a net present 
value of 7 percent over the same period.)
    Using the above cost and emission reduction estimates, we estimated 
the lifetime (2010 through 2040) cost per ton of pollutant reduced. For 
this analysis, all of the hardware costs associated with the Annex VI 
existing engine program and Tier 2 and Tier 3 NO<INF>X</INF> standards 
as well as the operational costs associated with the global Tier II and 
Tier III standards were attributed to NO<INF>X</INF> reductions. The 
costs associated with lower sulfur fuel operational costs as applied to 
all vessels visiting U.S. ports and the hardware costs associated with 
accommodating the use of lower sulfur fuel on U.S.-flagged vessels were 
associated with SO<INF>X</INF> and PM reductions. In this analysis, 
half of the costs associated with the use of lower sulfur fuel were 
allocated to PM reductions and half to SO<INF>X</INF> reductions, 
because the costs incurred to reduce SO<INF>X</INF> emissions directly 
reduce emissions of PM as well. Using this allocation of costs and the 
emission reductions shown in Table VII-5, we can estimate the lifetime 
cost per ton reduced associated with each pollutant. These results are 
shown in Table VII-6. Using a net present value of 3 percent, the 
discounted lifetime cost per ton of pollutant reduced is $510 for 
NO<INF>X</INF>, $930 for SO<INF>X</INF>, and $7,950 for PM ($500, $920, 
and $7,850 per ton of NO<INF>X</INF>, SO<INF>X</INF>, and PM, 
respectively, at a net present value of 7 percent.) As shown in Table 
VII-6, these estimated discounted lifetime costs are similar to the 
annual long-term (2030) cost per ton of pollutant reduced.
---------------------------------------------------------------------------

    \142\ The $/ton numbers presented here vary from those presented 
in the ECA proposal due to the net present value of the annualized 
reductions being applied from 2015-2020, and the use of metric 
tonnes rather than of short tons.

 Table VII-6 Coordinated Strategy Estimated Aggregate Discounted Lifetime Cost per Ton (2010-2040) and Long-Term
                                        Annual Cost per Ton (2030) \142\
----------------------------------------------------------------------------------------------------------------
                                                             2010 thru 2040    2010 thru 2040
                                                               discounted        discounted      Long-term cost
                         Pollutant                            lifetime cost     lifetime cost     per ton (for
                                                              per ton at 3%     per ton at 7%         2030)
----------------------------------------------------------------------------------------------------------------
NOx.......................................................              $510              $500              $520
SOx.......................................................               930               920               940
PM........................................................             7,950             7,850             8,760
----------------------------------------------------------------------------------------------------------------
Note: These costs are in 2006 U.S. dollars.

    These results for the coordinated strategy compare favorably to 
other air emissions control programs. Table VII-7 compares the 
coordinated strategy to other air programs. This comparison shows that 
the coordinated strategy will provide a cost-effective strategy for 
generating substantial NO<INF>X</INF>, SO<INF>X</INF>, and PM 
reductions from ocean-going vessels. The results presented in Table 
VII-7 are lifetime costs per ton discounted at a net present value of 3 
percent, with the exception of the stationary source program and 
locomotive/marine retrofits, for which annualized costs are presented. 
While results at a net present value of 7 percent are not presented, 
the results

[[Page 44496]]

would be similar. Specifically, the coordinated strategy falls within 
the range of values for other recent programs.

 Table VII-7--Estimated $/Ton for the Coordinated Strategy Compared to Previous Mobile Source Programs for NOX,
                                                  SOX, and PM10
----------------------------------------------------------------------------------------------------------------
                                           Implementation
           Source category \A\                  date          NOX cost/ton      SOX cost/ton      PM10 cost/ton
----------------------------------------------------------------------------------------------------------------
Coordinated Strategy NPRM, 2009.........              2011               510               930             7,950
Nonroad Small Spark-Ignition Engines....              2010   \B,C\ 330-1,200  ................  ................
73 FR 59034, October 8, 2008
Stationary Diesel (CI) Engines..........              2006        580-20,000  ................      3,500-42,000
71 FR 39154, July 11, 2006
Locomotives and C1/C2 Marine (Both New                2015           \B\ 730  ................   \D\ 8,400 (New)
 and Retrofits).........................                                                              \E\ 45,000
                                                                                                      (Retrofit)
73 FR 25097, May 6, 2008
Heavy Duty Nonroad Diesel Engines.......              2015         \B\ 1,100               780            13,000
69 FR 38957, June 29, 2004
Heavy Duty Onroad Diesel Engines........              2010         \B\ 2,200             5,800            14,000
66 FR 5001, January 18, 2001
----------------------------------------------------------------------------------------------------------------
Notes:
\A\ Table presents aggregate program-wide cost/ton over 30 years, discounted at a 3 percent NPV, except for
  Stationary CI Engines and Locomotive/Marine retrofits, for which annualized costs of control for individual
  sources are presented. All figures are in 2006 U.S. dollars per short ton.
\B\ Includes NOX plus non-methane hydrocarbons (NMHC). NMHC are also ozone precursors, thus some rules set
  combined NOX + NMHC emissions standards. NMHC are a small fraction of NOX so aggregate cost/ton comparisons
  are still reasonable.
\C\ Low end of range represents costs for marine engines with credit for fuel savings, high end of range
  represents costs for other nonroad SI engines without credit for fuel savings.

D. Economic Impact Analysis

    This section contains our analysis of the expected economic impacts 
of our coordinated strategy on the markets for Category 3 marine diesel 
engines, ocean-going vessels, and the U.S. marine transportation 
service sector. We briefly describe our methodology and present our 
estimated expected economic impacts.
    As described below and in more detail in the draft RIA, our 
economic impact analysis uses a competitive model approach for all 
affected markets. We request comment on this approach, or whether an 
alternative modeling approach should be used for these markets.
    The total estimated social costs of the coordinated strategy in 
2030 are equivalent to the estimated compliance costs of the 
coordinated strategy, at approximately $3.1 billion.\143\ These costs 
are expected to accrue initially to the owners and operators of 
affected vessels. These owners and operators are expected to pass their 
increased costs on to the entities that purchase international marine 
transportation services, in the form of higher freight rates. 
Ultimately, these costs will be borne by the final consumers of goods 
transported by ocean-going vessels in the form of slightly higher 
prices for those goods.
---------------------------------------------------------------------------

    \143\ The costs totals reported in this NPRM are slightly 
different than those reported in the ECA proposal. This is because 
the ECA proposal did not include costs associated with the Annex VI 
existing engine program, Tier II, or the costs associated with 
existing vessel modifications that may be required to accommodate 
the use of lower sulfur fuel. Further, the cost totals presented in 
the ECA package included Canadian cost estimates.
---------------------------------------------------------------------------

    We estimate that compliance with the coordinated strategy would 
increase the price of a new vessel by 0.5 to 2 percent. The impact of 
the coordinated strategy, including the ECA controls, on the price of 
ocean marine transportation services would vary, depending on the route 
and the amount of time spent in the proposed U.S. ECA. For example, we 
estimate that the cost of operating a ship in liner service between 
Singapore, Seattle, and Los Angeles/Long Beach, which includes about 
1,700 nm of operation in the proposed ECA, would increase by about 3 
percent. For a container ship, this represents a price increase of 
about $18 per container, assuming the total increase in operating costs 
is passed on to the purchaser of the marine transportation services. 
This would be about a 3 percent price increase. The per passenger price 
of a seven-day Alaska cruise operating entirely within the ECA is 
expected to increase by about $7 per day. For ships that spend less 
time in the ECA, the expected increase in total operating costs, and 
therefore the impacts on freight prices, would be smaller.
    It should be noted that this economic analysis holds all other 
aspects of the market constant except for the elements of the 
coordinated strategy. It does not attempt to predict future market 
equilibrium conditions, particularly with respect to how excess 
capacity in today's market due to the current economic downturn will be 
absorbed. This approach is appropriate because the goal of an economic 
impact analysis is to explore the impacts of a specific program; 
allowing changes in other market conditions would confuse the impacts 
due to the proposed regulatory program.
    The remainder of this section provides detailed information on the 
methodology we used to estimate these economic impacts and the results 
of our analysis.
(1) What Is the Purpose of an Economic Impact Analysis?
    In general, the purpose of an Economic Impact Analysis (EIA) is to 
provide information about the potential economic consequences of a 
regulatory action, such as the proposed coordinated strategy to reduce 
emissions from ocean-going vessels. Such an analysis consists of 
estimating the social costs of a regulatory program and the 
distribution of these costs across stakeholders.
    In an economic impact analysis, social costs are the value of the 
goods and services lost by society resulting from (a) the use of 
resources to comply with and implement a regulation and (b) reductions 
in output. There are two parts to the analysis.
    In the market analysis, we estimate how prices and quantities of 
goods directly affected by the emission control program can be expected 
to change once

[[Page 44497]]

the program goes into effect. In the economic welfare analysis, we look 
at the total social costs associated with the program and their 
distribution across key stakeholders.
(2) How Did We Estimate the Economic Impacts of the Coordinated 
Strategy?
    Our analysis of the economic impacts of the coordinated strategy is 
based on the application of basic microeconomic theory. We use a 
competitive market model approach in which the interaction between 
supply and demand determines equilibrium market prices and quantities. 
For markets in which there are many producers, such as the vessel 
building and transportation services markets, this approach is 
reasonable.\144\ For the Category 3 engine market, the market structure 
and therefore the choice of model is more complicated. This market 
consists of a small number of manufacturers (2 companies comprising 
about 60 percent of the market, with two others having a notable 
share), which suggests that an oligopolistic modeling approach may be 
more appropriate. In markets with a small number of producers, it is 
not uncommon for manufacturers to exercise market power to obtain 
prices above the competitive market clearing price, thereby securing 
greater profits. In such markets, market prices would increase more 
than the compliance costs of the regulatory program. However, an 
oligopoly market structure does not necessarily mean that the firms 
behave non-competitively. According to the Bertrand competition model, 
price competition among even a few manufacturers achieves socially 
optimal results similar to a competitive market.\145\ The Bertrand 
competition model relies on price competition between the firms; price 
competition among the firms may be reduced when the manufacturers face 
sharply rising marginal costs, when they compete repeatedly, or when 
their products are differentiated. We request comment on whether 
Category 3 engine manufacturers behave competitively, competing on 
price, or whether some other modeling approach should be used for this 
market.
---------------------------------------------------------------------------

    \144\ Stopford describes these markets as competitive. See 
Stopford, Martin. Maritime Economics, 3rd Edition (Routledge, 2009), 
Chapter 4.
    \145\ Tirole, Jean. The Theory of Industrial Organization 
(1989). MIT Press. See pages 223-224.
---------------------------------------------------------------------------

    In a competitive structure model, we use the relationships between 
supply and demand to simulate how markets can be expected to respond to 
increases in production costs that occur as a result of the new 
emission control program. We use the laws of supply and demand to 
construct a model to estimate the social costs of the program and 
identify how those costs will be shared across the markets and, thus, 
across stakeholders. The relevant concepts are summarized below and are 
presented in greater detail in Chapter 7 of the draft RIA.
    Before the implementation of a control program, a market is assumed 
to be in equilibrium, with producers producing the amount of a good 
that consumers desire to purchase at the market price. The 
implementation of a control program results in an increase in 
production costs by the amount of the compliance costs. This generates 
a ``shock'' to the initial equilibrium market conditions (a change in 
supply). Producers of affected products will try to pass some or all of 
the increased production costs on to the consumers of these goods 
through price increases, without changing the quantity produced. In 
response to the price increases, consumers will decrease the quantity 
they buy of the affected good (a change in the quantity demanded). This 
creates surplus production at the new price. Producers will react to 
the decrease in quantity demanded by reducing the quantity they 
produce, and they will be willing to sell the remaining production at a 
lower price that does not cover the full amount of the compliance 
costs. Consumers will then react to this new price. These interactions 
continue until the surplus is removed and a new market equilibrium 
price and quantity combination is achieved.
    The amount of the compliance costs that will be borne by 
stakeholders is ultimately limited by the price sensitivity of 
consumers and producers in the relevant markets, represented by the 
price elasticities of demand and supply for each market. An 
``inelastic'' price elasticity (less than one) means that supply or 
demand is not very responsive to price changes (a one percent change in 
price leads to less than one percent change in quantity). An 
``elastic'' price elasticity (more than one) means that supply or 
demand is sensitive to price changes (a one percent change in price 
leads to more than one percent change in quantity). A price elasticity 
of one is unit elastic, meaning there is a one-to-one correspondence 
between a percent change in price and percent change in quantity.
    On the production side, price elasticity of supply depends on the 
time available to adjust production in response to a change in price, 
how easy it is to store goods, and the cost of increasing (or 
decreasing) output. In this analysis, we assume the supply for engines, 
vessels, and marine transportation services is elastic: an increase in 
the market price of an engine, vessel or freight rates will lead 
producers to want to produce more, while a decrease will lead them to 
produce less (this is the classic upward-sloping supply curve). It 
would be difficult to estimate the slope of the supply curve for each 
of these markets given the global nature of the sector. However, it is 
reasonable to assume that the supply elasticity for the ocean marine 
transportation services market is likely to be greater than one. This 
is because output can more easily be adjusted due to a change in price. 
For the same reason, the supply elasticity for the new Category 3 
engine market is also likely to be greater than one, especially since 
these engines are often used in other land-based industries, notably in 
power plants. The supply elasticity for the vessel construction market, 
on the other hand, may be less than or equal to one depending on the 
vessel type, since it may be harder to adjust production and/or store 
output if the price drops, or rapidly increase production if the price 
increases. Because of the nature of this industry, it would not be 
possible to easily switch production to other goods, or to stop or 
start production of new vessels.
    On the consumption side, we assume that the demand for engines is a 
function of the demand for vessels, which is a function of the demand 
for international shipping (demand for engines and vessels is derived 
from the demand for marine transportation services). This makes 
intuitive sense: Category 3 engine and ocean-going vessel manufacturers 
would not be expected to build an engine or vessel unless there is a 
purchaser, and purchasers will want a new vessel/engine only if there 
is a need for one to supply marine transportation services. Deriving 
the price elasticity of demand for the vessel and engine markets from 
the international shipping market is an important feature of this 
analysis because it provides a link between the product markets.
    In this analysis, the price elasticity of demand for marine 
transportation services, and therefore for vessels and Category 3 
engines, is nearly perfectly inelastic. This stems from the fact that 
for most goods, there are no reasonable alternative shipping modes. In 
most cases, transportation by rail or truck is not feasible, and 
transportation by aircraft is too expensive. Approximately 90 percent 
of world trade by tonnage is moved by ship, and ships provide the most 
efficient method to transport these

[[Page 44498]]

goods on a tonne-mile basis.\146\ Stopford notes that ``shippers need 
the cargo and, until they have time to make alternative arrangements, 
must ship it regardless of cost * * * The fact that freight generally 
accounts for only a small portion of material costs reinforces this 
argument.'' \147\ A nearly perfectly inelastic price elasticity of 
demand for marine transportation services means that virtually all of 
the compliance costs can be expected to be passed on to the consumers 
of marine transportation services, with no change in output for engine 
producers, ship builders, or owners and operators of ships engaged in 
international trade.
---------------------------------------------------------------------------

    \146\ Harrould-Koleib, Ellycia. Shipping Impacts on Climate: A 
Source with Solutions. Oceana, July 2008. A copy of this report can 
be found at http://www.oceana.org/fileadmin/oceana/uploads/Climate_Change/Oceana_Shipping_Report.pdf
    \147\ Stopford, Martin. Maritime Economics, 3rd Edition. 
Routledge, 2009. p. 163.
---------------------------------------------------------------------------

    The economic impacts of the coordinated strategy presented in this 
section rely on the estimated engineering compliance costs described in 
Sections VII.A (fuels) and VII.B (engines) above. These costs include 
hardware costs for new U.S. vessels to comply with the Tier 2 and Tier 
3 engine standards, and for existing U.S. vessels to comply with the 
MARPOL Annex VI requirements for existing engines. There are also 
hardware costs for fuel switching equipment on new and existing U.S. 
vessels to comply with the 1,000 ppm fuel sulfur limit; the cost 
analysis assumes that 32 percent of all vessels require fuel switching 
equipment to be added (new vessels) or retrofit (existing vessels). 
Also included are expected increases in operating costs for U.S. and 
foreign vessels operating in the inventory modeling domain, including 
the proposed ECA. These increased operating costs include changes in 
fuel consumption rates, increases in fuel costs, and the use of urea 
for engines equipped with SCR.\148\
---------------------------------------------------------------------------

    \148\ The MARPOL amendments include Tier II and Tier III 
NO<INF>X</INF> standards that apply to all vessels, including 
foreign vessels. While the analysis does not include hardware costs 
for the MARPOL Tier II and Tier III standards for foreign vessels 
because foreign vessels operate anywhere in the world, it is 
appropriate to include the operating costs for these foreign vessels 
while they are operating in our inventory modeling domain. This is 
because foreign vessels complying with the Tier II and Tier III 
standards will have a direct beneficial impact on U.S. air quality, 
and if we consider the benefits of these standards we should also 
consider their costs.
---------------------------------------------------------------------------

(3) What Are the Estimated Market Impacts of the Coordinated Strategy?
(a) What Are the Estimated Engine and Vessel Market Impacts of the 
Coordinated Strategy?
    The estimated market impacts for engines and vessels are based on 
the variable costs associated with the engine and vessel compliance 
programs; fixed costs are not included in the market analysis. This is 
appropriate because in a competitive market the industry supply curve 
is generally based on the market's marginal cost curve; fixed costs do 
not influence production decisions at the margin. Therefore, the market 
analysis for a competitive market is based on variable costs only.
    The assumption of nearly perfectly inelastic demand for marine 
transportation services means that the quantity of these services 
purchased is not expected to change as a result of costs of complying 
with the ECA requirements. As a result, the demand for vessels and 
engines would also not change compared to the no-control scenario, and 
the quantities produced would remain the same.
    The assumption of nearly perfectly inelastic demand for marine 
transportation services also means the price impacts of the coordinated 
strategy on new engines and vessels would be equivalent to the variable 
engineering compliance costs. Estimated price impacts for a sample of 
engine-vessel combinations are set out in Table VII-8 for medium speed 
engines, and Table VII-9 for slow speed engines. These are the 
estimated price impacts associated with the Tier 3 engine standards on 
a vessel that will switch fuels to comply with the fuel sulfur 
requirements in the ECA. Because the standards do not phase in, the 
estimated price impacts are the same for all years, beginning in 2016.

            Table VII--8 Summary of Estimated Market Impacts--Medium Speed Tier 3 Engines and Vessels
                                                   [$2006] \a\
----------------------------------------------------------------------------------------------------------------
                                                               New vessel
                                                              engine price     New vessel fuel
                Ship type                      Average      impact (new tier      switching     New vessel total
                                          propulsion power   3 engine price    equipment price    price impact
                                                               impact) \b\       impact \c\
----------------------------------------------------------------------------------------------------------------
Auto Carrier............................             9,600          $573,200           $42,300          $615,500
Bulk Carrier............................             6,400           483,500            36,900           520,400
Container...............................            13,900           687,800            49,200           736,000
General Cargo...........................             5,200           450,300            34,900           475,200
Passenger...............................            23,800           952,500            65,400         1,107,900
Reefer..................................             7,400           511,000            38,500           549,500
RoRo....................................             8,600           543,800            40,500           584,300
Tanker..................................             6,700           492,800            37,400           530,200
Misc....................................             9,400           566,800            41,900           608,700
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ The new vessel engine price impacts listed here do not include a per engine cost of $10,000 for engines
  installed on U.S. vessels to comply with the proposed production testing requirement (Sec.   1042.302)
\b\ Medium speed engine price impacts are estimated from the cost information presented in Chapter 5 using the
  following formula: (10%*($/SHIP--MECH[rarr]CR))+(30%*($/SHIP--ELEC[rarr]CR))+(T3 ENGINE MODS)+(T3SCR))
\c\ Assumes 32 percent of new vessels would require the fuel switching equipment.


[[Page 44499]]


             Table VII--9 Summary of Estimated Market Impacts--Slow Speed Tier 3 Engines and Vessels
                                                   [$2006] \a\
----------------------------------------------------------------------------------------------------------------
                                                               New vessel
                                               Average        engine price     New vessel fuel
                Ship type                    Propulsion     impact (new tier      switching     New vessel total
                                                Power        3 engine price    equipment price    price impact
                                                               impact) \b\       impact \c\
----------------------------------------------------------------------------------------------------------------
Auto Carrier............................            11,300          $825,000           $48,000          $873,000
Bulk Carrier............................             8,400           672,600            42,700           715,300
Container...............................            27,500         1,533,100            63,900         1,597,000
General Cargo...........................             7,700           632,900            41,000           673,900
Passenger...............................            23,600         1,385,300            61,200         1,446,500
Reefer..................................            10,400           781,000            46,500           827,500
RoRo....................................            15,700         1,042,100            53,900         1,096,000
Tanker..................................             9,800           744,200            45,300           789,500
Misc....................................             4,700           453,600            32,000           485,600
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ The new vessel engine price impacts listed here do not include a per engine cost of $10,000 for engines
  installed on U.S. vessels to comply with the proposed production testing requirement (Sec.   1042.302)
\b\ Slow speed engine price impacts are estimated from the cost information presented in Chapter 5 using the
  following formula: (5%*($/SHIP--MECH[rarr]CR))+(15%*($/SHIP--ELEC[rarr]CR))+(T3 ENGINE MODS)+(T3 SCR))
\c\ Assumes 32 percent of new vessels would require the fuel switching equipment.

    The estimated price impacts for Tier 2 vessels would be 
substantially lower, given the technology that will be used to meet the 
Tier 2 standards is much less expensive. The cost of complying with the 
Tier 2 standards ranges from about $56,000 to $100,000 for a medium 
speed engine, and from about $130,000 to $250,000 for a slow speed 
engine. Again, because the standards do not phase in, the estimated 
price impacts are the same for all years the Tier 2 standards are 
required, 2011 through 2015.
    These estimated price impacts for Tier 2 and Tier 3 vessels are 
small when compared to the price of a new vessel. A selection of new 
vessel prices is provided in Table VII-10; these range from about $40 
million to $480 million. The program price increases range from about 
$600,000 to $1.5 million. A price increase of $600,000 to comply with 
the Tier 3 standards and fuel switching requirements would be an 
increase of approximately 2 percent for a $40 million vessel. The 
largest vessel price increase noted above for a Tier 3 passenger vessel 
is about $1.5 million; this is a price increase of less than 1 percent 
for a $478 million passenger vessel. Independent of the nearly-perfect 
inelasticity of demand, price increases of this magnitude would be 
expected to have little, if any, effect on the sales of new vessels, 
all other economic conditions held constant.

                                       Table VII-10--Newbuild Vessel Price by Ship Type and Size, Selected Vessels
                                                                    [Millions, $2008]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                 Vessel type                        Vessel size category                        Size range (mean) (DWT)                      Newbuild
--------------------------------------------------------------------------------------------------------------------------------------------------------
Bulk carrier................................  Handy..........................                                    10,095-39,990 (27,593)           $56.00
                                              Handymax.......................                                    40,009-54,881 (47,616)            79.00
                                              Panamax........................                                    55,000-78,932 (69,691)            97.00
                                              Capesize.......................                                  80,000-364,767 (157,804)           175.00
Container...................................  Feeder.........................                                      1,000-13,966 (9,053)            38.00
                                              Intermediate...................                                    14,003-36,937 (24,775)            70.00
                                              Panamax........................                                    37,042-54,700 (45,104)           130.00
                                              Post Panamax...................                                    55,238-84,900 (67,216)           165.00
Gas carrier.................................  Midsize........................                                      1,001-34,800 (7,048)            79.70
                                              LGC............................                                    35,760-59,421 (50,796)            37.50
                                              VLGC...........................                                   62,510-122,079 (77,898)           207.70
General cargo...............................  Coastal Small..................                                       1,000-9,999 (3,789)            33.00
                                              Coastal Large..................                                    10,000-24,912 (15,673)            43.00
                                              Handy..........................                                    25,082-37,865 (29,869)            52.00
                                              Panamax........................                                    41,600-49,370 (44,511)            58.00
Passenger...................................  All............................                                      1,000-19,189 (6,010)           478.40
Reefer......................................  All............................                                      1,000-19,126 (6,561)            17.30
Ro-Ro.......................................  All............................                                      1,000-19,126 (7,819)            41.20
Tanker......................................  Coastal........................                                      1,000-23,853 (7,118)            20.80
                                              Handymax.......................                                    25,000-39,999 (34,422)            59.00
                                              Panamax........................                                    40,000-75,992 (52,300)            63.00
                                              AFRAmax........................                                  76,000-117,153 (103,112)            77.00
                                              Suezmax........................                                 121,109-167,294 (153,445)            95.00
                                              VLCC...........................                                 180,377-319,994 (294,475)           154.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sources: Lloyd's Shipping Economist (2008), Informa (2008), Lloyd's Sea-Web (2008).


[[Page 44500]]

(b) What Are the Estimated Fuel Market Impacts of the Coordinated 
Strategy?
    The market impacts for the fuel markets were estimated through the 
modeling performed to estimate the fuel compliance costs for the 
coordinated strategy. In the WORLD model, the total quantity of fuel 
used is held constant, which is consistent with the assumption that the 
demand for international shipping transportation would not be expected 
to change due to the lack of transportation alternatives.
    The expected price impacts of the coordinated strategy are set out 
in Table VII-11. Note that on a mass basis, less distillate than 
residual fuel is needed to go the same distance (5 percent less). The 
prices in Table VII-11 are adjusted for this impact.
    Table VII-11 shows that the coordinated strategy is expected to 
result in a small increase in the price of marine distillate fuel, 
about 1.3 percent. The price of residual fuel is expected to decrease 
slightly, by less than one percent, due to a reduction in demand for 
that fuel.

                         Table VII-11--Summary of Estimated Market Impacts--Fuel Markets
----------------------------------------------------------------------------------------------------------------
                                                                                   Adjusted for
             Fuel                     Units       Baseline price   Control price  energy density     % change
----------------------------------------------------------------------------------------------------------------
Distillate....................  $/tonne.........             462             468             N/A            +1.3
Residual......................  $/tonne.........             322             321             N/A            -0.3
Fuel Switching................  $/tonne.........             322             468             444           +38.9
----------------------------------------------------------------------------------------------------------------

    Because of the need to shift from residual fuel to distillate fuel 
in the ECA, ship owners are expected to see an increase in their total 
cost of fuel. This increase is because distillate fuel is more 
expensive than residual fuel. Factoring in the higher energy content of 
distillate fuel relative to residual fuel, the fuel cost increase would 
be about 39 percent.
(c) What Are the Estimated Marine Transportation Market Impacts of the 
Coordinated Strategy?
    We used the above information to estimate the impacts on the prices 
of marine transportation services. This analysis, which is presented in 
Chapter 7 of the draft RIA, is limited to the impacts of increases in 
operating costs due to the fuel and emission requirements of the 
coordinated strategy. Operating costs would increase due to the 
increase in the price of fuel, the need to switch to fuel with a sulfur 
content not to exceed 1,000 ppm while operating in the ECA, and due to 
the need to dose the aftertreatment system with urea to meet the Tier 3 
standards. Table VII-12 summarizes these price impacts for selected 
transportation markets. Table VII-12 also lists the vessel and engine 
parameters that were used in the calculations.

                    Table VII-12--Summary of Impacts of Operational Fuel/Urea Cost Increases
----------------------------------------------------------------------------------------------------------------
                                           Vessel and engine
             Vessel type                      parameters                   Operational price increases
----------------------------------------------------------------------------------------------------------------
Container--North Pacific Circle Route  36,540 kW, 50,814 DWT...  $17.53/TEU.
Bulk Carrier--North Pacific Circle     3,825 kW, 16,600 DWT....  $0.56/tonne.
 Route.
Cruise Liner--(Alaska)...............  31,500 kW, 226,000 DWT,   $6.60/per passenger per day
                                        1,886 passengers..
----------------------------------------------------------------------------------------------------------------

    This information suggests that the increase in marine 
transportation service prices would be small, both absolutely and when 
compared to the price charged by the ship owner per unit transported. 
For example, Stopford notes that the price of transporting a 20 foot 
container between the UK and Canada is estimated to be about $1,500; of 
that, $700 is the cost of the ocean freight; the rest is for port, 
terminal, and other charges.\149\ An increase of about $18 represents 
an increase of less than 3 percent of ocean freight cost, and about one 
percent of transportation cost. Similarly, the price of a 7-day Alaska 
cruise varies from $100 to $400 per night or more. In that case, this 
price increase would range from 1.5 percent to about 6 percent.
---------------------------------------------------------------------------

    \149\ Stopford, Martin, Maritime Economics, 3rd Edition. 
Routledge, 2009. Page 519.
---------------------------------------------------------------------------

(4) What Are the Estimated Social Costs of the Coordinated Strategy and 
How Are They Expected To Be Distributed Across Stakeholders?
    The total social costs of the coordinated strategy are based on 
both fixed and variable costs. This is because fixed costs are a cost 
to society: they displace other product development activities that may 
improve the quality or performance of engines and vessels. In this 
economic impact analysis, fixed costs are accounted for in the year in 
which they occur, with the fixed costs associated with the Tier 2 
engine standards accounted for in 2010 and the fixed costs associated 
with the Tier 3 engine standards and the ECA controls accounted for in 
the five-year period beginning prior to their effective dates.
    The social costs of the coordinated strategy are estimated to be 
the same as the total engineering compliance costs. These costs for all 
years are presented in Table VII-4. For 2030, the social costs are 
estimated to be about $3.1 billion.\150\ For the reasons described 
above and explained more fully in the draft RIA, these costs are 
expected to be borne fully by consumers of marine transportation 
services.
---------------------------------------------------------------------------

    \150\ The costs totals reported in this NPRM are slightly 
different than those reported in the ECA proposal. This is because 
the ECA proposal did not include costs associated with the Annex VI 
existing engine program, Tier II, or the costs associated with 
existing vessel modifications that may be required to accommodate 
the use of lower sulfur fuel. Further, the cost totals presented in 
the ECA package included Canadian cost estimates.
---------------------------------------------------------------------------

    These social costs are small when compared to the total value of 
U.S. waterborne foreign trade. In 2007, waterborne trade for government 
and non-government shipments by vessel into and out of U.S. foreign 
trade zones, the 50 states, the District of Columbia, and Puerto Rico 
was about $1.4 trillion. Of that, about $1 trillion was for 
imports.\151\
---------------------------------------------------------------------------

    \151\ Census Bureau's Foreign Trade Division, U.S. Waterborne 
Foreign Trade by U.S. Custom Districts, as reported by the Maritime 
Administration at http://www.marad.dot.gov/library_landing_page/data_and_statistics/Data_and_Statistics.htm, accessed April 9, 
2009.

---------------------------------------------------------------------------

[[Page 44501]]

    If only U.S. vessels are considered, the social costs of the 
coordinated strategy in 2030 would be about $427.5 million. Again, 
these social costs are small when compared to the annual revenue for 
this sector. In 2002, the annual revenue for this sector was about 
$19.8 billion.\152\
---------------------------------------------------------------------------

    \152\ U.S. Census Bureau, Industry Statistics Sampler, NAICS 
48311, Deep sea, coastal, and Great Lakes transportation, at http://www.census.gov/econ/census02/data/industry/E48311.HTM, assessed on 
April 9, 2009.
---------------------------------------------------------------------------

(5) Alternative Analysis
    The above analysis is based on the assumption of near-perfectly 
inelastic demand for ocean marine transportation services. In this 
section, we discuss the implications of relaxing this assumption to 
consider the impacts of the coordinated strategy if consumers of marine 
transportation services were able to react to an increase in prices by 
reducing their demand for these services.
    The marine transportation services market is a global market, which 
makes it complicated to estimate the price sensitivity of demand. In 
addition, that sensitivity would likely vary depending on the types of 
goods transported and the type of vessel used. For example, the demand 
elasticity for bulk cargo transportation services would likely vary 
depending on the type of bulk (e.g., food, oil, electronic goods) and 
the type of vessel (bulk/tramp or liner). Instead of estimating these 
price elasticities, this alternative analysis relies on the price 
elasticities we developed for our 2008 rulemaking that set technology-
forcing standards for Category 1 and Category 2 engines (73 FR 25098, 
May 6, 2008). Although these price elasticities of demand and supply 
were developed using data for United States markets only, they reflect 
behavioral reactions to price changes if alternative modes of 
transportation were available. The values used for the behavioral 
parameters for the Category 1 and 2 markets are provided in Table VII-
13.

                                   Table VII-13--Behavioral Parameters Used in Locomotive/Marine Economic Impact Model
--------------------------------------------------------------------------------------------------------------------------------------------------------
               Sector                        Market             Demand elasticity            Source           Supply elasticity            Source
--------------------------------------------------------------------------------------------------------------------------------------------------------
Marine.............................  Marine Transportation   -0.5 (inelastic)......  Literature Estimate..  0.6 (inelastic)......  Literature
                                      Services.                                                                                    Estimate.
                                     Commercial Vessels \a\  Derived...............  N/A..................  2.3 (elastic)........  Econometric
                                                                                                                                   Estimate.
                                     Engines...............  Derived...............  N/A..................  3.8 (elastic)........  Econometric
                                                                                                                                   Estimate.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ Commercial vessels include tug/tow/pushboats, ferries, cargo vessels, crew/supply boats, and other commercial vessels.

    The alternative price elasticity of demand for marine 
transportation services is inelastic, at -0.5. This means a one percent 
increase in price will result in a 0.5 percent decrease in demand. This 
inelastic demand elasticity will yield inelastic demand elasticities 
for both engines and vessels. The estimates of the price elasticity of 
supply are elastic, consistent with the primary analysis described 
above.
    Rather than create a computer model to estimate the economic 
impacts of the coordinated strategy using this revised set of 
assumptions, we examine their impact qualitatively. In general, 
relaxing the condition of nearly perfectly inelastic demand elasticity 
would result in the compliance costs of the coordinated strategy being 
shared by consumers and suppliers. In the engine and vessel markets, 
the share borne by producers would nevertheless be expected to be 
small, given the elastic supply elasticity compared to the inelastic 
demand elasticity. Because suppliers would bear part of the compliance 
costs, the price increase for engines and vessels would be smaller than 
the per-unit engineering compliance costs. In the marine transportation 
market, the price impacts would be shared more equally between 
producers (vessel owners) and consumers (firms that purchase marine 
transportation services), due to the nearly identical price elasticity 
of supply (0.6) and demand (-0.5). However, given the relatively small 
per unit engineering costs, the total impacts on prices and quantities 
in these markets would still be expected to be modest.
    In addition, there would be a small change in demand since 
consumers would react to an increase in price by reducing their 
consumption of marine transportation services. Again, because the 
relative price impact is small, the impact on quantity would also be 
small.
    The distribution of compliance costs from our earlier rule are 
presented in Table VII-14. While the emission control requirements and 
the compliance cost structure of the coordinated strategy are somewhat 
different, these results give an idea of how costs would be shared if 
the assumption of nearly perfectly inelastic price elasticity of demand 
for the transportation services market in the ocean-going marine sector 
were relaxed.

  Table VII-14--Distribution of Social Costs Among Stakeholder Groups--
                Category 1 and Category 2 Engine Program
------------------------------------------------------------------------
            Stakeholder Group             2020 (percent)  2030 (percent)
------------------------------------------------------------------------
Marine engine producers.................             0.8             0.5
Marine vessel producers.................            10.7             3.8
Recreational and fishing vessel                      8.4             4.1
 consumers..............................
Marine transportation service providers.            36.4            41.5
Marine transportation service consumers.            43.8            50.0
                                         -------------------------------

[[Page 44502]]

 
    Total...............................           100.0           100.0
------------------------------------------------------------------------

VIII. Benefits

    This section presents our analysis of the health and environmental 
benefits that are estimated to occur as a result of EPA's coordinated 
strategy to address emissions from Category 3 engines and ocean-going 
vessels throughout the period from initial implementation through 2030. 
We provide estimated benefits for the entire coordinated strategy, 
including the Annex VI Tier 2 NO<INF>X</INF> requirements and the ECA 
controls that will be mandatory for U.S. and foreign vessels through 
the Act to Prevent Pollution from Ships. However, unlike the cost 
analysis, this benefits analysis does not allocate benefits between the 
components of the program (the requirements in this rule and the 
requirements that would apply through MARPOL Annex VI and ECA 
implementation). This is because the benefits of the coordinated 
strategy will be fully realized only when the U.S. ECA is in place and 
both U.S. and foreign vessel are required to use lower sulfur fuel and 
operate their Tier 3 NO<INF>X</INF> controls while in the designated 
area, and therefore it makes more sense to consider the benefits of the 
coordinated strategy as a whole.
    The components of the coordinated strategy would apply stringent 
NO<INF>X</INF> and SO<INF>X</INF> standards to virtually all vessels 
that affect U.S. air quality, and impacts on human health and welfare 
would be substantial. As presented in Section II, the coordinated is 
expected to provide very large reductions in direct PM, NO<INF>X</INF>, 
SO<INF>X</INF>, and toxic compounds, both in the near term and in the 
long term. Emissions of NO<INF>X</INF> (a precursor to ozone formation 
and secondarily-formed PM<INF>2.5</INF>), SO<INF>X</INF> (a precursor 
to secondarily-formed PM<INF>2.5</INF>) and directly-emitted 
PM<INF>2.5</INF> contribute to ambient concentrations of 
PM<INF>2.5</INF> and ozone. Exposure to ozone and PM<INF>2.5</INF> is 
linked to adverse human health impacts such as premature deaths as well 
as other important public health and environmental effects.
    Using the most conservative premature mortality estimates (Pope et 
al., 2002 for PM2.5 and Bell et al., 2004 for ozone),\153\\,\ \154\ we 
estimate that implementation of the coordinated strategy would reduce 
approximately 13,000 premature mortalities in 2030 and yield 
approximately $110 billion in total benefits. The upper end of the 
premature mortality estimates (Laden et al., 2006 for PM2.5 and Levy et 
al., 2005 for ozone) \155\\,\ \156\ increases avoided premature 
mortalities to approximately 32,000 in 2030 and yields approximately 
$280 billion in total benefits. Thus, even taking the most conservative 
premature mortality assumptions, the health impacts of the coordinated 
strategy presented in this proposal are clearly substantial.
---------------------------------------------------------------------------

    \153\ Pope, C.A., III, R.T. Burnett, M.J. Thun, E.E. Calle, D. 
Krewski, K. Ito, and G.D. Thurston. (2002). Lung Cancer, 
Cardiopulmonary Mortality, and Long-term Exposure to Fine 
Particulate Air Pollution. Journal of the American Medical 
Association, 287, 1132-1141.
    \154\ Bell, M.L., et al. (2004). Ozone and short-term mortality 
in 95 US urban communities, 1987-2000. Journal of the American 
Medical Association, 292(19), 2372-2378.
    \155\ Laden, F., J. Schwartz, F.E. Speizer, and D.W. Dockery. 
(2006). Reduction in Fine Particulate Air Pollution and Mortality. 
American Journal of Respiratory and Critical Care Medicine. 173, 
667-672.
    \156\ Levy, J.I., S.M. Chemerynski, and J.A. Sarnat. (2005). 
Ozone exposure and mortality: an empiric bayes metaregression 
analysis. Epidemiology. 16(4), 458-68.
---------------------------------------------------------------------------

A. Overview

    We base our analysis on peer-reviewed studies of air quality and 
human health effects (see U.S. EPA, 2006 and U.S. EPA, 2008).\157\\, 
\\158\ These methods are described in more detail in the draft RIA that 
accompanies this proposal. To model the ozone and PM air quality 
impacts of the proposed CAA standards and requirements and the ECA 
designation, we used the Community Multiscale Air Quality (CMAQ) model 
(see Section II). The modeled ambient air quality data serves as an 
input to the Environmental Benefits Mapping and Analysis Program 
(BenMAP).\159\ BenMAP is a computer program developed by the U.S. EPA 
that integrates a number of the modeling elements used in previous 
analyses (e.g., interpolation functions, population projections, health 
impact functions, valuation functions, analysis and pooling methods) to 
translate modeled air concentration estimates into health effects 
incidence estimates and monetized benefits estimates.
---------------------------------------------------------------------------

    \157\ U.S. Environmental Protection Agency. (2006). Final 
Regulatory Impact Analysis (RIA) for the Proposed National Ambient 
Air Quality Standards for Particulate Matter. Prepared by: Office of 
Air and Radiation. Retrieved March, 26, 2009 at http://www.epa.gov/ttn/ecas/ria.html.
    \158\ U.S. Environmental Protection Agency. (2008). Final Ozone 
NAAQS Regulatory Impact Analysis. Prepared by: Office of Air and 
Radiation, Office of Air Quality Planning and Standards. Retrieved 
March, 26, 2009 at http://www.epa.gov/ttn/ecas/ria.html.
    \159\ Information on BenMAP, including downloads of the 
software, can be found at http://www.epa.gov/ttn/ecas/benmodels.html.
---------------------------------------------------------------------------

    The range of total ozone- and PM-related benefits associated with 
the coordinated strategy to control ship emissions is presented in 
Table VIII-1. We present total benefits based on the PM- and ozone-
related premature mortality function used. The benefits ranges 
therefore reflect the addition of each estimate of ozone-related 
premature mortality (each with its own row in Table VIII-1) to 
estimates of PM-related premature mortality. These estimates represent 
EPA's preferred approach to characterizing the best estimate of 
benefits associated with the coordinated strategy. As is the nature of 
Regulatory Impact Analyses (RIAs), the assumptions and methods used to 
estimate air quality benefits evolve to reflect the Agency's most 
current interpretation of the scientific and economic literature. This 
analysis, therefore, incorporates four important changes from recent 
RIAs released by the Office of Transportation and Air Quality (OTAQ):
    <bullet> As is the nature of Regulatory Impact Analyses (RIAs), the 
assumptions and methods used to estimate air quality benefits evolve 
over time to reflect the Agency's most current interpretation of the 
scientific and economic literature. For a period of time (2004-2008), 
the Office of Air and Radiation (OAR) valued mortality risk reductions 
using a value of statistical life (VSL) estimate derived from a limited 
analysis of some of the available studies. OAR arrived at a VSL using a

[[Page 44503]]

range of $1 million to $10 million (2000$) consistent with two meta-
analyses of the wage-risk literature. The $1 million value represented 
the lower end of the interquartile range from the Mrozek and Taylor 
(2002) \160\ meta-analysis of 33 studies and $10 million represented 
the upper end of the interquartile range from the Viscusi and Aldy 
(2003) \161\ meta-analysis of 46 studies. The mean estimate of $5.5 
million (2000$) \162\ was also consistent with the mean VSL of $5.4 
million estimated in the Kochi et al. (2006) \163\ meta-analysis. 
However, the Agency neither changed its official guidance on the use of 
VSL in rule-makings nor subjected the interim estimate to a scientific 
peer-review process through the Science Advisory Board (SAB) or other 
peer-review group.
---------------------------------------------------------------------------

    \160\ Mrozek, J.R., and L.O. Taylor. (2002). What Determines the 
Value of Life? A Meta-Analysis. Journal of Policy Analysis and 
Management 21(2):253-270.
    \161\ Viscusi, V.K., and J.E. Aldy. (2003). The Value of a 
Statistical Life: A Critical Review of Market Estimates Throughout 
the World. Journal of Risk and Uncertainty 27(1):5-76.
    \162\ In this analysis, we adjust the VSL to account for a 
different currency year (2006$) and to account for income growth to 
2020 and 2030. After applying these adjustments to the $5.5 million 
value, the VSL is $7.7m in 2020 and $7.9 in 2030.
    \163\ Kochi, I., B. Hubbell, and R. Kramer. 2006. An Empirical 
Bayes Approach to Combining Estimates of the Value of Statistical 
Life for Environmental Policy Analysis. Environmental and Resource 
Economics. 34: 385-406.
---------------------------------------------------------------------------

    During this time, the Agency continued work to update its guidance 
on valuing mortality risk reductions, including commissioning a report 
from meta-analytic experts to evaluate methodological questions raised 
by EPA and the SAB on combining estimates from the various data 
sources. In addition, the Agency consulted several times with the 
Science Advisory Board Environmental Economics Advisory Committee (SAB-
EEAC) on the issue. With input from the meta-analytic experts, the SAB-
EEAC advised the Agency to update its guidance using specific, 
appropriate meta-analytic techniques to combine estimates from unique 
data sources and different studies, including those using different 
methodologies (i.e., wage-risk and stated preference) (U.S. EPA-SAB, 
2007).\164\
---------------------------------------------------------------------------

    \164\ U.S. Environmental Protection Agency (U.S. EPA). 2007. SAB 
Advisory on EPA's Issues in Valuing Mortality Risk Reduction.http://
yosemite.epa.gov/sab/sabproduct.nsf/
4128007E7876B8F0852573760058A978/$File/sab-08-001.pdf.
---------------------------------------------------------------------------

    Until updated guidance is available, the Agency determined that a 
single, peer-reviewed estimate applied consistently best reflects the 
SAB-EEAC advice it has received. Therefore, the Agency has decided to 
apply the VSL that was vetted and endorsed by the SAB in the Guidelines 
for Preparing Economic Analyses (U.S. EPA, 2000) while the Agency 
continues its efforts to update its guidance on this issue.\165\ This 
approach calculates a mean value across VSL estimates derived from 26 
labor market and contingent valuation studies published between 1974 
and 1991. The mean VSL across these studies is $6.3 million 
(2000$).\166\
---------------------------------------------------------------------------

    \165\ In the (draft) update of the Economic Guidelines, EPA 
retained the VSL endorsed by the SAB with the understanding that 
further updates to the mortality risk valuation guidance would be 
forthcoming in the near future. Therefore, this report does not 
represent final agency policy. The 2000 guidelines can be downloaded 
here: http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/Guidelines.html, and the draft updated version (2008) of the 
guidelines can be downloaded here: http://yosemite.epa.gov/ee/epa/eerm.nsf/vwRepNumLookup/EE-0516?OpenDocument.
    \166\ In this analysis, we adjust the VSL to account for a 
different currency year (2006$) and to account for income growth to 
2020 and 2030. After applying these adjustments to the $6.3 million 
value, the VSL is $8.9m in 2020 and $9.1m in 2030.
---------------------------------------------------------------------------

    The Agency is committed to using scientifically sound, 
appropriately reviewed evidence in valuing mortality risk reductions 
and has made significant progress in responding to the SAB-EEAC's 
specific recommendations. The Agency anticipates presenting results 
from this effort to the SAB-EEAC in the Fall 2009 and that draft 
guidance will be available shortly thereafter.
    <bullet> In recent analyses, OTAQ has estimated PM<INF>2.5</INF>-
related benefits assuming that a threshold exists in the PM-related 
concentration-response functions (at 10 [micro]g/m\3\) below which 
there are no associations between exposure to PM<INF>2.5</INF> and 
health impacts. EPA strives to use the best available science to 
support our benefits analyses, and we recognize that interpretation of 
the science regarding air pollution and health is dynamic and evolving. 
Based on our review of the body of scientific literature, EPA applied 
the no-threshold model in this analysis. Removing the threshold 
assumption is consistent with the approach taken in the recently 
published Portland Cement MACT RIA.\167\ EPA's draft Integrated Science 
Assessment (2008g), which was recently reviewed by EPA's Clean Air 
Scientific Advisory Committee (CASAC),<SUP>168, 169</SUP> concluded 
that the scientific literature consistently finds that a no-threshold 
log-linear model most adequately portrays the PM-mortality 
concentration-response relationship while recognizing potential 
uncertainty about the exact shape of the concentration-response 
function. Although this document does not represent final agency policy 
that has undergone the full agency scientific review process, it 
provides a basis for reconsidering the application of thresholds in 
PM<INF>2.5</INF> concentration-response functions used in EPA's RIAs. 
It is important to note that while CASAC provides advice regarding the 
science associated with setting the National Ambient Air Quality 
Standards, typically other scientific advisory bodies provide specific 
advice regarding benefits analysis. Because the Portland Cement RIA was 
completed while CASAC was reviewing the PM ISA, we solicited comment on 
the use of the no-threshold model for benefits analysis within the 
preamble of that proposed rule. The comment period for the Portland 
Cement proposed NESHAP has been extended until September 4, 2009.\170\ 
Please see Section 6.4.1.3 of the RIA that accompanies this preamble 
for more discussion of the treatment of thresholds in this analysis.
---------------------------------------------------------------------------

    \167\ U.S. Environmental Protection Agency. (2009). Regulatory 
Impact Analysis: National Emission Standards for Hazardous Air 
Pollutants from the Portland Cement Manufacturing Industry. Office 
of Air and Radiation. Retrieved on May 4, 2009, from http://www.epa.gov/ttn/ecas/regdata/RIAs/portlandcementria_4-20-09.pdf
    \168\ U.S. Environmental Protection Agency--Science Advisory 
Board (U.S. EPA-SAB). 2009. Review of EPA's Integrated Science 
Assessment for Particulate Matter (First External Review Draft, 
December 2008). EPA-COUNCIL-09-008. May. Available on the Internet 
at http://yosemite.epa.gov/sab/SABPRODUCT.NSF/
81e39f4c09954fcb85256ead006be86e/73ACCA834AB44A10852575BD0064346B/
$File/EPA-CASAC-09-008-unsigned.pdf.
    \169\ U.S. Environmental Protection Agency--Science Advisory 
Board (U.S. EPA-SAB). 2009b. Consultation on EPA's Particulate 
Matter National Ambient Air Quality Standards: Scope and Methods 
Plan for Health Risk and Exposure Assessment. EPA-COUNCIL-09-009. 
May. Available on the Internet at http://yosemite.epa.gov/sab/
SABPRODUCT.NSF/81e39f4c09954fcb85256ead006be86e/
723FE644C5D758DF852575BD00763A32/$File/EPA-CASAC-09-009-
unsigned.pdf.
    \170\ Readers interested in commenting on the use of the no-
threshold model for benefits analysis should direct their comments 
to Docket ID No. EPA-HQ-OAR-2002-0051 (available at http://www.regulations.gov) before the comment period closes.
---------------------------------------------------------------------------

    <bullet> For the coordinated strategy, we rely on two empirical 
(epidemiological) studies of the relationship between ambient 
PM<INF>2.5</INF> and premature mortality (the extended analyses of the 
Harvard Six Cities study by Laden et al (2006) and the American Cancer 
Society (ACS) cohort by Pope et al (2002)) to anchor our benefits 
analysis, though we also present the PM<INF>2.5</INF>-related premature 
mortality benefits associated with the estimates supplied by the expert 
elicitation as a sensitivity analysis. This approach was recently 
adopted in the Portland Cement MACT RIA. Since 2006, EPA has calculated 
benefits based on these two empirical studies and derived the range of 
benefits, including the minimum and maximum results, from an expert 
elicitation of the

[[Page 44504]]

relationship between exposure to PM<INF>2.5</INF> and premature 
mortality (Roman et al., 2008).\171\ Using alternate relationships 
between PM<INF>2.5</INF> and premature mortality supplied by experts, 
higher and lower benefits estimates are plausible, but most of the 
expert-based estimates have fallen between the two epidemiology-based 
estimates (Roman et al., 2008). Assuming no threshold in the 
empirically-derived premature mortality concentration response 
functions used in the analysis of the coordinated strategy, only one 
expert falls below the empirically-derived range while two of the 
experts are above this range (see Tables 6-5 and 6-6 in the draft RIA 
that accompanies this preamble). Please refer to the Portland Cement 
MACT RIA for more information about the preferred approach and the 
evolution of the treatment of threshold assumptions within EPA's 
regulatory analyses.
---------------------------------------------------------------------------

    \171\ Roman, Henry A., Walker, Katherine D., Walsh, Tyra L., 
Conner, Lisa, Richmond, Harvey M., Hubbell, Bryan J., and Kinney, 
Patrick L. (2008). Expert Judgment Assessment of the Mortality 
Impact of Changes in Ambient Fine Particulate Matter in the U.S. 
Environ. Sci. Technol., 42, 7, 2268--2274.
---------------------------------------------------------------------------

    <bullet> The range of ozone benefits associated with the 
coordinated strategy is estimated based on risk reductions derived from 
several sources of ozone-related mortality effect estimates. This 
analysis presents six alternative estimates for the association based 
upon different functions reported in the scientific literature. We use 
three multi-city studies,<SUP>172, 173, 174</SUP> including the Bell, 
2004 National Morbidity, Mortality, and Air Pollution Study (NMMAPS) 
that was used as the primary basis for the risk analysis in the ozone 
Staff Paper\175\ and reviewed by the Clean Air Science Advisory 
Committee (CASAC).\176\ We also use three studies that synthesize ozone 
mortality data across a large number of individual 
studies.<SUP>177, 178, 179</SUP> This approach is consistent with 
recommendations provided by the NRC in their ozone mortality report 
(NRC, 2008),\180\ ``The committee recommends that the greatest emphasis 
be placed on estimates from new systematic multicity analyses that use 
national databases of air pollution and mortality, such as in the 
NMMAPS, without excluding consideration of meta-analyses of previously 
published studies.'' The NRC goes on to note that there are 
uncertainties within each study that are not fully captured by this 
range of estimates.
---------------------------------------------------------------------------

    \172\ Bell, M.L., et al. (2004). Ozone and short-term mortality 
in 95 US urban communities, 1987-2000. Jama, 2004. 292(19): p. 2372-
8.
    \173\ Huang, Y.; Dominici, F.; Bell, M. L. (2005) Bayesian 
hierarchical distributed lag models for summer ozone exposure and 
cardio-respiratory mortality. Environmetrics 16: 547-562.
    \174\ Schwartz, J. (2005) How sensitive is the association 
between ozone and daily deaths to control for temperature? Am. J. 
Respir. Crit. Care Med. 171: 627-631.
    \175\ U.S. EPA (2007) Review of the National Ambient Air Quality 
Standards for Ozone, Policy Assessment of Scientific and Technical 
Information. OAQPS Staff Paper.EPA-452/R-07-003. This document is 
available in Docket EPA-HQ-OAR-2003-0190. Retrieved on April 10, 
2009, from http:www.epa.gov/ttn/naaqs/standards/ozone/s_o3_cr_sp.html
    \176\ CASAC (2007). Clean Air Scientific Advisory Committee's 
(CASAC) Review of the Agency's Final Ozone Staff Paper. EPA-CASAC-
07-002. March 26.
    \177\ Bell, M.L., F. Dominici, and J.M. Samet. (2005). A meta-
analysis of time-series studies of ozone and mortality with 
comparison to the national morbidity, mortality, and air pollution 
study. Epidemiology, 16(4): p. 436-45.
    \178\ Ito, K., S.F. De Leon, and M. Lippmann. (2005). 
Associations between ozone and daily mortality: analysis and meta-
analysis. Epidemiology. 16(4): p. 446-57.
    \179\ Levy, J.I., S.M. Chemerynski, and J.A. Sarnat. (2005). 
Ozone exposure and mortality: an empiric bayes metaregression 
analysis. Epidemiology. 16(4): p. 458-68.
    \180\ National Research Council (NRC), 2008. Estimating 
Mortality Risk Reduction and Economic Benefits from Controlling 
Ozone Air Pollution. The National Academies Press: Washington, DC.

  Table VIII-1--Estimated 2030 Monetized PM-and Ozone-Related Health Benefits of a Coordinated U.S. Strategy To
                                            Control Ship Emissions\a\
----------------------------------------------------------------------------------------------------------------
   2030 Total Ozone and PM Benefits--PM Mortality Derived from American Cancer Society Analysis and Six-Cities
                                                   Analysis\a\
-----------------------------------------------------------------------------------------------------------------
                                                                              Total Benefits     Total Benefits
                                                                            (Billions, 2006$,  (Billions, 2006$,
     Premature Ozone Mortality Function                Reference               3% Discount        7% Discount
                                                                                 Rate)c,d           Rate)c,d
----------------------------------------------------------------------------------------------------------------
Multi-city analyses........................  Bell et al., 2004............         $110--$280         $100--$250
                                             Huang et al., 2005...........           120--280           110--250
                                             Schwartz, 2005...............           120--280           110--250
Meta-analyses..............................  Bell et al., 2005............           120--280           110--250
                                             Ito et al., 2005.............           120--280           110--260
                                             Levy et al., 2005............           120--280           110--260
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Total includes premature mortality-related and morbidity-related ozone and PM2.5 benefits. Range was
  developed by adding the estimate from the ozone premature mortality function to the estimate of PM2.5-related
  premature mortality derived from either the ACS study (Pope et al., 2002) or the Six-Cities study (Laden et
  al., 2006).
\b\ Note that total benefits presented here do not include a number of unquantified benefits categories. A
  detailed listing of unquantified health and welfare effects is provided in Table VIII-2.
\c\ Results reflect the use of both a 3 and 7 percent discount rate, as recommended by EPA's Guidelines for
  Preparing Economic Analyses and OMB Circular A-4. Results are rounded to two significant digits for ease of
  presentation and computation.

    The benefits in Table VIII-1 include all of the human health 
impacts we are able to quantify and monetize at this time. However, the 
full complement of human health and welfare effects associated with PM 
and ozone remain unquantified because of current limitations in methods 
or available data. We have not quantified a number of known or 
suspected health effects linked with ozone and PM for which appropriate 
health impact functions are not available or which do not provide 
easily interpretable outcomes (i.e., changes in heart rate 
variability). Additionally, we are unable to quantify a number of known 
welfare effects, including reduced acid and particulate deposition 
damage to cultural monuments and other materials, and environmental 
benefits due to reductions of impacts of eutrophication in coastal 
areas. These are listed in Table VIII-2. As a result, the health 
benefits quantified in this section are likely underestimates of the 
total benefits attributable to the

[[Page 44505]]

implementation of the coordinated strategy to control ship emissions.

   Table VIII-2--Unquantified and Non-Monetized Potential Effects of a
           Coordinated U.S. Strategy to Control Ship Emissions
------------------------------------------------------------------------
                                             Effects not included in
           Pollutant/Effects                  analysis--changes in:
------------------------------------------------------------------------
Ozone Health\a\........................  Chronic respiratory damage.\b\
                                         Premature aging of the
                                          lungs.\b\
                                         Non-asthma respiratory
                                          emergency room visits.
                                         Exposure to UVb (+/-).\e\
Ozone Welfare..........................  Yields for:
                                            --commercial forests,
                                            --some fruits and
                                             vegetables,
                                            --non-commercial crops.
                                         Damage to urban ornamental
                                          plants.
                                         Impacts on recreational demand
                                          from damaged forest
                                          aesthetics.
                                         Ecosystem functions.
                                         Exposure to UVb (+/-).\e\
PM Health\c\...........................  Premature mortality--short term
                                          exposures.\d\
                                         Low birth weight.
                                         Pulmonary function.
                                         Chronic respiratory diseases
                                          other than chronic bronchitis.
                                         Non-asthma respiratory
                                          emergency room visits.
                                         Exposure to UVb (+/-).\e\
PM Welfare.............................  Residential and recreational
                                          visibility in non-Class I
                                          areas.
                                         Soiling and materials damage.
                                         Damage to ecosystem functions.
                                         Exposure to UVb (+/-).\e\
Nitrogen and Sulfate Deposition Welfare  Commercial forests due to
                                          acidic sulfate and nitrate
                                          deposition.
                                         Commercial freshwater fishing
                                          due to acidic deposition.
                                         Recreation in terrestrial
                                          ecosystems due to acidic
                                          deposition.
                                         Existence values for currently
                                          healthy ecosystems.
                                         Commercial fishing,
                                          agriculture, and forests due
                                          to nitrogen deposition.
                                         Recreation in estuarine
                                          ecosystems due to nitrogen
                                          deposition.
                                         Ecosystem functions
                                         Passive fertilization
CO Health..............................  Behavioral effects
HC/Toxics Health\f\....................  Cancer (benzene, 1,3-butadiene,
                                          formaldehyde, acetaldehyde).
                                         Anemia (benzene).
                                         Disruption of production of
                                          blood components (benzene).
                                         Reduction in the number of
                                          blood platelets (benzene).
                                         Excessive bone marrow formation
                                          (benzene).
                                         Depression of lymphocyte counts
                                          (benzene).
                                         Reproductive and developmental
                                          effects (1,3-butadiene).
                                         Irritation of eyes and mucus
                                          membranes (formaldehyde).
                                         Respiratory irritation
                                          (formaldehyde).
                                         Asthma attacks in asthmatics
                                          (formaldehyde).
                                         Asthma-like symptoms in non-
                                          asthmatics (formaldehyde).
                                         Irritation of the eyes, skin,
                                          and respiratory tract
                                          (acetaldehyde).
                                         Upper respiratory tract
                                          irritation and congestion
                                          (acrolein)
HC/Toxics Welfare......................  Direct toxic effects to
                                          animals.
                                         Bioaccumulation in the food
                                          chain.
                                         Damage to ecosystem function.
                                         Odor.
------------------------------------------------------------------------
Notes:
\a\ The public health impact of biological responses such as increased
  airway responsiveness to stimuli, inflammation in the lung, acute
  inflammation and respiratory cell damage, and increased susceptibility
  to respiratory infection are likely partially represented by our
  quantified endpoints.
\b\ The public health impact of effects such as chronic respiratory
  damage and premature aging of the lungs may be partially represented
  by quantified endpoints such as hospital admissions or premature
  mortality, but a number of other related health impacts, such as
  doctor visits and decreased athletic performance, remain unquantified.
\c\ In addition to primary economic endpoints, there are a number of
  biological responses that have been associated with PM health effects
  including morphological changes and altered host defense mechanisms.
  The public health impact of these biological responses may be partly
  represented by our quantified endpoints.
\d\ While some of the effects of short-term exposures are likely to be
  captured in the estimates, there may be premature mortality due to
  short-term exposure to PM not captured in the cohort studies used in
  this analysis. However, the PM mortality results derived from the
  expert elicitation do take into account premature mortality effects of
  short term exposures.
\e\ May result in benefits or disbenefits.
\f\ Many of the key hydrocarbons related to this rule are also hazardous
  air pollutants listed in the CAA.


[[Page 44506]]

B. Quantified Human Health Impacts

    Tables VIII-3 and VIII-4 present the annual PM<INF>2.5</INF> and 
ozone health impacts in the 48 contiguous U.S. states associated with 
the coordinated strategy for both 2020 and 2030. For each endpoint 
presented in Tables VIII-3 and VIII-4, we provide both the mean 
estimate and the 90% confidence interval.
    Using EPA's preferred estimates, based on the ACS and Six-Cities 
studies and no threshold assumption in the model of mortality, we 
estimate that the coordinated strategy would result in between 5,300 
and 14,000 cases of avoided PM<INF>2.5</INF>-related premature deaths 
annually in 2020 and between 13,000 and 32,000 avoided premature deaths 
annually in 2030. As a sensitivity analysis, when the range of expert 
opinion is used, we estimate between 1,900 and 18,000 fewer premature 
mortalities in 2020 and between 4,500 and 42,000 fewer premature 
mortalities in 2030 (see Tables 6-5 and 6-6 in the draft RIA that 
accompanies this proposal).
    For ozone-related premature mortality, we estimate a range of 
between 61 to 280 fewer premature mortalities as a result of the 
coordinated strategy in 2020 and between 220 to 980 in 2030. The 
increase in annual benefits from 2020 to 2030 reflects additional 
emission reductions from coordinated strategy, as well as increases in 
total population and the average age (and thus baseline mortality risk) 
of the population.

Table VIII-3--Estimated PM2.5-Related Health Impacts Associated With a Coordinated U.S. Strategy To Control Ship
                                                  Emissions \a\
----------------------------------------------------------------------------------------------------------------
                                                              2020 Annual reduction in  2030 Annual reduction in
                        Health effect                          ship-related incidence    ship-related incidence
                                                                   (5th%-95th%ile)           (5th%-95th%ile)
----------------------------------------------------------------------------------------------------------------
Premature Mortality--Derived from epidemiology literature:
 \b\
    Adult, age 30+, ACS Cohort Study (Pope et al., 2002)....                    5,300                    13,000
                                                                         (2,100-8,500)            (5,000-20,000)
    Adult, age 25+, Six-Cities Study (Laden et al., 2006)...                   14,000                    32,000
                                                                        (7,400-20,000)           (18,000-47,000)
    Infant, age <1 year (Woodruff et al., 1997).............                       20                        37
                                                                                (0-55)                   (0-100)
Chronic bronchitis (adult, age 26 and over).................                    3,800                     8,500
                                                                           (700-6,900)            (1,600-15,000)
Non-fatal myocardial infarction (adult, age 18 and over)....                    8,800                    22,000
                                                                        (3,200-14,000)            (8,100-35,000)
Hospital admissions-respiratory (all ages) \c\..............                    1,200                     2,900
                                                                           (590-1,800)              1,400-4,200)
Hospital admissions-cardiovascular (adults, age >18) \d\....                    2,700                     7,100
                                                                         (2,000-3,200)             (5,000-8,300)
Emergency room visits for asthma (age 18 years and younger).                    3,500                     8,100
                                                                         (2,000-4,900)            (4,800-11,000)
Acute bronchitis, (children, age 8-12)......................                    8,500                    19,000
                                                                            (0-17,000)                (0-37,000)
Lower respiratory symptoms (children, age 7-14).............                  100,000                   220,000
                                                                      (49,000-150,000)         (110,000-330,000)
Upper respiratory symptoms (asthmatic children, age 9-18)...                   77,000                   170,000
                                                                      (24,000-130,000)          (54,000-290,000)
Asthma exacerbation (asthmatic children, age 6-18)..........                   95,000                   210,000
                                                                      (10,000-260,000)          (23,000-580,000)
Work loss days..............................................                  720,000                 1,500,000
                                                                     (630,000-810,000)     (1,300,000-1,700,000)
Minor restricted activity days (adults age 18-65)...........                4,300,000                 9,000,000
                                                                 (3,600,000-4,900,000)    (7,600,000-10,000,000)
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Incidence is rounded to two significant digits. Estimates represent incidence within the 48 contiguous
  United States.
\b\ PM-related adult mortality based upon the American Cancer Society (ACS) Cohort Study (Pope et al., 2002) and
  the Six-Cities Study (Laden et al., 2006). Note that these are two alternative estimates of adult mortality
  and should not be summed. PM-related infant mortality based upon a study by Woodruff, Grillo, and Schoendorf,
  (1997).\181\
\c\ Respiratory hospital admissions for PM include admissions for chronic obstructive pulmonary disease (COPD),
  pneumonia and asthma.
\d\ Cardiovascular hospital admissions for PM include total cardiovascular and subcategories for ischemic heart
  disease, dysrhythmias, and heart failure.

     
---------------------------------------------------------------------------

    \181\ Woodruff, T.J., J. Grillo, and K.C. Schoendorf. 1997. 
``The Relationship Between Selected Causes of Postneonatal Infant 
Mortality and Particulate Air Pollution in the United States.'' 
Environmental Health Perspectives 105(6):608-612.

Table VIII-4--Estimated Ozone-Related Health Impacts Associated With a Coordinated U.S. Strategy To Control Ship
                                                  Emissions\a\
----------------------------------------------------------------------------------------------------------------
                                                              2020 Annual reduction in  2030 Annual reduction in
                        Health effect                          ship-related incidence    ship-related incidence
                                                                   (5th%-95th%ile)           (5th%-95th%ile)
----------------------------------------------------------------------------------------------------------------
Premature Mortality, All ages \b\

[[Page 44507]]

 
Multi-City Analyses:
    Bell et al. (2004)--Non-accidental......................                       61                       220
                                                                               (23-98)                  (71-370)
    Huang et al. (2005)-Cardiopulmonary.....................                      100                       370
                                                                              (43-160)                 (140-610)
    Schwartz (2005)--Non-accidental.........................                       93                       340
                                                                              (34-150)                 (100-570)
Meta-analyses:
    Bell et al. (2005)--All cause...........................                      200                       690
                                                                             (100-290)               (330-1,100)
    Ito et al. (2005)--Non-accidental.......................                      270                       980
                                                                             (170-370)               (580-1,400)
    Levy et al. (2005)--All cause...........................                      280                       980
                                                                             (200-360)               (670-1,300)
Hospital admissions--respiratory causes (adult, 65 and                            470                     2,000
 older) \c\.................................................                  (46-830)                (97-3,600)
Hospital admissions--respiratory causes (children, under 2).                      380                     1,200
                                                                             (180-590)               (500-2,000)
Emergency room visit for asthma (all ages)..................                      210                       740
                                                                               (0-550)                 (0-1,900)
Minor restricted activity days (adults, age 18-65)..........                  360,000                 1,200,000
                                                                     (160,000-570,000)       (440,000-1,900,000)
School absence days.........................................                  130,000                   450,000
                                                                      (51,000-190,000)         (150,000-680,000)
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Incidence is rounded to two significant digits. Estimates represent incidence within the 48 contiguous U.S.
\b\ Estimates of ozone-related premature mortality are based upon incidence estimates derived from several
  alternative studies: Bell et al. (2004); Huang et al. (2005); Schwartz (2005) ; Bell et al. (2005); Ito et al.
  (2005); Levy et al. (2005). The estimates of ozone-related premature mortality should therefore not be summed.
\c\ Respiratory hospital admissions for ozone include admissions for all respiratory causes and subcategories
  for COPD and pneumonia.

C. Monetized Benefits

    Table VIII-5 presents the estimated monetary value of reductions in 
the incidence of ozone and PM<INF>2.5</INF>-related health effects. All 
monetized estimates are stated in 2006$. These estimates account for 
growth in real gross domestic product (GDP) per capita between the 
present and the years 2020 and 2030. As the tables indicate, total 
benefits are driven primarily by the reduction in premature fatalities 
each year.
    Our estimate of total monetized benefits in 2020 for the 
coordinated strategy, using the ACS and Six-Cities PM mortality studies 
and the range of ozone mortality assumptions, is between $47 billion 
and $110 billion, assuming a 3 percent discount rate, or between $42 
billion and $100 billion, assuming a 7 percent discount rate. In 2030, 
we estimate the monetized benefits to be between $110 billion and $280 
billion, assuming a 3 percent discount rate, or between $100 billion 
and $260 billion, assuming a 7 percent discount rate. The monetized 
benefit associated with reductions in the risk of both ozone- and 
PM<INF>2.5</INF>-related premature mortality ranges between 90 to 98 
percent of total monetized health benefits, in part because we are 
unable to quantify a number of benefits categories (see Table VIII-2). 
These unquantified benefits may be substantial, although their 
magnitude is highly uncertain.

[[Page 44508]]

[GRAPHIC] [TIFF OMITTED] TP28AU09.002


[[Page 44509]]


[GRAPHIC] [TIFF OMITTED] TP28AU09.003

D. What Are the Limitations of the Benefits Analysis?

    Every benefit-cost analysis examining the potential effects of a 
change in environmental protection requirements is limited to some 
extent by data gaps, limitations in model capabilities (such as 
geographic coverage), and uncertainties in the underlying scientific 
and economic studies used to configure the benefit and cost models. 
Limitations of the scientific literature often result in the inability 
to estimate quantitative changes in health and environmental effects, 
such as potential increases in premature mortality associated with 
increased exposure to carbon monoxide. Deficiencies in the economics 
literature often result in the inability to assign economic values even 
to those health and environmental outcomes which can be quantified. 
These general uncertainties in the underlying scientific and economics 
literature, which can lead to valuations that are higher or lower, are 
discussed in detail in the draft RIA and its supporting references. Key 
uncertainties that have a bearing on the results of the benefit-cost 
analysis of the coordinated strategy include the following:
    <bullet> The exclusion of potentially significant and unquantified 
benefit categories (such as health, odor, and ecological benefits of 
reduction in air toxics, ozone, and PM);
    <bullet> Errors in measurement and projection for variables such as 
population growth;
    <bullet> Uncertainties in the estimation of future year emissions 
inventories and air quality;
    <bullet> Uncertainty in the estimated relationships of health and 
welfare effects to changes in pollutant concentrations including the 
shape of the C-R function, the size of the effect estimates, and the 
relative toxicity of the many components of the PM mixture;
    <bullet> Uncertainties in exposure estimation; and
    <bullet> Uncertainties associated with the effect of potential 
future actions to limit emissions.
    As Table VIII-5 indicates, total benefits are driven primarily by 
the reduction in premature mortalities each year. Some key assumptions 
underlying the premature mortality estimates include the following, 
which may also contribute to uncertainty:
    <bullet> Inhalation of fine particles is causally associated with 
premature death at concentrations near those experienced by most 
Americans on a daily basis. Although biological mechanisms for this 
effect have not yet been completely established, the weight of the 
available epidemiological, toxicological, and experimental evidence 
supports an assumption of causality. The impacts of including a 
probabilistic representation of causality were explored in the expert 
elicitation-based results of the PM NAAQS RIA.
    <bullet> All fine particles, regardless of their chemical 
composition, are equally potent in causing premature mortality. This is 
an important assumption, because PM produced via transported precursors 
emitted from marine engines may differ significantly from PM precursors 
released from electric generating units and other industrial sources. 
However, no clear scientific grounds exist for supporting differential 
effects estimates by particle type.
    <bullet> The C-R function for fine particles is approximately 
linear within the range of ambient concentrations under consideration. 
Thus, the estimates include health benefits from reducing fine 
particles in areas with varied concentrations of PM, including both 
regions that may be in attainment with PM<INF>2.5</INF> standards and 
those that are at risk of not meeting the standards.
    <bullet> There is uncertainty in the magnitude of the association 
between ozone and premature mortality. The range of ozone benefits 
associated with the proposed strategy is estimated based on the risk of 
several sources of ozone-related mortality effect estimates. In a 
recent report on the estimation of ozone-related premature mortality 
published by the National Research Council, a panel of experts and 
reviewers concluded that short-term exposure to ambient ozone is likely 
to contribute to premature deaths and that ozone-related mortality 
should be included in estimates of the health benefits of reducing 
ozone exposure.\182\ EPA has

[[Page 44510]]

requested advice from the National Academy of Sciences on how best to 
quantify uncertainty in the relationship between ozone exposure and 
premature mortality in the context of quantifying benefits.
---------------------------------------------------------------------------

    \182\ National Research Council (NRC), 2008. Estimating 
Mortality Risk Reduction and Economic Benefits from Controlling 
Ozone Air Pollution. The National Academies Press: Washington, DC.
---------------------------------------------------------------------------

    Emissions and air quality modeling decisions are made early in the 
analytical process. For this reason, the emission control scenarios 
used in the air quality and benefits modeling are slightly different 
than the coordinated strategy. The discrepancies impact the benefits 
analysis in three ways:
    <bullet> The air quality modeling used for the 2020 scenarios is 
based on inventory estimates that were modeled using incorrect boundary 
information. We believe the impact of this difference, while modest, 
likely leads to a small underestimate of the benefits that are 
presented in this section. Please refer to the Chapter 3 of the draft 
RIA for more information on the emissions excluded from the health 
impacts analysis.
    <bullet> The 2020 air quality modeling scenarios do not include 
emission reductions associated with the implementation of global 
controls (set through IMO) beyond the assumed ECA boundary of 200 
nautical miles (nm). Again, while we expect the impact of this 
difference is modest, the omission of these additional emission 
reductions likely leads to a small underestimate of the 2020 benefits 
presented in this section.
    <bullet> As described in Section II, the air quality modeling for 
the 2030 scenario reflects air quality impacts associated with an 
assumed ECA distance of 100 nm with global controls (set through IMO) 
beyond the ECA boundary. To estimate the 2030 benefits associated with 
a 200 nm ECA boundary, we transferred the relationship between modeled 
impacts between 100 nm and 200 nm ECA boundaries observed in 2020. For 
each health endpoint and associated valuation, we calculated a ratio 
based on the national-level estimate for the 200 nm and 100 nm scenario 
and applied that to the related 2030 100 nm estimate. For the final 
rulemaking, we plan to model the 2030 coordinated strategy to control 
ship emissions with a 200 nm boundary and global controls beyond.
    Despite the uncertainties described above, we believe this analysis 
provides a conservative estimate of the estimated economic benefits of 
the standards in future years because of the exclusion of potentially 
significant benefit categories that are not quantifiable at this time. 
Acknowledging benefits omissions and uncertainties, we present a best 
estimate of the total benefits based on our interpretation of the best 
available scientific literature and methods supported by EPA's 
technical peer review panel, the Science Advisory Board's Health 
Effects Subcommittee (SAB-HES). The National Academies of Science (NRC, 
2002) has also reviewed EPA's methodology for analyzing the health 
benefits of measures taken to reduce air pollution. EPA addressed many 
of these comments in the analysis of the final PM NAAQS.\183\ \184\ 
This analysis incorporates this most recent work to the extent 
possible.
---------------------------------------------------------------------------

    \183\ National Research Council (NRC). 2002. Estimating the 
Public Health Benefits of Proposed Air Pollution Regulations. The 
National Academies Press: Washington, DC.
    \184\ U.S. Environmental Protection Agency. October 2006. Final 
Regulatory Impact Analysis (RIA) for the Proposed National Ambient 
Air Quality Standards for Particulate Matter. Prepared by: Office of 
Air and Radiation. Available at http://www.epa.gov/ttn/ecas/ria.html.
---------------------------------------------------------------------------

E. Comparison of Costs and Benefits

    This section presents the cost-benefit comparison related to the 
expected impacts of our coordinated strategy for ocean-going vessels. 
In estimating the net benefits of the coordinated strategy, the 
appropriate cost measure is `social costs.' Social costs represent the 
welfare costs of a rule to society and do not consider transfer 
payments (such as taxes) that are simply redistributions of wealth. For 
this analysis, we estimate that the social costs of the coordinated 
program are equivalent to the estimated compliance costs of the 
program. While vessel owners and operators will see their costs 
increase by the amount of those compliance costs, they are expected to 
pass them on in their entirety to consumers of marine transportation 
services in the form of increased freight rates. Ultimately, these 
costs will be borne by the final consumers of goods transported by 
ocean-going vessels in the form of higher prices for those goods. The 
social benefits of the coordinated strategy are represented by the 
monetized value of health and welfare improvements experienced by the 
U.S. population. Table VIII-6 contains the estimated social costs and 
the estimated monetized benefits of the coordinated strategy.
    The results in Table VIII-6 suggest that the 2020 monetized 
benefits of the coordinated strategy are greater than the expected 
costs. Specifically, the annual benefits of the total program will 
range between $47 to $110 billion annually in 2020 using a three 
percent discount rate, or between $42 to $100 billion assuming a 7 
percent discount rate, compared to estimated social costs of 
approximately $1.9 billion in that same year. These benefits are 
expected to increase to between $110 and $280 billion annually in 2030 
using a three percent discount rate, or between $100 and $260 billion 
assuming a 7 percent discount rate, while the social costs are 
estimated to be approximately $3.1 billion. Though there are a number 
of health and environmental effects associated with the coordinated 
strategy that we are unable to quantify or monetize (see Table VIII-2), 
the benefits of the coordinated strategy far outweigh the projected 
costs.
    Using a conservative benefits estimate, the 2020 benefits outweigh 
the costs by a factor of 22. Using the upper end of the benefits range, 
the benefits could outweigh the costs by a factor of 58. Likewise, in 
2030 benefits outweigh the costs by at least a factor of 32 and could 
be as much as a factor of 90. Thus, even taking the most conservative 
benefits assumptions, benefits of the coordinated strategy clearly 
outweigh the costs.

  Table VIII-6--Summary of Annual Benefits and Costs Associated with a
         Coordinated U.S. Strategy To Control Ship Emissions \a\
                       [Millions of 2006 dollars]
------------------------------------------------------------------------
           Description                   2020                2030
------------------------------------------------------------------------
Total Estimated Costs \b\.......  $1,900............  $3,100.
Total Estimated Health Benefits
 c, d, e, f
    3 percent discount rate.....  $47,000 to          $110,000 to
                                   $110,000.           $280,000.
    7 percent discount rate.....  $42,000 to          $100,000 to
                                   $100,000.           $260,000.
Annual Net Benefits (Total
 Benefits--Total Costs)
    3 percent discount rate.....  $45,000 to          $110,000 to
                                   $110,000.           $280,000.

[[Page 44511]]

 
    7 percent discount rate.....  $40,000 to $98,000  $97,000 to
                                                       $260,000.
------------------------------------------------------------------------
Notes:
\a\ All estimates represent annual benefits and costs anticipated for
  the years 2020 and 2030. Totals are rounded to two significant digits
  and may not sum due to rounding.
\b\ The calculation of annual costs does not require amortization of
  costs over time. Therefore, the estimates of annual cost do not
  include a discount rate or rate of return assumption (see Chapter 7 of
  the draft RIA). In Chapter 7, however, we use both a 3 percent and 7
  percent social discount rate to calculate the net present value of
  total social costs consistent with EPA and OMB guidelines for
  preparing economic analyses.
\c\ Total includes ozone and PM2.5 benefits. Range was developed by
  adding the estimate from the Bell et al., 2005 ozone premature
  mortality function to PM2.5-related premature mortality derived from
  the ACS (Pope et al., 2002) and Six-Cities (Laden et al., 2006)
  studies.
\d\ Annual benefits analysis results reflect the use of a 3 percent and
  7 percent discount rate in the valuation of premature mortality and
  nonfatal myocardial infarctions, consistent with EPA and OMB
  guidelines for preparing economic analyses.
\e\ Valuation of premature mortality based on long-term PM exposure
  assumes discounting over the SAB recommended 20-year segmented lag
  structure described in the Regulatory Impact Analysis for the Final
  Clean Air Interstate Rule (March, 2005).
\f\ Not all possible benefits or disbenefits are quantified and
  monetized in this analysis. Potential benefit categories that have not
  been quantified and monetized are listed in Table VIII-2.

IX. Alternative Program Options

    EPA's coordinated strategy to control emissions from ocean-going 
vessels consists of a number of components including Clean Air Act 
standards for Category 3 engines and designation of an ECA for U.S. 
coasts through amendment to MARPOL Annex VI. The coordinated strategy 
will ensure that all ships operating within 200 nautical miles of U.S. 
coasts meet the most stringent NO<INF>X</INF> standards and fuel sulfur 
limits by 2015 (fuel sulfur) and 2016 (engine NO<INF>X</INF>).
    The air quality and benefits analysis we performed for the 
coordinated strategy suggests that substantial human health and 
environmental benefits can be obtained from additional reductions in 
emissions from ocean-going vessels, and many stakeholders have 
expressed a desire for additional NO<INF>X</INF> reductions from OGV in 
earlier years, prior to the effective dates for the Tier 2 and Tier 3 
NO<INF>X</INF> limits. As described in Section I, above, EPA has a 
number of port initiatives under our National Clean Diesel Campaign to 
reduce emissions from this sector. These include recognition for 
efforts by port authorities and their customers to reduce emissions 
from OGV through a variety of efforts, grants under the Energy Policy 
Act of 2005 Diesel Emissions Reduction Program to electrify piers and 
repower C1 and C2 marine vessels, and grants under the Clean Air Act to 
demonstrate sea water scrubbers and to provide incentives to ship 
operators to use lower sulfur fuels.\185\ EPA has also sponsored a 
number of workshops and conferences focused on exchanging technical 
information about emissions reduction techniques for ships (Clean Ships 
Conference in San Diego in 2007, Faster Freight meetings on East and 
West coasts, and up-coming workshop with MARAD). EPA welcomes comment 
on ways in which the NCDC can be improved through ideas such as 
incentives (including financing schemes) to facilitate faster 
introduction of cleaner fuels and engine technologies, eco-speed 
programs, and adoption of other emission reduction methods that can be 
used on a vessel-specific or port-specific basis.
---------------------------------------------------------------------------

    \185\ Clean Ports USA (see http://www.epa.gov/cleandiesel/ports 
for further information).
---------------------------------------------------------------------------

    In addition, we evaluated several programmatic alternatives 
including mandating the use of shoreside power in our CAA program, 
pulling the effective date of the CAA Tier 3 standards ahead, and 
various options for addressing emissions from existing engines. We also 
considered action under the Clean Air Act to apply the Tier 3 standards 
to foreign vessels that operate in the United States. However, as 
explained in more detail in Section V.D, foreign vessels will be 
required to comply with the Annex VI NO<INF>X</INF> and fuel sulfur 
limits through U.S. ECA designation and therefore it is unnecessary to 
take action under the Act at this time.
    The remainder of this section presents a summary of our analysis of 
these alternative control scenarios. We are interested in comments on 
each of these programmatic alternatives.

A. Mandatory Cold Ironing Requirement

    To provide earlier air quality benefits, some commenters suggested 
adopting earlier Tier 3 NO<INF>X</INF> standards and fuel sulfur 
limits, requiring standards for existing engines, and/or requiring the 
use of shoreside power while ships are at dock (called ``cold-
ironing''). Shoreside power is an effective way to reduce emissions 
from ships while they are at berth. The U.S. Navy is a pioneer and has 
used cold-ironing successfully for many years. However, to be 
successful, this strategy requires changes to both the ship and the 
port. First, the ship must be equipped to use shore power through 
changes to its equipment and electrical systems. The IMO, working with 
the International Organization for Standardization (ISO), is currently 
developing harmonized requirements for these systems, and we believe it 
would be more effective for EPA to consider requiring such systems once 
the technology is better defined.\186\ Second, the port terminal must 
ensure that the electricity is available at the berths. This is a 
significant barrier to the adoption of shoreside power on a national 
basis. However, some port authorities already require cold-ironing for 
frequent-calling vessels and are pursuing additional reductions from 
shoreside port equipment. The Ports of Los Angeles, Long Beach, 
Seattle, and Tacoma are among those with cold-ironing programs. EPA is 
working with East Coast ports to develop plans for shoreside power as 
part of port development plans.
---------------------------------------------------------------------------

    \186\ See MEPC 59/4/3 (9 April 2009), Response to IMO 
Secretariat's invitation to ISO to make recommendations regarding 
fuel characteristics and parameters addressing air quality, ship 
safety, engine performance and crew health, Submitted by the 
International Organization for Standardization (ISO).
---------------------------------------------------------------------------

B. Earlier Adoption of CAA Tier 3 Standards

    We considered a programmatic alternative that would pull ahead the 
CAA Tier 3 NO<INF>X</INF> standard from 2016 to 2014. This would 
require engine manufacturers to apply SCR two years earlier than they 
would be required to under the MARPOL Annex VI program.
    This option presents serious technical feasibility challenges. 
Beginning in 2011, manufacturers will be introducing

[[Page 44512]]

new engine-based technologies to meet the Tier 2 standards. We believe 
that these new NO<INF>X</INF>-reducing technologies and emission 
control approaches will also be the basis for Tier 3 engine designs. It 
will be necessary for manufacturers to design, develop, and validate 
these engine-based technologies before they can be used in conjunction 
with exhaust aftertreatment or additional engine-based technologies 
required to meet Tier 3 standards. Once these Tier 2 technologies are 
mature and well-understood, they can be further refined and developed 
for use with the additional NO<INF>X</INF> control technologies. The 
original five-year period between Tier 2 and Tier 3 was deemed 
challenging but feasible for engine manufacturers to design the Tier 3 
engines and incorporate those engines into new vessel designs. For this 
reason, we do not believe it is technically feasible to advance the 
Tier 3 standards for new engines earlier.
    Nevertheless, if such an alternative were feasible, we can estimate 
the inventory benefits associated with those earlier NO<INF>X</INF> 
reductions. Cumulative NO<INF>X</INF> emission reductions for the 
period 2014 to 2023 as a result of the coordinated strategy presented 
in this Federal Register notice are estimated to be 3 million short 
tons NO<INF>X</INF> reduction beyond the Tier 1 standards (Table IX-1). 
Introducing the CAA Tier 3 standards two years earlier than proposed 
would affect only U.S. vessels and would reduce an additional 0.07 
million short tons of reduction of NO<INF>X</INF> beyond our 
coordinated strategy through 2023. The method we used to estimate these 
inventory impacts are presented in the draft RIA, Appendix 3B.

 Table IX-1--Comparison of NOX Reductions Through 2023 With Adoption of
                     CAA Tier 3 in 2016 Versus 2014
------------------------------------------------------------------------
                                                        NOX Emissions
                     Scenario                        through 2023 (short
                                                            tons)
------------------------------------------------------------------------
Base Case.........................................            10,494,636
(Tier 1 only NOX standards).......................
Primary Case......................................             7,515,389
(2016 NOX standards)..............................
Alternative 1.....................................             7,444,866
(2014 NOX standards for U.S. Vessels).............
------------------------------------------------------------------------

    Due to the technical concerns described above, our review of this 
alternative leads us to conclude that advancing the introduction of the 
Tier 3 NO<INF>X</INF> standards is not a feasible way to improve 2023 
NO<INF>X</INF> reductions and could create significant problems for 
implementation of the overall coordinated strategy. Nevertheless, we 
request comment on this alternative and whether it could be modified to 
improve its feasibility.

C. Standards for Existing Engines

    We examined a third programmatic alternative, including 
improvements in NO<INF>X</INF> emissions from pre-2016 engines. A 
control program for existing engines would help many areas, notably the 
South Coast of California, to achieve their ozone and PM NAAQS goals 
through Category 3 engine NO<INF>X</INF> reductions sooner than fleet 
turnover would allow. In this section we describe several methods to 
control emissions from existing engines. We request comment on all 
aspects of these alternatives.
(1) Clean Air Act Remanufacturing Program
    Our recently-finalized emission control program for marine diesel 
engines up to 30 liters per cylinder displacement includes standards 
that will apply to existing engines at the time they are remanufactured 
(73 FR 25098, May 6, 2008, at 25130). In that program, we define ``new 
marine engine'' to include an engine that has been remanufactured, 
which is defined as replacement of all cylinder liners, either in one 
event or over a five-year period. Vessel owners/operators and engine 
rebuilders who remanufacture those engines would be required to use a 
certified remanufacture system when an engine is remanufactured if such 
a certified system is available; if there is no certified kit, there is 
no requirement until the time of the next remanufacture event. The 
program applies to engines with maximum engine power greater than 600 
kW and manufactured in 1973 or later, through Tier 2 (2012-14, 
depending on engine size). A certified marine remanufacture system must 
achieve a 25 percent reduction in PM emissions compared to the engine's 
measured baseline emissions level without increasing NO<INF>X</INF> 
emissions.
    The program, which is similar to locomotive remanufacture program, 
was possible to adopt under the Clean Air Act because many commercial 
Category 1 and 2 engines undergo periodic full like-new rebuilds to 
ensure their dependability by returning the engine to as-new condition. 
Many manufacturers provide guidance for a full rebuild to as-new 
condition, which might include replacing piston rings, heads, bearings, 
and gear train/camshaft as well as piston liners. Based on discussions 
with engine manufacturers, we determined that replacing all cylinder 
liners is a simple and clear indicator that the servicing being done is 
extensive enough for the engine to be considered functionally 
equivalent to a freshly manufactured engine, both mechanically and in 
terms of how it is used. Therefore, we defined remanufacture as the 
removal and replacement of all cylinder liners, either during a single 
maintenance event or over a five-year period. Marine diesel engines are 
not considered to be remanufactured if the rebuilding process falls 
short of this definition (i.e., the cylinder liners are removed and 
replaced over more than a five-year period).
    We do not think it is possible to adopt a similar program for 
Category 3 engines at this time. Even though Category 3 engines may 
remain in the fleet for several decades, they are not maintained in the 
same way as Category 1 or Category 2 engines. Category 3 engines are 
very large, with cylinder sizes of 90 liters not uncommon. Maintenance 
for these engines is very different than that for Category 1 or 
Category 2 engines. Specifically, piston liners, as well as other 
engine components, are not replaced unless there is a catastrophic 
failure. Our analysis of available information suggests that cylinder 
liners for engines this large are inspected based on hours of 
operation, with the standard interval being about 6,000 to 12,000 hours 
for engines operating on residual fuel and up to 25,000 hours for 
engines operating on distillate fuel.

[[Page 44513]]

Engine manufacturers specify how this inspection is to be performed. 
Typically, the liner is inspected, measured, dressed, honed or replaced 
if beyond specifications. As each cylinder has individual wear 
characteristics, the complete engine liner replacement is not normally 
done on all cylinders at one time, since this would be much more 
expensive than the maintenance according to the manufacturer 
specifications. If there is an extended drydock, it is possible that a 
ship owner may take advantage of this time to inspect and work on 
several or all cylinders, but it is doubtful that a complete cylinder 
liner replacement would be done due to the expense. These engines are 
an integral part of the vessel design, and it would be difficult to 
replace the cylinder liners if it is not absolutely necessary.
    Other maintenance occurs on a cylinder-specific basis and is not 
comprehensive enough to return the engine to as-new condition. Finally, 
engine manufacturers have informed us that these engines are built to 
last, with most vessels being scrapped before the engine is worn out. 
Operating at lower speeds (130 rpm) also reduces wear on the cylinders.
    Based on the above information and because there is no specific 
maintenance action common to all Category 3 engines that (1) would 
return an engine to as-new condition and (2) could be used to identify 
engines as being remanufactured and therefore ``new,'' we conclude it 
is not possible to extend the marine remanufacture program to Category 
3 engines at this time.
(2) MARPOL Annex VI Existing Engine Program
    MARPOL Annex VI has two sets of NO<INF>X</INF> provisions that 
apply to existing engines. These requirements will apply to engines on 
U.S. vessels through the Act to Prevent Pollution from Ships and are 
briefly described in this section. In addition to these NO<INF>X</INF> 
requirements, MARPOL Annex VI will provide significant PM reductions 
from existing vessels through its fuel sulfur requirements, 
particularly in a U.S. ECA. These PM benefits are described elsewhere 
in this Federal Register notice.
    First, Annex VI requires any engine above 130 kW that undergoes a 
major conversion to comply with the standards that are in effect at the 
time that major conversion takes place. Major conversion means the 
engine is replaced by a non-identical engine, an engine is added to the 
vessel, the engine's maximum continuous rating is increased by more 
than 10 percent, or the engine undergoes any modification that would 
increase its emissions.
    Second, the recent amendments to Annex VI add a provision that 
requires all engines at or above 90 liters per cylinder displacement 
and above 5,000 kW that were built between 1990 through 1999 to comply 
with the Tier I NO<INF>X</INF> limits if there is a certified Approved 
Method (remanufacture system) for that engine. This kit-based approach 
is similar to our domestic program except it is triggered solely by the 
existence of a certified remanufacture system and does not also require 
a specific remanufacture event (i.e., replacing all cylinder liners 
either all at once or within a period of five years). The Tier 1 
NO<INF>X</INF> limits are appropriate for this group of engines because 
they often are based on the same or a similar engine platform as the 
Tier 1 engines and the emission control techniques that apply to Tier 1 
engines should also be applicable to many of the pre-Tier 1 engines. 
Pre-1990 engines were excluded from this program because their base 
engine platforms can be very different from Tier 1 engines; because 
many of the original engine manufacturers of these engines are no 
longer in business; and because the population of these engines is 
expected to be too small in 2010 to warrant emission controls. Engine 
manufacturers are expected to begin certifying Approved Methods when 
the Annex amendments go into force in July 2010; owners will be 
required to install the kits at the time of the first renewal survey 
that occurs 12 months after the kit is certified.
    The combination of the Annex VI existing engine program to reduce 
NO<INF>X</INF> emissions from very large Category 3 engines and the 
Annex VI fuel sulfur program will significantly reduce NO<INF>X</INF> 
and PM emissions from existing vessels. Because these requirements will 
apply to Category 3 engines on U.S. and foreign vessels through APPS, 
it is not necessary to adopt these same requirements under our Clean 
Air Act authority to protect U.S. air quality or to implement Annex VI.
(3) Voluntary Marine Verification Program
    We are considering a programmatic alternative to encourage 
additional NO<INF>X</INF> reductions from Category 3 engines on ocean-
going vessels. In combination with state or local incentives, this 
program would provide incentives for owners to achieve, on a voluntary 
basis, greater emission reductions earlier than required for new 
Category 3 engines, and to retrofit existing Category 3 engines with 
more advanced NO<INF>X</INF> emission control technologies.
    In this approach, States, localities, and ports would encourage 
vessel owners to participate in this program through specially-designed 
incentive plans. This would allow States, localities, and ports the 
flexibility to tailor use of the program to their specific needs.
    To facilitate such state or local programs, EPA would set up a 
voluntary Marine Verification Program as an extension of our current 
diesel retrofit program. Under this program, we would provide a 
verification, based on simplified emission testing, for any vessel 
owner who provides data to show that the Category 3 propulsion engines 
on the relevant vessel achieve a more stringent tier of NO<INF>X</INF> 
limits, Tier 2 or Tier 3, than otherwise applies to those engines. 
While verification would not be equivalent to EPA certification (the 
base engine certification would remain the same), it would provide 
assurance to the states and localities that adopt such programs that 
the emission reductions are occurring. The test methods used to make 
this demonstration would be the same as those that would be used to 
comply with the production testing requirements for new engines (see 
Section VI.A.1.d, above). The verification could be periodically 
reviewed to ensure the engine continues to meet the verified emission 
levels. This could occur at the time of the vessel certification 
surveys required by MARPOL Annex VI, either the intermediate survey 
(every two and a half years) or the renewal survey (every five years).
    The voluntary Marine Verification Program would be available to 
Category 3 propulsion engines on new or existing vessels, and would be 
based on achieving the Tier 2 or Tier 3 NO<INF>X</INF> limits and not 
on a percent reduction from a baseline. Owners could achieve these 
NO<INF>X</INF> limits by adjusting the engine, retrofitting engine 
components, or retrofitting with an aftertreatment device. However, we 
would not consider an exhaust gas scrubber to be an acceptable control 
strategy for reducing NO<INF>X</INF> emissions (see Section V.C.2.b, 
above).
    Unlike a remanufacture program, which relies on the certification 
of remanufacture systems that would apply to all specified engines, the 
Marine Verification Program would apply to Category 3 propulsion 
engines on a vessel-specific basis. It would be up to the individual 
vessel owner to determine how to reduce the NO<INF>X</INF> emissions 
from the engines on a vessel, and to demonstrate, per the testing

[[Page 44514]]

protocols outlined above, that the relevant engines achieve the more 
stringent NO<INF>X</INF> limit. Note that an engine verification would 
not create the presumption that a verified retrofit constitutes a 
remanufacture system or Certified Approved Method that must be applied 
to all engines of the same model. However, we seek comment on whether 
there are ways to approve groups of engine in a verification to reduce 
the cost of the program by spreading design costs over more engines.
    Participation in the Marine Verification Program would be 
completely voluntary: no state, locality, or port authority would be 
required to adopt this program, and no vessel owner would be required 
to retrofit a NO<INF>X</INF> emission control technology.
    We request comment on whether such a voluntary program would be 
beneficial to states and localities that seek earlier NO<INF>X</INF> 
reductions, and whether port authorities would take advantage of it in 
the context of various incentive programs.
    We also seek comment on how such a program could be applied in the 
context of the MARPOL Annex VI requirements for major conversions. 
Specifically, Regulation 13 of Annex VI requires that an engine that 
undergoes a major conversion be certified to the NO<INF>X</INF> limits 
in effect at the time of the major conversion. A major conversion is 
defined as replacing an existing engine or adding an engine to a 
vessel, increasing the maximum continuous power of a vessel by more 
than ten percent, or by substantially modifying an engine. The 
NO<INF>X</INF> Technical Code defines substantial modification as any 
modification that ``could potentially cause the engine to exceed'' the 
Regulation 13 NO<INF>X</INF> limits. The NO<INF>X</INF> Technical Code 
further specifies that, in the case of engines installed on vessels 
constructed before January 1, 2000, the impact on emissions must be 
shown by an emissions test. We do not think that participation in a 
Voluntary Marine Verification Program would trigger these requirements 
since ships would not be making adjustments that would increase 
emissions. However, we seek comment on whether they imply that a 
Portable Emissions Measurement System (PEMS)-based emission measurement 
should not be used and the simplified measurement methods contained in 
the NO<INF>X</INF> Technical Code should be used instead in order to be 
in compliance with Annex VI and the NO<INF>X</INF> Technical Code. If 
the latter is the case, we also seek comment on the cost of such 
emission measurement.
    We seek comment on how the MARPOL Annex VI documentation for an 
engine, including its technical file, would need to be adjusted for a 
verified engine. We also seek comment on how this program would apply 
to foreign-flagged vessels. Specifically, if the Substantial 
Modification provisions of the NO<INF>X</INF> Technical Code are 
triggered by the Voluntary Marine Verification Program, it could also 
be necessary that vessels built before 2000 obtain an Engine 
International Air Pollution Prevention certificate from its flag state 
Administration. The ship could also be required to obtain and maintain 
the documentation that goes with it (Engine Technical File, Record Book 
of Engine Parameters). EPA would not be able to re-issue an EIAPP for 
vessels not flagged in the United States. It would be up to 
participating vessel owners to obtain a new EIAPP or a revised EIAPP 
from their flag Administration. We seek comment on whether this would 
prevent owners from participating in the program.

X. Public Participation

    We request comment on all aspects of the emission control program 
that we are proposing under the CAA. This section describes how you can 
participate in this process.

A. How Do I Submit Comments?

    We are opening a formal comment period by publishing this document. 
We will accept comments during the period indicated in the DATES 
section at the beginning of this document. If you have an interest in 
the proposed emission control program described in this document, we 
encourage you to comment on any aspect of this rulemaking. We also 
request comment on specific topics with respect to our CAA proposal 
identified throughout this document.
    Your comments will be most useful if you include appropriate and 
detailed supporting rationale, data, and analysis. Commenters are 
especially encouraged to provide specific suggestions for any changes 
to any aspect of the regulations that they believe need to be modified 
or improved. You should send all comments, except those containing 
proprietary information, to our Air Docket (see ADDRESSES located at 
the beginning of this document) before the end of the comment period.
    You may submit comments electronically, by mail, or through hand 
delivery/courier. To ensure proper receipt by EPA, identify the 
appropriate docket identification number in the subject line on the 
first page of your comment. Please ensure that your comments are 
submitted within the specified comment period. Comments received after 
the close of the comment period will be marked ``late.'' EPA is not 
required to consider these late comments. If you wish to submit 
Confidential Business Information (CBI) or information that is 
otherwise protected by statute, please follow the instructions in 
Section X.B.

B. How Should I Submit CBI to the Agency?

    Do not submit information that you consider to be CBI 
electronically through the electronic public docket, http://www.regulations.gov, or by e-mail. Send or deliver information 
identified as CBI only to the following address: U.S. Environmental 
Protection Agency, Assessment and Standards Division, 2000 Traverwood 
Drive, Ann Arbor, MI 48105, Attention Docket ID EPA-HQ-OAR-2007-0121. 
You may claim information that you submit to EPA as CBI by marking any 
part or all of that information as CBI (if you submit CBI on disk or CD 
ROM, mark the outside of the disk or CD ROM as CBI and then identify 
electronically within the disk or CD ROM the specific information that 
is CBI). Information so marked will not be disclosed except in 
accordance with procedures set forth in 40 CFR part 2.
    In addition to one complete version of the comment that includes 
any information claimed as CBI, a copy of the comment that does not 
contain the information claimed as CBI must be submitted for inclusion 
in the public docket. If you submit the copy that does not contain CBI 
on disk or CD ROM, mark the outside of the disk or CD ROM clearly that 
it does not contain CBI. Information not marked as CBI will be included 
in the public docket without prior notice. If you have any questions 
about CBI or the procedures for claiming CBI, please consult the person 
identified in the FOR FURTHER INFORMATION CONTACT section at the 
beginning of this document.

C. Will There Be a Public Hearing?

    We intend to hold two public hearings, one in the New York area and 
one in the Los Angeles area. We will publish information about the 
hearings on our Website, http://www.epa.gov/otaq/oceanvessels.htm.
    If you would like to present testimony at the public hearings, we 
ask that you notify the contact person listed under FOR FURTHER 
INFORMATION CONTACT at least ten days before the hearing. You should 
estimate the time you will need for your presentation and identify any 
needed audio/visual equipment. We

[[Page 44515]]

suggest that you bring copies of your statement or other material for 
the EPA panel and the audience. It would also be helpful if you send us 
a copy of your statement or other materials before the hearing.
    We will make a tentative schedule for the order of testimony based 
on the notifications we receive. This schedule will be available on the 
morning of the hearing. In addition, we will reserve a block of time 
for anyone else in the audience who wants to give testimony.
    We will conduct the hearing informally, and technical rules of 
evidence will not apply. We will arrange for a written transcript of 
the hearing and keep the official record of the hearing open for 30 
days to allow you to submit supplementary information. You may make 
arrangements for copies of the transcript directly with the court 
reporter.

D. Comment Period

    The comment period for this rule will end on September 28, 2009.

E. What Should I Consider as I Prepare My Comments for EPA?

    You may find the following suggestions helpful for preparing your 
comments:
    <bullet> Explain your views as clearly as possible.
    <bullet> Describe any assumptions that you used.
    <bullet> Provide any technical information and/or data you used 
that support your views.
    <bullet> If you estimate potential burden or costs, explain how you 
arrived at your estimate.
    <bullet> Provide specific examples to illustrate your concerns.
    <bullet> Offer alternatives.
    <bullet> Make sure to submit your comments by the comment period 
deadline identified.
    <bullet> To ensure proper receipt by EPA, identify the appropriate 
docket identification number in the subject line on the first page of 
your response. It would also be helpful if you provided the name, date, 
and Federal Register citation related to your comments.

XI. Statutory and Executive Order Reviews

    As explained in Section I.A, the program we are proposing is part 
of a coordinated strategy to address emissions from ocean-going 
vessels. That coordinated strategy includes, among other actions, the 
combination the global Tier 2 NO<INF>X</INF> standards included in the 
amendments to Annex VI and the ECA Tier 3 NO<INF>X</INF> limits and 
fuel sulfur limits that will apply when the U.S. coasts are designated 
as an ECA through an additional amendment to Annex VI. These engine and 
fuel standards will be enforceable for all vessels, U.S. and foreign, 
operating in the United States through the Act to Prevent Pollution 
from Ships. Because the coordinated strategy in its entirety is 
economically significant (see cost analysis in Section V), the 
components we are adopting in this rule (engine controls for Category 3 
engines on U.S. vessels under our Clean Air Act program, as required by 
section 213 of the Act that are identical to the MARPOL Annex VI 
NO<INF>X</INF> limits; limits on hydrocarbon and carbon monoxide 
emissions for Category 3 engines; PM measurement requirement; changes 
to our Clean Air Act diesel fuel program to allow production and sale 
of ECA-compliant fuel; changes to our emission control program for 
smaller marine diesel engines to harmonize with the Annex VI 
NO<INF>X</INF> requirements, for U.S. vessels that operate 
internationally) may also be considered to be economically significant.

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), 
this action is a ``significant regulatory action'' because it raises 
novel legal or policy issues due to the international nature of the use 
of Category 3 marine diesel engines. Accordingly, EPA submitted this 
action to the Office of Management and Budget (OMB) for review under EO 
12866 and any changes made in response to OMB recommendations have been 
documented in the docket for this action.
    In addition, EPA prepared an analysis of the potential costs and 
benefits associated with our coordinated strategy for controlling 
emissions from ocean-going vessels. While the costs of the coordinated 
strategy are ``significant,'' the costs of the CAA program described in 
this proposal are minimal, as explained above in the introduction to 
this section. This analysis is contained in the draft Regulatory Impact 
Analysis that was prepared, and is available in the docket for this 
rulemaking and at the docket Internet address listed under ADDRESSES 
above.

B. Paperwork Reduction Act

    The information collection requirements in this proposed rule have 
been submitted for approval to the Office of Management and Budget 
(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The 
Information Collection Request (ICR) document prepared by EPA has been 
assigned EPA ICR Number 2345.01.
    Section 208(a) of the Clean Air Act requires that manufacturers 
provide information the Administrator may reasonably require to 
determine compliance with the regulations; submission of the 
information is therefore mandatory. We will consider confidential all 
information meeting the requirements of section 208(c) of the Clean Air 
Act. Recordkeeping and reporting requirements for manufacturers would 
be pursuant to the authority of section 208 of the Clean Air Act.
    The data we require in this ICR is necessary to comply with Title 
II of the Clean Air Act, as amended in 1990. The Act directs us to 
adopt regulations for nonroad engines if we determine those engines 
contribute significantly to air pollution in the U.S. Now that we have 
made this determination, the Act directs us to set emission standards 
for any category of nonroad engines that contribute to air quality 
nonattainment in two or more areas in the U.S. We can only meet the 
requirements of the Act by collecting data from the regulated industry. 
Also, we will only have an effective program if we know that these 
engines maintain their certified emission level throughout their 
operating lives.
    The burden for certification testing is generally based on 
conducting two engine tests for each engine family, then using that 
test data for several years. The manufacturer's application for 
certification involves an extensive effort the first year, followed by 
relatively little effort in subsequent years. We estimate that 
manufacturers will conduct new certification testing every five years; 
the costs have been estimated on an annual average basis. In addition 
to testing, manufacturers must prepare the application for 
certification and maintain appropriate records. We have estimated the 
cost of these combined activities, which include engineering and 
clerical effort, to be about $20,000 for each Category 3 marine diesel 
engine per certification cycle. As with the testing costs, we are 
presenting annual average costs. The burden for production-line testing 
is based on an industry-wide calculation. Rebuilders, including 
operators of marine vessels with Category 3 engines, must keep records 
as needed to show that rebuilt engines continue to meet emission 
standards, consistent with the manufacturer's original design. In 
addition, owners and operators of marine vessels with Category 3 
engines must record information about their location when rebuilding 
engines or

[[Page 44516]]

making other adjustments and send minimal annual notification to EPA to 
show that engine maintenance and adjustments have not caused engines to 
be noncompliant. Burden is defined at 5 CFR 1320.3(b).
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9.
    To comment on the Agency's need for this information, the accuracy 
of the provided burden estimates, and any suggested methods for 
minimizing respondent burden, EPA has established a public docket for 
this rule, which includes this ICR, under Docket ID number EPA-HQ-OAR-
2007-0121. Submit any comments related to the ICR to EPA and OMB. See 
the ADDRESSES section at the beginning of this notice for where to 
submit comments to EPA. Send comments to OMB at the Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
725 17th Street, NW., Washington, DC 20503, Attention: Desk Office for 
EPA. Since OMB is required to make a decision concerning the ICR 
between 30 and 60 days after August 28, 2009, a comment to OMB is best 
assured of having its full effect if OMB receives it by September 28, 
2009. The final rule will respond to any OMB or public comments on the 
information collection requirements contained in this proposal.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of this rule on small 
entities, small entity is defined as: (1) A small business that is 
primarily engaged in manufacture of large diesel marine engines as 
defined by NAICS code 333618 with 1,000 or fewer employees (based on 
Small Business Administration size standards) or a small business 
primarily engaged in the shipbuilding and repairing as defined by NAICS 
code 336611 with 1,000 or fewer employees (based on Small Business 
Administration size standards); (2) a small governmental jurisdiction 
that is a government of a city, county, town, school district or 
special district with a population of less than 50,000; and (3) a small 
organization that is any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.
    After considering the economic impacts of today's proposed rule on 
small entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. This 
proposed rule will not impose any requirements on small entities. There 
are no small entities in this regulated industry. We continue to be 
interested in the potential impacts of the proposed rule on small 
entities and welcome comments on issues related to such impacts.

D. Unfunded Mandates Reform Act

    This rule does not contain a Federal mandate that may result in 
expenditures of $100 million or more for State, local, and tribal 
governments, in the aggregate, or the private sector in any one year. 
While the costs of the coordinated strategy exceed the $100 million per 
year threshold for the private sector, the costs of the components of 
that strategy that are the subject of this rule are less than $100 
million per year, as explained in the introduction to this section and 
in Section VII. Therefore, this action is not subject to the 
requirements of Sections 202 or 205 of the UMRA. This action is also 
not subject to the requirements of Section 203 of UMRA because it 
contains no regulatory requirements that might significantly or 
uniquely affect small governments.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.''
    This proposed rule does not have federalism implications. It will 
not have substantial direct effects on the States, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government, 
as specified in Executive Order 13132. The proposed rule will be 
implemented at the Federal level and impose compliance obligations only 
on private industry. Thus, Executive Order 13132 does not apply to this 
rule.
    Although Section 6 of Executive Order 13132 does not apply to this 
rule, EPA did consult with representatives of various State and local 
governments in developing this rule. EPA consulted with representatives 
from the National Association of Clean Air Agencies (NACAA, formerly 
STAPPA/ALAPCO), the Northeast States for Coordinated Air Use Management 
(NESCAUM), and the California Air Resources Board (CARB).
    In the spirit of Executive Order 13132, and consistent with EPA 
policy to promote communications between EPA and State and local 
governments, EPA specifically solicits comment on this proposed rule 
from State and local officials.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This proposed rule does not have tribal implications, as specified 
in Executive Order 13175 (65 FR 67249, November 9, 2000). The rule will 
be implemented at the Federal level and impose compliance costs only on 
manufacturers of marine engines and marine vessels. Tribal governments 
will be affected only to the extent they purchase and use the regulated 
engines and vehicles. Thus, Executive Order 13175 does not apply to 
this action.

G. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    This action is not subject to EO 13045 (62 FR 19885, April 23, 
1997) because it is not economically significant as defined in EO 
12866. While the costs of the coordinated strategy are ``significant,'' 
the costs of the CAA program described in this proposal are minimal, as 
explained above in the introduction to this section. The health and 
risk assessments associated with the coordinated strategy for 
controlling emissions from ocean-going vessels are contained in Section 
II.A of the preamble and Chapter 2 of the draft RIA, which has been 
placed in the public docket under Docket ID number EPA-HQ-OAR-2007-
0121.
    The public is invited to submit or identify peer-reviewed studies 
and data, of which EPA may not be aware, that assessed results of early 
life exposure to the pollutants addressed by this proposed rule.

[[Page 44517]]

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355 
(May 22, 2001)), requires EPA to prepare and submit a Statement of 
Energy Effects to the Administrator of the Office of Information and 
Regulatory Affairs, Office of Management and Budget, for certain 
actions identified as ``significant energy actions.'' Section 4(b) of 
Executive Order 13211 defines ``significant energy actions'' as ``any 
action by an agency (normally published in the Federal Register) that 
promulgates or is expected to lead to the promulgation of a final rule 
or regulation, including notices of inquiry, advance notices of 
proposed rulemaking, and notices of proposed rulemaking: (1)(i) That is 
a significant regulatory action under Executive Order 12866 or any 
successor order, and (ii) is likely to have a significant adverse 
effect on the supply, distribution, or use of energy; or (2) that is 
designated by the Administrator of the Office of Information and 
Regulatory Affairs as a significant energy action.'' We have prepared a 
Statement of Energy Effects for this action as follows.
    This rule's potential effects on energy supply, distribution, or 
use have been analyzed and are discussed in detail in Section 4.6 of 
the RIA. In summary, while we project that this rule would result in an 
energy effect that exceeds the 10,000 barrel per day change in crude 
oil production threshold noted in E.O. 13211, this rule does not 
significantly affect the energy use, production, or distribution beyond 
what is required by Annex VI of the International Convention for the 
Prevention of Pollution from Ships.

I. National Technology Transfer Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, 12(d) (15 U.S.C. 272 note) 
directs EPA to use voluntary consensus standards in its regulatory 
activities unless to do so would be inconsistent with applicable law or 
otherwise impractical. Voluntary consensus standards are technical 
standards (e.g., materials specifications, test methods, sampling 
procedures, and business practices) that are developed or adopted by 
voluntary consensus standards bodies. The NTTAA directs EPA to provide 
Congress, through OMB, explanations when the Agency decides not to use 
available and applicable voluntary consensus standards.
    The proposed rulemaking involves technical standards. Therefore, 
the Agency conducted a search to identify potentially applicable 
voluntary consensus standards. The International Organization for 
Standardization has a voluntary consensus standard that can be used to 
test engines. However, the test procedures in this proposal reflect a 
level of development that goes substantially beyond the ISO or other 
published procedures. The proposed procedures incorporate new 
specifications for steady-state emission measurements and measuring 
emissions using field-testing procedures. The procedures we adopt in 
this rule will form the working template for ISO and national and state 
governments to define test procedures for measuring engine emissions. 
As such, we have worked extensively with the representatives of other 
governments, testing organizations, and the affected industries.
    EPA welcomes comments on this aspect of the proposed rulemaking 
and, specifically, invites the public to identify potentially-
applicable voluntary consensus standards and to explain why such 
standards should be used in this regulation.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes 
Federal executive policy on environmental justice. Its main provision 
directs Federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies, and activities on minority populations and low-income 
populations in the United States.
    EPA has determined that this proposed rule will not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations because it increases the 
level of environmental protection for all affected populations without 
having any disproportionately high and adverse human health or 
environmental effects on any population, including any minority or low-
income population.
    Together, this proposed rule which addresses emissions from 
domestic-flagged vessels and the joint U.S./Canada ECA application to 
the IMO which addresses emissions from foreign-flagged vessels 
(referred to as the ``coordinated strategy'') will achieve significant 
reductions of various emissions from Category 3 marine diesel engines, 
including NO<INF>X</INF>, SO<INF>X</INF>, and direct PM. Exposure to 
these pollutants raises concerns regarding environmental health for the 
U.S. population in general including the minority populations and low-
income populations that are the focus of the environmental justice 
executive order.
    The emission reductions from the new standards in the coordinated 
strategy will have large beneficial effects on communities in proximity 
to port, harbor, and waterway locations, including low-income and 
minority communities. In addition to exhaust emission standards for 
freshly manufactured and remanufactured engines, the coordinated 
strategy, if finalized, would further reduce emissions from regulated 
engines that directly impact low-income and minority communities.
    EPA recently updated its initial screening-level analysis of 
selected marine port areas to better understand the populations, 
including minority and low-income populations, that are exposed to 
diesel PM emission sources from these facilities.<SUP>187, 188</SUP> 
This screening-level analysis is an inexact tool and should only be 
considered for illustrative purposes to help understand potential 
impacts. The analysis included all emission sources as well as ocean-
going marine diesel engines, and focused on a representative selection 
of national marine ports (45 ports total).<SUP>189, 190</SUP> 
Considering only ocean-going marine engine diesel PM emissions, the 
results indicate that 6.5 million people are exposed to ambient diesel 
PM levels that are 2.0 [mu]g/m\3\ and 0.2 [mu]g/m\3\ above levels found 
in areas further from these facilities. This population includes a 
disproportionate

[[Page 44518]]

number of low-income households, African-Americans, and Hispanics. The 
results from all emission sources show that nearly 18 million people 
are exposed to higher levels of diesel PM from all sources at the 
marine port areas than urban background levels. Because those living in 
the vicinity of marine ports are more likely to be low-income 
households and minority residents, these populations would receive a 
significant benefit from the combined coordinated strategy. See Section 
VIII of this preamble and Chapter 6 of the draft RIA for a discussion 
on the benefits of this rule, including the benefits to minority and 
low-income communities.
---------------------------------------------------------------------------

    \187\ ICF International. December 1, 2008. Estimation of diesel 
particulate matter concentration isopleths near selected harbor 
areas with revised emissions (revised). Memorandum to EPA under Work 
Assignment Number 1-9, Contract Number EP-C-06-094. This memo is 
available in Docket EPA-HQ-OAR-2007-0121.
    \188\ ICF International. December 10, 2008. Estimation of diesel 
particulate matter population exposure near selected harbor areas 
with revised harbor emissions (revised). Memorandum to EPA under 
Work Assignment Number 2-9, Contract Number EP-C-06-094. This memo 
is available in Docket EPA-HQ-OAR-2007-0121.
    \189\ The emissions inventories used as inputs for the analyses 
are not official estimates and likely underestimate overall 
emissions because they are not inclusive of all emission sources at 
the individual ports in the sample.
    \190\ The Agency selected a representative sample from the top 
150 U.S. ports including coastal, inland and Great Lake ports.
---------------------------------------------------------------------------

XII. Statutory Provisions and Legal Authority

    Statutory authority for the controls in this final rule can be 
found in sections 203-209, 211, 213 (which specifically authorizes 
controls on emissions from nonroad engines and vehicles), 216, and 301 
of the Clean Air Act (CAA), 42 U.S.C. 7414, 7522, 7523, 7424, 7525, 
7541, 7542, 7543, 7545, 7547, 7550, and 7601.

List of Subjects

40 CFR Part 80

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Confidential business information, Diesel Fuel, 
Fuel Additives, Imports, Labeling, Penalties, Reporting and 
recordkeeping requirements.

40 CFR Part 85

    Confidential business information, Imports, Labeling, Motor vehicle 
pollution, Reporting and recordkeeping requirements, Research, 
Warranties.

40 CFR Part 86

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Reporting and recordkeeping requirements, Motor 
vehicle.

40 CFR Part 94

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Confidential business information, Imports, 
Incorporation by reference, Labeling, Penalties, Vessels, Reporting and 
recordkeeping requirements, Warranties.

40 CFR Part 1027

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Imports, Reporting and recordkeeping 
requirements.

40 CFR Part 1033

    Environmental protection, Administrative practice and procedure, 
Confidential business information, Incorporation by reference, 
Labeling, Penalties, Railroads, Reporting and recordkeeping 
requirements.

40 CFR Part 1039

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Confidential business information, Imports, 
Incorporation by reference, Labeling, Penalties, Reporting and 
recordkeeping requirements, Warranties.

40 CFR Part 1042

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Confidential business information, Imports, 
Incorporation by reference, Labeling, Penalties, Vessels, Reporting and 
recordkeeping requirements, Warranties.

40 CFR Part 1043

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Imports, Vessels, Reporting and recordkeeping 
requirements.

40 CFR Parts 1045, 1048, 1051, 1054, and 1060

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Confidential business information, Imports, 
Incorporation by reference, Labeling, Penalties, Reporting and 
recordkeeping requirements, Warranties.

40 CFR Part 1065

    Environmental protection, Administrative practice and procedure, 
Incorporation by reference, Reporting and recordkeeping requirements, 
Research.

40 CFR Part 1068

    Environmental protection, Administrative practice and procedure, 
Confidential business information, Imports, Incorporation by reference, 
Motor vehicle pollution, Penalties, Reporting and recordkeeping 
requirements, Warranties.

    Dated: June 26, 2009.
Lisa P. Jackson,
Administrator.
    For the reasons set out in the preamble, title 40, chapter I of the 
Code of Federal Regulations is proposed to be amended as set forth 
below.

PART 80--REGULATION OF FUEL AND FUEL ADDITIVES

    1. The authority citation for part 80 continues to read as follows:

    Authority: 42 U.S.C. 7414, 7542, 7545, and 7601.

    2. Section 80.2 is amended as follows:
    a. By revising paragraph (ccc).
    b. By revising paragraph (nnn).
    c. By adding paragraph (ttt).


Sec.  80.2  Definitions.

* * * * *
    (ccc) Heating Oil means any <greek-i>1, <greek-i>2, or non-
petroleum diesel blend that is sold for use in furnaces, boilers, and 
similar applications and which is commonly or commercially known or 
sold as heating oil, fuel oil, and similar trade names, and that is not 
jet fuel, kerosene, or MVNRLM diesel fuel.
* * * * *
    (nnn) Nonroad, locomotive, or marine (NRLM) diesel fuel means any 
diesel fuel or other distillate fuel that is used, intended for use, or 
made available for use, as a fuel in any nonroad diesel engines, 
including locomotive and marine diesel engines, except the following: 
Distillate fuel with a T90 at or above 700 [deg]F that is used only in 
Category 2 and 3 marine engines is not NRLM diesel fuel, and ECA marine 
fuel is not NRLM diesel fuel. Use the distillation test method 
specified in 40 CFR 1065.1010 to determine the T90 of the fuel. NR 
diesel fuel and LM diesel fuel are subcategories of NRLM diesel fuel.
    (1) Any diesel fuel that is sold for use in stationary engines that 
are required to meet the requirements of Sec.  80.510(a) and/or (b), 
when such provisions are applicable to nonroad engines, shall be 
considered NRLM diesel fuel.
    (2) [Reserved]
* * * * *
    (ttt) ECA marine fuel is distillate or residual fuel that is used, 
intended for use, or made available for use in Category 3 marine 
vessels operating within an Emission Control Area (ECA).
    3. Revise the heading to Subpart I of part 80 to read as follows:

Subpart I--Motor Vehicle Diesel Fuel; Nonroad, Locomotive, and 
Marine Diesel Fuel; and ECA Marine Fuel

    4. Section 80.501 is amended as follows:
    a. By revising paragraph (a)(5).
    b. By revising paragraph (a)(6).
    c. By adding paragraph (a)(7).


Sec.  80.501  What fuel is subject to the provisions of this subpart?

    (a) * * *

[[Page 44519]]

    (5) ECA marine fuel.
    (6) Other distillate fuels.
    (7) Motor oil that is used as or intended for use as fuel in diesel 
motor vehicles or nonroad diesel engines or is blended with diesel fuel 
for use in diesel motor vehicles or nonroad diesel engines, including 
locomotive and marine diesel engines, at any downstream location.
* * * * *
    5. Section 80.502 is amended as follows:
    a. By revising paragraph (a).
    b. By revising paragraph (b) introductory text and paragraph (b)(1) 
introductory text.
    c. By revising paragraph (c).
    d. By revising paragraph (d) introductory text.
    e. By adding paragraph (g).
    f. By adding paragraph (h).


Sec.  80.502  What definitions apply for purposes of this subpart?

* * * * *
    (a) Entity means any refiner, importer, distributor, retailer or 
wholesale-purchaser consumer of any distillate fuel (or other product 
subject to the requirements of this subpart I).
    (b) Facility means any place, or series of places, where an entity 
produces, imports, or maintains custody of any distillate fuel (or 
other product subject to the requirements of this subpart I) from the 
time it is received to the time custody is transferred to another 
entity, except as described in paragraphs (b)(1) through (4) of this 
section:
    (1) Where an entity maintains custody of a batch of diesel fuel (or 
other product subject to the requirements of this subpart I) from one 
place in the distribution system to another place (e.g., from a 
pipeline to a terminal), all owned by the same entity, both places 
combined are considered to be one single aggregated facility, except 
where an entity chooses to treat components of such an aggregated 
facility as separate facilities. The choice made to treat these places 
as separate facilities may not be changed by the entity during any 
applicable compliance period. Except as specified in paragraph (b)(2) 
of this section, where compliance requirements depend upon facility-
type, the entire facility must comply with the requirements that apply 
to its components as follows:
* * * * *
    (c) Truck loading terminal means any facility that dyes NRLM diesel 
fuel or ECA marine fuel, pays taxes on motor vehicle diesel fuel per 
IRS code (26 CFR part 48), or adds a fuel marker pursuant to Sec.  
80.510 to heating oil and delivers diesel fuel or heating oil into 
trucks for delivery to retail or ultimate consumer locations.
    (d) Batch means a quantity of diesel fuel (or other product subject 
to the requirements of this subpart I) which is homogeneous with regard 
to those properties that are specified for MVNRLM diesel fuel or ECA 
marine fuel under this subpart I of this part, has the same designation 
under this subpart I (if applicable), and whose custody is transferred 
from one facility to another facility.
* * * * *
    (g) Emission Control Area. An Emission Control Area (ECA), for the 
purposes of this Part, is defined as the area delineated in section 2 
of the document ``CONSIDERATION AND ADOPTION OF AMENDMENTS TO MANDATORY 
INSTRUMENTS'' submitted by the governments of the United States and 
Canada to the International Maritime Organization on March 27, 2009, 
and all internal waters of the United States.
    (h) Marine diesel engine. For the purposes of this subpart I only, 
marine diesel engine means a diesel engine installed on a Category 1 
(C1) or Category 2 (C2) marine vessel.
    6. Section 80.510 is amended as follows:
    a. By revising the section heading.
    b. By revising paragraph (f) introductory text and adding paragraph 
(f)(6).
    c. By revising paragraph (g)(1).
    d. By adding paragraph (k).


Sec.  80.510  What are the standards and marker requirements for NRLM 
diesel fuel and ECA marine fuel?

* * * * *
    (f) Marking provisions. From June 1, 2012 through May 31, 2014:
* * * * *
    (6) Marker solvent yellow 124 shall not be used in any MVNRLM or 
heating oil after May 31, 2014.
    (g) * * *
    (1) Northeast/Mid-Atlantic Area, which includes the following 
states and counties, through May 31, 2014: North Carolina, Virginia, 
Maryland, Delaware, New Jersey, Connecticut, Rhode Island, 
Massachusetts, Vermont, New Hampshire, Maine, Washington D.C., New York 
(except for the counties of Chautauqua, Cattaraugus, and Allegany), 
Pennsylvania (except for the counties of Erie, Warren, McKean, Potter, 
Cameron, Elk, Jefferson, Clarion, Forest, Venango, Mercer, Crawford, 
Lawrence, Beaver, Washington, and Greene), and the eight eastern-most 
counties of West Virginia (Jefferson, Berkeley, Morgan, Hampshire, 
Mineral, Hardy, Grant, and Pendleton).
* * * * *
    (k) Beginning June 1, 2014. Except as otherwise specifically 
provided in this subpart, all ECA marine fuel is subject to a maximum 
per-gallon sulfur content of 1,000 ppm.
    7. Section 80.511 is amended as follows:
    a. By revising the section heading.
    b. By revising paragraph (a).
    c. By revising paragraphs (b)(4) and (b)(9).
    d. By adding paragraph (b)(10).


Sec.  80.511  What are the per-gallon and marker requirements that 
apply to NRLM diesel fuel, ECA marine fuel, and heating oil downstream 
of the refiner or importer?

    (a) Applicable dates for marker requirements. Beginning June 1, 
2006, all NRLM diesel fuel and ECA marine fuel shall contain less than 
0.10 milligrams per liter of the marker solvent yellow 124, except for 
LM diesel fuel subject to the marking requirements of Sec.  80.510(e).
    (b) * * *
    (4) Except as provided in paragraphs (b)(5) through (b)(8) of this 
section, the per-gallon sulfur standard of Sec.  80.510(c) shall apply 
to all NRLM diesel fuel beginning August 1, 2014 for all downstream 
locations other than retail outlets or wholesale purchaser-consumer 
facilities, shall apply to all NRLM diesel fuel beginning October 1, 
2014 for retail outlets and wholesale purchaser-consumer facilities, 
and shall apply to all NRLM diesel fuel beginning December 1, 2014 for 
all locations.
* * * * *
    (9) The per-gallon sulfur standard of Sec.  80.510(k) shall apply 
to all ECA marine fuel beginning August 1, 2014 for all downstream 
locations other than retail outlets or wholesale purchaser-consumer 
facilities, shall apply to all ECA marine fuel beginning October 1, 
2014 for retail outlets and wholesale purchaser-consumer facilities, 
and shall apply to all ECA marine fuel beginning December 1, 2014 for 
all locations.
    (10) For the purposes of this section, distributors that have their 
own fuel storage tanks and deliver only to ultimate consumers shall be 
treated the same as retailers and their facilities treated the same as 
retail outlets.
    8. Section 80.513 is amended by revising paragraph (e) to read as 
follows:


Sec.  80.513  What provisions apply to transmix processing facilities?

* * * * *
    (e) From June 1, 2014 and beyond, NRLM diesel fuel produced by a 
transmix processor is subject to the standards of Sec.  80.510(c).

[[Page 44520]]

    9. Section 80.525 is amended by revising paragraphs (b) and (d) to 
read as follows:


Sec.  80.525  What requirements apply to kerosene blenders?

* * * * *
    (b) Kerosene blenders are not subject to the requirements of this 
subpart applicable to refiners of diesel fuel, but are subject to the 
requirements and prohibitions applicable to downstream parties.
* * * * *
    (d) Kerosene that a kerosene blender adds or intends to add to 
diesel fuel subject to the 15 ppm sulfur content standard must meet the 
15 ppm sulfur content standard, and either of the following 
requirements:
    (1) The product transfer document received by the kerosene blender 
indicates that the kerosene is diesel fuel that complies with the 15 
ppm sulfur content standard.
    (2) The kerosene blender has test results indicating the kerosene 
complies with the 15 ppm sulfur standard.
    10. Section 80.551 is amended by revising paragraph (f) to read as 
follows:


Sec.  80.551  How does a refiner obtain approval as a small refiner 
under this subpart?

* * * * *
    (f) Approval of small refiner status for refiners who apply under 
Sec.  80.550(d) will be based on all information submitted under 
paragraph (c) of this section, except as provided in Sec.  80.550(e).
* * * * *
    11. Section 80.561 is amended by revising the section heading to 
read as follows:


Sec.  80.561  How can a refiner or importer seek temporary relief from 
the requirements of this subpart in case of extreme unforeseen 
circumstances?

* * * * *
    12. Section 80.570 is amended by revising paragraph (a) to read as 
follows:


Sec.  80.570  What labeling requirements apply to retailers and 
wholesale purchaser-consumers of diesel fuel beginning June 1, 2006?

    (a) From June 1, 2006 through September 30, 2010, any retailer or 
wholesale purchaser-consumer who sells, dispenses, or offers for sale 
or dispensing, motor vehicle diesel fuel subject to the 15 ppm sulfur 
standard of Sec.  80.520(a)(1), must affix the following conspicuous 
and legible label, in block letters of no less than 24-point bold type, 
and printed in a color contrasting with the background, to each pump 
stand:
ULTRA-LOW SULFUR HIGHWAY DIESEL FUEL (15 ppm Sulfur Maximum)
    Required for use in all model year 2007 and later highway diesel 
vehicles and engines. Recommended for use in all diesel vehicles and 
engines.
* * * * *
    13. Section 80.571 is amended by revising paragraphs (b) and (d) to 
read as follows:


Sec.  80.571  What labeling requirements apply to retailers and 
wholesale purchaser-consumers of NRLM diesel fuel or heating oil 
beginning June 1, 2007?

* * * * *
    (b) From June 1, 2007 through September 30, 2010, for pumps 
dispensing NRLM diesel fuel meeting the 500 ppm sulfur standard of 
Sec.  80.510(a):
LOW SULFUR NON-HIGHWAY DIESEL FUEL (500 ppm Sulfur Maximum)
WARNING
    Federal Law prohibits use in highway vehicles or engines.
* * * * *
    (d) From June 1, 2007 and beyond, for pumps dispensing non-motor 
vehicle diesel fuel for use other than in nonroad, locomotive, or 
marine engines, such as for use as heating oil:
HEATING OIL (May Exceed 500 ppm Sulfur)
WARNING
    Federal law prohibits use in highway vehicles or engines, or in 
nonroad, locomotive, or marine diesel engines.
    Its use may damage these diesel engines.
* * * * *
    14. Section 80.572 is amended by revising paragraphs (a) and (b) to 
read as follows:


Sec.  80.572  What labeling requirements apply to retailers and 
wholesale purchaser-consumers of NR and NRLM diesel fuel and heating 
oil beginning June 1, 2010?

* * * * *
    (a) From June 1, 2010 through September 31, 2014, any retailer or 
wholesale purchaser-consumer who sells, dispenses, or offers for sale 
or dispensing, motor vehicle diesel fuel subject to the 15 ppm sulfur 
standard of Sec.  80.520(a)(1), must affix the following conspicuous 
and legible label, in block letters of no less than 24-point bold type, 
and printed in a color contrasting with the background, to each pump 
stand:
ULTRA-LOW SULFUR HIGHWAY DIESEL FUEL (15 ppm Sulfur Maximum)
    Required for use in all highway diesel vehicles and engines.
    Recommended for use in all diesel vehicles and engines.
    (b) From June 1, 2010 through September 30, 2012, for pumps 
dispensing NR diesel fuel subject to the 15 ppm sulfur standard of 
Sec.  80.510(b):
ULTRA-LOW SULFUR NON-HIGHWAY DIESEL FUEL (15 ppm Sulfur Maximum)
    Required for use in all model year 2011 and later nonroad diesel 
engines. Recommended for use in all other non-highway diesel engines.
WARNING
    Federal law prohibits use in highway vehicles or engines.
* * * * *
    15. Section 80.573 is amended by revising paragraph (a) to read as 
follows:


Sec.  80.573  What labeling requirements apply to retailers and 
wholesale purchaser-consumers of NRLM diesel fuel and heating oil 
beginning June 1, 2012?

* * * * *
    (a) From June 1, 2012 through September 30, 2014, for pumps 
dispensing NRLM diesel fuel subject to the 15 ppm sulfur standard of 
Sec.  80.510(c):
ULTRA-LOW SULFUR NON-HIGHWAY DIESEL FUEL (15 ppm Sulfur Maximum)
    Required for use in all model year 2011 and later nonroad diesel 
engines.
    Recommended for use in all other non-highway diesel engines.
WARNING
    Federal law prohibits use in highway vehicles or engines.
* * * * *
    16. Section 80.574 is revised to read as follows:


Sec.  80.574  What labeling requirements apply to retailers and 
wholesale purchaser-consumers of ECA marine fuel beginning June 1, 
2014?

    (a) Any retailer or wholesale purchaser-consumer who sells, 
dispenses, or offers for sale or dispensing ECA marine fuel must 
prominently and conspicuously display in the immediate area of each 
pump stand from which ECA marine fuel is offered for sale or 
dispensing, one of the following legible labels, as applicable, in 
block letters of no less than 24-point bold type, printed in a color 
contrasting with the background:

[[Page 44521]]

    (1) From June 1, 2014 and beyond, for pumps dispensing ECA marine 
fuel subject to the 1,000 ppm sulfur standard of Sec.  80.510(k):
1,000 ppm SULFUR ECA MARINE FUEL (1,000 ppm Sulfur Maximum).
    For use in Category 3 (C3) marine vessels only.
WARNING
    Federal law prohibits use in any engine that is not installed on a 
C3 marine vessel; use of fuel oil with a sulfur content greater than 
1,000 ppm in the U.S. Emission Control Area and all U.S. internal 
waters is illegal.
    (2) The labels required by paragraph (a)(1) of this section must be 
placed on the vertical surface of each pump housing and on each side 
that has gallon and price meters. The labels shall be on the upper two-
thirds of the pump, in a location where they are clearly visible.
    (b) Alternative labels to those specified in paragraph (a) of this 
section may be used as approved by EPA.
    (1) For US Mail: U.S. EPA, Attn: Diesel Sulfur Alternative Label 
Request, 6406J, 1200 Pennsylvania Avenue, NW., Washington, DC 20460.
    (2) For overnight or courier services: U.S. EPA, Attn: Diesel 
Sulfur Alternative Label Request, 6406J, 1310 L Street, NW., 6th floor, 
Washington, DC 20005. (202) 343-9038.
    17. Section 80.580 is amended by adding paragraphs (b)(1) and 
(c)(1) to read as follows:


Sec.  80.580  What are the sampling and testing methods for sulfur?

* * * * *
    (b) * * *
    (1) For ECA marine fuel subject to the 1,000 ppm sulfur standard of 
Sec.  80.510(k)(1), sulfur content may be determined using ASTM D2622 
(incorporated by reference, see paragraph (e) of this section).
* * * * *
    (c) * * *
    (1) Options for testing sulfur content of 1,000 ppm diesel fuel. 
(i) For ECA marine fuel subject to the 1,000 ppm sulfur standard of 
Sec.  80.510(k), sulfur content may be determined using ASTM D4294, 
ASTM D5453, or ASTM D6920 (all incorporated by reference, see paragraph 
(e) of this section), provided that the refiner or importer test result 
is correlated with the appropriate method specified in paragraph (b)(1) 
of this section; or
    (ii) For ECA marine fuel subject to the 1,000 ppm sulfur standard 
of Sec.  80.510(k), sulfur content may be determined using any test 
method approved under Sec.  80.585.
* * * * *
    18. Section 80.581 is amended by revising the section heading and 
paragraphs (a) and (c)(1) to read as follows:


Sec.  80.581  What are the batch testing and sample retention 
requirements for motor vehicle diesel fuel, NRLM diesel fuel, and ECA 
marine fuel?

    (a) Beginning on June 1, 2006 or earlier pursuant to Sec.  80.531 
for motor vehicle diesel fuel, beginning June 1, 2010 or earlier 
pursuant to Sec.  80.535 for NRLM diesel fuel, and beginning June 1, 
2014 for ECA marine fuel, each refiner and importer shall collect a 
representative sample from each batch of motor vehicle or NRLM diesel 
fuel produced or imported and subject to the 15 ppm sulfur content 
standard, or ECA marine fuel subject to the 1,000 ppm sulfur content 
standard. Batch, for the purposes of this section, means batch as 
defined under Sec.  80.2 but without the reference to transfer of 
custody from one facility to another facility.
* * * * *
    (c)(1) Any refiner who produces motor vehicle, NRLM diesel fuel, or 
ECA marine fuel using computer-controlled in-line blending equipment, 
including the use of an on-line analyzer test method that is approved 
under the provisions of Sec.  80.580, and who, subsequent to the 
production of the diesel fuel batch tests a composited sample of the 
batch under the provisions of Sec.  80.580 for purposes of designation 
and reporting, is exempt from the requirement of paragraph (b) of this 
section to obtain the test result required under this section prior to 
the diesel fuel leaving the refinery, provided that the refiner obtains 
approval from EPA. The requirement of this paragraph (c)(1) that the 
in-line blending equipment must include an on-line analyzer test method 
that is approved under the provisions of Sec.  80.580 is effective 
beginning June 1, 2006.
* * * * *
    19. Section 80.583 is amended by revising the section heading to 
read as follows:


Sec.  80.583  What alternative sampling and testing requirements apply 
to importers who transport motor vehicle diesel fuel, NRLM diesel fuel, 
or ECA marine fuel by truck or rail car?

* * * * *
    20. Section 80.584 is amended by revising the section heading and 
adding paragraphs (a)(3) and (b)(3) to read as follows:


Sec.  80.584  What are the precision and accuracy criteria for approval 
of test methods for determining the sulfur content of motor vehicle 
diesel fuel, NRLM diesel fuel, and ECA marine fuel?

    (a) * * *
    (3) For ECA marine fuel subject to the 1,000 ppm sulfur standard of 
Sec.  80.510(k), of a standard deviation less than 18.07 ppm, computed 
from the results of a minimum of 20 repeat tests made over 20 days on 
samples taken from a single homogeneous commercially available diesel 
fuel with a sulfur content in the range of 700-1,000 ppm. The 20 
results must be a series of tests with a sequential record of the 
analyses and no omissions. A laboratory facility may exclude a given 
sample or test result only if the exclusion is for a valid reason under 
good laboratory practices and it maintains records regarding the sample 
and test results and the reason for excluding them.
    (b) * * *
    (3) For ECA marine fuel subject to the 1,000 ppm sulfur standard of 
Sec.  80.510(k):
    (i) The arithmetic average of a continuous series of at least 10 
tests performed on a commercially available gravimetric sulfur standard 
in the range of 300-400 ppm sulfur shall not differ from the ARV of 
that standard by more than 13.55 ppm sulfur;
    (ii) The arithmetic average of a continuous series of at least 10 
tests performed on a commercially available gravimetric sulfur standard 
in the range of 900-1,000 ppm sulfur shall not differ from the ARV of 
that standard by more than 13.55 ppm sulfur; and
    (iii) In applying the tests of paragraphs (b)(3)(i) and (ii) of 
this section, individual test results shall be compensated for any 
known chemical interferences.
    21. Section 80.585 is amended by revising the section heading and 
paragraphs (e)(2) and (e)(4) to read as follows:


Sec.  80.585  What is the process for approval of a test method for 
determining the sulfur content of diesel or ECA marine fuel?

* * * * *
    (e) * * *
    (2) Follow paragraph 7.3.1 of ASTM D 6299-02 to check standards 
using a reference material at least monthly or following any major 
change to the laboratory equipment or test procedure. Any deviation 
from the accepted reference value of a check standard greater than 1.44 
ppm (for diesel fuel subject to the 15 ppm sulfur standard), 19.36 ppm 
(for diesel fuel subject to the 500 ppm sulfur standard), or 36.14 ppm

[[Page 44522]]

(for ECA marine fuel subject to the 1,000 ppm sulfur standard must be 
investigated.
* * * * *
    (4) Upon discovery of any quality control testing violation of 
paragraph A 1.5.1.3 or A 1.5.2.1 of ASTM D 6299-02, or any check 
standard deviation greater than 1.44 ppm (for diesel fuel subject to 
the 15 ppm sulfur standard), 19.36 ppm (for diesel fuel subject to the 
500 ppm sulfur standard), or 36.14 ppm (for ECA marine fuel subject to 
the 1,000 ppm sulfur standard), conduct an investigation into the cause 
of such violation or deviation and, after restoring method performance 
to statistical control, retest retained samples from batches originally 
tested since the last satisfactory quality control material or check 
standard testing occasion.
    22. Section 80.590 is amended as follows:
    a. By revising the section heading.
    b. By revising paragraphs (a) introductory text, (a)(5), (a)(6) 
introductory text, and (a)(6)(ii).
    c. By adding paragraph (a)(7)(vii).
    d. By redesignating paragraphs (e) through (i) as paragraphs (f) 
through (j), respectively.
    e. By adding a new paragraph (e).


Sec.  80.590  What are the product transfer document requirements for 
motor vehicle diesel fuel, NRLM diesel fuel, heating oil, ECA marine 
fuel, and other distillates?

    (a) This paragraph (a) applies on each occasion that any person 
transfers custody or title to MVNRLM diesel fuel, heating oil, or ECA 
marine fuel (including distillates used or intended to be used as 
MVNRLM diesel fuel, heating oil, or ECA marine fuel) except when such 
fuel is dispensed into motor vehicles or nonroad, locomotive, or marine 
equipment or C3 vessels. Note that 40 CFR part 1043 specifies 
requirements for documenting fuel transfers to certain marine vessels. 
For all fuel transfers subject to this paragraph (a), the transferor 
must provide to the transferee documents which include the following 
information:
* * * * *
    (5) For transfers of MVNRLM diesel fuel or ECA marine fuel 
(beginning June 1, 2014), the sulfur content standard the transferor 
represents the fuel to meet.
    (6) Beginning June 1, 2006, when an entity, from a facility at any 
point in the distribution system, transfers custody of a distillate or 
residual fuel designated under Sec.  80.598, the following information 
must also be included:
* * * * *
    (ii) An accurate and clear statement of the applicable designation 
and/or classification under Sec.  80.598(a) and (b), for example, ``500 
ppm sulfur NRLM diesel fuel'', or ``jet fuel''; and whether the fuel is 
dyed or undyed, and for heating oil, whether marked or unmarked where 
applicable.
    (7) * * *
    (vii) ECA marine fuel. For ECA marine fuel produced or imported 
beginning June 1, 2014, ``1,000 ppm sulfur (maximum) ECA marine fuel. 
For use in Category 3 marine vessels only. Not for use in engines not 
installed on C3 marine vessels.''
* * * * *
    (e) Beginning June 1, 2014. For ECA marine fuel only (except for 
transfers to truck carriers, retailers or wholesale purchaser-
consumers), product codes may be used to convey the information 
required under this section if such codes are clearly understood by 
each transferee. ``1000'' must appear clearly on the product transfer 
document, and may be contained in the product code. If the designation 
is included in the code, codes used to convey the statement in 
paragraph (a)(7)(vii) of this section must contain the number ``1000''. 
If another letter, number, or symbol is being used to convey the 
statement in paragraph (a)(7)(vii) of this section, it must be clearly 
defined and denoted on the product transfer document.
* * * * *
    23. Section 80.593 is amended by revising the introductory text to 
read as follows:


Sec.  80.593  What are the reporting requirements for refiners and 
importers of motor vehicle diesel fuel subject to temporary refiner 
relief standards?

    Beginning with 2006, or the first compliance period during which 
credits are generated under Sec.  80.531(b) or (c), whichever is 
earlier, any refiner or importer who produces or imports motor vehicle 
diesel fuel subject to the 500 ppm sulfur standard under Sec.  
80.520(c), or any refiner or importer who generates, uses, obtains, or 
transfers credits under Sec. Sec.  80.530 through 80.532, and 
continuing for each year thereafter, must submit to EPA annual reports 
that contain the information required in this section, and such other 
information as EPA may require:
* * * * *
    24. Section 80.597 is amended by revising paragraphs (c), (d), (e), 
and (f) and adding paragraph (g) to read as follows:


Sec.  80.597  What are the registration requirements?

* * * * *
    (c) Registration for ECA marine fuel. Refiners and importers that 
intend to produce or supply ECA marine fuel beginning June 1, 2014, 
must provide EPA the information under Sec.  80.76 no later than 
December 31, 2012, if such information has not been previously provided 
under the provisions of this part. In addition, for each import 
facility, the same identifying information as required for each 
refinery under Sec.  80.76(c) must be provided.
    (d) Entity registration. (1) Except as prescribed in paragraph 
(d)(6) of this section, each entity as defined in Sec.  80.502 that 
intends to deliver or receive custody of any of the following fuels 
from June 1, 2006 through May 31, 2010 must register with EPA by 
December 31, 2005 or six months prior to commencement of producing, 
importing, or distributing any distillate listed in paragraphs 
(d)(1)(i) through (d)(1)(iii) of this section:
    (i) Fuel designated as 500 ppm sulfur MVNRLM diesel fuel under 
Sec.  80.598 on which taxes have not been assessed pursuant to IRS code 
(26 CFR part 48).
    (ii) Fuel designated as 15 ppm sulfur MVNRLM diesel fuel under 
Sec.  80.598 on which taxes have not been assessed pursuant to IRS code 
(26 CFR part 48).
    (iii) Fuel designated as NRLM diesel fuel under Sec.  80.598 that 
is undyed pursuant to Sec.  80.520.
    (iv) Fuel designated as California Diesel fuel under Sec.  80.598 
on which taxes have not been assessed and red dye has not been added 
(if required) pursuant to IRS code (26 CFR part 48) and that is 
delivered by pipeline to a terminal outside of the State of California 
pursuant to the provisions of Sec.  80.617(b).
    (2) Except as prescribed in paragraph (d)(6) of this section, each 
entity as defined in Sec.  80.502 that intends to deliver or receive 
custody of any of the following fuels from June 1, 2007 through May 31, 
2014 must register with EPA by December 31, 2005 or six months prior to 
commencement of producing, importing, or distributing any distillate 
listed in paragraph (d)(1) of this section:
    (i) Fuel designated as 500 ppm sulfur MVNRLM diesel fuel under 
Sec.  80.598 on which taxes have not been assessed pursuant to IRS code 
(26 CFR part 48).
    (ii) Fuel designated as NRLM diesel fuel under Sec.  80.598 that is 
undyed pursuant to Sec.  80.520.
    (iii) Fuel designated as heating oil under Sec.  80.598 that is 
unmarked pursuant to Sec.  80.510(d) through (f).

[[Page 44523]]

    (iv) Fuel designated as LM diesel fuel under Sec.  
80.598(a)(2)(iii) that is unmarked pursuant to Sec.  80.510(e).
    (3) Except as prescribed in paragraph (d)(6) of this section, each 
entity as defined in Sec.  80.502 that intends to deliver or receive 
custody of any of the following fuels beginning June 1, 2014 must 
register with EPA by December 31, 2012 or prior to commencement of 
producing, importing, or distributing any distillate or residual fuel 
listed in this paragraph (d):
    (i) Fuel designated as 1,000 ppm sulfur ECA marine fuel under Sec.  
80.598.
    (ii) [Reserved]
    (4) Registration shall be on forms prescribed by the Administrator, 
and shall include the name, business address, contact name, telephone 
number, e-mail address, and type of production, importation, or 
distribution activity or activities engaged in by the entity.
    (5) Registration shall include the information required under 
paragraph (e) of this section for each facility owned or operated by 
the entity that delivers or receives custody of a fuel described in 
paragraphs (d)(1), (d)(2), and (d)(3) of this section.
    (6) Exceptions for Excluded Liquids. An entity that would otherwise 
be required to register pursuant to the requirements of paragraphs 
(d)(1) through (3) of this section is exempted from the registration 
requirements under this section provided that:
    (i) The only diesel fuel or heating oil that the entity delivers or 
receives on which taxes have not been assessed or which is not received 
dyed pursuant to Internal Revenue Service (IRS) code 26 CFR part 48 is 
an excluded liquid as defined pursuant to IRS code 26 CFR 4081-1(b).
    (ii) The entity does not transfer the excluded liquid to a facility 
which delivers or receives diesel fuel other than an excluded liquid on 
which taxes have not been assessed pursuant to IRS code (26 CFR part 
48).
    (e) Facility registration. (1) List for each separate facility of 
an entity required to register under paragraph (d) of this section, the 
facility name, physical location, contact name, telephone number, e-
mail address and type of facility. For facilities that are aggregated 
under Sec.  80.502, provide information regarding the nature and 
location of each of the components. If aggregation is changed for any 
subsequent compliance period, the entity must provide notice to EPA 
prior to the beginning of such compliance period.
    (2) If facility records are kept off-site, list the off-site 
storage facility name, physical location, contact name, and telephone 
number.
    (3) Mobile facilities: (i) A description shall be provided in the 
registration detailing the types of mobile vessels that will likely be 
included and the nature of the operations.
    (ii) Entities may combine all mobile operations into one facility; 
or may split the operations by vessel, region, route, waterway, etc. 
and register separate mobile facilities for each.
    (iii) The specific vessels need not be identified in the 
registration, however information regarding specific vessel contracts 
shall be maintained by each registered entity for its mobile 
facilities, pursuant to Sec.  80.602(d).
    (f) Changes to registration information. Any company or entity 
shall submit updated registration information to the Administrator 
within 30 days of any occasion when the registration information 
previously supplied for an entity, or any of its registered facilities, 
becomes incomplete or inaccurate.
    (g) Issuance of registration numbers. EPA will supply a 
registration number to each entity and a facility registration number 
to each of an entity's facilities that is identified, which shall be 
used in all reports to the Administrator.
    25. Section 80.598 is amended as follows:
    a. By revising paragraphs (a)(2)(i)(A), (a)(2)(i)(B), (a)(2)(i)(C), 
(a)(2)(i)(D), (a)(2)(i)(E), and (a)(2)(i)(F).
    b. By adding paragraph (a)(2)(i)(H).
    c. By revising paragraph (a)(2)(v).
    d. By adding paragraph (a)(3)(xv).
    e. By revising paragraphs (b)(4)(i), (b)(4)(ii), (b)(7)(i), 
(b)(7)(ii), (b)(8) introductory text, (b)(8)(i), (b)(8)(ii), 
(b)(9)(ii), (b)(9)(vii), and (b)(9)(x).
    f. By removing and reserving paragraph (e).


Sec.  80.598  What are the designation requirements for refiners, 
importers, and distributors?

    (a) * * *
    (2) * * *
    (i) * * *
    (A) Motor vehicle, nonroad, locomotive or marine (MVNRLM) diesel 
fuel.
    (B) Heating oil.
    (C) Jet fuel.
    (D) Kerosene.
    (E) No. 4 fuel.
    (F) Distillate fuel for export only.
* * * * *
    (H) ECA marine fuel. This designation may be used beginning June 1, 
2014, and fuel designated as such is subject to the restriction in 
paragraph (a)(3)(xv) of this section.
* * * * *
    (v) From June 1, 2006 through May 31, 2010, any batch designated as 
motor vehicle diesel fuel must also be designated according to one of 
the following distillation classifications that most accurately 
represents the fuel:
* * * * *
    (3) * * *
    (xv) Beginning June 1, 2014, any fuel designated as ECA marine fuel 
will be subject to all the following restrictions:
    (A) Such fuel may not exceed a sulfur level of 1,000 ppm.
    (B) Such fuel may only be produced, distributed, sold, and 
purchased for use in C3 marine vessels.
    (b) * * *
    (4) * * *
    (i) <greek-i>1D 500 ppm sulfur motor vehicle diesel fuel.
    (ii) <greek-i>2D 500 ppm sulfur motor vehicle diesel fuel.
* * * * *
    (7) * * *
    (i) 500 ppm sulfur NRLM diesel fuel.
    (ii) Heating oil.
* * * * *
    (8) Beginning June 1, 2014, whenever custody of a batch of 
distillate or residual fuel (other than jet fuel, kerosene, No. 4 fuel, 
fuel for export, or fuel intended for use outside an ECA) having a 
sulfur content greater than 15 ppm is transferred to another facility, 
the entity transferring custody must accurately and clearly designate 
the batch as one of the following and specify its volume:
    (i) ECA marine fuel.
    (ii) Heating oil.
* * * * *
    (9) * * *
    (ii) Until June 1, 2014, any distillate fuel containing greater 
than or equal to 0.10 milligrams per liter of marker solvent yellow 124 
required under Sec.  80.510(d), (e), or (f) must be designated as 
heating oil except that from June 1, 2010 through October 1, 2012 it 
may also be designated as LM diesel fuel as specified under Sec.  
80.510(e).
* * * * *
    (viii) For facilities in areas other than those specified in Sec.  
80.510(g)(1) and (2), batches or portions of batches of unmarked 
distillate received designated as heating oil may be re-designated as 
NRLM or LM diesel fuel only if all the following restrictions are met:
    (A) From June 1, 2007 through May 31, 2010, for any compliance 
period, the volume of high sulfur NRLM diesel fuel delivered from a 
facility cannot be greater than the volume received, unless the volume 
of heating oil delivered from the facility is also greater than the 
volume it received by an equal or greater proportion, as calculated in 
Sec.  80.599(c)(2).

[[Page 44524]]

    (B) From June 1, 2010 through May 31, 2014, for any compliance 
period, the volume of fuel designated as heating oil delivered from a 
facility cannot be less than the volume of fuel designated as heating 
oil received, as calculated in Sec.  80.599(c)(4).
* * * * *
    (x) Notwithstanding the provisions of paragraphs (b)(5) and (8) of 
this section, beginning October 1, 2007:
* * * * *
    (e) [Reserved]
* * * * *
    26. Section 80.599 is amended as follows:
    a. By revising paragraph (a)(1).
    b. By removing and reserving paragraph (a)(2).
    c. By revising paragraph (e)(4).


Sec.  80.599  How do I calculate volume balances for designation 
purposes?

    (a) * * *
    (1) The annual compliance periods before the period beginning July 
1, 2016 are shown in the following table:

------------------------------------------------------------------------
                                                Ending date of annual
Beginning date of annual compliance period        compliance period
------------------------------------------------------------------------
June 1, 2006..............................  May 31, 2007.
June 1, 2007..............................  June 30, 2008.
July 1, 2008..............................  June 30, 2009.
July 1, 2009..............................  May 31, 2010.
June 1, 2010..............................  June 30, 2011.
July 1, 2011..............................  May 31, 2012.
June 1, 2012..............................  June 30, 2013.
July 1, 2013..............................  May 31, 2014.
------------------------------------------------------------------------

     (2) [Reserved]
* * * * *
    (e) * * *
    (4) The following calculation may be used to account for wintertime 
blending of kerosene and the blending of non-petroleum diesel:

<greek-i>2MV500<INF>O</INF>< = <greek-i>2MV500<INF>I</INF> + 
<greek-i>2MV500<INF>P</INF> - <greek-i>2MV500<INF>INVCHG</INF> + 0.2 * 
(<greek-i>1MV15<INF>I</INF> + <greek-i>2MV15<INF>I</INF> + 
NPMV15<INF>I</INF>)

Where:

<greek-i>1MV15<INF>I</INF> = the total volume of fuel received 
during the compliance period that is designated as <greek-i>1D 15 
ppm sulfur motor vehicle diesel fuel. Any motor vehicle diesel fuel 
produced by or imported into the facility shall not be included in 
this volume.
NPMV15<INF>I</INF> = the total volume of fuel received during the 
compliance period that is designated as NP15 ppm sulfur motor 
vehicle diesel fuel. Any motor vehicle diesel fuel produced by or 
imported into the facility shall not be included in this volume.
<greek-i>1MV15<INF>P</INF> = the total volume of fuel produced by or 
imported into the facility during the compliance period that was 
designated as <greek-i>1D 15 ppm sulfur motor vehicle diesel fuel 
when it was delivered.
* * * * *
    27. Section 80.600 is amended as follows:
    a. By revising paragraphs (a)(5) and (a)(12).
    b. By revising paragraphs (b)(1)(v) and (b)(3).
    c. By revising paragraph (i).
    d. By revising paragraphs (o)(1) and (o)(2).


Sec.  80.600  What records must be kept for purposes of the designate 
and track provisions?

    (a) * * *
    (5) Any refiner or importer shall maintain the records specified in 
paragraphs (a)(6) through (10) of this section for each batch of 
distillate or residual fuel that it transfers custody of and designates 
from June 1, 2014 and later as any of the following categories:
    (i) Heating oil.
    (ii) ECA marine fuel.
* * * * *
    (12) Records must be maintained that demonstrate compliance with a 
refiner's compliance plan required under Sec.  80.554, for distillate 
fuel designated as high sulfur NRLM diesel fuel and delivered from June 
1, 2007 through May 31, 2010, for distillate fuel designated as 500 ppm 
sulfur NR diesel fuel and delivered from June 1, 2010 through May 31, 
2012, and for distillate fuel designated as 500 ppm sulfur NRLM diesel 
fuel and delivered from June 1, 2012 through May 31, 2014 in the areas 
specified in Sec.  80.510(g)(2).
* * * * *
    (b) * * *
    (1) * * *
    (v) For each facility that receives fuel designated as heating oil, 
records for each batch of distillate or residual fuel with any of the 
following designations for which custody is received or delivered as 
well as any batches produced from June 1, 2014 and beyond:
    (A) 1,000 ppm sulfur ECA marine fuel.
    (B) Heating oil.
* * * * *
    (3) Records that clearly and accurately identify the total volume 
in gallons of each designated fuel identified under paragraph (b)(1) of 
this section transferred over each of the compliance periods, and over 
the periods from June 1, 2006 to the end of each compliance period. The 
records shall be maintained separately for each fuel designated under 
paragraph (b)(1) of this section, and for each EPA entity and facility 
registration number from whom the fuel was received or to whom it was 
delivered. For batches of fuel received from facilities without an EPA 
facility registration number:
    (i) Any batches of fuel received marked pursuant to Sec.  80.510(d) 
or (f) shall be deemed designated as heating oil.
    (ii) Any batches of fuel received marked pursuant to Sec.  
80.510(e) shall be deemed designated as heating oil or LM diesel fuel.
    (iii) Any batches of fuel received on which taxes have been paid 
pursuant to Section 4082 of the Internal Revenue Code (26 U.S.C. 4082) 
shall be deemed designated as motor vehicle diesel fuel.
    (iv) Any 500 ppm sulfur diesel fuel dyed pursuant to Sec.  
80.520(b) and not marked pursuant to Sec.  80.510(d) or (f) shall be 
deemed designated as NRLM diesel fuel.
    (v) Any diesel fuel with less than or equal to 500 ppm sulfur which 
is dyed pursuant to Sec.  80.520(b) and not marked pursuant to Sec.  
80.510(e) shall be deemed to be NR diesel fuel.
    (vi) Beginning June 1, 2014, any batches of fuel with greater than 
15 ppm sulfur, but less than or equal to 1,000 ppm sulfur, and not 
designated as heating oil shall be deemed to be 1,000 ppm ECA marine 
fuel.
* * * * *
    (i) Additional records that must be kept by mobile facilities. Any 
registered mobile facility must keep records of all contracts from any 
contracted components (e.g., tank truck, barge, marine tanker, rail 
car, etc.) in each of its registered mobile facilities.
* * * * *
    (o) * * *
    (1) Any aggregated facility consisting of a refinery and truck 
loading terminal shall maintain records of all the following 
information for each batch of distillate fuel (and/or residual fuel 
with a sulfur level of 1,000 ppm or less that is intended for use in an 
ECA) produced by the refinery and sent over the aggregated facility's 
truck loading terminal rack:
    (i) The batch volume.
    (ii) The batch number, assigned under the batch numbering 
procedures under Sec. Sec.  80.65(d)(3) and 80.502(d)(1).
    (iii) The date of production.
    (iv) A record designating the batch as distillate or residual fuel 
meeting the 500 ppm, 15 ppm, or 1,000 ppm ECA marine sulfur standard.
    (v) A record indicating the volumes that were either taxed, dyed, 
or dyed and marked.
    (2) Volume reports for all distillate fuel (and/or residual fuel 
with a sulfur level of 1,000 ppm or less that is

[[Page 44525]]

intended for use in an ECA) from external sources (i.e., from another 
refiner or importer), as described in Sec.  80.601(f)(2), sent over the 
aggregated facility's truck rack.
    28. Section 80.601 is amended by revising paragraph (b)(3)(x) to 
read as follows:


Sec.  80.601  What are the reporting requirements for purposes of the 
designate and track provisions?

* * * * *
    (b) * * *
    (3) * * *
    (x) Beginning with the report due August 31, 2011 and ending with 
the report due August 31, 2012, the volume balance under Sec. Sec.  
80.598(b)(9)(ix) and 80.599(d)(2).
* * * * *
    29. Section 80.602 is amended as follows:
    a. By revising the section heading.
    b. By revising paragraphs (a) introductory text, (a)(2) 
introductory text, and (a)(3).
    c. By revising paragraphs (b) introductory text, (b)(4)(i), 
(b)(4)(ii).
    d. By revising paragraphs (g)(1) and (g)(2).


Sec.  80.602  What records must be kept by entities in the NRLM diesel 
fuel, ECA marine fuel, and diesel fuel additive production, 
importation, and distribution systems?

    (a) Records that must be kept by parties in the NRLM diesel fuel, 
ECA marine fuel and diesel fuel additive production, importation, and 
distribution systems. Beginning June 1, 2007, or June 1, 2006, if that 
is the first period credits are generated under Sec.  80.535, any 
person who produces, imports, sells, offers for sale, dispenses, 
distributes, supplies, offers for supply, stores, or transports 
nonroad, locomotive or marine diesel fuel, or ECA marine fuel 
(beginning June 1, 2014) subject to the provisions of this subpart, 
must keep all the following records:
* * * * *
    (2) For any sampling and testing for sulfur content for a batch of 
NRLM diesel fuel produced or imported and subject to the 15 ppm sulfur 
standard or any sampling and testing for sulfur content as part of a 
quality assurance testing program, and any sampling and testing for 
cetane index, aromatics content, marker solvent yellow 124 content or 
dye solvent red 164 content of NRLM diesel fuel, ECA marine fuel, NRLM 
diesel fuel additives or heating oil:
* * * * *
    (3) The actions the party has taken, if any, to stop the sale or 
distribution of any NRLM diesel fuel or ECA marine fuel found not to be 
in compliance with the sulfur standards specified in this subpart, and 
the actions the party has taken, if any, to identify the cause of any 
noncompliance and prevent future instances of noncompliance.
    (b) Additional records to be kept by refiners and importers of NRLM 
diesel fuel and ECA marine fuel. Beginning June 1, 2007, or June 1, 
2006, pursuant to the provisions of Sec.  80.535 or Sec.  80.554(d) (or 
June 1, 2014, pursuant to the provisions of Sec.  80.510(k)), any 
refiner producing distillate or residual fuel subject to a sulfur 
standard under Sec.  80.510, Sec.  80.513, Sec.  80.536, Sec.  80.554, 
Sec.  80.560, or Sec.  80.561, for each of its refineries, and any 
importer importing such fuel separately for each facility, shall keep 
records that include the following information for each batch of NRLM 
diesel fuel, ECA marine fuel, or heating oil produced or imported:
* * * * *
    (4) * * *
    (i) NRLM diesel fuel, NR diesel fuel, LM diesel fuel, ECA marine 
fuel, or heating oil, as applicable.
    (ii) Meeting the 500 ppm sulfur standard of Sec.  80.510(a), the 15 
ppm sulfur standard of Sec.  80.510(b) and (c), the 1,000 ppm sulfur 
standard of Sec.  80.510(k), or other applicable standard.
* * * * *
    (g) * * *
    (1) All the following information for each batch of distillate fuel 
(or residual fuel with a sulfur level of 1,000 ppm or less if such fuel 
is intended for use in an ECA) produced by the refinery and sent over 
the aggregated facility's truck rack:
    (i) The batch volume.
    (ii) The batch number, assigned under the batch numbering 
procedures under Sec. Sec.  80.65(d)(3) and 80.502(d)(1).
    (iii) The date of production.
    (iv) A record designating the batch as one of the following:
    (A) NRLM diesel fuel, NR diesel fuel, LM diesel fuel, ECA marine 
fuel, or heating oil, as applicable.
    (B) Meeting the 500 ppm sulfur standard of Sec.  80.510(a), the 15 
ppm sulfur standard of Sec.  80.510(b) and (c), the 1,000 ppm sulfur 
standard of Sec.  80.510(k), or other applicable standard.
    (C) Dyed or undyed with visible evidence of solvent red 164.
    (D) Marked or unmarked with solvent yellow 124.
    (2) Hand-off reports for all distillate fuel (or residual fuel with 
a sulfur level of 1,000 ppm or less if such fuel is intended for use in 
an ECA) from external sources (i.e., from another refiner or importer), 
as described in Sec.  80.601(f)(2).
    30. Section 80.606 is amended as follows:
    a. By revising the section heading.
    b. By revising paragraph (a) introductory text and paragraph 
(a)(1).
    c. By revising paragraph (b).
    d. By adding paragraph (c).


Sec.  80.606  What national security exemption applies to fuels covered 
under this subpart?

    (a) The standards of all the fuels listed in paragraph (b) of this 
section do not apply to fuel that is produced, imported, sold, offered 
for sale, supplied, offered for supply, stored, dispensed, or 
transported for use in any of the following:
    (1) Tactical military motor vehicles or tactical military nonroad 
engines, vehicles or equipment, including locomotive and marine, having 
an EPA national security exemption from the motor vehicle emissions 
standards under 40 CFR 85.1708, or from the nonroad engine emission 
standards under 40 CFR part 89, 92, 94, or 1068.
* * * * *
    (b)(1) The motor vehicle diesel fuel standards of Sec.  
80.520(a)(1), (a)(2), and (c).
    (2) The nonroad, locomotive, and marine diesel fuel standards of 
Sec.  80.510(a), (b), and (c).
    (3) The 1,000 ppm ECA marine fuel standards of Sec.  80.510(k).
    (c) The exempt fuel must meet all the following conditions:
    (1) It must be accompanied by product transfer documents as 
required under Sec.  80.590.
    (2) It must be segregated from non-exempt MVNRLM diesel fuel and 
ECA marine fuel at all points in the distribution system.
    (3) It must be dispensed from a fuel pump stand, fueling truck or 
tank that is labeled with the appropriate designation of the fuel, such 
as ``JP-5'' or ``JP-8''.
    (4) It may not be used in any motor vehicles or nonroad engines, 
equipment or vehicles, including locomotive and marine, other than the 
vehicles, engines, and equipment referred to in paragraph (a) of this 
section.
    31. Section 80.607 is amended as follows:
    a. By revising the section heading.
    b. By revising paragraph (a).
    c. By revising paragraphs (c)(3)(iv) and (c)(4).
    d. By revising paragraphs (d)(2), (d)(3), and (d)(4).
    e. By revising paragraph (e)(1).
    f. By revising paragraph (f).

[[Page 44526]]

Sec.  80.607  What are the requirements for obtaining an exemption for 
diesel fuel or ECA marine fuel used for research, development or 
testing purposes?

    (a) Written request for a research and development exemption. Any 
person may receive an exemption from the provisions of this subpart for 
diesel fuel or ECA marine fuel used for research, development, or 
testing purposes by submitting the information listed in paragraph (c) 
of this section to: Director, Transportation and Regional Programs 
Division (6406J), U.S. Environmental Protection Agency, 1200 
Pennsylvania Avenue, NW., Washington, DC 20460 (postal mail); or 
Director, Transportation and Regional Programs Division, U.S. 
Environmental Protection Agency, 1310 L Street, NW., 6th floor, 
Washington, DC 20005 (express mail/courier); and Director, Air 
Enforcement Division (2242A), U.S. Environmental Protection Agency, 
Ariel Rios Building, 1200 Pennsylvania Avenue, NW., Washington, DC 
20460.
* * * * *
    (c) * * *
    (3) * * *
    (iv) The quantity of fuel which does not comply with the 
requirements of Sec. Sec.  80.520 and 80.521 for motor vehicle diesel 
fuel, or Sec.  80.510 for NRLM diesel fuel or ECA marine fuel.
    (4) With regard to control, a demonstration that the program 
affords EPA a monitoring capability, including all the following:
    (i) The site(s) of the program (including facility name, street 
address, city, county, state, and zip code).
    (ii) The manner in which information on vehicles and engines used 
in the program will be recorded and made available to the Administrator 
upon request.
    (iii) The manner in which information on the fuel used in the 
program (including quantity, fuel properties, name, address, telephone 
number and contact person of the supplier, and the date received from 
the supplier), will be recorded and made available to the Administrator 
upon request.
    (iv) The manner in which the party will ensure that the research 
and development fuel will be segregated from motor vehicle diesel fuel, 
NRLM diesel fuel, or ECA marine fuel, as applicable, and how fuel pumps 
will be labeled to ensure proper use of the research and development 
fuel.
    (v) The name, address, telephone number and title of the person(s) 
in the organization requesting an exemption from whom further 
information on the application may be obtained.
    (vi) The name, address, telephone number and title of the person(s) 
in the organization requesting an exemption who is responsible for 
recording and making available the information specified in this 
paragraph (c), and the location where such information will be 
maintained.
    (d) * * *
    (2) The research and development fuel must be designated by the 
refiner or supplier, as applicable, as research and development fuel.
    (3) The research and development fuel must be kept segregated from 
non-exempt MVNRLM diesel fuel and ECA marine fuel at all points in the 
distribution system.
    (4) The research and development fuel must not be sold, 
distributed, offered for sale or distribution, dispensed, supplied, 
offered for supply, transported to or from, or stored by a fuel retail 
outlet, or by a wholesale purchaser-consumer facility, unless the 
wholesale purchaser-consumer facility is associated with the research 
and development program that uses the fuel.
* * * * *
    (e) * * *
    (1) The volume of fuel subject to the approval shall not exceed the 
estimated amount under paragraph (c)(3)(iv) of this section, unless EPA 
grants a greater amount in writing.
* * * * *
    (f) Effects of exemption. Motor vehicle diesel fuel, NRLM diesel 
fuel, or ECA marine fuel that is subject to a research and development 
exemption under this section is exempt from other provisions of this 
subpart provided that the fuel is used in a manner that complies with 
the purpose of the program under paragraph (c) of this section and the 
requirements of this section.
* * * * *
    32. Section 80.608 is revised to read as follows:


Sec.  80.608  What requirements apply to diesel fuel and ECA marine 
fuel for use in the Territories?

    The sulfur standards of Sec.  80.520(a)(1) and (c) related to motor 
vehicle diesel fuel, of Sec.  80.510(a), (b), and (c) related to NRLM 
diesel fuel, and of Sec.  80.510(k) related to ECA marine fuel, do not 
apply to fuel that is produced, imported, sold, offered for sale, 
supplied, offered for supply, stored, dispensed, or transported for use 
in the Territories of Guam, American Samoa or the Commonwealth of the 
Northern Mariana Islands, provided that such diesel fuel is all of the 
following:
    (a) Designated by the refiner or importer as high sulfur diesel 
fuel only for use in Guam, American Samoa, or the Commonwealth of the 
Northern Mariana Islands.
    (b) Used only in Guam, American Samoa, or the Commonwealth of the 
Northern Mariana Islands.
    (c) Accompanied by documentation that complies with the product 
transfer document requirements of Sec.  80.590(b)(1).
    (d) Segregated from non-exempt MVNRLM diesel fuel and/or non-exempt 
ECA marine fuel at all points in the distribution system from the point 
the fuel is designated as exempt fuel only for use in Guam, American 
Samoa, or the Commonwealth of the Northern Mariana Islands, while the 
exempt fuel is in the United States (or the United States Emission 
Control Area) but outside these Territories.
    33. Section 80.610 is amended as follows:
    a. By revising paragraph (a)(1) and adding paragraph (a)(4).
    b. By revising paragraph (b).
    c. By revising paragraph (c).
    d. By revising paragraphs (e)(3)(iii) and (e)(4)(iii) and adding 
paragraph (e)(6).
    e. By revising paragraph (g).


Sec.  80.610  What acts are prohibited under the diesel fuel sulfur 
program?

* * * * *
    (a) * * *
    (1) Produce, import, sell, offer for sale, dispense, supply, offer 
for supply, store or transport motor vehicle diesel fuel, NRLM diesel 
fuel, ECA marine fuel or heating oil that does not comply with the 
applicable standards, dye, marking or any other product requirements 
under this subpart I and 40 CFR part 69.
* * * * *
    (4) Beginning June 1, 2014, produce, import, sell, offer for sale, 
dispense, supply, offer for supply, store or transport any fuel with a 
sulfur content above 1,000 ppm for use in an ECA or U.S. internal 
waters.
    (b) Designation and volume balance violation. Produce, import, 
sell, offer for sale, dispense, supply, offer for supply, store or 
transport motor vehicle diesel fuel, NRLM diesel fuel, ECA marine fuel, 
heating oil or other fuel that does not comply with the applicable 
designation or volume balance requirements under Sec. Sec.  80.598 and 
80.599.
    (c) Additive violation. (1) Produce, import, sell, offer for sale, 
dispense, supply, offer for supply, store or transport any fuel 
additive for use at a downstream location that does not comply with the 
applicable requirements of Sec.  80.521.
    (2) Blend or permit the blending into motor vehicle diesel fuel, 
NRLM diesel fuel, or ECA marine fuel at a downstream location, or use, 
or permit

[[Page 44527]]

the use, in motor vehicle diesel fuel, NRLM diesel fuel, or ECA marine 
fuel, of any additive that does not comply with the applicable 
requirements of Sec.  80.521.
* * * * *
    (e) * * *
    (3) * * *
    (iii) This prohibition begins December 1, 2014 in all other areas.
    (4) * * *
    (iii) This prohibition begins December 1, 2014 in all other areas.
* * * * *
    (6) Beginning January 1, 2015 introduce (or permit the introduction 
of) any fuel with a sulfur content greater than 1,000 ppm for use in a 
Category 3 marine vessel within an ECA or U.S. internal waters.
* * * * *
    (g) Cause violating fuel or additive to be in the distribution 
system. Cause motor vehicle diesel fuel, NRLM diesel fuel, or ECA 
marine fuel to be in the diesel fuel distribution system which does not 
comply with the applicable standard, dye or marker requirements or the 
product segregation requirements of this Subpart I, or cause any fuel 
additive to be in the fuel additive distribution system which does not 
comply with the applicable sulfur standards under Sec.  80.521.
    34. Section 80.612 is amended by revising paragraph (b) 
introductory text to read as follows:


Sec.  80.612  Who is liable for violations of this subpart?

* * * * *
    (b) Persons liable for failure to comply with other provisions of 
this subpart. Any person who:
* * * * *
    35. Section 80.613 is amended by revising paragraph (a)(1)(iv) 
introductory text to read as follows:


Sec.  80.613  What defenses apply to persons deemed liable for a 
violation of a prohibited act under this subpart?

    (a) * * *
    (1) * * *
    (iv) For refiners and importers of diesel fuel subject to the 15 
ppm sulfur standard under Sec.  80.510(b) or (c) or Sec.  80.520(a)(1), 
the 500 ppm sulfur standard under Sec.  80.510(a) or Sec.  80.520(c), 
and/or the 1,000 ppm sulfur standard under Sec.  80.510(k), test 
results that--
* * * * *
    36. Section 80.615 is amended by revising paragraphs (b)(2) and 
(b)(4) to read as follows:


Sec.  80.615  What penalties apply under this subpart?

* * * * *
    (b) * * *
    (2) Any person liable under Sec.  80.612(a)(2) for causing motor 
vehicle diesel fuel, NRLM diesel fuel, ECA marine fuel, heating oil, or 
other distillate fuel to be in the distribution system which does not 
comply with an applicable standard or requirement of this Subpart I is 
subject to a separate day of violation for each and every day that the 
non-complying fuel remains any place in the diesel fuel distribution 
system.
* * * * *
    (4) For purposes of this paragraph (b):
    (i) The length of time the motor vehicle diesel fuel, NRLM diesel 
fuel, ECA marine fuel, heating oil, or other distillate fuel in 
question remained in the diesel fuel distribution system is deemed to 
be 25 days, except as further specified in paragraph (b)(4)(ii) of this 
section.
    (ii) The length of time is deemed not to be 25 days if a person 
subject to liability demonstrates by reasonably specific showings, by 
direct or circumstantial evidence, that the non-complying motor 
vehicle, NR diesel fuel, NRLM diesel fuel, ECA marine fuel, heating 
oil, or distillate fuel remained in the distribution system for fewer 
than or more than 25 days.
* * * * *

PART 85-- CONTROL OF AIR POLLUTION FROM MOBILE SOURCES

    37. The authority citation for part 85 continues to read as 
follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart R--[Amended]

    38. Section 85.1703 is amended by revising the section heading and 
paragraph (a) introductory text to read as follows:


Sec.  85.1703  Definition of motor vehicle.

    (a) For the purpose of determining the applicability of section 
216(2), a vehicle which is self-propelled and capable of transporting a 
person or persons or any material or any permanently or temporarily 
affixed apparatus shall be deemed a motor vehicle, unless any one or 
more of the criteria set forth below are met, in which case the vehicle 
shall be deemed not a motor vehicle and excluded from the operation of 
the Act:
* * * * *
    39. A new Sec.  85.1715 is added to subpart R to read as follows:


Sec.  85.1715  Aircraft meeting the definition of motor vehicle.

    This section applies for aircraft meeting the definition of motor 
vehicle in Sec.  85.1703.
    (a) For the purpose of this section, aircraft means any vehicle 
capable of sustained air travel above treetop heights.
    (b) The standards, requirements, and prohibitions of 40 CFR part 86 
do not apply for aircraft or aircraft engines. Standards apply 
separately to certain aircraft engines, as described in 40 CFR part 87.

Subpart X--[Amended]

    40. A new Sec.  85.2306 is added to subpart X to read as follows:


Sec.  85.2306  Inventory and stockpiling provisions related to new 
emission standards for heavy-duty engines.

    (a) Notwithstanding any other provision of this subpart, a vehicle 
manufacturer may not sell, offer for sale, or introduce or deliver into 
commerce in the United States or import into the United States any new 
heavy-duty engine or vehicle equipped with a new heavy-duty engine 
after emission standards take effect for that engine or vehicle, unless 
the engine has an appropriate certificate of conformity or exemption. 
An appropriate certificate of conformity is one that applies for the 
same model year as the model year of the vehicle or that shows 
conformity with the same standards as engines manufactured in the model 
year of the vehicle (except as provided in paragraph (b) of this 
section).
    (b) If new emission standards apply in a given model year, a new 
vehicle in that model year must be powered by an engine that is 
certified to the new standards, except that a manufacturer may continue 
to use up its normal inventory of earlier engines that were built 
before the date of the new or changed standards. For example, if a 
manufacturer's normal inventory practice is to keep on hand a one-month 
supply of engines based on its upcoming production schedule, a 
manufacturer may order engines in anticipation of the 2010 emission 
standards based on its normal inventory requirements late in the engine 
manufacturer's 2009 model year and install those engines in the 
manufacturer's vehicle, regardless of the date of installation. Also, 
if an equipment manufacturer's model year starts before the end of the 
calendar year preceding new standards, the equipment manufacturer may 
use engines from the previous model year for equipment produced before 
January

[[Page 44528]]

1 of the year that new standards apply. If emission standards for the 
engine do not change in a given model year, an equipment manufacturer 
may continue to install engines from the previous model year without 
restriction. Vehicle and engine manufacturers may not circumvent the 
provisions in paragraph (a) of this section by stockpiling engines 
(i.e., acquiring more engines than normal for inventory) that were 
built before new or changed standards take effect or stockpiling 
engines that otherwise fail to have an appropriate certificate of 
conformity as provided in paragraph (a) of this section. Note that this 
allowance does not apply for vehicles subject to vehicle-based 
standards.
    (c) A heavy-duty engine manufacturer, who otherwise produces 
engines covered by an appropriate certificate of conformity, may not 
cause or otherwise aid a vehicle manufacturer to fail to comply with 
paragraphs (a) and (b) of this section.
    (d) Exemptions from certification requirements are described in 
subpart R of this part and apply as appropriate to this section.

PART 86--CONTROL OF EMISSIONS FROM NEW AND IN-USE HIGHWAY VEHICLES 
AND ENGINES

    41. The authority citation for part 86 continues to read as 
follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--[Amended]

    42. Subpart A is amended by removing the following sections: 
86.000-15, 86.000-21, 86.000-23, 86.000-25, 86.001-1, 86.087-38, 
86.090-8, 86.091-10, 86.094-1, 86.094-15, 86.094-17, 86.094-23, 86.094-
9, 86.096-9, 86.096-10, 86.096-11, 86.096-14, 86.096-23, 86.098-7, 
86.098-8, 86.098-11, 86.098-15, 86.098-17, 86.098-21, 86.098-22, 
86.099-1, 86.099-30.


Sec.  86.000-28--[Amended]  

    43. Section 86.000-28 is amended as follows:
    a. By removing the introductory text.
    b. By removing and reserving paragraph (a)(3).
    c. By removing paragraph (a)(4) introductory text.
    d. By removing and reserving paragraphs (a)(4)(i)(A) through 
(a)(4)(i)(B)(2)(i).
    e. By removing paragraphs (a)(4)(i)(B)(2)(iii) through 
(a)(4)(i)(D)(2).
    f. By removing and reserving paragraph (a)(4)(ii)(B).
    g. By removing paragraphs (a)(4)(ii)(C) and (a)(4)(iv) through (v).
    h. By removing and reserving paragraphs (a)(5) through (6).
    i. By removing paragraph (a)(7) introductory text.
    j. By removing and reserving paragraphs (a)(7)(ii) through 
(b)(4)(i).
    k. By removing paragraphs (b)(7) through (h).
    44. Section 86.008-10 is amended by revising paragraph (a)(2) to 
read as follows:


Sec.  86.008-10  Emission standards for 2008 and later model year Otto-
cycle heavy-duty engines and vehicles.

* * * * *
    (a) * * *
    (2) The standards set forth in paragraph (a)(1) of this section 
refer to the exhaust emitted over the operating schedule set forth in 
paragraph (f)(1) of appendix I to this part, and measured and 
calculated in accordance with the procedures set forth in subpart N or 
P of this part:
    (i) Perform the test interval set forth in paragraph (f)(1) of 
Appendix I of this part with a cold-start according to 40 CFR part 
1065, subpart F. This is the cold-start test interval.
    (ii) Shut down the engine after completing the test interval and 
allow 20 minutes to elapse. This is the hot soak.
    (iii) Repeat the test interval. This is the hot-start test 
interval.
    (iv) Calculate the total emission mass of each constituent, m, and 
the total work, W, over each test interval according to 40 CFR 
1065.650.
    (v) Determine your engine's brake-specific emissions using the 
following calculation, which weights the emissions from the cold-start 
and hot-start test intervals:
[GRAPHIC] [TIFF OMITTED] TP28AU09.007

* * * * *
    45. Section 86.010-38 is amended by revising paragraphs (j) 
introductory text and (j)(15)(i) introductory text to read as follows:


Sec.  86.010-38  Maintenance instructions.

* * * * *
    (j) The following provisions describe requirements related to 
emission control diagnostic service information for heavy-duty engines 
used in vehicles over 14,000 pounds gross vehicle weight (GVW):
* * * * *
    (15) * * *
    (i) By July 1, 2013, manufacturers shall make available for sale to 
the persons specified in paragraph (j)(3)(i) of this section their own 
manufacturer-specific diagnostic tools at a fair and reasonable cost. 
These tools shall also be made available in a timely fashion either 
through the manufacturer Web site or through a manufacturer-designated 
intermediary. Upon Administrator approval, manufacturers will not be 
required to make available manufacturer-specific tools with 
reconfiguration capabilities if they can demonstrate to the 
satisfaction of the Administrator that these tools are not essential to 
the completion of an emissions-related repair, such as recalibration. 
As a condition of purchase, manufacturers may request that the 
purchaser take all necessary training offered by the engine 
manufacturer. Any required training materials and classes must comply 
with the following:
* * * * *


Sec.  86.091-7--[Amended]  

    46. Section 86.091-7 is amended by removing paragraph (a)(3) and 
removing and reserving paragraphs (c)(3) and (d)(2)


Sec.  86.094-7--[Amended]  

    47. Section 86.094-7 is amended as follows:
    a. By removing the introductory text.
    b. By removing paragraph (a) introductory text.
    c. By removing and reserving paragraphs (a)(1) through (2), (b) 
through (c)(2), (c)(4) through (d)(1)(v), (d)(3) through (g), and 
(h)(1).
    d. By removing paragraphs (h)(6) and (i).


Sec.  86.094-14--[Amended]  

    48. Section 86.094-14 is amended as follows:
    a. By removing paragraph (c)(7)(i)(C)(4).
    b. By removing and reserving paragraph (c)(11)(ii)(B)(1).

[[Page 44529]]

    c. By removing paragraphs (c)(11)(ii)(B)(16) through (18).
    d. By removing and reserving paragraphs (c)(11)(ii)(C) and 
(c)(11)(ii)(D)(1) through (6)


Sec.  86.094-21--[Amended]  

    49. Section 86.094-21 is amended by removing and reserving 
paragraph (b)(6).


Sec.  86.094-22--[Amended]  

    50. Section 86.094-22 is amended by removing and reserving 
paragraph (d)(1).


Sec.  86.094-26--[Amended]  

    51. Section 86.094-26 is amended as follows:
    a. By removing and reserving paragraph (a)(2).
    b. By removing the text of paragraphs (a)(3) introductory text and 
(a)(3)(i) introductory text.
    c. By removing and reserving paragraphs (a)(3)(i)(A), (a)(3)(i)(C), 
(a)(3)(ii)(C), and (a)(4)(i)(C).
    d. By removing paragraph (a)(6)(iii).
    e. By removing and reserving paragraphs (a)(9)(ii) and (b)(2)(i) 
through (ii).
    f. By removing paragraphs (b)(2)(iv) and (b)(4)(i)(C) through (D).
    g. By removing and reserving paragraphs (b)(4)(ii), (c), and 
(d)(2)(ii).


Sec.  86.094-28--[Amended]  

    52. Section 86.094-28 is amended as follows:
    a. By removing and reserving paragraphs (a)(1) through (2).
    b. By removing the text of paragraphs (a)(4) introductory text and 
(a)(4)(i) introductory text.
    c. By removing and reserving paragraph (a)(4)(i)(B)(2)(ii).
    d. By removing paragraph (a)(4)(i)(C).
    e. By removing and reserving paragraph (a)(4)(ii) and(iii).
    f. By removing paragraph (a)(4)(v).
    g. By removing the text of paragraph (a)(7) introductory text.
    h. By removing and reserving paragraphs (a)(7)(i), (b)(1) through 
(2), and (b)(4)(ii).
    i. By removing paragraphs (b)(4)(iii) through (iv), (b)(5) through 
(8), and (c) through (d).


Sec.  86.094-30--[Amended]  

    53. Section 86.094-30 is amended as follows:
    a. By removing and reserving paragraphs (a)(3) and (a)(4)(i) 
through (ii).
    b. By removing the text of paragraph (a)(4)(iv) introductory text.
    c. By removing and reserving paragraphs (a)(10) through (11), 
(a)(13), (b)(1)(ii)(B), (b)(1)(ii)(D), and (b)(2).
    d. By removing the text of paragraph (b)(4)(ii) introductory text.
    e. By removing and reserving paragraph (b)(4)(ii)(B).
    f. By removing paragraphs (b)(4)(iii) through (iv) and (f).


Sec.  86.095-14--[Amended]  

    54. Section 86.095-14 is amended by removing the introductory text 
and removing and reserving paragraphs (a) through (c)(11)(ii)(B)(15) 
and (c)(11)(ii)(D)(7) through (c)(15).


Sec.  86.095-23--[Amended]  

    55. Section 86.095-23 is amended to read as follows:
    a. By removing and reserving paragraphs (a) and (b).
    b. By removing and reserving paragraph (c)(2).
    c. By removing and reserving paragraphs (d) and (e).
    d. By removing and reserving paragraphs (h) through (k).


Sec.  86.095-26--[Amended]  

    56. Section 86.095-26 is amended as follows:
    a. By removing the introductory text.
    b. By removing and reserving paragraphs (a) through (b)(4)(i)(C) 
and (b)(4)(ii)(C).
    c. By removing paragraphs (b)(4)(iii) through (d).


Sec.  86.095-30--[Amended]  

    57. Section 86.095-30 is amended as follows:
    a. By removing the introductory text.
    b. By removing and reserving paragraphs (a)(1) through (a)(3) and 
(a)(4)(i) through (iii).
    c. By removing paragraphs (a)(4)(iv)(A) through (C).
    d. By removing and reserving paragraphs (a)(5) through (12).
    e. By removing paragraph (a)(14).
    f. By removing and reserving paragraph (b).
    g. By removing paragraphs (c) through (f).


Sec.  86.095-35--[Amended]  

    58. Section 86.095-35 is amended as follows:
    a. By removing the introductory text.
    b. By removing the text of paragraph (a)(2) introductory text.
    c. By removing and reserving paragraphs (a)(2)(i) through (ii).
    d. By removing the text of paragraph (a)(2)(iii) introductory text.
    e. By removing and reserving paragraphs (a)(2)(iii)(A) through (C) 
and (c).


Sec.  86.096-7--[Amended]  

    59. Section 86.096-7 is amended as follows:
    a. By removing the introductory text.
    b. By removing and reserving paragraphs (a) through (h) (5).
    c. By removing the text of paragraph (h)(6) introductory text.
    d. By removing and reserving paragraph (h)(6)(i).
    e. By removing paragraph (h)(7)(vii).


Sec.  86.096-8--[Amended]  

    60. Section 86.096-8 is amended as follows:
    a. By removing paragraph (a)(1)(iii).
    b. By removing and reserving paragraph (a)(2).
    c. By removing paragraph (a)(3).
    d. By removing the text of paragraph (b) introductory text.
    e. By removing and reserving paragraphs (b)(1) through (b)(4).


Sec.  86.096-21--[Amended]  

    61. Section 86.096-21 is amended by removing the introductory text 
and removing and reserving paragraphs (a) through (j).


Sec.  86.096-24--[Amended]  

    62. Section 86.096-24 is amended as follows:
    a. By removing and reserving paragraphs (a)(5) through (7), 
(b)(1)(i) through (ii), and (b)(1)(vii).
    b. By removing the text of paragraph (b)(1)(viii) introductory 
text.
    c. By removing and reserving paragraphs (b)(1)(viii)(A) and (f).
    d. By removing paragraph (g)(3).


Sec.  86.096-26--[Amended]  

    63. Section 86.096-26 is amended as follows:
    a. By removing the introductory text.
    b. By removing and reserving paragraphs (a) and (b).
    c. By removing and reserving paragraphs (c)(1) through (c)(3).
    d. By removing paragraph (d).


Sec.  86.096-30--[Amended]  

    64. Section 86.096-30 is amended as follows:
    a. By removing the introductory text.
    b. By removing and reserving paragraphs (a)(1) through (14).
    c. By removing paragraphs (a)(19) through (24).
    d. By removing and reserving paragraph (b).
    e. By removing paragraphs (c) through (f).


Sec.  86.097-9--[Amended]  

    65. Section 86.097-9 is amended as follows:
    a. By removing paragraph (a)(1)(iv).
    b. By removing and reserving paragraph (a)(2).
    c. By removing paragraph (a)(3).
    d. By removing and reserving paragraphs (b) and (d) through (f).

[[Page 44530]]

Sec.  86.098-10  [Amended]

    66. Section 86.098-10 is amended by removing and reserving 
paragraph (b).


Sec.  86.098-23  [Amended]

    67. Section 86.098-23 is amended as follows:
    a. By removing the introductory text.
    b. By removing and reserving paragraphs (b)(2), (c), and (d)(2).
    c. By removing paragraph (d)(3).
    d. By removing and reserving paragraphs (f) through (g) and (l).


Sec.  86.098-24  [Amended]

    68. Section 86.098-24 is amended as follows:
    a. By removing the introductory text.
    b. By removing paragraph (a) introductory text.
    c. By removing and reserving paragraphs (a)(1) through (4).
    d. By removing paragraph (a)(8) through (15).
    e. By removing paragraphs (b) introductory text and (b)(1) 
introductory text.
    f. By removing and reserving paragraphs (b)(1)(i) through (vi) and 
(b)(1)(viii)(B).
    g. By removing paragraphs (b)(1)(ix) through (xii).
    h. By removing and reserving paragraph (b)(2).
    i. By removing paragraphs (b)(3) and (c) through (h).


Sec.  86.098-25  [Amended]

    69. Section 86.098-25 is amended as follows:
    a. By removing the introductory text.
    b. By removing and reserving paragraph (a).
    c. By removing paragraph (b) introductory text.
    d. By removing and reserving paragraphs (b)(1) through (2).
    e. By removing paragraph (b)(3) introductory text.
    f. By removing and reserving paragraphs (b)(3)(i) through (v).
    g. By removing paragraph (b)(3)(vi) introductory text.
    h. By removing and reserving paragraphs (b)(3)(vi)(A) through (D).
    i. By removing paragraphs (b)(3)(vii), (b)(4) through (7), and (c) 
through (h).


Sec.  86.098-26  [Amended]

    70. Section 86.098-26 is amended as follows:
    a. By removing the introductory text.
    b. By removing and reserving paragraphs (a)(1) through (2).
    c. By removing the text of paragraphs (a)(3) introductory text and 
(a)(3)(i) introductory text.
    d. By removing and reserving paragraphs (a)(3)(i)(A) through (B).
    e. By removing paragraph (a)(3)(i)(D).
    f. By removing paragraph (a)(3)(ii) introductory text.
    g. By removing and reserving paragraphs (a)(3)(ii)(A) through (B).
    h. By removing paragraphs (a)(3)(ii)(D) and (a)(4) through (11).
    i. By removing and reserving paragraph (b).
    j. By removing paragraphs (c) through (d).


Sec.  86.098-28  [Amended]

    71. Section 86.098-28 is amended as follows:
    a. By removing the introductory text.
    b. By removing and reserving paragraphs (a)(1) through (a)(3).
    c. By removing the text of paragraph (a)(4)(i) introductory text.
    d. By removing and reserving paragraphs (a)(4)(i)(A) through (B) 
and (a)(4)(ii)(A).
    e. By removing paragraphs (a)(4)(iii) through (iv).
    f. By removing and reserving paragraphs (a)(5) through (6), 
(a)(7)(i) through (ii), and (b).
    g. By removing paragraphs (c) through (h).


Sec.  86.098-30  [Amended]

    72. Section 86.098-30 is amended as follows:
    a. By removing the introductory text.
    b. By removing and reserving paragraphs (a)(1) through (18), 
(b)(1), and (b)(3).
    c. By removing paragraph (b)(4) introductory text.
    d. By removing and reserving paragraphs (b)(4)(i) and 
(b)(4)(ii)(A).
    e. By removing paragraphs (b)(5) through (f).


Sec.  86.099-8  [Amended]

    73. Section 86.099-8 is amended as follows:
    a. By removing the introductory text.
    b. By removing paragraph (a)(1) introductory text.
    c. By removing and reserving paragraphs (a)(1)(i) through (ii), 
(b)(5), and (c).
    d. By removing paragraphs (e) through (k).


Sec.  86.099-9  [Amended]

    74. Section 86.099-9 is amended as follows:
    a. By removing the introductory text.
    b. By removing paragraph (a)(1) introductory text.
    c. By removing and reserving paragraphs (a)(1)(i) through (iii).
    d. By removing paragraph (c) through (k).

Subpart B--[Amended]

    75. Section 86.138-96 is amended by revising paragraph (k) to read 
as follows:


Sec.  86.138-96  Hot soak test.

* * * * *
    (k) For the supplemental two-diurnal test sequence (see Sec.  
86.130-96), perform a hot soak test as described in this section, 
except that the test shall be conducted within seven minutes after 
completion of the hot start exhaust test and temperatures throughout 
the hot soak measurement period must be between 68[deg] and 86 [deg]F. 
This hot soak test is followed by two consecutive diurnal heat builds, 
described in Sec.  86.133-96(p).
* * * * *
    76. Section 86.144-94 is amended by revising paragraph (c)(7)(ii) 
to read as follows:


Sec.  86.144-94  Calculations; exhaust emissions.

* * * * *
    (c) * * *
    (7) * * *
    (ii) For methanol-fueled vehicles, where fuel composition is 
C<INF>x</INF>H<INF>y</INF>O<INF>z</INF> as measured, or calculated, for 
the fuel used:
[GRAPHIC] [TIFF OMITTED] TP28AU09.008


[[Page 44531]]


* * * * *

Subpart E--[Amended]

    77. Section 86.415-78 is amended by revising paragraph (b) to read 
as follows:


Sec.  86.415-78  Production vehicles.

* * * * *
    (b) Any manufacturer obtaining certification shall notify the 
Administrator of the number of vehicles of each engine family-engine 
displacement-emission control system-fuel system-transmission type-
inertial mass category combination produced for sale in the United 
States during the preceding year. This report must be submitted every 
year within 45 days after the end of the model year.
* * * * *

Subpart G--Selective Enforcement Auditing of New Light-Duty 
Vehicles, Light-Duty Trucks, and Heavy-Duty Vehicles

    78. The heading for subpart G is revised as set forth above.
    79. Section 86.601-84 is amended by revising the introductory text 
to read as follows:


Sec.  86.601-84  Applicability.

    The provisions of this subpart apply to light-duty vehicles, light-
duty trucks, and heavy-duty vehicles. References to ``light-duty 
vehicle'' or ``LDT'' in this subpart G shall be deemed to include 
light-duty trucks and heavy-duty vehicles as appropriate.
* * * * *
    80. Subpart K is revised to read as follows:

Subpart K--Selective Enforcement Auditing of New Heavy-Duty Engines


Sec.  86.1001  Applicability.

    The selective enforcement auditing program described in 40 CFR part 
1068, subpart E, applies for all heavy-duty engines. In addition, the 
provisions of 40 CFR 1068.10 and 1068.20 apply for any selective 
enforcement audits of these engines.

Subpart N--[Amended]

    81. Section 86.1305-2010 is amended by revising paragraph (h)(2) to 
read as follows:


Sec.  86.1305-2010  Introduction; structure of subpart.

* * * * *
    (h) * * *
    (2) Follow the provisions of 40 CFR 1065.342 to verify the 
performance of any sample dryers in your system. Correct your 
measurements according to 40 CFR 1065.659, except use the value of 
K<INF>w</INF> in Sec.  86.1342-90(i) as the value of (1--
x<INF>H2Oexh</INF>) in Equation 1065.659-1.
* * * * *

Subpart T--[Amended]

    82. Section 86.1910 is amended by revising paragraph (d) to read as 
follows:


Sec.  86.1910  How must I prepare and test my in-use engines?

* * * * *
    (d) You must test the selected engines while they remain installed 
in the vehicle. Use portable emission sampling equipment and field-
testing procedures referenced in Sec.  86.1375. Measure emissions of 
THC, NMHC (by any method specified in 40 CFR part 1065, subpart J), CO, 
NO<INF>x</INF>, PM (as appropriate), and CO<INF>2</INF>. Measure or 
determine O<INF>2</INF> emissions using good engineering judgment.
* * * * *

PART 1027-- FEES FOR ENGINE, VEHICLE, AND EQUIPMENT COMPLIANCE 
PROGRAMS

    83. The authority citation for part 1027 continues to read as 
follows:

    Authority: 42 U.S.C. 7401-7671q.

    84. Section 1027.101 is amended by revising paragraphs (a)(2)(iii) 
and (d) and adding paragraph (a)(4) to read as follows:


Sec.  1027.101  To whom do these requirements apply?

    (a) * * *
    (2) * * *
    (iii) Marine compression-ignition engines we regulate under 40 CFR 
part 94, or 1042, or 1043.
* * * * *
    (4) Portable fuel containers we certify under 40 CFR part 59, 
subpart F.
* * * * *
    (d) Paragraph (a) of this section identifies the parts of the CFR 
that define emission standards and other requirements for particular 
types of engines, vehicles, and fuel-system components. This part 1027 
refers to each of these other parts generically as the ``standard-
setting part.'' For example, 40 CFR part 1051 is always the standard-
setting part for recreational vehicles. For some nonroad engines, we 
allow for certification related to evaporative emissions separate from 
exhaust emissions. In this case, 40 CFR part 1060 is the standard-
setting part for the equipment or fuel system components you produce.
* * * * *
    85. Section 1027.105 is amended by revising paragraph (b)(3) to 
read as follows:


Sec.  1027.105  How much are the fees?

* * * * *
    (b) * * *
    (3) The following fees apply for nonroad and stationary engines, 
vehicles, equipment, and components:

------------------------------------------------------------------------
             Category                 Certificate type          Fee
------------------------------------------------------------------------
(i) Locomotives and locomotive      All.................            $826
 engines.
(ii) Marine compression-ignition    All, including Annex             826
 engines and stationary              VI.
 compression-ignition engines with
 per-cylinder displacement at or
 above 10 liters.
(iii) Other nonroad compression-    All.................           1,822
 ignition engines and stationary
 compression-ignition engines with
 per-cylinder displacement below
 10 liters.
(iv) Large SI engines.............  All.................             826
(v) Stationary spark-ignition       All.................             826
 engines above 19 kW.
(vi) Marine SI engines and small    Exhaust only........             826
 SI engines.
(vii) Stationary spark-ignition     Exhaust only........             826
 engines at or below 19 kW.
(viii) Recreational vehicles......  Exhaust (or combined             826
                                     exhaust and evap).
(ix) Equipment and fuel-system      Evap (where separate             241
 components associated with          certification is
 nonroad and stationary spark-       required).
 ignition engines, including
 portable fuel containers.
------------------------------------------------------------------------


[[Page 44532]]

* * * * *
    86. Section 1027.150 is amended by revising the definition of 
``Annex VI'' to read as follows:


Sec.  1027.150  What definitions apply to this subpart?

* * * * *
    Annex VI means MARPOL Annex VI, which is an annex to the 
International Convention on the Prevention of Pollution from Ships, 
1973, as modified by the protocol of 1978 relating thereto. Note that 
40 CFR part 1043 contains regulations implementing portions of Annex 
VI, including certain certification provisions.
* * * * *

PART 1033--CONTROL OF EMISSIONS FROM LOCOMOTIVES

    87. The authority citation for part 1033 continues to read as 
follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--[Amended]

    88. Section 1033.15 is amended by revising paragraph (a) to read as 
follows:


Sec.  1033.15  Other regulation parts that apply for locomotives?

    (a) Part 1065 of this chapter describes procedures and equipment 
specifications for testing engines to measure exhaust emissions. 
Subpart F of this part 1033 describes how to apply the provisions of 
part 1065 of this chapter to test locomotives to determine whether they 
meet the exhaust emission standards in this part.
* * * * *
    89. A new Sec.  1033.30 is added to subpart A to read as follows:


Sec.  1033.30  Submission of information.

    (a) This part includes various requirements to record data or other 
information. Refer to Sec.  1033.925 and 40 CFR 1068.25 regarding 
recordkeeping requirements. If recordkeeping requirements are not 
specified, store these records in any format and on any media and keep 
them readily available for one year after you send an associated 
application for certification, or one year after you generate the data 
if they do not support an application for certification. You must 
promptly send us organized, written records in English if we ask for 
them. We may review them at any time.
    (b) The regulations in Sec.  1033.255 and 40 CFR 1068.101 describe 
your obligation to report truthful and complete information and the 
consequences of failing to meet this obligation. This includes 
information not related to certification.
    (c) Send all reports and requests for approval to the Designated 
Compliance Officer (see Sec.  1033.901).
    (d) Any written information we require you to send to or receive 
from another company is deemed to be a required record under this 
section. Such records are also deemed to be submissions to EPA. We may 
require you to send us these records whether or not you are a 
certificate holder.

Subpart B--[Amended]

    90. Section 1033.101 is amended by revising paragraph (d) to read 
as follows:


Sec.  1033.101  Exhaust emission standards.

* * * * *
    (d) Averaging, banking, and trading. You may generate or use 
emission credits under the averaging, banking, and trading (ABT) 
program as described in subpart H of this part to comply with the 
NO<INF>X</INF> and/or PM standards of this part. You may also use ABT 
to comply with the Tier 4 HC standards of this part as described in 
paragraph (j) of this section. Generating or using emission credits 
requires that you specify a family emission limit (FEL) for each 
pollutant you include in the ABT program for each engine family. These 
FELs serve as the emission standards for the engine family with respect 
to all required testing instead of the standards specified in 
paragraphs (a) and (b) of this section. FELs may not be higher than the 
following limits:
    (1) FELs for Tier 0 and Tier 1 locomotives originally manufactured 
before 2002 may have any value.
    (2) FELs for Tier 1 locomotives originally manufactured 2002 
through 2004 may not exceed 9.5 g/bhp-hr for NO<INF>X</INF> emissions 
or 0.60 g/bhp-hr for PM emissions measured over the line-haul duty 
cycle. FELs for these locomotives may not exceed 14.4 g/bhp-hr for 
NO<INF>X</INF> emissions or 0.72 g/bhp-hr for PM emissions measured 
over the switch duty cycle.
    (3) FELs for Tier 2 and Tier 3 locomotives may not exceed the Tier 
1 standards of this section.
    (4) FELs for Tier 4 locomotives may not exceed the Tier 3 standards 
of this section.
* * * * *
    91. Section 1033.120 is amended by revising paragraph (c) to read 
as follows:


Sec.  1033.120  Emission-related warranty requirements.

* * * * *
    (c) Components covered. The emission-related warranty covers all 
components whose failure would increase a locomotive's emissions of any 
regulated pollutant. This includes components listed in 40 CFR part 
1068, Appendix I, and components from any other system you develop to 
control emissions. The emission-related warranty covers the components 
you sell even if another company produces the component. Your emission-
related warranty does not cover components whose failure would not 
increase a locomotive's emissions of any regulated pollutant. For 
remanufactured locomotives, your emission-related warranty is required 
to cover only those parts that you supply or those parts for which you 
specify allowable part manufacturers. It does not need to cover used 
parts that are not replaced during the remanufacture.
* * * * *
    92. Section 1033.150 is amended by revising paragraph (a)(4) to 
read as follows:


Sec.  1033.150  Interim provisions.

* * * * *
    (a) * * *
    (4) Estimate costs as described in this paragraph (a)(4).
    (i) The cost limits described in paragraph (a)(1) of this section 
are specified in terms of 2007 dollars. Adjust these values for future 
years according to the following equation:

Actual Limit = (2007 Limit) x [(0.6000) x (Commodity Index) + (0.4000) 
x (Earnings Index)

Where:

2007 Limit = The value specified in paragraph (a)(1) of this section 
($250,000 or $125,000).
Commodity Index = The U.S. Bureau of Labor Statistics Producer Price 
Index for Industrial Commodities Less Fuel (Series WPU03T15M05) for 
the month prior to the date you submit your application divided by 
173.1.
Earnings Index = The U.S. Bureau of Labor Statistics Estimated 
Average Hourly Earnings of Production Workers for Durable 
Manufacturing (Series CES3100000008) for the month prior to the date 
you submit your application divided by 18.26.

    (ii) Calculate all costs in current dollars (for the month prior to 
the date you submit your application). Calculate fuel costs based on a 
fuel price adjusted by the Association of American Railroads' monthly 
railroad fuel price index (P), which is available at https: //
www.aar.org/~/media/AAR/RailCostIndexes/Index--MonthlyFuelPrices.ashx. 
(Use the value for the column in which P equals 539.8 for November 
2007.) Calculate a new fuel price using the following equation:


[[Page 44533]]


Fuel Price = ($2.76 per gallon) x (P/539.8)
* * * * *

Subpart C--[Amended]

    93. Section 1033.220 is amended by revising the introductory text 
and paragraph (a) to read as follows:


Sec.  1033.220  Amending maintenance instructions.

    You may amend your emission-related maintenance instructions after 
you submit your application for certification, as long as the amended 
instructions remain consistent with the provisions of Sec.  1033.125. 
You must send the Designated Compliance Officer a request to amend your 
application for certification for an engine family if you want to 
change the emission-related maintenance instructions in a way that 
could affect emissions. In your request, describe the proposed changes 
to the maintenance instructions. If owners/operators follow the 
original maintenance instructions rather than the newly specified 
maintenance, this does not allow you to disqualify those locomotives 
from in-use testing or deny a warranty claim.
    (a) If you are decreasing or eliminating any of the specified 
maintenance, you may distribute the new maintenance instructions to 
your customers 30 days after we receive your request, unless we 
disapprove your request. This would generally include replacing one 
maintenance step with another. We may approve a shorter time or waive 
this requirement.
* * * * *
    94. Section 1033.225 is amended by revising paragraphs (b)(2), (e), 
and (f) to read as follows:


Sec.  1033.225  Amending applications for certification.

* * * * *
    (b) * * *
    (2) Include engineering evaluations or data showing that the 
amended engine family complies with all applicable requirements. You 
may do this by showing that the original emission-data locomotive is 
still appropriate for showing that the amended family complies with all 
applicable requirements.
* * * * *
    (e) For engine families already covered by a certificate of 
conformity, you may start producing the new or modified locomotive 
anytime after you send us your amended application, before we make a 
decision under paragraph (d) of this section. However, if we determine 
that the affected locomotives do not meet applicable requirements, we 
will notify you to cease production of the locomotives and may require 
you to recall the locomotives at no expense to the owner. Choosing to 
produce locomotives under this paragraph (e) is deemed to be consent to 
recall all locomotives that we determine do not meet applicable 
emission standards or other requirements and to remedy the 
nonconformity at no expense to the owner. If you do not provide 
information required under paragraph (c) of this section within 30 days 
after we request it, you must stop producing the new or modified 
locomotives.
    (f) You may ask us to approve a change to your FEL in certain cases 
after the start of production. The changed FEL may not apply to 
locomotives you have already introduced into U.S. commerce, except as 
described in this paragraph (f). If we approve a changed FEL after the 
start of production, you must include the new FEL on the emission 
control information label for all locomotives produced after the 
change. You may ask us to approve a change to your FEL in the following 
cases:
    (1) You may ask to raise your FEL for your engine family at any 
time. In your request, you must show that you will still be able to 
meet the emission standards as specified in subparts B and H of this 
part. If you amend your application by submitting new test data to 
include a newly added or modified locomotive, as described in paragraph 
(b)(3) of this section, use the appropriate FELs with corresponding 
production volumes to calculate emission credits for the model year, as 
described in subpart H of this part. In all other circumstances, you 
must use the higher FEL for the entire family to calculate emission 
credits under subpart H of this part.
    (2) You may ask to lower the FEL for your emission family only if 
you have test data from production locomotives showing that emissions 
are below the proposed lower FEL. The lower FEL applies only to engines 
or fuel-system components you produce after we approve the new FEL. Use 
the appropriate FELs with corresponding production volumes to calculate 
emission credits for the model year, as described in subpart H of this 
part.
    95. Section 1033.235 is amended by revising paragraphs (c) and (d) 
introductory text to read as follows:


Sec.  1033.235  Emission testing required for certification.

* * * * *
    (c) We may measure emissions from any of your emission-data 
locomotives or other locomotives from the engine family.
    (1) We may decide to do the testing at your plant or any other 
facility. If we do this, you must deliver the locomotive to a test 
facility we designate. If we do the testing at your plant, you must 
schedule it as soon as possible and make available the instruments, 
personnel, and equipment we need.
    (2) If we measure emissions from one of your locomotives, the 
results of that testing become the official emission results for the 
locomotive. Unless we later invalidate these data, we may decide not to 
consider your data in determining if your engine family meets 
applicable requirements.
    (3) Before we test one of your locomotives, we may set its 
adjustable parameters to any point within the adjustable ranges (see 
Sec.  1033.115(b)).
    (4) Before we test one of your locomotives, we may calibrate it 
within normal production tolerances for anything we do not consider an 
adjustable parameter. For example, this would apply where we determine 
that an engine parameter is not an adjustable parameter (as defined in 
Sec.  1042.901) but that it is subject to production variability.
    (d) You may ask to use carryover emission data from a previous 
model year instead of doing new tests if all the following are true:
* * * * *
    96. Section 1033.240 is amended by revising paragraph (b) 
introductory text to read as follows:


Sec.  1033.240  Demonstrating compliance with exhaust emission 
standards.

* * * * *
    (b) Your engine family is deemed not to comply if any emission-data 
locomotive representing that family has test results showing a 
deteriorated emission level for any pollutant that is above an 
applicable emission standard . Use the following steps to determine the 
deteriorated emission level for the test locomotive:
* * * * *
    97. Section 1033.255 is amended by revising paragraph (b) to read 
as follows:


Sec.  1033.255  EPA decisions.

* * * * *
    (b) We may deny your application for certification if we determine 
that your engine family fails to comply with emission standards or 
other requirements of this part or the Clean Air Act. We will base our 
decision on all available information. If we deny

[[Page 44534]]

your application, we will explain why in writing.
* * * * *

Subpart D--[Amended]

    98. Section 1033.325 is amended by revising paragraph (d) to read 
as follows:


Sec.  1033.325  Maintenance of records; submittal of information.

* * * * *
    (d) Nothing in this section limits our authority to require you to 
establish, maintain, keep or submit to us information not specified by 
this section. We may also ask you to send less information.
* * * * *

Subpart F--[Amended]

    99. Section 1033.501 is amended by revising paragraph (i) to read 
as follows:


Sec.  1033.501  General provisions.

* * * * *
    (i) For passenger locomotives that can generate hotel power from 
the main propulsion engine, the locomotive must comply with the 
emission standards when in non-hotel setting. For hotel mode, the 
locomotive is subject to the notch cap provisions of Sec.  1033.101 and 
the defeat device prohibition of Sec.  1033.115.
* * * * *
    100. Section 1033.530 is amended by revising paragraph (h) to read 
as follows:


Sec.  1033.530  Duty cycles and calculations.

* * * * *
    (h) Calculation adjustments for energy-saving design features. The 
provisions of this paragraph (h) apply for locomotives equipped with 
new energy-saving locomotive design features. They do not apply for 
features that only improve the engine's brake-specific fuel 
consumption. They also do not apply for features that were commonly 
incorporated in locomotives before 2008.
    (1) Manufacturers/remanufacturers choosing to adjust emissions 
under this paragraph (h) must do all of the following for 
certification:
    (i) Describe the energy-saving features in your application for 
certification.
    (ii) Describe in your installation instruction and/or maintenance 
instructions all steps necessary to utilize the energy-saving features.
    (2) If your design feature will also affect the locomotives' duty 
cycle, you must comply with the requirements of paragraph (g) of this 
section.
    (3) Calculate the energy savings as described in this paragraph 
(h)(3).
    (i) Estimate the expected mean in-use fuel consumption rate (on a 
BTU per ton-mile basis) with and without the energy saving design 
feature, consistent with the specifications of paragraph (h)(4) of this 
section. The energy savings is the ratio of fuel consumed from a 
locomotive operating with the new feature to fuel consumed from a 
locomotive operating without the feature under identical conditions. 
Include an estimate of the 80 percent confidence interval for your 
estimate of the mean, and other statistical parameters we specify.
    (ii) Your estimate must be based on in-use operating data, 
consistent with good engineering judgment. Where we have previously 
certified your design feature under this paragraph (h), we may require 
you to update your analysis based on all new data that are available. 
You must obtain preliminary approval before you begin collecting 
operational data for this purpose.
    (iii) We may allow you to consider the effects of your design 
feature separately for different route types, regions, or railroads. We 
may require that you certify these different locomotives in different 
engine families and may restrict their use to the specified 
applications.
    (iv) Design your test plan so that the operation of the locomotives 
with and without is as similar as possible in all material aspects 
(other than the design feature being evaluated). Correct all data for 
any relevant differences, consistent with good engineering judgment.
    (v) Do not include any brake-specific energy savings in your 
calculated values. If it is not possible to exclude such effects from 
your data gathering, you must correct for these effects, consistent 
with good engineering judgment.
    (4) Calculate adjustment factors as described in this paragraph 
(h)(4). If the energy savings will apply broadly, calculate and apply 
the adjustment on a cycle-weighted basis. Otherwise, calculate and 
apply the adjustment separately for each notch. To apply the 
adjustment, multiply the emissions (either cycle-weighted or notch-
specific, as applicable) by the adjustment. Use the lower bound of the 
80 percent confidence interval of the estimate of the mean as your 
estimated energy savings rate. We may cap your energy savings rate for 
this paragraph (h)(4) at 80 percent of the estimate of the mean. 
Calculate the emission adjustment factors as:
    AF = 1.000 - (energy savings rate)
    (5) We may require you to collect and report data from locomotives 
we allow you to certify under this paragraph (h) and to recalculate the 
adjustment factor for future model years based on such data.

Subpart G--[Amended]

    101. Section 1033.601 is amended by revising paragraph (a) to read 
as follows:


Sec.  1033.601  General compliance provisions.

* * * * *
    (a) Meaning of terms. When used in 40 CFR part 1068, apply meanings 
for specific terms as follows:
    (1) ``Manufacturer'' means manufacturer and/or remanufacturer.
    (2) ``Date of manufacture'' means date of original manufacture for 
freshly manufactured locomotives and the date on which a remanufacture 
is completed for remanufactured engines.
* * * * *
    102. Section 1033.625 is amended by revising paragraphs (a)(1), 
(b), and (c) to read as follows:


Sec.  1033.625  Special certification provisions for non-locomotive-
specific engines.

* * * * *
    (a) * * *
    (1) Before being installed in the locomotive, the engines were 
covered by a certificate of conformity issued under 40 CFR Part 1039 
(or part 89) that is effective for the calendar year in which the 
manufacture or remanufacture occurs. You may use engines certified 
during the previous years if they were subject to the same standards. 
You may not make any modifications to the engines unless we approve 
them.
* * * * *
    (b) To certify your locomotives by design under this section, 
submit your application as specified in Sec.  1033.205, with the 
following exceptions:
    (1) Include the following instead of the locomotive test data 
otherwise required by Sec.  1033.205:
    (i) A description of the engines to be used, including the name of 
the engine manufacturer and engine family identifier for the engines.
    (ii) A brief engineering analysis describing how the engine's 
emission controls will function when installed in the locomotive 
throughout the locomotive's useful life.
    (iii) The emission data submitted under 40 CFR part 1039 (or part 
89).
    (2) You may separately submit some of the information required by 
Sec.  1033.205, consistent with the provisions of Sec.  1033.1(d). For 
example, this may be an appropriate way to submit detailed information 
about proprietary engine software. Note that this allowance to 
separately submit some of the information required by

[[Page 44535]]

Sec.  1033.205 is also available for applications not submitted under 
this section.
    (c) Locomotives certified under this section are subject to all the 
requirements of this part except as specified in paragraph (b) of this 
section. The engines used in such locomotives are not considered to be 
included in the otherwise applicable engines family of 40 CFR part 1039 
(or part 89).
* * * * *
    103. A new Sec.  1033.652 is added to read as follows:


Sec.  1033.652  Special provisions for exported locomotives.

    (a) Uncertified locomotives. Locomotives covered by an export 
exemption under 40 CFR 1068.230 may be introduced into U.S. commerce 
prior to being exported, but may not be used in any revenue generating 
service in the U.S. Locomotives covered by this paragraph (a) may not 
include any EPA emission control information label. Such locomotives 
may include emission control information labels for the country to 
which they are being exported.
    (b) Locomotives covered by export-only certificates. Locomotives 
may be certified for export under 40 CFR 1068.230. Such locomotives may 
be introduced into U.S. commerce prior to being exported, but may not 
be used in any revenue generating service in the U.S.
    (c) Locomotives included in a certified engine family. Except as 
specified in paragraph (d) of this section, locomotives included in a 
certified engine family may be exported without restriction. Note that 
Sec.  1033.705 requires that exported locomotives be excluded from 
emission credit calculations in certain circumstances.
    (d) Locomotives certified to FELs above the standards. The 
provisions of this paragraph (d) apply for locomotive configurations 
included in engine families certified to one or more FELs above any 
otherwise applicable standard. Individual locomotives that will be 
exported may be excluded from an engine family if they are unlabeled. 
For locomotives that were labeled during production, you may remove the 
emission control information labels prior to export. All unlabeled 
locomotives that will be exported are subject to the provisions of 
paragraph (a) of this section. Locomotives that are of a configuration 
included in an engine family certified to one of more FELs above any 
otherwise applicable standard that includes an EPA emission control 
information label when exported are considered to be part of the engine 
family and must be included in credit calculations under Sec.  
1033.705. Note that this requirement does not apply for locomotives 
that do not have EPA emission control information labels, but that do 
have other labels (such as an export-only label).

Subpart H--[Amended]

    104. Section 1033.705 is amended by revising paragraph (b) 
introductory text to read as follows:


Sec.  1033.705  Calculating emission credits.

* * * * *
    (b) For each participating engine family, calculate positive or 
negative emission credits relative to the otherwise applicable emission 
standard. For the end of year report, round the sum of emission credits 
to the nearest one hundredth of a megagram (0.01 Mg). Round your end of 
year emission credit balance to the nearest megagram (Mg). Use 
consistent units throughout the calculation. When useful life is 
expressed in terms of megawatt-hrs, calculate credits for each engine 
family from the following equation:
* * * * *
    105. Section 1033.715 is revised to read as follows:


Sec.  1033.715  Banking emission credits.

    (a) Banking is the retention of emission credits by the 
manufacturer/remanufacturer generating the emission credits (or owner/
operator, in the case of transferred credits) for use in future model 
years for averaging, trading, or transferring. You may use banked 
emission credits only as allowed by Sec.  1033.740.
    (b) You may designate any emission credits you plan to bank in the 
reports you submit under Sec.  1042.730. During the model year and 
before the due date for the final report, you may designate your 
reserved emission credits for averaging, trading, or transferring.
    (c) Reserved credits become actual emission credits when you submit 
your final report. However, we may revoke these emission credits if we 
are unable to verify them after reviewing your reports or auditing your 
records.
    106. Section 1033.725 is amended by revising paragraph (b)(2) to 
read as follows:


Sec.  1033.725  Requirements for your application for certification.

* * * * *
    (b) * * *
    (2) Detailed calculations of projected emission credits (positive 
or negative) based on projected production volumes. We may require you 
to include similar calculations from your other engine families to 
demonstrate that you will be able to avoid a negative credit balance 
for the model year. If you project negative emission credits for a 
family, state the source of positive emission credits you expect to use 
to offset the negative emission credits.
    107. Section 1033.730 is amended by revising paragraphs (b)(3) and 
(b)(5) to read as follows:


Sec.  1033.730  ABT reports.

* * * * *
    (b) * * *
    (3) The FEL for each pollutant. If you change the FEL after the 
start of production, identify the date that you started using the new 
FEL and/or give the engine identification number for the first engine 
covered by the new FEL. In this case, identify each applicable FEL and 
calculate the positive or negative emission credits under each FEL.
* * * * *
    (5) Rated power for each locomotive configuration, and the average 
locomotive power weighted by U.S.-directed production volumes for the 
engine family.
* * * * *
    108. Section 1033.735 is amended by revising paragraphs (b), (d), 
and (e) to read as follows:


Sec.  1033.735  Required records.

* * * * *
    (b) Keep the records required by this section for at least eight 
years after the due date for the end-of-year report. You may not use 
emission credits for any engines if you do not keep all the records 
required under this section. You must therefore keep these records to 
continue to bank valid credits. Store these records in any format and 
on any media, as long as you can promptly send us organized, written 
records in English if we ask for them. You must keep these records 
readily available. We may review them at any time.
* * * * *
    (d) Keep records of the engine identification number for each 
locomotive you produce that generates or uses emission credits under 
the ABT program. If you change the FEL after the start of production, 
identify the date you started using each FEL and the range of engine 
identification numbers associated with each FEL. You must also be able 
to identify the purchaser and destination for each engine you produce.
    (e) We may require you to keep additional records or to send us 
relevant information not required by this section in accordance with 
the Clean Air Act.

[[Page 44536]]

Subpart J--[Amended]

    109. Section 1033.901 is amended by revising the definitions for 
``Carryover'', ``Total hydrocarbon'', ``Total hydrocarbon equivalent'', 
and ``Useful life'' and adding a new definition for ``Alcohol-fueled 
locomotive'' in alphabetical order to read as follows:


Sec.  1033.901  Definitions.

* * * * *
    Alcohol-fueled locomotive means a locomotive with an engine that is 
designed to run using an alcohol fuel. For purposes of this definition, 
alcohol fuels do not include fuels with a nominal alcohol content below 
25 percent by volume.
* * * * *
    Carryover means relating to certification based on emission data 
generated from an earlier model year as described in Sec.  1033.235(d). 
This generally requires that the locomotives in the engine family do 
not differ in any aspect related to emissions.
* * * * *
    Total hydrocarbon has the meaning given in 40 CFR 1065.1001. This 
generally means the combined mass of organic compounds measured by the 
specified procedure for measuring total hydrocarbon, expressed as a 
hydrocarbon with a hydrogen-to-carbon mass ratio of 1.85:1.
    Total hydrocarbon equivalent has the meaning given in 40 CFR 
1065.1001. This generally means the sum of the carbon mass 
contributions of non-oxygenated hydrocarbons, alcohols and aldehydes, 
or other organic compounds that are measured separately as contained in 
a gas sample, expressed as exhaust hydrocarbon from petroleum-fueled 
locomotives. The hydrogen-to-carbon mass ratio of the equivalent 
hydrocarbon is 1.85:1.
* * * * *
    Useful life means the period during which the locomotive engine is 
designed to properly function in terms of reliability and fuel 
consumption, without being remanufactured, specified as work output or 
miles. It is the period during which a locomotive is required to comply 
with all applicable emission standards. See Sec.  1033.101(g).
* * * * *
    110. A new Sec.  1033.925 is added to subpart J to read as follows:


Sec.  1033.925  Reporting and recordkeeping requirements.

    Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq), the 
Office of Management and Budget approves the reporting and 
recordkeeping specified in the applicable regulations. The following 
items illustrate the kind of reporting and recordkeeping we require for 
engines regulated under this part:
    (a) We specify the following requirements related to engine 
certification in this part 1033:
    (1) In Sec.  1033.150 we state the requirements for interim 
provisions.
    (2) In subpart C of this part we identify a wide range of 
information required to certify engines.
    (3) In Sec.  1033.325 we specify certain records related to 
production-line testing.
    (4) In subpart G of this part we identify several reporting and 
recordkeeping items for making demonstrations and getting approval 
related to various special compliance provisions.
    (5) In Sec. Sec.  1033.725, 1033.730, and 1033.735 we specify 
certain records related to averaging, banking, and trading.
    (6) In subpart I of this part we specify certain records related to 
meeting requirements for remanufactured engines.
    (b) We specify the following requirements related to testing in 40 
CFR part 1065:
    (1) In 40 CFR 1065.2 we give an overview of principles for 
reporting information.
    (2) In 40 CFR 1065.10 and 1065.12 we specify information needs for 
establishing various changes to published test procedures.
    (3) In 40 CFR 1065.25 we establish basic guidelines for storing 
test information.
    (4) In 40 CFR 1065.695 we identify data that may be appropriate for 
collecting during testing of in-use engines using portable analyzers.
    (c) We specify the following requirements related to the general 
compliance provisions in 40 CFR part 1068:
    (1) In 40 CFR 1068.5 we establish a process for evaluating good 
engineering judgment related to testing and certification.
    (2) In 40 CFR 1068.25 we describe general provisions related to 
sending and keeping information.
    (3) In 40 CFR 1068.27 we require manufacturers to make engines 
available for our testing or inspection if we make such a request.
    (4) In 40 CFR 1068.105 we require vessel manufacturers to keep 
certain records related to duplicate labels from engine manufacturers.
    (5) In 40 CFR 1068.120 we specify recordkeeping related to 
rebuilding engines.
    (6) In 40 CFR part 1068, subpart C, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to various exemptions.
    (7) In 40 CFR part 1068, subpart D, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to importing engines.
    (8) In 40 CFR 1068.450 and 1068.455 we specify certain records 
related to testing production-line engines in a selective enforcement 
audit.
    (9) In 40 CFR 1068.501 we specify certain records related to 
investigating and reporting emission-related defects.
    (10) In 40 CFR 1068.525 and 1068.530 we specify certain records 
related to recalling nonconforming engines.

PART 1039--CONTROL OF EMISSIONS FROM NEW AND IN-USE NONROAD 
COMPRESSION-IGNITION ENGINES

    111. The authority citation for part 1039 continues to read as 
follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--[Amended]

    112. Section 1039.5 is amended by revising paragraph (a) to read as 
follows:


Sec.  1039.5  Which engines are excluded from this part's requirements?

* * * * *
    (a) Locomotive engines. (1) The following locomotive engines are 
not subject to the provisions of this part 1039:
    (i) Engines in locomotives subject to the standards of 40 CFR part 
92 or 1033.
    (ii) Engines in locomotives that are exempt from the standards of 
40 CFR part 1033 pursuant to the provisions of 40 CFR part 1033 or 1068 
(except for the provisions of 40 CFR 1033.150(e)).
    (iii) Engines in locomotives that are exempt from the standards of 
40 CFR part 92 pursuant to the provisions of 40 CFR part 92 (except for 
the provisions of 40 CFR 92.907). For example, an engine that is exempt 
under 40 CFR 92.906 because it is in a manufacturer-owned locomotive is 
not subject to the provisions of this part 1039.
    (2) The following locomotive engines are subject to the provisions 
of this part 1039:
    (i) Engines in locomotives exempt from 40 CFR part 92 or 1033 
pursuant to the provisions of 40 CFR 92.907 or 1033.150(e).
    (ii) Locomotive engines excluded from the definition of locomotive 
in 40 CFR 1033.901.
* * * * *
    113. Section 1039.15 is amended by revising paragraph (a) to read 
as follows:

[[Page 44537]]

Sec.  1039.15  Do any other regulation parts apply to me?

    (a) Part 1065 of this chapter describes procedures and equipment 
specifications for testing engines to measure exhaust emissions. 
Subpart F of this part 1039 describes how to apply the provisions of 
part 1065 of this chapter to determine whether engines meet the exhaust 
emission standards in this part.
* * * * *
    114. A new Sec.  1039.30 is added to subpart A to read as follows:


Sec.  1039.30  Submission of information.

    (a) This part includes various requirements to record data or other 
information. Refer to Sec.  1039.825 and 40 CFR 1068.25 regarding 
recordkeeping requirements. If recordkeeping requirements are not 
specified, store these records in any format and on any media and keep 
them readily available for one year after you send an associated 
application for certification, or one year after you generate the data 
if they do not support an application for certification. You must 
promptly send us organized, written records in English if we ask for 
them. We may review them at any time.
    (b) The regulations in Sec.  1039.255 and 40 CFR 1068.101 describe 
your obligation to report truthful and complete information and the 
consequences of failing to meet this obligation. This includes 
information not related to certification.
    (c) Send all reports and requests for approval to the Designated 
Compliance Officer (see Sec.  1039.801).
    (d) Any written information we require you to send to or receive 
from another company is deemed to be a required record under this 
section. Such records are also deemed to be submissions to EPA. We may 
require you to send us these records whether or not you are a 
certificate holder.

Subpart B--[Amended]

    115. Section 1039.120 is amended by revising paragraph (c) to read 
as follows:


Sec.  1039.120  What emission-related warranty requirements apply to 
me?

* * * * *
    (c) Components covered. The emission-related warranty covers all 
components whose failure would increase an engine's emissions of any 
regulated pollutant, including components listed in 40 CFR part 1068, 
Appendix I, and components from any other system you develop to control 
emissions. The emission-related warranty covers these components even 
if another company produces the component. Your emission-related 
warranty does not cover components whose failure would not increase an 
engine's emissions of any regulated pollutant.
* * * * *
    116. Section 1039.125 is amended by revising paragraphs 
(a)(1)(iii), (c), and (d) and adding paragraph (a)(5) to read as 
follows:


Sec.  1039.125  What maintenance instructions must I give to buyers?

* * * * *
    (a) * * *
    (1) * * *
    (iii) You provide the maintenance free of charge and clearly say so 
in your maintenance instructions.
* * * * *
    (5) You may ask us to approve a maintenance interval shorter than 
that specified in paragraphs (a)(2) and (a)(3) of this section under 
Sec.  1039.210, including emission-related components that were not in 
widespread use with nonroad compression-ignition engines before 2011. 
In your request you must describe the proposed maintenance step, 
recommend the maximum feasible interval for this maintenance, include 
your rationale with supporting evidence to support the need for the 
maintenance at the recommended interval, and demonstrate that the 
maintenance will be done at the recommended interval on in-use engines. 
In considering your request, we will evaluate the information you 
provide and any other available information to establish alternate 
specifications for maintenance intervals, if appropriate.
* * * * *
    (c) Special maintenance. You may specify more frequent maintenance 
to address problems related to special situations, such as atypical 
engine operation. You must clearly state that this additional 
maintenance is associated with the special situation you are 
addressing. We may disapprove your maintenance instructions if we 
determine that you have specified special maintenance steps to address 
engine operation that is not atypical, or that the maintenance is 
unlikely to occur in use. If we determine that certain maintenance 
items do not qualify as special maintenance under this paragraph (c), 
you may identify this as recommended additional maintenance under 
paragraph (b) of this section.
    (d) Noncritical emission-related maintenance. Subject to the 
provisions of this paragraph (d), you may schedule any amount of 
emission-related inspection or maintenance that is not covered by 
paragraph (a) of this section (that is, maintenance that is neither 
explicitly identified as critical emission-related maintenance, nor 
that we approve as critical emission-related maintenance). Noncritical 
emission-related maintenance generally includes maintenance on the 
components we specify in 40 CFR part 1068, Appendix I, that is not 
covered in paragraph (a) of this section. You must state in the owners 
manual that these steps are not necessary to keep the emission-related 
warranty valid. If operators fail to do this maintenance, this does not 
allow you to disqualify those engines from in-use testing or deny a 
warranty claim. Do not take these inspection or maintenance steps 
during service accumulation on your emission-data engines.
* * * * *
    117. Section 1039.135 is amended by revising paragraphs (c)(6) and 
(c)(8) to read as follows:


Sec.  1039.135  How must I label and identify the engines I produce?

* * * * *
    (c) * * *
    (6) State the date of manufacture [DAY (optional), MONTH, and 
YEAR]; however, you may omit this from the label if you stamp, engrave, 
or otherwise permanently identify it elsewhere on the engine, in which 
case you must also describe in your application for certification where 
you will identify the date on the engine.
* * * * *
    (8) Identify the emission-control system. Use terms and 
abbreviations as described in 40 CFR 1068.45. You may omit this 
information from the label if there is not enough room for it and you 
put it in the owners manual instead.
* * * * *

Subpart C--[Amended]

    118. Section 1039.201 is amended by adding paragraph (h) to read as 
follows:


Sec.  1039.201  What are the general requirements for obtaining a 
certificate of conformity?

* * * * *
    (h) For engines that become new after being placed into service, 
such as engines converted to nonroad use after being used in motor 
vehicles, we may specify alternate certification provisions consistent 
with the intent of this part. See the definition of ``new nonroad 
engine'' in Sec.  1039.801.
    119. Section 1039.220 is revised to read as follows:

[[Page 44538]]

Sec.  1039.220  How do I amend the maintenance instructions in my 
application?

    You may amend your emission-related maintenance instructions after 
you submit your application for certification as long as the amended 
instructions remain consistent with the provisions of Sec.  1039.125. 
You must send the Designated Compliance Officer a written request to 
amend your application for certification for an engine family if you 
want to change the emission-related maintenance instructions in a way 
that could affect emissions. In your request, describe the proposed 
changes to the maintenance instructions. If operators follow the 
original maintenance instructions rather than the newly specified 
maintenance, this does not allow you to disqualify those engines from 
in-use testing or deny a warranty claim.
    (a) If you are decreasing or eliminating any specified maintenance, 
you may distribute the new maintenance instructions to your customers 
30 days after we receive your request, unless we disapprove your 
request. This would generally include replacing one maintenance step 
with another. We may approve a shorter time or waive this requirement.
    (b) If your requested change would not decrease the specified 
maintenance, you may distribute the new maintenance instructions 
anytime after you send your request. For example, this paragraph (b) 
would cover adding instructions to increase the frequency of filter 
changes for engines in severe-duty applications.
    (c) You need not request approval if you are making only minor 
corrections (such as correcting typographical mistakes), clarifying 
your maintenance instructions, or changing instructions for maintenance 
unrelated to emission control. We may ask you to send us copies of 
maintenance instructions revised under this paragraph (c).
    120. Section 1039.225 is amended by revising paragraphs (b)(2), 
(e), and (f) to read as follows:


Sec.  1039.225  How do I amend my application for certification to 
include new or modified engines or to change an FEL?

* * * * *
    (b) * * *
    (2) Include engineering evaluations or data showing that the 
amended engine family complies with all applicable requirements. You 
may do this by showing that the original emission-data engine is still 
appropriate for showing that the amended family complies with all 
applicable requirements.
* * * * *
    (e) For engine families already covered by a certificate of 
conformity, you may start producing the new or modified engine 
configuration anytime after you send us your amended application and 
before we make a decision under paragraph (d) of this section. However, 
if we determine that the affected engines do not meet applicable 
requirements, we will notify you to cease production of the engines and 
may require you to recall the engines at no expense to the owner. 
Choosing to produce engines under this paragraph (e) is deemed to be 
consent to recall all engines that we determine do not meet applicable 
emission standards or other requirements and to remedy the 
nonconformity at no expense to the owner. If you do not provide 
information required under paragraph (c) of this section within 30 days 
after we request it, you must stop producing the new or modified 
engines.
    (f) You may ask us to approve a change to your FEL in certain cases 
after the start of production. The changed FEL may not apply to engines 
you have already introduced into U.S. commerce, except as described in 
this paragraph (f). If we approve a changed FEL after the start of 
production, you must include the new FEL on the emission control 
information label for all engines produced after the change. You may 
ask us to approve a change to your FEL in the following cases:
    (1) You may ask to raise your FEL for your engine family at any 
time. In your request, you must show that you will still be able to 
meet the emission standards as specified in subparts B and H of this 
part. If you amend your application by submitting new test data to 
include a newly added or modified engine, as described in paragraph 
(b)(3) of this section, use the appropriate FELs with corresponding 
production volumes to calculate emission credits for the model year, as 
described in subpart H of this part. In all other circumstances, you 
must use the higher FEL for the entire engine family to calculate 
emission credits under subpart H of this part.
    (2) You may ask to lower the FEL for your engine family only if you 
have test data from production engines showing that emissions are below 
the proposed lower FEL. The lower FEL applies only to engines you 
produce after we approve the new FEL. Use the appropriate FELs with 
corresponding production volumes to calculate emission credits for the 
model year, as described in subpart H of this part.
    121. Section 1039.230 is amended by revising paragraphs (b) and (d) 
to read as follows:


Sec.  1039.230  How do I select engine families?

* * * * *
    (b) Group engines in the same engine family if they are the same in 
all the following aspects:
    (1) The combustion cycle and fuel.
    (2) The cooling system (water-cooled vs. air-cooled).
    (3) Method of air aspiration.
    (4) Method of exhaust aftertreatment (for example, catalytic 
converter or particulate trap).
    (5) Combustion chamber design.
    (6) Bore and stroke.
    (7) Cylinder arrangement (for engines with aftertreatment devices 
only).
    (8) Method of control for engine operation other than governing 
(i.e., mechanical or electronic).
    (9) Power category.
    (10) Numerical level of the emission standards that apply to the 
engine.
* * * * *
    (d) In unusual circumstances, you may group engines that are not 
identical with respect to the things listed in paragraph (b) of this 
section in the same engine family if you show that their emission 
characteristics during the useful life will be similar.
* * * * *
    122. Section 1039.235 is amended by revising paragraphs (c) and (d) 
introductory text to read as follows:


Sec.  1039.235  What emission testing must I perform for my application 
for a certificate of conformity?

* * * * *
    (c) We may measure emissions from any of your emission-data engines 
or other engines from the engine family, as follows:
    (1) We may decide to do the testing at your plant or any other 
facility. If we do this, you must deliver the engine to a test facility 
we designate. The engine you provide must include appropriate 
manifolds, aftertreatment devices, electronic control units, and other 
emission-related components not normally attached directly to the 
engine block. If we do the testing at your plant, you must schedule it 
as soon as possible and make available the instruments, personnel, and 
equipment we need.
    (2) If we measure emissions on one of your engines, the results of 
that testing become the official emission results for the engine. 
Unless we later invalidate these data, we may decide not to consider 
your data in determining if your engine family meets applicable 
requirements.
    (3) Before we test one of your engines, we may set its adjustable 
parameters to any point within the physically adjustable ranges (see 
Sec.  1039.115(e)).

[[Page 44539]]

    (4) Before we test one of your engines, we may calibrate it within 
normal production tolerances for anything we do not consider an 
adjustable parameter. For example, this would apply where we determine 
that an engine parameter is not an adjustable parameter (as defined in 
Sec.  1039.801) but that it is subject to production variability.
    (d) You may ask to use carryover emission data from a previous 
model year instead of doing new tests, but only if all the following 
are true:
* * * * *
    123. Section 1039.240 is amended by revising paragraphs (a), (b), 
and (c)(1) to read as follows:


Sec.  1039.240  How do I demonstrate that my engine family complies 
with exhaust emission standards?

    (a) For purposes of certification, your engine family is considered 
in compliance with the emission standards in Sec.  1039.101(a) and (b), 
Sec.  1039.102(a) and (b), Sec.  1039.104, and Sec.  1039.105 if all 
emission-data engines representing that family have test results 
showing deteriorated emission levels at or below these standards. This 
includes all test points over the course of the durability 
demonstration. Note that your FELs are considered to be the applicable 
emission standards with which you must comply if you participate in the 
ABT program in subpart H of this part.
    (b) Your engine family is deemed not to comply if any emission-data 
engine representing that family has test results showing a deteriorated 
emission level for any pollutant that is above an applicable emission 
standard. Similarly, your engine family is deemed not to comply if any 
emission-data engine representing that family has test results showing 
any emission level above the applicable not-to-exceed emission standard 
for any pollutant. This includes all test points over the course of the 
durability demonstration.
    (c) * * *
    (1) Additive deterioration factor for exhaust emissions. Except as 
specified in paragraph (c)(2) of this section, use an additive 
deterioration factor for exhaust emissions. An additive deterioration 
factor is the difference between exhaust emissions at the end of the 
useful life and exhaust emissions at the low-hour test point. In these 
cases, adjust the official emission results for each tested engine at 
the selected test point by adding the factor to the measured emissions. 
If the factor is less than zero, use zero. Additive deterioration 
factors must be specified to one more decimal place than the applicable 
standard.
* * * * *
    124. Section 1039.245 is amended by revising the introductory text 
to read as follows:


Sec.  1039.245  How do I determine deterioration factors from exhaust 
durability testing?

    This section describes how to determine deterioration factors, 
either with an engineering analysis, with pre-existing test data, or 
with new emission measurements. Apply these deterioration factors to 
determine whether your engines will meet the duty-cycle emission 
standards throughout the useful life as described in Sec.  1039.240.
* * * * *
    125. Section 1039.250 is amended by revising paragraphs (a) 
introductory text and (c) and removing paragraph (e) to read as 
follows:


Sec.  1039.250  What records must I keep and what reports must I send 
to EPA?

    (a) Within 45 days after the end of the model year, send the 
Designated Compliance Officer a report describing the following 
information about engines you produced during the model year:
* * * * *
    (c) Keep data from routine emission tests (such as test cell 
temperatures and relative humidity readings) for one year after we 
issue the associated certificate of conformity. Keep all other 
information specified in this section for eight years after we issue 
your certificate.
* * * * *
    126. Section 1039.255 is amended by revising paragraph (b) to read 
as follows:


Sec.  1039.255  What decisions may EPA make regarding my certificate of 
conformity?

* * * * *
    (b) We may deny your application for certification if we determine 
that your engine family fails to comply with emission standards or 
other requirements of this part or the Clean Air Act. We will base our 
decision on all available information. If we deny your application, we 
will explain why in writing.
* * * * *

Subpart G--[Amended]

    127. Section 1039.605 is amended by revising paragraph (d)(3) 
introductory text to read as follows:


Sec.  1039.605  What provisions apply to engines certified under the 
motor-vehicle program?

* * * * *
    (d) * * *
    (3) You must show that fewer than 50 percent of the engine family's 
total sales in the United States are used in nonroad applications. This 
includes engines used in any application without regard to which 
company manufactures the vehicle or equipment. Show this as follows:
* * * * *
    128. Section 1039.610 is amended by revising paragraph (d)(3) 
introductory text to read as follows:


Sec.  1039.610  What provisions apply to vehicles certified under the 
motor-vehicle program?

* * * * *
    (d) * * *
    (3) You must show that fewer than 50 percent of the engine family's 
total sales in the United States are used in nonroad applications. This 
includes any type of vehicle, without regard to which company completes 
the manufacturing of the nonroad equipment. Show this as follows:
* * * * *

Subpart H--[Amended]

    129. Section 1039.705 is amended by revising paragraph (b) before 
the equation to read as follows:


Sec.  1039.705  How do I generate and calculate emission credits?

* * * * *
    (b) For each participating family, calculate positive or negative 
emission credits relative to the otherwise applicable emission 
standard. Calculate positive emission credits for a family that has an 
FEL below the standard. Calculate negative emission credits for a 
family that has an FEL above the standard. Sum your positive and 
negative credits for the model year before rounding. Round the sum of 
emission credits to the nearest kilogram (kg), using consistent units 
throughout the following equation:
* * * * *
    130. Section 1039.715 is revised to read as follows:


Sec.  1039.715  How do I bank emission credits?

    (a) Banking is the retention of emission credits by the 
manufacturer generating the emission credits for use in future model 
years for averaging or trading.
    (b) You may designate any emission credits you plan to bank in the 
reports you submit under Sec.  1039.730. During the model year and 
before the due date for the final report, you may designate your 
reserved emission credits for averaging or trading.
    (c) Reserved credits become actual emission credits when you submit 
your final report. However, we may revoke

[[Page 44540]]

these emission credits if we are unable to verify them after reviewing 
your reports or auditing your records.
    131. Section 1039.720 is amended by revising paragraph (b) to read 
as follows:


Sec.  1039.720  How do I trade emission credits?

* * * * *
    (b) You may trade actual emission credits as described in this 
subpart. You may also trade reserved emission credits, but we may 
revoke these emission credits based on our review of your records or 
reports or those of the company with which you traded emission credits. 
You may trade banked credits within an averaging set to any certifying 
manufacturer.
* * * * *
    132. Section 1039.725 is amended by revising paragraph (b)(2) to 
read as follows:


Sec.  1039.725  What must I include in my application for 
certification?

* * * * *
    (b) * * *
    (2) Detailed calculations of projected emission credits (positive 
or negative) based on projected production volumes. We may require you 
to include similar calculations from your other engine families to 
demonstrate that you will be able to avoid a negative credit balance 
for the model year. If you project negative emission credits for a 
family, state the source of positive emission credits you expect to use 
to offset the negative emission credits.
    133. Section 1039.730 is amended by revising paragraphs (b)(3), 
(b)(5), and (f) to read as follows:


Sec.  1039.730  What ABT reports must I send to EPA?

* * * * *
    (b) * * *
    (3) The FEL for each pollutant. If you change the FEL after the 
start of production, identify the date that you started using the new 
FEL and/or give the engine identification number for the first engine 
covered by the new FEL. In this case, identify each applicable FEL and 
calculate the positive or negative emission credits under each FEL.
* * * * *
    (5) Maximum engine power for each engine configuration, and the 
average engine power weighted by U.S.-directed production volumes for 
the engine family.
* * * * *
    (f) Correct errors in your end-of-year report or final report as 
follows:
    (1) You may correct any errors in your end-of-year report when you 
prepare the final report, as long as you send us the final report by 
the time it is due.
    (2) If you or we determine within 270 days after the end of the 
model year that errors mistakenly decreased your balance of emission 
credits, you may correct the errors and recalculate the balance of 
emission credits. You may not make these corrections for errors that 
are determined more than 270 days after the end of the model year. If 
you report a negative balance of emission credits, we may disallow 
corrections under this paragraph (f)(2).
    (3) If you or we determine anytime that errors mistakenly increased 
your balance of emission credits, you must correct the errors and 
recalculate the balance of emission credits.
    134. Section 1039.735 is amended by revising paragraphs (b), (d), 
and (e) to read as follows:


Sec.  1039.735  What records must I keep?

* * * * *
    (b) Keep the records required by this section for at least eight 
years after the due date for the end-of-year report. You may not use 
emission credits for any engines if you do not keep all the records 
required under this section. You must therefore keep these records to 
continue to bank valid credits. Store these records in any format and 
on any media, as long as you can promptly send us organized, written 
records in English if we ask for them. You must keep these records 
readily available. We may review them at any time.
* * * * *
    (d) Keep records of the engine identification number for each 
engine you produce that generates or uses emission credits under the 
ABT program. You may identify these numbers as a range. If you change 
the FEL after the start of production, identify the date you started 
using each FEL and the range of engine identification numbers 
associated with each FEL. You must also be able to identify the 
purchaser and destination for each engine you produce.
    (e) We may require you to keep additional records or to send us 
relevant information not required by this section in accordance with 
the Clean Air Act.

Subpart I--[Amended]

    135. Section 1039.801 is amended by revising the definitions for 
``Model year'', ``New nonroad engine'', ``Total hydrocarbon'', ``Total 
hydrocarbon equivalent'', and ``Useful life and adding definitions for 
``Alcohol-fueled engine'', ``Carryover'', and ``Date of manufacture'' 
in alphabetical order to read as follows:


Sec.  1039.801  What definitions apply to this part?

* * * * *
    Alcohol-fueled engine means an engine that is designed to run using 
an alcohol fuel. For purposes of this definition, alcohol fuels do not 
include fuels with a nominal alcohol content below 25 percent by 
volume.
* * * * *
    Carryover means relating to certification based on emission data 
generated from an earlier model year as described in Sec.  1042.235(d). 
This generally requires that the engines in the engine family do not 
differ in any aspect related to emissions.
* * * * *
    Date of manufacture has the meaning given in 40 CFR 1068.30.
* * * * *
    Model year means one of the following things:
    (1) For freshly manufactured equipment and engines (see definition 
of ``new nonroad engine,'' paragraph (1)), model year means one of the 
following:
    (i) Calendar year.
    (ii) Your annual new model production period if it is different 
than the calendar year. This must include January 1 of the calendar 
year for which the model year is named. It may not begin before January 
2 of the previous calendar year and it must end by December 31 of the 
named calendar year.
    (2) For an engine that is converted to a nonroad engine after being 
placed into service as a stationary engine, or being certified and 
placed into service as a motor vehicle engine, model year means the 
calendar year in which the engine was originally produced. For a motor 
vehicle engine that is converted to be a nonroad engine without having 
been certified, model year means the calendar year in which the engine 
becomes a new nonroad engine. (See definition of ``new nonroad 
engine,'' paragraph (2).)
    (3) For a nonroad engine excluded under Sec.  1039.5 that is later 
converted to operate in an application that is not excluded, model year 
means the calendar year in which the engine was originally produced 
(see definition of ``new nonroad engine,'' paragraph (3)).
    (4) For engines that are not freshly manufactured but are installed 
in new nonroad equipment, model year means the calendar year in which 
the engine is installed in the new nonroad equipment (see definition of 
``new nonroad engine,'' paragraph (4)).
    (5) For imported engines:
    (i) For imported engines described in paragraph (5)(i) of the 
definition of

[[Page 44541]]

``new nonroad engine,'' model year has the meaning given in paragraphs 
(1) through (4) of this definition.
    (ii) For imported engines described in paragraph (5)(ii) of the 
definition of ``new nonroad engine,'' model year has the meaning given 
in 40 CFR 89.602 for independent commercial importers.
    (iii) For imported engines described in paragraph (5)(iii) of the 
definition of ``new nonroad engine,'' model year means the calendar 
year in which the engine is assembled in its imported configuration, 
unless specified otherwise in this part or in 40 CFR part 1068.
* * * * *
    New nonroad engine means any of the following things:
    (1) A freshly manufactured nonroad engine for which the ultimate 
purchaser has never received the equitable or legal title. This kind of 
engine might commonly be thought of as ``brand new.'' In the case of 
this paragraph (1), the engine is new from the time it is produced 
until the ultimate purchaser receives the title or the product is 
placed into service, whichever comes first.
    (2) An engine originally manufactured as a motor vehicle engine or 
a stationary engine that is later used or intended to be used in a 
piece of nonroad equipment. In this case, the engine is no longer a 
motor vehicle or stationary engine and becomes a ``new nonroad 
engine.'' The engine is no longer new when it is placed into nonroad 
service. This paragraph (2) applies if a motor vehicle engine or a 
stationary engine is installed in nonroad equipment, or if a motor 
vehicle or a piece of stationary equipment is modified (or moved) to 
become nonroad equipment.
    (3) A nonroad engine that has been previously placed into service 
in an application we exclude under Sec.  1039.5, when that engine is 
installed in a piece of equipment that is covered by this part 1039. 
The engine is no longer new when it is placed into nonroad service 
covered by this part 1039. For example, this would apply to marine 
diesel engine that is no longer used in a marine vessel but is instead 
installed in a piece of nonroad equipment subject to the provisions of 
this part.
    (4) An engine not covered by paragraphs (1) through (3) of this 
definition that is intended to be installed in new nonroad equipment. 
This generally includes installation of used engines in new equipment. 
The engine is no longer new when the ultimate purchaser receives a 
title for the equipment or the product is placed into service, 
whichever comes first.
    (5) An imported nonroad engine, subject to the following 
provisions:
    (i) An imported nonroad engine covered by a certificate of 
conformity issued under this part that meets the criteria of one or 
more of paragraphs (1) through (4) of this definition, where the 
original engine manufacturer holds the certificate, is new as defined 
by those applicable paragraphs.
    (ii) An imported engine covered by a certificate of conformity 
issued under this part, where someone other than the original engine 
manufacturer holds the certificate (such as when the engine is modified 
after its initial assembly), is a new nonroad engine when it is 
imported. It is no longer new when the ultimate purchaser receives a 
title for the engine or it is placed into service, whichever comes 
first.
    (iii) An imported nonroad engine that is not covered by a 
certificate of conformity issued under this part at the time of 
importation is new, but only if it was produced on or after the dates 
shown in the following table. This addresses uncertified engines and 
equipment initially placed into service that someone seeks to import 
into the United States. Importation of this kind of engine (or 
equipment containing such an engine) is generally prohibited by 40 CFR 
part 1068. However, the importation of such an engine is not prohibited 
if the engine has a model year before 2004, since it is not subject to 
standards.

     Applicability of Emission Standards for Nonroad Diesel Engines
------------------------------------------------------------------------
                                              Initial date of emission
           Maximum engine power                       standards
------------------------------------------------------------------------
kW < 19...................................  January 1, 2000.
19 <= kW < 37.............................  January 1, 1999.
37 <= kW < 75.............................  January 1, 1998.
75 <= kW < 130............................  January 1, 1997.
130 <= kW <= 560..........................  January 1, 1996.
kW > 560..................................  January 1, 2000.
------------------------------------------------------------------------

* * * * *
    Total hydrocarbon has the meaning given in 40 CFR 1065.1001. This 
generally means the combined mass of organic compounds measured by the 
specified procedure for measuring total hydrocarbon, expressed as a 
hydrocarbon with a hydrogen-to-carbon mass ratio of 1.85:1.
    Total hydrocarbon equivalent has the meaning given in 40 CFR 
1065.1001. This generally means the sum of the carbon mass 
contributions of non-oxygenated hydrocarbons, alcohols and aldehydes, 
or other organic compounds that are measured separately as contained in 
a gas sample, expressed as exhaust hydrocarbon from petroleum-fueled 
engines. The hydrogen-to-carbon mass ratio of the equivalent 
hydrocarbon is 1.85:1.
* * * * *
    Useful life means the period during which the engine is designed to 
properly function in terms of reliability and fuel consumption, without 
being remanufactured, specified as a number of hours of operation or 
calendar years, whichever comes first. It is the period during which a 
nonroad engine is required to comply with all applicable emission 
standards. See Sec.  1039.101(g).
* * * * *


Sec.  1039.810--[Removed]  

    136. Section 1039.810 is removed.

PART 1042--CONTROL OF EMISSIONS FROM NEW AND IN-USE MARINE 
COMPRESSION-IGNITION ENGINES AND VESSELS

    137. The authority citation for part 1042 continues to read as 
follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--[Amended]

    138. Section 1042.1 is revised to read as follows:


Sec.  1042.1  Applicability.

    Except as provided in Sec.  1042.5, the regulations in this part 
1042 apply for all new compression-ignition marine engines (including 
new engines deemed to be compression-ignition engines under this 
section) and vessels containing such engines. See Sec.  1042.901 for 
the definitions of engines and vessels considered to be new. This part 
1042 applies as follows:
    (a) This part 1042 applies for freshly manufactured marine engines 
starting with the model years noted in the following tables:

                         Table 1 to Sec.   1042.1--Part 1042 Applicability by Model Year
----------------------------------------------------------------------------------------------------------------
                                                           Maximum engine   Displacement (L/cyl)
                    Engine category                          power \a\         or application       Model year
----------------------------------------------------------------------------------------------------------------
Category 1.............................................             kW <75            disp.< 0.9        \b\ 2009

[[Page 44542]]

 
                                                            75 <=kW <=3700            disp.< 0.9            2012
                                                         .................     0.9 <=disp. < 1.2            2013
                                                         .................     1.2 <=disp. < 2.5            2014
                                                         .................     2.5 <=disp. < 3.5            2013
                                                         .................      3.5 <=disp.< 7.0            2012
                                                                 kW > 3700            disp.< 7.0            2014
Category 2.............................................          kW <=3700    7.0 <=disp. < 15.0            2013
                                                                 kW > 3700    7.0 <=disp. < 15.0            2014
                                                                       All       15 <=disp. < 30            2014
Category 3.............................................                All            disp. > 30            2011
----------------------------------------------------------------------------------------------------------------
\a\ See Sec.   1042.140, which describes how to determine maximum engine power.
\b\ See Table 1 of Sec.   1042.101 for the first model year in which this part 1042 applies for engines with
  maximum engine power below 75 kW and displacement at or above 0.9 L/cyl.

     (b) The requirements of subpart I of this part apply to 
remanufactured Category 1 and Category 2 engines beginning July 7, 
2008.
    (c) See 40 CFR part 94 for requirements that apply to engines with 
maximum engine power at or above 37 kW not yet subject to the 
requirements of this part 1042. See 40 CFR part 89 for requirements 
that apply to engines with maximum engine power below 37 kW not yet 
subject to the requirements of this part 1042.
    (d) The provisions of Sec. Sec.  1042.620 and 1042.901 apply for 
new engines used solely for competition beginning January 1, 2009.
    (e) The marine engines listed in this paragraph (e) are subject to 
all the requirements of this part even if they do not meet the 
definition of ``compression-ignition'' in Sec.  1042.901. The following 
engines are deemed to be compression-ignition engines for the purposes 
of this subchapter:
    (1) Marine engines powered by natural gas or other gaseous fuels 
with maximum engine power at or above 250 kW. Note that gaseous-fueled 
engines with maximum engine power below 250 kW may or may not meet the 
definition of ``compression-ignition'' in Sec.  1042.901.
    (2) Marine gas turbine engines.
    (3) Other marine internal combustion engines that do not meet the 
definition of ``spark-ignition'' in Sec.  1042.901.
    (f) Some of the provisions of this part may apply for other engines 
as specified in 40 CFR part 1043.
    139. Section 1042.5 is amended by adding paragraph (c) to read as 
follows:


Sec.  1042.5  Exclusions.

* * * * *
    (c) Recreational gas turbine engines. The requirements and 
prohibitions of this part do not apply to gas turbine engines installed 
on recreational vessels, as defined in Sec.  1042.901.
    140. Section 1042.15 is revised to read as follows:


Sec.  1042.15  Do any other regulation parts apply to me?

    (a) Part 1043 of this chapter describes requirements related to 
international pollution prevention that apply for some of the engines 
subject to this part.
    (b) The evaporative emission requirements of part 1060 of this 
chapter apply to vessels that include installed engines fueled with a 
volatile liquid fuel as specified in Sec.  1042.107. (Note: 
Conventional diesel fuel is not considered to be a volatile liquid 
fuel.)
    (c) Part 1065 of this chapter describes procedures and equipment 
specifications for testing engines to measure exhaust emissions. 
Subpart F of this part 1042 describes how to apply the provisions of 
part 1065 of this chapter to determine whether engines meet the exhaust 
emission standards in this part.
    (d) The requirements and prohibitions of part 1068 of this chapter 
apply to everyone, including anyone who manufactures, imports, 
installs, owns, operates, or rebuilds any of the engines subject to 
this part 1042, or vessels containing these engines. Part 1068 of this 
chapter describes general provisions, including these seven areas:
    (1) Prohibited acts and penalties for engine manufacturers, vessel 
manufacturers, and others.
    (2) Rebuilding and other aftermarket changes.
    (3) Exclusions and exemptions for certain engines.
    (4) Importing engines.
    (5) Selective enforcement audits of your production.
    (6) Defect reporting and recall.
    (7) Procedures for hearings.
    (e) Other parts of this chapter apply if referenced in this part.
    141. A new Sec.  1042.30 is added to subpart A to read as follows:


Sec.  1042.30  Submission of information.

    (a) This part includes various requirements to record data or other 
information. Refer to Sec.  1042.925 and 40 CFR 1068.25 regarding 
recordkeeping requirements. If recordkeeping requirements are not 
specified, store these records in any format and on any media and keep 
them readily available for one year after you send an associated 
application for certification, or one year after you generate the data 
if they do not support an application for certification. You must 
promptly send us organized, written records in English if we ask for 
them. We may review them at any time.
    (b) The regulations in Sec.  1042.255 and 40 CFR 1068.101 describe 
your obligation to report truthful and complete information and the 
consequences of failing to meet this obligation. This includes 
information not related to certification.
    (c) Send all reports and requests for approval to the Designated 
Compliance Officer (see Sec.  1042.901).
    (d) Any written information we require you to send to or receive 
from another company is deemed to be a required record under this 
section. Such records are also deemed to be submissions to EPA. We may 
require you to send us these records whether or not you are a 
certificate holder.

Subpart B--[Amended]

    142. Section 1042.101 is amended by revising the section heading, 
Table 1 in paragraph (a)(3), and paragraph (d)(1)(iii) to read as 
follows:


Sec.  1042.101  Exhaust emission standards for Category 1 engines and 
Category 2 engines.

    (a) * * *
    (3) * * *

[[Page 44543]]

[GRAPHIC] [TIFF OMITTED] TP28AU09.004

* * * * *
    (d) * * *
    (1) * * *
    (iii) Diesel-fueled and all other engines not described in 
paragraph (d)(1)(i) or (ii) of this section must comply with Tier 3 HC 
standards based on THC emissions and with Tier 4 standards based on 
NMHC emissions.
* * * * *
    143. A new Sec.  1042.104 is added to subpart B to read as follows:


Sec.  1042.104  Exhaust emission standards for Category 3 engines.

    (a) Duty-cycle standards. Exhaust emissions from your engines may 
not exceed emission standards, as follows:
    (1) Measure emissions using the test procedures described in 
subpart F of this part. Note that while no PM standards apply for 
Category 3 engines, PM emissions must be measured and reported.
    (2) NO<INF>X</INF> standards apply based on the engine's model year 
and maximum in-use engine speed as shown in the following table:

[[Page 44544]]



               Table 1 to Sec.   1042.104 NOX Emission Standards for Category 3 Engines (g/kW-hr)
----------------------------------------------------------------------------------------------------------------
                                                                           Maximum in-use engine speed
                                                               -------------------------------------------------
          Emission standards                  Model year         Less than 130
                                                                      RPM       130-2000 RPM \a\   Over 2000 RPM
----------------------------------------------------------------------------------------------------------------
Tier 1...............................  2004-2010 \b\..........            17.0   45.0 [middot] n             9.8
                                                                                         (-0.20)
Tier 2...............................  2011-2015..............            14.4   44.0 [middot] n             7.7
                                                                                         (-0.23)
Tier 3...............................  2016 and later.........             3.4  9.0 [middot] n (-            2.0
                                                                                           0.20)
----------------------------------------------------------------------------------------------------------------
\a\ Applicable standards are calculated from n (maximum in-use engine speed, in RPM, as specified in Sec.
  1042.140), rounded to one decimal place.
\b\ Tier 1 NOx standards apply as specified in 40 CFR part 94 for engines originally manufactured in model years
  2004 through 2010. They are shown here only for reference.

     (3) The HC standard for Tier 2 and later engines is 2.0 g/kW-hr. 
This standard applies as follows:
    (i) Alcohol-fueled engines must comply with HC standards based on 
THCE emissions.
    (ii) Natural gas-fueled engines must comply with HC standards based 
on NMHC emissions.
    (iii) Diesel-fueled and all other engines not described in 
paragraph (a)(3)(i) or (ii) of this section must comply with HC 
standards based on THC emissions.
    (4) The CO standard for Tier 2 and later engines is 5.0 g/kW-hr.
    (b) Averaging, banking, and trading. Category 3 engines are not 
eligible for participation in the averaging, banking, and trading (ABT) 
program as described in subpart H of this part.
    (c) Mode caps. Measured NO<INF>X</INF> emissions may not exceed the 
cap specified in this paragraph (c) for any applicable duty-cycle test 
modes with power greater than 10 percent maximum engine power. 
Calculate the mode cap by multiplying the applicable NO<INF>X</INF> 
standard by 1.5 and rounding to the nearest 0.1 g/kW-hr. Note that mode 
caps do not apply for pollutants other than NO<INF>X</INF> and do not 
apply for any modes of operation outside of the applicable duty-cycles 
in Sec.  1042.505. Category 3 engines are not subject to not-to-exceed 
standards.
    (d) Useful life. Your engines must meet the exhaust emission 
standards of this section over their full useful life, expressed as a 
period in years or hours of engine operation, whichever comes first.
    (1) The minimum useful life value is 3 years or 10,000 hours of 
operation.
    (2) Specify a longer useful life in hours for an engine family 
under either of two conditions:
    (i) If you design, advertise, or market your engine to operate 
longer than the minimum useful life (your recommended hours until 
rebuild indicates a longer design life).
    (ii) If your basic mechanical warranty is longer than the minimum 
useful life.
    (e) Applicability for testing. The duty-cycle emission standards in 
this section apply to all testing performed according to the procedures 
in Sec.  1042.505, including certification, production-line, and in-use 
testing. See paragraph (g) of this section for standards that apply for 
certain other test procedures, such as some production-line testing.
    (f) Domestic engines. Engines installed on vessels excluded from 40 
CFR part 1043 because they operate only domestically may not be 
certified for use with residual fuels.
    (g) Alternate installed-engine standards. NO<INF>X</INF> emissions 
may not exceed the standard specified in this paragraph (g) for test of 
engines installed on vessels when you are unable to operate the engine 
at the test points for the specified duty cycle, and you approximate 
these points consistent with the specifications of section 6 of 
Appendix 8 to the NO<INF>X</INF> Technical Code. Calculate the 
alternate installed-engine standard by multiplying the applicable 
NO<INF>X</INF> standard by 1.1 and rounding to the nearest 0.1 g/kW-hr.
    144. Section 1042.110 is amended by revising paragraph (a)(2) and 
adding paragraphs (a)(3) and (d) to read as follows:


Sec.  1042.110  Recording reductant use and other diagnostic functions.

    (a) * * *
    (2) The onboard computer log must record in nonvolatile computer 
memory all incidents of engine operation with inadequate reductant 
injection or reductant quality. Use good engineering judgment to ensure 
that the operator can readily access the information to submit the 
report required by Sec.  1042.660. For example, you may meet this 
requirement by documenting the incident in a text file that can be 
downloaded or printed by the operator.
    (3) SCR systems on Category 3 engines must also conform to the 
provisions of paragraph (d) of this section if they are equipped with 
on-off controls as allowed under Sec.  1042.115(g).
* * * * *
    (d) For Category 3 engines equipped with on-off controls (as 
allowed by Sec.  1042.115(g)), you must also equip your engine to 
continuously monitor NO<INF>X</INF> concentrations in the exhaust. Use 
good engineering judgment to alert operators if measured NO<INF>X</INF> 
concentrations indicate malfunctioning emission controls. Record any 
such operation in nonvolatile computer memory. You are not required to 
monitor NO<INF>X</INF> concentrations during operation for which the 
emission controls may be disabled under Sec.  1042.115(g).
    For the purpose of this paragraph (d), ``malfunctioning emission 
controls'' means any condition in which the measured NO<INF>X</INF> 
concentration exceeds the value expected when the engine is in 
compliance with the at-sea standard of Sec.  1042.104(g). Determine 
these expected values during production-line testing of the engine, 
using linear interpolation between test points. You may also use 
additional intermediate test points measured during the production-line 
test. Note that the provisions of paragraph (a) of this section also 
apply for SCR systems covered by this paragraph (d). For engines 
subject to both the provisions of paragraph (a) of this section and 
this paragraph (d), use good engineering judgment to integrate 
diagnostic features to comply with both paragraphs.
    145. Section 1042.115 is amended by revising paragraphs (d)(2) 
introductory text, (f) introductory text, and adding paragraphs (f)(4) 
and (g) to read as follows:


Sec.  1042.115  Other requirements.

* * * * *
    (d) * * *
    (2) Category 2 and Category 3 engines that have adjustable 
parameters must meet all the requirements of this part for any 
adjustment in the specified adjustable range. You must specify in your 
application for certification the adjustable range of each adjustable 
parameter on a new engine to-
* * * * *

[[Page 44545]]

    (f) Defeat devices. You may not equip your engines with a defeat 
device. A defeat device is an auxiliary emission control device that 
reduces the effectiveness of emission controls under conditions that 
the engine may reasonably be expected to encounter during normal 
operation and use. (Note that this means emissions control for 
operation outside of and between the official test modes is generally 
expected to be similar to the emissions control demonstrated at the 
test modes for engines.) This does not apply to auxiliary emission 
control devices you identify in your certification application if any 
of the following is true:
* * * * *
    (4) The engine is a Category 3 engine and the AECD conforms to the 
requirements of paragraph (g) of this section.
    (g) On-off controls for Category 3 engines. Manufacturers may equip 
Category 3 engines with features that disable Tier 3 emission controls 
subject to the following provisions:
    (1) Features that disable Tier 3 emission controls are considered 
to be AECDs whether or not they meet the definition of an AECD. For 
example, manually operated on-off features are AECDs under this 
paragraph (g). The features must be identified in your application for 
certification as AECDs.
    (2) If IMO has not established an ECA for U.S. waters, you must 
demonstrate that the AECD will not disable emission controls while 
operating in areas where emissions could reasonably be expected to 
adversely affect U.S. air quality. If ECAs have been established for 
U.S. waters, then you must demonstrate that the AECD will not disable 
emission control while operating in waters within the outer boundaries 
of the ECAs. (Note: See the regulations in 40 CFR part 1043 for 
requirements related to operation in other ECAs.) Compliance with this 
paragraph will generally require that the AECD operation be based on 
Global Positioning System (GPS) inputs. We may consider any relevant 
information to determine whether your AECD conforms to this paragraph 
(g).
    (3) The onboard computer log must record in nonvolatile computer 
memory all incidents of engine operation with the Tier 3 emission 
controls disabled.
    (4) The engine must comply fully with the Tier 2 standards when the 
Tier 3 emission controls are disabled.
    146. Section 1042.120 is amended by adding paragraph (b)(2) and 
revising paragraph (c) to read as follows:


Sec.  1042.120  Emission-related warranty requirements.

    (b) * * *
    (2) For Category 3 engines, your emission-related warranty must be 
valid throughout the engine's full useful life as specified in Sec.  
1042.104(d).
* * * * *
    (c) Components covered. The emission-related warranty covers all 
components whose failure would increase an engine's emissions of any 
regulated pollutant, including components listed in 40 CFR part 1068, 
Appendix I, and components from any other system you develop to control 
emissions. The emission-related warranty for freshly manufactured 
marine engines covers these components even if another company produces 
the component. Your emission-related warranty does not cover components 
whose failure would not increase an engine's emissions of any regulated 
pollutant. For remanufactured engines, your emission-related warranty 
is required to cover only those parts that you supply or those parts 
for which you specify allowable part manufacturers. It does not need to 
cover used parts that are not replaced during the remanufacture.
* * * * *
    147. Section 1042.125 is amended by revising the heading, 
introductory text, and paragraphs (a)(1)(iii) and (d) to read as 
follows:


Sec.  1042.125  Maintenance instructions.

    Give the ultimate purchaser of each new engine written instructions 
for properly maintaining and using the engine, including the emission 
control system, as described in this section. The maintenance 
instructions also apply to service accumulation on your emission-data 
engines as described in Sec.  1042.245 and in 40 CFR part 1065. The 
restrictions specified in paragraphs (a) through (e) of this section 
related to allowable maintenance apply only to Category 1 and Category 
2 engines. Manufacturers may specify any maintenance for Category 3 
engines.
    (a) * * *
    (1) * * *
    (iii) You provide the maintenance free of charge and clearly say so 
in your maintenance instructions.
* * * * *
    (d) Noncritical emission-related maintenance. Subject to the 
provisions of this paragraph (d), you may schedule any amount of 
emission-related inspection or maintenance that is not covered by 
paragraph (a) of this section (that is, maintenance that is neither 
explicitly identified as critical emission-related maintenance, nor 
that we approve as critical emission-related maintenance). Noncritical 
emission-related maintenance generally includes maintenance on the 
components we specify in 40 CFR part 1068, Appendix I that is not 
covered in paragraph (a) of this section. You must state in the owners 
manual that these steps are not necessary to keep the emission-related 
warranty valid. If operators fail to do this maintenance, this does not 
allow you to disqualify those engines from in-use testing or deny a 
warranty claim. Do not take these inspection or maintenance steps 
during service accumulation on your emission-data engines.
* * * * *
    148. Section 1042.135 is amended by revising paragraphs (c)(5), 
(c)(8), (c)(9), and (c)(11) and adding paragraph (c)(12) to read as 
follows:


Sec.  1042.135  Labeling.

* * * * *
    (c) * * *
    (5) State the date of manufacture [DAY (optional), MONTH, and 
YEAR]; however, you may omit this from the label if you stamp, engrave, 
or otherwise permanently identify it elsewhere on the engine, in which 
case you must also describe in your application for certification where 
you will identify the date on the engine.
* * * * *
    (8) State the useful life for your engine family if the applicable 
useful life is based on the provisions of Sec.  1042.101(e)(2) or (3), 
or Sec.  1042.104(d)(2).
    (9) Identify the emission control system. Use terms and 
abbreviations as described in 40 CFR 1068.45. You may omit this 
information from the label if there is not enough room for it and you 
put it in the owners manual instead.
* * * * *
    (11) For a Category 1 or Category 2 engine that can be modified to 
operate on residual fuel, but has not been certified to meet the 
standards on such a fuel, include the statement: ``THIS ENGINE IS 
CERTIFIED FOR OPERATION ONLY WITH DIESEL FUEL. MODIFYING THE ENGINE TO 
OPERATE ON RESIDUAL OR INTERMEDIATE FUEL MAY BE A VIOLATION OF FEDERAL 
LAW SUBJECT TO CIVIL PENALTIES.''
    (12) For an engine equipped with on-off emissions controls as 
allowed by Sec.  1042.115, include the statement: ``THIS ENGINE IS 
CERTIFIED WITH ON-OFF EMISSION CONTROLS. OPERATION OF THE ENGINE 
CONTRARY TO 40 CFR 1042.115(g) IS A VIOLATION OF FEDERAL LAW SUBJECT TO 
CIVIL PENALTIES.''
* * * * *

[[Page 44546]]

    149. Section 1042.140 is amended by revising the heading and 
introductory text and adding paragraph (g) to read as follows:


Sec.  1042.140  Maximum engine power, displacement, power density, and 
maximum in-use engine speed.

    This section describes how to determine the maximum engine power, 
displacement, and power density of an engine for the purposes of this 
part. Note that maximum engine power may differ from the definition of 
``maximum test power'' in Sec.  1042.901. This section also specifies 
how to determine maximum in-use engine speed for Category 3 engines.
* * * * *
    (g) Calculate a maximum test speed for the nominal power curve as 
specified in 40 CFR 1065.610. This is the maximum in-use engine speed 
used for calculating the NO<INF>X</INF> standard in Sec.  1042.104 for 
Category 3 engines. Alternatively, you may use a lower value if engine 
speed will be limited in actual use to that lower value.
    150. Section 1042.145 is amended by revising paragraph (a) and the 
heading of paragraph (c) introductory text and adding paragraph (h) to 
read as follows:


Sec.  1042.145  Interim provisions.

    (a) General. The provisions in this section apply instead of other 
provisions in this part. This section describes when these interim 
provisions expire. Only the provisions of paragraph (h) of this section 
apply for Category 3 engines.
* * * * *
    (c) Part 1065 test procedures for Category 1 and Category 2 
engines. * * *
* * * * *
    (h) The following interim provisions apply for Category 3 engines:
    (1) Applicability of Tier 3 standards to Category 3 engines 
operating in Alaska, Hawaii, and U.S. Pacific territories. (i) Category 
3 engines are not required to comply with the Tier 3 NO<INF>X</INF> 
standard when operating in areas of Guam, American Samoa, or the 
Commonwealth of the Northern Mariana Islands. Category 3 engines are 
also not required to comply with the Tier 3 NO<INF>X</INF> standards 
when operating in the waters of the smallest Hawaiian islands or in the 
waters of Alaska west of Kodiak. For the purpose of this paragraph 
(h)(1), ``the smallest Hawaiian islands'' includes all Hawaiian islands 
other than Hawaii, Kahoolawe, Kauai, Lanai, Maui, Molokai, Niihau, and 
Oahu. Engines must comply fully with the appropriate Tier 2 
NO<INF>X</INF> standard and all other applicable requirements when 
operating in the areas identified in this paragraph (h)(1).
    (ii) The provisions of paragraph (h)(1)(i) of this section do not 
apply for areas included in an ECA. The Tier 3 standards apply in full 
for any area included in an ECA.
    (2) Part 1065 test procedures. You must generally use the test 
procedures specified in subpart F of this part for Category 3 engines, 
including the applicable test procedures in 40 CFR part 1065. You may 
use a combination of the test procedures specified in this part and the 
test procedures specified in 40 CFR part 94 before January 1, 2016 
without request. After this date, you must use test procedures only as 
specified in subpart F of this part.

Subpart C--[Amended]

    151. Section 1042.201 is amended by revising paragraph (h) to read 
as follows:


Sec.  1042.201  General requirements for obtaining a certificate of 
conformity.

* * * * *
    (h) For engines that become new after being placed into service, 
such as engines installed on imported vessels, we may specify alternate 
certification provisions consistent with the intent of this part. See 
the definition of ``new marine engine'' in Sec.  1042.901.
    152. Section 1042.205 is amended by adding paragraph (b)(12) and 
revising paragraphs (i), (o), and (s)(5) to read as follows:


Sec.  1042.205  Application requirements.

* * * * *
    (b) * * *
    (12) Include any other information required by this part with 
respect to AECDs. For example, see Sec.  1042.115 for requirements 
related to on-off technologies.
* * * * *
    (i) Include the maintenance and warranty instructions you will give 
to the ultimate purchaser of each new engine (see Sec. Sec.  1042.120 
and 1042.125). Describe your plan for meeting warranty obligations 
under Sec.  1042.120.
* * * * *
    (o) Present emission data for HC, NO<INF>X</INF>, PM, and CO on an 
emission-data engine to show your engines meet emission standards as 
specified in Sec. Sec.  1042.101 or 1042.104. Note that you must submit 
PM data for all engines, whether or not a PM standard applies. Show 
emission figures before and after applying adjustment factors for 
regeneration and deterioration factors for each pollutant and for each 
engine. If we specify more than one grade of any fuel type (for 
example, high-sulfur and low-sulfur diesel fuel), you need to submit 
test data only for one grade, unless the regulations of this part 
specify otherwise for your engine. Include emission results for each 
mode for Category 3 engines or for other engines if you do discrete-
mode testing under Sec.  1042.505. Note that Sec. Sec.  1042.235 and 
1042.245 allows you to submit an application in certain cases without 
new emission data.
* * * * *
    (s) * * *
    (5) For Category 2 and Category 3 engines, propose a range of 
adjustment for each adjustable parameter, as described in Sec.  
1042.115(d). Include information showing why the limits, stops, or 
other means of inhibiting adjustment are effective in preventing 
adjustment of parameters on in-use engines to settings outside your 
proposed adjustable ranges.
* * * * *
    153. Section 1042.220 is revised to read as follows:


Sec.  1042.220  Amending maintenance instructions.

    You may amend your emission-related maintenance instructions after 
you submit your application for certification as long as the amended 
instructions remain consistent with the provisions of Sec.  1042.125. 
You must send the Designated Compliance Officer a written request to 
amend your application for certification for an engine family if you 
want to change the emission-related maintenance instructions in a way 
that could affect emissions. In your request, describe the proposed 
changes to the maintenance instructions. If operators follow the 
original maintenance instructions rather than the newly specified 
maintenance, this does not allow you to disqualify those engines from 
in-use testing or deny a warranty claim.
    (a) If you are decreasing or eliminating any specified maintenance, 
you may distribute the new maintenance instructions to your customers 
30 days after we receive your request, unless we disapprove your 
request. This would generally include replacing one maintenance step 
with another. We may approve a shorter time or waive this requirement.
    (b) If your requested change would not decrease the specified 
maintenance, you may distribute the new maintenance instructions 
anytime after you send your request. For example, this paragraph (b) 
would cover adding instructions to increase the frequency of filter 
changes for engines in severe-duty applications.

[[Page 44547]]

    (c) You need not request approval if you are making only minor 
corrections (such as correcting typographical mistakes), clarifying 
your maintenance instructions, or changing instructions for maintenance 
unrelated to emission control. We may ask you to send us copies of 
maintenance instructions revised under this paragraph (c).
    154. Section 1042.225 is amended by revising paragraphs (b)(2), 
(e), and (f) to read as follows:


Sec.  1042.225  Amending applications for certification.

* * * * *
    (b) * * *
    (2) Include engineering evaluations or data showing that the 
amended engine family complies with all applicable requirements. You 
may do this by showing that the original emission-data engine is still 
appropriate for showing that the amended family complies with all 
applicable requirements.
* * * * *
    (e) For engine families already covered by a certificate of 
conformity, you may start producing the new or modified engine 
configuration anytime after you send us your amended application and 
before we make a decision under paragraph (d) of this section. However, 
if we determine that the affected engines do not meet applicable 
requirements, we will notify you to cease production of the engines and 
may require you to recall the engines at no expense to the owner. 
Choosing to produce engines under this paragraph (e) is deemed to be 
consent to recall all engines that we determine do not meet applicable 
emission standards or other requirements and to remedy the 
nonconformity at no expense to the owner. If you do not provide 
information required under paragraph (c) of this section within 30 days 
after we request it, you must stop producing the new or modified 
engines.
    (f) You may ask us to approve a change to your FEL in certain cases 
after the start of production. The changed FEL may not apply to engines 
you have already introduced into U.S. commerce, except as described in 
this paragraph (f). If we approve a changed FEL after the start of 
production, you must include the new FEL on the emission control 
information label for all engines produced after the change. You may 
ask us to approve a change to your FEL in the following cases:
    (1) You may ask to raise your FEL for your engine family at any 
time. In your request, you must show that you will still be able to 
meet the emission standards as specified in subparts B and H of this 
part. If you amend your application by submitting new test data to 
include a newly added or modified engine, as described in paragraph 
(b)(3) of this section, use the appropriate FELs with corresponding 
production volumes to calculate emission credits for the model year, as 
described in subpart H of this part. In all other circumstances, you 
must use the higher FEL for the entire family to calculate emission 
credits under subpart H of this part.
    (2) You may ask to lower the FEL for your engine family only if you 
have test data from production engines showing that emissions are below 
the proposed lower FEL. The lower FEL applies only to engines you 
produce after we approve the new FEL. Use the appropriate FELs with 
corresponding production volumes to calculate emission credits for the 
model year, as described in subpart H of this part.
    155. Section 1042.230 is amended by revising paragraphs (a), (b), 
(f) introductory text, and (g) and adding paragraph (d) to read as 
follows:


Sec.  1042.230  Engine families.

    (a) For purposes of certification, divide your product line into 
families of engines that are expected to have similar emission 
characteristics throughout the useful life as described in this 
section. You may not group engines in different engine categories in 
the same family. Your engine family is limited to a single model year.
    (b) For Category 1 engines, group engines in the same engine family 
if they are the same in all the following aspects:
    (1) The combustion cycle and the fuel with which the engine is 
intended or designed to be operated.
    (2) The cooling system (for example, raw-water vs. separate-circuit 
cooling).
    (3) Method of air aspiration.
    (4) Method of exhaust aftertreatment (for example, catalytic 
converter or particulate trap).
    (5) Combustion chamber design.
    (6) Nominal bore and stroke.
    (7) Cylinder arrangement (for engines with aftertreatment devices 
only).
    (8) Method of control for engine operation other than governing 
(i.e., mechanical or electronic).
    (9) Application (commercial or recreational).
    (10) Numerical level of the emission standards that apply to the 
engine, except as allowed under paragraphs (f) and (g) of this section.
* * * * *
    (d) For Category 3 engines, group engines into engine families 
based on the criteria specified in Section 4.3 of the Annex VI 
Technical Code (incorporated by reference in Sec.  1042.910), except as 
allowed in paragraphs (e) and (f) of this section.
* * * * *
    (f) You may group engines that are not identical with respect to 
the things listed in paragraph (b), (c), or (d) of this section in the 
same engine family, as follows:
* * * * *
    (g) If you combine engines that are subject to different emission 
standards into a single engine family under paragraph (f) of this 
section, you must certify the engine family to the more stringent set 
of standards for that model year. For Category 3 engine families that 
include a range of maximum in-use engine speeds, use the highest value 
of maximum in-use engine speed to establish the applicable 
NO<INF>X</INF> emission standard.
    156. Section 1042.235 is amended by revising the introductory text 
and paragraphs (a), (c), and (d) introductory text to read as follows:


Sec.  1042.235  Emission testing required for a certificate of 
conformity.

    This section describes the emission testing you must perform to 
show compliance with the emission standards in Sec.  1042.101(a) or 
Sec.  1042.104. See Sec.  1042.205(p) regarding emission testing 
related to the NTE standards. See Sec. Sec.  1042.240 and 1042.245 and 
40 CFR part 1065, subpart E, regarding service accumulation before 
emission testing. See Sec.  1042.655 for special testing provisions 
available for Category 3 engines subject to Tier 3 standards.
    (a) Select an emission-data engine from each engine family for 
testing. For engines at or above 560 kW, you may use a development 
engine that is equivalent in design to the engine being certified. For 
Category 3 engines, you may use a single-cylinder version of the 
engine. Using good engineering judgment, select the engine 
configuration most likely to exceed an applicable emission standard 
over the useful life, considering all exhaust emission constituents and 
the range of installation options available to vessel manufacturers.
* * * * *
    (c) We may measure emissions from any of your emission-data engines 
or other engines from the engine family, as follows:
    (1) We may decide to do the testing at your plant or any other 
facility. If we do this, you must deliver the engine to a test facility 
we designate. The engine you provide must include appropriate 
manifolds, aftertreatment devices, electronic control units, and other 
emission-related components not

[[Page 44548]]

normally attached directly to the engine block. If we do the testing at 
your plant, you must schedule it as soon as possible and make available 
the instruments, personnel, and equipment we need.
    (2) If we measure emissions from one of your engines, the results 
of that testing become the official emission results for the engine. 
Unless we later invalidate these data, we may decide not to consider 
your data in determining if your engine family meets applicable 
requirements.
    (3) Before we test one of your engines, we may set its adjustable 
parameters to any point within the specified adjustable ranges (see 
Sec.  1042.115(d)).
    (4) Before we test one of your engines, we may calibrate it within 
normal production tolerances for anything we do not consider an 
adjustable parameter. For example, this would apply where we determine 
that an engine parameter is not an adjustable parameter (as defined in 
Sec.  1042.901) but that it is subject to production variability.
    (d) You may ask to use carryover emission data from a previous 
model year instead of doing new tests, but only if all the following 
are true:
* * * * *
    157. Section 1042.240 is amended by revising paragraphs (a), (b), 
and (c) introductory text and adding paragraphs (e) and (f) to read as 
follows:


Sec.  1042.240  Demonstrating compliance with exhaust emission 
standards.

    (a) For purposes of certification, your engine family is considered 
in compliance with the emission standards in Sec.  1042.101(a) or Sec.  
1042.104 if all emission-data engines representing that family have 
test results showing deteriorated emission levels at or below these 
standards. This includes all test points over the course of the 
durability demonstration. See paragraph (f) of this section for 
provisions related to demonstrating compliance with non-duty-cycle 
standards, such as NTE standards.. Note that your FELs are considered 
to be the applicable emission standards with which you must comply if 
you participate in the ABT program in subpart H of this part.
    (b) Your engine family is deemed not to comply if any emission-data 
engine representing that family has test results showing a deteriorated 
emission level for any pollutant that is above an applicable emission 
standard. Similarly, your engine family is deemed not to comply if any 
emission-data engine representing that family has test results showing 
any emission level above the applicable not-to-exceed emission standard 
for any pollutant. This includes all test points over the course of the 
durability demonstration.
    (c) To compare emission levels from the emission-data engine with 
the applicable emission standards, apply deterioration factors to the 
measured emission levels for each pollutant. Section 1042.245 specifies 
how to test your Category 1 or Category 2 engine to develop 
deterioration factors that represent the deterioration expected in 
emissions over your engines' full useful life. See paragraph (e) of 
this section for determining deterioration factors for Category 3 
engines. Your deterioration factors must take into account any 
available data from in-use testing with similar engines. Small-volume 
engine manufacturers and post-manufacture marinizers may use assigned 
deterioration factors that we establish. Apply deterioration factors as 
follows:
* * * * *
    (e) For Category 3 engines, determine a deterioration factor based 
on an engineering analysis. The engineering analysis must describe how 
the measured emission levels from the emission-data engine show that 
engines comply with applicable emission standards throughout the useful 
life. Include this analysis in your application for certification and 
add a statement that all data, analyses, evaluations, and other 
information you used are available for our review upon request.
    (f) For NTE standards and mode caps, use good engineering judgment 
to demonstrate compliance based on testing of low-hour engines. You 
may, but are not required to, apply the same deterioration factors used 
to show compliance with the applicable duty-cycle standards. We will 
deny your application for certification if we determine that your low-
hour test data show that your engines would exceed one or more NTE 
standard or mode cap during their useful lives.
    158. Section 1042.245 is amended by revising the introductory text 
and paragraph (a) to read as follows:


Sec.  1042.245  Deterioration factors.

    This section describes how to determine deterioration factors for 
Category 1 and Category 2 engines, either with an engineering analysis, 
with pre-existing test data, or with new emission measurements. Apply 
these deterioration factors to determine whether your engines will meet 
the duty-cycle emission standards throughout the useful life as 
described in Sec.  1042.240. This section does not apply for Category 3 
engines.
    (a) You may ask us to approve deterioration factors for an engine 
family with established technology based on engineering analysis 
instead of testing. Engines certified to a NO<INF>x</INF>+HC standard 
or FEL greater than the Tier 3 NO<INF>x</INF>+HC standard are 
considered to rely on established technology for control of gaseous 
emissions, except that this does not include any engines that use 
exhaust-gas recirculation or aftertreatment. In most cases, 
technologies used to meet the Tier 1 and Tier 2 emission standards 
would qualify as established technology. We must approve your plan to 
establish a deterioration factor under this paragraph (a) before you 
submit your application for certification.
* * * * *
    159. Section 1042.250 is amended by revising paragraphs (a) and (c) 
and removing paragraph (e) to read as follows:


Sec.  1042.250  Recordkeeping and reporting.

    (a) Send the Designated Compliance Officer information related to 
your U.S.-directed production volumes as described in Sec.  1042.345. 
In addition, within 45 days after the end of the model year, you must 
send us a report describing information about engines you produced 
during the model year as follows:
    (1) State the total production volume for each engine family that 
is not subject to reporting under Sec.  1042.345.
    (2) State the total production volume for any engine family for 
which you produce engines after completing the reports required in 
Sec.  1042.345.
* * * * *
    (c) Keep data from routine emission tests (such as test cell 
temperatures and relative humidity readings) for one year after we 
issue the associated certificate of conformity. Keep all other 
information specified in this section for eight years after we issue 
your certificate.
* * * * *
    160. Section 1042.255 is amended by revising paragraph (b) to read 
as follows:


Sec.  1042.255  EPA decisions.

* * * * *
    (b) We may deny your application for certification if we determine 
that your engine family fails to comply with emission standards or 
other requirements of this part or the Clean Air Act. We will base our 
decision on all available information. If we deny your application, we 
will explain why in writing.
* * * * *

[[Page 44549]]

Subpart D--[Amended]

    161. Section 1042.301 is amended by revising paragraphs (a)(2), 
(c), (e), and (f) to read as follows:


Sec.  1042.301  General provisions.

    (a) * * *
    (2) We may exempt Category 1 engine families with a projected U.S.-
directed production volume below 100 engines from routine testing under 
this subpart. Request this exemption in your application for 
certification and include your basis for projecting a production volume 
below 100 units. We will approve your request if we agree that you have 
made good-faith estimates of your production volumes. Your exemption is 
approved when we grant your certificate. You must promptly notify us if 
your actual production exceeds 100 units during the model year. If you 
exceed the production limit or if there is evidence of a nonconformity, 
we may require you to test production-line engines under this subpart, 
or under 40 CFR part 1068, subpart E, even if we have approved an 
exemption under this paragraph (a)(2).
* * * * *
    (c) Other regulatory provisions authorize us to suspend, revoke, or 
void your certificate of conformity, or order recalls for engine 
families, without regard to whether they have passed these production-
line testing requirements. The requirements of this subpart do not 
affect our ability to do selective enforcement audits, as described in 
40 CFR part 1068. Individual engines in families that pass these 
production-line testing requirements must also conform to all 
applicable regulations of this part and 40 CFR part 1068.
* * * * *
    (e) If you certify a Category 1 or Category 2 engine family with 
carryover emission data, as described in Sec.  1042.235(d), and these 
equivalent engine families consistently pass the production-line 
testing requirements over the preceding two-year period, you may ask 
for a reduced testing rate for further production-line testing for that 
family. The minimum testing rate is one engine per engine family. If we 
reduce your testing rate, we may limit our approval to any number of 
model years. In determining whether to approve your request, we may 
consider the number of engines that have failed the emission tests.
    (f) We may ask you to make a reasonable number of production-line 
engines available for a reasonable time so we can test or inspect them 
for compliance with the requirements of this part. For Category 3 
engines, you are not required to deliver engines to us, but we may 
inspect and test your engines at any facility at which they are 
assembled or installed in vessels.
    162. A new Sec.  1042.302 is added to subpart D to read as follows:


Sec.  1042.302  Applicability of this subpart for Category 3 engines.

    If you produce Category 3 engines that are subject to the 
requirements of this part, you must test them as described in this 
subpart, except as specified in this section.
    (a) You must test each engine at the sea trial of the vessel in 
which it is installed or within the first 300 hours of operation, 
whichever occurs first. Since you must test each engine, the provisions 
of Sec. Sec.  1042.310 and 1042.315(b) do not apply for Category 3 
engines. If we determine that an engine failure under this subpart is 
caused by defective components or design deficiencies, we may revoke or 
suspend your certificate for the engine family as described in Sec.  
1042.340. If we determine that an engine failure under this subpart is 
caused only by incorrect assembly, we may suspend your certificate for 
the engine family as described in Sec.  1042.325.
    (b) You are only required to measure NO<INF>X</INF> emissions. You 
do not need to measure HC, CO or PM emissions under this subpart.
    (c) If you are unable to operate the engine at the test points for 
the specified duty cycle, you may approximate these points consistent 
with the specifications of section 6 of Appendix 8 to the 
NO<INF>X</INF> Technical Code and show compliance with the alternate 
installed-engine standard of Sec.  1042.104(g). You must obtain EPA 
approval of your test procedure prior to testing the engine. Include in 
your request a description of your basis for concluding that the engine 
cannot be tested at the actual test points of the specified duty-cycle.
    (d) You may measure NO<INF>X</INF> emissions at additional test 
points for the purposes of the continuous NO<INF>X</INF> monitoring 
requirements of Sec.  1042.110(d). If you do, you must report these 
values along with your other test results. Describe in your application 
for certification how you plan to use these values for continuous 
NO<INF>X</INF> monitoring.
    (e) You may ask to measure emissions according to the Direct 
Measurement and Monitoring method specified in section 6.4 of the 
NO<INF>X</INF> Technical Code.
    163. Section 1042.305 is amended by revising paragraphs (a), (d) 
introductory text, (d)(2), (e)(2), and (g) to read as follows:


Sec.  1042.305  Preparing and testing production-line engines.

* * * * *
    (a) Test procedures. Test your production-line engines using the 
applicable testing procedures in subpart F of this part to show you 
meet the duty-cycle emission standards in subpart B of this part. For 
Category 1 and Category 2 engines, the not-to-exceed standards apply 
for this testing of Category 1 and Category 2 engines, but you need not 
do additional testing to show that production-line engines meet the 
not-to-exceed standards. The mode cap standards apply for the testing 
of Category 3 engines.
* * * * *
    (d) Setting adjustable parameters. Before any test, we may require 
you to adjust any adjustable parameter on a Category 1 engine to any 
setting within its physically adjustable range. We may adjust or 
require you to adjust any adjustable parameter on a Category 2 or 
Category 3 engine to any setting within its specified adjustable range.
* * * * *
    (2) We may specify adjustments within the physically adjustable 
range or the specified adjustable range by considering their effect on 
emission levels. We may also consider how likely it is that someone 
will make such an adjustment with in-use engines.
    (e) * * *
    (2) For Category 2 or Category 3 engines, you may ask us to approve 
a Green Engine Factor for each regulated pollutant for each engine 
family. Use the Green Engine Factor to adjust measured emission levels 
to establish a stabilized low-hour emission level.
* * * * *
    (g) Retesting after invalid tests. You may retest an engine if you 
determine an emission test is invalid under subpart F of this part. 
Explain in your written report reasons for invalidating any test and 
the emission results from all tests. If we determine that you 
improperly invalidated a test, we may require you to ask for our 
approval for future testing before substituting results of the new 
tests for invalid ones.
    164. Section 1042.310 is amended by revising the section heading to 
read as follows:


Sec.  1042.310  Engine selection for Category 1 and Category 2 engines.

* * * * *
    165. Section 1042.315 is amended by revising paragraphs (a) and (b) 
to read as follows:


Sec.  1042.315  Determining compliance.

* * * * *

[[Page 44550]]

    (a) Calculate your test results as follows:
    (1) Initial and final test results. Calculate and round the test 
results for each engine. If you do several tests on an engine, 
calculate the initial results for each test, then add all the test 
results together and divide by the number of tests. Round this final 
calculated value for the final test results on that engine. Include the 
Green Engine Factor to determine low-hour emission results, if 
applicable.
    (2) Final deteriorated test results. Apply the deterioration factor 
for the engine family to the final test results (see Sec.  
1042.240(c)).
    (3) Round deteriorated test results. Round the results to the 
number of decimal places in the emission standard expressed to one more 
decimal place.
    (b) For Category 1 and Category 2 engines, if a production-line 
engine fails to meet emission standards and you test two additional 
engines as described in Sec.  1042.310, calculate the average emission 
level for each pollutant for the three engines. If the calculated 
average emission level for any pollutant exceeds the applicable 
emission standard, the engine family fails the production-line testing 
requirements of this subpart. Tell us within ten working days if this 
happens. You may request to amend the application for certification to 
raise the FEL of the engine family as described in Sec.  1042.225(f).
    166. Section 1042.320 is amended by revising paragraph (a)(2) to 
read as follows:


Sec.  1042.320  What happens if one of my production-line engines fails 
to meet emission standards?

    (a) * * *
    (2) Include the test results and describe the remedy for each 
engine in the written report required under Sec.  1042.345.
* * * * *
    167. Section 1042.325 is amended by revising paragraph (e) to read 
as follows:


Sec.  1042.325  What happens if an engine family fails the production-
line testing requirements?

* * * * *
    (e) You may request to amend the application for certification to 
raise the FEL of the entire engine family before or after we suspend 
your certificate as described in Sec.  1042.225(f). We will approve 
your request if the failure is not caused by a defect and it is clear 
that you used good engineering judgment in establishing the original 
FEL.
    168. Section 1042.345 is amended by revising paragraphs (a)(6) and 
(b) to read as follows:


Sec.  1042.345  Reporting.

    (a) * * *
    (6) Provide the test number; the date, time and duration of 
testing; test procedure; all initial test results; final test results; 
and final deteriorated test results for all tests. Provide the emission 
results for all measured pollutants. Include information for both valid 
and invalid tests and the reason for any invalidation.
* * * * *.
    (b) We may ask you to add information to your written report so we 
can determine whether your new engines conform with the requirements of 
this subpart. We may also ask you to send less information.
* * * * *
    169. Section 1042.350 is amended by revising paragraphs (b), (e), 
and (f) to read as follows:


Sec.  1042.350  Recordkeeping.

* * * * *
    (b) Keep paper or electronic records of your production-line 
testing for eight years after you complete all the testing required for 
an engine family in a model year.
* * * * *
    (e) If we ask, you must give us a more detailed description of 
projected or actual production figures for an engine family. We may ask 
you to divide your production figures by maximum engine power, 
displacement, fuel type, or assembly plant (if you produce engines at 
more than one plant).
    (f) Keep records of the engine identification number for each 
engine you produce under each certificate of conformity. You may 
identify these numbers as a range. Give us these records within 30 days 
if we ask for them.
* * * * *

Subpart F--[Amended]

    170. Section 1042.501 is amended by revising paragraphs (a) and (c) 
and adding paragraph (g) to read as follows:


Sec.  1042.501  How do I run a valid emission test?

    (a) Use the equipment and procedures for compression-ignition 
engines in 40 CFR part 1065 to determine whether engines meet the duty-
cycle emission standards in Sec.  1042.101 or 1042.104. Measure the 
emissions of all regulated pollutants as specified in 40 CFR part 1065. 
Use the applicable duty cycles specified in Sec.  1042.505.
* * * * *
    (c) Use the fuels and lubricants specified in 40 CFR part 1065, 
subpart H, for all the testing we require in this part, except as 
specified in this section and Sec.  1042.515.
    (1) For service accumulation, use the test fuel or any commercially 
available fuel that is representative of the fuel that in-use engines 
will use.
    (2) For diesel-fueled engines, use the appropriate diesel fuel 
specified in 40 CFR part 1065, subpart H, for emission testing. Unless 
we specify otherwise, the appropriate diesel test fuel for Category 1 
and Category 2 engines is the ultra low-sulfur diesel fuel. If we allow 
you to use a test fuel with higher sulfur levels, identify the test 
fuel in your application for certification. Unless we specify 
otherwise, the appropriate diesel test fuel for Category 3 engines is 
the high-sulfur diesel fuel. For Category 2 and Category 3 engines, you 
may ask to use commercially available diesel fuel similar but not 
necessarily identical to the applicable fuel specified in 40 CFR part 
1065, subpart H; we will approve your request if you show us that it 
does not affect your ability to demonstrate compliance with the 
applicable emission standards.
    (3) For Category 1 and Category 2 engines that are expected to use 
a type of fuel (or mixed fuel) other than diesel fuel (such as natural 
gas, methanol, or residual fuel), use a commercially available fuel of 
that type for emission testing. If a given engine is designed to 
operate on different fuels, we may (at our discretion) require testing 
on each fuel. Propose test fuel specifications that take into account 
the engine design and the properties of commercially available fuels. 
Describe these test fuel specifications in the application for 
certification.
* * * * *
    (g) For Category 3 engines, you may submit test data for 
NO<INF>X</INF>, HC, and CO emissions that were collected as specified 
in the Annex VI Technical Code instead of test data collected as 
specified in 40 CFR part 1065. We may require you to include a brief 
engineering analysis showing how these data demonstrate that your 
engines would meet the applicable emission standards if you had used 
the test procedures specified in 40 CFR part 1065.
    171. Section 1042.505 is amended by revising paragraph (b) 
introductory text to read as follows:


Sec.  1042.505  Testing engines using discrete-mode or ramped-modal 
duty cycles.

* * * * *
    (b) Measure emissions by testing the engine on a dynamometer with 
one of the following duty cycles (as specified) to determine whether it 
meets the

[[Page 44551]]

emission standards in Sec.  1042.101 or 1042.104:
* * * * *
    172. Section 1042.525 is amended by revising paragraph (b) and 
adding paragraph (g) to read as follows:


Sec.  1042.525  How do I adjust emission levels to account for 
infrequently regenerating aftertreatment devices?

* * * * *
    (b) Calculating average adjustment factors. Calculate the average 
adjustment factor (EFA) based on the following equation: EFA = (F)(EFH) 
+ (1 - F)(EFL)

    Where:
    F = the frequency of the regeneration event during normal in-use 
operation, expressed in terms of the fraction of equivalent tests 
during which the regeneration occurs. You may determine F from in-
use operating data or running replicate tests. For example, if you 
observe that the regeneration occurs 125 times during 1000 MW-hrs of 
operation, and your engine typically accumulates 1 MW-hr per test, F 
would be (125) / (1000) / (1) = 0.125. No further adjustments, 
including weighting factors, may be applied to F.
    EFH = Measured emissions from a test segment in which the 
regeneration occurs.
    EFL = Measured emissions from a test segment in which the 
regeneration does not occur.

\* * * * *
    (g) Category 3 engines. We may specify an alternate methodology to 
account for regeneration events from Category 3 engines. If we do not, 
the provisions of this section apply as specified.

Subpart G--[Amended]

    173. Section 1042.601 is amended by revising paragraph (b) and 
adding paragraphs (g) and (h) to read as follows:


Sec.  1042.601  General compliance provisions for marine engines and 
vessels.

* * * * *
    (b) Subpart I of this part describes how the prohibitions of 40 CFR 
1068.101(a)(1) apply for certain remanufactured engines. The provisions 
of 40 CFR 1068.105 do not allow the installation of a new 
remanufactured engine in a vessel that is defined as a new vessel 
unless the remanufactured engine is subject to the same standards as 
the standards applicable to freshly manufactured engines of the 
required model year.
* * * * *
    (g) The selective enforcement audit provisions of 40 CFR part 1068 
do not apply for Category 3 engines.
    (h) The defect reporting requirements of 40 CFR 1068.501 apply for 
Category 3 engines, except the threshold for filing a defect report is 
two.
    174. Section 1042.605 is amended by revising paragraph (a) to read 
as follows:


Sec.  1042.605  Dressing engines already certified to other standards 
for nonroad or heavy-duty highway engines for marine use.

    (a) General provisions. If you are an engine manufacturer 
(including someone who marinizes a land-based engine), this section 
allows you to introduce new marine engines into U.S. commerce if they 
are already certified to the requirements that apply to compression-
ignition engines under 40 CFR parts 85 and 86 or 40 CFR part 89, 92, 
1033, or 1039 for the appropriate model year. If you comply with all 
the provisions of this section, we consider the certificate issued 
under 40 CFR part 86, 89, 92, 1033, or 1039 for each engine to also be 
a valid certificate of conformity under this part 1042 for its model 
year, without a separate application for certification under the 
requirements of this part 1042. This section does not apply for 
Category 3 engines.
* * * * *
    175. Section 1042.610 is amended by revising the introductory text 
to read as follows:


Sec.  1042.610  Certifying auxiliary marine engines to land-based 
standards.

    This section applies to auxiliary marine engines that are identical 
to certified land-based engines. See Sec.  1042.605 for provisions that 
apply to propulsion marine engines or auxiliary marine engines that are 
modified for marine applications. This section does not apply for 
Category 3 engines.
* * * * *
    176. Section 1042.615 is amended by revising the introductory text 
to read as follows:


Sec.  1042.615  Replacement engine exemption.

    For Category 1 and Category 2 replacement engines, apply the 
provisions of 40 CFR 1068.240 as described in this section. New 
Category 3 engines are not eligible for the replacement-engine 
exemption.
* * * * *
    177. Section 1042.620 is revised to read as follows:


Sec.  1042.620  Engines used solely for competition.

    The provisions of this section apply for new engines and vessels 
built on or after January 1, 2009.
    (a) We may grant you an exemption from the standards and 
requirements of this part for a new engine on the grounds that it is to 
be used solely for competition. The requirements of this part, other 
than those in this section, do not apply to engines that we exempt for 
use solely for competition.
    (b) We will exempt engines that we determine will be used solely 
for competition. The basis of our determination is described in 
paragraphs (c) and (d) of this section. Exemptions granted under this 
section are good for only one model year and you must request renewal 
for each subsequent model year. We will not approve your renewal 
request if we determine the engine will not be used solely for 
competition.
    (c) Engines meeting all the following criteria are considered to be 
used solely for competition:
    (1) Neither the engine nor any vessels containing the engine may be 
displayed for sale in any public dealership or otherwise offered for 
sale to the general public. Note that this does not preclude display of 
these engines as long as they are not available for sale to the general 
public.
    (2) Sale of the vessel in which the engine is installed must be 
limited to professional racing teams, professional racers, or other 
qualified racers. For replacement engines, the sale of the engine 
itself must be limited to professional racing teams, professional 
racers, other qualified racers, or to the original vessel manufacturer.
    (3) The engine and the vessel in which it is installed must have 
performance characteristics that are substantially superior to 
noncompetitive models.
    (4) The engines are intended for use only as specified in paragraph 
(e) of this section.
    (d) You may ask us to approve an exemption for engines not meeting 
the criteria listed in paragraph (c) of this section as long as you 
have clear and convincing evidence that the engines will be used solely 
for competition.
    (e) Engines are considered to be used solely for competition only 
if their use is limited to competition events sanctioned by the U.S. 
Coast Guard or another public organization with authorizing permits for 
participating competitors. Operation of such engines may include only 
racing events, trials to qualify for racing events, and practice 
associated with racing events. Authorized attempts to set speed records 
are also considered racing events. Engines will not be considered to be 
used solely for competition if they are ever used for any recreational 
or other noncompetitive purpose. Use of exempt engines in any 
recreational events, such as poker runs and

[[Page 44552]]

lobsterboat races, is a violation of 40 CFR 1068.101(b)(4).
    (f) You must permanently label engines exempted under this section 
to clearly indicate that they are to be used only for competition. 
Failure to properly label an engine will void the exemption for that 
engine.
    (g) If we request it, you must provide us any information we need 
to determine whether the engines are used solely for competition. This 
would include documentation regarding the number of engines and the 
ultimate purchaser of each engine as well as any documentation showing 
a vessel manufacturer's request for an exempted engine. Keep these 
records for five years.
    178. Section 1042.625 is amended by adding introductory text to 
read as follows:


Sec.  1042.625  Special provisions for engines used in emergency 
applications.

    This section describes an exemption that is available for certain 
Category 1 and Category 2 engines. This exemption is not available for 
Category 3 engines.
* * * * *
    179. Section 1042.630 is amended by revising the introductory text 
to read as follows:


Sec.  1042.630  Personal-use exemption.

    This section applies to individuals who manufacture vessels for 
personal use with used engines. If you and your vessel meet all the 
conditions of this section, the vessel and its engine are considered to 
be exempt from the standards and requirements of this part that apply 
to new engines and new vessels. The prohibitions in Sec.  
1068.101(a)(1) do not apply to engines exempted under this section. For 
example, you may install an engine that was not certified as a marine 
engine.
* * * * *
    180. Section 1042.635 is amended by revising paragraph (a) to read 
as follows:


Sec.  1042.635  National security exemption.

* * * * *
    (a) An engine is exempt without a request if it will be used or 
owned by an agency of the Federal government responsible for national 
defense, where the vessel in which it is installed has armor, 
permanently attached weaponry, specialized electronic warfare systems, 
unique stealth performance requirements, and/or unique combat 
maneuverability requirements. This applies to both remanufactured and 
freshly manufactured marine engines. Gas turbine engines are also 
exempt without a request if they will be owned by an agency of the 
Federal government responsible for national defense.
* * * * *
    181. Section 1042.650 is amended by revising the introductory text 
to read as follows:


Sec.  1042.650  Migratory vessels.

    The provisions of this section address concerns for vessel owners 
related to extended use of vessels with Tier 4 engines outside the 
United States where ultra low-sulfur diesel fuel is not available. The 
provisions of this section apply for Category 1 and Category 2 engines, 
including auxiliary engines installed on vessels with Category 3 
propulsion engines. These provisions do not apply for any Category 3 
engines.
* * * * *
    182. A new Sec.  1042.655 is added to subpart G to read as follows:


Sec.  1042.655  Special certification provisions for catalyst-equipped 
Category 3 engines.

    This section describes an optional approach for demonstrating for 
certification that catalyst-equipped engines comply with applicable 
emission standards.
    (a) Eligibility. You may use the provisions of this section without 
our prior approval to demonstrate that catalyst-equipped Category 3 
engines meet the Tier 3 standards. In unusual circumstances, we may 
also allow you to use this approach to demonstrate that catalyst-
equipped Category 2 engines meet the Tier 4 standards. We will 
generally approve this for Category 2 engines only if the engines are 
too large to be practically tested in a laboratory with a fully 
assembled catalyst system. If we approve this approach for a Category 2 
engine, interpret references to Tier 3 in this section to mean Tier 4, 
and interpret references to Tier 2 in this section to mean Tier 3.
    (b) Required testing. The emission-data engine must be tested as 
specified in Subpart F to verify that the engine-out emissions comply 
with the Tier 2 standards. The catalyst material must be tested under 
conditions that accurately represent actual engine conditions for the 
test points. This catalyst testing may be performed on a benchscale.
    (c) Engineering analysis. Include with your application a detailed 
engineering analysis describing how the test data collected for the 
engine and catalyst material demonstrate that all engines in the family 
will meet all applicable emission standards. We may require that you 
submit this analysis separately from your application, or that you 
obtain preliminary approval under Sec.  1042.210.
    (d) Verification. You must verify your design by testing a complete 
production engine with installed catalysts in the final assembled 
configuration. Unless we specify otherwise, do this by complying with 
production-line testing requirements of subpart D of this part.
    (e) Other requirements. All other requirements of this part, 
including the non-testing requirements for certification, apply for 
these engines.
    183. Section 1042.660 is revised to read as follows:


Sec.  1042.660  Requirements for vessel manufacturers, owners, and 
operators.

    (a) For vessels equipped with emission controls requiring the use 
of specific fuels, lubricants, or other fluids, owners and operators 
must comply with the manufacturer/remanufacturer's specifications for 
such fluids when operating the vessels. Failure to comply with the 
requirements of this paragraph is a violation of 40 CFR 1068.101(b)(1). 
For marine vessels containing Category 3 engines that are excluded from 
the requirements of 40 CFR part 1043 because they operate only 
domestically, it is also a violation of 40 CFR 1068.101(b)(1) to 
operate the vessel using residual fuel. Note that 40 CFR part 80 also 
includes provisions that restrict the use of certain fuels by certain 
marine engines.
    (b) For vessels equipped with SCR systems requiring the use of urea 
or other reductants, owners and operators must report to us within 30 
days any operation of such vessels without the appropriate reductant. 
Failure to comply with the requirements of this paragraph is a 
violation of 40 CFR 1068.101(a)(2). Note that such operation is a 
violation of 40 CFR 1068.101(b)(1).
    (c) The provisions of this paragraph (c) apply for marine vessels 
containing Category 3 engines.
    (1) All maintenance, repair, adjustment, and alteration of Category 
3 engines subject to the provisions of this part performed by any 
owner, operator or other maintenance provider must be performed using 
good engineering judgment, in such a manner that the engine continues 
(after the maintenance, repair, adjustment or alteration) to meet the 
emission standards it was certified as meeting prior to the need for 
service. This includes but is not limited to complying with the 
maintenance instructions described in Sec.  1042.125. Adjustments are 
limited to the range specified by the engine manufacturer in the 
approved application for certification.
    (2) It is a violation of 40 CFR 1068.101(b)(1) to operate the 
vessel with the engine adjusted outside of the

[[Page 44553]]

specified adjustable range. Each two hour period of such operation 
constitutes a separate offense. A violation lasting less than two hours 
constitutes a single offense.
    (3) The owner and operator of the engine must maintain on board the 
vessel records of all maintenance, repair, and adjustment that could 
reasonably affect the emission performance of any engine subject to the 
provision of this part. Owners and operators must also maintain, on 
board the vessel, records regarding certification, parameter 
adjustment, and fuels used. For engines that are automatically adjusted 
electronically, all adjustments must be logged automatically. Owners 
and operators must make these records available to EPA upon request. 
These records must include the following:
    (i) The Technical File, Record Book of Engine Parameters, and 
bunker delivery notes that are required by the Annex VI Technical Code 
(incorporated by reference in Sec.  1042.910). This file must be 
transferred to subsequent purchasers in the event of a sale of the 
engine or vessel.
    (ii) Specific descriptions of engine maintenance, repair, 
adjustment, and alteration (including rebuilding). The descriptions 
must include at least the date, time, and nature of the maintenance, 
repair, adjustment, or alteration and the position of the vessel when 
the maintenance, repair, adjustment, or alteration was made.
    (iii) Emission-related maintenance instructions provided by the 
manufacturer. These instructions must be transferred to subsequent 
purchasers in the event of a sale of the engine or vessel.
    (4) Owners and operators of engines equipped with on-off emission 
controls must comply with the requirements of this paragraph (c)(4) 
whenever a malfunction of the emission controls is indicated as 
specified in Sec.  1042.110(d). You must determine the cause of the 
malfunction and remedy it consistent with paragraph (c)(1) of this 
section. See paragraph (b) of this section if the malfunction is due to 
either a lack of reductant or inadequate reductant quality. If the 
malfunction occurs during the useful life, report the malfunction to 
the certificate holder for investigation and compliance with defect 
reporting requirements of 40 CFR 1068.501 (unless the malfunction is 
due to operation without adequate urea or other malmaintenance).
    (d) For each marine vessel containing a Category 3 engine, the 
owner must annually review the vessel's records and submit to EPA a 
signed statement certifying compliance during the preceding year with 
the requirements of this part that are applicable to owners and 
operators of such vessels. Alternately, if review of the vessel's 
records indicates that there has been one or more violations of the 
requirements of this part, the owner must submit to EPA a signed 
statement specifying the noncompliance, including the nature of the 
noncompliance, the time of the noncompliance, and any efforts made to 
remedy the noncompliance. The statement of compliance (or 
noncompliance) required by this paragraph must be signed by the 
executive with responsibility for marine activities of the owner. If 
the vessel is operated by a different business entity than the vessel 
owner, the reporting requirements of this paragraph (e) apply to both 
the owner and the operator. Compliance with these review and 
certification requirements by either the vessel owner or the vessel 
operator with respect to a compliance statement will be considered 
compliance with these requirements by both of these parties for that 
compliance statement. The executive(s) may authorize a captain or other 
primary operator to conduct this review and submit the certification, 
provided that the certification statement is accompanied by written 
authorization for that individual to submit such statements. The 
Administrator may waive the requirements of this paragraph when 
equivalent assurance of compliance is otherwise available.
    (e) Manufacturers, owners and operators must allow emission tests 
and inspections required by this part to be conducted and must provide 
reasonable assistance to perform such tests or inspections.
    184. A new Sec.  1042.670 is added to subpart G to read as follows:


Sec.  1042.670  Special provisions for gas turbine engines.

    The provisions of this section apply for gas turbine engines.
    (a) Special test procedures. Manufacturers seeking certification of 
gas turbine engines must obtain preliminary approval of the test 
procedures to be used, consistent with Sec.  1042.210 and 40 CFR 
1065.10.
    (b) Remanufacturing. The requirements of subpart I of this part do 
not apply for gas turbine engines.
    (c) Equivalent displacement. Apply displacement-based provisions of 
this part by calculating an equivalent displacement from the maximum 
engine power. The equivalent per-cylinder displacement (in liters) 
equals the maximum engine power in kW multiplied by 0.00311, except 
that all gas turbines with maximum engine power above 9,300 kW are 
considered to have an equivalent per-cylinder displacement of 29.0 
liters.
    (d) Emission-related components. All components meeting the 
criteria of 40 CFR 1068.501(a)(1) are considered to be emission-related 
components with respect to maintenance, warranty, and defect reporting 
for gas turbine engines.
    (e) Engines used for national defense. See Sec.  1042.635 for 
provisions related to exempting gas turbine engines used for national 
defense.

Subpart H--[Amended]

    185. Section 1042.701 is amended by adding introductory text to 
read as follows:


Sec.  1042.701  General provisions.

    This subpart describes how you may use emission credits to 
demonstrate that Category 1 and Category 2 engines comply with emission 
standards under this part. The provisions of this subpart do not apply 
for Category 3 engines.
* * * * *
    186. Section 1042.705 is amended by revising paragraph (a) before 
the equation to read as follows:


Sec.  1042.705  Generating and calculating emission credits.

* * * * *
    (a) For each participating family, calculate positive or negative 
emission credits relative to the otherwise applicable emission 
standard. Calculate positive emission credits for a family that has an 
FEL below the standard. Calculate negative emission credits for a 
family that has an FEL above the standard. Sum your positive and 
negative credits for the model year before rounding. Round the sum of 
emission credits to the nearest kilogram (kg) using consistent units 
throughout the following equation:
* * * * *
    187. Section 1042.715 is revised to read as follows:


Sec.  1042.715  Banking emission credits.

    (a) Banking is the retention of emission credits by the 
manufacturer generating the emission credits for use in future model 
years for averaging or trading.
    (b) You may designate any emission credits you plan to bank in the 
reports you submit under Sec.  1042.730. During the model year and 
before the due date for the final report, you may designate your 
reserved emission credits for averaging or trading.
    (c) Reserved credits become actual emission credits when you submit 
your

[[Page 44554]]

final report. However, we may revoke these emission credits if we are 
unable to verify them after reviewing your reports or auditing your 
records.
    188. Section 1042.720 is amended by revising paragraph (b) to read 
as follows:


Sec.  1042.720  Trading emission credits.

* * * * *
    (b) You may trade actual emission credits as described in this 
subpart. You may also trade reserved emission credits, but we may 
revoke these emission credits based on our review of your records or 
reports or those of the company with which you traded emission credits. 
You may trade banked credits within an averaging set to any certifying 
manufacturer.
* * * * *
    189. Section 1042.725 is amended by revising paragraph (b)(2) to 
read as follows:


Sec.  1042.725  Information required for the application for 
certification.

* * * * *
    (b) * * *
    (2) Detailed calculations of projected emission credits (positive 
or negative) based on projected production volumes. We may require you 
to include similar calculations from your other engine families to 
demonstrate that you will be able to avoid a negative credit balance 
for the model year. If you project negative emission credits for a 
family, state the source of positive emission credits you expect to use 
to offset the negative emission credits.
    190. Section 1042.730 is amended by revising paragraphs (b)(3) and 
(b)(5) to read as follows:


Sec.  1042.730  ABT reports.

* * * * *
    (b) * * *
    (3) The FEL for each pollutant. If you change the FEL after the 
start of production, identify the date that you started using the new 
FEL and/or give the engine identification number for the first engine 
covered by the new FEL. In this case, identify each applicable FEL and 
calculate the positive or negative emission credits under each FEL.
* * * * *
    (5) Maximum engine power for each engine configuration, and the 
average engine power weighted by U.S.-directed production volumes for 
the engine family.
* * * * *
    191. Section 1042.735 is amended by revising paragraphs (b), (d), 
and (e) to read as follows:


Sec.  1042.735  Recordkeeping.

* * * * *
    (b) Keep the records required by this section for at least eight 
years after the due date for the end-of-year report. You may not use 
emission credits for any engines if you do not keep all the records 
required under this section. You must therefore keep these records to 
continue to bank valid credits. Store these records in any format and 
on any media as long as you can promptly send us organized, written 
records in English if we ask for them. You must keep these records 
readily available. We may review them at any time.
* * * * *
    (d) Keep records of the engine identification number for each 
engine you produce that generates or uses emission credits under the 
ABT program. You may identify these numbers as a range. If you change 
the FEL after the start of production, identify the date you started 
using each FEL and the range of engine identification numbers 
associated with each FEL. You must also be able to identify the 
purchaser and destination for each engine you produce.
    (e) We may require you to keep additional records or to send us 
relevant information not required by this section in accordance with 
the Clean Air Act.

Subpart I--[Amended]

    192. Section 1042.801 is amended by revising the introductory text 
and paragraph (a) to read as follows:


Sec.  1042.801  General provisions.

    This subpart describes how the provisions of this part 1042 apply 
for certain remanufactured marine engines.
    (a) The requirements of this subpart apply for remanufactured Tier 
2 and earlier commercial Category 1 and Category 2 marine engines at or 
above 600 kW, excluding those engines originally manufactured before 
1973. Note that the requirements of this subpart do not apply for 
engines below 600 kW, Category 3 engines, engines installed on 
recreational vessels, or Tier 3 and later engines.
* * * * *
    193. Section 1042.836 is amended by revising the introductory text 
and paragraphs (a) introductory text, and (c) to read as follows:


Sec.  1042.836  Marine certification of locomotive remanufacturing 
systems.

    If you certify a Tier 0, Tier 1, or Tier 2 remanufacturing system 
for locomotives under 40 CFR part 1033, you may also certify the system 
under this part 1042, according to the provisions of this section. Note 
that in certain cases before 2013, locomotives may be certified under 
40 CFR part 1033 to the standards of 40 CFR part 92.
    (a) Include the following with your application for certification 
under 40 CFR part 1033 (or as an amendment to your application):
* * * * *
    (c) Systems certified to the standards of 40 CFR part 92 are 
subject to the following restrictions:
    (1) Tier 0 locomotives systems may not be used for any Category 1 
engines or Tier 1 or later Category 2 engines.
    (2) Where systems certified to the standards of 40 CFR part 1033 
are also available for an engine, you may not use a system certified to 
the standards of 40 CFR part 92.
    194. Section 1042.850 is amended by revising paragraph (c) to read 
as follows:


Sec.  1042.850  Exemptions and hardship relief.

* * * * *
    (c) If you believe that a remanufacturing system that we identified 
as being available cannot be installed without significant modification 
of your vessel, you may ask us to determine that a remanufacturing 
system is not considered available for your vessel because the cost 
would exceed the total marginal cost threshold in Sec.  1042.815(a)(2).
* * * * *

Subpart J--[Amended]

    195. Section 1042.901 is amended by revising the definitions for 
``Annex VI Technical Code'', ``Carryover'', ``Category 1'', ``Category 
2'', ``Category 3'', ``Compression-ignition'', ``Deterioration 
factor'', ``Hydrocarbon (HC)'', ``Model year'', ``New marine engine'', 
``Residual fuel'', ``Small-volume boat builder'', ``Small-volume engine 
manufacturer'', ``Tier 2'', ``Tier 3'', ``Total hydrocarbon'', ``Total 
hydrocarbon equivalent'', and ``Useful life'' and adding new 
definitions for ``Alcohol-fueled engine'', ``Annex VI'', ``Date of 
manufacture'', ``Emission control area (ECA)'', ``Gas turbine engine'', 
and ``Maximum in-use engine speed'' in alphabetical order to read as 
follows:


Sec.  1042.901  Definitions.

* * * * *
    Alcohol-fueled engine means an engine that is designed to run using 
an alcohol fuel. For purposes of this definition, alcohol fuels do not 
include fuels with a nominal alcohol content below 25 percent by 
volume.
* * * * *
    Annex VI means MARPOL Annex VI, which is an annex to the 
International

[[Page 44555]]

Convention on the Prevention of Pollution from Ships, 1973, as modified 
by the protocol of 1978 relating thereto.
    Annex VI Technical Code or NO<INF>X</INF> Technical Code means the 
``Technical Code on Control of Emission of Nitrogen Oxides from Marine 
Diesel Engines, 2008'' adopted by the International Maritime 
Organization (incorporated by reference in Sec.  1042.910).
* * * * *
    Carryover means relating to certification based on emission data 
generated from an earlier model year as described in Sec.  1042.235(d). 
This generally requires that the engines in the engine family do not 
differ in any aspect related to emissions.
    Category 1 means relating to a marine engine with specific engine 
displacement below 7.0 liters per cylinder. See Sec.  1042.670 to 
determine equivalent per-cylinder displacement for nonreciprocating 
marine engines (such as gas turbine engines).
    Category 2 means relating to a marine engine with a specific engine 
displacement at or above 7.0 liters per cylinder but less than 30.0 
liters per cylinder. See Sec.  1042.670 to determine equivalent per-
cylinder displacement for nonreciprocating marine engines (such as gas 
turbine engines).
    Category 3 means relating to a reciprocating marine engine with a 
specific engine displacement at or above 30.0 liters per cylinder.
* * * * *
    Compression-ignition means relating to a type of reciprocating, 
internal-combustion engine that is not a spark-ignition engine. Note 
that certain other marine engines (such as those powered by natural gas 
with maximum engine power at or above 250 kW) are deemed to be 
compression-ignition engines in Sec.  1042.1.
* * * * *
    Date of manufacture has the meaning given in 40 CFR 1068.30.
* * * * *
    Deterioration factor means the relationship between emissions at 
the end of useful life and emissions at the low-hour test point (see 
Sec. Sec.  1042.240 and 1042.245), expressed in one of the following 
ways:
    (1) For multiplicative deterioration factors, the ratio of 
emissions at the end of useful life to emissions at the low-hour test 
point.
    (2) For additive deterioration factors, the difference between 
emissions at the end of useful life and emissions at the low-hour test 
point.
* * * * *
    Emission control area (ECA) means an area designated by IMO as an 
Emission Control Area. Note that this designation is made by amendment 
to MARPOL Annex VI.
* * * * *
    Gas turbine engine has the meaning given in 40 CFR 1068.30. In 
general, this means anything commercially known as a gas turbine 
engine. It does not include external combustion steam engines.
* * * * *
    Hydrocarbon (HC) means the hydrocarbon group on which the emission 
standards are based for each fuel type, as described in Sec.  
1042.101(d) and Sec.  1042.104(a).
* * * * *
    Maximum in-use engine speed has the meaning given in Sec.  
1042.140.
* * * * *
    Model year means one of the following things:
    (1) For freshly manufactured marine engines (see definition of 
``new marine engine,'' paragraph (1)), model year means one of the 
following:
    (i) Calendar year.
    (ii) Your annual new model production period if it is different 
than the calendar year. This must include January 1 of the calendar 
year for which the model year is named. It may not begin before January 
2 of the previous calendar year and it must end by December 31 of the 
named calendar year. For seasonal production periods not including 
January 1, model year means the calendar year in which the production 
occurs, unless you choose to certify the applicable engine family with 
the following model year. For example, if your production period is 
June 1, 2010 through November 30, 2010, your model year would be 2010 
unless you choose to certify the engine family for model year 2011.
    (2) For an engine that is converted to a marine engine after being 
certified and placed into service as a motor vehicle engine, a nonroad 
engine that is not a marine engine, or a stationary engine, model year 
means the calendar year in which the engine was originally produced. 
For an engine that is converted to a marine engine after being placed 
into service as a motor vehicle engine, a nonroad engine that is not a 
marine engine, or a stationary engine without having been certified, 
model year means the calendar year in which the engine becomes a new 
marine engine. (see definition of ``new marine engine,'' paragraph 
(2)).
    (3) [Reserved]
    (4) For engines that are not freshly manufactured but are installed 
in new vessels, model year means the calendar year in which the engine 
is installed in the new vessel (see definition of ``new marine 
engine,'' paragraph (4)).
    (5) For imported engines:
    (i) For imported engines described in paragraph (5)(i) of the 
definition of ``new marine engine,'' model year has the meaning given 
in paragraphs (1) through (4) of this definition.
    (ii) For imported engines described in paragraph (5)(ii) of the 
definition of ``new marine engine,'' model year means the calendar year 
in which the engine is modified.
    (iii) For imported engines described in paragraph (5)(iii) of the 
definition of ``new marine engine,'' model year means the calendar year 
in which the engine is assembled in its imported configuration, unless 
specified otherwise in this part or in 40 CFR part 1068. (6) For 
freshly manufactured vessels, model year means the calendar year in 
which the keel is laid or the vessel is at a similar stage of 
construction. For vessels that become new under paragraph (2) of the 
definition of ``new vessel'' (as a result of modifications), model year 
means the calendar year in which the modifications physically begin.
    (7) For remanufactured engines, model year means the calendar year 
in which the remanufacture takes place.
* * * * *
    New marine engine means any of the following things:
    (1) A freshly manufactured marine engine for which the ultimate 
purchaser has never received the equitable or legal title. This kind of 
engine might commonly be thought of as ``brand new.'' In the case of 
this paragraph (1), the engine is new from the time it is produced 
until the ultimate purchaser receives the title or the product is 
placed into service, whichever comes first.
    (2) An engine originally manufactured as a motor vehicle engine, a 
nonroad engine that is not a marine engine, or a stationary engine that 
is later used or intended to be used as a marine engine. In this case, 
the engine is no longer a motor vehicle, nonmarine, or stationary 
engine and becomes a ``new marine engine.'' The engine is no longer new 
when it is placed into marine service as a marine engine. This 
paragraph (2) applies for engines we exclude under Sec.  1042.5, where 
that engine is later installed as a marine engine in a vessel that is 
covered by this part 1042. For example, this would apply to an engine 
that is no longer used in a foreign vessel.
    (3) [Reserved]
    (4) An engine not covered by paragraphs (1) through (3) of this

[[Page 44556]]

definition that is intended to be installed in a new vessel. This 
generally includes installation of used engines in new vessels. The 
engine is no longer new when the ultimate purchaser receives a title 
for the vessel or it is placed into service, whichever comes first.
    (5) A remanufactured marine engine. An engine becomes new when it 
is remanufactured (as defined in this section) and ceases to be new 
when placed back into service.
    (6) An imported marine engine, subject to the following provisions:
    (i) An imported marine engine covered by a certificate of 
conformity issued under this part that meets the criteria of one or 
more of paragraphs (1) through (4) of this definition, where the 
original engine manufacturer holds the certificate, is new as defined 
by those applicable paragraphs.
    (ii) An imported remanufactured engine that would have been 
required to be certified if it had been remanufactured in the United 
States.
    (iii) An imported engine that will be covered by a certificate of 
conformity issued under this part, where someone other than the 
original engine manufacturer holds the certificate (such as when the 
engine is modified after its initial assembly), is a new marine engine 
when it is imported. It is no longer new when the ultimate purchaser 
receives a title for the engine or it is placed into service, whichever 
comes first.
    (iv) An imported marine engine that is not covered by a certificate 
of conformity issued under this part at the time of importation is new, 
but only if it was produced on or after the dates shown in the 
following table. This addresses uncertified engines and vessels 
initially placed into service that someone seeks to import into the 
United States. Importation of this kind of engine (or vessel containing 
such an engine) is generally prohibited by 40 CFR part 1068.

                   Applicability of Emission Standards for Compression-Ignition Marine Engines
----------------------------------------------------------------------------------------------------------------
                                                                                                       Initial
                                                                         Per-cylinder displacement    model year
         Engine category and type                  Power  (kW)                    (L/cyl)            of emission
                                                                                                      standards
----------------------------------------------------------------------------------------------------------------
Category 1...............................  P < 19.....................  All........................         2000
Category 1...............................  19 <= P < 37...............  All........................         1999
Category 1, Recreational.................  P >= 37....................  disp. < 0.9................         2007
Category 1, Recreational.................  All........................  0.9 <= disp. < 2.5.........         2006
Category 1, Recreational.................  All........................  disp. >= 2.5...............         2004
Category 1, Commercial...................  P >= 37....................  disp. < 0.9................         2005
Category 1, Commercial...................  All........................  disp. >= 0.9...............         2004
Category 2 and Category 3................  All........................  disp. >= 5.0...............         2004
----------------------------------------------------------------------------------------------------------------

* * * * *
    Residual fuel means any fuel with a T<INF>90</INF> greater than 700 
[deg]F as measured with the distillation test method specified in 40 
CFR 1065.1010. This generally includes all RM grades of marine fuel 
without regard to whether they are known commercially as residual fuel. 
For example, fuel marketed as intermediate fuel may be residual fuel.
* * * * *
    Small-volume boat builder means a boat manufacturer with fewer than 
500 employees and with annual worldwide production of fewer than 100 
boats. For manufacturers owned by a parent company, these limits apply 
to the combined production and number of employees of the parent 
company and all its subsidiaries. Manufacturers that produce vessels 
with Category 3 engines are not small-volume boat builders.
    Small-volume engine manufacturer means a manufacturer of Category 1 
and/or Category 2 engines with annual worldwide production of fewer 
than 1,000 internal combustion engines (marine and nonmarine). For 
manufacturers owned by a parent company, the limit applies to the 
production of the parent company and all its subsidiaries. 
Manufacturers that certify or produce any Category 3 engines are not 
small-volume engine manufacturers.
* * * * *
    Tier 2 means relating to the Tier 2 emission standards, as shown in 
Sec.  1042.104 and Appendix I.
    Tier 3 means relating to the Tier 3 emission standards, as shown in 
Sec.  1042.101 and Sec.  1042.104.
* * * * *
    Total hydrocarbon has the meaning given in 40 CFR 1065.1001. This 
generally means the combined mass of organic compounds measured by the 
specified procedure for measuring total hydrocarbon, expressed as a 
hydrocarbon with a hydrogen-to-carbon mass ratio of 1.85:1.
    Total hydrocarbon equivalent has the meaning given in 40 CFR 
1065.1001. This generally means the sum of the carbon mass 
contributions of non-oxygenated hydrocarbons, alcohols and aldehydes, 
or other organic compounds that are measured separately as contained in 
a gas sample, expressed as exhaust hydrocarbon from petroleum-fueled 
engines. The hydrogen-to-carbon mass ratio of the equivalent 
hydrocarbon is 1.85:1.
* * * * *
    Useful life means the period during which the engine is designed to 
properly function in terms of reliability and fuel consumption, without 
being remanufactured, specified as a number of hours of operation or 
calendar years, whichever comes first. It is the period during which an 
engine is required to comply with all applicable emission standards. 
See Sec. Sec.  1042.101(e) and 1042.104(d).
    196. Section 1042.905 is amended by adding the acronym ``IMO'' in 
alphabetical order to read as follows:


Sec.  1042.905  Symbols, acronyms, and abbreviations.

* * * * *

------------------------------------------------------------------------
 
------------------------------------------------------------------------
 
                                * * * * *
IMO.......................................  International Maritime
                                             Organization.
 
                                * * * * *
------------------------------------------------------------------------

    197. Section 1042.910 is revised to read as follows:


Sec.  1042.910  Reference materials.

    Documents listed in this section have been incorporated by 
reference into this part. The Director of the Federal Register approved 
the incorporation by reference as prescribed in 5 U.S.C. 552(a) and 1 
CFR part 51. Anyone may inspect copies at the U.S. EPA, Air and 
Radiation Docket and Information

[[Page 44557]]

Center, 1301 Constitution Ave., NW., Room B102, EPA West Building, 
Washington, DC 20460 or at the National Archives and Records 
Administration (NARA). For information on the availability of this 
material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.
    (a) IMO material. Table 1 to this section lists material from the 
International Maritime Organization that we have incorporated by 
reference. The first column lists the number and name of the material. 
The second column lists the section of this part where we reference it. 
Anyone may purchase copies of these materials from the International 
Maritime Organization, 4 Albert Embankment, London SE1 7SR, United 
Kingdom or http://www.imo.org. Table 1 follows:

                Table 1 to Sec.   1042.910--IMO Materials
------------------------------------------------------------------------
                                                              Part 1042
                  Document number and name                    reference
------------------------------------------------------------------------
Resolutions of the 1997 MARPOL Conference: Resolution 2--       1042.901
 Technical Code on Control of Emission of Nitrogen Oxides
 from Marine Diesel Engines, 2008..........................
------------------------------------------------------------------------

     (b) [Reserved]
    198. Appendix I to part 1042 is amended by revising paragraphs 
(b)(2) introductory text and (b)(3) to read as follows:

Appendix I to Part 1042--Summary of Previous Emission Standards

* * * * *
    (b) * * *
    (2) Tier 2 primary standards. Exhaust emissions from Category 1 
engines at or above 37 kW and all Category 2 engines may not exceed 
the values shown in the following table:
* * * * *
    (3) Tier 2 supplemental standards. The not-to-exceed emission 
standards specified in 40 CFR 94.8(e) apply for all engines subject 
to the Tier 2 standards described in paragraph (b)(2) of this 
appendix.

    199. A new part 1043 is added to subchapter U to read as follows:

PART 1043--CONTROL OF NOX, SOX, and PM EMISSIONS FROM MARINE 
ENGINES AND VESSELS SUBJECT TO THE MARPOL PROTOCOL

Sec.
1043.1 Overview.
1043.5 Effective dates.
1043.10 Applicability.
1043.20 Definitions.
1043.30 General requirements.
1043.40 EIAPP certificates.
1043.41 EIAPP certification process.
1043.50 Approval of methods to meet Tier 1 retrofit NO<INF>X</INF> 
standards.
1043.60 Operating requirements for engines and vessels subject to 
this part.
1043.70 General recordkeeping and reporting requirements.
1043.80 Recordkeeping and reporting requirements for fuel suppliers.
1043.90 Emission Control Areas. [Reserved]

    Authority:  33 U.S.C. 1901-1915.


Sec.  1043.1  Overview.

    The Act to Prevent Pollution from Ships (APPS) requires engine 
manufacturers, owners and operators of vessels, and other persons to 
comply with Annex VI of the MARPOL Protocol. This part implements 
portions of APPS as it relates to Regulations 13, 14 and 18 of Annex 
VI. These regulations clarify the application of some Annex VI 
provisions; provide procedures and criteria for the issuance of EIAPP 
certificates; and specify requirements applicable to ships that are not 
registered by Parties to Annex VI. Additional regulations may also 
apply with respect to the MARPOL Protocol, such as those issued by the 
U.S. Coast Guard in 33 CFR part 151.
    (a) The general requirements for non-public U.S.-flagged and other 
Party vessels are specified in Annex VI, as implemented by 33 U.S.C. 
1901-1915. These requirements apply to engine manufacturers, owners and 
operators of vessels, and other persons.
    (b) The provisions of this part specify how Regulations 13, 14 and 
18 of Annex VI, as implemented by 33 U.S.C. 1901-1915 will be applied 
to public vessels and U.S.-flagged vessels that operate only 
domestically. This Part also describes where the requirements of 
Regulation 13.5.1 of Annex VI and Regulation 14.4 of Annex VI will 
apply.
    (c) The provisions of this part implements section 1902(e) of APPS 
by specifying that non-public vessels flagged by a country that is not 
a party to Annex VI are subject to the substantive requirements of 
Regulations 13, 14 and 18 of Annex VI as implemented by APPS.
    (d) This part 1043 does not limit the requirements specified in 
Annex VI, as implemented by 33 U.S.C. 1901-1915, except as specified in 
Sec.  1043.10(a)(2).
    (e) The provisions of this part specify how to obtain EIAPP 
certificates and certificates for Approved Methods.


Sec.  1043.5  Effective dates.

    (a) The requirement of APPS for marine vessels to comply with Annex 
VI of the MARPOL Protocol is in effect.
    (b) Annex VI was amended on October 8, 2008 and enters into force 
July 1, 2010. The requirement of APPS for marine vessels to comply with 
the amended Annex VI is effective July 1, 2010.
    (c) Compliance with the regulations of this part is required for 
all persons on or after July 1, 2010. In addition, compliance with 
Sec. Sec.  1043.40 and 1043.41 is required before July 1, 2010 for 
manufacturers (and other persons) seeking EIAPP certificates prior to 
July 1, 2010.
    (d) The requirements related to operation in ECAs for any portion 
of U.S. navigable waters or the U.S. exclusive economic zone are 
effective the date on which an ECA is designated by IMO.


Sec.  1043.10  Applicability.

    (a) U.S.-flagged vessels. The provisions of this part apply for all 
U.S.-flagged vessels (including engines installed or intended to be 
installed on such vessels), except as specified in this paragraph (a).
    (1) Public vessels are excluded from this part.
    (2) Vessels that operate only domestically and conform to the 
requirements of this paragraph (a)(2) are excluded from Regulation 13 
of Annex VI. For the purpose of this exclusion, the phrase ``operate 
only domestically'' means the vessels do not enter waters subject to 
the jurisdiction or control of any foreign country. (See Sec. Sec.  
1043.60 and 1043.70 for provision related to fuel use by such vessels). 
To be excluded, the vessel must conform to each of the following 
provisions:
    (i) All compression ignition engines on the vessel must conform 
fully to all applicable provisions of 40 CFR parts 94 and 1042.
    (ii) The vessel may not contain any engines with a specific engine 
displacement at or above 30.0 liters per cylinder.
    (b) Foreign-flagged vessels. The provisions of this part apply for 
all non-public foreign-flagged vessels (including engines installed or 
intended to be installed on such vessels) as specified in this 
paragraph (b).
    (1) The requirements of this part apply for foreign-flagged vessels 
operating in U.S. navigable waters or the U.S. EEZ.
    (2) For non-public vessels flagged by a country that is not a party 
to Annex VI, the requirements of this part apply in the same manner as 
apply for Party vessels, except that engines on non-Party vessels are 
not required to have EIAPP certificates.

[[Page 44558]]

    (c) Fuel suppliers. The provisions of Sec.  1043.80 apply for all 
persons supplying fuel to any vessel subject to this part.


Sec.  1043.20  Definitions.

    The following definitions apply to this part:
    Administrator means the Administrator of the Environmental 
Protection Agency.
    Annex VI means Annex VI of the MARPOL Protocol.
    Designated Certification Officer means the EPA official to whom the 
Administrator has delegated authority to issue EIAPP certificates.
    EIAPP certificate means a certificate issued to certify initial 
compliance with Regulation 13 of Annex VI. (Note that EIAPP stands for 
Engine International Air Pollution Prevention under Annex VI.)
    Emission control area (ECA) means an area designated by IMO as an 
Emission Control Area plus all U.S. navigable waters shoreward of the 
ECA. For example, where an ECA has been designated by IMO to include 
the Gulf of St. Lawrence (or the Atlantic Ocean surrounding the Gulf of 
St. Lawrence), the ECA would be deemed to include the U.S. portions of 
the St. Lawrence River and Great Lakes for the purposes of this part.
    Engine has the meaning given in 40 CFR 1068.30.
    EPA means the United States Environmental Protection Agency.
    Foreign-flagged vessel means a vessel of foreign registry or a 
vessel operated under the authority of a country other than the United 
States.
    IMO means the International Maritime Organization.
    Major conversion has the meaning given in Annex VI.
    MARPOL Protocol has the meaning given in 33 U.S.C. 1901.
    Navigable waters has the meaning given in 33 U.S.C. 1901.
    Non-Party vessel means a vessel flagged by a country that is not a 
party to Annex VI.
    NO<INF>X</INF> Technical Code means the NO<INF>X</INF> Technical 
Code of Annex VI.
    Operator has the meaning given in 33 U.S.C. 1901.
    Owner has the meaning given in 33 U.S.C. 1901.
    Party vessel means a vessel flagged by a country that is a party to 
Annex VI.
    Person has the meaning given in 33 U.S.C. 1901.
    Public vessels means warships, naval auxiliary vessels and other 
vessels owned or operated by a sovereign country when engaged in 
noncommercial service.
    Secretary has the meaning given in 33 U.S.C. 1901.
    U.S.-flagged vessel means a vessel of U.S. registry or a vessel 
operated under the authority of the United States.
    We means EPA.


Sec.  1043.30  General requirements.

    (a) Manufacturers, owners and operators of vessels subject to this 
part must comply with Regulations 13, 14, and 18 of Annex VI and 
related provisions of this part. It is the responsibility of such 
manufacturers, owners and operators to ensure that all employees and 
other agents operating on their behalf comply with these requirements. 
Manufacturers of engines subject to this part must comply with all 
applicable requirements of Regulation 13 of Annex VI and related 
provisions of this part prior to the engine being installed in the 
vessel. Note that 33 U.S.C. 1907 also prohibits anyone from violating 
any provisions of the MARPOL Protocol, whether or not they are a 
manufacturer, owner or operator.
    (b) Engines with power output of more than 130 kW that are listed 
in this paragraph (b) must be covered by a valid EIAPP certificate 
unless the engine is excluded under paragraph (c) of this section. An 
EIAPP certificate is valid for a given engine only if it certifies 
compliance with the Tier of standards applicable to that engine and the 
vessel into which it is being installed. Note that none of the 
requirements of this paragraph (b) are limited to new engines.
    (1) Engines meeting any of the following criteria must be covered 
by a valid EIAPP certificate:
    (i) Engines installed (or intended to be installed) on vessels that 
were constructed on or after January 1, 2000. This includes engines 
that met the definition of ``new marine engine'' in 40 CFR 1042.901 at 
any time on or after January 1, 2000, unless such engines are installed 
on vessels that were constructed before January 1, 2000.
    (ii) Engines that undergo a major conversion on or after January 1, 
2000, unless the engine have been exempt from this requirement under 
paragraph (e) of this section. See section 2.1 of Annex VI for a 
definition of major conversion.
    (2) For such engines intended to be installed on U.S.-flagged 
vessels, the engine may not be introduced into U.S. commerce before it 
is covered by a valid EIAPP certificate, unless it has been exempted by 
EPA under 40 CFR part 1042 or part 1068. Uninstalled engines covered by 
a valid exemption under 40 CFR part 1042 or part 1068 may be introduced 
into U.S. commerce without a valid EIAPP certificate; however, this 
allowance does affect whether the engine must ultimately be covered by 
an EIAPP certificate. For example, engines allowed to be temporarily 
distributed in an uncertified configuration under 40 CFR 1068.260 would 
not be required to be covered by an EIAPP certificate while it is 
covered by the temporary exemption under 40 CFR 1068.260; however, it 
would be required to be covered by an EIAPP certificate before being 
placed into service. All uninstalled marine engines within the United 
States are presumed to be intended to be installed on a U.S.-flagged 
vessel, unless there is clear and convincing evidence to the contrary.
    (3) For engines installed on Party vessels, the engine may not 
operate in the U.S. navigable waters or the U.S. exclusive economic 
zone, or other waters designated by the Administrator under 1902(a)(5) 
before it is covered by a valid EIAPP certificate. Engines installed on 
non-Party vessels are not required to have EIAPP certificates, provided 
the operator can demonstrate that the engines conform to the 
requirements of Regulation 13 of Annex VI. Evidence of conformity may 
be issued by either the government of a country that is party to Annex 
VI or a recognized classification society. For the purposes of this 
paragraph, ``recognized classification society'' means a classification 
society that is a participating member of the International Association 
of Classification Societies (IACS).
    (c) The following engines are excluded from the requirement to have 
an EIAPP certificate (or equivalent demonstration of compliance in the 
case of non-Party vessels) or otherwise meet the requirements of 
Regulation 13 of Annex VI.
    (1) Spark-ignition engines.
    (2) Non-reciprocating engines.
    (3) Engines that do not use liquid fuel.
    (4) Engines intended to be used solely for emergencies. This 
includes engines that power equipment such as pumps that are intended 
to be used solely for emergencies and engines installed in lifeboats 
intended to be used solely for emergencies. It does not include engines 
to be used for both emergency and non-emergency purposes.
    (d) The requirements specified in Annex VI apply for vessels 
subject to this part for operation in U.S. navigable waters or the U.S. 
EEZ. Vessels operating in waters deemed to be included in an ECA under 
this part (see Sec.  1043.20) must comply with the requirements of 
Annex VI for operation in an ECA. This means that the requirements of 
Regulations 13.5 and

[[Page 44559]]

14.4 of Annex VI apply both in waters designated by IMO as an ECA and 
in all shoreward U.S. waters.
    (e) A replacement engine may be exempted from Regulation 13 of 
annex VI by EPA if it is identical to the engine being replaced and 
that engine was not subject to Regulation 13 of Annex VI. Send requests 
for such exemptions to the Designated Certification Officer.
    (f) Compliance with the provisions of this part 1043 does not 
affect your responsibilities under 40 CFR part 1042 for engines subject 
to that part 1042.


Sec.  1043.40  EIAPP certificates.

    (a) Engine manufacturers seeking EIAPP certificates for new engines 
to be used in U.S.-flagged vessels must apply to EPA for an EIAPP 
certificate in compliance with the requirements of this section (which 
references 40 CFR part 1042) and the applicable requirements of 
Regulation 13 of Annex VI. Note that only the Administrator or the EPA 
official designated by the Administrator may issue EIAPP certificates 
on behalf of the United States Government.
    (b) Persons other than engine manufacturers may apply for and 
obtain EIAPP certificates for new engines to be used in U.S.-flagged 
vessels by complying with the requirements of this section (which 
references 40 CFR part 1042) and the applicable requirements of 
Regulation 13 of Annex VI.
    (c) In appropriate circumstances, EPA may issue an EIAPP 
certificate under this section for non-new engines or engines for 
vessels that will not initially be flagged in the U.S.
    (d) The process for obtaining an EIAPP certificate is described in 
Sec.  1043.41. That section references regulations in 40 CFR part 1042, 
which apply under the Clean Air Act. References in that part to 
certificates of conformity are deemed to mean EIAPP certificates. 
References in that part to the Clean Air Act as the applicable statute 
are deemed to mean 33 U.S.C. 1901-1915.
    (e) For engines that undergo a major conversion or for engines 
installed on imported vessels that become subject to the requirements 
of this part, we may specify alternate certification provisions 
consistent with the intent of this part.


Sec.  1043.41  EIAPP certification process.

    This section describes the process for obtaining the EIAPP 
certificate required by Sec.  1043.40.
    (a) You must send the Designated Certification Officer (see 
definition in Sec.  1043.20) a separate application for an Engine 
International Air Pollution Prevention (EIAPP) certificate for each 
engine family. An EIAPP certificate is valid starting with the 
indicated effective date and is valid for any production until such 
time as the design of the engine family changes or more stringent 
emission standards become applicable, whichever comes first. You may 
obtain preliminary approval of portions of the application consistent 
with the provisions of 40 CFR 1042.210.
    (b) The application must contain all the information required by 
this part. It must not include false or incomplete statements or 
information (see 40 CFR 1042.255). Include the information specified in 
40 CFR 1042.205 except as follows:
    (1) You must include the dates on which the test engines were built 
and the locations where the test engines were built.
    (2) Include a copy of documentation required by Annex VI related to 
maintenance and in-use compliance (such as the Technical File and 
onboard NO<INF>X</INF> verification procedures as specified by the 
NO<INF>X</INF> Technical Code).
    (3) You are not required to provide information required by 40 CFR 
1042.205 about useful life, emission labels, deterioration factors, PM 
emissions, not-to-exceed standards.
    (4) You must include a copy of your warranty instructions, but are 
not required to describe how you will meet warranty obligations.
    (c) We may ask you to include less information than we specify in 
this section as long as you maintain all the information required by 
paragraph (b) of this section.
    (d) You must use good engineering judgment for all decisions 
related to your application (see 40 CFR 1068.5).
    (e) An authorized representative of your company must approve and 
sign the application.
    (f) See 40 CFR 1042.255 for provisions describing how we will 
process your application.
    (g) Your application, including the Technical File and onboard 
NO<INF>X</INF> verification procedures, is subject to amendment as 
described in 40 CFR 1042.225.
    (h) This paragraph (h) describes the emission testing you must 
perform.
    (1) Select an emission-data engine from each engine family for 
testing. For engines at or above 560 kW, you may use a development 
engine that is equivalent in design to the engine being certified. For 
Category 3 engines, you may use a single-cylinder version of the 
engine. Using good engineering judgment, select the engine 
configuration most likely to exceed an applicable emission standard, 
considering all exhaust emission constituents and the range of 
installation options available to vessel manufacturers.
    (2) Test your emission-data engines using the procedures and 
equipment specified in the NO<INF>X</INF> Technical Code or subpart F 
of part 1042. We may require that your test be witnessed by an EPA 
official.
    (3) We may measure emissions from any of your test engines or other 
engines from the engine family, as follows:
    (i) We may decide to do the testing at your plant or any other 
facility. You must deliver the test engine to any test facility we 
designate. The test engine you provide must include appropriate 
manifolds, aftertreatment devices, electronic control units, and other 
emission-related components not normally attached directly to the 
engine block. If we do the testing at your plant, you must schedule it 
as soon as possible and make available the instruments, personnel, and 
equipment we need.
    (ii) If we measure emissions from one of your test engines, the 
results of that testing become the official emission results for the 
engine. Unless we later invalidate these data, we may decide not to 
consider your data in determining if your engine family meets 
applicable requirements.
    (iii) Before we test one of your engines, we may set its adjustable 
parameters to any point within the specified adjustable ranges (see 40 
CFR 1042.115(d)).
    (iv) Before we test one of your engines, we may calibrate it within 
normal production tolerances for anything we do not consider an 
adjustable parameter.
    (4) We may require you to test a second engine of the same or 
different configuration in addition to the engine tested under 
paragraph (b) of this section.
    (5) If you use an alternate test procedure under 40 CFR 1065.10 and 
later testing shows that such testing does not produce results that are 
equivalent to the procedures otherwise required by this part, we may 
reject data you generated using the alternate procedure.
    (i) Collect emission data using measurements to one more decimal 
place than the applicable standard, then round the value to the same 
number of decimal places as the emission standard. Compare the rounded 
emission levels to the emission standard for each emission-data engine.
    (j) Your engine family is considered in compliance with the 
emission standards in Regulation 13 of Annex VI if all emission-data 
engines representing that family have test results showing

[[Page 44560]]

emission levels at or below these standards. Your engine family is 
deemed not to comply if any emission-data engine representing that 
family has test results showing an emission level above an applicable 
emission standard for any pollutant.
    (k) If we determine your application is complete and shows that the 
engines meet all the requirements of this part, we will issue an EIAPP 
certificate for your engines. We may make the approval subject to 
additional conditions.


Sec.  1043.50  Approval of methods to meet Tier 1 retrofit 
NO<INF>X</INF> standards.

    Regulation 13 of Annex VI provides for certification of Approved 
Methods, which are retrofit procedures that enable Pre-Tier 1 engines 
to meet the Tier 1 NO<INF>X</INF> standard of regulation 13 of Annex 
VI. Any person may request approval of such a method by submitting an 
application for certification of an Approve Method to the Designated 
Certification Officer. If we determine that your application conforms 
to the requirements of Regulation 13 of Annex VI, we will issue a 
certificate and notify IMO that your Approved Method has been 
certified.


Sec.  1043.60  Operating requirements for engines and vessels subject 
to this part.

    (a) All of the operating requirements and restrictions of 
Regulations 13, 14, and 18 of Annex VI apply for vessels subject to 
this part.
    (b) Nothing in this part limits the operating requirements and 
restrictions applicable for engines and vessels subject to 40 CFR part 
1042 or the requirements and restrictions applicable for fuels subject 
to 40 CFR part 80.
    (c) Operators of non-Party vessels must comply with the same 
operating requirements and restrictions as apply to other vessels under 
this part. This means they must comply with operating requirements and 
restrictions equivalent to those of Annex VI related to Regulations 13, 
14, and 18.
    (d) This paragraph (d) applies for vessels that are excluded from 
Regulation 13 of Annex VI under Sec.  1043.10(a) because they operate 
only domestically. Where the operators of such vessels comply fully 
with the fuel requirements of 40 CFR part 80, they are deemed to be in 
full compliance with the fuel use requirements and prohibitions of 
Regulations 14 and 18 of Annex VI.


Sec.  1043.70  General recordkeeping and reporting requirements.

    (a) Owners and operators of vessels subject to this part must keep 
all records required by Regulations 13, 14, and 18 of Annex VI. We may 
inspect these records as allowed by those Regulations and 33 U.S.C. 
1901-1915. As part of our inspection, we may require that the owner 
submit copies of these records to us.
    (b) Nothing in this part limits recordkeeping and reporting the 
Secretary may require, nor does it preclude the Secretary from 
providing copies of any records to EPA.
    (c) Nothing in this part limits the recordkeeping and reporting 
requirements applicable with respect to engines and vessels subject to 
40 CFR part 1042 or with respect to fuels subject to 40 CFR part 80.
    (d) This paragraph (d) applies for vessels that are excluded from 
Regulation 13 of Annex VI under Sec.  1043.10(a) because they operate 
only domestically. Where the operators of such vessels comply fully 
with the fuel requirements of 40 CFR part 80, they are deemed to be in 
full compliance with the fuel recordkeeping requirements and 
prohibitions of Annex VI.


Sec.  1043.80  Recordkeeping and reporting requirements for fuel 
suppliers.

    If you supply any fuel for an engine on any vessel identified in 
paragraph (a) of this section, you must comply with the requirements of 
Regulation 18 of Annex VI to provide bunker delivery notes to the 
vessel operators and to keep copies for your records.
    (a) The requirements of this section apply for fuel delivered to 
any of the following vessels:
    (1) Vessels of 400 gross tonnage and above.
    (2) Platforms and drilling rigs.
    (b) Except as allowed by paragraph (c) of this section, the bunker 
delivery note must contain the following:
    (1) The name and IMO number of receiving vessel.
    (2) Port (or other description of the location, if the delivery 
does not take place at a port).
    (3) Date the fuel is delivered to the vessel (or date on which the 
delivery begins where the delivery begins on one day and ends on a 
later day).
    (4) Name, address, and telephone number of fuel supplier.
    (5) Fuel type and designation under 40 CFR part 80.
    (6) Quantity in metric tons.
    (7) Density at 15 [deg]C, in kg/m \3\.
    (8) Sulfur content in weight percent.
    (9) A signed statement by an authorized representative of the fuel 
supplier certifying that the fuel supplied conforms to Regulations 14 
and 18 of Annex VI consistent with its designation, intended use, and 
the date on which it is to be used. For example, with respect to 
conformity to Regulation 14 of Annex VI, a fuel designated and intended 
for use in an ECA any time between July 1, 2010 and January 1 2015 may 
not have a sulfur content above 1.00 weight percent.
    (c) Measure density and sulfur content according to the 
specifications of Annex VI, or other methods we approve as equivalent. 
Where the density and/or sulfur content of the delivered fuel cannot be 
measured, we may allow the use of alternate methods to specify the 
density and/or sulfur content of the fuel. For example, where fuel is 
supplied from multiple tanks on a supply vessel, we may allow the 
density and sulfur content of the fuel to be calculated as a weighted 
average of the measured densities and sulfur contents of the fuel that 
is supplied from each tank.


Sec.  1043.90  Emission Control Areas. [Reserved]

PART 1045--CONTROL OF EMISSIONS FROM SPARK-IGNITION PROPULSION 
MARINE ENGINES AND VESSELS

    200. The authority citation for part 1045 continues to read as 
follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart B--[Amended]

    201. Section 1045.103 is amended by revising paragraph (b) 
introductory text to read as follows:


Sec.  1045.103  What exhaust emission standards must my outboard and 
personal watercraft engines meet?

* * * * *
    (b) Averaging, banking, and trading. You may generate or use 
emission credits under the averaging, banking, and trading (ABT) 
program described in subpart H of this part for demonstrating 
compliance with HC+NO<INF>X</INF> emission standards. For CO emissions, 
you may generate or use emission credits for averaging as described in 
subpart H of this part, but such credits may not be banked or traded. 
To generate or use emission credits, you must specify a family emission 
limit for each pollutant you include in the ABT program for each engine 
family. These family emission limits serve as the emission standards 
for the engine family with respect to all required testing instead of 
the standards specified in this section. An engine family meets 
emission standards even if its family emission limit is higher than the 
standard, as long as you show that the whole averaging set of 
applicable engine families meets the emission standards using emission

[[Page 44561]]

credits and the engines within the family meet the family emission 
limit. The following FEL caps apply:
* * * * *
    202. Section 1045.125 is amended by adding paragraph (a)(3) and 
revising paragraphs (a)(2) and (c) to read as follows:


Sec.  1045.125  What maintenance instructions must I give to buyers?

* * * * *
    (a) * * *
    (2) You may not schedule critical emission-related maintenance 
within the useful life period for aftertreatment devices, pulse-air 
valves, fuel injectors, oxygen sensors, electronic control units, 
superchargers, or turbochargers, except as specified in paragraph 
(a)(3), (b), or (c) of this section.
    (3) You may ask us to approve a maintenance interval shorter than 
that specified in paragraph (a)(2) of this section. In your request you 
must describe the proposed maintenance step, recommend the maximum 
feasible interval for this maintenance, include your rationale with 
supporting evidence to support the need for the maintenance at the 
recommended interval, and demonstrate that the maintenance will be done 
at the recommended interval on in-use engines. In considering your 
request, we will evaluate the information you provide and any other 
available information to establish alternate specifications for 
maintenance intervals, if appropriate.
* * * * *
    (c) Special maintenance. You may specify more frequent maintenance 
to address problems related to special situations, such as atypical 
engine operation. You must clearly state that this additional 
maintenance is associated with the special situation you are 
addressing. We may disapprove your maintenance instructions if we 
determine that you have specified special maintenance steps to address 
engine operation that is not atypical, or that the maintenance is 
unlikely to occur in use. If we determine that certain maintenance 
items do not qualify as special maintenance under this paragraph (c), 
you may identify this as recommended additional maintenance under 
paragraph (b) of this section.
* * * * *
    203. Section 1045.140 is amended by revising paragraph (a) to read 
as follows:


Sec.  1045.140  What is my engine's maximum engine power?

    (a) An engine configuration's maximum engine power is the maximum 
brake power point on the nominal power curve for the engine 
configuration, as defined in this section. Round the power value to the 
nearest whole kilowatt for engines above 30 kW and to the nearest 0.1 
kilowatt for engines at or below 30 kW.
* * * * *
    204. Section 1045.145 is amended by adding paragraph (o) to read as 
follows:


Sec.  1045.145  Are there interim provisions that apply only for a 
limited time?

* * * * *
    (o) Banking early credits for jet boat engines. Banked emission 
credits that were originally generated from outboard and personal 
watercraft engines under 40 CFR part 91 may be used to certify jet boat 
engines under the provisions Sec.  1045.660.

Subpart C--[Amended]

    205. Section 1045.201 is amended by adding paragraph (h) to read as 
follows:


Sec.  1045.201  What are the general requirements for obtaining a 
certificate of conformity?

* * * * *
    (h) For engines that become new after being placed into service, 
such as engines installed on imported vessels or engines converted to 
run on a different fuel, we may specify alternate certification 
provisions consistent with the intent of this part. See Sec.  1045.645 
and the definition of ``new propulsion marine engine'' in Sec.  
1045.801.
    206. Section 1045.220 is amended by revising paragraph (a) to read 
as follows:


Sec.  1045.220  How do I amend the maintenance instructions in my 
application?

* * * * *
    (a) If you are decreasing or eliminating any specified maintenance, 
you may distribute the new maintenance instructions to your customers 
30 days after we receive your request, unless we disapprove your 
request. This would generally include replacing one maintenance step 
with another. We may approve a shorter time or waive this requirement.
* * * * *
    207. Section 1045.240 is amended by revising paragraphs (a) and (b) 
and adding paragraph (e) to read as follows:


Sec.  1045.240  How do I demonstrate that my engine family complies 
with exhaust emission standards?

    (a) For purposes of certification, your engine family is considered 
in compliance with the duty-cycle emission standards in Sec.  1045.103 
or Sec.  1045.105 if all emission-data engines representing that family 
have test results showing deteriorated emission levels at or below 
these standards. This includes all test points over the course of the 
durability demonstration. Note that your FELs are considered to be the 
applicable emission standards with which you must comply if you 
participate in the ABT program in subpart H of this part. See paragraph 
(e) of this section for provisions related to demonstrating compliance 
with NTE standards.
    (b) Your engine family is deemed not to comply with the duty-cycle 
emission standards in Sec.  1045.103 or Sec.  1045.105 if any emission-
data engine representing that family has test results showing a 
deteriorated emission level for any pollutant that is above an 
applicable emission standard. Similarly, your engine family is deemed 
not to comply if any emission-data engine representing that family has 
test results showing any emission level above the applicable not-to-
exceed emission standard for any pollutant. The provisions of this 
paragraph (b) apply for all test points over the course of the 
durability demonstration.
* * * * *
    (e) Use good engineering judgment to demonstrate compliance with 
NTE standards based on testing with low-hour engines. You may, but are 
not required to, apply the same deterioration factors used to show 
compliance with the applicable duty-cycle standards.

Subpart E--[Amended]

    208. Section 1045.405 is amended by revising paragraph (c) 
introductory text to read as follows:


Sec.  1045.405  How does this program work?

* * * * *
    (c) Send us an in-use testing plan for engine families selected for 
testing. Complete the testing within 24 calendar months after we 
receive your plan. Send us the in-use testing plan according to the 
following deadlines:
* * * * *

Subpart F--[Amended]

    209. Section 1045.515 is amended by revising paragraph (c)(5) 
introductory text to read as follows:


Sec.  1045.515  What are the test procedures related to not-to-exceed 
standards?

* * * * *
    (c) * * *
    (5) For two-stroke engines not equipped with a catalyst, the NTE 
zone described in paragraph (c)(3) of this section is divided into 
subzones for testing to determine compliance with the applicable NTE 
standards. Measure

[[Page 44562]]

emissions to get an NTE result by collecting emissions at five points 
as described in this paragraph (c)(5). Calculate a weighted test result 
for these emission measurements using the weighting factors from 
Appendix II of this part for the corresponding modal result (similar to 
discrete-mode testing for certification). Test engines over the 
following modes corresponding to the certification duty cycle:
* * * * *

Subpart H--[Amended]

    210. Section 1045.701 is amended by revising paragraphs (d), (g), 
(j)(4) and (j)(5) to read as follows:


Sec.  1045.701  General provisions.

* * * * *
    (d) Sterndrive/inboard engines certified under Sec.  1045.660 for 
jet boats may use HC+NOx and CO exhaust credits generated from outboard 
and personal watercraft engines, as long as the credit-using engine is 
the same model as an engine model from an outboard or personal 
watercraft family. Such emission credits that you generate under this 
part 1045 may be used for averaging, but not for banking or trading. 
The FEL caps for such jet boat families are the HC+NOx and CO standard 
for outboard and personal watercraft engines. U.S.-directed sales from 
jet boat engines using the provisions of this paragraph (d) may not be 
greater than the U.S.-directed sales of the same engine model for 
outboard or personal watercraft engines.
* * * * *
    (g) Emission credits may be used for averaging in the model year 
they are generated or banked for averaging in future model years, 
except that CO emission credits for outboard and personal watercraft 
engines may not be banked or traded.
* * * * *
    (j) * * *
    (4) Engines or vessels not subject to the requirements of this 
part, such as those excluded under Sec.  1045.5.
    (5) Any other engines or vessels where we indicate elsewhere in 
this part 1045 that they are not to be included in the calculations of 
this subpart.
    211. Section 1045.705 is amended by revising paragraph (a) to read 
as follows:


Sec.  1045.705  How do I generate and calculate exhaust emission 
credits?

* * * * *
    (a) For each participating family, calculate positive or negative 
emission credits relative to the otherwise applicable emission 
standard. Calculate positive emission credits for a family that has an 
FEL below the standard. Calculate negative emission credits for a 
family that has an FEL above the standard. Sum your positive and 
negative credits for the model year before rounding. Round the sum of 
emission credits to the nearest kilogram (kg) using consistent units 
throughout the following equation:

Emission credits (kg) = (STD-FEL) x (Volume) x (Power) x (UL) x (LF) 
x(10<SUP>-3</SUP>)

Where:

STD = the emission standard, in g/kW-hr.
FEL = the family emission limit for the family, in g/kW-hr.
Volume = the number of engines eligible to participate in the 
averaging, banking, and trading program within the given family 
during the model year, as described in Sec.  1045.701(j).
Power = maximum engine power for the family, in kilowatts (see Sec.  
1045.140).
UL = The useful life for the given family.
LF = load factor. Use 0.207. We may specify a different load factor 
if we approve the use of special test procedures for an engine 
family under 40 CFR 1065.10(c)(2), consistent with good engineering 
judgment.
* * * * *

Subpart I--[Amended]

    212. Section 1045.801 is amended by revising the definition of 
``Fuel system'' and paragraphs (2) and (5)(iii) of the definition of 
``Model year'' to read as follows:


Sec.  1045.801  What definitions apply to this part?

* * * * *
    Fuel system means all components involved in transporting, 
metering, and mixing the fuel from the fuel tank to the combustion 
chamber(s), including the fuel tank, fuel tank cap, fuel pump, fuel 
filters, fuel lines, carburetor or fuel-injection components, and all 
fuel-system vents. In the case where the fuel tank cap or other 
components (excluding fuel lines) are directly mounted on the fuel 
tank, they are considered to be a part of the fuel tank.
* * * * *
    Model year * * *
    (2) For an engine that is converted to a propulsion marine engine 
after being certified and placed into service as a motor vehicle 
engine, a nonroad engine that is not a propulsion marine engine, or a 
stationary engine, model year means the calendar year in which the 
engine was originally produced. For an engine that is converted to a 
propulsion marine engine after being placed into service as a motor 
vehicle engine, a nonroad engine that is not a propulsion marine 
engine, or a stationary engine without having been certified, model 
year means the calendar year in which the engine becomes a new 
propulsion marine engine. (See definition of ``new propulsion marine 
engine,'' paragraph (2).)
* * * * *
    (5) * * *
    (iii) For imported engines described in paragraph (5)(iii) of the 
definition of ``new propulsion marine nonroad engine,'' model year 
means the calendar year in which the engine is assembled in its 
imported configuration, unless specified otherwise in this part or in 
40 CFR part 1068.
* * * * *

PART 1048--CONTROL OF EMISSIONS FROM NEW, LARGE NONROAD SPARK-
IGNITION ENGINES

    213. The authority citation for part 1048 continues to read as 
follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--[Amended]

    214. Section 1048.15 is amended by revising paragraph (b) to read 
as follows:


Sec.  1048.15  Do any other regulation parts apply to me?

* * * * *
    (b) Part 1065 of this chapter describes procedures and equipment 
specifications for testing engines to measure exhaust emissions. 
Subpart F of this part 1048 describes how to apply the provisions of 
part 1065 of this chapter to determine whether engines meet the exhaust 
emission standards in this part.
* * * * *
    215. A new Sec.  1048.30 is added to subpart A to read as follows:


Sec.  1048.30  Submission of information.

    (a) This part includes various requirements to record data or other 
information. Refer to Sec.  1048.825 and 40 CFR 1068.25 regarding 
recordkeeping requirements. If recordkeeping requirements are not 
specified, store these records in any format and on any media and keep 
them readily available for one year after you send an associated 
application for certification, or one year after you generate the data 
if they do not support an application for certification. You must 
promptly send us organized, written records in English if we ask for 
them. We may review them at any time.
    (b) The regulations in Sec.  1048.255 and 40 CFR 1068.101 describe 
your obligation to report truthful and complete information and the 
consequences of failing to meet this obligation. This includes 
information not related to certification.

[[Page 44563]]

    (c) Send all reports and requests for approval to the Designated 
Compliance Officer (see Sec.  1048.801).
    (d) Any written information we require you to send to or receive 
from another company is deemed to be a required record under this 
section. Such records are also deemed to be submissions to EPA. We may 
require you to send us these records whether or not you are a 
certificate holder.

Subpart B--[Amended]

    216. Section 1048.120 is amended by revising paragraph (b) to read 
as follows:


Sec.  1048.120  What emission-related warranty requirements apply to 
me?

* * * * *
    (b) Warranty period. Your emission-related warranty for evaporative 
emission controls must be valid for at least two years. Your emission-
related warranty for exhaust emission controls must be valid for at 
least 50 percent of the engine's useful life in hours of operation or 
at least three years, whichever comes first. In the case of a high-cost 
warranted part, the warranty must be valid for at least 70 percent of 
the engine's useful life in hours of operation or at least five years, 
whichever comes first. You may offer an emission-related warranty more 
generous than we require. The emission-related warranty for the engine 
may not be shorter than any published warranty you offer without charge 
for the engine. Similarly, the emission-related warranty for any 
component may not be shorter than any published warranty you offer 
without charge for that component. If an engine has no hour meter, we 
base the warranty periods in this paragraph (b) only on the engine's 
age (in years). The warranty period begins when the engine is placed 
into service.
* * * * *
    217. Section 1048.125 is amended by adding paragraph (a)(4) and 
revising paragraph (c) to read as follows:


Sec.  1048.125  What maintenance instructions must I give to buyers?

* * * * *
    (a) * * *
    (4) You may ask us to approve a maintenance interval shorter than 
that specified in paragraphs (a)(2) of this section. In your request 
you must describe the proposed maintenance step, recommend the maximum 
feasible interval for this maintenance, include your rationale with 
supporting evidence to support the need for the maintenance at the 
recommended interval, and demonstrate that the maintenance will be done 
at the recommended interval on in-use engines. In considering your 
request, we will evaluate the information you provide and any other 
available information to establish alternate specifications for 
maintenance intervals, if appropriate.
* * * * *
    (c) Special maintenance. You may specify more frequent maintenance 
to address problems related to special situations, such as substandard 
fuel or atypical engine operation. For example, you may specify more 
frequent cleaning of fuel system components for engines you have reason 
to believe will be using fuel that causes substantially more engine 
performance problems than commercial fuels of the same type that are 
generally available across the United States. You must clearly state 
that this additional maintenance is associated with the special 
situation you are addressing. We may disapprove your maintenance 
instructions if we determine that you have specified special 
maintenance steps to address engine operation that is not atypical, or 
that the maintenance is unlikely to occur in use. If we determine that 
certain maintenance items do not qualify as special maintenance under 
this paragraph (c), you may identify this as recommended additional 
maintenance under paragraph (b) of this section.
* * * * *

Subpart C--[Amended]

    218. Section 1048.201 is amended by adding paragraph (h) to read as 
follows:


Sec.  1048.201  What are the general requirements for obtaining a 
certificate of conformity?

* * * * *
    (h) For engines that become new after being placed into service, 
such as engines converted to nonroad use after being used in motor 
vehicles, we may specify alternate certification provisions consistent 
with the intent of this part. See the definition of ``new nonroad 
engine'' in Sec.  1048.801.
    219. Section 1048.220 is amended by revising paragraphs (a) and (c) 
to read as follows:


Sec.  1048.220  How do I amend the maintenance instructions in my 
application?

* * * * *
    (a) If you are decreasing or eliminating any specified maintenance, 
you may distribute the new maintenance instructions to your customers 
30 days after we receive your request, unless we disapprove your 
request. This would generally include replacing one maintenance step 
with another. We may approve a shorter time or waive this requirement.
* * * * *
    (c) You need not request approval if you are making only minor 
corrections (such as correcting typographical mistakes), clarifying 
your maintenance instructions, or changing instructions for maintenance 
unrelated to emission control. We may ask you to send us copies of 
maintenance instructions revised under this paragraph (c).
    220. Section 1048.240 is amended by revising paragraphs (a) and (b) 
and adding paragraph (e) to read as follows:


Sec.  1048.240  How do I demonstrate that my engine family complies 
with exhaust emission standards?

    (a) For purposes of certification, your engine family is considered 
in compliance with the applicable numerical emission standards in Sec.  
1048.101(a) and (b) if all emission-data engines representing that 
family have test results showing deteriorated emission levels at or 
below these standards. This includes all test points over the course of 
the durability demonstration. See paragraph (e) of this section for 
provisions related to demonstrating compliance with field-testing 
standards.
    (b) Your engine family is deemed not to comply if any emission-data 
engine representing that family has test results showing a deteriorated 
emission level for any pollutant that is above an applicable emission 
standard from Sec.  1048.101(a) and (b). Similarly, your engine family 
is deemed not to comply if any emission-data engine representing that 
family has test results showing any emission level above the applicable 
field-testing standard for any pollutant. This includes all test points 
over the course of the durability demonstration.
* * * * *
    (e) Use good engineering judgment to demonstrate compliance with 
field-testing standards based on testing with low-hour engines. You 
may, but are not required to, apply the same deterioration factors used 
to show compliance with the applicable duty-cycle standards.
    221. Section 1048.245 is amended by revising paragraph (e) to read 
as follows:


Sec.  1048.245  How do I demonstrate that my engine family complies 
with evaporative emission standards?

* * * * *
    (e) You may demonstrate that your engine family complies with the 
evaporative emission standards by demonstrating that you use the 
following control technologies:

[[Page 44564]]

    (1) For certification to the standards specified in Sec.  
1048.105(c), with the following technologies:
    (i) Use a tethered or self-closing gas cap on a fuel tank that 
stays sealed up to a positive pressure of 24.5 kPa (3.5 psig); however, 
they may contain air inlets that open when there is a vacuum pressure 
inside the tank. Nonmetal fuel tanks must also use one of the 
qualifying designs for controlling permeation emissions specified in 40 
CFR 1060.240.
    (ii) [Reserved]
    (2) For certification to the standards specified in Sec.  
1048.105(d), demonstrating that you use design features to prevent fuel 
boiling under all normal operation. If you install engines in 
equipment, you may do this using fuel temperature data measured during 
normal operation. Otherwise, you may do this by including appropriate 
information in your emission-related installation instructions.
    (3) We may establish additional options for design-based 
certification where we find that new test data demonstrate that a 
technology will ensure compliance with the emission standards in this 
section.
    222. Section 1048.255 is amended by revising paragraph (b) to read 
as follows:


Sec.  1048.255  What decisions may EPA make regarding my certificate of 
conformity?

* * * * *
    (b) We may deny your application for certification if we determine 
that your engine family fails to comply with emission standards or 
other requirements of this part or the Clean Air Act. We will base our 
decision on all available information. If we deny your application, we 
will explain why in writing.
* * * * *

Subpart E--[Amended]

    223. Section 1048.405 is amended by revising paragraph (b) to read 
as follows:


Sec.  1048.405  How does this program work?

* * * * *
    (b) Send us an in-use testing plan within 12 calendar months after 
we direct you to test a particular engine family. Complete the testing 
within 24 calendar months after we receive your plan.
* * * * *

Subpart F--[Amended]

    224. Section 1048.505 is amended by revising the section heading 
and paragraph (b)(5)(i) to read as follows:


Sec.  1048.505  How do I test engines using steady-state duty cycles, 
including ramped-modal testing?

* * * * *
    (b) * * *
    (5) * * *
    (i) The following duty cycle applies for discrete-mode testing:

                                           Table 3 of Sec.   1048.505
----------------------------------------------------------------------------------------------------------------
                                                                                   Minimum time
              Mode number                     Engine speed            Torque          in mode        Weighting
                                                                   (percent)\1\      (minutes)        factors
----------------------------------------------------------------------------------------------------------------
1.....................................  Maximum test............             100             3.0            0.50
2.....................................  Maximum test............              75             3.0            0.50
----------------------------------------------------------------------------------------------------------------
\1\ The percent torque is relative to the maximum torque at maximum test speed.

* * * * *

Subpart I--[Amended]

    225. Section 1048.801 is amended by adding definitions for 
``Carryover'' and ``Date of manufacture'' in alphabetical order to read 
as follows:


Sec.  1048.801  What definitions apply to this part?

* * * * *
    Carryover means relating to certification based on emission data 
generated from an earlier model year as described in Sec.  1042.235(d). 
This generally requires that the engines in the engine family do not 
differ in any aspect related to emissions.
* * * * *
    Date of manufacture has the meaning given in 40 CFR 1068.30.
* * * * *

PART 1051-- CONTROL OF EMISSIONS FROM RECREATIONAL ENGINES AND 
VEHICLES

    226. The authority citation for part 1051 continues to read as 
follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--[Amended]

    227. Section 1051.15 is amended by revising paragraph (a) to read 
as follows:


Sec.  1051.15  Do any other regulation parts apply to me?

    (a) Parts 86 and 1065 of this chapter describe procedures and 
equipment specifications for testing vehicles and engines to measure 
exhaust emissions. Subpart F of this part 1051 describes how to apply 
the provisions of parts 86 and 1065 of this chapter to determine 
whether vehicles meet the exhaust emission standards in this part.
* * * * *
    228. Section 1051.20 is amended by adding paragraph (g) to read as 
follows:


Sec.  1051.20  May I certify a recreational engine instead of the 
vehicle?

* * * * *
    (g) Apply the provisions of 40 CFR part 1068 for engines certified 
under this section as if they were subject to engine-based standards. 
For example, you may rely on the provisions of 40 CFR 1068.261 to have 
vehicle manufacturers install catalysts that you describe in your 
application for certification.
    229. A new Sec.  1051.30 is added to subpart A to read as follows:


Sec.  1051.30  Submission of information.

    (a) This part includes various requirements to record data or other 
information. Refer to Sec.  1051.825 and 40 CFR 1068.25 regarding 
recordkeeping requirements. If recordkeeping requirements are not 
specified, store these records in any format and on any media and keep 
them readily available for one year after you send an associated 
application for certification, or one year after you generate the data 
if they do not support an application for certification. You must 
promptly send us organized, written records in English if we ask for 
them. We may review them at any time.
    (b) The regulations in Sec.  1051.255 and 40 CFR 1068.101 describe 
your obligation to report truthful and complete information and the 
consequences of failing to meet this obligation. This includes 
information not related to certification.
    (c) Send all reports and requests for approval to the Designated 
Compliance Officer (see Sec.  1051.801).
    (d) Any written information we require you to send to or receive 
from

[[Page 44565]]

another company is deemed to be a required record under this section. 
Such records are also deemed to be submissions to EPA. We may require 
you to send us these records whether or not you are a certificate 
holder.

Subpart B--[Amended]

    230. Section 1051.125 is amended by adding paragraph (a)(3) and 
revising paragraph (c) to read as follows:


Sec.  1051.125  What maintenance instructions must I give to buyers?

* * * * *
    (a) * * *
    (3) You may ask us to approve a maintenance interval shorter than 
that specified in paragraph (a)(2) of this section. In your request you 
must describe the proposed maintenance step, recommend the maximum 
feasible interval for this maintenance, include your rationale with 
supporting evidence to support the need for the maintenance at the 
recommended interval, and demonstrate that the maintenance will be done 
at the recommended interval on in-use engines. In considering your 
request, we will evaluate the information you provide and any other 
available information to establish alternate specifications for 
maintenance intervals, if appropriate.
* * * * *
    (c) Special maintenance. You may specify more frequent maintenance 
to address problems related to special situations, such as atypical 
engine operation. You must clearly state that this additional 
maintenance is associated with the special situation you are 
addressing. We may disapprove your maintenance instructions if we 
determine that you have specified special maintenance steps to address 
engine operation that is not atypical, or that the maintenance is 
unlikely to occur in use. If we determine that certain maintenance 
items do not qualify as special maintenance under this paragraph (c), 
you may identify this as recommended additional maintenance under 
paragraph (b) of this section.
* * * * *
    231. Section 1051.135 is amended by revising paragraph (c)(12) to 
read as follows:


Sec.  1051.135  How must I label and identify the vehicles I produce?

* * * * *
    (c) * * *
    (12) State: ``THIS VEHICLE MEETS U.S. EPA REGULATIONS FOR [MODEL 
YEAR] [SNOWMOBILES or OFF-ROAD MOTORCYCLES or ATVs or OFF-ROAD UTILITY 
VEHICLES].''.
* * * * *

Subpart C--[Amended]

    232. Section 1051.201 is amended by adding paragraph (h) to read as 
follows:


Sec.  1051.201  What are the general requirements for obtaining a 
certificate of conformity?

* * * * *
    (h) For vehicles that become new after being placed into service, 
such as vehicles converted to run on a different fuel, we may specify 
alternate certification provisions consistent with the intent of this 
part. See Sec.  1051.650 and the definition of ``new'' in Sec.  
1051.801.
    233. Section 1051.220 is amended by revising paragraphs (a) and (c) 
to read as follows:


Sec.  1051.220  How do I amend the maintenance instructions in my 
application?

* * * * *
    (a) If you are decreasing or eliminating any specified maintenance, 
you may distribute the new maintenance instructions to your customers 
30 days after we receive your request, unless we disapprove your 
request. This would generally include replacing one maintenance step 
with another. We may approve a shorter time or waive this requirement.
* * * * *
    (c) You need not request approval if you are making only minor 
corrections (such as correcting typographical mistakes), clarifying 
your maintenance instructions, or changing instructions for maintenance 
unrelated to emission control. We may ask you to send us copies of 
maintenance instructions revised under this paragraph (c).
    234. Section 1051.255 is amended by revising paragraph (b) to read 
as follows:


Sec.  1051.255  What decisions may EPA make regarding my certificate of 
conformity?

* * * * *
    (b) We may deny your application for certification if we determine 
that your engine family fails to comply with emission standards or 
other requirements of this part or the Clean Air Act. We will base our 
decision on all available information. If we deny your application, we 
will explain why in writing.
* * * * *

Subpart I--[Amended]

    235. Section 1051.801 is amended by revising paragraph (2) of the 
definition for ``All-terrain vehicle'' and the definition for ``Offroad 
utility vehicle'' to read as follows:


Sec.  1051.801  What definitions apply to this part?

* * * * *
    All-terrain vehicle means * * *
    (2) Other all-terrain vehicles have three or more wheels and one or 
more seats, are designed for operation over rough terrain, are intended 
primarily for transportation, and have a maximum vehicle speed higher 
than 25 miles per hour . Golf carts generally do not meet these 
criteria since they are generally not designed for operation over rough 
terrain.
* * * * *
    Offroad utility vehicle means a nonroad vehicle that has four or 
more wheels, seating for two or more persons, is designed for operation 
over rough terrain, and has either a rear payload capacity of 350 
pounds or more or seating for six or more passengers. Vehicles intended 
primarily for recreational purposes that are not capable of 
transporting six passengers (such as dune buggies) are not offroad 
utility vehicles. (Note: Sec.  1051.1(a) specifies that some offroad 
utility vehicles are required to meet the requirements that apply for 
all-terrain vehicles.) Unless there is significant information to the 
contrary, we consider vehicles to be intended primarily for 
recreational purposes if they are marketed for recreational use, have a 
rear payload capacity no greater than 1,000 pounds, and meet at least 
five of the following criteria:
    (1) Front and rear suspension travel is greater than 18 cm.
    (2) The vehicle has no tilt bed.
    (3) The vehicle has no mechanical power take-off (PTO) and no 
permanently installed hydraulic system for operating utility-oriented 
accessory devices.
    (4) The engine has in-use operating speeds at or above 4,000 rpm.
    (5) Maximum vehicle speed is greater than 35 miles per hour.
    (6) The speed at which the engine produces peak power is above 
4,5000 rpm and the engine is equivalent to engines in ATVs that you 
have certified. For the purpose of this paragraph (6), the engine is 
considered equivalent if it could be included in the same emission 
family based on the characteristics specified in Sec.  1051.230(b).
    (7) Gross Vehicle Weight Rating is no greater than 3,750 pounds. 
This is the maximum design loaded weight of the vehicle as defined in 
40 CFR 86.1803-01, including passengers and cargo.
* * * * *

[[Page 44566]]

PART 1054--CONTROL OF EMISSIONS FROM NEW, SMALL NONROAD SPARK-
IGNITION ENGINES AND EQUIPMENT

    236. The authority citation for part 1054 continues to read as 
follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--[Amended]

    237. Section 1054.1 is amended by revising paragraph (a)(4) to read 
as follows:


Sec.  1054.1  Does this part apply for my engines and equipment?

    (a) * * *
    (4) This part 1054 applies for other spark-ignition engines as 
follows:
    (i) The provisions of Sec. Sec.  1054.620 and 1054.801 apply for 
new engines used solely for competition beginning January 1, 2010.
    (ii) The provisions of Sec. Sec.  1054.660 and 1054.801 apply for 
new engines used in emergency rescue equipment beginning January 1, 
2010.
* * * * *

Subpart B--[Amended]

    238. Section 1054.125 is amended by adding paragraph (a)(4) and 
revising paragraph (c) to read as follows:


Sec.  1054.125  What maintenance instructions must I give to buyers?

* * * * *
    (a) * * *
    (4) You may ask us to approve a maintenance interval shorter than 
that specified in paragraph (a)(3) of this section. In your request you 
must describe the proposed maintenance step, recommend the maximum 
feasible interval for this maintenance, include your rationale with 
supporting evidence to support the need for the maintenance at the 
recommended interval, and demonstrate that the maintenance will be done 
at the recommended interval on in-use engines. In considering your 
request, we will evaluate the information you provide and any other 
available information to establish alternate specifications for 
maintenance intervals, if appropriate.
* * * * *
    (c) Special maintenance. You may specify more frequent maintenance 
to address problems related to special situations, such as atypical 
engine operation. You must clearly state that this additional 
maintenance is associated with the special situation you are 
addressing. We may disapprove your maintenance instructions if we 
determine that you have specified special maintenance steps to address 
engine operation that is not atypical, or that the maintenance is 
unlikely to occur in use. If we determine that certain maintenance 
items do not qualify as special maintenance under this paragraph (c), 
you may identify this as recommended additional maintenance under 
paragraph (b) of this section.
* * * * *

Subpart C--[Amended]

    239. Section 1054.201 is amended by adding paragraph (h) to read as 
follows:


Sec.  1054.201  What are the general requirements for obtaining a 
certificate of conformity?

* * * * *
    (h) For engines that become new after being placed into service, 
such as engines converted to run on a different fuel, we may specify 
alternate certification provisions consistent with the intent of this 
part. See Sec.  1054.645 and the definition of ``new nonroad engine'' 
in Sec.  1054.801.
    240. Section 1054.205 is amended by revising paragraph (b) to read 
as follows:


Sec.  1054.205  What must I include in my application?

* * * * *
    (b) Explain how the emission control systems operate. Describe the 
evaporative emission controls and show how your design will prevent 
running loss emissions, if applicable. Also describe in detail all 
system components for controlling exhaust emissions, including all 
auxiliary emission control devices (AECDs) and all fuel-system 
components you will install on any production or test engine. Identify 
the part number of each component you describe. For this paragraph (b), 
treat as separate AECDs any devices that modulate or activate 
differently from each other. Include sufficient detail to allow us to 
evaluate whether the AECDs are consistent with the defeat device 
prohibition of Sec.  1054.115. For example, if your engines will 
routinely experience in-use operation that differs from the specified 
duty cycle for certification, describe how the fuel-metering system 
responds to varying speeds and loads not represented by the duty cycle. 
If you test an emission-data engine by disabling the governor for full-
load operation such that the engine operates at an air-fuel ratio 
significantly different than under full-load operation with an 
installed governor, explain why these differences are necessary or 
appropriate. For conventional carbureted engines without electronic 
fuel controls, it is sufficient to state that there is no significant 
difference in air-fuel ratios.
* * * * *
    241. Section 1054.220 is amended by revising paragraph (a) to read 
as follows:


Sec.  1054.220  How do I amend the maintenance instructions in my 
application?

* * * * *
    (a) If you are decreasing or eliminating any specified maintenance, 
you may distribute the new maintenance instructions to your customers 
30 days after we receive your request, unless we disapprove your 
request. This would generally include replacing one maintenance step 
with another. We may approve a shorter time or waive this requirement.
* * * * *

Subpart G--[Amended]

    242. Section 1054.601 is amended by adding paragraph (c) to read as 
follows:


Sec.  1054.601  What compliance provisions apply to these engines?

* * * * *
    (c) The provisions of 40 CFR 1068.215 apply for cases in which the 
manufacturer takes possession of engines for purposes of recovering 
components as described in this paragraph (c). Note that this paragraph 
(c) does not apply for certified engines that still have the emission 
control information label since such engines do not need an exemption.
    (1) You must label the engine as specified in 40 CFR 
1068.215(c)(3), except that the label may be removable as specified in 
40 CFR 1068.45(b).
    (2) You may not resell the engine. For components other than the 
engine block, you may generate revenue from the sale of the components 
that you recover, or from the sale of new engines containing these 
components. You may also use components other than the engine block for 
engine rebuilds as otherwise allowed under the regulations. You may use 
the engine block from an engine that is exempted under this paragraph 
(c) only to make a new engine, and then only where such an engine has a 
separate identity from the original engine.
    (3) Once the engine has reached its final destination, you may stop 
collecting records describing the engine's final disposition and how 
you use the engine. This does not affect the requirement to maintain 
the records you have already collected under 40 CFR 1068.215. This also 
does not affect the requirement to maintain records for new engines.

[[Page 44567]]

    243. Section 1054.690 is amended by revising paragraphs (d), (f), 
and (j) to read as follows:


Sec.  1054.690  What bond requirements apply for certified engines?

* * * * *
    (d) The minimum value of the bond is $500,000. A higher bond value 
may apply based on the per-engine bond values shown in Table 1 to this 
section and on the U.S.-directed production volume from each 
displacement grouping for the calendar model year. For example, if you 
have projected U.S.-directed production volumes of 10,000 engines with 
180 cc displacement and 10,000 engines with 400 cc displacement in 
2013, the appropriate bond amount is $750,000. Adjust the value of the 
bond as follows:
    (1) If your estimated or actual U.S.-directed production volume in 
any later year increases beyond the level appropriate for your current 
bond payment, you must post additional bond to reflect the increased 
volume within 90 days after you change your estimate or determine the 
actual production volume. You may not decrease your bond.
    (2) If you sell engines without aftertreatment components under the 
provisions of Sec.  1054.610, you must increase the per-engine bond 
values for the current year by 20 percent.

           Table 1 to Sec.   1054.690--Per-Engine Bond Values
------------------------------------------------------------------------
                                                          The per-engine
 For engines with displacement falling in the following    bond value is
                      ranges . . .                             . . .
------------------------------------------------------------------------
Disp. < 225 cc..........................................             $25
225 <= Disp. < 740 cc...................................              50
740 <= Disp. <= 1,000 cc................................             100
Disp. > 1,000 cc........................................             200
------------------------------------------------------------------------

* * * * *
    (f) You may meet the bond requirements of this section by obtaining 
a bond from a third-party surety that is cited in the U.S. Department 
of Treasury Circular 570, ``Companies Holding Certificates of Authority 
as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring 
Companies'' (http://www.fms.treas.gov/c570/c570.html#certified). You 
must maintain this bond for every year in which you sell certified 
engines. The surety agent remains responsible for obligations under the 
bond for two years after the bond is cancelled or expires without being 
replaced.
* * * * *
    (j) The following provisions apply if you import engines for resale 
when those engines have been certified by someone else (or equipment 
containing such engines):
    (1) You and the certificate holder are each responsible for 
compliance with the requirements of this part and the Clean Air Act. 
For example, we may require you to comply with the warranty 
requirements in Sec.  1054.120.
    (2) You do not need to post bond if you or the certificate holder 
complies with the bond requirements of this section. You also do not 
need to post bond if the certificate holder complies with the asset 
requirements of this section and the repair-network provisions of Sec.  
1054.120(f)(4).

Subpart H--[Amended]

    244. Section 1054.730 is amended by revising paragraph (b)(4) to 
read as follows:


Sec.  1054.730  What ABT reports must I send to EPA?

* * * * *
    (b) * * *
    (4) The projected and actual production volumes for the model year 
with a point of first retail sale in the United States, as described in 
Sec.  1054.701(i). For fuel tanks, state the production volume in terms 
of surface area and production volume for each fuel tank configuration 
and state the total surface area for the emission family. If you 
changed an FEL during the model year, identify the actual production 
volume associated with each FEL.
* * * * *

Subpart I--[Amended]

    245. Section 1054.801 is amended by revising the definitions for 
``Oxides of nitrogen'' and ``Total hydrocarbon equivalent'' and adding 
a definition for ``Point of first retail sale'' in alphabetical order 
to read as follows:
* * * * *
    Oxides of nitrogen has the meaning given in 40 CFR 1065.1001
* * * * *
    Point of first retail sale means the location at which the initial 
retail sale occurs. This generally means an equipment dealership, but 
may also include an engine seller or distributor in cases where loose 
engines are sold to the general public for uses such as replacement 
engines.
* * * * *
    Total hydrocarbon equivalent has the meaning given in 40 CFR 
1065.1001. This generally means the sum of the carbon mass 
contributions of non-oxygenated hydrocarbons, alcohols and aldehydes, 
or other organic compounds that are measured separately as contained in 
a gas sample, expressed as exhaust hydrocarbon from petroleum-fueled 
engines. The hydrogen-to-carbon mass ratio of the equivalent 
hydrocarbon is 1.85:1.
* * * * *

PART 1060--CONTROL OF EVAPORATIVE EMISSIONS FROM NEW AND IN-USE 
NONROAD AND STATIONARY EQUIPMENT

    246. The authority citation for part 1060 continues to read as 
follows:

    Authority:  42 U.S.C. 7401-7671q.

Subpart B--[Amended]

    247. Section 1060.103 is amended by revising paragraph (e) to read 
as follows:


Sec.  1060.103  What permeation emission control requirements apply for 
fuel tanks?

* * * * *
    (e) Fuel caps may be certified separately relative to the 
permeation emission standard in paragraph (b) of this section using the 
test procedures specified in Sec.  1060.521. Fuel caps certified alone 
do not need to meet the emission standard. Rather, fuel caps would be 
certified with a Family Emission Limit, which is used for demonstrating 
that fuel tanks meet the emission standard as described in Sec.  
1060.520(b)(5). For the purposes of this paragraph (e), gaskets or O-
rings that are produced as part of an assembly with the fuel cap are 
considered part of the fuel cap.
* * * * *
    248. Section 1060.135 is amended by revising paragraph (a)(5) to 
read as follows:


Sec.  1060.135  How must I label and identify the engines and equipment 
I produce?

* * * * *
    (a) * * *
    (5) Readily visible in the final installation. It may be under a 
hinged door or other readily opened cover. It may not be hidden by any 
cover attached with screws or any similar designs. Labels on marine 
vessels (except personal watercraft) must be visible from the helm.
* * * * *
    249. Section 1060.137 is amended by revising paragraphs (a)(4) and 
(a)(5) to read as follows:


Sec.  1060.137  How must I label and identify the fuel-system 
components I produce?

* * * * *
    (a) * * *
    (4) Fuel caps, as described in this paragraph (a)(4). Fuel caps 
must be labeled if they are separately certified

[[Page 44568]]

under Sec.  1060.103 or if the diurnal control system requires that the 
fuel tank hold pressure. Fuel caps must also be labeled if they are 
mounted directly on the fuel tank, unless the fuel tank is certified 
based on a worst-case fuel cap.
    (5) Replaceable pressure-relief assemblies. This does not apply if 
the component is integral to the fuel tank or fuel cap. If the assembly 
is too small to be properly labeled, you may omit the label, provided 
that you identify the part numbers in your maintenance and installation 
instructions.
* * * * *

Subpart F--[Amended]

    250. Section 1060.515 is amended by revising paragraph (c) to read 
as follows:


Sec.  1060.515  How do I test EPA Nonroad Fuel Lines and EPA Cold-
Weather Fuel Lines for permeation emissions?

* * * * *
    (c) Measure fuel line permeation emissions using the equipment and 
procedures for weight-loss testing specified in SAE J30 or SAE J1527 
(incorporated by reference in Sec.  1060.810). Start the measurement 
procedure within 8 hours after draining and refilling the fuel line. 
Perform the emission test over a sampling period of 14 days. Determine 
your final emission result based on the highest measured valued over 
the 14-day period.
* * * * *
    251. Section 1060.520 is amended as follows:
    a. By adding paragraph (a)(4).
    b. By removing and reserving paragraph (b)(3).
    c. By revising paragraphs (b)(5)(ii)(B), (d)(8), and (d)(10).


Sec.  1060.520  How do I test fuel tanks for permeation emissions?

* * * * *
    (a) * * *
    (4) Perform durability cycles on fuel caps intended for use with 
handheld equipment by putting the fuel cap on and taking it off 300 
times. Tighten the fuel cap each time in a way that represents the 
typical in-use experience.
    (b) * * *
    (3) [Reserved]
* * * * *
    (5) * * *
    (ii) * * *
    (B) You may seal the fuel inlet with a nonpermeable covering if you 
separately account for permeation emissions from the fuel cap. This may 
involve a separate measurement of permeation emissions from a worst-
case fuel cap as described in Sec.  1060.521. This may also involve 
specifying a worst-case Family Emission Limit based on separately 
certified fuel caps as described in Sec.  1060.103(e).
* * * * *
    (d) * * *
    (8) Measure weight loss daily by retaring the balance using the 
reference tank and weighing the sealed test tank. Calculate the 
cumulative weight loss in grams for each measurement. Calculate the 
coefficient of determination, r\2\, based on a linear plot of 
cumulative weight loss vs. test days. Use the equation in 40 CFR 
1065.602(k), with cumulative weight loss represented by y<INF>i</INF> 
and cumulative time represented by y<INF>ref</INF>. The daily 
measurements must be at approximately the same time each day. You may 
omit up to two daily measurements in any seven-day period. Test for ten 
full days, then determine when to stop testing as follows:
    (i) You may stop testing after the measurement on the tenth day if 
r\2\ is at or above 0.95 or if the measured value is less than 50 
percent of the applicable standard. (Note that if a Family Emission 
Limit applies for the family, it is considered to be the applicable 
standard for that family.) This means that if you stop testing with an 
r\2\ below 0.95, you may not use the data to show compliance with a 
Family Emission Limit less than twice the measured value.
    (ii) If after ten days of testing your r\2\ value is below 0.95 and 
your measured value is more than 50 percent of the applicable standard, 
continue testing for a total of 20 days or until r\2\ is at or above 
0.95. If r\2\ is not at or above 0.95 within 20 days of testing, 
discontinue the test and precondition the fuel tank further until it 
has stabilized emission levels, then repeat the testing.
* * * * *
    (10) Determine your final emission result based on the cumulative 
weight loss measured on the final day of testing. Round this result to 
the same number of decimal places as the emission standard.
* * * * *

Subpart G--[Amended]

    252. Section 1060.601 is amended by adding paragraph (h) to read as 
follows:


Sec.  1060.601  How do the prohibitions of 40 CFR 1068.101 apply with 
respect to the requirements of this part?

* * * * *
    (h) If equipment manufacturers hold certificates of conformity for 
their equipment but they use only fuel-system components that have been 
certified by other companies, they may satisfy their defect-reporting 
obligations by tracking the information described in 40 CFR 
1068.501(b)(1) related to possible defects, reporting this information 
to the appropriate component manufacturers, and keeping these records 
for eight years. Such equipment manufacturers will not be considered in 
violation of 40 CFR 1068.101(b)(6) for failing to perform 
investigations, make calculations, or submit reports to EPA as 
specified in 40 CFR 1068.501. See Sec.  1060.5(a).

Subpart I--[Amended]

    253. Section 1060.801 is amended by revising the definitions for 
``Detachable fuel line'' and ``Sealed'' and adding definitions for 
``Installed marine fuel line'' and ``Portable marine fuel line'' to 
read as follows:


Sec.  1060.801  What definitions apply to this part?

* * * * *
    Detachable fuel line means a fuel line or fuel line assembly 
intended to be used with a portable nonroad fuel tank and which is 
connected by special fittings to the fuel tank and/or engine for easy 
disassembly. Fuel lines that require a wrench or other tools to 
disconnect are not considered detachable fuel lines. Fuel lines that 
are labeled or marketed as USCG Type B1 fuel line as specified in 33 
CFR 183.540 are not considered detachable fuel lines if they are sold 
to the ultimate purchaser without quick-connect fittings or similar 
hardware.
* * * * *
    Installed marine fuel line means a fuel line designed for 
delivering fuel to a Marine SI engine, excluding portable marine fuel 
line.
* * * * *
    Portable marine fuel line means a detachable fuel line that is used 
or intended to be used to supply fuel to a marine engine during 
operation. This also includes any fuel line labeled or marketed at USCG 
Type B1 fuel line as specified in 33 CFR 183.540, whether or not it 
includes detachable connecting hardware; this is often called universal 
fuel line.
* * * * *
    Sealed means lacking openings to the atmosphere that would allow a 
measurable amount of liquid or vapor to leak out under normal operating 
pressures or other pressures specified in this part. For example, you 
may generally establish a maximum value for operating pressures based 
on the highest pressure you would observe from an installed fuel tank 
during continuous equipment operation on a sunny day with ambient 
temperatures of 35[deg]C. A fuel system may be considered to have

[[Page 44569]]

no measurable leak if it does not release bubbles when held underwater 
at the identified pressure for 60 seconds. This determination presumes 
the use of good engineering judgment; for example, it would not be 
appropriate to test the fuel tank such that small leaks would avoid 
detection by collecting in a cavity created by holding the tank with a 
certain orientation. Sealed fuel systems may have openings for emission 
controls or for fuel lines needed to route fuel to the engine.
* * * * *

PART 1065--ENGINE-TESTING PROCEDURES

    254. The authority citation for part 1065 continues to read as 
follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A-- [Revised]

    255. Section 1065.1 is amended by revising paragraph (d) to read as 
follows:


Sec.  1065.1  Applicability.

* * * * *
    (d) Paragraph (a) of this section identifies the parts of the CFR 
that define emission standards and other requirements for particular 
types of engines. In this part, we refer to each of these other parts 
generically as the ``standard-setting part.'' For example, 40 CFR part 
1051 is always the standard-setting part for snowmobiles. Note that 
while 40 CFR part 86 is the standard-setting part for heavy-duty 
highway engines, this refers specifically to 40 CFR part 86, subpart A, 
and to certain portions of 40 CFR part 86, subpart N, as described in 
40 CFR 86.1301.
* * * * *
    256. Section 1065.2 is amended by revising paragraphs (a) and (b) 
to read as follows:


Sec.  1065.2  Submitting information to EPA under this part.

    (a) You are responsible for statements and information in your 
applications for certification, requests for approved procedures, 
selective enforcement audits, laboratory audits, production-line test 
reports, field test reports, or any other statements you make to us 
related to this part 1065. If you provide statements or information to 
someone for submission to EPA, you are responsible for these statements 
and information as if you had submitted them to EPA yourself.
    (b) In the standard-setting part and in 40 CFR 1068.101, we 
describe your obligation to report truthful and complete information 
and the consequences of failing to meet this obligation. See also 18 
U.S.C. 1001 and 42 U.S.C. 7413(c)(2). This obligation applies whether 
you submit this information directly to EPA or through someone else.
* * * * *
    257. Section 1065.10 is amended by revising paragraphs (c)(2) and 
(c)(7) to read as follows:


Sec.  1065.10  Other procedures.

* * * * *
    (c) * * *
    (2) You may request to use special procedures if your engine cannot 
be tested using the specified procedures. For example, this may apply 
if your engine cannot operate on the specified duty cycle. In this 
case, tell us in writing why you cannot satisfactorily test your engine 
using this part's procedures and ask to use a different approach. We 
will approve your request if we determine that it would produce 
emission measurements that represent in-use operation and we determine 
that it can be used to show compliance with the requirements of the 
standard-setting part. Where we approve special procedures that differ 
substantially from the specified procedures, we may preclude you from 
participating in averaging, banking, and trading with the affected 
engine families.
* * * * *
    (7) You may request to use alternate procedures that are equivalent 
to the allowed procedures, or procedures that are more accurate or more 
precise than the allowed procedures. The following provisions apply to 
requests for alternate procedures:
    (i) Applications. Follow the instructions in Sec.  1065.12.
    (ii) Submission. Submit requests in writing to the Designated 
Compliance Officer.
    (iii) Notification. We may approve your request by telling you 
directly, or we may issue guidance announcing our approval of a 
specific alternate procedure, which would make additional requests for 
approval unnecessary.
* * * * *
    258. Section 1065.15 is amended by revising paragraph (c) to read 
as follows:


Sec.  1065.15  Overview of procedures for laboratory and field testing.

* * * * *
    (c) We generally set brake-specific emission standards over test 
intervals and/or duty cycles, as follows:
    (1) Engine operation. Testing may involve measuring emissions and 
work in a laboratory-type environment or in the field, as described in 
paragraph (f) of this section. For most laboratory testing, the engine 
is operated over one or more duty cycles specified in the standard-
setting part. However, laboratory testing may also include non-duty 
cycle testing (such as simulation of field testing in a laboratory). 
For field testing, the engine is operated under normal in-use 
operation. The standard-setting part specifies how test intervals are 
defined for field testing. Refer to the definitions of ``duty cycle'' 
and ``test interval'' in Sec.  1065.1001. Note that a single duty cycle 
may have multiple test intervals and require weighting of results from 
multiple test intervals to calculate a composite brake-specific 
emissions value to compare to the standard.
    (2) Constituent determination. Determine the total mass of each 
constituent over a test interval by selecting from the following 
methods:
    (i) Continuous sampling. In continuous sampling, measure the 
constituent's concentration continuously from raw or dilute exhaust. 
Multiply this concentration by the continuous (raw or dilute) flow rate 
at the emission sampling location to determine the constituent's flow 
rate. Sum the constituent's flow rate continuously over the test 
interval. This sum is the total mass of the emitted constituent.
    (ii) Batch sampling. In batch sampling, continuously extract and 
store a sample of raw or dilute exhaust for later measurement. Extract 
a sample proportional to the raw or dilute exhaust flow rate. You may 
extract and store a proportional sample of exhaust in an appropriate 
container, such as a bag, and then measure HC, CO, and NO<INF>X</INF> 
concentrations in the container after the test interval. You may 
deposit PM from proportionally extracted exhaust onto an appropriate 
substrate, such as a filter. In this case, divide the PM by the amount 
of filtered exhaust to calculate the PM concentration. Multiply batch 
sampled concentrations by the total (raw or dilute) flow from which it 
was extracted during the test interval. This product is the total mass 
of the emitted constituent.
    (iii) Combined sampling. You may use continuous and batch sampling 
simultaneously during a test interval, as follows:
    (A) You may use continuous sampling for some constituents and batch 
sampling for others.
    (B) You may use continuous and batch sampling for a single 
constituent, with one being a redundant measurement. See Sec.  1065.201 
for more information on redundant measurements.

[[Page 44570]]

    (3) Work determination. Determine work over a test interval by one 
of the following methods:
    (i) Speed and torque. Synchronously multiply speed and brake torque 
to calculate instantaneous values for engine brake power. Sum engine 
brake power over a test interval to determine total work.
    (ii) Fuel consumed and brake-specific fuel consumption. Directly 
measure fuel consumed or calculate it with chemical balances of the 
fuel, intake air, and exhaust. To calculate fuel consumed by a chemical 
balance, you must also measure either intake-air flow rate or exhaust 
flow rate. Divide the fuel consumed during a test interval by the 
brake-specific fuel consumption to determine work over the test 
interval. For laboratory testing, calculate the brake-specific fuel 
consumption using fuel consumed and speed and torque over a test 
interval. For field testing, refer to the standard-setting part and 
Sec.  1065.915 for selecting an appropriate value for brake-specific 
fuel consumption.
* * * * *

Subpart B-- [Revised]

    259. Section 1065.125 is amended by revising paragraphs (c) and (e) 
to read as follows:


Sec.  1065.125  Engine intake air.

* * * * *
    (c) Maintain the temperature of intake air upstream of all engine 
components within the range of allowable ambient temperatures (or other 
range specified by the standard-setting part), consistent with the 
provisions of Sec.  1065.10(c)(1).
* * * * *
    (e) This paragraph (e) includes provisions for simulating charge-
air cooling in the laboratory. This approach is described in paragraph 
(e)(1) of this section. Limits on using this approach are described in 
paragraphs (e)(2) and (3) of this section.
    (1) Use a charge-air cooling system with a total intake-air 
capacity that represents production engines' in-use installation. 
Design any laboratory charge-air cooling system to minimize 
accumulation of condensate. Drain any accumulated condensate and 
completely close all drains before starting a duty cycle. Keep the 
drains closed during the emission test. Maintain coolant conditions as 
follows:
    (i) Maintain a coolant temperature of at least 20 [deg]C at the 
inlet to the charge-air cooler throughout testing. We recommend 
maintaining a coolant temperature of 25 <plus-minus> 5 [deg]C at the 
inlet of the charge-air cooler.
    (ii) At the engine conditions specified by the manufacturer, set 
the coolant flow rate to achieve an air temperature within <plus-
minus>5 [deg]C of the value specified by the manufacturer after the 
charge-air cooler's outlet. Measure the air-outlet temperature at the 
location specified by the manufacturer. Use this coolant flow rate set 
point throughout testing. If the engine manufacturer does not specify 
engine conditions or the corresponding charge-air cooler air outlet 
temperature, set the coolant flow rate at maximum engine power to 
achieve a charge-air cooler air outlet temperature that represents in-
use operation.
    (iii) If the engine manufacturer specifies pressure-drop limits 
across the charge-air cooling system, ensure that the pressure drop 
across the charge-air cooling system at engine conditions specified by 
the manufacturer is within the manufacturer's specified limit(s). 
Measure the pressure drop at the manufacturer's specified locations.
    (2) Using a constant flow rate as described in paragraph (e)(1) of 
this section may result in unrepresentative overcooling of the intake 
air. The provisions of this paragraph (e)(2) apply instead of the 
provisions of Sec.  1065.10(c)(1) for this simulation. Our allowance to 
cool intake air as specified in this paragraph (e) does not affect your 
liability for field testing or for laboratory testing that is done in a 
way that better represents in-use operation. Where we determine that 
this allowance adversely affects your ability to demonstrate that your 
engines would comply with emission standards under in-use conditions, 
we may require you to use more sophisticated setpoints and controls of 
charge-air pressure drop, coolant temperature, and flow rate to achieve 
more representative results.
    (3) This approach does not apply for field testing. You may not 
correct measured emission levels from field testing to account for any 
differences caused by the simulated cooling in the laboratory.
    260. Section 1065.140 is amended by revising paragraphs (c)(6), (e) 
introductory text, and (e)(4) to read as follows:


Sec.  1065.140  Dilution for gaseous and PM constituents.

* * * * *
    (c) * * *
    (6) Aqueous condensation. To ensure that you measure a flow that 
corresponds to a measured concentration, you may either prevent aqueous 
condensation throughout the dilution tunnel or you may allow aqueous 
condensation to occur and then measure humidity at the flow meter 
inlet. You may heat or insulate the dilution tunnel walls, as well as 
the bulk stream tubing downstream of the tunnel to prevent aqueous 
condensation. Calculations in Sec.  1065.645 and Sec.  1065.650 account 
for either method of addressing humidity in the diluted exhaust. Note 
that preventing aqueous condensation involves more than keeping pure 
water in a vapor phase (see Sec.  1065.1001).
* * * * *
    (e) Dilution air temperature, dilution ratio, residence time, and 
temperature control of PM samples. Dilute PM samples at least once 
upstream of transfer lines. You may dilute PM samples upstream of a 
transfer line using full-flow dilution, or partial-flow dilution 
immediately downstream of a PM probe. In the case of partial-flow 
dilution, you may have up to 26 cm of insulated length between the end 
of the probe and the dilution stage, but we recommend that the length 
be as short as practical. The intent of these specifications is to 
minimize heat transfer to or from the emission sample before the final 
stage of dilution, other than the heat you may need to add to prevent 
aqueous condensation. This is accomplished by initially cooling the 
sample through dilution. Configure dilution systems as follows:
* * * * *
    (4) Control sample temperature to a (47 <plus-minus>5) [deg]C 
tolerance, as measured anywhere within 20 cm upstream or downstream of 
the PM storage media (such as a filter). Measure this temperature with 
a bare-wire junction thermocouple with wires that are (0.500 <plus-
minus>0.025) mm diameter, or with another suitable instrument that has 
equivalent performance.
    261. Section 1065.145 is revised to read as follows:


Sec.  1065.145  Gaseous and PM probes, transfer lines, and sampling 
system components.

    (a) Continuous and batch sampling. Determine the total mass of each 
constituent with continuous or batch sampling, as described in Sec.  
1065.15(c)(2). Both types of sampling systems have probes, transfer 
lines, and other sampling system components that are described in this 
section.
    (b) Options for engines with multiple exhaust stacks. Measure 
emissions from a test engine as described in this paragraph (b) if it 
has multiple exhaust stacks. You may choose to use different 
measurement procedures for different pollutants under this paragraph 
(b) for a given test. For purposes of this part 1065, the test engine 
includes all the devices related to converting the

[[Page 44571]]

chemical energy in the fuel to the engine's mechanical output energy. 
This may or may not involve vehicle- or equipment-based devices. For 
example, all of an engine's cylinders are considered to be part of the 
test engine even if the exhaust is divided into separate exhaust 
stacks. As another example, all the cylinders of a diesel-electric 
locomotive are considered to be part of the test engine even if they 
transmit power through separate output shafts, such as might occur with 
multiple engine-generator sets working in tandem. Use one of the 
following procedures to measure emissions with multiple exhaust stacks:
    (1) Route the exhaust flow from the multiple stacks into a single 
flow as described in Sec.  1065.130(c)(6). Sample and measure emissions 
after the exhaust streams are mixed. Calculate the emissions as a 
single sample from the entire engine. We recommend this as the 
preferred option, since it requires only a single measurement and 
calculation of the exhaust molar flow for the entire engine.
    (2) Sample and measure emissions from each stack and calculate 
emissions separately for each stack. Add the mass (or mass rate) 
emissions from each stack to calculate the emissions from the entire 
engine. Testing under this paragraph (b)(2) requires measuring or 
calculating the exhaust molar flow for each stack separately. If the 
exhaust molar flow in each stack cannot be calculated from combustion 
air flow(s), fuel flow(s), and measured gaseous emissions, and it is 
impractical to measure the exhaust molar flows directly, you may 
alternatively proportion the engine's calculated total exhaust molar 
flow rate (where the flow is calculated using combustion air mass 
flow(s), fuel mass flow(s), and emissions concentrations) based on 
exhaust molar flow measurements in each stack using a less accurate, 
non-traceable method. For example, you may use a total pressure probe 
and static pressure measurement in each stack.
    (3) Sample and measure emissions from one stack and repeat the duty 
cycle as needed to collect emissions from each stack separately. 
Calculate the emissions from each stack and add the separate 
measurements to calculate the mass (or mass rate) emissions from the 
entire engine. Testing under this paragraph (b)(3) requires measuring 
or calculating the exhaust molar flow for each stack separately. You 
may alternatively proportion the engine's calculated total exhaust 
molar flow rate based on calculation and measurement limitations as 
described in paragraph (b)(2) of this section. Use the average of the 
engine's total power or work values from the multiple test runs to 
calculate brake-specific emissions. Divide the total mass (or mass 
rate) of each emission by the average power (or work). You may 
alternatively use the engine power or work associated with the 
corresponding stack during each test run if these values can be 
determined for each stack separately.
    (4) Sample and measure emissions from each stack separately and 
calculate emissions for the entire engine based on the stack with the 
highest concentration. Testing under this paragraph (b)(4) requires 
only a single exhaust flow measurement or calculation for the entire 
engine. You may determine which stack has the highest concentration by 
performing multiple test runs, reviewing the results of earlier tests, 
or using good engineering judgment. Note that the highest concentration 
of different pollutants may occur in different stacks. Note also that 
the stack with the highest concentration of a pollutant during a test 
interval for field testing may be a different stack than the one you 
identified based on average concentrations over a duty cycle.
    (5) Sample emissions from each stack separately and combine the wet 
sample streams from each stack proportionally to the exhaust molar 
flows in each stack. Measure the emission concentrations and calculate 
the emissions for the entire engine based on these weighted 
concentrations. Testing under this paragraph (b)(5) requires measuring 
or calculating the exhaust molar flow for each stack separately during 
the test run to proportion the sample streams from each stack. If it is 
impractical to measure the exhaust molar flows directly, you may 
alternatively proportion the wet sample streams based on less accurate, 
non-traceable flow methods. For example, you may use a total pressure 
probe and static pressure measurement in each stack. The following 
restrictions apply for testing under this paragraph (b)(5):
    (i) You must use an accurate, traceable measurement or calculation 
of the engine's total exhaust molar flow rate for calculating the mass 
of emissions from the entire engine.
    (ii) You may dry the single, combined, proportional sample stream; 
you may not dry the sample streams from each stack separately.
    (iii) You must measure and proportion the sample flows from each 
stack with active flow controls. For PM sampling, you must measure and 
proportion the diluted sample flows from each stack with active flow 
controls that use only smooth walls with no sudden change in cross-
sectional area. For example, you may control the dilute exhaust PM 
sample flows using electrically conductive vinyl tubing and a control 
device that pinches the tube over a long enough transition length so no 
flow separation occurs.
    (iv) For PM sampling, the transfer lines from each stack must be 
joined so the angle of the joining flows is 12.5[deg] or less. Note 
that the exhaust manifold must meet the same specifications as the 
transfer line according to paragraph (d) of this section.
    (6) Sample emissions from each stack separately and combine the wet 
sample streams from each stack equally. Measure the emission 
concentrations and calculate the emissions for the entire engine based 
on these measured concentrations. Testing under this paragraph (b)(6) 
assumes that the raw-exhaust and sample flows are the same for each 
stack. The following restrictions apply for testing under this 
paragraph (b)(6):
    (i) You must measure and demonstrate that the sample flow from each 
stack is within 5% of the value from the stack with the highest sample 
flow. You may alternatively ensure that the stacks have equal flow 
rates without measuring sample flows by designing a passive sampling 
system that meets the following requirements:
    (A) The probes and transfer line branches must be symmetrical, have 
equal lengths and diameters, have the same number of bends, and have no 
filters.
    (B) If probes are designed such that they are sensitive to stack 
velocity, the stack velocity must be similar at each probe. For 
example, a static pressure probe used for gaseous sampling is not 
sensitive to stack velocity.
    (C) The stack static pressure must be the same at each probe. You 
can meet this requirement by placing probes at the end of stacks that 
are vented to atmosphere.
    (D) For PM sampling, the transfer lines from each stack must be 
joined so the angle of the joining flows is 12.5[deg] or less. Note 
that the exhaust manifold must meet the same specifications as the 
transfer line according to paragraph (d) of this section.
    (ii) You may use the procedure in this paragraph (b)(6) only if you 
perform an analysis showing that the resulting error due to imbalanced 
stack flows and concentrations is either at or below 2%. You may 
alternatively show that the resulting error does not impact your 
ability to demonstrate compliance with applicable standards. For 
example, you may use less accurate, non-traceable

[[Page 44572]]

measurements of emission concentrations and molar flow in each stack 
and demonstrate that the imbalances in flows and concentrations cause 
2% or less error.
    (iii) For a two-stack engine, you may use the procedure in this 
paragraph (b)(6) only if you can show that the stack with the higher 
flow has the lower average concentration for each pollutant over the 
duty cycle.
    (iv) You must use an accurate, traceable measurement or calculation 
of the engine's total exhaust molar flow rate for calculating the mass 
of emissions from the entire engine.
    (v) You may dry the single, equally combined, sample stream; you 
may not dry the sample streams from each stack separately.
    (vi) You may determine your exhaust flow rates with a chemical 
balance of exhaust gas concentrations and either intake air flow or 
fuel flow.
    (c) Gaseous and PM sample probes. A probe is the first fitting in a 
sampling system. It protrudes into a raw or diluted exhaust stream to 
extract a sample, such that its inside and outside surfaces are in 
contact with the exhaust. A sample is transported out of a probe into a 
transfer line, as described in paragraph (d) of this section. The 
following provisions apply to sample probes:
    (1) Probe design and construction. Use sample probes with inside 
surfaces of 300 series stainless steel or, for raw exhaust sampling, 
use any nonreactive material capable of withstanding raw exhaust 
temperatures. Locate sample probes where constituents are mixed to 
their mean sample concentration. Take into account the mixing of any 
crankcase emissions that may be routed into the raw exhaust. Locate 
each probe to minimize interference with the flow to other probes. We 
recommend that all probes remain free from influences of boundary 
layers, wakes, and eddies--especially near the outlet of a raw-exhaust 
tailpipe where unintended dilution might occur. Make sure that purging 
or back-flushing of a probe does not influence another probe during 
testing. You may use a single probe to extract a sample of more than 
one constituent as long as the probe meets all the specifications for 
each constituent.
    (2) Gaseous sample probes. Use either single-port or multi-port 
probes for sampling gaseous emissions. You may orient these probes in 
any direction relative to the raw or diluted exhaust flow. For some 
probes, you must control sample temperatures, as follows:
    (i) For probes that extract NO<INF>x</INF> from diluted exhaust, 
control the probe's wall temperature to prevent aqueous condensation.
    (ii) For probes that extract hydrocarbons for THC or NMHC analysis 
from the diluted exhaust of compression-ignition engines, 2-stroke 
spark-ignition engines, or 4-stroke spark-ignition engines below 19 kW, 
we recommend heating the probe to minimize hydrocarbon contamination 
consistent with good engineering judgment. If you routinely fail the 
contamination check in the 1065.520 pretest check, we recommend heating 
the probe section to approximately 190 [deg]C to minimize 
contamination.
    (3) PM sample probes. Use PM probes with a single opening at the 
end. Orient PM probes to face directly upstream. If you shield a PM 
probe's opening with a PM pre-classifier such as a hat, you may not use 
the preclassifier we specify in paragraph (f)(1) of this section. We 
recommend sizing the inside diameter of PM probes to approximate 
isokinetic sampling at the expected mean flow rate.
    (d) Transfer lines. You may use transfer lines to transport an 
extracted sample from a probe to an analyzer, storage medium, or 
dilution system, noting certain restrictions for PM sampling in Sec.  
1065.140(e). Minimize the length of all transfer lines by locating 
analyzers, storage media, and dilution systems as close to probes as 
practical. We recommend that you minimize the number of bends in 
transfer lines and that you maximize the radius of any unavoidable 
bend. Avoid using 90 [deg]elbows, tees, and cross-fittings in transfer 
lines. Where such connections and fittings are necessary, take steps, 
using good engineering judgment, to ensure that you meet the 
temperature tolerances in this paragraph (d). This may involve 
measuring temperature at various locations within transfer lines and 
fittings. You may use a single transfer line to transport a sample of 
more than one constituent, as long as the transfer line meets all the 
specifications for each constituent. The following construction and 
temperature tolerances apply to transfer lines:
    (1) Gaseous samples. Use transfer lines with inside surfaces of 300 
series stainless steel, PTFE, Viton\TM\, or any other material that you 
demonstrate has better properties for emission sampling. For raw 
exhaust sampling, use a non-reactive material capable of withstanding 
raw exhaust temperatures. You may use in-line filters if they do not 
react with exhaust constituents and if the filter and its housing meet 
the same temperature requirements as the transfer lines, as follows:
    (i) For NO<INF>X</INF> transfer lines upstream of either an 
NO<INF>2</INF>-to-NO converter that meets the specifications of Sec.  
1065.378 or a chiller that meets the specifications of Sec.  1065.376, 
maintain a sample temperature that prevents aqueous condensation.
    (ii) For THC transfer lines for testing compression-ignition 
engines, 2-stroke spark-ignition engines, or 4-stroke spark-ignition 
engines below 19 kW, maintain a wall temperature tolerance throughout 
the entire line of (191 <plus-minus> 11) [deg]C. If you sample from raw 
exhaust, you may connect an unheated, insulated transfer line directly 
to a probe. Design the length and insulation of the transfer line to 
cool the highest expected raw exhaust temperature to no lower than 191 
[deg]C, as measured at the transfer line's outlet. For dilute sampling, 
you may use a transition zone between the probe and transfer line of up 
to 92 cm to allow your wall temperature to transition to (191 <plus-
minus> 11) [deg]C.
    (2) PM samples. We recommend heated transfer lines or a heated 
enclosure to minimize temperature differences between transfer lines 
and exhaust constituents. Use transfer lines that are inert with 
respect to PM and are electrically conductive on the inside surfaces. 
We recommend using PM transfer lines made of 300 series stainless 
steel. Electrically ground the inside surface of PM transfer lines.
    (e) Optional sample-conditioning components for gaseous sampling. 
You may use the following sample-conditioning components to prepare 
gaseous samples for analysis, as long as you do not install or use them 
in a way that adversely affects your ability to show that your engines 
comply with all applicable gaseous emission standards.
    (1) NO2-to-NO converter. You may use an NO<INF>2</INF>-to-NO 
converter that meets the efficiency-performance check specified in 
Sec.  1065.378 at any point upstream of a NO<INF>x</INF> analyzer, 
sample bag, or other storage medium.
    (2) Sample dryer. You may use either type of sample dryer described 
in this paragraph (e)(2) to decrease the effects of water on gaseous 
emission measurements. You may not use a chemical dryer, or use dryers 
upstream of PM sample filters.
    (i) Osmotic-membrane. You may use an osmotic-membrane dryer 
upstream of any gaseous analyzer or storage medium, as long as it meets 
the temperature specifications in paragraph (d)(1) of this section. 
Because osmotic-membrane dryers may deteriorate after prolonged 
exposure to certain exhaust constituents, consult with the membrane 
manufacturer regarding your application before incorporating an

[[Page 44573]]

osmotic-membrane dryer. Monitor the dewpoint, T<INF>dew,</INF> and 
absolute pressure, p<INF>total,</INF> downstream of an osmotic-membrane 
dryer. You may use continuously recorded values of T<INF>dew</INF> and 
p<INF>total</INF> in the amount of water calculations specified in 
Sec.  1065.645. If you do not continuously record these values, you may 
use their peak values observed during a test or their alarm setpoints 
as constant values in the calculations specified in Sec.  1065.645. You 
may also use a nominal p<INF>total,</INF> which you may estimate as the 
dryer's lowest absolute pressure expected during testing.
    (ii) Thermal chiller. You may use a thermal chiller upstream of 
some gas analyzers and storage media. You may not use a thermal chiller 
upstream of a THC measurement system for compression-ignition engines, 
2-stroke spark-ignition engines, or 4-stroke spark-ignition engines 
below 19 kW. If you use a thermal chiller upstream of an 
NO<INF>2</INF>-to-NO converter or in a sampling system without an 
NO<INF>2</INF>-to-NO converter, the chiller must meet the 
NO<INF>2</INF> loss-performance check specified in Sec.  1065.376. 
Monitor the dewpoint, T<INF>dew,</INF> and absolute pressure, 
p<INF>total,</INF> downstream of a thermal chiller. You may use 
continuously recorded values of T<INF>dew</INF> and p<INF>total</INF> 
in the emission calculations specified in Sec.  1065.650. If you do not 
continuously record these values, you may use the maximum temperature 
and minimum pressure values observed during a test or the high alarm 
temperature setpoint and the low alarm pressure setpoint as constant 
values in the amount of water calculations specified in Sec.  1065.645. 
You may also use a nominal p<INF>total,</INF> which you may estimate as 
the dryer's lowest absolute pressure expected during testing. If it is 
valid to assume the degree of saturation in the thermal chiller, you 
may calculate T<INF>dew</INF> based on the known chiller performance 
and continuous monitoring of chiller temperature, T<INF>chiller.</INF> 
If you do not continuously record values of T<INF>chiller,</INF> you 
may use its peak value observed during a test, or its alarm setpoint, 
as a constant value to determine a constant amount of water according 
to Sec.  1065.645. If it is valid to assume that T<INF>chiller</INF> is 
equal to T<INF>dew,</INF> you may use T<INF>chiller</INF> in lieu of 
T<INF>dew</INF> according to Sec.  1065.645. If it is valid to assume a 
constant temperature offset between T<INF>chiller</INF> and 
T<INF>dew,</INF> due to a known and fixed amount of sample reheat 
between the chiller outlet and the temperature measurement location, 
you may factor in this assumed temperature offset value into emission 
calculations. If we ask for it, you must show by engineering analysis 
or by data the validity of any assumptions allowed by this paragraph 
(e)(2)(ii).
    (3) Sample pumps. You may use sample pumps upstream of an analyzer 
or storage medium for any gas. Use sample pumps with inside surfaces of 
300 series stainless steel, PTFE, or any other material that you 
demonstrate has better properties for emission sampling. For some 
sample pumps, you must control temperatures, as follows:
    (i) If you use a NO<INF>x</INF> sample pump upstream of either an 
NO<INF>2</INF>-to-NO converter that meets Sec.  1065.378 or a chiller 
that meets Sec.  1065.376, it must be heated to prevent aqueous 
condensation.
    (ii) For testing compression-ignition engines, 2-stroke spark-
ignition engines, or 4-stroke spark-ignition engines below 19 kW, if 
you use a THC sample pump upstream of a THC analyzer or storage medium, 
its inner surfaces must be heated to a tolerance of (191 <plus-
minus>11) [deg]C.
    (4) Ammonia Scrubber. You may use ammonia scrubbers for any or all 
gaseous sampling systems to prevent interference with NH<INF>3</INF>, 
poisoning of the NO<INF>2</INF>-to-NO converter, and deposits in the 
sampling system or analyzers. Follow the ammonia scrubber 
manufacturer's recommendations or use good engineering judgment in 
applying ammonia scrubbers.
    (f) Optional sample-conditioning components for PM sampling. You 
may use the following sample-conditioning components to prepare PM 
samples for analysis, as long as you do not install or use them in a 
way that adversely affects your ability to show that your engines 
comply with the applicable PM emission standards. You may condition PM 
samples to minimize positive and negative biases to PM results, as 
follows:
    (1) PM preclassifier. You may use a PM preclassifier to remove 
large-diameter particles. The PM preclassifier may be either an 
inertial impactor or a cyclonic separator. It must be constructed of 
300 series stainless steel. The preclassifier must be rated to remove 
at least 50% of PM at an aerodynamic diameter of 10 [mu]m and no more 
than 1% of PM at an aerodynamic diameter of 1 [mu]m over the range of 
flow rates for which you use it. Follow the preclassifier 
manufacturer's instructions for any periodic servicing that may be 
necessary to prevent a buildup of PM. Install the preclassifier in the 
dilution system downstream of the last dilution stage. Configure the 
preclassifier outlet with a means of bypassing any PM sample media so 
the preclassifier flow may be stabilized before starting a test. Locate 
PM sample media within 75 cm downstream of the preclassifier's exit. 
You may not use this preclassifier if you use a PM probe that already 
has a preclassifier. For example, if you use a hat-shaped preclassifier 
that is located immediately upstream of the probe in such a way that it 
forces the sample flow to change direction before entering the probe, 
you may not use any other preclassifier in your PM sampling system.
    (2) Other components. You may request to use other PM conditioning 
components upstream of a PM preclassifier, such as components that 
condition humidity or remove gaseous-phase hydrocarbons from the 
diluted exhaust stream. You may use such components only if we approve 
them under Sec.  1065.10.

Subpart C-- [Revised]

    262. Section 1065.240 is amended by revising paragraph (d) 
introductory text to read as follows:


Sec.  1065.240  Dilution air and diluted exhaust flow meters.

* * * * *
    (d) Exhaust cooling. You may cool diluted exhaust upstream of a 
dilute-exhaust flow meter, as long as you observe all the following 
provisions:
* * * * *

Subpart D--[Revised]

    263. Section 1065.303 is revised to read as follows:


Sec.  1065.303  Summary of required calibration and verifications

    The following table summarizes the required and recommended 
calibrations and verifications described in this subpart and indicates 
when these have to be performed:

     Table 1 of Sec.   1065.303-Summary of Required Calibration and
                              Verifications
------------------------------------------------------------------------
  Type of calibration or verification         Minimum frequency \a\
------------------------------------------------------------------------
Sec.   1065.305: Accuracy,               Accuracy: Not required, but
 repeatability and noise.                 recommended for initial
                                          installation.
                                         Repeatability: Not required,
                                          but recommended for initial
                                          installation.
                                         Noise: Not required, but
                                          recommended for initial
                                          installation.

[[Page 44574]]

 
Sec.   1065.307: Linearity verification  Speed: Upon initial
                                          installation, within 370 days
                                          before testing and after major
                                          maintenance.
                                         Torque: Upon initial
                                          installation, within 370 days
                                          before testing and after major
                                          maintenance.
                                         Electrical power: Upon initial
                                          installation, within 370 days
                                          before testing and after major
                                          maintenance.
                                         Fuel flow: Upon initial
                                          installation, within 370 days
                                          before testing, and after
                                          major maintenance.
                                         Clean gas and diluted exhaust
                                          flows: Upon initial
                                          installation, within 370 days
                                          before testing and after major
                                          maintenance, unless flow is
                                          verified by propane check or
                                          by carbon or oxygen balance.
                                         Raw exhaust flow: Upon initial
                                          installation, within 185 days
                                          before testing and after major
                                          maintenance, unless flow is
                                          verified by propane check or
                                          by carbon or oxygen balance.
                                         Gas dividers: Upon initial
                                          installation, within 370 days
                                          before testing, and after
                                          major maintenance.
                                         Gas analyzers: Upon initial
                                          installation, within 35 days
                                          before testing and after major
                                          maintenance.
                                         PM balance: Upon initial
                                          installation, within 370 days
                                          before testing and after major
                                          maintenance.
                                         Stand-alone pressure,
                                          temperature, and dewpoint:
                                          Upon initial installation,
                                          within 370 days before testing
                                          and after major maintenance.
Sec.   1065.308: Continuous gas          Upon initial installation or
 analyzer system response and updating-   after system modification that
 recording verification--for gas          would affect response.
 analyzers not continuously compensated
 for other gas species.
Sec.   1065.309: Continuous gas          Upon initial installation or
 analyzer system-response and updating-   after system modification that
 recording verification--for gas          would affect response.
 analyzers continuously compensated for
 other gas species.
Sec.   1065.310: Torque................  Upon initial installation and
                                          after major maintenance.
Sec.   1065.315: Pressure, temperature,  Upon initial installation and
 dewpoint.                                after major maintenance.
Sec.   1065.320: Fuel flow.............  Upon initial installation and
                                          after major maintenance.
Sec.   1065.325: Intake flow...........  Upon initial installation and
                                          after major maintenance.
Sec.   1065.330: Exhaust flow..........  Upon initial installation and
                                          after major maintenance.
Sec.   1065.340: Diluted exhaust flow    Upon initial installation and
 (CVS).                                   after major maintenance.
Sec.   1065.341: CVS and batch sampler   Upon initial installation,
 verification.\b\                         within 35 days before testing,
                                          and after major maintenance.
Sec.   1065.342 Sample dryer             For thermal chillers; upon
 verification.                            installation and after major
                                          maintenance.
                                         For osmotic membranes; upon
                                          installation, after major
                                          maintenance, and within 35
                                          days of testing.
Sec.   1065.345: Vacuum leak...........  Before each laboratory test
                                          according to subpart F of this
                                          part and before each field
                                          test according to subpart J of
                                          this part.
Sec.   1065.350: CO2 NDIR H2O            Upon initial installation and
 interference.                            after major maintenance.
Sec.   1065.355: CO NDIR CO2 and H2O     Upon initial installation and
 interference.                            after major maintenance.
Sec.   1065.360: FID calibration THC     Calibrate all FID analyzers:
 FID optimization, and THC FID            upon initial installation and
 verification.                            after major maintenance.
                                         Optimize and determine CH4
                                          response for THC FID
                                          analyzers: upon initial
                                          installation and after major
                                          maintenance.
                                         Verify CH4 response for THC FID
                                          analyzers: upon initial
                                          installation, within 185 days
                                          before testing, and after
                                          major maintenance.
Sec.   1065.362: Raw exhaust FID O2      For all FID analyzers: upon
 interference.                            initial installation and after
                                          major maintenance.
                                         For THC FID analyzers: upon
                                          initial installation after
                                          major maintenance, and after
                                          FID optimization according to
                                          Sec.   1065.360.
Sec.   1065.365: Nonmethane cutter       Upon initial installation,
 penetration.                             within 185 days before
                                          testing, and after major
                                          maintenance.
Sec.   1065.370: CLD CO2 and H2O quench  Upon initial installation and
                                          after major maintenance.
Sec.   1065.372: NDUV HC and H2O         Upon initial installation and
 interference.                            after major maintenance.
Sec.   1065.376: Chiller NO2             Upon initial installation and
 penetration.                             after major maintenance.
Sec.   1065.378: NO2-to-NO converter     Upon initial installation,
 conversion.                              within 35 days before testing,
                                          and after major maintenance.
Sec.   1065.390: PM balance and          Independent verification: upon
 weighing.                                initial installation, within
                                          370 days before testing, and
                                          after major maintenance.
                                         Zero, span, and reference
                                          sample verifications: within
                                          12 hours of weighing and after
                                          major maintenance.
Sec.   1065.395: Inertial PM balance     Independent verification: upon
 and weighing.                            initial installation, within
                                          370 days before testing, and
                                          after major maintenance.
                                         Other verifications: upon
                                          initial installation and after
                                          major maintenance.
------------------------------------------------------------------------
\a\ Perform calibrations and verifications more frequently, according to
  measurement system manufacturer instructions and good engineering
  judgment.
\b\ The CVS verification described in Sec.   1065.341 is not required
  for systems that agree within <plus-minus> 2% based on a chemical
  balance of carbon or oxygen of the intake air, fuel, and diluted
  exhaust.


[[Page 44575]]

    264. Section 1065.307 is amended by revising paragraphs (c)(6), 
(d), and (e)(3)(ii) and Table 1 to read as follows:


Sec.  1065.307  Linearity verification.

* * * * *
    (c) * * *
    (6) For all measured quantities, use instrument manufacturer 
recommendations and good engineering judgment to select reference 
values, y<INF>refi,</INF> that cover a range of values that you expect 
would prevent extrapolation beyond these values during emission 
testing. We recommend selecting a zero reference signal as one of the 
reference values of the linearity verification. For stand-alone 
pressure, temperature, and dewpoint linearity verifications, we 
recommend at least three reference values. For all other linearity 
verifications select at least ten reference values.
* * * * *
    (d) Reference signals. This paragraph (d) describes recommended 
methods for generating reference values for the linearity-verification 
protocol in paragraph (c) of this section. Use reference values that 
simulate actual values, or introduce an actual value and measure it 
with a reference-measurement system. In the latter case, the reference 
value is the value reported by the reference-measurement system. 
Reference values and reference-measurement systems must be NIST-
traceable. We recommend using calibration reference quantities that are 
NIST-traceable within 0.5% uncertainty, if not specified otherwise in 
other sections of this part 1065. Use the following recommended methods 
to generate reference values or use good engineering judgment to select 
a different reference:
    (1) Speed. Run the engine or dynamometer at a series of steady-
state speeds and use a strobe, a photo tachometer, or a laser 
tachometer to record reference speeds.
    (2) Torque. Use a series of calibration weights and a calibration 
lever arm to simulate engine torque. You may instead use the engine or 
dynamometer itself to generate a nominal torque that is measured by a 
reference load cell or proving ring in series with the torque-
measurement system. In this case use the reference load cell 
measurement as the reference value. Refer to Sec.  1065.310 for a 
torque-calibration procedure similar to the linearity verification in 
this section.
    (3) Electrical power. Use a controlled source of current and a 
watt-hour standard reference meter. Complete calibration systems that 
contain a current source and a reference watt-hour meter are commonly 
used in the electrical power distribution industry and are therefore 
commercially available.
* * * * *
    (e) * * *
    (3) * * *
    (ii) For linearity verification of torque on the engine's primary 
output shaft, T<INF>max</INF> refers to the manufacturer's specified 
engine torque peak value of the lowest torque engine to be tested.
* * * * *

[[Page 44576]]

[GRAPHIC] [TIFF OMITTED] TP28AU09.005

    265. Section 1065.309 is amended by revising paragraph (d)(2) to 
read as follows:


Sec.  1065.309  Continuous gas analyzer system-response and updating-
recording verification--for gas analyzers continuously compensated for 
other gas species.

* * * * *
    (d) * * *
    (2) Equipment setup. We recommend using minimal lengths of gas 
transfer lines between all connections and fast-acting three-way valves 
(2 inlets, 1 outlet) to control the flow of zero and blended span gases 
to the sample system's probe inlet or a tee near the outlet of the 
probe. Normally the gas flow rate is higher than the probe sample flow 
rate and the excess is overflowed out the inlet of the probe. If the 
gas flow rate is lower than the probe flow rate, the gas concentrations 
must be adjusted to account for the dilution from ambient air drawn 
into the probe. Select span gases for the species being continuously 
combined, other than H<INF>2</INF>O. Select concentrations of 
compensating species that will yield concentrations of these species at 
the analyzer inlet that covers the range of concentrations expected 
during testing. You may use binary or multi-gas span gases. You may use 
a gas blending or mixing device to blend span gases. A gas blending or 
mixing device is recommended when blending span gases diluted in 
N<INF>2</INF> with span gases diluted in air. You may use a multi-gas 
span gas, such as NO-CO-CO<INF>2</INF>-C<INF>3</INF>H<INF>8</INF>-
CH<INF>4</INF>, to verify multiple

[[Page 44577]]

analyzers at the same time. In designing your experimental setup, avoid 
pressure pulsations due to stopping the flow through the gas blending 
device. If H<INF>2</INF>O correction is applicable, then span gases 
must be humidified before entering the analyzer; however, you may not 
humidify NO<INF>2</INF> span gas by passing it through a sealed 
humidification vessel that contains water. You must humidify 
NO<INF>2</INF> span gas with another moist gas stream. We recommend 
humidifying your NO-CO-CO<INF>2</INF>-C<INF>3</INF>H<INF>8</INF>-
CH<INF>4</INF>, balance N<INF>2</INF> blended gas by flowing the gas 
mixture through a sealed vessel that humidifies the gas by bubbling it 
through distilled water and then mixing the gas with dry NO<INF>2</INF> 
gas, balance purified synthetic air. If your system does not use a 
sample dryer to remove water from the sample gas, you must humidify 
your span gas to the highest sample H<INF>2</INF>O content that you 
estimate during emission sampling. If your system uses a sample dryer 
during testing, it must pass the sample dryer verification check in 
Sec.  1065.342, and you must humidify your span gas to an 
H<INF>2</INF>O content greater than or equal to the level determined in 
Sec.  1065.145(e)(2). If you are humidifying span gases without 
NO<INF>2</INF>, use good engineering judgment to ensure that the wall 
temperatures in the transfer lines, fittings, and valves from the 
humidifying system to the probe are above the dewpoint required for the 
target H<INF>2</INF>O content. If you are humidifying span gases with 
NO<INF>2</INF>, use good engineering judgment to ensure that there is 
no condensation in the transfer lines, fittings, or valves from the 
point where humidified gas is mixed with NO<INF>2</INF> span gas to the 
probe. We recommend that you design your setup so that the wall 
temperatures in the transfer lines, fittings, and valves from the 
humidifying system to the probe are at least 5 [deg]C above the local 
sample gas dewpoint. Operate the measurement and sample handling system 
as you do for emission testing. Make no modifications to the sample 
handling system to reduce the risk of condensation. Flow humidified gas 
through the sampling system before this check to allow stabilization of 
the measurement system's sampling handling system to occur, as it would 
for an emission test.
* * * * *
    266. Section 1065.342 is amended by revising paragraph (a), (c), 
(d)(4), and (d)(7) to read as follows:


Sec.  1065.342  Sample dryer verification.

    (a) Scope and frequency. If you use a sample dryer as allowed in 
Sec.  1065.145(e)(2) to remove water from the sample gas, verify the 
performance upon installation, after major maintenance, for thermal 
chiller. For osmotic membrane dryers, verify the performance upon 
installation, after major maintenance, and within 35 days of testing.
* * * * *
    (c) System requirements. The sample dryer must meet the 
specifications as determined in Sec.  1065.145(e)(2) for dewpoint, 
T<INF>dew,</INF> and absolute pressure, p<INF>total,</INF> downstream 
of the osmotic-membrane dryer or thermal chiller.
    (d) * * *
    (4) Maintain the sample lines, fittings, and valves from the 
location where the humidified gas water content is measured to the 
inlet of the sampling system at a temperature at least 5 [deg]C above 
the local humidified gas dewpoint. For dryers used in NO<INF>X</INF> 
sample systems, verify the sample system components used in this 
verification to prevent aqueous condensation as required in Sec.  
1065.145(d)(1)(i). We recommend that the sample system components be 
maintained at least 5 [deg]C above the local humidified gas dewpoint to 
prevent aqueous condensation.
* * * * *
    (7) The sample dryer meets the verification if the dewpoint at the 
sample dryer pressure as measured in paragraph (d)(6) of this section 
is less than the dewpoint corresponding to the sample dryer 
specifications as determined in Sec.  1065.145(e)(2) plus 2 [deg]C or 
if the mole fraction of water as measured in (d)(6) is less than the 
corresponding sample dryer specifications plus 0.002 mol/mol.
* * * * *
    267. Section 1065.345 is amended by revising paragraph (e)(1)(iii) 
to read as follows:


Sec.  1065.345  Vacuum-side leak verification.

* * * * *
    (e) * * *
    (1) * * *
    (iii) Close a leak-tight valve located in the sample transfer line 
within 92 cm of the probe.
* * * * *
    268. Section 1065.350 is amended by revising paragraph (d) to read 
as follows:


Sec.  1065.350  H<INF>2</INF>O interference verification for 
CO<INF>2</INF> NDIR analyzers.

* * * * *
    (d) Procedure. Perform the interference verification as follows:
    (1) Start, operate, zero, and span the CO<INF>2</INF> NDIR analyzer 
as you would before an emission test. If the sample is passed through a 
dryer during emission testing, you may run this verification test with 
the dryer if it meets the requirements of Sec.  1065.342. Operate the 
dryer at the same conditions as you will for an emission test. You may 
also run this verification test without the sample dryer.
    (2) Create a humidified test gas by bubbling zero gas that meets 
the specifications in Sec.  1065.750 through distilled water in a 
sealed vessel. If the sample is not passed through a dryer during 
emission testing, control the vessel temperature to generate an 
H<INF>2</INF>O level at least as high as the maximum expected during 
emission testing. If the sample is passed through a dryer during 
emission testing, control the vessel temperature to generate an 
H<INF>2</INF>O level at least as high as the level determined in Sec.  
1065.145(e)(2) for that dryer.
    (3) Introduce the humidified test gas into the sample system. You 
may introduce it downstream of any sample dryer, if one is used during 
testing.
    (4) If the sample is not passed through a dryer during this 
verification test, measure the water mole fraction, x<INF>H2O,</INF> of 
the humidified test gas, as close as possible to the inlet of the 
analyzer. For example, measure dewpoint, T<INF>dew,</INF> and absolute 
pressure, p<INF>total,</INF> to calculate x<INF>H2O.</INF> Verify that 
the water content meets the requirement in paragraph (d)(2) of this 
section. If the sample is passed through a dryer during this 
verification test, you must verify that the water content of the 
humidified test gas downstream of the vessel meets the requirement in 
paragraph (d)(2) of this section based on either direct measurement of 
the water content (e.g., dewpoint and pressure) or an estimate based on 
the vessel pressure and temperature. Use good engineering judgment to 
estimate the water content. For example, you may use previous direct 
measurements of water content to verify the vessel's level of 
saturation.
    (5) If a sample dryer is not used in this verification test, use 
good engineering judgment to prevent condensation in the transfer 
lines, fittings, or valves from the point where x<INF>H2O</INF> is 
measured to the analyzer. We recommend that you design your system so 
the wall temperatures in the transfer lines, fittings, and valves from 
the point where x<INF>H2O</INF> is measured to the analyzer are at 
least 5 [deg]C above the local sample gas dewpoint.
* * * * *
    269. Section 1065.355 is amended by revising paragraph (d) to read 
as follows:


Sec.  1065.355  H<INF>2</INF>O and CO<INF>2</INF> interference 
verification for CO NDIR analyzers.

* * * * *

[[Page 44578]]

    (d) Procedure. Perform the interference verification as follows:
    (1) Start, operate, zero, and span the CO NDIR analyzer as you 
would before an emission test. If the sample is passed through a dryer 
during emission testing, you may run this verification test with the 
dryer if it meets the requirements of Sec.  1065.342. Operate the dryer 
at the same conditions as you will for an emission test. You may also 
run this verification test without the sample dryer.
    (2) Create a humidified CO<INF>2</INF> test gas by bubbling a 
CO<INF>2</INF> span gas that meets the specifications in Sec.  1065.750 
through distilled water in a sealed vessel. If the sample is not passed 
through a dryer during emission testing, control the vessel temperature 
to generate an H<INF>2</INF>O level at least as high as the maximum 
expected during emission testing. If the sample is passed through a 
dryer during emission testing, control the vessel temperature to 
generate an H<INF>2</INF>O level at least as high as the level 
determined in Sec.  1065.145(e)(2) for that dryer. Use a CO<INF>2</INF> 
span gas concentration at least as high as the maximum expected during 
testing.
    (3) Introduce the humidified CO<INF>2</INF> test gas into the 
sample system. You may introduce it downstream of any sample dryer, if 
one is used during testing.
    (4) If the sample is not passed through a dryer during this 
verification test, measure the water mole fraction, x<INF>H2O,</INF> of 
the humidified CO<INF>2</INF> test gas as close as possible to the 
inlet of the analyzer. For example, measure dewpoint, T<INF>dew,</INF> 
and absolute pressure, p<INF>total,</INF> to calculate x<INF>H2O.</INF> 
Verify that the water content meets the requirement in paragraph (d)(2) 
of this section. If the sample is passed through a dryer during this 
verification test, you must verify that the water content of the 
humidified test gas downstream of the vessel meets the requirement in 
paragraph (d)(2) of this section based on either direct measurement of 
the water content (e.g., dewpoint and pressure) or an estimate based on 
the vessel pressure and temperature. Use good engineering judgment to 
estimate the water content. For example, you may use previous direct 
measurements of water content to verify the vessel's level of 
saturation.
    (5) If a sample dryer is not used in this verification test, use 
good engineering judgment to prevent condensation in the transfer 
lines, fittings, or valves from the point where x<INF>H2O</INF> is 
measured to the analyzer. We recommend that you design your system so 
that the wall temperatures in the transfer lines, fittings, and valves 
from the point where x<INF>H2O</INF> is measured to the analyzer are at 
least 5 [deg]C above the local sample gas dewpoint.
* * * * *
    270. Section 1065.370 is amended by revising paragraph (e)(5) to 
read as follows:


Sec.  1065.370  CLD CO<INF>2</INF> and H<INF>2</INF>O quench 
verification.

* * * * *
    (e) * * *
    (5) Humidify the NO span gas by bubbling it through distilled water 
in a sealed vessel. If the humidified NO span gas sample does not pass 
through a sample dryer for this verification test, control the vessel 
temperature to generate an H<INF>2</INF>O level approximately equal to 
the maximum mole fraction of H<INF>2</INF>O expected during emission 
testing. If the humidified NO span gas sample does not pass through a 
sample dryer, the quench verification calculations in Sec.  1065.675 
scale the measured H<INF>2</INF>O quench to the highest mole fraction 
of H<INF>2</INF>O expected during emission testing. If the humidified 
NO span gas sample passes through a dryer for this verification test, 
control the vessel temperature to generate an H<INF>2</INF>O level at 
least as high as the level determined in Sec.  1065.145(e)(2). For this 
case, the quench verification calculations in Sec.  1065.675 do not 
scale the measured H<INF>2</INF>O quench.
* * * * *

Subpart F-- [Revised]

    271. Section 1065.501 is amended by revising paragraphs (b)(2)(i) 
and (b)(2)(ii) to read as follows:


Sec.  1065.501  Overview.

* * * * *
    (b) * * *
    (2) * * *
    (i) Discrete-mode cycles. Before emission sampling, stabilize an 
engine at the first discrete mode. Sample emissions and other 
parameters for that mode in the same manner as a transient cycle, with 
the exception that reference speed and torque values are constant. 
Record mean values for that mode, and then stabilize the engine at the 
next mode. Continue to sample each mode discretely as separate test 
intervals and calculate weighted emission results according to the 
standard-setting part.
    (ii) Ramped-modal cycles. Perform ramped-modal cycles similar to 
the way you would perform transient cycles, except that ramped-modal 
cycles involve mostly steady-state engine operation. Generate a ramped-
modal duty cycle as a sequence of second-by-second (1 Hz) reference 
speed and torque points. Run the ramped-modal duty cycle in the same 
manner as a transient cycle and use the 1 Hz reference speed and torque 
values to validate the cycle, even for cycles with % power. 
Proportionally sample emissions and other parameters during the cycle 
and use the calculations in subpart G of this part to calculate 
emissions.
* * * * *
    272. Section 1065.510 is amended by revising paragraph (b)(5) to 
read as follows:


Sec.  1065.510  Engine mapping.

* * * * *
    (b) * * *
    (5) Perform one of the following:
    (i) For any engine subject only to steady-state duty cycles (i.e., 
discrete-mode or ramped-modal), you may perform an engine map by using 
discrete speeds. Select at least 20 evenly spaced setpoints between 
warm idle speed and the endpoint. At each setpoint, stabilize speed and 
allow torque to stabilize. Record the mean speed and torque at each 
setpoint. We recommend that you stabilize an engine for at least 15 
seconds at each setpoint and record the mean feedback speed and torque 
of the last (4 to 6) seconds. Use linear interpolation to determine 
intermediate speeds and torques. Use this series of speeds and torques 
to generate the power map as described in paragraph (e) of this 
section.
    (ii) For any variable-speed engine, you may perform an engine map 
by using a continuous sweep of speed by continuing to record the mean 
feedback speed and torque at 1 Hz or more frequently and increasing 
speed at a constant rate such that it takes (4 to 6) min to sweep from 
95% of warm idle speed to the endpoint. Stop recording after you 
complete the sweep. From the series of mean speed and maximum torque 
values, use linear interpolation to determine intermediate values. Use 
this series of speeds and torques to generate the power map as 
described in paragraph (e) of this section.
    (iii) Determine the endpoint of the map using one of the following 
methods:
    (A) You may use as your endpoint the highest speed above maximum 
power at which (50<plus-minus>5) % of maximum power occurs.
    (B) You may use as your endpoint any speed higher than that 
specified in paragraph (b)(5)(iii)(A) of this section. If you determine 
your endpoint for a continuous sweep according to this paragraph 
(b)(5)(iii)(B), you may base your compliance with the (4 to 6) min 
specification in paragraph (b)(5)(ii) of this section on the time it 
takes you to

[[Page 44579]]

reach the speed specified in paragraph (b)(5)(iii)(A) of this section.
    (C) If the speed specified in paragraph (b)(5)(iii)(A) of this 
section is unsafe (e.g, for ungoverned engines), use good engineering 
judgment to map up to the maximum safe speed. If the engine is equipped 
with a governor that prevents the engine from operating at the speeds 
specified in paragraph (b)(5)(iii)(A) of this section, you may use the 
highest achievable speed as the endpoint. Note that under Sec.  
1065.10(c)(1) we may allow you to disregard portions of the map when 
selecting maximum test speed if the specified procedure would result in 
a duty cycle that does not represent in-use operation.
* * * * *
    273. Section 1065.520 is amended by revising paragraph (b)(1) to 
read as follows:


Sec.  1065.520  Pre-test verification procedures and pre-test data 
collection.

* * * * *
    (b) * * *
    (1) Ambient temperature of (20 to 30) [deg]C. However, testing may 
occur at higher ambient temperatures without EPA approval if it is not 
practical to achieve an ambient temperature at or below 30 [deg]C. See 
Sec.  1065.125 for requirements related to intake air temperature.
* * * * *
    274. Section 1065.530 is amended by revising paragraph (g)(3)(iv) 
to read as follows:


Sec.  1065.530  Emission test sequence.

* * * * *
    (g) * * *
    (3) * * *
    (iv) Analyze non-conventional gaseous batch samples, such as 
ethanol (NMHCE) as soon as practical using good engineering judgment.
* * * * *
    275. Section 1065.545 is amended by revising the section heading 
and removing paragraph (d) to read as follows:


Sec.  1065.545  Validation of proportional flow control for batch 
sampling.

* * * * *
    276. A new Sec.  1065.546 is added to subpart F to read as follows:


Sec.  1065.546  Validation of minimum dilution ratio for PM batch 
sampling.

    Use continuous flows and/or tracer gas concentrations for transient 
and ramped modal cycles to validate the minimum dilution ratios for PM 
batch sampling as specified in Sec.  1065.140(e)(2) over the test 
interval. You may use mode-average values instead of continuous 
measurements for discrete mode steady-state duty cycles. Determine the 
minimum primary and minimum overall dilution ratios using one of the 
following methods (you may use a different method for each stage of 
dilution):
    (a) Determine minimum dilution ratio based on molar flow data. This 
involves determination of at least two of the following three 
quantities: raw exhaust flow (or previously diluted flow), dilution air 
flow, and dilute exhaust flow. You may determine the raw exhaust flow 
rate based on the measured intake air molar flow rate and the chemical 
balance terms in Sec.  1065.655. You may alternatively estimate the 
molar raw exhaust flow rate based on intake air, fuel rate 
measurements, and fuel properties, consistent with good engineering 
judgment.
    (b) Determine minimum dilution ratio based on tracer gas (e.g., 
CO<INF>2</INF>) concentrations in the raw (or previously diluted) and 
dilute exhaust corrected for any removed water.
    (c) Use good engineering judgment to develop your own method of 
determining dilution ratios.
    277. Section 1065.550 is amended by revising paragraph (b) to read 
as follows:


Sec.  1065.550  Gas analyzer range validation, drift validation, and 
drift correction.

* * * * *
    (b) Drift validation and drift correction. Calculate two sets of 
brake-specific emission results for each test interval. Calculate one 
set using the data before drift correction and calculate the other set 
after correcting all the data for drift according to Sec.  1065.672. 
Use the two sets of brake-specific emission results to validate the 
duty cycle for drift as follows:
    (1) The duty cycle is validated for drift if you satisfy one of the 
following criteria:
    (i) For each test interval of the duty cycle and for each regulated 
pollutant, the difference between the uncorrected and the corrected 
brake-specific emission values over the test interval is within <plus-
minus>4% of the uncorrected value or applicable emission standard, 
whichever is greater.
    (ii) For the entire duty cycle and for each regulated pollutant, 
the difference between the uncorrected and corrected composite brake-
specific emission values over the entire duty cycle is within <plus-
minus>4% of the uncorrected value or the applicable emission standard, 
whichever is greater. Note that for purposes of drift validation using 
composite brake-specific emission values over the entire duty cycle, 
leave unaltered any negative emission results over a given test 
interval (i.e., do not set them to zero). A third calculation of 
composite brake-specific emission values is required for final 
reporting. This calculation uses drift-corrected mass (or mass rate) 
values from each test interval and sets any negative mass (or mass 
rate) values to zero before calculating the composite brake-specific 
emission values over the entire duty cycle.
    (2) For standards consisting of multiple emission mass measurements 
(such as NMHC+NO<INF>X</INF> or separate NO and NO<INF>2</INF> 
measurements to comply with a NO<INF>X</INF> standard), the duty cycle 
shall be validated for drift if you satisfy one of the following:
    (i) For each test interval of the duty cycle and for each 
individual mass, the difference between the uncorrected and the 
corrected brake-specific emission values over the test interval is 
within <plus-minus>4% of the uncorrected value; or
    (ii) For the entire duty cycle the difference between the combined 
(e.g. NMHC + NO<INF>X</INF>) uncorrected and combined (e.g. NMHC + 
NO<INF>X</INF>) corrected composite brake-specific emissions values 
over the entire duty cycle is within <plus-minus>4% of the uncorrected 
value or the applicable emissions standard, whichever is greater.
    (3) If the test is not validated for drift, you may consider the 
test results for the duty cycle to be valid only if, using good 
engineering judgment, the observed drift does not affect your ability 
to demonstrate compliance with the applicable emission standards. For 
example, if the drift-corrected value is less than the standard by at 
least two times the absolute difference between the uncorrected and 
corrected values, you may consider the data to be valid for 
demonstrating compliance with the applicable standard.

Subpart G--[Revised]

    278. Section 1065.602 is amended by revising paragraphs (e) and 
(l)(1)(iii) to read as follows:


Sec.  1065.602  Statistics.

* * * * *
    (e) Accuracy. Determine accuracy as described in this paragraph 
(e). Make multiple measurements of a standard quantity to create a set 
of observed values, y<INF>i</INF>, and compare each observed value to 
the known value of the standard quantity. The standard quantity may 
have a single known value, such as a gas standard, or a set of known 
values of negligible range, such as a known applied pressure produced 
by a calibration device during repeated applications. The known value

[[Page 44580]]

of the standard quantity is represented by y<INF>ref</INF>i. If you use 
a standard quantity with a single value y<INF>ref</INF>i would be 
constant. Calculate an accuracy value as follows:
[GRAPHIC] [TIFF OMITTED] TP28AU09.009

Example:

y<INF>ref</INF> = 1800.0
N = 3
y<INF>1</INF> = 1806.4
y<INF>2</INF> = 1803.1
y<INF>3</INF> = 1798.9
[GRAPHIC] [TIFF OMITTED] TP28AU09.010

accuracy = 2.8
* * * * *
    (l) * * *
    (1) * * *
    (iii) Use your estimated values as described in the following 
example calculation:
[GRAPHIC] [TIFF OMITTED] TP28AU09.011

[GRAPHIC] [TIFF OMITTED] TP28AU09.012

Example:

e<INF>NO</INF>X = 2.5 g/(kW hr)
W<INF>ref</INF> = 11.883 kW hr
M<INF>NO</INF>X = 46.0055 g/mol = 46.0055 10<SUP>-6</SUP> g/[mu]mol
[Delta]t<INF>dutycycle</INF> = 20 min = 1200 s
 = 35.65 kW
 = 15%
P<INF>max</INF> = 125 kW
p<INF>max</INF> = 300 kPa = 300000 Pa
V<INF>disp</INF> = 3.0 L = 0.0030 m\3\
f<INF>nmax</INF> = 2800 rev/min = 46.67 rev/s
N<INF>stroke</INF> = 4 1/rev
[eta]<INF>V</INF> = 0.9
R = 8.314472 J/(mol[middot]K)
T<INF>max</INF> = 348.15 K
[GRAPHIC] [TIFF OMITTED] TP28AU09.013

= 6.53 mol/s
[GRAPHIC] [TIFF OMITTED] TP28AU09.014

= 189.4 [mu]mol/mol
* * * * *
    279. Section 1065.610 is amended by revising paragraph (c)(3) 
introductory text to read as follows:


Sec.  1065.610  Duty cycle generation.

* * * * *
    (c) * * *
    (3) Intermediate speed. If your normalized duty cycle specifies a 
speed as ``intermediate speed,'' use your torque-versus-speed curve to 
determine the speed at which maximum torque occurs. This is peak torque 
speed. If maximum torque occurs in a flat region of the torque-versus-
speed curve, your peak torque speed is the midpoint between the lowest 
and highest speeds at which the trace reaches the flat region. For 
purposes of this paragraph (c)(3), a flat region is one in which 
measured torque values are within 2.0% of the maximum recorded value. 
Identify your reference intermediate speed as one of the following 
values:
* * * * *
    280. Section 1065.640 is amended by revising paragraph (b)(1) and 
adding paragraph (c)(3)(iii) to read as follows:


Sec.  1065.640  Flow meter calibration calculations.

* * * * *
    (b) * * *
    (1) PDP volume pumped per revolution, V<INF>rev</INF> (m\3\/rev):

[[Page 44581]]

[GRAPHIC] [TIFF OMITTED] TP28AU09.015

Example:

    n<INF>ref</INF> = 25.096 mol/s
    R = 8.314472 J/(mol[middot]K)
    T<INF>in</INF> = 299.5 K
    P<INF>in</INF> = 98290 Pa
    f<INF>nPDP</INF> = 1205.1 rev/min = 20.085 rev/s
    [GRAPHIC] [TIFF OMITTED] TP28AU09.016
    
    V<INF>rev</INF> = 0.03166 m\3\/rev
* * * * *
    (c) * * *
    (3) * * *
    (iii) For CFV systems measuring dilute flow only, you may calculate 
r<INF>CFV</INF> using Equation 1065.640-13 instead of Equation 
1065.640-8.
* * * * *
    281. Section 1065.642 is amended by revising paragraph (a) to read 
as follows:


Sec.  1065.642  SSV, CFV, and PDP molar flow rate calculations.

* * * * *
    (a) PDP molar flow rate. Based upon the speed at which you operate 
the PDP for a test interval, select the corresponding slope, 
a<INF>1</INF>, and intercept, a<INF>0</INF>, as calculated in Sec.  
1065.640, to calculate molar flow rate, n, as follows:
[GRAPHIC] [TIFF OMITTED] TP28AU09.017

Where:
[GRAPHIC] [TIFF OMITTED] TP28AU09.018

Example:

a<INF>1</INF> = 50.43
---- = 755.0 rev/min = 12.58 rev/s
p<INF>out</INF> = 99950 Pa
p<INF>in</INF> = 98575 Pa
a<INF>0</INF> = 0.056
R = 8.314472 J/(mol\.\K)
T<INF>in</INF> = 323.5 K
C<INF>p</INF> = 1000 (J/m\3\)/kPa
C<INF>t</INF> = 60 s/min
[GRAPHIC] [TIFF OMITTED] TP28AU09.019

V<INF>rev</INF> = 0.52618 m\3\/rev
[GRAPHIC] [TIFF OMITTED] TP28AU09.084

= 242.592 mol/s
* * * * *
    282. Section 1065.645 is amended by revising paragraphs (a)(2) and 
(c) to read as follows:


Sec.  1065.645  Amount of water in an ideal gas.

* * * * *
    (a) * * *
    (2) For humidity measurements over ice at ambient temperatures from 
(-100 to 0) [deg]C, use the following equation:
[GRAPHIC] [TIFF OMITTED] TP28AU09.020

Example:

T<INF>ice</INF> = -15.4 [deg]C
T<INF>ice</INF> = -15.4+ 273.15 = 257.75 K
[GRAPHIC] [TIFF OMITTED] TP28AU09.021

log<INF>10</INF>(p<INF>H20</INF>) =- 0.798207
p<INF>H20</INF> = 10 \0.79821\ = 0.159145 kPa
* * * * *
    (c) Relative humidity. If you measure humidity as a relative 
humidity, RH %, determine the amount of water in an ideal gas, 
x<INF>H2O,</INF> as follows:
[GRAPHIC] [TIFF OMITTED] TP28AU09.022

Where:

x<INF>H20</INF> = amount of water in an ideal gas.
RH % = relative humidity.
p<INF>H20</INF> = water vapor pressure at 100% relative humidity at 
the location of your relative humidity measurement,, T<INF>sat</INF> 
= T<INF>amb.</INF>
p<INF>abs</INF> = wet static absolute pressure at the location of 
your relative humidity measurement.

Example:

RH % = 50.77%
p<INF>abs</INF> = 99.980 kPa
T<INF>sat = T</INF><INF>amb</INF> = 20 [deg]C
Using Eq. 1065.645-1,
p<INF>H20</INF> = 2.3371 kPa
x<INF>H2O</INF> = (50.77%[sdot] 2.3371)/99.980
x<INF>H2O</INF> = 0.011868 mol/mol

    283. Section 1065.650 is amended by revising paragraphs (a), (b), 
(c) introductory text, (d) introductory text, (d)(7), (e)(2), (f)(4), 
(g) and (h) to read as follows:


Sec.  1065.650  Emission calculations.

    (a) General. Calculate brake-specific emissions over each 
applicable duty cycle or test interval. For test intervals with zero 
work (or power), calculate the emission mass (or mass rate), but not 
brake-specific emissions. For duty cycles with multiple test intervals, 
refer to the standard-setting part for calculations you need to 
determine a composite result, such as a calculation that weights and 
sums the results of individual test intervals in a duty cycle. If the 
standard-setting part does not include those calculations, use the 
equations in paragraph (g) of this section. This section is written 
based on rectangular integration, where each indexed value (i.e., 
``<INF>i</INF>'') represents (or approximates) the mean value of the 
parameter for its respective time interval, delta-t. You may also 
integrate continuous signals using trapezoidal integration consistent 
with good engineering judgment.
    (b) Brake-specific emissions over a test interval. We specify three 
alternative ways to calculate brake-

[[Page 44582]]

specific emissions over a test interval, as follows:
    (1) For any testing, you may calculate the total mass of emissions, 
as described in paragraph (c) of this section, and divide it by the 
total work generated over the test interval, as described in paragraph 
(d) of this section, using the following equation:
[GRAPHIC] [TIFF OMITTED] TP28AU09.023

Example:

m<INF>NOx</INF> = 64.975 g
W = 25.783 kW\.\hr
e<INF>NOx</INF> = 64.975/25.783
e<INF>NOx</INF> = 2.520 g/(kW\.\hr)

    (2) For discrete-mode steady-state testing, you may calculate the 
brake-specific emissions over a test interval using the ratio of 
emission mass rate to power, as described in paragraph (e) of this 
section, using the following equation:
[GRAPHIC] [TIFF OMITTED] TP28AU09.024

    (3) For field testing, you may calculate the ratio of total mass to 
total work, where these individual values are determined as described 
in paragraph (f) of this section. You may also use this approach for 
laboratory testing, consistent with good engineering judgment. Good 
engineering judgment dictates that this method not be used if there are 
any work flow paths described in Sec.  1065.210 that cross the system 
boundary, other than the primary output shaft (crankshaft). This is a 
special case in which you use a signal linearly proportional to raw 
exhaust molar flow rate to determine a value proportional to total 
emissions. You then use the same linearly proportional signal to 
determine total work using a chemical balance of fuel, intake air, and 
exhaust as described in Sec.  1065.655, plus information about your 
engine's brake-specific fuel consumption. Under this method, flow 
meters need not meet accuracy specifications, but they must meet the 
applicable linearity and repeatability specifications in subpart D or 
subpart J of this part. The result is a brake-specific emission value 
calculated as follows:
[GRAPHIC] [TIFF OMITTED] TP28AU09.025

Example:

= 805.5 g
= 52.102 kW\.\hr
    e<INF>CO</INF> = 805.5/52.102
    e<INF>CO</INF> = 2.520 g/(kW\.\hr)

    (c) Total mass of emissions over a test interval. To calculate the 
total mass of an emission, multiply a concentration by its respective 
flow. For all systems, make preliminary calculations as described in 
paragraph (c)(1) of this section, then use the method in paragraphs 
(c)(2) through (4) of this section that is appropriate for your system. 
Calculate the total mass of emissions as follows:
* * * * *
    (d) Total work over a test interval. To calculate the total work 
from the engine over a test interval, add the total work from all the 
work paths described in Sec.  1065.210 that cross the system boundary 
including electrical energy/work, mechanical shaft work, and fluid 
pumping work. For all work paths, except the engine's primary output 
shaft (crankshaft), the total work for the path over the test interval 
is the integration of the net work flow rate (power) out of the system 
boundary. When energy/work flows into the system boundary, this work 
flow rate signal becomes negative; in this case, include these negative 
work rate values in the integration to calculate total work from that 
work path. Some work paths may result in a negative total work. Include 
negative total work values from any work path in the calculated total 
work from the engine rather than setting the values to zero. The rest 
of this paragraph (d) describes how to calculate total work from the 
engine's primary output shaft over a test interval. Before integrating 
power on the engine's primary output shaft, adjust the speed and torque 
data for the time alignment used in Sec.  1065.514(c). Any advance or 
delay used on the feedback signals for cycle validation must also be 
used for calculating work. Account for work of accessories according to 
Sec.  1065.110. Exclude any work during cranking and starting. Exclude 
work during actual motoring operation (negative feedback torques), 
unless the engine was connected to one or more energy storage devices. 
Examples of such energy storage devices include hybrid powertrain 
batteries and hydraulic accumulators, like the ones illustrated in 
Figure 1 of Sec.  1065.210. Exclude any work during reference zero-load 
idle periods (0% speed or idle speed with 0 N\.\m reference torque). 
Note, that there must be two consecutive reference zero load idle 
points to establish a period where this applies. Include work during 
idle points with simulated minimum torque such as Curb Idle 
Transmissions Torque (CITT) for automatic transmissions in ``drive''. 
The work calculation method described in paragraphs (b)(1) though (7) 
of this section meets these requirements using rectangular integration. 
You may use other logic that gives equivalent results. For example, you 
may use a trapezoidal integration method as described in paragraph 
(b)(8) of this section.
* * * * *
    (7) Integrate the resulting values for power over the test 
interval. Calculate total work as follows:
[GRAPHIC] [TIFF OMITTED] TP28AU09.026

Where:

W = total work from the primary output shaft
P<INF>i</INF> = instantaneous power from the primary output shaft 
over an interval i.
P<INF>i</INF> = f<INF>ni</INF> [middot] T<INF>i</INF>
Eq. 1065.650-11

Example:

N = 9000
f<INF>n1</INF> = 1800.2 rev/min
f<INF>n2</INF> = 1805.8 rev/min
T<INF>1</INF> = 177.23 N[middot]m
T<INF>2</INF> = 175.00 N[middot]m
C<INF>rev</INF> = 2 [middot] [pi] rad/rev
C<INF>t1</INF> = 60 s/min
C<INF>p</INF> = 1000 (N[middot]m[middot]rad/s)/kW
f<INF>record</INF> = 5 Hz
C<INF>t2</INF> = 3600 s/hr
[GRAPHIC] [TIFF OMITTED] TP28AU09.027

P<INF>1</INF> = 33.41 kW
P<INF>2</INF> = 33.09 kW
Using Eq. 1065.650-5,
[Delta]t = \1/5\ = 0.2 s
[GRAPHIC] [TIFF OMITTED] TP28AU09.028

W = 16.875 kW[middot]hr
* * * * *
    (e) * * *
    (2) To calculate an engine's mean steady-state total power, P, add 
the mean steady-state power from all the work paths described in Sec.  
1065.210 that cross the system boundary including electrical power, 
mechanical shaft power, and fluid pumping power. For all work paths, 
except the engine's primary output shaft (crankshaft), the mean steady-
state power over the test interval is the integration of the net work 
flow rate (power) out of the system boundary divided by the period of 
the test interval. When power flows into the system boundary, the 
power/work flow rate signal becomes negative; in this case, include 
these negative power/work rate values in the integration to calculate 
the mean power from that work path. Some work paths may result in a 
negative mean power. Include negative mean power values from any work 
path in the mean total power from

[[Page 44583]]

the engine rather than setting these values to zero. The rest of this 
paragraph (e)(2) describes how to calculate the mean power from the 
engine's primary output shaft. Calculate using Equation 1065.650-13, 
noting that P, fn and T refer to mean power, mean rotational shaft 
frequency, and mean torque from the primary output shaft. Account for 
the power of simulated accessories according to Sec.  1065.110 
(reducing the mean primary output shaft power or torque by the 
accessory power or torque). Set the power to zero during actual 
motoring operation (negative feedback torques), unless the engine was 
connected to one or more energy storage devices. Examples of such 
energy storage devices include hybrid powertrain batteries and 
hydraulic accumulators, like the ones illustrated in Figure 1 of Sec.  
1065.210. Set the power to zero for modes with a zero reference load (0 
N[middot]m reference torque or 0 kW reference power). Include power 
during idle modes with simulated minimum torque or power.
[GRAPHIC] [TIFF OMITTED] TP28AU09.029

* * * * *
    (f) * * *
    (4) Example. The following example shows how to calculate mass of 
emissions using proportional values:

N = 3000
f<INF>record</INF> = 5 Hz
e<INF>fuel</INF> = 285 g/(kW[middot]hr)
w<INF>fuel</INF> = 0.869 g/g
M<INF>c</INF> = 12.0107 g/mol = 3.922 ~mol/s = 14119.2 mol/hr
x<INF>Ccombdry1</INF> = 91.634 mmol/mol = 0.091634 mol/mol
x<INF>H2Oexh1</INF> = 27.21 mmol/mol = 0.02721 mol/mol
Using Eq. 1065.650-5,
[Delta]t = 0.2 s
[GRAPHIC] [TIFF OMITTED] TP28AU09.030

= 5.09 (kW[middot]hr)
    (g) Brake-specific emissions over a duty cycle with multiple test 
intervals. The standard-setting part may specify a duty cycle with 
multiple test intervals, such as with discrete-mode steady-state 
testing. Unless we specify otherwise, calculate composite brake-
specific emissions over the duty cycle as described in this paragraph 
(g). If a measured mass (or mass rate) is negative, set it to zero for 
calculating composite brake-specific emissions, but leave it unchanged 
for drift validation. In the case of calculating composite brake-
specific emissions relative to a combined emission standard (such as a 
NO<INF>X</INF> + NMHC standard), change any negative mass (or mass 
rate) values to zero for a particular pollutant before combining the 
values for the different pollutants.
    (1) Use the following equation to calculate composite brake-
specific emissions for duty cycles with multiple test intervals all 
with prescribed durations, such as cold-start and hot-start transient 
cycles:
[GRAPHIC] [TIFF OMITTED] TP28AU09.031

Where:

i = test interval number.
N = number of test intervals.
WF = weighting factor for the test interval as defined in the 
standard-setting part.
m = mass of emissions over the test interval as determined in 
paragraph (c) of this section.
W = total work from the engine over the test interval as determined 
in paragraph (d) of this section.

Example:

N = 2
WF<INF>1</INF> = 0.1428
WF<INF>2</INF> = 0.8572
m<INF>1</INF> = 70.125 g
m<INF>2</INF> = 64.975 g
W<INF>1</INF> = 25.783 kW[middot]hr
W<INF>2</INF> = 25.783 kW[middot]hr
[GRAPHIC] [TIFF OMITTED] TP28AU09.032

e<INF>NOxcomposite</INF> = 2.548 g/kW[middot]hr

    (2) Calculate composite brake-specific emissions for duty cycles 
with multiple test intervals that allow use of varying duration, such 
as discrete-mode steady-state duty cycles, as follows:
    (i) Use the following equation if you calculate brake-specific 
emissions over test intervals based on total mass and total work as 
described in paragraph (b)(1) of this section:
[GRAPHIC] [TIFF OMITTED] TP28AU09.033

Where

i = test interval number.
N = number of test intervals.
WF = weighting factor for the test interval as defined in the 
standard-setting part.
m = mass of emissions over the test interval as determined in 
paragraph (c) of this section.
W = total work from the engine over the test interval as determined 
in paragraph (d) of this section.
t = duration of the test interval.
Example:


[[Page 44584]]


N = 2
WF1 = 0.85
WF2 = 0.15
m1 = 1.3753 g
m2 =<INF>-</INF>0.4135 g
t1 =<INF>-</INF>120 s
t2 =<INF>-</INF>200 s
W1 = 2.8375 kW\.\hr
W2 = 0.0 kW\.\hr
[GRAPHIC] [TIFF OMITTED] TP28AU09.034

e<INF>NOxcomposite</INF> = 0.5001 g/kW\.\hr

    (ii) Use the following equation if you calculate brake-specific 
emissions over test intervals based on the ratio of mass rate to power 
as described in paragraph (b)(2) of this section:
[GRAPHIC] [TIFF OMITTED] TP28AU09.035

Where

i = test interval number.
N = number of test intervals.
WF = weighting factor for the test interval as defined in the 
standard-setting part.
m = mean steady-state mass rate of emissions over the test interval 
as determined in paragraph (e) of this section.
P is the mean steady-state power over the test interval as described 
in paragraph (e) of this section.
Example:

N = 2
WF<INF>1</INF> = 0.85
WF<INF>2</INF> = 0.15
m<INF>1</INF> = 2.25842 g/hr
m<INF>2</INF> = 0.063443 g/hr
P<INF>1</INF> = 4.5383 kW
P<INF>2</INF> = 0.0 kW
[GRAPHIC] [TIFF OMITTED] TP28AU09.036

e<INF>NOxcomposite</INF> = 0.5001 g/kW\.\hr

    (h) Rounding. Round the final brake-specific emission values to be 
compared to the applicable standard only after all calculations are 
complete (including any drift correction, applicable deterioration 
factors, adjustment factors, and allowances) and the result is in g/
(kW[sdot]hr) or units equivalent to the units of the standard, such as 
g/(hp\.\hr). See the definition of ``Round'' in Sec.  1065.1001.
    284. Section 1065.655 is amended by revising paragraphs (c) 
introductory text, (c)(3), (c)(4), (c)(5), and (d) to read as follows:


Sec.  1065.655  Chemical balances of fuel, intake air, and exhaust.

* * * * *
    (c) Chemical balance procedure. The calculations for a chemical 
balance involve a system of equations that require iteration. We 
recommend using a computer to solve this system of equations. You must 
guess the initial values of up to three quantities: the amount of water 
in the measured flow, x<INF>H2Oexh,</INF> fraction of dilution air in 
diluted exhaust, x<INF>dil/exh,</INF> and the amount of products on a 
C<INF>1</INF> basis per dry mole of dry measured flow, 
x<INF>Ccombdry.</INF> You may use time-weighted mean values of 
combustion air humidity and dilution air humidity in the chemical 
balance; as long as your combustion air and dilution air humidities 
remain within tolerances of <plus-minus>0.0025 mol/mol of their 
respective mean values over the test interval. For each emission 
concentration, x, and amount of water, x<INF>H2Oexh,</INF> you must 
determine their completely dry concentrations, x<INF>dry</INF> and 
x<INF>H2Oexhdry.</INF> You must also use your fuel's atomic hydrogen-
to-carbon ratio, [alpha], oxygen-to-carbon ratio, [beta], sulfur-to-
carbon ratio, [gamma], and nitrogen-to-carbon ratio, [delta]. You may 
measure [alpha], [beta], [gamma], and [delta] or you may use default 
values for a given fuel as described in Sec.  1065.655(d). Use the 
following steps to complete a chemical balance:
* * * * *
    (3) Use the following symbols and subscripts in the equations for 
this paragraph (c):

x<INF>dil/exh</INF> = amount of dilution gas or excess air per mole 
of exhaust.
x<INF>H2Oexh</INF> = amount of water in exhaust per mole of exhaust.
x<INF>Ccombdry</INF> = amount of carbon from fuel in the exhaust per 
mole of dry exhaust.
x<INF>H2dry</INF> = amount of H<INF>2</INF> in exhaust per amount of 
dry exhaust.
K<INF>H2Ogas</INF> = water-gas reaction equilibrium coefficient. You 
may use 3.5 or calculate your own value using good engineering 
judgment.
x<INF>H2Oexhdry</INF> = amount of water in exhaust per dry mole of 
dry exhaust.
x<INF>prod/intdry</INF> = amount of dry stoichiometric products per 
dry mole of intake air.
x<INF>dil/exhdry</INF> = amount of dilution gas and/or excess air 
per mole of dry exhaust.
x<INF>int/exhdry</INF> = amount of intake air required to produce 
actual combustion products per mole of dry (raw or diluted) exhaust.
x<INF>raw/exhdry</INF> = amount of undiluted exhaust, without excess 
air, per mole of dry (raw or diluted) exhaust.
x<INF>O2int</INF> = amount of intake air O<INF>2</INF> per mole of 
intake air.
x<INF>CO2intdry</INF> = amount of intake air CO<INF>2</INF> per mole 
of dry intake air. You may use x<INF>CO2intdry</INF> = 375 
[micro]mol/mol, but we recommend measuring the actual concentration 
in the intake air.
x<INF>H2Ointdry</INF> = amount of intake air H<INF>2</INF>O per mole 
of dry intake air.
x<INF>CO2int</INF> = amount of intake air CO<INF>2</INF> per mole of 
intake air.
x<INF>CO2dil</INF> = amount of dilution gas CO<INF>2</INF> per mole 
of dilution gas.
x<INF>CO2dildry</INF> = amount of dilution gas CO<INF>2</INF> per 
mole of dry dilution gas. If you use air as diluent, you may use 
x<INF>CO2dildry</INF> = 375

[[Page 44585]]

[micro]mol/mol, but we recommend measuring the actual concentration 
in the intake air.
x<INF>H2Odildry</INF> = amount of dilution gas H<INF>2</INF>O per 
mole of dry dilution gas.
x<INF>H2Odil</INF> = amount of dilution gas H<INF>2</INF>O per mole 
of dilution gas.
x<INF>[emission]meas</INF> = amount of measured emission in the 
sample at the respective gas analyzer.
x<INF>[emission]dry</INF> = amount of emission per dry mole of dry 
sample.
x<INF>H2O[emission]meas</INF> = amount of water in sample at 
emission-detection location. Measure or estimate these values 
according to Sec.  1065.145(e)(2).
x<INF>H2Oint</INF> = amount of water in the intake air, based on a 
humidity measurement of intake air.
[alpha] = atomic hydrogen-to-carbon ratio of the mixture of fuel(s) 
being combusted, weighted by molar consumption.
[beta] = atomic oxygen-to-carbon ratio of the mixture of fuel(s) 
being combusted, weighted by molar consumption.
[gamma] = atomic sulfur-to-carbon ratio of the mixture of fuel(s) 
being combusted, weighted by molar consumption.
[delta] = atomic nitrogen-to-carbon ratio of the mixture of fuel(s) 
being combusted, weighted by molar consumption.

    (4) Use the following equations to iteratively solve for 
x<INF>dil/exh, x</INF><INF>H2Oexh,</INF> and x<INF>Ccombdry</INF>:
[GRAPHIC] [TIFF OMITTED] TP28AU09.037

[GRAPHIC] [TIFF OMITTED] TP28AU09.038

[GRAPHIC] [TIFF OMITTED] TP28AU09.039

[GRAPHIC] [TIFF OMITTED] TP28AU09.040

[GRAPHIC] [TIFF OMITTED] TP28AU09.041

[GRAPHIC] [TIFF OMITTED] TP28AU09.042

[GRAPHIC] [TIFF OMITTED] TP28AU09.043

[GRAPHIC] [TIFF OMITTED] TP28AU09.044

[GRAPHIC] [TIFF OMITTED] TP28AU09.045

[GRAPHIC] [TIFF OMITTED] TP28AU09.046

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[[Page 44586]]


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[GRAPHIC] [TIFF OMITTED] TP28AU09.049

[GRAPHIC] [TIFF OMITTED] TP28AU09.050

[GRAPHIC] [TIFF OMITTED] TP28AU09.051

[GRAPHIC] [TIFF OMITTED] TP28AU09.052

[GRAPHIC] [TIFF OMITTED] TP28AU09.053

[GRAPHIC] [TIFF OMITTED] TP28AU09.054

    (5) The following example is a solution for x<INF>dil/exh</INF>, x 
<INF>H2Oexh,</INF> and x<INF>Ccombdry</INF> using the equations in 
paragraph (c)(4) of this section:
[GRAPHIC] [TIFF OMITTED] TP28AU09.055

[GRAPHIC] [TIFF OMITTED] TP28AU09.056

[GRAPHIC] [TIFF OMITTED] TP28AU09.057


[[Page 44587]]


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[GRAPHIC] [TIFF OMITTED] TP28AU09.060

[GRAPHIC] [TIFF OMITTED] TP28AU09.061

[GRAPHIC] [TIFF OMITTED] TP28AU09.062

[GRAPHIC] [TIFF OMITTED] TP28AU09.063

[GRAPHIC] [TIFF OMITTED] TP28AU09.064

[GRAPHIC] [TIFF OMITTED] TP28AU09.065

[GRAPHIC] [TIFF OMITTED] TP28AU09.066

[GRAPHIC] [TIFF OMITTED] TP28AU09.067

[GRAPHIC] [TIFF OMITTED] TP28AU09.068

[GRAPHIC] [TIFF OMITTED] TP28AU09.069

[alpha] = 1.8
[beta] = 0.05
[gamma] = 0.0003
[delta] = 0.0001

    (d) Carbon mass fraction. Determine carbon mass fraction of fuel, 
w<INF>c,</INF> using one of the following methods:
    (1) You may calculate w<INF>c</INF> as described in this paragraph 
(d)(1) based on measured fuel properties. To do so, you must determine 
values for [alpha] and [beta] in all cases, but you may set [gamma] and 
[delta] to zero if the default value listed in Table 1 of this section 
is zero. Calculate w<INF>c</INF> using the following equation:
[GRAPHIC] [TIFF OMITTED] TP28AU09.070

Where:

W<INF>C</INF> = carbon mass fraction of fuel.
M<INF>C</INF> = molar mass of carbon.
[alpha] = atomic hydrogen-to-carbon ratio of the mixture of fuel(s) 
being combusted, weighted by molar consumption.
M<INF>H</INF> = molar mass of hydrogen.
[beta] = atomic oxygen-to-carbon ratio of the mixture of fuel(s) 
being combusted, weighted by molar consumption.
M<INF>O</INF> = molar mass of oxygen.
[gamma] = atomic sulfur-to-carbon ratio of the mixture of fuel(s) 
being combusted, weighted by molar consumption.
M<INF>S</INF> = molar mass of sulfur.
[delta] = atomic nitrogen-to-carbon ratio of the mixture of fuel(s) 
being combusted, weighted by molar consumption.
M<INF>N</INF> = molar mass of nitrogen.
[alpha] = 1.8
[beta] = 0.05
[gamma] = 0.0003
[delta] = 0.0001
<INF>C</INF> = 12.0107
M<INF>H</INF> = 1.01
M<INF>O</INF> = 15.9994
M<INF>S</INF> = 32.0655
M<INF>N</INF> = 14.0067

[[Page 44588]]

[GRAPHIC] [TIFF OMITTED] TP28AU09.071

W<INF>C</INF> = 0.8205

    (2) You may use the default values in the following table to 
determine w<INF>c</INF> for a given fuel:

    Table 1 of Sec.   1065.655-Default values of [alpha], [beta], [gamma], [delta], and wC, for Various Fuels
----------------------------------------------------------------------------------------------------------------
                                              Atomic hydrogen, oxygen, sulfur, and nitrogen-to-    Carbon mass
                    Fuel                       carbon  ratios CH[alpha]O[beta]S[gamma]N[delta]  fraction, wC g/g
----------------------------------------------------------------------------------------------------------------
Gasoline....................................  CH[ihel1].[ihel8][ihel5]O[ihel0]S[ihel0]N[ihel0]             0.866
<greek-i>2 Diesel...........................  CH[ihel1].[ihel8][ihel0]O[ihel0]S[ihel0]N[ihel0]             0.869
<greek-i>1 Diesel...........................  CH[ihel1].[ihel9][ihel3]O[ihel0]S[ihel0]N[ihel0]             0.861
Liquefied Petroleum Gas.....................  CH[ihel2].[ihel6][ihel4]O[ihel0]S[ihel0]N[ihel0]             0.819
Natural gas.................................  CH[ihel3].[ihel7][ihel8]O[ihel0].[ihel0][ihel1][             0.747
                                               ihel6]S0N0.
Ethanol.....................................  CH[ihel3]O[ihel0].[ihel5]S0N0...................             0.521
Methanol....................................  CH[ihel4]O[ihel1]S[ihel0]N[ihel0]...............             0.375
Residual fuel blends........................    Must be determined by measured fuel properties as described in
                                                               paragraph (d)(1) of this section.
----------------------------------------------------------------------------------------------------------------

    285. Section 1065.670 is amended by revising paragraphs (a) and (b) 
and adding paragraph (c) to read as follows:


Sec.  1065.670  NOX intake-air humidity and temperature corrections.

* * * * *
    (a) For compression-ignition engines, correct for intake-air 
humidity using the following equation:
    x<INF>NOxcor</INF> = x<INF>NOxuncor</INF> \.\ (9.953 \.\ 
x<INF>H2O</INF> + 0.832)
    Eq. 1065.670-1
Example:

x<INF>NOxuncor</INF> = 700.5 [micro]mol/mol
x<INF>H2O</INF> = 0.022 mol/mol
x<INF>NOxcor</INF> = 700.5 \.\ (9.953 \.\ 0.022 + 0.832)
x<INF>NOxcor</INF> = 736.2 [micro]mol/mol

    (b) For spark-ignition engines, correct for intake-air humidity 
using the following equation:
[GRAPHIC] [TIFF OMITTED] TP28AU09.072


    x<INF>NOxuncor</INF> = 154.7 [micro]mol/mol
    x<INF>H2O</INF> = 0.022 mol/mol
    x<INF>NOxcor</INF> = 154.7 \.\ (18.840 \.\ 0.022 + 0.68094)
    x<INF>NOxcor</INF> = 169.5 [micro]mol/mol

    (c) Develop your own correction, based on good engineering 
judgment.
    286. Section 1065.690 is amended by revising paragraphs (c) and (e) 
to read as follows:


Sec.  1065.690  Buoyancy correction for PM sample media.

* * * * *
    (c) Air density. Because a PM balance environment must be tightly 
controlled to an ambient temperature of (22 <plus-minus<ls-thn-eq>1) 
[deg]C and humidity has an insignificant effect on buoyancy correction, 
air density is primarily a function of atmospheric pressure. We 
therefore specify a buoyancy correction that is only a function of 
atmospheric pressure. Using good engineering judgment, you may develop 
and use your own buoyancy correction that includes the effects of 
temperature and dewpoint on density in addition to the effect of 
atmospheric pressure.
* * * * *
    (e) Correction calculation. Correct the PM sample media for 
buoyancy using the following equations:
[GRAPHIC] [TIFF OMITTED] TP28AU09.073

Where:

m<INF>cor</INF> = PM mass corrected for buoyancy.
m<INF>uncor</INF> = PM mass uncorrected for buoyancy.
p<INF>air</INF> = density of air in balance environment.
p<INF>weight</INF> = density of calibration weight used to span 
balance.
p<INF>media</INF> = density of PM sample media, such as a filter.
[GRAPHIC] [TIFF OMITTED] TP28AU09.074

Where:

p<INF>abs</INF> = absolute pressure in balance environment.
M<INF>mix</INF> = molar mass of air in balance environment.
R = molar gas constant.
T<INF>amb</INF> = absolute ambient temperature of balance 
environment.

Example:

p<INF>abs</INF> = 99.980 kPa
T<INF>sat</INF> = T<INF>dew</INF> = 9.5 [deg]C
Using Eq. 1065.645-1,
p<INF>H20</INF> = 1.1866 kPa
Using Eq. 1065.645-3,
x<INF>H2O</INF> = 0.011868 mol/mol
Using Eq. 1065.640-9,
M<INF>mix</INF> = 28.83563 g/mol
R = 8.314472 J/(mol\.\K)
T<INF>amb</INF> = 20 [deg]C

[[Page 44589]]

[GRAPHIC] [TIFF OMITTED] TP28AU09.089

p<INF>air</INF> = 1.18282 kg/m\3\
m<INF>uncorr</INF> = 100.0000 mg
p<INF>weight</INF> = 8000 kg/m\3\
p<INF>media</INF> = 920 kg/m\3\
[GRAPHIC] [TIFF OMITTED] TP28AU09.075

m<INF>cor</INF> = 100.1139 mg

Subpart H--[Revised]

    287. Section 1065.701 is amended by revising paragraph (f) to read 
as follows:


Sec.  1065.701  General requirements for test fuels.

* * * * *
    (f) Service accumulation and field testing fuels. If we do not 
specify a service-accumulation or field-testing fuel in the standard-
setting part, use an appropriate commercially available fuel such as 
those meeting minimum specifications from the following table:

              Table 1 of Sec.   1065.701--Examples of Service-Accumulation and Field-Testing Fuels
----------------------------------------------------------------------------------------------------------------
              Fuel category                          Subcategory                   Reference  procedure\1\
----------------------------------------------------------------------------------------------------------------
Diesel..................................  Light distillate and light        ASTM D975-07b
                                           blends with residual.
                                          Middle distillate...............  ASTM D6985-04a
                                          Biodiesel (B100)................  ASTM D6751-07b
Intermediate and residual fuel..........  All.............................  See Sec.   1065.705
Gasoline................................  Motor vehicle gasoline..........  ASTM D4814-07a
                                          Minor oxygenated gasoline blends  ASTM D4814-07a
Alcohol.................................  Ethanol (Ed75-85)...............  ASTM D5798-07
                                          Methanol (M70-M85)..............  ASTM D5797-07
Aviation fuel...........................  Aviation gasoline...............  ASTM D910-07
                                          Gas turbine.....................  ASTM D1655-07e01
                                          Jet B wide cut..................  ASTM D6615-06
Gas turbine fuel........................  General.........................  ASTM D2880-03
----------------------------------------------------------------------------------------------------------------
\1\ ASTM specifications are incorporated by reference in Sec.   1065.1010.

    288. Section 1065.703 is amended by revising Table 1 to read as 
follows:


Sec.  1065.703  Distillate diesel fuel.

* * * * *

                 Table 1 of Sec.   1065.703--Test Fuel Specifications for Distillate Diesel Fuel
----------------------------------------------------------------------------------------------------------------
                                                    Ultra low                                       Reference
             Item                    Units           sulfur        Low sulfur      High sulfur    procedure \1\
----------------------------------------------------------------------------------------------------------------
Cetane Number................  ................           40-50           40-50           40-50  ASTM D613-05.
Distillation range:            [deg]C..........
    Initial boiling point....  ................         171-204         171-204         171-204  ASTM D86-07a.
    10 pct. point............  ................         204-238         204-238         204-238
    50 pct. point............  ................         243-282         243-282         243-282
    90 pct. point............  ................         293-332         293-332         293-332
    Endpoint.................  ................         321-366         321-366         321-366
Gravity......................  [deg]API........           32-37           32-37           32-37  ASTM D4052-
                                                                                                  96e01.
Total sulfur, ultra low        mg/kg...........            7-15  ..............  ..............  See 40 CFR
 sulfur.                                                                                          80.580.
Total sulfur, low and high     mg/kg...........  ..............         300-500        800-2500  ASTM D2622-07
 sulfur.                                                                                          or alternates
                                                                                                  as allowed
                                                                                                  under 40 CFR
                                                                                                  80.580.
Aromatics, min. (Remainder     g/kg............             100             100             100  ASTM D5186-03.
 shall be paraffins,
 naphthalenes, and olefins).
Flashpoint, min..............  [deg]C..........              54              54              54  ASTM D93-07.
Kinematic Viscosity..........  cSt.............         2.0-3.2         2.0-3.2         2.0-3.2  ASTM D445-06.
----------------------------------------------------------------------------------------------------------------
\1\ ASTM procedures are incorporated by reference in Sec.   1065.1010. See Sec.   1065.701(d) for other allowed
  procedures.

Subpart K--[Revised]

    289. Section 1065.1001 is amended by revising the definitions for 
``Duty cycle'' and ``Percent'' to read as follows:


Sec.  1065.1001  Definitions.

* * * * *
    Duty cycle means one of the following:
    (1) A series of speed and torque values (or power values) that an 
engine must follow during a laboratory test. Duty cycles are specified 
in the standard-setting part. A single duty cycle may consist of one or 
more test intervals. A series of speed and torque values meeting the 
definition of this paragraph (1) may also be considered a test cycle. 
For example, a duty cycle may be a ramped-modal cycle, which has one 
test interval; a cold-start plus hot-start transient cycle, which has 
two test intervals; or a discrete-mode cycle, which has one test 
interval for each mode.
    (2) A set of weighting factors and the corresponding speed and 
torque values, where the weighting factors are used to combine the 
results of multiple test intervals into a composite result.
* * * * *
    Percent (%) means a representation of exactly 0.01 (with infinite 
precision). Significant digits for the product of % and another value, 
or the expression of any other value as a percentage, are defined as 
follows:
    (1) Where we specify some percentage of a total value (such as 
tolerances), the calculated value has the same number of

[[Page 44590]]

significant digits as the total value. The specified percentage by 
which the total value is multiplied has infinite precision. Note that 
not all displayed or recorded digits are significant. For example, 2% 
of a span value where the span value is 101.3302 is 2.026604. However, 
where the span value has limited precision such that only one digit to 
the right of the decimal is significant (i.e., the actual value is 
101.3), 2% of the span value is 2.026.
    (2) In other cases (such as some expressions of CO<INF>2</INF> 
concentrations), determine the number of significant digits using the 
same method as you would use for determining the number of significant 
digits of any calculated value. For example, a calculated value of 
0.0321, where the last three digits are significant, is equivalent to 
3.21%.
* * * * *
    290. Section 1065.1005 is amended by revising paragraph (f)(2) to 
read as follows:


Sec.  1065.1005  Symbols, abbreviations, acronyms, and units of 
measure.

* * * * *
    (f) * * *
    (2) This part uses the following molar masses or effective molar 
masses of chemical species:

------------------------------------------------------------------------
                                                            g/mol (10-
            Symbol                      Quantity         3kg[middot]mol-
                                                                1)
------------------------------------------------------------------------
Mair..........................  molar mass of dry air 1        28.96559
MAr...........................  molar mass of argon....        39.948
MC............................  molar mass of carbon...        12.0107
MCO...........................  molar mass of carbon           28.0101
                                 monoxide.
MCO2..........................  molar mass of carbon           44.0095
                                 dioxide.
MH............................  molar mass of atomic            1.00794
                                 hydrogen.
MH2...........................  molar mass of molecular         2.01588
                                 hydrogen.
MH2O..........................  molar mass of water....        18.01528
MHe...........................  molar mass of helium...         4.002602
MN............................  molar mass of atomic           14.0067
                                 nitrogen.
MN2...........................  molar mass of molecular        28.0134
                                 nitrogen.
MNMHC.........................  effective molar mass of        13.875389
                                 nonmethane hydrocarbon
                                 \2\.
MNMHCE........................  effective molar mass of        13.875389
                                 nonmethane equivalent
                                 hydrocarbon \2\.
MNOx..........................  effective molar mass of        46.0055
                                 oxides of nitrogen \3\.
MO............................  molar mass of atomic           15.9994
                                 oxygen.
MO2...........................  molar mass of molecular        31.9988
                                 oxygen.
MC3H8.........................  molar mass of propane..        44.09562
MS............................  molar mass of sulfur...        32.0655
MTHC..........................  effective molar mass of        13.875389
                                 total hydrocarbon \2\.
MTHCE.........................  effective molar mass of        13.875389
                                 total hydrocarbon
                                 equivalent \2\.
------------------------------------------------------------------------
\1\ See paragraph (f)(1) of this section for the composition of dry air.
\2\ The effective molar masses of THC, THCE, NMHC, and NMHCE are defined
  by an atomic hydrogen-to-carbon ratio, [alpha], of 1.85.
\3\ The effective molar mass of NOX is defined by the molar mass of
  nitrogen dioxide, NO2.

* * * * *

PART 1068--GENERAL COMPLIANCE PROVISIONS FOR ENGINE PROGRAMS

    292. The heading for part 1068 is revised as set forth above.
    293. The authority citation for part 1068 continues to read as 
follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--[Amended]

    294. Section 1068.25 is amended by adding paragraph (c) to read as 
follows:


Sec.  1068.25  What information must I give to EPA?

* * * * *
    (c) You are responsible for statements and information in your 
applications for certification or any other requests or reports. If you 
provide statements or information to someone for submission to EPA, you 
are responsible for these statements and information as if you had 
submitted them to EPA yourself. For example, knowingly submitting false 
information to someone else for inclusion in an application for 
certification would be deemed to be a submission of false information 
to the U.S. Government in violation of 18 U.S.C. 1001.
    295. Section 1068.30 is amended as follows:
    a. By revising the introductory text of the definition for 
``Engine''.
    b. By revising the definition for ``Ultimate purchaser''.
    c. By adding a definition for ``Gas turbine engine'' in 
alphabetical order.


Sec.  1068.30  What definitions apply to this part?

* * * * *
    Engine means an engine block with an installed crankshaft, or a gas 
turbine engine. The term engine does not include engine blocks without 
an installed crankshaft, nor does it include any assembly of 
reciprocating engine components that does not include the engine block. 
(Note: For purposes of this definition, any component that is the 
primary means of converting an engine's energy into usable work is 
considered a crankshaft, whether or not it is known commercially as a 
crankshaft.) This includes complete and partially complete engines as 
follows:
* * * * *
    Gas turbine engine means anything commercially known as a gas 
turbine engine or any collection of assembled engine components that is 
substantially similar to engines commercially known as gas turbine 
engines. For example, a jet engine is a gas turbine engine. Gas turbine 
engines may be complete or partially complete. Turbines that rely on 
external combustion such as steam engines are not gas turbine engines.
* * * * *
    Ultimate purchaser means the first person who in good faith 
purchases a new engine or new piece of equipment for purposes other 
than resale.
* * * * *
    296. Section 1068.31 is amended by revising paragraph (d) to read 
as follows:


Sec.  1068.31  What provisions apply to nonroad or stationary engines 
that change their status?

* * * * *
    (d) Changing the status of a nonroad engine to be a new stationary 
engine as

[[Page 44591]]

described in paragraph (e) of this section is a violation of Sec.  
1068.101(a)(1) unless the engine complies with all the requirements of 
this chapter for new stationary engines of the same type (for example, 
a compression-ignition engine rated at 40 kW) and model year. For a new 
stationary engine that is required to be certified under 40 CFR part 
60, the engine must have been certified to be compliant with all the 
requirements that apply to new stationary engines of the same type and 
model year, and must be in its certified configuration. Note that the 
definitions of ``model year'' in the standard-setting part generally 
identifies the engine's original date of manufacture as the basis for 
determining which standards apply if it becomes a stationary engine 
after it is no longer new. For example, see 40 CFR 60.4219 and 60.4248.
* * * * *
    297. Section 1068.45 is amended by revising paragraph (c) 
introductory text to read as follows:


Sec.  1068.45  General labeling provisions.

* * * * *
    (c) Labels on packaging. Unless we specify otherwise, where we 
require engine/equipment labels that may be removable, you may instead 
label the packaging if the engines/equipment are packaged together as 
described in this paragraph (c). For example, this may involve 
packaging engines together by attaching them to a rack, binding them 
together on a pallet, or enclosing them in a box. The provisions of 
this paragraph (c) also apply for engines/equipment boxed individually 
where you do not apply labels directly to the engines/equipment. The 
following provisions apply if you label the packaging instead of 
labeling engines/equipment individually:
* * * * *
    298. Section 1068.101 is revised to read as follows:


Sec.  1068.101  What general actions does this regulation prohibit?

    This section specifies actions that are prohibited and the maximum 
civil penalties that we can assess for each violation in accordance 
with 42 U.S.C. 7522 and 7524. The maximum penalty values listed in 
paragraphs (a) and (b) of this section apply as of January 12, 2009. As 
described in paragraph (h) of this section, these maximum penalty 
limits are different for earlier violations and they may be adjusted as 
set forth in 40 CFR part 19.
    (a) The following prohibitions and requirements apply to 
manufacturers of new engines, manufacturers of equipment containing 
these engines, and manufacturers of new equipment, except as described 
in subparts C and D of this part:
    (1) Introduction into commerce. You may not sell, offer for sale, 
or introduce or deliver into commerce in the United States or import 
into the United States any new engine/equipment after emission 
standards take effect for the engine/equipment, unless it is covered by 
a valid certificate of conformity for its model year and has the 
required label or tag. You also may not take any of the actions listed 
in the previous sentence with respect to any equipment containing an 
engine subject to this part's provisions unless the engine is covered 
by a valid certificate of conformity for its model year and has the 
required engine label or tag. We may assess a civil penalty up to 
$37,500 for each engine or piece of equipment in violation.
    (i) For purposes of this paragraph (a)(1), a valid certificate of 
conformity is one that applies for the same model year as the model 
year of the equipment (except as allowed by Sec.  1068.105(a)), covers 
the appropriate category of engines/equipment (such as locomotive or 
Marine SI), and conforms to all requirements specified for equipment in 
the standard-setting part. Engines/equipment are considered not covered 
by a certificate unless they are in a configuration described in the 
application for certification.
    (ii) The requirements of this paragraph (a)(1) also cover new 
engines you produce to replace an older engine in a piece of equipment, 
unless the engine qualifies for the replacement-engine exemption in 
Sec.  1068.240.
    (iii) For engines used in equipment subject to equipment-based 
standards, you may not sell, offer for sale, or introduce or deliver 
into commerce in the United States or import into the United States any 
new engine unless it is covered by a valid certificate of conformity 
for its model year and has the required label or tag. See the standard-
setting part for more information about how this prohibition applies.
    (2) Reporting and recordkeeping. This chapter requires you to 
record certain types of information to show that you meet our 
standards. You must comply with these requirements to make and maintain 
required records (including those described in Sec.  1068.501). You may 
not deny us access to your records or the ability to copy your records 
if we have the authority to see or copy them. Also, you must give us 
complete and accurate reports and information without delay as required 
under this chapter. Failure to comply with the requirements of this 
paragraph is prohibited. We may assess a civil penalty up to $37,500 
for each day you are in violation. In addition, knowingly submitting 
false information is a violation of 18 U.S.C. 1001, which may involve 
criminal penalties and up to five years imprisonment.
    (3) Testing and access to facilities. You may not keep us from 
entering your facility to test engines/equipment or inspect if we are 
authorized to do so. Also, you must perform the tests we require (or 
have the tests done for you). Failure to perform this testing is 
prohibited. We may assess a civil penalty up to $37,500 for each day 
you are in violation.
    (b) The following prohibitions apply to everyone with respect to 
the engines and equipment to which this part applies:
    (1) Tampering. You may not remove or render inoperative any device 
or element of design installed on or in engines/equipment in compliance 
with the regulations prior to its sale and delivery to the ultimate 
purchaser. You also may not knowingly remove or render inoperative any 
such device or element of design after such sale and delivery to the 
ultimate purchaser. This includes, for example, operating an engine 
without a supply of appropriate quality urea if the emissions control 
system relies on urea to reduce NOx emissions or the use of incorrect 
fuel or engine oil that renders the emissions control system 
inoperative. Section 1068.120 describes how this applies to rebuilding 
engines. See the standard-setting part, which may include additional 
provisions regarding actions prohibited by this requirement. For a 
manufacturer or dealer, we may assess a civil penalty up to $37,500 for 
each engine or piece of equipment in violation. For anyone else, we may 
assess a civil penalty up to $3,750 for each day an engine or piece of 
equipment is operated in violation. This prohibition does not apply in 
any of the following situations:
    (i) You need to repair the engine/equipment and you restore it to 
proper functioning when the repair is complete.
    (ii) You need to modify the engine/equipment to respond to a 
temporary emergency and you restore it to proper functioning as soon as 
possible.
    (iii) You modify new engines/equipment that another manufacturer 
has already certified to meet emission standards and recertify them 
under your own family. In this case you must tell the original 
manufacturer not to include the modified engines/equipment in the 
original family.

[[Page 44592]]

    (2) Defeat devices. You may not knowingly manufacture, sell, offer 
to sell, or install, any part that bypasses, impairs, defeats, or 
disables the control of emissions of any regulated pollutant, except as 
explicitly allowed by the standard-setting part. We may assess a civil 
penalty up to $3,750 for each part in violation.
    (3) Stationary engines. For an engine that is excluded from any 
requirements of this chapter because it is a stationary engine, you may 
not move it or install it in any mobile equipment except as allowed by 
the provisions of this chapter. You may not circumvent or attempt to 
circumvent the residence-time requirements of paragraph (2)(iii) of the 
nonroad engine definition in Sec.  1068.30. Anyone violating this 
paragraph (b)(3) is deemed to be a manufacturer in violation of 
paragraph (a)(1) of this section. We may assess a civil penalty up to 
$37,500 for each day you are in violation.
    (4) Competition engines/equipment. For uncertified engines/
equipment that are excluded or exempted from any requirements of this 
chapter because they are to be used solely for competition, you may not 
use any of them in a manner that is inconsistent with use solely for 
competition. Anyone violating this paragraph (b)(4) is deemed to be a 
manufacturer in violation of paragraph (a)(1) of this section. We may 
assess a civil penalty up to $37,500 for each day you are in violation.
    (5) Importation. You may not import an uncertified engine or piece 
of equipment if it is defined to be new in the standard-setting part 
with a model year for which emission standards applied. Anyone 
violating this paragraph (b)(5) is deemed to be a manufacturer in 
violation of paragraph (a)(1) of this section. We may assess a civil 
penalty up to $37,500 for each day you are in violation. Note the 
following:
    (i) The definition of new is broad for imported engines/equipment; 
uncertified engines and equipment (including used engines and 
equipment) are generally considered to be new when imported.
    (ii) Used engines/equipment that were originally manufactured 
before applicable EPA standards were in effect are generally not 
subject to emission standards.
    (6) Warranty, recall, and maintenance instructions. You must meet 
your obligation to honor your emission-related warranty under Sec.  
1068.115, including any commitments you identify in your application 
for certification. You must also fulfill all applicable requirements 
under subpart F of this part related to emission-related defects and 
recalls. You must also provide emission-related installation and 
maintenance instructions as described in the standard-setting part. 
Failure to meet these obligations is prohibited. Also, except as 
specifically provided by regulation, you are prohibited from directly 
or indirectly communicating to the ultimate purchaser or a later 
purchaser that the emission-related warranty is valid only if the owner 
has service performed at authorized facilities or only if the owner 
uses authorized parts, components, or systems. We may assess a civil 
penalty up to $37,500 for each engine or piece of equipment in 
violation.
    (7) Labeling. (i) You may not remove or alter an emission control 
information label or other required permanent label except as specified 
in this paragraph (b)(7) or otherwise allowed by this chapter. Removing 
or altering an emission control information label is a violation of 
paragraph (b)(1) of this section. However, it is not a violation to 
remove a label in the following circumstances:
    (A) The engine is destroyed, is permanently disassembled, or 
otherwise loses its identity such that the original title to the engine 
is no longer valid.
    (B) The regulations specifically direct you to remove the label. 
For example, see Sec.  1068.235.
    (C) The part on which the label is mounted needs to be replaced. In 
this case, you must have a replacement part with a duplicate of the 
original label installed by the certifying manufacturer or an 
authorized agent, except that the replacement label may omit the date 
of manufacture if applicable. We generally require labels to be 
permanently attached to parts that will not normally be replaced, but 
this provision allows for replacements in unusual circumstances, such 
as damage in a collision or other accident.
    (D) The original label is incorrect, provided that it is replaced 
with the correct label from the certifying manufacturer or an 
authorized agent. This allowance to replace incorrect labels does not 
affect whether the application of an incorrect original label is a 
violation.
    (ii) Removing or altering a temporary or removable label contrary 
to the provisions of this paragraph (b)(7)(ii) is a violation of 
paragraph (b)(1) of this section.
    (A) For labels identifying temporary exemptions, you may not remove 
or alter the label while the engine/equipment is in an exempt status. 
The exemption is automatically revoked for each engine/equipment for 
which the label has been removed.
    (B) For temporary or removable consumer information labels, only 
the ultimate purchaser may remove the label.
    (iii) You may not apply a false emission control information label. 
You also may not manufacture, sell, or offer to sell false labels. The 
application, manufacture, sale, or offer for sale of false labels is a 
violation of this section (such as paragraph (a)(1) or (b)(2) of this 
section). Note that applying an otherwise valid emission control 
information label to the wrong engine is considered to be applying a 
false label.
    (c) If you cause someone to commit a prohibited act in paragraph 
(a) or (b) of this section, you are in violation of that prohibition.
    (d) Exemptions from these prohibitions are described in subparts C 
and D of this part and in the standard-setting part.
    (e) The standard-setting parts describe more requirements and 
prohibitions that apply to manufacturers (including importers) and 
others under this chapter.
    (f) The specification of prohibitions and penalties in this part 
does not limit the prohibitions and penalties described in the Clean 
Air Act. Additionally, a single act may trigger multiple violations 
under this section and the Act. We may pursue all available 
administrative, civil, or criminal remedies for those violations even 
if the regulation references only a single prohibited act in this 
section.
    (g) [Reserved]
    (h) The maximum penalty values listed in paragraphs (a) and (b) of 
this section apply as of January 12, 2009. Maximum penalty values for 
earlier violations are published in 40 CFR part 19. Maximum penalty 
limits may be adjusted after January 12, 2009 based on the Consumer 
Price Index. The specific regulatory provisions for changing the 
maximum penalties, published in 40 CFR part 19, reference the 
applicable U.S. Code citation on which the prohibited action is based. 
The following table is shown here for informational purposes:

[[Page 44593]]



Table 1 of Sec.   1068.101--Legal Citation for Specific Prohibitions for
                   Determining Maximum Penalty Amounts
------------------------------------------------------------------------
                                                      U.S. Code citation
    Part 1068 regulatory      General description of   for Clean Air Act
   citation of prohibited          prohibition          authority  (42
           action                                        U.S.C. 7524)
------------------------------------------------------------------------
Sec.   1068.101(a)(1)......  Introduction into U.S.   42 U.S.C.
                              commerce of an           7522(a)(1) and
                              uncertified source.      (a)(4).
Sec.   1068.101(a)(2)......  Failure to provide       42 U.S.C.
                              information.             7522(a)(2).
Sec.   1068.101(a)(3)......  Denying access to        42 U.S.C.
                              facilities.              7522(a)(2).
                  Sec.       Tampering with emission  42 U.S.C.
                   1068.101   controls by a            7522(a)(3).
                   (b)(1).    manufacturer or dealer.
                             Tampering with emission
                              controls by someone
                              other than a
                              manufacturer or dealer.
Sec.   1068.101(b)(2)......  Sale or use of a defeat  42 U.S.C.
                              device.                  7522(a)(3).
Sec.   1068.101(b)(3)......  Mobile use of a          42 U.S.C.
                              stationary engine.       7522(a)(1) and
                                                       (a)(4).
Sec.   1068.101(b)(4)......  Noncompetitive use of    42 U.S.C.
                              uncertified engines/     7522(a)(1) and
                              equipment that is        (a)(4).
                              exempted for
                              competition.
Sec.   1068.101(b)(5)......  Importation of an        42 U.S.C.
                              uncertified source.      7522(a)(1) and
                                                       (a)(4).
Sec.   1068.101(b)(6)......  Recall and warranty....  42 U.S.C.
                                                       7522(a)(4).
Sec.   1068.101(b)(7)......  Removing labels........  42 U.S.C.
                                                       7522(a)(3).
------------------------------------------------------------------------

    299. Section 1068.103 is amended by revising paragraph (a) to read 
as follows:


Sec.  1068.103  What are the provisions related to the duration and 
applicability of certificates of conformity?

    (a) Engines/equipment covered by a certificate of conformity are 
limited to those that are produced during the period specified in the 
certificate and conform to the specifications described in the 
certificate and the associated application for certification. For the 
purposes of this paragraph (a), specifications includes any conditions 
or limitations identified by the manufacturer or EPA, but does not 
include any information provided in the application that is not 
relevant to a demonstration of compliance with applicable regulations. 
For example, if the application for certification specifies certain 
engine configurations, the certificate does not cover any 
configurations that are not specified. However, your certificate would 
not be conditioned upon your actual U.S.-directed production volumes 
matching the volumes you projected in your application.
* * * * *
    300. Section 1068.105 is amended by revising paragraph (a) to read 
as follows:


Sec.  1068.105  What other provisions apply to me specifically if I 
manufacture equipment needing certified engines?

* * * * *
    (a) Transitioning to new engine-based standards. If new engine-
based emission standards apply in a given model year, your equipment in 
that calendar year must have engines that are certified to the new 
standards, except that you may continue to use up your normal inventory 
of earlier engines that were built before the date of the new or 
changed standards. (Note: This paragraph (a) does not apply in the case 
of new remanufacturing standards.) For example, if your normal 
inventory practice is to keep on hand a one-month supply of engines 
based on your upcoming production schedules, and a new tier of 
standards starts to apply for the 2015 model year, you may order 
engines consistent with your normal inventory requirements late in the 
engine manufacturer's 2014 model year and install those engines in your 
equipment, regardless of the date of installation. Also, if your model 
year starts before the end of the calendar year preceding new 
standards, you may use engines from the previous model year for those 
units you produce before January 1 of the year that new standards 
apply. If emission standards for the engine do not change in a given 
model year, you may continue to install engines from the previous model 
year without restriction (or any earlier model year for which the same 
standards apply). You may not circumvent the provisions of Sec.  
1068.101(a)(1) by stockpiling engines that were built before new or 
changed standards take effect. Note that this allowance does not apply 
for equipment subject to equipment-based standards. See 40 CFR 1060.601 
for similar provisions that apply for equipment subject to evaporative 
emission standards.
* * * * *
    301. Section 1068.120 is amended by revising paragraph (e) to read 
as follows:


Sec.  1068.120  What requirements must I follow to rebuild engines?

* * * * *
    (e) If the rebuilt engine remains installed or is reinstalled in 
the same piece of equipment, you must rebuild it to the original 
configuration, except as allowed by this paragraph (e). You may rebuild 
it to a different certified configuration of the same or later model 
year. You may also rebuild it to a certified configuration from an 
earlier model year as long as the earlier configuration is as clean or 
cleaner than the original configuration. For purposes of this paragraph 
(e), ``as clean or cleaner'' means one of the following:
    (1) For engines not certified with a Family Emission Limit for 
calculating credits for a particular pollutant, this means that the 
same emission standard applied for both model years. This includes 
supplemental standards such as Not-to-Exceed standards.
    (2) For engines certified with a Family Emission Limit for a 
particular pollutant, this means that the configuration to which the 
engine is being rebuilt has a Family Emission Limit for that pollutant 
that is at or below the standard that applied to the engine originally, 
and is at or below the original Family Emission Limit.
* * * * *
    302. Section 1068.125 is amended by revising paragraph (b) 
introductory text to read as follows:


Sec.  1068.125  What happens if I violate the regulations?

* * * * *
    (b) Administrative penalties. Instead of bringing a civil action, 
we may assess administrative penalties if the total is less than 
$295,000 against you individually. This maximum penalty may be greater 
if the Administrator and the Attorney General jointly determine that a 
greater administrative penalty assessment is appropriate, or if the 
limit is adjusted under 40 CFR part 19. No court may review this 
determination. Before we assess an administrative penalty, you may ask 
for a hearing (subject to 40 CFR part 22). The Administrator may 
compromise or remit, with or without conditions, any administrative 
penalty that may be imposed under this section.
* * * * *

[[Page 44594]]

Subpart C--[Amended]

    303. Section 1068.215 is amended by revising paragraphs (a) and (b) 
to read as follows:


Sec.  1068.215  What are the provisions for exempting manufacturer-
owned engines/equipment?

    (a) You are eligible for the exemption for manufacturer-owned 
engines/equipment only if you are a certificate holder. Any engine for 
which you meet all applicable requirements under this section is exempt 
without request.
    (b) Engines/equipment may be exempt without a request if they are 
nonconforming engines/equipment under your ownership, possession, and 
control and you do not operate them for purposes other than to develop 
products, assess production methods, or promote your engines/equipment 
in the marketplace, or other purposes we approve. You may not loan, 
lease, sell, or use the engine/equipment to generate revenue, either by 
itself or for an engine installed in a piece of equipment, except as 
allowed by Sec.  1068.201(i). Note that this paragraph (b) does not 
prevent the sale or shipment of a partially complete engine to a 
secondary engine manufacturer that will meet the requirements of this 
paragraph (b). See Sec.  1068.262 for provisions related to shipping 
partially complete engines to secondary engine manufacturers.
* * * * *
    304. Section 1068.240 is amended by revising paragraphs (b)(6), (c) 
introductory text, (d), (e), and (g)(2) to read as follows:


Sec.  1068.240  What are the provisions for exempting new replacement 
engines?

* * * * *
    (b) * * *
    (6) You add a permanent label, consistent with Sec.  1068.45, with 
your corporate name and trademark and the following additional 
information:
    (i) Add the following statement if the engine being replaced was 
not subject to any emission standards under this chapter:
    THIS ENGINE DOES NOT COMPLY WITH U.S. EPA EMISSION REQUIREMENTS. 
SELLING OR INSTALLING THIS ENGINE FOR ANY PURPOSE OTHER THAN TO REPLACE 
AN ENGINE BUILT BEFORE JANUARY 1, [Insert appropriate year reflecting 
when the earliest tier of standards began to apply to engines of that 
size and type] MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL 
PENALTY.
    (ii) Add the following statement if the engine being replaced was 
subject to emission standards:
    THIS ENGINE COMPLIES WITH U.S. EPA EMISSION REQUIREMENTS FOR 
[Identify the appropriate emission standards (by model year, tier, or 
emission levels) for the replaced engine] ENGINES UNDER 40 CFR 
1068.240. SELLING OR INSTALLING THIS ENGINE FOR ANY PURPOSE OTHER THAN 
TO REPLACE A [Identify the appropriate emission standards for the 
replaced engine, by model year(s), tier(s), or emission levels)] ENGINE 
MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.
    (c) Previous-tier replacement engines without tracking. You may 
produce a limited number of new replacement engines that are not from a 
currently certified engine family under the provisions of this 
paragraph (c). If you produce new engines under this paragraph (c) to 
replace engines subject to emission standards, the new replacement 
engine must be in a configuration identical in all material respects to 
the old engine and meet the requirements of Sec.  1068.265. This would 
apply, for example, for engine configurations that were certified in an 
earlier model year but are no longer covered by a certificate of 
conformity. You must comply with the requirements of paragraph (b) of 
this section for any number of replacement engines you produce in 
excess of what we allow under this paragraph (c). The following 
provisions apply to engines exempted under this paragraph (c):
* * * * *
    (d) Partially complete engines. The following requirements apply if 
you ship a partially complete replacement engine under paragraph (b) or 
(c) of this section:
    (1) Include installation instructions specifying how to complete 
the engine assembly such that the resulting engine conforms to the 
applicable certificate of conformity or the specifications of Sec.  
1068.265. Where a partially complete engine can be built into multiple 
different configurations, you must be able to identify all the engine 
models and model years for which the partially complete engine may 
properly be used for replacement purposes. Your installation 
instructions must make clear how the final assembler can determine 
which configurations are appropriate for the engine they receive.
    (2) You must label the engine as follows:
    (i) If you have a reasonable basis to believe that the fully 
assembled engine will include the original emission control information 
label, you may add a removable label to the engine with your corporate 
name and trademark and the statement: ``This replacement engine is 
exempt under 40 CFR 1068.240(b) [or 40 CFR 1068.240(c) if 
appropriate].'' This would generally apply if all the engine models 
that are compatible with the replacement engine were covered by a 
certificate of conformity and they were labeled in a position on the 
engine or equipment that is not included as part of the partially 
complete engine being shipped for replacement purposes. Removable 
labels must meet the requirements specified in Sec.  1068.45.
    (ii) If you do not qualify for using a removable label in paragraph 
(d)(1) of this section, you must add a permanent label in a readily 
visible location, though it may be obscured after installation in a 
piece of equipment. Include on the permanent label your corporate name 
and trademark, the engine's part number (or other identifying 
information), and the statement: ``This replacement engine is exempt 
under 40 CFR 1068.240(b) [or 40 CFR 1068.240(c) if appropriate].'' If 
there is not enough space for this statement, you may alternatively 
add: ``REPLACEMENT'' or ``SERVICE ENGINE''. For purposes of this 
paragraph (d)(2), engine part numbers permanently stamped or engraved 
on the engine are considered to be included on the label.
    (e) Partially complete current-tier replacement engines. The 
provisions of paragraph (d) of this section apply for partially 
complete engines you produce from a current line of certified engines 
or vehicles, except that the appropriate regulatory cite on the label 
is 40 CFR 1068.240(e). This applies for engine-based and equipment-
based standards as follows:
    (1) Where engine-based standards apply, you may introduce into U.S. 
commerce short blocks or other partially complete engines from a 
currently certified engine family as replacement components for in-use 
equipment powered by engines you originally produced. You must be able 
to identify all the engine models and model years for which the 
partially complete engine may properly be used for replacement 
purposes.
    (2) Where equipment-based standards apply, you may introduce into 
U.S. commerce engines that are identical to engines covered by a 
current certificate of conformity by demonstrating compliance with 
currently applicable standards where the engines will be installed as 
replacement engines. These engines might be fully assembled, but we 
would consider them to be partially

[[Page 44595]]

complete engines because they are not yet installed in the equipment.
* * * * *
    (g) * * *
    (2) Anyone installing or completing assembly of an exempted new 
replacement engine is deemed to be a manufacturer of a new engine with 
respect to the prohibitions of Sec.  1068.101(a)(1). This applies to 
all engines exempted under this section.
* * * * *


Sec.  1068.261--[Amended]  

    305. Section 1068.261 is amended by removing and reserving 
paragraph (c)(5).

Subpart D--[Amended]

    306. Section 1068.325 is amended by revising paragraph (g) to read 
as follows:


Sec.  1068.325  What are the temporary exemptions for imported engines/
equipment?

* * * * *
    (g) You may import an engine if another company already has a 
certificate of conformity and will be modifying the engine to be in its 
final certified configuration or a final exempt configuration under the 
provisions of Sec.  1068.262. You may also import a partially complete 
engine by shipping it from one of your facilities to another under the 
provisions of Sec.  1068.260(c). If you are importing a used engine 
that becomes new as a result of importation, you must meet all the 
requirements that apply to original engine manufacturers under Sec.  
1068.262.
* * * * *

Subpart E--[Amended]

    307. Section 1068.415 is amended by revising paragraph (c) to read 
as follows:


Sec.  1068.415  How do I test my engines/equipment?

* * * * *
    (c) Test at least two engines/equipment in each 24-hour period 
(including void tests). However, if your projected U.S.-directed 
production volume is less than 7,500 engines/equipment for the year, 
you may test a minimum of one per 24-hour period. If you request and 
justify it, we may approve a lower testing rate.
* * * * *

Subpart F--[Amended]

    308. Section 1068.501 is amended by revising paragraphs (a)(5), 
(e), and (f) to read as follows:


Sec.  1068.501  How do I report emission-related defects?

* * * * *
    (a) * * *
    (5) You must track the information specified in paragraph (b)(1) of 
this section. You must assess this data at least every three months to 
evaluate whether you exceed the thresholds specified in paragraphs (e) 
and (f) of this section. Where thresholds are based on a percentage of 
engines/equipment in the family, use actual U.S.-directed production 
volumes for the whole model year when they become available. Use 
projected production figures until the actual production figures become 
available. You are not required to collect additional information other 
than that specified in paragraph (b)(1) of this section before reaching 
a threshold for an investigation specified in paragraph (e) of this 
section.
* * * * *
    (e) Thresholds for conducting a defect investigation. You must 
begin a defect investigation based on the following number of engines/
equipment that may have the defect:
    (1) For engines/equipment with maximum engine power at or below 560 
kW:
    (i) For families with annual production below 500 units: 50 or more 
engines/equipment.
    (ii) For families with annual production from 500 to 50,000 units: 
more than 10.0 percent of the total number of engines/equipment in the 
family.
    (iii) For families with annual production from 50,000 to 550,000 
units: more than the total number of engines/equipment represented by 
the following equation:
    Investigation threshold = 5,000 + (Production units -50,000) x 0.04
    (iv) For families with annual production above 550,000 units: 
25,000 or more engines/equipment.
    (2) For engines/equipment with maximum engine power greater than 
560 kW:
    (i) For families with annual production below 250 units: 25 or more 
engines/equipment.
    (ii) For families with annual production at or above 250 units: 
more than 10.0 percent of the total number of engines/equipment in the 
family.
    (f) Thresholds for filing a defect report. You must send a defect 
report based on the following number of engines/equipment that have the 
defect:
    (1) For engines/equipment with maximum engine power at or below 560 
kW:
    (i) For families with annual production below 1,000 units: 20 or 
more engines/equipment.
    (ii) For families with annual production from 1,000 to 50,000 
units: more than 2.0 percent of the total number of engines/equipment 
in the family.
    (iii) For families with annual production from 50,000 to 550,000 
units: more than the total number of engines/equipment represented by 
the following equation:
    Reporting threshold = 1,000 + (Production units -50,000) x 0.01
    (iv) For families with annual production above 550,000 units: 6,000 
or more engines/equipment.
    (2) For engines/equipment with maximum engine power greater than 
560 kW:
    (i) For families with annual production below 150 units: 10 or more 
engines/equipment.
    (ii) For families with annual production from 150 to 750 units: 15 
or more engines/equipment.
    (iii) For families with annual production above 750 units: more 
than 2.0 percent of the total number of engines/equipment in the 
family.
* * * * *
[FR Doc. E9-19187 Filed 8-27-09; 8:45 am]
BILLING CODE 6560-50-P


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