4678 Federal Register / Vol. 77, No. 20 / Tuesday, January 31, 2012 / Rules and Regulations 

submit the document to the Office of the 

Federal Register for publication 

electronically as an official document of 

the Department of Veterans Affairs. John 

R. Gingrich, Chief of Staff, Department 

of Veterans Affairs, approved this 

document on January 4, 2012, for 

publication. 

List of Subjects in 38 CFR Part 38 

Administrative practice and 

procedure, Cemeteries, Veterans 

cemeteries. 

Dated: January 26, 2012. 

Robert C. McFetridge, 

Director of Regulation Policy and 

Management, Office of the General Counsel, 

Department of Veterans Affairs. 

For the reasons set out in the 

preamble, 38 CFR part 38 is amended as 

follows: 

PART 38—NATIONAL CEMETERIES 

OF THE DEPARTMENT OF VETERANS 

AFFAIRS 

■ 1. The authority citation for part 38 is 

revised to read as follows: 

Authority: 38 U.S.C. 107, 501, 512, 2306, 

2402, 2403, 2404, 2408, 2411, 7105. 

■ 2. Amend § 38.620 to add paragraph 

(i) to read as follows: 

§ 38.620 Persons eligible for burial. 

* * * * * 

(i)(1) Any biological or legally 

adoptive parent who dies on or after 

October 13, 2010, and whose deceased 

child: 

(i) Is a veteran who dies on or after 

October 7, 2001, and 

(A) Except as provided in paragraph 

(i)(2) of this section, dies as the direct 

result of hostile action with the enemy, 

while in combat, while in transit to or 

from a combat mission if the cause of 

death is directly related to hostile 

action, or while hospitalized or 

undergoing treatment at the expense of 

the United States for injury incurred 

during combat; or 

(B) Is killed mistakenly or 

accidentally by friendly fire that was 

directed at a hostile force or what was 

thought to be a hostile force; or 

(C) Died from a training-related injury 

while performing authorized training 

activities in preparation for a combat 

mission; 

(ii) Is interred in a national cemetery; 

and 

(iii) Has no spouse or child who is 

buried, or surviving spouse or child 

who, upon death, may be eligible for 

burial, in a national cemetery under 

paragraph (e) of this section. 

(2) A parent is not eligible for burial 

if the veteran dies due to the elements, 

a self-inflicted wound, combat fatigue, 

or a friendly force while the veteran was 

in an absent-without-leave, deserter, or 

dropped-from-rolls status or was 

voluntarily absent from a place of duty. 

(3)(i) A parent may be buried only 

within the veteran child’s gravesite. 

(ii) No more than two parents are 

eligible for burial per deceased veteran 

child. 

(4) Parent burial eligibility is subject 

to a determination by the Secretary that 

there is available space within the 

veteran’s gravesite. 

[FR Doc. 2012–2043 Filed 1–30–12; 8:45 am] 

BILLING CODE 8320–01–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 86 

[AMS–FRL–9623–8] 

Nonconformance Penalties for OnHighway Heavy Heavy-Duty Diesel 

Engines 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Interim final rule. 

SUMMARY: EPA is taking final action to 

make nonconformance penalties (NCPs) 

available to manufacturers of heavy 

heavy-duty diesel engines in model 

years 2012 and 2013 for emissions of 

oxides of nitrogen (NOX). In general, the 

availability of NCPs allows a 

manufacturer of heavy-duty engines 

(HDEs) whose engines fail to conform to 

specified applicable emission standards, 

but do not exceed a designated upper 

limit, to be issued a certificate of 

conformity upon payment of a monetary 

penalty to the United States 

Government. The upper limit associated 

with these NCPs is 0.50 grams of NOX

per horsepower-hour. 

DATES: This rule is effective January 31, 

2012. We will accept comments on this 

interim final rule until April 4, 2012. 

ADDRESSES: Submit your comments, to 

Docket EPA–HQ–OAR–2011–1000, by 

one of the following methods: http:// 

www.regulations.gov: Follow the on-line 

instructions for submitting comments. 

Email: a-and-r-docket@epa.gov. 

Fax: EPA: (202) 566–9744. 

Mail: EPA: Air Docket, Environmental 

Protection Agency, EPA Docket Center, 

Mailcode: 2822T, 1200 Pennsylvania 

Ave. NW., Washington, DC 20460. 

Hand Delivery: EPA: 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–2011– 

1000. See the SUPPLEMENTARY

INFORMATION section on ‘‘Public 

Participation’’ for additional 

instructions on submitting written 

comments. 

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., confidential 

business information or other 

information whose disclosure is 

restricted by statute. Certain other 

material, such as copyrighted material, 

will be publicly available only in hard 

copy in the docket. Publicly available 

docket materials are available either 

electronically in http:// 

www.regulations.gov or in hard copy at 

the following locations: 

EPA: EPA Docket Center, 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 

Air Docket is (202) 566–1742. 

FOR FURTHER INFORMATION CONTACT: 

Chuck Moulis, U.S. EPA, National 

Vehicle and Fuel Emissions Laboratory, 

2000 Traverwood, Ann Arbor, MI 

48105; Telephone (734) 214–4826; 

Email moulis.charles@epa.gov. 

SUPPLEMENTARY INFORMATION: 

Regulated Entities 

This action affects you if you produce 

or import new heavy heavy-duty diesel 

engines which are intended for use in 

highway vehicles such as trucks and 

buses or heavy-duty highway vehicles. 

The table below gives some examples of 

entities that may be affected by these 

regulations. But because these are only 

examples, you should carefully examine 

the regulations in 40 CFR part 86. If you 

have questions, call the person listed in 

the FOR FURTHER INFORMATION CONTACT

section above. 

Category NAICSa

Codes 

Examples of potentially regulated entities 

Industry .... 336112 

336120 

Engine and truck 

manufacturers. 

a North American Industry Classification 

System (NAICS). 


wreier-aviles on DSK5TPTVN1PROD with RULES
Federal Register / Vol. 77, No. 20 / Tuesday, January 31, 2012 / Rules and Regulations 4679 

Table of Contents 

I. Statutory Authority and Regulatory 

Background 

A. Statutory Authority 

B. Background Regarding Nonconformance 

Penalty Rules 

C. 2007 and 2010 NOX Standards 

II. Justification for This Interim Final Rule 

III. Notice of Proposed Rulemaking 

IV. Nonconformance Penalties for 2012 and 

Later Heavy-Duty Engines and HeavyDuty Vehicles 

A. NCP Eligibility: Emission Standards for 

Which NCPs Are Being Established in 

This Interim Final Rule 

B. NCP Eligibility: Emission Standards for 

Which We Are Not Establishing NCPs in 

This Interim Final Rule 

V. Penalty Rates 

A. Parameters 

VI. Economic Impact 

VII. Environmental Impact 

VIII. Public Participation 

IX. Statutory and Executive Order Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review and Executive 

Order 13563: Improving Regulation and 

Regulatory 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 

Risks and Safety Risks’’ 

H. Executive Order 13211 (Energy Effects) 

I. National Technology Transfer 

Advancement Act 

J. Executive Order 12898: Federal Actions 

To Address Environmental Justice in 

Minority Populations and Low-Income 

Populations 

K. Congressional Review Act 

X. Statutory Provisions and Legal Authority 

I. Statutory Authority and Regulatory 

Background 

A. Statutory Authority 

Section 206(g) of the Clean Air Act 

(the Act), 42 U.S.C. 7525(g), allows EPA 

to promulgate regulations permitting 

manufacturers of heavy-duty engines 

(HDEs) or heavy-duty vehicles (HDVs) 

to receive a certificate of conformity for 

HDEs or HDVs that exceed a federal 

emissions standard, but do not exceed 

an upper limit associated with that 

standard, if the manufacturer pays a 

nonconformance penalty (NCP) 

established by rulemaking. Congress 

adopted section 206(g) in the Clean Air 

Act Amendments of 1977 as a response 

to a concern with requiring technologyforcing emissions standards for heavyduty engines. The concern was if strict 

technology-forcing standards were 

promulgated, then some manufacturers 

might be unable to comply initially and 

would be forced out of the marketplace. 

NCPs were intended to remedy this 

concern. The nonconforming 

manufacturers would have a temporary 

alternative that would permit them to 

sell their engines or vehicles by 

payment of a penalty. At the same time, 

conforming manufacturers would not 

suffer a competitive disadvantage 

compared to nonconforming 

manufacturers, because the NCPs would 

be based, in part, on money saved by the 

nonconforming manufacturer. 

Under section 206(g)(1), NCPs may be 

offered for HDVs or HDEs. The penalty 

may vary by pollutant and by class or 

category of vehicle or engine. Section 

206(g)(3) requires that NCPs: 

• Account for the degree of emission 

nonconformity; 

• Increase periodically to provide 

incentive for nonconforming 

manufacturers to achieve the emission 

standards; and 

• Remove the competitive 

disadvantage to conforming 

manufacturers. 

Section 206(g) authorizes EPA to 

require testing of production vehicles or 

engines in order to determine the 

emission level upon which the penalty 

is based. If the emission level of a 

vehicle or engine exceeds an upper limit 

of nonconformity established by EPA 

through regulation, the vehicle or 

engine would not qualify for an NCP 

under section 206(g) and no certificate 

of conformity could be issued to the 

manufacturer. If the emission level is 

below the upper limit but above the 

standard, that emission level becomes 

the ‘‘compliance level,’’ which is also 

the benchmark for warranty and recall 

liability. The manufacturer who elects 

to pay the NCP is liable for vehicles or 

engines that exceed the compliance 

level in use. The manufacturer does not 

have in-use warranty or recall liability 

for emissions levels above the standard 

but below the compliance level. 

B. Background Regarding 

Nonconformance Penalty Rules 

Since the promulgation of the first 

NCP rule in 1985, subsequent NCP rules 

generally have been described as 

continuing ‘‘phases’’ of the initial NCP 

rule. The first NCP rule (Phase I), 

sometimes referred to as the ‘‘generic’’ 

NCP rule, established three basic criteria 

for determining the eligibility of 

emission standards for nonconformance 

penalties in any given model year (50 

FR 35374, August 30, 1985). As 

described in section IV.A.(1) of this 

Interim Final Rule, we have determined 

that these criteria have been met for one 

manufacturer. (For regulatory language, 

see 40 CFR 86.1103–87.) The first 

criterion is that the emission standard in 

question must become more difficult to 

meet. This can occur in two ways, either 

by the emission standard itself 

becoming more stringent, or due to its 

interaction with another emission 

standard that has become more 

stringent. Second, substantial work 

must be required in order to meet the 

emission standard. EPA considers 

‘‘substantial work’’ to mean the 

application of technology not previously 

used in that vehicle or engine class/ 

subclass, or a significant modification of 

existing technology, in order to bring 

that vehicle/engine into compliance. 

EPA does not consider minor 

modifications or calibration changes to 

be classified as substantial work. Third, 

EPA must find that a manufacturer is 

likely to be noncomplying for 

technological reasons (referred to in 

earlier rules as a ‘‘technological 

laggard’’). Prior NCP rules have 

considered such a technological laggard 

to be a manufacturer who cannot meet 

a particular emission standard due to 

technological (not economic) difficulties 

and who, in the absence of NCPs, might 

be forced from the marketplace. As 

described in section IV.A.(1) of this 

Interim Final Rule, we have determined 

that this criterion has been met for one 

manufacturer. This manufacturer 

notified us late in 2011 that it would not 

have enough emission credits for its 

model year 2012 heavy heavy-duty 

engines. 

The criteria and methodologies 

established in the 1985 NCP rule have 

since been used to determine eligibility 

and to establish NCPs for a number of 

heavy-duty emission standards. Phases 

II, III, IV, V, and VI published in the 

period from 1985 to 2002, established 

NCPs that, in combination, cover the 

full range of heavy-duty—from heavy 

light-duty trucks (6,000–8,500 pounds 

gross vehicle weight) to the largest 

diesel truck and urban bus engines. 

NCPs have been established for 

hydrocarbons (HC), carbon monoxide 

(CO), nitrogen oxides (NOX), and 

particulate matter (PM). The most recent 

NCP rule (67 FR 51464, August 8, 2002) 

established NCPs for the 2004 and later 

model year NOX standard for heavyduty diesel engines (HDDEs). The NCP 

rulemaking phases are summarized in 

greater detail in the Interim and 

Proposed Technical Support Document 

for this rulemaking. 

C. 2007 and 2010 NOX Standards 

The 0.20 g/hp-hr NOX standard that 

applies for current and future heavyduty engines was adopted January 18, 

2001 (66 FR 5001), and first applied in 

the 2007 model year. However, because 

of phase-in provisions adopted in that 


wreier-aviles on DSK5TPTVN1PROD with RULES
4680 Federal Register / Vol. 77, No. 20 / Tuesday, January 31, 2012 / Rules and Regulations 

1FELs are emission levels specified by the 

manufacturer that serve as the applicable emission 

standard for engines participating in the emission 

averaging program. The FEL cap is the highest FEL 

to which a manufacturer may certify an engine 

using emission credits. 

rule and use of emission credits 

generated by manufacturers for early 

compliance, manufacturers have been 

able to continue to produce engines 

with NOX emissions greater than 0.20 

g/hp-hr. The phase-in provisions ended 

after model year 2009 so that the 0.20 

g/hp-hr NOX standard was fully phasedin for model year 2010. Equally 

important, the cap applicable to Family 

Emission Limits (FELs) 1 for credit using 

engine families was lowered to 0.50 

g/hp-hr beginning in model year 2010. 

Because of these changes that occurred 

in model year 2010, the 0.20 g/hp-hr 

NOX emission standard is often referred 

to as the 2010 NOX emission standard, 

even though it applied to engines as 

early as model year 2007. 

While some manufacturers retain NOX

emission credits that currently allow 

them to produce engines with NOX

emissions as high as 0.50 g/hp-hr, we 

expect that one of these manufacturers 

could exhaust its supply of heavy 

heavy-duty engine NOX credits as early 

as this year. 

II. Justification for This Interim Final 

Rule 

EPA is taking this action as an interim 

final rule without prior proposal and 

public comment because EPA finds for 

good cause under section 553(b)(B) of 

the Administrative Procedure Act 

(APA), 5 U.S.C. 551 et seq. that noticeand-comment are impracticable, 

unnecessary or contrary to the public 

interest in this instance. Section 307(d) 

of the CAA states that in the case of any 

rule to which section 307(d) applies, 

notice of proposed rulemaking must be 

published in the Federal Register (CAA 

§ 307(d)(3)). The promulgation or 

revision of regulations under section 

206 of the CAA is generally subject to 

section 307(d). However, section 307(d) 

does not apply to any rule referred to in 

subparagraphs (A) or (B) of section 

553(b) of the APA. 

In reaching this determination, EPA 

considered several factors: (1) Taking 

interim final action avoids the 

possibility of an engine manufacturer 

from being unable to certify a complete 

product line of engines for model year 

2012 and/or 2013; (2) the Agency is only 

amending limited provisions in existing 

NCP regulations in 40 CFR part 86; (3) 

the rule’s duration is limited (see, e.g., 

Small Refiner Lead Phase-Down Task 

Force v. EPA, 705 F.2d 506 (D.C. Cir. 

1983)); and (4) there is no risk to the 

public interest in allowing 

manufacturers to certify using NCPs 

before the point at which EPA could 

make them available through a full 

notice-and-comment rulemaking. 

EPA is promulgating NCPs for heavy 

heavy-duty diesel engines in this 

Interim Final Rule because we have 

concluded that there is a significant 

likelihood that they will be needed 

during the 2012 model year. One 

manufacturer is currently using NOX

credits to certify all of its heavy heavyduty diesel engines at nearly 0.50 g/hphr. Based on its current credit balance 

and projected sales for this service class, 

we do not expect this manufacturer to 

have sufficient credits to cover its entire 

model year 2012 production. Since we 

have not certified any of this 

manufacturer’s model year 2012 heavy 

heavy-duty diesel engines without the 

need for emission credits, we believe it 

is possible that it may need NCPs during 

this model year. We have concluded 

that the very earliest we could make 

NCPs available through a full noticeand-comment rulemaking, would be late 

in model year 2012, which would likely 

be after the manufacturer’s credit supply 

has been depleted. Thus, making NCPs 

available through this Interim Final 

Rule is the only way to ensure that the 

manufacturer’s depletion of its NOX

credits will not force it to cease 

production of heavy heavy-duty engines 

this year. 

The second reason for invoking the 

good cause exemption is that EPA is 

establishing NCPs based on the existing 

regulatory provisions in 40 CFR part 86, 

subpart L, and is only adding new 

penalty parameters to reflect the costs of 

compliance specific to the 2010 NOX

standard. In this Interim Final Rule, 

EPA is not revisiting the regulatory 

provisions that specify how to calculate 

penalties from the penalty parameters, 

how to determine a compliance level, or 

how to report to EPA. Since these 

provisions have been established 

through notice-and-comment 

rulemaking several times before, 

interested parties have had opportunity 

to comment on them. Thus, it is 

unnecessary to provide an additional 

opportunity to comment prior to issuing 

this interim final rule. 

Third, at most, this interim final rule 

will address only heavy heavy-duty 

engines in model years 2012 and 2013, 

and by its own terms is applicable for 

less than two calendar years. It is thus 

limited in duration. EPA is publishing 

a parallel notice of proposed rulemaking 

simultaneously with this rule and EPA 

intends to take appropriate final action 

on that rule as soon as possible. With 

due consideration to comments, the 

interim NCPs being established in this 

IFR will cease to be applicable once the 

follow up Final Rule is effective. 

Finally, it is important to note that 

NCPs are set at a level that is intended 

to ensure that manufacturers only use 

them when there is no other path to 

certification. Thus, should EPA be 

incorrect in its projection that NCPs will 

be needed during model year 2012, the 

fact that they will be available on an 

interim basis will have no practical 

significance because manufacturers will 

not use them. 

For the reasons explained above, EPA 

finds that this constitutes good cause 

under 5 U.S.C. 553(b)(B). Nonetheless, 

EPA is providing until April 4, 2012 for 

submission of public comments 

following this action. EPA will consider 

all written comments submitted in the 

allotted time period in the context of the 

accompanying notice of proposed 

rulemaking. 

Section 553(d) of the Administrative 

Procedure Act (APA), 5 U.S.C. chapter 

5, generally provides that rules may not 

take effect earlier than 30 days after they 

are published in the Federal Register. 

APA section 553(d) excepts from this 

provision any action that grants or 

recognizes an exemption or relieves a 

restriction. Since today’s action can be 

considered to either effectively grant an 

exemption from meeting the current 

applicable NOX emission standard or 

relieve a restriction that would 

otherwise prevent a manufacturer from 

certifying, EPA is making this action 

effective immediately upon publication. 

III. Notice of Proposed Rulemaking 

EPA is also simultaneously 

publishing a parallel Notice of Proposed 

Rulemaking (NPRM) addressing NCPs 

for heavy-duty engines. Among other 

things, that NPRM seeks comment on 

NCPs for model year 2012 and later 

heavy heavy-duty diesel engines, as 

well as for medium heavy-duty diesel 

engines. The NCPs in the Final Rule for 

that NPRM will eventually supersede 

the NCPs being promulgated in this 

Interim Final Rule, especially for model 

year 2013 and later. For example, 

should the follow-up Final Rule be 

published by September 14, 2012, it 

would likely have an effective date of 

November 13, 2012. Should that Final 

Rule establish different NCPs for heavy 

heavy-duty engines, those new NCPs 

would be available for any engines 

produced on or after November 13, 

2012, instead of the interim NCPs being 

finalized today. 

Note that Docket Number EPA–HQ– 

OAR–2011–1000 is being used for both 

the Interim Final Rule and the parallel 

NPRM. 


wreier-aviles on DSK5TPTVN1PROD with RULES
Federal Register / Vol. 77, No. 20 / Tuesday, January 31, 2012 / Rules and Regulations 4681 

2NMHC stands for non-methane hydrocarbons, 

which is a measure of total hydrocarbons with the 

methane emissions subtracted out. For typical onhighway diesel fueled heavy-duty engines, methane 

emissions are on the order of 10 percent of the total 

hydrocarbon emissions. 

3For this notice, EPA describes those 

manufacturers that have achieved the 0.20 g/hp-hr 

emission standard as ‘‘conforming’’, ‘‘compliant’’ or 

‘‘complying’’ manufacturers, and those that have 

not as the ‘‘nonconforming’’, ‘‘noncompliant’’ or 

‘‘noncomplying’’ manufacturers. However, it is 

important to clarify that manufacturers certifying 

above the 0.20 g/hp-hr NOX emission standard 

using emission credits are in compliance with 

regulations as long as they have enough emission 

credits to offset their total NOX emissions above the 

standard. 

4The previous NCP rules include: The Phase VI 

rulemaking (67 FR 51464, August 8, 2002), Phase 

IV rulemaking (58 FR 68532, December 28, 1993), 

Phase III rulemaking (55 FR 46622, November 5, 

1990), the Phase II rulemaking (50 FR 53454, 

Continued 

IV. Nonconformance Penalties for 2012 

and Later Heavy-Duty Engines and 

Heavy-Duty Vehicles 

A. NCP Eligibility: Emission Standards 

for Which NCPs Are Being Established 

in This Interim Final Rule 

(1) Heavy Heavy-Duty Diesel NOX

Standard 

As discussed in section I.B., EPA 

must determine that three criteria are 

met in order to determine that an NCP 

should be established in any given 

model year. For the 2010 NOX standard, 

we believe these criteria have been met 

for heavy heavy-duty diesel engines, 

and it is therefore appropriate to 

establish NCPs for this standard for the 

current model year and later. 

The first criterion requires that the 

emission standard in question must 

become more difficult to meet. This is 

the case with the 2010 NOX standard. 

The previous emission standard for this 

category is a combined NMHC + NOX

standard of 2.4 g/hp-hr, or optionally a 

2.5 g/hp-hr NMHC + NOX with a limit 

of 0.5 g/hp-hr NMHC.2 The 2010 (i.e., 

current) standards are 0.20 g/hp-hr for 

NOX and 0.14 g/hp-hr for NMHC. When 

promulgated, the Agency concluded 

that the 0.20 g/hp-hr NOX standard was 

a technology forcing standard. Second, 

all heavy heavy-duty diesel engines 

currently certified to the 0.20 g/hp-hr 

standard without using credits are using 

new aftertreatment systems to meet this 

standard.3 It is therefore logical to 

conclude the standard is more difficult 

to meet and that substantial work was 

required to meet the emission standard. 

Third, EPA is promulgating NCPs for 

heavy heavy-duty diesel engines 

because we have concluded that there is 

a significant likelihood that they will be 

needed by an engine manufacturer that 

has not yet met the requirements for 

technological reasons. One 

manufacturer is currently using NOX

credits to certify all of its heavy heavyduty diesel engines at nearly the FEL 

cap level of 0.50 g/hp-hr. Based on its 

current credit balance and projected 

sales for this service class, we do not 

expect this manufacturer to have 

sufficient credits to cover its entire 

model year 2012 production. This 

manufacturer intends to use a different 

technology to meet the NOX standard 

but has not yet submitted an application 

for the 2012 model year with NOX

emissions at or below the 0.20 g/hp-hr 

standard. Since it has not yet submitted 

an application for certification for any 

model year 2012 heavy heavy-duty 

diesel engines that would not require 

emission credits, we believe it is a 

reasonable possibility that this 

manufacturer may not be able to comply 

for technological reasons with respect to 

the 2010 NOX standards for heavy 

heavy-duty diesel engines in the 2012 

and 2013 model years. This 

manufacturer notified us late in 2011 

that it would not have enough emission 

credits for its model year 2012 heavy 

heavy-duty engines. 

B. NCP Eligibility: Emission Standards 

for Which We Are Not Establishing 

NCPs in This Interim Final Rule 

This section identifies the emission 

standards for which we are not 

establishing NCPs in this Interim Final 

Rule. Note that EPA is issuing a parallel 

Notice of Proposed Rulemaking (NPRM) 

proposing and/or seeking comment on 

NCPs for certain other emission 

standards. 

(1) Light and Medium Heavy-Duty 

Diesel NOX Standards 

EPA believes that the first two NCP 

criteria have been met for the 2010 NOX

standard for light and medium heavyduty diesel engines. However, we have 

not determined that any manufacturer of 

light or medium heavy-duty diesel 

engines will be unable to certify to the 

2010 NOX standard for the 2012 and 

2013 model years. We believe that any 

manufacturer unable to achieve 0.20 

g/hp-hr will have sufficient NOX

emission credits to continue certifying 

light heavy-duty and medium heavyduty engines through the 2013 model 

year. (See the parallel NPRM.) 

(2) Heavy-Duty Gasoline Engine 

Standards 

In a final rule published on January 

18, 2001 (66 FR 5001), EPA established 

more stringent emission standards for 

all heavy-duty gasoline (or ‘‘Otto-cycle’’) 

vehicles and engines. These standards 

took two forms: A chassis-based set of 

standards for complete vehicles under 

14,000 pounds GVWR (the chassisbased program), and an engine-based set 

of standards for all other Otto-cycle 

heavy-duty engines (the engine-based 

program). Each of the two programs has 

an associated averaging, banking, and 

trading (ABT) program. The new 

standards generally took effect starting 

with the 2008 model year, and all 

manufacturers are in compliance with 

them. 

(3) Heavy-Duty Diesel Engine NMHC, 

CO, and PM Standards 

EPA adopted new NMHC and PM for 

model year 2007 and later heavy-duty 

engines in the same rule that set the 

2010 NOX emission standard (66 FR 

5001, January 18, 2001). The CO 

standard was not changed. We are not 

considering NCPs for any of these other 

standards because all manufacturers are 

already fully compliant with them. 

(4) Heavy-Duty CO2 Standards 

In a final rule published on 

September 15, 2011 (76 FR 57106), EPA 

established new CO2 emission standards 

for all heavy-duty vehicles and engines. 

We are not considering NCPs for any of 

these standards at this time because we 

currently do not have a basis to 

conclude that a technological laggard is 

likely to develop. 

We are adding a new regulatory 

provision related to these CO2 emission 

standards. The provision prohibits 

generating CO2 emission credits from 

engines paying NCPs for NOX. Given the 

general tradeoff between CO2 and NOX

emissions, we were concerned that a 

manufacturer capable of meeting the 

0.20 g/hp-hr NOX emission standard 

could choose to pay an NCP in order to 

generate CO2 credits by recalibrating its 

engines for higher NOX emissions and 

lower CO2. There are two reasons this 

would be inappropriate. First, emission 

credits are supposed to provide an 

incentive for a manufacturer to go 

beyond what is normally required to 

meet emission standards. However, 

allowing manufacturers to generate CO2

credits while paying NCPs would 

actually create an incentive for 

manufacturers to do less than is 

required to meet the emission standards. 

Equally important, NCPs have always 

been intended for manufacturers that 

cannot meet an emission standard for 

technological reasons rather than 

manufacturers choosing not to comply. 

V. Penalty Rates 

This rulemaking is the most recent in 

a series of NCP rulemakings. These are 

referred to as Phases and are referenced 

below.4 The discussions of penalty rates 


wreier-aviles on DSK5TPTVN1PROD with RULES
4682 Federal Register / Vol. 77, No. 20 / Tuesday, January 31, 2012 / Rules and Regulations 

December 31, 1985) as well as the Phase I 

rulemaking (50 FR 35374, August 30, 1985). 

in those rulemakings are incorporated 

by reference. This section briefly 

reviews the penalty rate formula 

originally promulgated in the Phase I 

rule (currently found at 40 CFR 

86.1113–87) and discusses how EPA 

arrived at the penalty rates in this 

Interim Final Rule. 

The penalty rates being established in 

this rule rely on the existing NCP 

regulatory structure. Thus, the only 

changes being made to the regulations 

are updates to the cost parameters to 

reflect the compliance costs for the 2010 

standards, setting of the upper limit, 

and clarifying in § 86.1104–91 that EPA 

may set the upper limit at a level below 

the previous standard if we determine 

that the lower level is achievable by all 

engines. 

Because these penalties are being 

adopted in an Interim Final Rule, we are 

limiting their applicability to model 

years 2012 and 2013. Prior to model 

year 2014, we will promulgate a Final 

Rule addressing NCPs following notice 

and comment. Note that we may 

promulgate the Final Rule as soon as 

later this calendar year, and as 

applicable, it would supersede the 

provisions of this Interim Final Rule 

after it becomes effective. 

The NCP rates being adopted in this 

IFR are specified for model year 2012. 

As required by the Clean Air Act, the 

existing regulations include a formula 

that increases the penalty rates with 

each new model year. We will apply 

this annual adjustment formula to the 

NCPs by setting the 2012 model year as 

year number one. Traditionally, NCPs 

are available the first year of the new 

emission standard and that becomes 

year one for purposes of the annual 

escalator. However, EPA believes the 

2012 model year is the correct year for 

the first year of the escalator calculation 

even though the NOX emission standard 

began in 2010. 

A. Parameters 

As in the previous NCP rules, we are 

specifying the NCP formula for each 

standard using the following 

parameters: COC50, COC90, MC50, F, and 

UL. The NCP formula is the same as that 

promulgated in the Phase I rule. As was 

done in previous NCP rules, costs 

consider additional manufacturer costs 

and additional owner costs, but do not 

consider certification costs because both 

complying and noncomplying 

manufacturers must incur certification 

costs. COC50 is an estimate of the 

industry-wide average incremental cost 

per engine (references to engines are 

intended to include vehicles as well) 

associated with meeting the standard for 

which an NCP is offered, compared with 

meeting the upper limit. COC90 is an 

estimate of the 90th percentile 

incremental cost per-engine associated 

with meeting the standard for which an 

NCP is offered, compared with meeting 

the associated upper limit. 

Conceptually, COC50 represents costs for 

a typical or average manufacturer, while 

COC90 represents costs for the 

manufacturers with the highest 

compliance costs. 

MC50 is an estimate of the industrywide average marginal cost of 

compliance per unit of reduced 

pollutant associated with the least cost 

effective emission control technology 

installed to meet the new standard. 

MC50 is measured in dollars per g/hp-hr 

for heavy-duty engines. F is a factor 

used to derive MC90, the 90th percentile 

marginal cost of compliance with the 

NCP standard for engines in the NCP 

category. MC90 defines the slope of the 

penalty rate curve near the standard and 

is equal to MC50 multiplied by F. UL is 

the upper limit above which no engine 

may be certified. 

The derivation of the cost parameters 

is described in a support document 

entitled ‘‘Interim and Proposed 

Technical Support Document: 

Nonconformance Penalties for 2012 and 

later Highway Heavy-Duty Diesel 

Engines,’’ which is available in the 

public docket for this rulemaking. All 

costs are presented in 2011 dollars. 

(1) Upper Limit 

We are revising the regulations in 

§ 86.1104–91 to clarify that EPA may set 

(during rulemaking) the upper limit at a 

level below the previous standard if we 

determine that the lower level is 

achievable by all engines. As described 

below, we are also establishing the 

upper limit for this NCP rule at 0.50 g/ 

hp-hr. These are the only regulatory 

changes being made with respect to the 

upper limit. 

The upper limit is the emission level 

established by regulation above which 

NCPs are not available and a heavy duty 

engine cannot be certified or introduced 

into commerce. CAA section 206(g)(2) 

refers to the upper limit as a percentage 

above the emission standard, set by 

regulation, that corresponds to an 

emission level EPA determines to be 

‘‘practicable.’’ The upper limit is an 

important aspect of the NCP regulations 

not only because it establishes an 

emission level above which no engine 

may be certified, but it is also a critical 

component of the cost analysis used to 

develop the penalty rates. The 

regulations specify that the relevant 

costs for determining the COC50 and the 

COC90 factors are the difference between 

an engine at the upper limit and one 

that meets the applicable standards (see 

40 CFR 86.1113–87). 

The regulatory approach adopted 

under the prior NCP rules sets the 

default Upper Limit (UL) at the prior 

emission standard when a prior 

emission standard exists and is then 

changed to become more stringent. EPA 

concluded that the upper limit should 

be reasonably achievable by all 

manufacturers with vehicles in the 

relevant class. It should be within reach 

of all manufacturers of HDEs or HDVs 

that are currently allowed so that they 

can, if they choose, pay NCPs and 

continue to sell their engines and 

vehicles while finishing their 

development of fully complying 

engines. A manufacturer of a previously 

certified engine or vehicle should not be 

forced to immediately remove an HDE 

or HDV from the market when an 

emission standard becomes more 

stringent. The prior emissions standard 

generally meets these goals because 

manufactures have already certified 

their vehicles to that standard. 

In the past, EPA has rejected 

suggestions that the upper limit should 

be more stringent than the prior 

emission standard because it would be 

very difficult to identify a limit that 

could be met by all manufacturers. For 

this rule, however, all manufacturers are 

currently certifying all of their engines 

at or below the 0.50 g/hp-hr FEL cap. 

Thus, since NCPs were not intended to 

allow manufacturers to increase 

emissions, we are setting the upper limit 

for this NCP rule at 0.50 g/hp-hr NOX. 

This will conform to the purpose of 

NCPs, which is to allow manufacturers 

to continue selling engines they are 

producing, but not to allow backsliding. 

(2) Cost Parameter Values 

The regulations being adopted specify 

that the values in Table 1 (in 2011 

dollars) be used in the NCP formula for 

the 2012 and later model year NOX

standard of 0.20 g/hp-hr for diesel heavy 

heavy-duty engines. The basis is 

summarized here. The complete 

derivation of these parameters is 

described in the Interim Technical 

Support Document for this rulemaking. 

We also considered other 

methodologies for estimating the 

incremental compliance costs between 

the upper limit and the standard. We 

rejected these alternatives because we 

are not confident that we could estimate 

the costs with sufficient accuracy or 

describe our basis without revealing 

confidential business information. 

Moreover, we have no reason to believe 


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that these alternative methodologies 

would have been better with respect to 

the statutory requirement to remove the 

competitive disadvantage of the 

complying manufacturers. 

(a) General Methodology 

Based on our review of the various 

hypothetical baseline engine designs, 

we selected a straightforward ‘‘baseline 

engine’’ technology package with 

associated costs that were determinable 

within a reasonably high degree of 

certainty. This approach best limited the 

sensitivity of the penalty rate versus 

small variations in any of the ‘‘baseline 

engine’’ technology package elements. 

This cost stability mitigated the 

hypothetical nature of the ‘‘baseline 

engine’’ technology package, which, in 

turn, led to a penalty rate that we 

believe is reasonable. As is described in 

the TSD, we believe estimating costs by 

this approach is the least speculative 

method to determine compliance costs. 

We selected a baseline engine 

technology package that would employ 

the same basic emission controls used to 

meet the 2007 NOX and PM emission 

standards (e.g. cooled exhaust gas 

recirculation), optimized turbocharging, optimized fuel injection, 

diesel particulate filters), plus liquid 

urea based Selective Catalytic Reduction 

(SCR) NOX emissions control 

technology with an appropriately sized 

tank for the diesel exhaust fluid (DEF). 

Further details are provided in this 

rule’s TSD. While EPA selected the 

baseline engine (or upper limit engine) 

to be a fully optimized, SCR-equipped 

engine that complies with all other 

emission standards and requirements, 

the NCPs may be used for engines using 

other technologies. 

This approach differs slightly from 

that used in previous NCP rules, where 

EPA based the NCPs directly on an 

average of actual compliance costs for 

all manufacturers. This was appropriate 

in those prior rules because each of the 

manufacturers had actually produced 

engines at the upper limit (which was 

usually the previous emission standard). 

It was relatively straightforward for 

them to provide us with a confidential 

engineering analysis of the costs they 

actually incurred: The real costs of 

additional hardware and fluids and the 

differences in performance 

characteristics. We have always sought 

full understanding of the manufacturers’ 

inputs, and for previous NCP rules it 

was also reasonable for EPA to conclude 

that the manufacturers’ input accurately 

reflected the manufacturers’ actual costs 

because the costs were derived directly 

from actual in-production engine 

information. In the case of this NCP 

rule, however, compliant manufacturers 

have not designed and optimized inproduction engines for the U.S. market 

at 0.50 g/hp-hr NOX (the upper limit). 

Thus, a compliance cost estimate based 

directly on actual experience for inproduction engines was not available for 

this NCP rule. 

Instead of averaging actual costs 

(because none were available), the NCP 

penalty formulas for this rule are based 

primarily on EPA’s estimate of the cost 

difference between an engine emitting at 

the upper limit (the ‘‘baseline engine’’) 

and one emitting at the standard (the 

‘‘compliant engine’’). We requested cost 

of compliance information from several 

engine manufacturers and used that 

information to inform our own analysis 

of compliance costs, as described in the 

Interim and Proposed Technical 

Support Document. The engine 

manufacturers we contacted approached 

this cost analysis in the same way we 

did. That is, the scenarios we and the 

manufacturers considered were all 

based upon hypothetical baseline 

engine designs that were intended to 

meet the 0.50 g/hp-hr NOX upper limit. 

It is worth noting that each of the five 

engine manufacturers we contacted 

considered hypothetical baseline 

engines with different technology 

packages. Two complying 

manufacturers based their compliance 

costs on a baseline engine equipped 

with similar (but not identical) 

hardware as EPA; another on an SCRequipped engine without exhaust gas 

recirculation, and a fourth on its 

estimation of the non-complying 

engines produced by a competitor. All 

four manufacturers meeting the 0.20 

g/hp-hr NOX standard compared the 

costs for their hypothetical baseline 

engines to the costs for their actual 

compliant engines. The one non-SCR 

manufacturer we contacted (that has not 

yet certified any engines with NOX

emissions at 0.20 g/hp-hr) provided its 

projections of what it will spend to 

bring its current 2011 engine into 

compliance without the use of emission 

credits. 

(b) Calculated Values 

The most significant of the NCP 

parameters is the 90th percentile costs 

of compliance, COC90, which defines 

the penalty for engines emitting at the 

upper limit. The value of COC50 only 

matters when EPA estimates that 

marginal compliance costs change as the 

compliance level approaches the 

standard. In such cases, COC50 defines 

that point on the curve at which the 

slope changes. We estimated COC90 and 

COC50 by assuming the baseline engine 

would have been an SCR equipped 

engine with NOX emissions at 0.50 g/ 

hp-hr and that it looked very similar to 

an engine with NOX emissions at 0.20 

g/hp-hr. However, the higher NOX

emissions of the baseline engine would 

allow the use of less expensive 

hardware and would require less 

consumption of liquid urea (also known 

as diesel emission fluid or ‘‘DEF’’). 

We estimated the marginal costs of 

compliance as being equal to the total 

incremental costs of compliance divided 

by 0.30 g/hp-hr (the difference between 

the upper limit and the standard). This 

assumes that the cost to reduce 

emissions from 0.30 g/hp-hr to 0.20 g/ 

hp-hr is not significantly different from 

the cost to reduce emissions from 0.50 

g/hp-hr to 0.40 g/hp-hr. This results in 

a penalty curve that is a straight line, 

which in turn makes our estimate of the 

average cost of compliance irrelevant to 

the calculation of the penalty. In other 

words, the COC50 point lies directly 

between zero cost at 0.20 g/hp-hr and 

COC90 at the Upper Limit of 0.50 g/hphr NOX. The penalty paid for engines at 

the upper limit would be equal to EPA’s 

estimate of the highest marginal cost 

paid by a complying manufacturer for 

the same emission range. 

TABLE 1—INTERIM NCP CALCULATION

PARAMETERS

Parameter Heavy heavy-duty diesel 

engines 

COC50 ......... $1,561. 

COC90 ......... $1,919. 

MC50 ........... $5,203 per gram per horsepower-hour. 

F .................. 1.23. 

UL ............... 0.50 g/hp-hr. 

(3) Resulting Penalties 

The calculation parameters listed in 

Table 1 are used to calculate the penalty 

rate. These parameters are used in the 

penalty rate formulas which are defined 

in the existing NCP regulations (See 40 

CFR 86.1113(a)(1) and (2)). Using the 

parameters in Table 1, and the equations 

in the existing NCP regulations, we have 

plotted penalty rates versus compliance 

levels in Figure 1 below. This penalty 

curve is for the first year of use of the 

NCPs (i.e., the annual adjustment factors 

specified in the existing NCP 

regulations have been set equal to one). 


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The Clean Air Act NCP provisions 

require that the penalty be set at such 

a level that it removes any competitive 

disadvantage a complying manufacturer 

by requiring non-complying 

manufacturers to pay NCPs. Our 

methodology for developing the NCP is 

detailed in the Interim and Proposed 

Technical Support Document. Our 

technology approach includes relatively 

minor hardware upgrades, calibration 

changes, and increased use of DEF. For 

the reasons described in the Interim and 

Proposed Technical Support Document, 

we believe that the NCPs being 

established in this rulemaking will 

remove any competitive disadvantage 

that complying manufacturers may face. 

VI. Economic Impact 

Because the use of NCPs is optional, 

manufacturers have the flexibility and 

will likely choose whether or not to use 

NCPs based on their ability to comply 

with emissions standards. If no 

manufacturer elects to use NCPs, these 

manufacturers and the users of their 

products will not incur any additional 

costs related to NCPs. NCPs remedy the 

potential problem of having a 

manufacturer forced out of the 

marketplace due to that manufacturer’s 

inability to conform to new, strict 

emission standards in a timely manner. 

Without NCPs, a manufacturer which 

has difficulty certifying HDEs in 

conformance with emission standards or 

whose engines fail a Selective 

Enforcement Audit (SEA) has only two 

alternatives: fix the nonconforming 

engines, perhaps at a prohibitive cost, or 

prevent their introduction into 

commerce. The availability of NCPs 

provides manufacturers with a third 

alternative: continue production and 

introduce into commerce upon payment 

of a penalty an engine that exceeds the 

standard until an emission conformance 

technique is developed. Therefore, 

NCPs represent a regulatory mechanism 

that allows affected manufacturers to 

have increased flexibility. A decision to 

use NCPs may be a manufacturer’s only 

way to continue to introduce its 

products into commerce. 

VII. Environmental Impact 

When evaluating the environmental 

impact of this rule, one must keep in 

mind that, under the Act, NCPs are a 

consequence of enacting new, more 

stringent emissions requirements for 

heavy duty engines. Emission standards 

are set at a level that most, but not 

necessarily all, manufacturers can 

achieve by the model year in which the 

standard becomes effective. Following 

International Harvester v. Ruckelshaus, 

478 F. 2d 615 (DC Cir. 1973), Congress 

realized the dilemma that technologyforcing standards could potentially 

cause, and allowed manufacturers of 

heavy-duty engines to certify 

nonconforming vehicles/engines upon 

the payment of an NCP, under certain 

terms and conditions. This mechanism 

was intended to allow manufacturer(s) 

who cannot meet technology-forcing 

standards immediately to continue to 

manufacture nonconforming engines 

while they tackle the technological 

problems associated with meeting new 

emission standard(s). Thus, as part of 

the statutory structure to force 

technological improvements without 

driving manufacturers or individual 

engine models out of the market, NCPs 

provide a flexibility that fosters longterm emissions improvement through 

the setting of lower emission standards 

at an earlier date than could otherwise 

be feasible. Because NCPs are designed 

to increase with time, manufacturers 

using NCPs are likely to reduce 

emission levels to meet the standard as 

quickly as possible, which minimizes 

the environmental impact. 

As is always the case with NCPs, the 

potential exists for there to be more 

extensive use of NCPs beyond what may 

be expected to be used by the 

manufacturer that we believe will need 

them. For example, depending upon the 

penalty rate and other factors, some 

otherwise fully compliant 

manufacturers could elect to pay the 

NCP in order to reconfigure their 

0.20 g/hp-hr NOX compliant engines to 

emit up to 0.50 g/hp-hr so that they can 

re-optimize engine hardware and 

vehicle operating costs. This potential 

action is not without R&D and other 

financial costs to the manufacturer and 

thus is not a decision which would be 


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taken lightly, given the short-term 

nature of the NCPs allowed for in this 

interim final rule. Furthermore, we 

believe that any such impacts would be 

short-term and self-limiting in nature 

because the NCP annual adjustment 

factor, established via prior NCP rules, 

increases the levels of the penalties over 

time and based on the extent of the use 

of NCPs by all manufacturers. In other 

words the NCP program is structured 

such that the incentives to produce 

engines that meet the standard increase 

year-by-year and increase upon NCP 

use. The practical impact of this 

adjustment factor is that the NCPs will 

rapidly become an undesirable option 

for all manufacturers that may elect to 

use them. However, while we expect 

their use to be limited, we have no way 

of predicting at this time how many 

manufacturers will make use of the 

NCPs, or how many engine families 

would be subject to the NCP program. 

Because of these uncertainties we are 

unable to accurately quantify the 

potential impact the NCPs might have 

on emission inventories, although, as 

stated above, any impacts are expected 

to be short-term and self-limiting in 

nature. 

VIII. Public Participation 

We are opening a formal comment 

period by publishing this document. We 

will accept comments for the period 

indicated under DATES above. If you 

have an interest in the program 

described in this document, we 

encourage you to comment on any 

aspect of this rulemaking. 

Your comments will be most useful if 

you include appropriate and detailed 

supporting rationale, data, and analysis. 

If you disagree with parts of the interim 

program, we encourage you to suggest 

and analyze alternate approaches to 

meeting the goals described in this 

Interim Final Rule. You should send all 

comments, except those containing 

proprietary information, to our Air 

Docket (see ADDRESSES) before the end 

of the comment period. 

If you submit proprietary information 

for our consideration, you should 

clearly separate it from other comments 

by labeling it ‘‘Confidential Business 

Information.’’ You should also send it 

directly to the contact person listed 

under FOR FURTHER INFORMATION

CONTACT instead of the public docket. 

This will help ensure that no one 

inadvertently places proprietary 

information in the docket. We will 

disclose information covered by a claim 

of confidentiality only through the 

application of procedures described in 

40 CFR part 2. If you do not identify 

information as confidential when we 

receive it, we may make it available to 

the public without notifying you. 

IX. Statutory and Executive Order 

Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review and Executive 

Order 13563: Improving Regulation and 

Regulatory Review 

This action is not a ‘‘significant 

regulatory action’’ under the terms of 

Executive Order 12866 (58 FR 51735, 

October 4, 1993) and is therefore not 

subject to review under Executive 

Orders 12866 and 13563 (76 FR 3821, 

January 21, 2011). 

B. Paperwork Reduction Act 

This action does not impose any new 

information collection burden. It only 

updates the penalty amounts to 

correspond to the current emission 

standards. However, the Office of 

Management and Budget (OMB) has 

previously approved the information 

collection requirements contained in the 

existing regulations 40 CFR part 86, 

subpart L under the provisions of the 

Paperwork Reduction Act, 44 U.S.C. 

3501 et seq. and has assigned OMB 

control number 2060–0132. The OMB 

control numbers for EPA’s regulations 

in 40 CFR are listed in 40 CFR part 9. 

C. Regulatory Flexibility Act 

(1) Overview 

The Regulatory Flexibility Act 

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 these rules on small entities, small 

entity is defined as: (1) A small business 

as defined by SBA regulations at 13 CFR 

121.201; (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. 

(2) Summary of Potentially Affected 

Small Entities 

After considering the economic 

impacts of this rule on small entities, I 

certify that this action will not have a 

significant impact on a substantial 

number of small entities. 

When these emission standards were 

established, the final rulemaking (66 FR 

5001, January 18, 2001) noted that we 

were not aware of ‘‘any manufacturers 

of heavy-duty engines that meet SBA’s 

definition of a small business.’’ Based 

on an updated assessment, EPA has 

identified a total of about 14 

manufacturers that produce diesel cycle 

heavy-duty motor vehicle engines. Of 

these, none of these are small businesses 

that are producing engines with NOX

emissions above 0.20 g/hp-hr. Based on 

this, we are certifying that this rule will 

not have a significant economic impact 

on a substantial number of small 

entities. 

(3) Conclusions 

I therefore certify that this Interim 

Final Rule will not have a significant 

economic impact on a substantial 

number of small entities. 

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. 

The agency has determined that this 

action does not contain a Federal 

mandate that may result in expenditures 

of $100 million or more for the private 

sector in any one year. Because the use 

of NCPs is optional, manufacturers have 

the flexibility and will likely choose 

whether or not to use NCPs based on 

their ability to comply with emissions 

standards. The availability of NCPs 

provides manufacturers with a third 

alternative: To continue production and 

introduce into commerce upon payment 

of a penalty an engine that exceeds the 

standard until an emission conformance 

technique is developed. Therefore, 

NCPs represent a regulatory mechanism 

that allows affected manufacturers to 

have increased flexibility. Thus, 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 the 

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 


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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 action 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. These rules will 

apply to manufacturers of on-highway 

engines and not to State or local 

governments. Thus, Executive Order 

13132 does not apply to this action. 

F. Executive Order 13175 (Consultation 

and Coordination With Indian Tribal 

Governments) 

This IFR does not have tribal 

implications, as specified in Executive 

Order 13175 (65 FR 67249, November 9, 

2000). This rule will be implemented at 

the Federal level and impose 

compliance costs only on engine 

manufacturers who elect to use the NCP 

regulatory flexibility to comply with 

emissions standards. Tribal 

governments would be affected only to 

the extent they purchase and use 

engines and vehicles to which an NCP 

has been applied. Thus, Executive Order 

13175 does not apply to this rule. 

G. Executive Order 13045: ‘‘Protection 

of Children From Environmental Health 

Risks and Safety Risks’’ 

Executive Order 13045: ‘‘Protection of 

Children from Environmental Health 

Risks and Safety Risks’’ (62FR19885, 

April 23, 1997) applies to any rule that: 

(1) Is determined to be ‘‘economically 

significant’’ as defined under Executive 

Order 12866, and (2) concerns an 

environmental health or safety risk that 

EPA has reason to believe may have a 

disproportionate effect on children. If 

the regulatory action meets both criteria, 

the agency must evaluate the 

environmental health or safety effects of 

the planned rule on children, and 

explain why the planned regulation is 

preferable to other potentially effective 

and reasonably feasible alternatives 

considered by the agency. 

EPA interprets Executive Order 13045 

as applying only to those regulatory 

actions that are based on health or safety 

risks, such that the analysis required 

under section 5–501 of the Order has 

the potential to influence the regulation. 

This rule is not subject to Executive 

Order 13045 because it does not 

establish an environmental standard 

intended to mitigate health or safety 

risks. 

H. Executive Order 13211 (Energy 

Effects) 

This action is not subject to Executive 

Order 13211 (66 FR 28355 (May 22, 

2001)), because it is not a significant 

regulatory action under Executive Order 

12866. 

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 the agencies 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. NTTAA directs EPA 

to provide Congress, through OMB, 

explanations when the EPA decides not 

to use available and applicable 

voluntary consensus standards. 

This rule does not involve technical 

standards. Therefore, EPA is not 

considering the use of any voluntary 

consensus standards. 

J. Executive Order 12898: Federal 

Actions To Address Environmental 

Justice in Minority Populations and 

Low-Income Populations 

Executive Order 12898 (59 FR 7629, 

February 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 action 

will not have disproportionately high 

and adverse human health or 

environmental effects on minority or 

low-income populations. The overall 

environmental impacts of this action are 

expected to be small and of limited 

duration. Moreover, there is no reason 

to believe that trucks using NCP engines 

will be more likely to operate near any 

minority or low-income populations 

than other trucks. 

K. Congressional Review Act 

The Congressional Review Act, 

5 U.S.C. 801 et seq., as added by the 

Small Business Regulatory Enforcement 

Fairness Act of 1996, generally provides 

that before a rule may take effect, the 

agency promulgating the rule must 

submit a rule report, which includes a 

copy of the rule, to each House of the 

Congress and to the Comptroller General 

of the United States. Section 808 allows 

the issuing agency to make a rule 

effective sooner than otherwise 

provided by the CRA if the agency 

makes a good cause finding that notice 

and public procedure is impracticable, 

unnecessary or contrary to the public 

interest. This determination must be 

supported by a brief statement. 5 U.S.C. 

808(2). As stated previously in Section 

II above, EPA has made such a good 

cause finding, including the reasons 

therefore, and established an effective 

date of January 31, 2012. EPA will 

submit a report containing this rule and 

other required information to the U.S. 

Senate, the U.S. House of 

Representatives, and the Comptroller 

General of the United States prior to 

publication of the rule in the Federal 

Register. This action is not a ‘‘major 

rule’’ as defined by 5 U.S.C. 804(2). 

X. Statutory Provisions and Legal 

Authority 

Statutory authority for the vehicle 

controls in these rules is found in CAA 

section 206(g), of the CAA, 42 U.S.C. 

7525(g). 

List of Subjects in 40 CFR Part 86 

Administrative practice and 

procedure, Confidential business 

information, Motor vehicle pollution, 

Reporting and recordkeeping 

requirements. 

Dated: January 20, 2012. 

Lisa P. Jackson, 

Administrator. 

For the reasons set forth in the 

preamble, the Environmental Protection 

Agency is amending 40 CFR chapter I of 

the Code of Federal Regulations as 

follows: 

PART 86—CONTROL OF EMISSIONS 

FROM NEW AND IN-USE HIGHWAY 

VEHICLES AND ENGINES 

■ 1. The authority citation for part 86 

continues to read as follows: 

Authority: 42 U.S.C. 7401–7671q. 

Subpart L—[Amended] 

■ 2. Section 86.1104–91 is revised to 

read as follows: 


wreier-aviles on DSK5TPTVN1PROD with RULES
Federal Register / Vol. 77, No. 20 / Tuesday, January 31, 2012 / Rules and Regulations 4687 

§ 86.1104–91 Determination of upper 

limits. 

EPA shall set a separate upper limit 

for each phase of NCPs and for each 

service class. 

(a) The provisions of this section 

specify a default approach for 

determining the upper limit values. 

(1) The default upper limit applicable 

to a pollutant emission standard for a 

subclass of heavy-duty engines or 

heavy-duty vehicles for which an NCP 

is established in accordance with 

§ 86.1103–87, shall be the previous 

pollutant emission standard for that 

subclass. 

(2) If a manufacturer participates in 

any of the emissions averaging, trading, 

or banking programs, and carries over 

certification of an engine family from 

the prior model year, the upper limit for 

that engine family shall be the family 

emission limit of the prior model year, 

unless the family emission limit is less 

than the upper limit determined in 

paragraph (a) of this section. 

(b) If no previous standard existed for 

the pollutant under paragraph (a) of this 

section, the upper limit will be 

developed by EPA during rulemaking. 

(c) EPA may set the upper limit 

during rulemaking at a level below the 

default level specified in paragraph (a) 

of this section if we determine that a 

lower level is achievable by all engines. 

■ 3. Section 86.1105–87 is amended by 

revising paragraph (e) and adding 

paragraph (j) to read as follows: 

§ 86.1105–87 Emission standards for 

which nonconformance penalties are 

available. 

* * * * * 

(e) The values of COC50, COC90, and 

MC50 in paragraphs (a) and (b) of this 

section are expressed in December 1984 

dollars. The values of COC50, COC90, 

and MC50 in paragraphs (c) and (d) of 

this section are expressed in December 

1989 dollars. The values of COC50, 

COC90, and MC50 in paragraph (f) of 

this section are expressed in December 

1991 dollars. The values of COC50, 

COC90, and MC50 in paragraphs (g) and 

(h) of this section are expressed in 

December 1994 dollars. The values of 

COC50, COC90, and MC50 in paragraph 

(i) of this section are expressed in 

December 2001 dollars. The values of 

COC50, COC90, and MC50 in paragraph 

(j) of this section are expressed in 

December 2011 dollars. These values 

shall be adjusted for inflation to dollars 

as of January of the calendar year 

preceding the model year in which the 

NCP is first available by using the 

change in the overall Consumer Price 

Index, and rounded to the nearest whole 

dollar in accordance with ASTM E29– 

67 (reapproved 1980), Standard 

Recommended Practice for Indicating 

Which Places of Figures are to be 

Considered Significant in Specified 

Limiting Values. This method was 

approved by the Director of the Federal 

Register in accordance with 5 U.S.C. 

552(a) and 1 CFR part 51. This 

document is available from ASTM 

International, 100 Barr Harbor Drive, 

P.O. Box C700, West Conshohocken, PA 

19428–2959, and is also available for 

inspection as part of Docket A–91–06, 

located at the U.S. EPA, Air and 

Radiation Docket and Information 

Center, 1301 Constitution Ave., NW., 

Room 3334, EPA West Building, 

Washington, DC 20004, (202) 202– 

1744or 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/cfr/ibr-locations.html. 

These materials are incorporated as they 

exist on the date of the approval and a 

notice of any change in these materials 

will be published in the Federal 

Register. 

* * * * * 

(j) Effective in the 2012 and 2013 

model years, NCPs will be available for 

the following emission standard: 

(1) Diesel heavy-duty engine oxides of 

nitrogen standard of 0.20 grams per 

brake horsepower-hour in § 86.007– 

11(a)(1)(i). 

(i) [Reserved]. 

(ii) For heavy heavy-duty diesel 

engines: 

(A) The following values shall be used 

to calculate an NCP in accordance with 

§ 86.1113–87(a): 

(1) COC50: $1,561. 

(2) COC90: $1,919. 

(3) MC50: $5,203 per gram per brake 

horsepower-hour NOX. 

(4) F: 1.23. 

(5) UL: 0.50 grams per brake 

horsepower-hour NOX. 

(B) The following factor shall be used 

to calculate the engineering and 

development component of the NCP for 

the standard set forth in § 86.007– 

11(a)(1)(i) in accordance with 

§ 86.1113–87(h): 0.004. 

(2) Manufacturers may not generate 

emission credits for any pollutant from 

engines for which the manufacturer 

pays an NCP. 

(3) The penalty shall be adjusted 

annually as specified in § 86.1113–87 

with 2012 as the first year. Note that this 

means AAF2012 is equal to 1. 

[FR Doc. 2012–1937 Filed 1–30–12; 8:45 am] 

BILLING CODE 6560–50–P 


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