STAFF REPORT: INITIAL STATEMENT OF REASONS FOR 

PROPOSED RULEMAKING

AMENDMENTS TO THE REGULATION FOR MOBILE CARGO 

HANDLING EQUIPMENT AT

PORTS AND INTERMODAL RAIL YARDS

Stationary Source Division

Emissions Assessment Branch

August 2011

i

State of California

AIR RESOURCES BOARD

STAFF REPORT: INITIAL STATEMENT OF REASONS

FOR PROPOSED RULEMAKING

Public Hearing to Consider

ADOPTION OF THE PROPOSED AMENDMENTS TO THE REGULATION

FOR MOBILE CARGO HANDLING EQUIPMENT AT PORTS

AND INTERMODAL RAIL YARDS

To be considered by the Air Resources Board on September 22-23, 2011, at:

California Environmental Protection Agency

Headquarters Building

1001 “I” Street

Byron Sher Auditorium

Sacramento, California

Stationary Source Division:

Richard Corey, Chief

Daniel E. Donohoue, Chief, Emissions Assessment Branch

Cherie Rainforth, Manager, Control Strategies Section 

This report has been prepared by the staff of the Air Resources Board. Publication 

does not signify that the contents reflect the views and policies of the Air Resources 

Board, nor does mention of trade names or commercial products constitute 

endorsement or recommendation for use. 
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iii

State of California

AIR RESOURCES BOARD

PROPOSED AMENDMENT OF THE REGULATION FOR MOBILE CARGO 

HANDLING EQUIPMENT

AT PORTS AND INTERMODAL RAIL YARDS

Contributing Authors

Kirk Rosenkranz (Lead)

Layla Gonzalez

Doug Grandt

Michele Houghton

John Lee

Todd Sterling

Carolyn Suer

Zhenlei Wang

Legal Counsel

Michael Terris

Supporting Divisions

Enforcement Division

Mobile Source Control Division

Office of Legal Affairs

Planning and Technical Support Division

Research Division

Acknowledgements

This report was prepared with the assistance and support from the other divisions and 

offices of the Air Resources Board. In addition, we would like to acknowledge the 

assistance and cooperation that we have received from many individuals and 

organizations. 
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TABLE OF CONTENTS

Contents Page

Executive Summary .................................................................................................. ES-1

 I. Introduction......................................................................................................... I-1

A. Overview.................................................................................................. I-1

B. Description of Cargo Handling Equipment............................................... I-1

C. Regulatory Authority ................................................................................ I-2

D. Summary of the Current Regulation ........................................................ I-3

E. Implementation Status ............................................................................. I-5

F. Need for the Regulation for Mobile Cargo Handling Equipment at Ports 

and Intermodal Rail Yards ....................................................................... I-7

G. ARB Staff Actions and Process to Develop the Proposed Amendments . I-8

II. Need for Amendments....................................................................................... II-1

A. Retrofit Requirements............................................................................. II-1

B. Operational Practices.............................................................................. II-3

C. Emission Standards................................................................................ II-8

D. Compliance Requirements...................................................................... II-9

E. Need to Clarify the Current Regulation ................................................. II-11

F. Other Issues ......................................................................................... II-11

III. Proposed Amendments ................................................................................... III-1

A. Summary of the Proposed Amendments to the Regulation ................... III-1

B. Discussion of the Proposed Amendments to the Regulation ................. III-2

IV. Air Emissions and Health Impacts from Proposed Amendments......................IV-1

A. Emissions from Cargo Handling Equipment ..........................................IV-1

B. Emission Impacts from the Proposed Amendments ..............................IV-6

C. Public Health Impacts from the Proposed Amendments......................IV-11

 V. Economic Impacts from Proposed Amendments...............................................V-1

A. Summary of Statewide Economic Impacts..............................................V-1

B. Legal Requirements................................................................................V-2

C. Methodology ...........................................................................................V-2

D. Costs and Savings Estimated to Result From Proposed Amendments ..V-3

E. Estimated Costs to Businesses ............................................................V-15

F. Potential Costs to Local, State, and Federal Agencies .........................V-19

G. Analysis of Alternatives.........................................................................V-19

VI. CEQA Environmental Impacts Analysis............................................................VI-1

A. Legal Requirements...............................................................................VI-1
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TABLE OF CONTENTS (cont.)

B. Reasonably Foreseeable Environmental Impact of Methods of 

Compliance............................................................................................VI-2

C. Reasonably Foreseeable Mitigation Measures ......................................VI-3

D. Reasonably Foreseeable Alternative Means of Compliance with the 

Proposed Amendments .........................................................................VI-6

E. Summary ...............................................................................................VI-8

APPENDICES

Appendix A: Proposed Regulation Order: Title 13, Proposed Amendments to the 

Regulation for Mobile Cargo Handling Equipment at Ports and 

Intermodal Rail Yards

Appendix B: Emissions Inventory Methodology

Appendix C: Cost Analysis - Basis for Calculations

Appendix D: VDECS Available for Installation on Cargo Handling Equipment

Appendix E: List of Acronyms and Abbreviations
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TABLE OF CONTENTS (cont.)

TABLES AND FIGURES

Contents Page

Tables

Table ES-1: Key Requirements of CHE Regulation ................................................ ES-3

Table ES-2: Method of Compliance with Current CHE Regulation ......................... ES-4

Table ES-3: Summary of Verified Diesel Emission Control Strategies ................... ES-5

Table I-1: Key Requirements of CHE Regulation .................................................... I-4

Table I-2: Status of Implementation of Current CHE Regulation (as of June 2011) I-5

Table I-3: Methods Used to Comply with the Current CHE Regulation.................... I-6

Table I-4: Summary of Verified Diesel Emission Control Strategies ....................... I-6

Table I-5: Workshop/Workgroup and Public Outreach Meetings ............................ I-8

Table II-1: Maximum Opacity Limits Based on the “Simple Rule” .......................... II-7

Table IV-1: Equipment Population for Baseline Inventory .......................................IV-1

Table IV-2: Estimated Statewide 2006 Cargo Handling Equipment Emissions .......IV-2

Table IV-3: Estimated 2006 Cargo Handling Equipment Emissions by District 

(tons per day) ........................................................................................IV-3

Table IV-4: Cargo Handling Equipment Engines Projected Year 2014 and 2020 

Baseline Emission Estimates (Without the CHE Regulation) ................IV-4

Table IV-5: Emissions Inventory Statewide (tons per day) ......................................IV-8

Table IV-6: Emissions Inventory for South Coast Air Basin (tons per day) ..............IV-8

Table IV-7: Emissions Inventory for San Francisco Air Basin (tons per day) ..........IV-8

Table IV-8: Statewide Emission Reductions Attributable to the Existing CHE 

Regulation and Reductions Attributable to the Proposed Amendments IV-9

Table IV-9: Total PM Emissions Reductions and NOx Emissions Increases Due to 

Proposed Amendments ......................................................................IV-10

Table IV-10: Comparison of Port of Humboldt Bay Emissions Inventory: Subject to 

CHE Regulation Compared to Subject to Off-Road In-Use Equipment 

Regulation ...........................................................................................IV-11

Table V-1: Costs or Savings Associated With Proposed Amendments over Years 

2011 through 2020 in 2011 Dollars ........................................................V-1

Table V-2: Savings from Delayed Expenditure Due to Additional Two Years of “No 

VDECS Available” Amendment ..............................................................V-4

Table V-3: Savings from Delayed Expenditure Due to Low-Use Amendment..........V-5

Table V-4: Cost Savings for Small Port Equipment Exemption ...............................V-7

Table V-5: Opacity Test Training Costs ...................................................................V-9

Table V-6: Opacity Test Training Cost for Two Mechanics at 140 Facilities ............V-9

Table V-7: Initial Statewide Costs for Mechanic Training and Opacity Meters ........V-9

Table V-8: Statewide Costs for Terminal Mechanics to Conduct Opacity Tests ....V-10
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TABLE OF CONTENTS (cont.)

Contents Page

Table V-9: Cost for Consultants to Conduct Opacity Tests ...................................V-11

Table V-10: Savings Due to Equipment Transfer ....................................................V-12

Table V-11: Cost for VDECS Retrofits for FEL Alternative PM Engines...................V-14

Table V-12: Summary of Annual Costs/(Savings) Resulting from Proposed 

Amendments (Present Value)...............................................................V-15

Table V-13: Estimated Costs and Savings for Typical Businesses in 2011 Dollars Over 

2011 to 2020 Time Period.....................................................................V-17

Table V-14: Estimated Costs and Savings for Typical Small Businesses in 2011

Dollars Over 2011 to 2020 Time Period................................................V-18

Table V-15: Estimated Cost and Savings for Local Agencies in 2011 Dollars Over the 

2011 to 2020 Time Period ....................................................................V-19

Table VI-1: Statewide Emissions Reductions Attributable to the Existing CHE 

Regulation and Reductions Attributable to the Proposed Amendments VI-3

Figures

Figure ES-1: Equipment Types and Number of Equipment Retrofitted with DECS

(as of June 2011)................................................................................. ES-5

Figure I-1: Equipment Types and Number of Equipment Retrofitted with DECS

(as of June 2011) .................................................................................... I-7

Figure II-1: Opacity and Measured Engine-Out PM Correlation ............................... II-6

Figure IV-1 Economic Recovery Scenarios ..............................................................IV-5

Figure IV-2 Growth Factors for California Ports........................................................IV-6

Figure IV-3: Projected Statewide PM Emission Estimates from CHE .......................IV-7

Figure IV-4: Projected Statewide NOx Emission Estimates from CHE ......................IV-7
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EXECUTIVE SUMMARY

The California Air Resources Board (ARB or Board) staff is proposing amendments to 

the Regulation for Mobile Cargo Handling Equipment at Ports and Intermodal Rail Yards

(CHE Regulation or regulation).1 The primary purposes of the proposed amendments 

are to provide additional flexibility to owners/operators in an effort to reduce compliance 

costs, maintain the anticipated emissions reduction benefits of the regulation, and clarify 

several provisions in the regulation. These amendments were designed to ensure the 

continued reduction of diesel particulate matter (PM) and oxides of nitrogen (NOx) 

emissions from mobile cargo handling equipment (CHE) that operate at ports and 

intermodal rail yards in California. California’s ports and intermodal rail yards operate 

in, or near, densely populated areas, exposing residents to unhealthy levels of air 

pollution. As such, the proposed amendments to the regulation will continue to protect 

the public’s health while providing CHE owners/operators with additional flexibility to 

comply with the regulation in a cost-effective manner. 

The proposed amendments to the CHE regulation address several areas including: 

retrofit requirements, operational requirements, emission standards, compliance 

requirements, definitions, and other clarifying language. A description of each 

amendment is presented later in this section.

The emissions reductions originally anticipated from the implementation of the 

regulation continue to be ARB’s goal and are still projected to be met. However, when 

compared to the emission reductions anticipated in the original rule, there is a potential 

for small increases in diesel PM emissions in 2012 through 2014 and NOx emissions in 

2012 through 2016. Overall, diesel PM emission reductions will be greater under the 

proposed amendments than under the original rule. However, NOx emission reductions 

will be slightly less. At the Port of Humboldt Bay, diesel PM and NOx emission 

reductions will be slightly less than under the original rule. ARB staff estimates that by 

2020, diesel PM emissions from CHE at ports and intermodal rail yards will have been 

reduced by nearly 90 percent and NOx emissions by approximately 75 percent relative 

to the 2006 baseline, including the impacts of the amendments.

In developing the proposed 2011 amendments to the CHE regulation, ARB staff 

conducted three public workshops and worked closely with stakeholders, including CHE 

owners/operators, CHE original equipment manufacturers, CHE dealers, diesel 

emissions control strategy manufacturers, environmental groups, and other interested 

parties. ARB staff also hosted a one-day technical meeting to discuss issues 

associated with exhaust emission control strategies (retrofits) installed on new and inuse engines and the use of on-road engines in yard trucks. CHE owners/operators, 

CHE original equipment manufacturers, diesel emissions control strategy 

manufacturers, and other interested parties participated in the meeting. ARB staff 

travelled to Eureka, California to meet with representatives of the Port of Humboldt Bay 

 1 Title 13, California Code of Regulations, section 2479.
ES - 2

and the local air district. Staff toured the port area, discussed the issues facing the port, 

and collected information on emissions sources and receptor locations. 

BACKGROUND

Why did the ARB adopt the CHE Regulation?

In 1998, following the ARB’s identification of diesel PM as a toxic air contaminant (TAC), 

California embarked on an ambitious strategy to reduce emissions from diesel-fueled 

engines. The Risk Reduction Plan to Reduce Particulate Matter Emissions from DieselFueled Engines and Vehicles (Diesel Risk Reduction Plan), adopted by the Board in 

October 2000, outlined steps to reduce diesel emissions and associated potential 

cancer risks by 85 percent by 2020. (ARB, 2000) Diesel PM is a primary contributor to 

adverse health impacts in California. It is estimated that nearly 80 percent of the 

statewide potential cancer risks from exposure to TACs comes from exposure to diesel 

PM. Exposure to fine PM (PM2.5) has been linked to increased hospital admissions, 

emergency room visits, asthma attacks, and premature deaths. (USEPA, 2009) Diesel 

PM is a major component of PM2.5, and as such is a contributor to the statewide 

burden of adverse health impacts related to PM2.5 exposure. CHE are a significant 

source of diesel PM.

What are the types of equipment affected by the CHE Regulation and how many 

are there in the State?

The current regulation applies to mobile equipment with compression-ignition engines 

that handle cargo at ports and intermodal rail yards. Cargo arrives and/or departs by 

ship, truck, or train, and can include liquid, bulk (break bulk and dry bulk material), and 

containers. Bulk cargo handling usually requires equipment such as loaders, dozers, 

cranes, forklifts, and sweepers. Container cargo handling, which is the most common 

type of cargo at ports and intermodal rail yards, requires equipment such as yard trucks, 

rubber-tired gantry (RTG) cranes, top picks, side picks, forklifts, and reach stackers. 

Staff estimates there are about 4,400 mobile CHE vehicles at California’s ports and 

intermodal rail yards in the updated 2006 baseline inventory. 

The most common type of CHE is a yard truck, comprising approximately 55 percent of 

all CHE in the 2006 baseline year. Yard trucks are also known as yard goats, utility 

tractor rigs, hustlers, yard hostlers, and yard tractors. Yard trucks are very similar to 

heavy-duty on-road truck tractors, but the majority has historically been equipped with 

off-road engines. In this report, the CHE are often referred to as either yard truck or 

non-yard truck equipment.

When was the CHE Regulation adopted and what does it require?

The CHE Regulation was considered and approved by the Board on December 8, 2005 

(title 13, California Code of Regulations, section 2479) and became effective on 

December 31, 2006. This regulation is one of many steps that ARB is taking to reduce 
ES - 3

diesel PM emissions and the associated health risk in communities near ports and 

intermodal rail yards. The ultimate goal of the CHE Regulation is to reduce diesel PM 

emissions from CHE by 85 percent or more through the application of Level 3 VDECS 

or replacement to Tier 4 engine technology. A summary of the key requirements of the 

CHE Regulation is provided in Table ES-1. 

Table ES-1: Key Requirements of CHE Regulation

Requirement of CHE Regulation

Yard Trucks New Yard Trucks

• Equip with either a certified on-road engine meeting the current model 

year standards or a certified final Tier 4 off-road diesel engine.

In-Use Yard Trucks

• Meet BACT performance standards primarily through accelerated turnover 

of older yard trucks to those equipped with cleaner, certified on-road or 

off-road engines. 

Non-Yard Truck Equipment New Non-Yard Truck Equipment

• Equip with a certified on-road engine meeting the current model year 

standards or certified Tier 4 off-road diesel engine. 

• If neither is available, the engine must be certified to the highest level offroad diesel engine standards and the highest level available verified 

diesel emission control strategy (VDECS) must be installed within one 

year or within six months of the VDECS becoming available, whichever is 

later.

In-Use Non-yard Truck Equipment 

• Equipment are required to meet BACT, which includes replacement to 

cleaner on-road or off-road engines and/or the use of retrofits. 

• For owners/operators that elect to use retrofits, a second compliance step, 

which would require replacement to Tier 4 off-road engines or installation 

of a Level 3 VDECS (85 percent diesel PM reduction), may be required, 

depending on the equipment category and level of VDECS applied.

Compliance Schedule • Compliance with the regulation is phased in beginning in 2007 based on 

the age of the engine, whether or not it is equipped with VDECS, and the 

size of the fleets. 

• Compliance date for the in-use performance standards can be extended 

if:

o an engine is within one year of retirement 

o no VDECS are available for non-yard truck equipment 

o an experimental diesel PM emission control strategy is used for 

non-yard truck equipment

o there are delivery delays

Recordkeeping • Owners/operators are required to maintain records for all CHE

• Submit a compliance plan 

• Perform annual reporting

What is the implementation status of the CHE Regulation and how are 

owners/operators complying?

Implementation of the CHE regulation began in 2007 and is reducing diesel PM 

emissions and associated health risk in communities near ports and intermodal rail 
ES - 4

yards.2 The data from the regulation’s reporting requirements indicates that as of 

June 2011, 60 percent of yard trucks and nearly 45 percent of non-yard truck equipment 

have taken action to meet the phase-in compliance schedule in the current regulation. 

This represents over 2,400 pieces of CHE, or over 50 percent of the in-use inventory. 

The above percentages indicate that the implementation of the regulation is on

schedule. Overall, the two methods used most frequently to comply with the current 

regulation are equipment retirement and equipment replacement. In Table ES-2 below, 

it can be seen that nearly 60 percent of the equipment were retired and 36 percent were 

replaced with compliant equipment. 

Table ES-2: Method of Compliance with Current CHE Regulation

Method of Compliance Percent of 

Compliant Equipment

Retired from Service 58%

Replaced with Compliant Engine 36%

Retrofitted with VDECS 6%

Staff had anticipated wider use of VDECS through the retrofit compliance options as this 

is typically considered less costly. However, with the economic downturn and 

subsequent decline in port and intermodal rail yard activity, many owners/operators 

have chosen to retire older equipment, finding that this compliance path was often less 

costly as the equipment was not needed. Approximately 75 extensions have been 

granted for non-yard truck equipment for which no VDECS were available. 

 

What VDECS have been verified for CHE and what equipment has been 

retrofitted?

VDECS are an essential component of the compliance strategies that can be utilized by 

CHE owners/operators to achieve emission reductions. Installing VDECS is a less 

costly compliance strategy than equipment or engine replacement. VDECS work 

across a broad spectrum of CHE types and functions. Table ES-3 provides a summary 

of the number of VDECS that are currently available to CHE owners/operators. All of 

 2 While the ARB has the authority to implement and enforce the recordkeeping, reporting, and new engine 

requirements of the CHE Regulation per California State law, an authorization from the United States 

Environmental Protection Agency (U.S. EPA) is required in order for ARB to enforce the retrofit 

component of the regulation. (USEPA, 1990) In January 2007, the ARB submitted a waiver and 

authorization request to the U.S. EPA, pursuant to section 209(e)(2) of the federal Clean Air Act. On 

January 25, 2011, the U.S. EPA initiated a public comment period on ARB’s authorization request. This 

comment period ended March 17, 2011. As of this publication, the U.S. EPA has not yet made a decision 

on the request. Nevertheless, as evidenced, by the level of compliance shown in the response, many 

port terminal and rail yard operators have elected, to date, to comply voluntarily with the regulation’s 

implementation schedule. 
ES - 5

these devices have one or more operational restrictions including engine model year, 

equipment type, engine horsepower, or operational characteristics of the engine.

Table ES-3: Summary of Verified Diesel Emission Control Strategies

Level of Control Percent of Diesel PM 

Control

Number of Verified 

Devices

3 85 or greater 9

2 50 or greater 1

1 25 to 50 4

Based on information reported to date, there have been over 150 CHE retrofits installed

on non-yard truck equipment including 21 CHE retrofits using experimental control 

technologies. The types of CHE and number of pieces of equipment that these VDECS 

are retrofitted on are shown in Figure ES-1 below. Experimental control technologies 

include diesel particulate filters targeting specific equipment types, mainly RTG cranes, 

and engine-rebuild kits. The most common types of equipment that have been 

retrofitted are forklifts, top picks, and loaders, comprising approximately 65 percent of all 

retrofits. However, as shown in the “Other” equipment category, VDECS have been 

installed on a wide variety of CHE.

Figure ES-1: Equipment Types and Number of Equipment Retrofitted with DECS

(as of June 2011)
ES - 6

Diesel emissions control systems continue to be verified and ARB anticipates that there 

will be more VDECS options available to CHE owners/operators in the future. This 

should provide CHE owners/operators with additional lower-cost compliance options for 

their consideration when assessing compliance options.

How have fluctuations in the state’s economy impacted CHE operating at 

California’s ports and intermodal rail yards?

Due to its geographic location and major ports and railways, California is a global 

gateway for goods movement. In terms of world-wide annual container throughput, 

California’s ports of Los Angeles and Long Beach rank 16th and 18th in 2009, 

respectively. However, the recent downturn in trade and general goods movement 

have caused ports and intermodal rail yards to experience decline or limited growth over 

the past four years.

The economic impacts on California’s ports and intermodal rail yards directly impact 

CHE activities. From 2007 through 2009, there was a 24 percent decline in container 

throughput at the ports of Los Angeles, Long Beach, and Oakland. Throughput of bulk 

materials also declined from 2007 through 2009. The ports of Los Angeles, Long 

Beach, Humboldt, Sacramento, and Stockton had a 20 percent decline in the tonnage of 

bulk material handled by these ports. 

Recent increases in container traffic are an indication that California’s economy has 

begun to recover from the downturn. The three major ports in California have seen an 

18 percent increase in container traffic when comparing 2010 to 2009 traffic. That 

recovery is still developing, and the State’s ports and intermodal rail yards have not 

experienced the full benefits of that recovery. 

ARB staff does not believe that major adjustments to the compliance schedules in the 

regulation are needed to address the economic impacts of the decline in throughput at 

ports and rail yards due to the economic recovery that is occurring and the need for 

reductions of CHE emissions impacting public health in surrounding communities. 

However, staff is proposing several amendments which will provide additional 

compliance flexibility and a measure of economic relief to owners/operators at ports and 

intermodal rail yards. 

The one exception to the above statement would be for the Port of Humboldt Bay. The 

Port of Humboldt Bay has experienced severe economic impacts due to limited 

operations. The Port of Humboldt Bay tonnage shipped dropped from 800,000 tons in 

2005 to 500,000 tons in 2007 and 90,000 tons in 2009. In 2008 the Port of Humboldt 

Bay annual throughput was approximately 0.2 percent of California’s annual throughput 

of non-petroleum products. Because the port primarily serves the local lumber 

industry, it has been hard hit due to the close tie of the lumber industry to housing. The 

North Coast Unified Air Quality Management District (North Coast ) and the Humboldt 

Bay Harbor, Recreation, and Conservation District (Humboldt Bay District) sent letters 
ES - 7

to ARB requesting an exemption from the current CHE Regulation for the equipment at 

this port. 

SUMMARY OF PROPOSED AMENDMENTS 

What are the proposed amendments? 

The proposed amendments were designed to provide additional compliance flexibility, 

maintain the anticipated emission reductions, and clarify several provisions in the 

regulation. The proposed amendments address several areas including: retrofit 

requirements, operational requirements, emission standards, compliance provisions, 

definitions, and other clarifying language. 

Retrofit Requirements

• Additional time for equipment with no VDECS available: Staff is proposing to add 

two years to the current two years maximum annual compliance extensions for 

in-use non-yard truck equipment for which there are no VDECS available to 

provide owners/operators the flexibility of the least costly compliance option. 

• Add a safety provision for VDECS: Staff is proposing to add VDECS safety as a 

reason for determining there is “No VDECS Available” if the owner/operator can 

demonstrate that there is no VDECS verified that can be safely and feasibly used 

for their equipment. The annual extension is contingent upon a re-evaluation of 

whether or not the VDECS available continue to pose a safety or feasibility issue. 

• Allow more time for extension application: The time frame to apply for the “No 

VDECS Available” extension or an extension to use an experimental strategy is 

proposed to be changed from 6 months to 60 days prior to the compliance 

deadline in order to give operators more time to determine if a compliance 

extension is needed. 

• Require equipment with a “No VDECS Available” extension to be brought into 

compliance within 6 months: Staff is proposing that the “No VDEC Available” 

extension be amended to require the installation of VDECS, or another 

compliance option, within six months of notification that a VDECS becomes 

available for the equipment. This is currently required for new equipment with 

retrofit requirements. 

• Allow extensions for experimental diesel PM emissions control strategies for 

gathering verification data: Staff is proposing to expand the “No VDECS

Available” extension for an experimental diesel emission control strategy to allow 

use of this extension to gather information needed for verification even in 

situations where there are other VDECS available.. 
ES - 8

Operational Practices

• Low-use compliance extension: A two-year compliance extension for equipment 

that operates 200 hours per year or less is proposed. The amendment would 

allow ARB to limit the number of extensions per fleet to two pieces of equipment 

or two percent of the fleet. The current CHE Regulation does not include a lowuse compliance extension.

• Non-yard truck equipment transfers: Staff is proposing to allow non-yard truck 

CHE owned or leased by one party to be transferred to another location within 

California owned or leased by the same party. Transfers could not be used to 

comply, or delay compliance, with the regulation. The equipment would be 

required to apply BACT prior to being used in the new location. ARB would 

approve transfer requests, on a case-by-case basis. The allowance would not be 

available to yard trucks. 

• Warranty engine replacement: Staff is proposing an amendment allowing, in 

cases of premature engine failure, the replacement of an engine under the 

original equipment manufacturers warranty with a like-engine even when newer 

engine standards are in place.

• Allow rental of non–compliant equipment for manufacturer delivery delays: Staff 

is proposing, in cases where new compliant equipment has been purchased but 

there is a delay in delivery, to allow rental of equipment that does not meet 

current standards for up to six months, or until new equipment can be delivered, 

if rental equipment meeting current standards are not available and the 

owner/operator can demonstrate need for the equipment. Rental equipment 

could only be one Tier lower than required engine standards (i.e., if Tier 4 engine 

standards are in place, only Tier 3 engines could be rented).

• Initiate CHE opacity based monitoring program: Staff is proposing that an 

opacity-based monitoring program be incorporated into the CHE Regulation. 

This program would establish work practice requirements for annual opacity 

monitoring of all CHE to ensure proper operation and maintenance so that 

engines continue to perform as designed and certified. Retrofitted engines would 

be monitored to ensure that the engine continues to be in compliance with the 

VDECS executive order. Equipment with excessive opacity would receive 

necessary maintenance and repair before being returned to service. 

Emission Standards

• Treat Tier 4 Engines Certified to Alternate PM Emissions Standards as Tier 3 

Engines: Staff is proposing to require that any engines certified to Tier 4 Family 

Emission Limit (FEL) Alternate PM standards be retrofitted with highest level 

VDECS within one year of acquisition. The U.S. EPA allows engine 

manufacturers to produce a specified percentage of Tier 4 engines built to 
ES - 9

alternative, less stringent, PM and NOx emissions limits. These engines are 

referred to as FEL or Averaging, Banking, and Trading (AB&T) engines. The 

Tier 4 Alternate PM standards are essentially Tier 3 standards and will not result 

in the emission reductions anticipated by the CHE Regulation with the 

introduction of Tier 4 engines. 

• Allow demonstration of emissions equivalency for alternative technology: Staff is 

proposing an amendment to allow owners/operators to use alternate 

compression-ignition power systems that meet applicable new or in-use 

emissions limits. Hybrid power systems are an example of a type of systems that 

could benefit from this amendment.

Compliance Requirements

• Allow compliance schedule modification to bring older engines into compliance 

first: Staff is proposing an amendment to allow CHE owners/operators to modify 

their non-yard truck compliance schedules such that older model year engines 

(that happen to have later compliance dates) can be brought into compliance in 

place of newer model year engines (that are required to comply earlier). The 

number of engines required to comply each year would remain the same. 

• Exempt equipment at rural low-throughput ports: Staff is proposing that any port 

that has an average annual throughput of less than one million tons and is 

located more than 75 miles from an urban area would be exempt from the 

requirements of the CHE regulation. The Port of Humboldt Bay is the only port 

that currently meets this set of criteria. CHE with off-road engines at exempt 

ports would be subject to ARB’s Off-Road In-Use Equipment Regulation. CHE 

with on-road engines would be subject to the on-road truck and bus regulation. 

Amendments to Clarify Language and Intent

• Definitions: Staff is proposing to clarify the intent of the CHE Regulation by 

modifying several existing definitions including: compression ignition engines; 

intermodal rail yard; newly, purchased, leased or rented cargo handling 

equipment; owner or operator; port; retirement or retire; and rubber-tired gantry 

crane.

In addition, staff is proposing to add definitions for the following terms to support 

both modified definitions and other amendments: alternate PM standard; cargo; 

Class I Railroad; construction activities; Family Emissions Limit (FEL); lowthroughput port; opacity, Otto cycle engine; safe; two-year average annual cargo 

throughput; urban area; warranty period; and water-borne commerce. 

• Clarifying Language: Staff is also proposing to clarify that equipment brought 

onto a port or intermodal rail yard solely for construction or unexpected repairs 

are exempt from the regulation.
ES - 10

IMPACTS OF THE PROPOSED AMENDMENTS

What are the environmental impacts from the amendments?

The goals of the CHE Regulation, to reduce diesel PM by 85 percent and NOx by 75 

percent by 2020, as compared to the 2006 baseline, are expected to be achieved. 

However, when compared to the emission reductions anticipated for the original rule, 

there is a potential for small increases in diesel PM emissions in 2012 through 2014 and 

NOx emissions in 2012 through 2016. Overall, diesel PM emission reductions will be 

greater under the proposed amendments than the original rule. However, NOx emission 

reductions will be slightly less. At the Port of Humboldt Bay, diesel PM and NOx

emissions will be slightly greater than under the original rule, but will remain well below 

the 2006 baseline levels due to decreased activity. Staff has not identified any other 

significant adverse environmental impacts due to the proposed amendments.

What are the health impacts of the proposed amendments?

Given that the proposed amendments will result in a very small potential increase in 

emissions over a two to four year period and an overall decrease in diesel PM 

emissions over the 2012 through 2020 timeframe, staff does not anticipate any 

significant adverse health impacts due to the proposal. 

 

What are the economic impacts from the amendments?

Staff estimates that the proposed amendments will result in both costs and savings to 

CHE owners/operators. However, the overall cost-effectiveness of the CHE Regulation 

will remain essentially the same as estimated in the original CHE rulemaking. The 

overall economic impact is estimated to be a savings of approximately $100,000 to 

$200,000 annually over the next ten years. These cost savings are due to added 

flexibility in the rule including the additional two years of annual compliance extension 

for “No VDECS Available” and low-use non-yard truck equipment. The cost savings 

associated with the “No VDECS Available” and low-use non-yard truck compliance 

extensions are based on delayed compliance costs. Currently, the CHE Regulation 

would require owners/operators to replace equipment for which VDECS are not 

available once the initial two year extension has expired. Low-use equipment must be 

similarly brought into compliance or retired. Additionally, the exemption from the CHE 

Regulation for equipment at the Port of Humboldt Bay, which would then be required to 

comply with the Off-Road In-Use Regulation, would result in a savings of approximately 

$1 million to the tenants at this port. The additional costs to CHE owners/operators are 

the result of the amendments requiring annual opacity testing of all equipment and the 

retrofit of Tier 4 engines certified to the FEL Alternate PM standards. 
ES - 11

What are the impacts from the amendments on greenhouse gas emissions?

The impacts of the proposed amendments on the emissions of greenhouse gases 

would be minimal. The proposed amendments would have a minor impact to both 

increase and decrease the emissions of greenhouse gases. While some of the 

amendments would defer some of the emissions reductions and equipment activity with 

newer, more fuel efficient engines, the opacity test requirements would require engines 

producing high soot levels to receive needed maintenance, resulting in a reduction of 

carbon black emissions. It is anticipated that the net impacts on the emissions of 

greenhouse gases associated with CHE would be insignificant. 

ENVIRONMENTAL JUSTICE

The proposed 2011 amendments to the CHE regulation are consistent with ARB 

environmental justice policies. These amendments achieve the emissions reduction 

benefits set forth in the current regulation, irrespective of the two year shift in the 

required compliance date for a small portion of the in-use equipment. The proposed 

amendments would have a negligible net effect on emissions and public health risks in 

communities near ports and intermodal rail yards.

RECOMMENDATION

ARB staff recommends the Board approve the proposed 2011 amendments to the CHE 

regulation as presented in Appendix A of this Staff Report. 
ES - 12

REFERENCES:

(ARB, 2000) California Air Resources Board. Risk Reduction Plan to Reduce 

Particulate Matter Emissions from Diesel-Fueled Engines and Vehicles; October 2000. 

(USEPA, 2009) United States Environmental Protection Agency. U.S. EPA Integrated 

Science Assessment for Particulate Matter, December 2009.

http://www.epa.gov/ncea/pdfs/partmatt/Dec2009/PM_ISA_full.pdf

(USEPA, 1990) United States Environmental Protection Agency. Federal Clean Air Act, 

Title II, Part A, Sec. 209(e); 1990. 
I - 1

I. INTRODUCTION

A. Overview

In this chapter, the Air Resources Board (ARB or Board) staff provides a brief 

description of cargo handling equipment (CHE), an overview of the Mobile Cargo 

Handling Equipment at Ports and Intermodal Rail Yards Regulation (CHE Regulation or 

regulation), and regulatory authority.

3 Also included in this chapter is information on

the implementation status of the CHE Regulation, the need for the CHE Regulation, and 

a description of staff’s actions to develop the proposed amendments. Additional 

information on some of these topics can also be found in the Initial Statement of 

Reasons prepared for the adoption of the regulation in 2005 (2005 ISOR or Staff 

Report). (ARB, 2005a) The 2005 ISOR can be accessed at the following web address: 

http://www.arb.ca.gov/regact/cargo2005/cargo2005.htm

The primary purposes of the proposed amendments are to provide additional flexibility 

to owners/operators in an effort to reduce compliance costs while continuing to reduce 

emissions of diesel particulate matter (PM) and oxides of nitrogen (NOx), maintain the 

anticipated emissions reduction benefits of the regulation, and make clarifying changes. 

Additionally, the amendments maintain the anticipated emission reductions to be

achieved with the introduction of Tier 4 engines and enable the successful use of 

retrofits. This approach is consistent with ARB’s mission to protect public health, 

welfare, and ecological resources through the effective and efficient reduction of air 

pollutants, while recognizing and considering the effects on the economy of the State.

B. Description of Cargo Handling Equipment 

Mobile CHE at ports and intermodal rail yards is as diverse a group of equipment as the 

cargo that it handles. Cargo that arrives and/or departs by ship, truck, or train, can 

include liquid, bulk (break bulk and dry bulk), and containers. Liquid cargo, such as 

petroleum products and chemicals, are often transported via pipelines, and therefore, 

do not usually have mobile cargo handling equipment associated with their operation. 

Break bulk cargo, such as lumber, steel, machinery, and many types of palletized 

goods, and dry bulk cargo, such as cement, scrap metal, salt, sugar, sulfur, and 

petroleum coke, usually require equipment such as loaders, dozers, cranes, forklifts, 

and sweepers for their operations. Container cargo, which is the most common type of 

cargo at ports and intermodal rail yards, requires equipment such as yard trucks, 

rubber-tired gantry (RTG) cranes, top picks, side picks, forklifts, and straddle carriers. 

There are about 4,400 mobile cargo handling equipment vehicles at California’s ports 

and intermodal rail yards in the updated 2006 baseline inventory. 

The most common type of cargo handling equipment is a yard truck, comprising about

55 percent of the in-use CHE at the beginning of regulation implementation. Yard 

trucks are also known as yard goats, utility tractor rigs, hustlers, yard hostlers, and yard 

 3 Title 13, California Code of Regulations, section 2479
I - 2

tractors. Yard trucks are very similar to heavy-duty on-road truck tractors, but the 

majority has been equipped with off-road engines. For this report, the CHE are 

commonly referred to as either yard truck or non-yard truck equipment. A more detailed 

description of CHE and their uses can be found in the 2005 Staff Report. (ARB, 2005a) 

C. Regulatory Authority

ARB has been granted both general and specific authority under the Health and Safety 

Code (HSC) to adopt the proposed regulation. HSC sections 39600 (General Powers) 

and 39601 (Standards, Definitions, Rules, and Measures) confer to the ARB, the 

general authority and obligation to adopt rules and measures necessary to execute the 

Board's powers and duties imposed by State law. HSC sections 43013(b) and 43018(a) 

provide broad authority to achieve the maximum feasible and cost-effective emission 

reductions from all mobile source categories, including off-road diesel engines and 

equipment. 

With respect to toxic air contaminants (TACs), California's Air Toxics Program, 

established under California law by Assembly Bill (AB) 1807 (Stats. 1983, Ch. 1047) 

and set forth in HSC sections 39650 through 39675, mandates that ARB identify and 

control air toxics emissions in California. The identification phase of the Air Toxics 

Program requires the ARB, with participation of other state agencies, such as the Office 

of Environmental Health Hazard Assessment (OEHHA), to evaluate the health impacts 

of, and exposure to, substances and to identify those substances that pose the greatest 

health threat as TACs. ARB's evaluation is then made available to the public and is 

formally reviewed by the Scientific Review Panel (SRP) established under HSC 

section 39670. Following the ARB's evaluation and the SRP's review, the Board may 

formally identify a TAC at a public hearing. Following the identification of a substance 

as a TAC, HSC sections 39658, 39665, 39666, and 39667 require ARB, with the 

participation of the air pollution control and air quality management districts (districts), 

and in consultation with affected sources and interested parties, to prepare a report on 

the need and appropriate degree of regulation for that substance. The mobile CHE 

subject to these proposed amendments to the regulation are vehicular sources for 

which ARB is the agency that has been vested by the Legislature with near-exclusive 

authority to adopt standards and regulations. (HSC sections 39002, 39667, 40000, 

43000, 43000.5, 43013, and 43018.) 

Under federal Clean Air Act (CAA) section 209(e)(2), California may adopt emission 

standards for off-road engines that are not otherwise expressly preempted under 

section 209(e)(1).4

 Section 209(e)(1) provides that no state, including California, or any 

political subdivision thereof may adopt or enforce emission standards or other 

requirements relating to the control of emissions for nonroad engines under 

175 horsepower that are used in farm or construction equipment or used in locomotives 

or locomotive engines. CAA section 209(e)(2) provides California with sole authority 

among the states to adopt emission standards and requirements related to emission 

 4 The CAA refers to “nonroad engines” and California has historically referred to these same engines as 

“off-road engines.” For the purposes of this regulation the two terms are interchangeable.
I - 3

control for new and in-use nonroad engines that are not specifically preempted under 

section 209(e)(1). Section 209(e)(2) requires that California must obtain authorization 

from the Administrator of the U.S EPA prior to the regulation becoming effective. As 

part of the authorization process, ARB must establish that the adopted regulations “will 

be, in the aggregate, at least as protective of public health and welfare as the applicable 

Federal standards.” U.S. EPA is authorized by CAA section 213 to adopt emission 

standards and other regulations for only new non-road engines. In Engine 

Manufacturers Association v. U.S. EPA (D.C. Cir.1996) 88 F.3d 1075, the Court 

concluded that California is the only government body, including U.S. EPA, with 

authority to adopt emission standards and other regulations for in-use nonroad engines. 

(Id., at 1089-1091.) 

In January 2007, the ARB submitted a waiver and authorization request to the 

U.S. EPA, pursuant to section 209(e)(2) of the federal Clean Air Act. On January 25, 

2011, the U.S. EPA initiated a public comment period on ARB’s authorization request. 

This comment period ended March 17, 2011. As of this publication, the U.S. EPA has 

not yet made a decision on the request. Nevertheless, as evidenced, by the level of 

compliance shown in the response, many port terminal and rail yard operators have 

elected, to date, to comply voluntarily with the regulation’s implementation schedule.

D. Summary of the Current Regulation

The CHE Regulation was formally adopted by the Board in 2006 and became operative 

under California law on December 31, 2006. The regulation is designed to use the best 

available control technology (BACT) to reduce the public’s exposure to diesel PM and 

NOx emissions from mobile CHE. In addition, the regulation includes recordkeeping and 

reporting requirements to provide staff up-to-date information on CHE and activities. 

The requirements for newly purchased, leased, or rented equipment, as well as in-use 

equipment affect owners/operators of mobile CHE that operate at ports and intermodal 

rail yards in California. The requirements also affect any person who sells, offers for 

sale, purchases, leases, or rents mobile CHE for use at a port or intermodal rail yard in 

California. This includes shipping terminals at ports and intermodal rail yard terminals. 

Mobile CHE that do not operate at a port or intermodal rail yard, portable compressionignition engines, and cargo handling equipment used to transport personnel and deliver 

fuel are not be covered by the rule. Table I-1 provides a summary of the key 

requirements of the CHE Regulation. 
I - 4

Table I-1: Key Requirements of CHE Regulation

Requirement of CHE Regulation

Yard Trucks New Yard Trucks

• Equip with either a certified on-road engine meeting the current 

model year standards or a certified final Tier 4 off-road diesel 

engine.

In-Use Yard Trucks

• Meet BACT performance standards primarily through accelerated 

turnover of older yard trucks to those equipped with cleaner, 

certified on-road or off-road engines. 

Non-Yard Truck 

Equipment

New Non-Yard Truck Equipment

• Equip with a certified on-road engine meeting the current model 

year standards or certified Tier 4 off-road diesel engine. 

• If neither is available, the engine must be certified to the highest 

level off-road diesel engine standards, and the highest level 

available verified diesel emission control strategy (VDECS) must 

be installed within one year or within six months of the VDECS 

becoming available, whichever is later.

In-Use Non-yard Truck Equipment 

• Equipment are required to meet BACT, which includes 

replacement to cleaner on-road or off-road engines and/or the use 

of retrofits. 

• For owners/operators that elect to use retrofits, a second 

compliance step, which would require replacement to Tier 4 offroad engines or installation of a Level 3 VDECS (85 percent diesel 

PM reduction), may be required, depending on the equipment 

category and level of VDECS applied.

Compliance Schedule • Compliance with the regulation is phased in beginning in 2007 

based on the age of the engine, whether or not it is equipped with 

VDECS, and the size of the fleets. 

• Compliance date for the in-use performance standards can be 

extended if:

o an engine is within one year of retirement 

o no VDECS are available for non-yard truck equipment 

o an experimental diesel PM emission control strategy is 

used for non-yard truck equipment

o there are delivery delays

Recordkeeping • Owners/operators are required to maintain records for all CHE

• Submit a compliance plan 

• Perform annual reporting

The regulation includes provisions that allow qualified owners/operators to delay 

compliance with the in-use performance standards under the following circumstances: if 

an engine is within one year of retirement, if no VDECS are available, if an experimental 

diesel PM emission control strategy is used, or if there are equipment manufacturer 

delivery delays. Additionally, owners/operators of yard trucks may delay compliance if 

the yard truck had received incentive funding from public agencies to apply VDECS by 
I - 5

the end of 2005 with minimum use requirements. The maximum delay depends on the 

compliance extension granted. Several of the proposed amendments affect these 

sections of the regulation.

E. Implementation Status

Implementation of the CHE regulation began in 2007 and is reducing diesel PM 

emissions and associated health risk in communities near ports and intermodal rail 

yards.5

 The data from the regulation’s reporting requirements indicates that as of

June 2011, over 2,400 pieces of CHE have been brought in to compliance with the CHE 

Regulation. Nearly two-thirds of the compliant equipment have been yard trucks due to 

the accelerated compliance time lines for these vehicles. Consequently, 60 percent of 

yard trucks and 45 percent of non-yard truck equipment are compliant with the current 

regulation. The above percentages indicate that the implementation of the regulation is 

on schedule. Table I-2 provides the current status of the implementation of the existing 

CHE regulation.

Table I-2: Status of Implementation of Current CHE Regulation

(as of June 2011)

Equipment Type Target Date for Full

Compliance

Percent 

Compliant*

Yard trucks w/off-road engines 2015 or 2016 (w/VDECS)

60

Yard trucks w/on-road engines 2016 or 2017 (w/VDECS)

Non-yard truck equipment 2013 45

* Compliance with the CHE Regulation is on schedule

Of the 2,400 pieces of compliant equipment, approximately 1,400 pieces of CHE have 

complied with the current regulation by being retired from service. This represents 

58 percent of all compliant equipment. Approximately 850 pieces of CHE 

(approximately 30 percent of all compliant equipment) have complied with the current 

regulation by being replaced with equipment having compliant engines. Overall, the two 

methods used most frequently to comply with the current regulation are equipment 

retirement and equipment replacement. Staff had anticipated wider use of VDECS for

compliance, as this option is typically considered less costly than other means of 

compliance. However, with the economic downturn and subsequent decline in port and 

intermodal rail yard activity, owners/operators have elected to retire older equipment as 

a path to compliance, finding it to be less costly than retrofitting since the equipment 

was not needed. The retirement and replacement of older equipment has accelerated

the emissions reduction of the regulation. Table I-3 provides a breakdown of the 

methods of yard truck and non-yard truck CHE compliance to-date. However, with 

 5 As stated, as of this publication, the U.S. EPA has not yet made a decision on the request. 

Nevertheless, as evidenced, by the level of compliance shown, many port terminal and rail yard operators 

have elected, to, date, to comply voluntarily with the regulation’s implementation schedule.
I - 6

economic recovery, it is anticipated that more owners/operators will turn to the use of 

VDECS for non-yard truck CHE compliance. 

Table I-3: Methods Used to Comply with the Current CHE Regulation

Equipment 

Type Method of Compliance

Approximate 

Percent of 

Compliant 

Equipment

Yard truck

Retired 49

Replaced w/on-road engine

yard trucks 45

Use alternate fuel 5

Other (repower, retrofit, etc.) 1

Non-yard truck

Retired 71

Aftertreatment controls 17

Replace w/off-road engine 8

Use alternate fuel 3

Other (repower, on-road engine, 

etc.) 1

A list of the currently verified controls is provided in Appendix D. Table I-4 provides a 

summary of the verification levels and number of devices that have been verified in 

each level.

Table I-4: Summary of Verified Diesel Emission Control Strategies

Level of Control Percent of Control Number of Verified 

Devices

3 85 or greater 9

2 50 or greater 1

1 25 to less than 50 4

All of these devices have one or more operational restrictions including engine model 

year, equipment type, engine horsepower, and operational characteristics of the engine. 

The Level 1 and Level 2 VDECS are only applicable to RTG cranes. Additional 

information regarding these VDECS is provided in Appendix D. 

Based on information reported to date, there have been over 150 CHE retrofits with 

various types of control strategies. Of these retrofits, 21 have used experimental control 

technologies. The types and number of CHE that VDECS have been installed on are 

shown in Figure I-1 below. The most common equipment types that have been 

retrofitted are forklifts, top picks, and loaders, comprising approximately 65 percent of all 

retrofits. The experimental retrofits include DPFs targeting specific equipment types 
I - 7

and engine rebuild kits. The vast majority of the experimental retrofits have been 

installed on RTG cranes.

Figure I-1: Equipment Types and Number of Equipment Retrofitted with DECS

(as of June 2011)

F. Need for the Regulation for Mobile Cargo Handling Equipment at Ports and 

Intermodal Rail Yards 

ARB’s vision is that all individuals in California, especially children and the elderly, can 

live, work, and play in a healthful environment – free from harmful exposure to air 

pollution. In 1998, diesel engine exhaust was identified as a TAC. Diesel engine 

exhaust is a source of unhealthful air pollutants including PM, carbon monoxide, 

hydrocarbons, and NOx. Diesel PM is a primary contributor to adverse health impacts in 

California. It is estimated that nearly 80 percent of the statewide potential cancer risks 

from exposure to TACs comes from exposure to diesel PM. Diesel PM is a major 

source of fine particulate pollution. Exposure to fine PM (PM2.5) has been linked to 

increased hospital admissions, emergency room visits, asthma attacks, and premature 

deaths. (USEPA, 2009) CHE are a significant source of diesel PM.

Emissions from diesel-fueled CHE continue to be of concern in communities near ports 

and intermodal rail yards. The regulation has reduced emissions that have contributed 

to ambient levels of PM, reducing the resulting community exposures to diesel PM, and 
I - 8

reducing the contribution to NOx levels and reactive organic compounds (ROG) levels, 

which are precursors to the formation of ozone. To ensure continued reductions of 

diesel PM and NOx from CHE in the most efficient manner, staff is proposing some 

amendments to the regulation. The proposed amendments to the regulation are 

designed to provide additional implementation flexibility to CHE owners/operators while 

continuing to reduce levels of ambient particulate matter, the general public's exposure 

to diesel PM, and ozone precursor emissions from CHE at ports and intermodal rail 

yards. Additionally, the amendments will assure that the anticipated reductions are 

achieved due to the introduction of Tier 4 engines and to enable the successful use of 

retrofits. Chapter II of this Staff Report contains a discussion of the need for 

amendments to the regulation.

G. ARB Staff Actions and Process to Develop the Proposed Amendments

Public Outreach

During the development process, ARB staff provided opportunities to present 

information about the proposed amendments to the regulation at places and times 

convenient to stakeholders. Attendees included representatives from environmental 

community organizations, terminal operators, port and rail representatives, engine and 

diesel emission control associations, and other parties interested in CHE. These 

individuals participated both by providing data and reviewing draft regulations and by 

participating in open forum workshops, in which staff directly addressed their concerns. 

Table I-5 below provides meeting dates that were made to apprise the public about the 

development of the proposed regulation.

Table I-5: Workshop/Workgroup and Public Outreach Meetings

Date Meeting Location Time

November 30, 2010 Public Workshop Cal/EPA Building, 

Sacramento 12:30 p.m.

February 23, 2011 Public Workshop Cal/EPA Building, 

Sacramento 9:00 a.m.

March 21 & 22, 2011 Site Visit and Public 

Meeting Port of Humboldt Bay, Eureka 2:00 p.m. & 7:30 a.m.

May 26, 2011 Technology Workgroup Cal/EPA Building, 

Sacramento 9:00 a.m.

June 27, 2011 Public Workshop Cal/EPA Building, 

Sacramento 1:00 p.m.

ARB staff has held three public workshops, one site visit/public meeting, and one 

exhaust aftertreatment (retrofit) control technology workgroup meeting since November 

2010 in developing the proposed amendments. Over 700 individuals and/or companies 

were notified for each workshop/meeting through a series of mailings. Notices were 

posted to ARB's CHE and public workshops web sites and e-mailed to subscribers of 

the CHE electronic list server. The public workshops were broadcast live via the 
I - 9

internet. The public meeting in Eureka was held at the request of the Port of Humboldt 

Bay, the local air district, and the businesses associated with activities at the port in an 

effort to make staff more accessible to the stakeholders. In addition, ARB staff and 

management participated in numerous industry meetings over the past two years, 

presenting information on implementation of the current regulation and our proposed 

amendments to the CHE regulation. 

As a way of inviting public participation and enhancing the information flow between the 

ARB and interested parties, staff created a CHE Internet web site 

(http://www.arb.ca.gov/cargo) in March 2004. Since that time, staff has consistently 

made available on the web site all related documents, including meeting presentations 

and draft versions of the proposed regulatory language. The web site has also provided 

background information on diesel PM, workshop and meeting notices and materials, 

and other diesel related information, and has served as a portal to other web sites with 

related information.

Outreach efforts have also included more than a hundred personal contacts via 

telephone, electronic mail, regular mail, surveys, facility visits, and individual meetings 

with interested parties. These contacts have included interactions with engine 

manufacturers and operators, emission control system manufacturers, local, national, 

and international trade association representatives, and environmental, community, and 

public health organizations. 

Environmental Justice

ARB is committed to integrating environmental justice in all of its activities. On 

December 13, 2001, the Board approved "Policies and Actions for Environmental 

Justice," which formally established a framework for incorporating Environmental 

Justice into the ARB's programs, consistent with the directive of California state law. 

(ARB, 2001) Environmental Justice is defined as the fair treatment of people of all 

races, cultures, and incomes with respect to the development, adoption, 

implementation, and enforcement of environmental laws, regulations, and policies. 

The proposed amendments to the regulation are consistent with the environmental 

justice policy to reduce health risks from TACs in all communities, including those with 

low-income and minority populations, regardless of location. The proposed 

amendments to the regulation will continue to reduce diesel PM emissions from mobile 

CHE at ports and intermodal rail yards by requiring a turnover to cleaner engines and 

the use of BACT. The proposed amendments to the regulation will continue provide air 

quality benefits for all Californians, particularly those living near ports and intermodal rail 

facilities where CHE operate. 
I - 10

REFERENCES:

(ARB, 2005a) California Air Resources Board. Staff Report: Initial Statement of Reason 

for Proposed Rulemaking, Regulation for Mobile Cargo Handling Equipment at Ports 

and Intermodal Rail Yards, October 2005.

(USEPA, 2009) United States Environmental Protection Agency. U.S. EPA Integrated 

Science Assessment for Particulate Matter, December 2009.

http://www.epa.gov/ncea/pdfs/partmatt/Dec2009/PM_ISA_full.pdf
II - 1

II. NEED FOR AMENDMENTS

In this chapter, ARB staff provides a discussion of the events and information that have 

resulted in the need for amendments to the CHE Regulation. In addition, ARB staff 

provides the rationale for the individual amendments. These amendments have been 

drafted to address a variety of implementation issues that have arisen since the CHE 

Regulation became effective and provide some relief from the recent economic 

downturn. While all of the amendments are relatively minor, they provide the additional 

flexibility sought after by the regulated community without sacrificing significant 

emission reductions. 

A. Retrofit Requirements

The CHE Regulation requires that in-use non-yard truck equipment, as of 

January 1, 2007, meet BACT emission standards though one of a menu of compliance 

options. These options include replacement to cleaner on-road or off-road engines 

and/or the use of retrofits. For owners/operators that elect to use retrofits, a second 

compliance step, which would require replacement to Tier 4 off-road engines or 

installation of a Level 3 (85 percent or greater of diesel PM reduction) VDECS, may be 

required, depending on the equipment category and level of VDECS applied. 

While retrofitting of in-use non-yard truck equipment is not required, it is seen as the 

most cost-effective option for compliance. However, since the regulation has been 

implemented, the use of VDECS has not been as robust as staff anticipated and some 

start-up problems have been reported by terminal operators. The use of retrofits is 

relatively new to port and intermodal rail yard operators. The successful use of retrofits 

requires some changes in operation and maintenance practices. This has been 

demonstrated with other regulated categories and their introduction to retrofits. 

ARB staff believes a few minor changes to the CHE Regulation will help port and 

intermodal rail yard owners/operators to more successfully use retrofits as a compliance 

option. These include: 

• Providing an additional two years of eligibility for compliance extensions where 

no VDECS are available.

• Providing owners/operators with more time to evaluate the need for an extension

before having to apply for a “No VDECS Available” extension.

• Including safety issues as a reason for a “No VDECS Available” extension. 

• Allowing an experimental extension for situations where a diesel emissions 

control strategy (DECS) manufacturer is developing an experimental system and 

needs to generate data for verification.

The following paragraphs discuss the need for these changes.
II - 2

“No VDECS Available” Compliance Extension

There are CHE for which no currently verified VDECS will work. The CHE Regulation 

allows an annual compliance extension of up to two years for non-yard truck mobile 

cargo handling equipment when a VDECS is not available. Owners/operators are 

required to bring all other equipment into compliance before applying this extension. 

Under the current CHE Regulation, owners/operators must bring this equipment into 

compliance by either replacing or retiring if there are still no VDECS available once the 

two years extension has passed. There are situations where there is specialty 

equipment required for certain cargo that is very expensive. Staff is proposing to 

amend the CHE Regulation to add two additional annual years of compliance extension 

to allow more time for additional DECS to be verified for CHE. These additional two 

years delays the capital expenditure to replace this equipment and provides more time 

for an applicable retrofit to be verified. In consideration of the amount of time required 

for the evaluation of whether VDECS are available or not, staff is also proposing to 

change the deadline for submitting a “No VDECS Available” compliance extension 

request from six months to 60 days prior to the compliance deadline.

While a VDECS may be available for a piece of equipment, it is important that the 

installation of the retrofit device does not impact the safe operation of the equipment. 

This is a clarification in that safety has always been allowable as a factor in determining 

available VDECS. Factors impacting the installation include the location of the exhaust 

outlet, the equipment configuration, and the size of the retrofit device necessary for the 

engine. One possible impact would be if the retrofit device was placed such that the 

view of the driver was obstructed. Title 8, section 1591(b) of the California Code of 

Regulations (CCR) states, “Equipment and accessories installed on haulage vehicles 

shall be arranged so as to avoid impairing the driver’s operational vision to the front and 

sides.” ARB staff has been working with staff of California Division of Occupational 

Safety and Health (CalOSHA) in an effort to better define what constitutes a line-of-sight 

impairment so aftertreatment control installers have a consistent standard. Those 

discussions are on-going. Until such time as the line-of-sight standards are clearly 

delineated, ARB will work with CHE owners/operators to ensure that aftertreatment 

controls are installed in safe manner.

Extension for Experimental Systems

Since the start of CHE Regulation implementation, it has been determined that 

significant differences between RTG cranes and other rubber tired off-road equipment 

impact their operation with exhaust retrofit devices. RTG cranes are used to lift and 

move containers from container stacks to trucks or rail cars. The propulsion engine on 

an RTG crane is a diesel generator set that either produces electricity to run the crane 

(diesel-electric crane) or runs a pump to produce hydraulic pressure to run the crane 

(hydraulic crane). These engines are similar to generator sets used for stationary 

applications. Additionally, the engine operates under a low load (idle) a large 

percentage of the time, such as when it is moving a container laterally or dropping a 

container, but then ramps up to high load when it picks up a container. Consequently, 
II - 3

VDECS demonstrated on non-RTG crane equipment may not operate satisfactorily on 

RTG cranes. 

Therefore, RTG cranes are a separate category for verification. Currently, there are 

only three devices verified for RTG cranes, one Level 2 device and two Level 1 devices. 

There are approximately 370 RTG cranes in California. Consequently, this is a very 

small market and may not attract the attention of DECS manufacturers for verification. 

The devices that are currently verified for RTG cranes were demonstrated using an

experimental extension which allows the use of a non-verified DECS if there are no 

VDECS available for the equipment. 

Once there are VDECS available for the equipment, this experimental extension is no 

longer available. Staff believes that having more verified products for CHE cranes 

would provide greater flexibility for CHE owners/operators. Therefore, we are proposing 

to add a provision to allow the use of the experimental extension for situations where a 

DECS manufacturer needs to generate data for verification of a system, regardless of 

whether VDECS are available. Staff believes these types of extensions will support the 

verification of additional DECS. 

B. Operational Practices

ARB staff has determined that there are four minor amendments that could be made in 

the regulation to allow port and intermodal rail yard operators to conduct their 

operations more effectively while delaying minor emission reductions. These are:

• Providing a low-use extension for a limited number of equipment.

• Allowing non-yard truck equipment to be transferred between terminals or 

intermodal rail yards controlled by single owner.

• Allowing for warranty replacements due to engine failure.

• Allowing rental of equipment meeting previous engine standards for up to six 

months after new engine standards go into effect if there is a manufacturer’s 

delay. 

• Requiring operators to annually conduct opacity monitoring on the engine-out 

exhaust for all CHE equipment.

The need for these amendments is discussed in the following paragraphs. 

Low-Use Provision

Equipment owners/operators maintain a small number of equipment that is used only for 

backup should another piece of equipment stop operating. Maintaining this back-up 

equipment is essential to keeping a terminal operating when a ship comes into dock or 

a train into a rail yard for loading or unloading. Additionally, some smaller port terminals 

have specialty equipment that is required for certain cargo such as large steel I-beams 

and large wire coils and would be expensive to replace. This equipment is used 

infrequently but is necessary for situations where this cargo comes in. Staff is 

proposing a two year extension for equipment operated less than 200 hours per year for 
II - 4

such equipment. Other fleet rules include a low-use extension. Staff is proposing an 

extension for this equipment due to the environmental justice issues related to the 

residential communities surrounding these captive fleets. A provision would be included 

that gives Executive Officer discretion to limit the number of pieces of equipment at a 

facility to two percent or two pieces of equipment of an owner/operator’s fleet based on 

the potential impact of the low-use equipment activity on public health.

Transfer of Equipment

Equipment owners/operators with fleets in different parts of California occasionally need 

to move equipment from one facility to another facility elsewhere in the State. To 

require an owner/operator to purchase additional equipment while equipment elsewhere 

sits unused creates an unnecessary impact on capital expenditures. Currently, these 

transfers are allowed only if the two facilities are at the same port or if the equipment 

meets current engine emission standards. Staff is proposing to allow an owner/operator 

to transfer non-yard truck equipment from one port terminal or intermodal rail yard to 

another port terminal or intermodal rail yard that is under common control of the same 

owner/operator if specified conditions we met that ensure that risk exposure and public 

health are not adversely impacted.. Among the conditions would be a requirement that 

equipment would have to meet the regulation’s BACT performance standards. 

Warranty Replacements

An issue has come up regarding engines that fail within the manufacturer’s warranty 

period (usually one to two years after initial purchase). If the new engine standard 

changed during the warranty period, under the current rule a warranty replacement of 

an engine meeting the old standard would not be allowed. Since the warranty would 

only pay for the replacement of an engine identical to the failed engine, the 

owner/operator would be responsible for the difference between the cost of the warranty 

engine and new engine and equipment modifications to accommodate the newer 

engines. Tier 4 engines typically have aftertreatment controls that require more engine 

compartment space and increased cooling capacity and equipment modifications to 

accommodate these changes may be costly. To address this situation, staff is 

proposing to allow engines that fail under warranty to be replaced with a same emission 

level engine even if there has been an engine emission standard change since the 

original engine was purchased. 

New Equipment Delivery Delays

Equipment with engines meeting new engine standards are often not immediately 

available once the standard comes into effect. Consequently, if during the time when

the new standard first comes into effect, an owner/ operator orders new equipment and 

there is a manufacturer’s delay, they may not be able to rent equipment with engines 

meeting the new standards to use until the equipment they have purchased is delivered. 

Consequently, staff is proposing an amendment to allow the rental of equipment 
II - 5

meeting the previous standard for up to six months, or until the equipment is delivered, 

whichever is longer. 

Opacity Based Inspection Program

Diesel engines have been the workhorse of American industry since the early 20th

century. These engines, which are designed to withstand the explosive impact of 

compression ignition, are highly durable and will continue to operate effectively with 

minimal maintenance. Unfortunately, this can result in delayed maintenance and 

engines operating at higher than design emission levels. 

The smoke opacity test is a quick and inexpensive way to detect if an engine is emitting 

excessive visible emissions. These visible emissions could be an indication of a 

maintenance issue such as the fuel pump calibration, fuel injection timing, air filter 

plugging, or turbo pump failure. ARB staff has been using opacity testing to determine 

when on-road truck engines need maintenance since 1991. This program is called the 

Period Smoke Inspection Program and requires that diesel truck and bus fleet owners 

conduct annual smoke opacity inspections of their vehicles and repair those with 

excessive smoke emissions to ensure compliance.6 ARB randomly audits fleets, 

maintenance and inspection records and tests a representative sample of vehicles. All 

vehicles that do not pass the test must be repaired and retested. Opacity limits for these 

on-road engines are a maximum of 55 percent opacity for pre-1991 model year 

(unregulated) on-road engines and a maximum of 40 percent opacity for 1991 model 

year and later (certified) on-road engines. 

The opacity test is performed using the Society of Automotive Engineers’ (SAE) J1667 

snap-acceleration test procedure. (SAE, 1996) To perform this test, a smoke sensing 

meter is placed either just above the exhaust, or a probe is placed inside the vehicle’s 

exhaust pipe. The driver then rapidly accelerates the engine three times, with the 

transmission in neutral, to clear the exhaust of loose particles. The driver then repeats

the snap-acceleration test three times. The meter measures the opacity of the smoke 

being emitted.

ARB is in the first phase of a detailed study on the correlation of measured engine-out 

exhaust opacity to a variety of engine parameters including measured PM emissions 

and engine mileage, age and certification level. This study has included measuring 

both the opacity and engine-out PM of a number of on-road and off-road engines. 

(ARB, 2011a) The PM measurements were made with a portable emissions 

measurement system (PEMS). Data from the study indicates that while measured 

engine-out opacity does not appear to correlate with engine mileage, age, or 

certification level, it does correlate with measured PM emission levels. The measured 

engine-out opacity is shown plotted as a function of the measured PM emission data in 

Figure II-1 below. 

 6 Title 13, sections 2180 - 2194
II - 6

Figure II-1: Opacity and Measured Engine-Out PM Correlation

Two of the preliminary conclusions from this study are that measured opacity can be 

used to estimate engine PM emission levels and that this test can be easily extended to 

off-road equipment.

One startling observation of the data from this ARB study is that in-use engine-out PM 

emissions from certified diesel engines can be significantly higher than the certification 

levels if the engine manufacturer’s recommended engine maintenance schedules are 

not followed. These in-use PM levels are significantly higher than the expected engine 

deterioration levels. However, PM emission levels and measured opacity levels in 

well-maintained fleets correlate much better with their certification levels. Based on this 

information, ARB staff has devised a simplified correlation of an opacity limit to the PM 

standard that an engine is certified to. This “Simple Rule”, shown in the figure above, is:

Opacity Limit = (PM standard + 0.05) X 100.

So, while measured opacity does not appear to correlate well with the certification level 

in random fleets, the measured opacity for the engines in well-maintained fleets follow 

the ARB “Simple Rule” unless engine maintenance or repair is necessary. 

The following maximum opacity limits are based on the “Simple Rule”.
II - 7

Table II-1: Maximum Opacity Limits Based on the “Simple Rule”

Off/On-Road Certified at X: (g/bhp-hr) Maximum Opacity Limit

>0.4 55%

0.31≤X≤0.40 45%

0.21≤X≤0.30 35%

0.11≤X≤0.20 25%

0.05≤X≤0.10 15%

X<0.05 5%

ARB staff is proposing to require an opacity test of the engine-out exhaust of all CHE 

once a year to identify elevated emission levels and alert operators to potential engine 

maintenance issues. This is similar to what is required of California truck and bus fleet 

operators. The engine-out exhaust would be opacity tested for all equipment, including 

those retrofitted with VDECS or equipped with a factory installed PM control system. 

Retrofitted engines would be tested when the VDECS is removed for cleaning out the 

ash. Engines that include integral aftertreatment devices that are part of the certified 

engine would not require removing these aftertreatment devices for opacity testing. The 

maximum opacity limits for certified engines would be based on the limits set by the 

“Simple Rule,” shown in Table II-1 above. The maximum limit for unregulated engines 

would be set at 55 percent, similar to that for unregulated on-road engines. Retrofitted 

engines would need to meet the limit set for the installed VDECS. This will help prevent 

VDECS failures. 

The ARB Verification Procedure, Warranty and In-Use Compliance Requirements for 

In-Use Strategies to Control Emissions from Diesel Engines (ARB Verification 

Procedure) requires that when diesel emission control devices are verified for use in 

California, specifications for the engine size and maximum PM emissions level are 

included as part of the verification.7

 If a VDECS is installed on an engine that exceeds 

the PM emissions level that it is designed for, the device quickly becomes clogged with 

soot and cannot operate as expected. Additionally, if an engine is burning an excessive 

amount of lubricating oil, the VDECS will quickly become clogged with incombustible 

ash from the metal additives in the lubricating oil. Consequently, an engine 

maintenance program designed to keep diesel engines running at sufficient power to 

complete the job may not be sufficient to keep engines from producing excessive soot 

and burn excessive oil for proper VDECS operation. 

The ARB Verification Procedure in currently being amended to require that a maximum 

opacity limit be specified for each verified device. (ARB, 2011b) While the ARB 

Verification Procedure will require that a pre-retrofit opacity test be performed on

engines to be retrofitted, it will not require that periodic checks be performed to confirm 

that the engine opacity does not exceed the maximum level for the device. An annual 

opacity test program, as proposed here, would help ensure that operators perform 

 7 Title 13, sections 2700 - 2711
II - 8

proper engine maintenance to correct problems before they cause retrofit failure. 

Additionally, use of the opacity test would help keep non-retrofitted equipment operating 

more cleanly by requiring repairs to equipment that operate at higher than the specified 

limits.

C. Emission Standards

With Tier 4 off-road engine emission standards becoming effective for engines used in 

CHE, some implementation issues have arisen. Interim Tier 4 standards came into 

effect at the beginning of 2011 for engines of 175 horsepower (hp) or greater and in 

2012 for engines of 75 to less than 175 hp. Final Tier 4 standards will become effective 

in either 2014 or 2015, depending on engine horsepower. The proposed amendments 

address:

• Tier 4 Family Emission Limits (FEL) engines.

• The demonstration of emissions equivalency.

Tier 4 FEL Engines

U.S. EPA allows engine manufacturers some flexibility during periods where engine 

emissions standards are transitioning from one tier to the next. This flexibility involves 

allowing engine manufacturers to certify specific percentages of engines manufactured, 

and identified as being part of the next Tier, to emissions levels that do not meet the 

emissions standards for the specified Tier. These engines are known as Family 

Emission Limits (FEL) engines and are certified to alternate (Alt) PM and Alt NOx

emissions limits. The FEL Alt PM standards allow for emissions that are approximately

ten times higher than the Tier 4 PM standards. These Alt PM standards are essentially 

equivalent to Tier 3 PM standards. The original regulation assumed that all Tier 4 

engines would be certified to the Tier 4 PM standards. If engines certified to these Alt 

PM standards are allowed to be introduced into California’s ports and intermodal rail 

yards as Tier 4 engines, emission reductions anticipated with the adoption of the 

original regulation will be lost. Consequently, staff is proposing that if engines certified 

to the Alt PM standards are used at ports or intermodal rail yards, these engines would 

be treated as if they were Tier 3, and owners/operators would be required to retrofit this 

equipment with the highest level VDECS within one year of purchase, lease, or rental. 

Owners/operators will be able to determine if an engine is a FEL engine based on the 

engine label. Labeling requirements set forth in the Code of Federal Regulations, 

title 40, part 1039, section 135, require that the FEL standards to which an engine is 

certified to be included on the label. 

Demonstration of Emissions Equivalency

There is now new hybrid technology for RTG cranes that has undergone years of 

development with Tier 3 engines. Modifying the technology to accommodate Tier 4 

engines would require significant additional development funding. The current CHE 

Regulation would not allow this technology to be introduced at port or intermodal rail 

yard terminals once Tier 4 engine emission standards come into effect and those 
II - 9

engines are available for RTG cranes. Staff is proposing an amendment that would 

allow alternative technology developed with an engine certified to a previous standard to 

be allowed to be purchased, leased, or rented as compliant equipment at a port or 

intermodal rail yard if it can be demonstrated that the engine provides the same 

emission reductions that the use of an engine certified to the current standard would 

with conventional technology. These alternative technologies are much more energy 

efficient than conventional technologies, thus providing GHG benefits as well as toxic 

and criteria pollutant reductions. This amendment would encourage the introduction of 

more energy efficient technologies at terminal ports and intermodal rail yards.

D. Compliance Requirements

Two compliance related issues have surfaced since the start of CHE Regulation 

implementation. The first issue involves general compliance deadlines for fleets that 

have in-use engines that were manufactured across several model years; the second 

issue deals specifically with the Port of Humboldt Bay. To address these issues, two 

amendments are being proposed:

• Allow compliance schedule modification to bring older engines into compliance 

first.

• Exempt equipment at rural low-throughput ports.

These are discussed in the following sections.

Compliance Schedule Modification

The compliance schedules in the CHE Regulation organizes the engines in fleets into 

model year groups and then requires a certain percentage of each group to be brought 

into compliance each year. Compliance for the older model year groups is initiated 

earlier than that for the newer model year groups. However, the phased compliance 

schedules overlap such that a certain number of newer model year engines are required 

to comply before all of the older model year engines have been brought into 

compliance. Some owners/operators have requested that they be allowed to bring all of 

their older equipment into compliance before they start bringing their new equipment 

into compliance. Allowing modifications to the compliance schedule to swap older 

engine’s earlier compliance dates with earlier dates for newer engines makes sense 

and provides the same or better emission benefits. Consequently, staff is proposing an 

amendment to allow such modifications. The newer engines would then be required to 

comply when the older engines were originally required to comply. The number of 

engines required to comply each year would remain the same. 

Rural Low-Throughput Ports

The North Coast Unified Air Quality Management District (North Coast), the Port 

Authority of the Port of Humboldt Bay, and Port of Humboldt Bay tenants have 

requested that ARB consider providing relief to this small port from the CHE Regulation 

requirements. (North Coast, 2010), (Humboldt Bay District, 2010) 
II - 10

The Port of Humboldt Bay is a small port in Northern California surrounded by a 

community of less than 50,000 people. (CB, 2011) The 2010 United States Census

Bureau designated the surrounding community as an urban cluster. (CB, 2010) The 

next largest community, Redding, California, which the census designated as an urban 

area, is over 75 miles away. The North Coast, in which the port is located, is in 

attainment for ozone per the National Ambient Air Quality Standards (NAAQS) and does 

not contribute to violations of the federal ozone standard for air districts downwind.

(ARB, 2011c) 

The port is primarily dependent on the local lumber industry. Logs and chips are the 

primary cargo going through the port. The rail access to the community and the port is 

out of service due to the geologic activity in the area and is not anticipated to be brought 

back into service due to the high maintenance costs related to this area. The 

community is economically dependent on the lumber industry and the availability of the 

port to get the lumber products to market. The activity has averaged about one to two

wood chip or log barges a month. The recent decline in the economy, and specifically 

the housing industry, has caused a severe decline in the lumber industry. 

Using U.S. Army Corps of Engineers, Waterborne Statistics Data Center Data historical 

information, the peak port throughput was in 2005 at 815,000 tons of material per year. 

The economic decline has brought this down to 90,000 tons per year in 2009. (USACE, 

WSDC, 2010) With the closure of one of the local lumber mills, return to the peak of 

2005 is unlikely. However, the Port is seeking additional business in a long-term project 

to transport containers by barge. The current plan for the project would bring 

approximately 1,100 twenty-foot equivalent units (TEUs) through the port per month. As 

planned, it would take several years to reach the project’s anticipated annual throughput 

goals of approximately 140,000 tons. Taking into account the current annual throughput 

tonnage and the projected increases, a projected annual throughput tonnage of 230,000 

tons would be significantly below the maximum throughputs experienced in 2005. 

(ARB, 2011d) 

A survey of port tenants indicated that less than 20 pieces of CHE either work at the 

port or may work at the port in the future. (ARB, 2011e) Much of this equipment works 

only part time at the port. The annual hours of operation of this equipment range from 

200 up to 2,500 hours, with a horsepower weighted average of 875 annual hours. The 

average horsepower of the equipment is approximately 240 hp. Average annual hours 

of operation for similar equipment at other ports are estimated to be approximately

1,500 hours. The emissions for these equipment are estimated to be approximately 

0.001 tpd of PM and 0.02 tpd of NOx. These emissions are less than 1 percent of the 

emissions of either the Port of Los Angeles or Long Beach in 2011. Consequently, the 

health risk from these emissions is similarly insignificant. 

The variable nature of the lumber industry is expected to result in higher throughputs in 

some years than in others. The seasonal nature of the lumber industry also results in 

port activity being limited by weather to May to October. In an effort to even out peak 
II - 11

years with low years, a two-year average is being proposed for determination of the 

throughput limit. This would allow the port to sustain a single peak year, but not two in a 

row. 

To address this and similar situations in the future, staff is proposing an amendment 

that would exempt a port from the CHE regulation if it has an annual throughput of less 

than one million tons and is located more than 75 miles from an urban area.

E. Need to Clarify the Current Regulation

Staff is also proposing changes to clarify the intent of the CHE Regulation by modifying 

several existing definitions including: compression ignition engines; intermodal rail yard; 

newly, purchased, leased or rented cargo handling equipment; owner or operator; port; 

retirement or retire; and rubber-tired gantry crane. In addition, staff is proposing to add 

definitions for the following terms to support both modified definitions and other 

amendments: alternate PM standard; cargo; Class I Railroad; construction activities; 

Family Emissions Limits (FEL); low-throughput port; opacity; Otto cycle engine; safe; 

two-year average annual cargo throughput; urban area; warranty period; and waterborne commerce. Staff is also proposing to clarify that equipment brought onto a port or 

intermodal rail yard solely for construction or unexpected repairs would be exempt from 

the regulation.

.

F. Other Issues

Other issues were discussed in the workshops that staff felt were better addressed 

through means other than a regulatory amendment. These issues include the operation 

of VDECS on non-yard truck equipment and of on-road engines in the yard trucks. ARB 

staff conducted a survey of owners/operators with retrofitted equipment and yard trucks 

with on-road engines and hosted a technical meeting on May 26, 2011, to address 

these issues. The following sections provide a discussion of the issues, findings, and 

action plan that evolved from this meeting. 

May 26, 2011 Technical Meeting

Staff held a technical meeting on May 26, 2011, in Sacramento to address concerns 

heard at the workshops from owners/operators regarding the operation of VDECS on 

non-yard truck equipment and on-road engines in the yard trucks. The morning session 

addressed the use of VDECS on non-yard truck equipment; the afternoon session

addressed the use of on-road engines in yard trucks. All terminal port and intermodal 

rail yard operators were invited to both meetings. VDECS manufacturers with products 

verified for use on CHE were invited to the morning session and representatives from 

the on-road engine manufacturer, Cummins, were invited to the afternoon session. In 

addition, representatives from the Manufacturers of Emissions Control Association 

(MECA) were invited to the morning session, and representatives from the Pacific 

Maritime Association (PMA) were invited to both sessions. An open invitation to provide 
II - 12

a presentation was extended to all participants. The MECA representative and the 

Cummins representative both provided presentations. 

Use of VDECS on Non-Yard Truck CHE

In the technical meeting, owners/operators discussed different operational problems 

that they have been encountering with the use of VDECS on their non-yard truck CHE. 

These issues are similar to issues other fleets have encountered under ARB’s in-use 

regulations that require the use of VDECS to reduce in-use fleet emissions. 

The owners/operators’ concerns primarily involved the operational and financial impacts

incurred by the fleets from equipment downtime due to problems with VDECS. Many

felt that their equipment duty cycles were not amenable to retrofitting with VDECS due 

to the degree of idling that occurs during vehicle operation and the resulting low exhaust 

temperatures. ARB staff, however, has determined that VDECS are available that can 

operate under these conditions. It appears that a common problem is that many pieces 

of equipment operating at the ports and rail yards have VDECS installed that have not 

been adequately matched to the equipment’s duty cycles. Additionally, VDECS 

manufacturers believe that owners/operators need more education on the VDECS 

operational and maintenance requirements and that this would help the 

owners/operators operate the retrofitted equipment more effectively. While diesel 

engines without aftertreatment controls will normally continue to operate without 

required maintenance, engines that have been retrofitted will more likely incur high 

incidences of operational problems if they are not properly maintained. 

ARB staff found that closer coordination between all of the parties involved, including 

the owners/operators, equipment field operators, VDECS manufacturers, VDECS 

installers, and ARB staff is essential in making certain that equipment is properly 

matched to the VDECS that will be installed, taking into consideration the equipment’s 

duty cycle, and to ensure that proper maintenance is provided. ARB’s Verification 

Procedure, by which devices become verified products, is in the process of being 

modified to require that VDECS manufacturers provide adequate education to the 

equipment owners/operators. Additionally, this procedure is being modified to require 

the VDECS manufacturers to determine a maximum opacity level for equipment that is 

to be retrofitted with their device. The opacity requirements of the Verification 

Procedure program would be synergistic with the proposed opacity monitoring

requirements proposed herein. The opacity tests would alert owners/operators as to 

when equipment are starting to produce soot levels that are too high for adequate 

VDECS operation. The equipment would then be able to receive maintenance 

necessary to reduce soot levels. 

ARB staff have committed to host periodic meetings on the use of VDECS on non-yard 

truck CHE to work out solutions to issues with retrofitting equipment and to alert 

owners/operators concerning these solutions. 
II - 13

Use of On-Road Engines in Yard Trucks

In the technical meeting, owners/operators discussed different operational problems 

that they have been encountering with the use of on-road engines in yard trucks. These 

issues included DPF regeneration, exhaust pipe leakage, sludge in exhaust the gas 

recirculation (EGR) system, and diesel fuel fumes in the air brakes. Meeting 

participants suggested that the problems appear to correlate with drive time and speed. 

Multiple causes were identified for problems that have been incurred, including: an 

engine duty cycle that involves significant idle and low speed operation, lack of truck 

operator education, and truck operators ignoring necessary maintenance requirements. 

The Cummins representative made a commitment to meet with the different terminal 

operators who were having problems with the on-road engines in their yard trucks to 

determine if maintenance or software upgrade solutions are available. 

The findings from the Cummins representative; to date, indicated that he found multiple 

causes for the operational problems and suggested maintenance practices and 

upgrades to deal with the different issues. The issues and suggested solutions are 

provided in the paragraphs below. One of the fundamental issues is that some yard 

truck operators were not cooperating regarding providing necessary maintenance, 

primarily the DPF regeneration. Regeneration is the name for the process by which the 

accumulated soot in the filter is burned off. There is an indicator light on the yard trucks’ 

dashboard that turns on when the engine DPF needs to be regenerated. Performing 

the regeneration, referred to as a stationary regeneration, requires parking the truck and 

pushing the regeneration button. This regeneration process takes between 20 to 45 

minutes depending on the amount of soot that has accumulated in the filter.

(Cummins, 2008) One terminal has addressed the problem by hooking the truck’s horn 

into the electrical circuit for the dash light to call attention to the warning light. Other 

findings from the Cummins representative were that some terminals have not updated 

their maintenance procedures for the 2007+ model year engines. These newer engines 

are significantly different from earlier model year engines. One important difference is 

that they include an integral DPF. As discussed above, regeneration burns off 

accumulated soot. However, there is a component of the soot that is not combustible.

This non-combustible portion of the soot is called ash. Ash is composed of metals from 

lubricating oil compounds. Diesel engines burn a small amount of the oil that lubricates 

the pistons and cylinders. Required DPF maintenance includes regularly removing the 

DPF from the truck to clean out the ash. As ash accumulates, the engine back pressure 

increases. If the ash is allowed to accumulate too long, it becomes more difficult to 

remove all the ash and the engine back pressure will not return to the original conditions 

after cleaning. This increase in back pressure can cause other problems, as discussed 

in the next paragraph.

Another Cummins finding was that the exhaust pipe leak was exacerbated by high back 

pressure in the exhaust system. As discussed above, excessive ash and soot 

accumulation in the DPF can cause an increase in engine back pressure. Additionally, 

the exhaust is a two piece system with a slip fit. When the pressure in the exhaust 
II - 14

system increases due to ash and soot buildup in the DPF, exhaust gases may be forced 

through the slip fit in the exhaust pipe. Consequently, the Cummins representative 

found that the exhaust leak can be remedied by replacing the original equipment twopiece exhaust with a single piece exhaust system. This single piece exhaust system 

has significantly less potential to leak when engine back pressure increases.

The Cummins representative also found that there were two possible solutions to the 

issue of migration of the engine exhaust air into the truck air system. Cummins has a 

service bulletin describing the relocation of the air compressor inlet to help mitigate this 

problem. Additionally, the maintenance practice of daily purging the truck’s main air 

tank would also help relieve this problem. Purging the air tanks releases accumulated 

fluids which could otherwise release vapors and contaminate the air. Terminals that 

practiced the daily purging did not experience this problem. 

One important Cummins finding was that some port yard trucks had not received up to 

ten calibration updates needed for engines in-field. Since Cummins is responsible for 

the critical updates, closer interaction between Cummins and owners/operators would 

facilitate the necessary calibration updates.

ARB staff has determined that closer coordination among all parties, including Cummins 

representatives, terminal owners/operators, equipment field operators, and ARB staff is 

needed to continue troubleshooting the operational problems being encountered. ARB 

staff have committed to host periodic technical meeting to review the performance of the 

on-road engines in yard trucks, find out what is working, and what is needed for future 

success.
II - 15

REFERENCES:

(SAE, 1996) Society of Automotive Engineers (SAE). Snap Acceleration Smoke Test 

Procedure for Heavy-Duty Powered Vehicles, 1996.

(ARB, 2011a) California Air Resources, Preliminary Investigation of the Correlation 

Between In-Use Diesel PM Emission Rate and Opacity Reading, CRC Real World 

Emissions Workshop, March 2011.

(ARB, 2011b) California Air Resources Board, ARB staff presentation at public 

workshop for Proposed Amendments to the Verification Procedure, May 24, 2011. 

http://www.arb.ca.gov/diesel/verdev/in-use/workshop_presentation_5-24-11.pdf

(North Coast, 2010) North Coast Unified Air Quality Management District. Letter of 

Recommendation, July, 2010.

(Humboldt Bay, 2010) Humboldt Bay Harbor, Recreation, and Conservation District.

Letter of Recommendation, August, 2010

(CB, 2011) U.S. Census Bureau, U.S. Census Urban Areas, 2011.

(CB, 2010) Federal Register, Department of Commerce, Proposed Urban Area Criteria 

for the 2010 Census; Notice, August, 2010

(ARB, 2011c) California Air Resources Board, Proposed 2011 Amendments to the Area 

Designations, May, 2011.

(USACE, WCSC, 2011) US Army Corps of Engineers USACE Water-borne Commerce 

Statistics Center, CA Ports Throughput Data, 2011.

(ARB, 2011d) California Air Resources Board, Personal correspondence, 

Stephen Pepper, May 19, 2011.

(ARB, 2011e) California Air Resources Board, Humboldt Bay Cargo Handling 

Equipment Database: Results from 2011 Survey of Operators at the Port”, April 2011.

(Cummins, 2008), Cummins, Cummins Driver Tips, 2008. 
II - 16

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III - 1

III. PROPOSED AMENDMENTS

In this chapter, we discuss the key requirements of the proposed amendments to the 

regulation for mobile CHE at ports and intermodal rail yards. This chapter begins with a 

general summary of the proposed amendments to the regulation, and each major 

requirement of the proposed amendments is discussed and explained. Unless 

otherwise noted herein, all references to mobile CHE include mobile CHE at ports and 

intermodal rail yards, as defined in the current regulation.

A. Summary of the Proposed Amendments to the Regulation

The complete text of the proposed amendments to the regulation for Mobile Cargo 

Handling Equipment at Ports and Intermodal Rail Yards is included in Appendix A. The 

proposed amendments have been developed to provide CHE owners/operators with 

additional flexibility when complying with the regulation while using BACT to reduce the 

general public’s exposure to diesel PM and NOx emissions from mobile CHE. 

Amendments are also being proposed to maintain the anticipated risk reduction with the 

introduction of Tier 4 engines, enable the more successful use of retrofits, and provide 

clarification of the regulatory language. The proposed amendments address several 

areas including retrofit requirements, operational requirements, emission standards, 

compliance provisions, definitions, and other clarifying language.

Retrofit Requirements: 

• allow an additional two years of annual extension for equipment for which there 

are no VDECS available, 

• add safety as a factor when considering VDECS availability,

• allow more time for extension applications,

• require equipment with a “No VDECS Available” extension to be brought into 

compliance within 6 months of a VDECS becoming available, and

• allow an experimental extension regardless of VDECS availability if it supports 

generating data for verification.

Operational Practices:

• allow a two year extension for a limited number of low-use equipment (200 

annual hours of operation or less), 

• allow transfer of non-yard truck equipment for which BACT has been applied, 

• allow replacement of an engine that fails while under warranty to be replaced 

with a like engine regardless of the current emissions standard,

• allow rental of non-compliant equipment when there are manufacturer delays for 

the delivery of purchased compliant equipment, and

• require CHE opacity monitoring to ensure that engines meet original design 

specification or VDECS manufacturers’ smoke opacity limits.
III - 2

Emission Standards:

• treat Tier 4 engines certified to Alternate PM Standards as Tier 3 engines, and

• allow alternative technologies that demonstrate emissions equivalency. 

Compliance Requirements:

• allow compliance schedule modification to bring older engines into compliance 

first, and

• exempt CHE equipment at rural low-throughput ports.

Clarify language and intent:

• modify several existing definitions and add others to support the amendments, 

and

• clarify that equipment brought onto a port or intermodal rail yard solely for 

construction or unexpected repairs are exempt from the regulation. 

These amendments are explained in the following sections. 

B. Discussion of the Proposed Amendments to the Regulation

The following paragraphs provide a plain English description of each of the proposed 

amendments. This discussion has been grouped by the general areas of the regulation 

where the amendments apply.

1. Applicability

Staff is proposing to add a sentence to the Applicability section, title 13, CCR 

section 2479(b) which clarifies that the regulation is applicable only to equipment 

powered by diesel fueled (compression ignition) engines and not gasoline or propane 

fueled (spark ignition) engines. Diesel fueled engines are certified to a test cycle 

referred to as the diesel cycle and gasoline and propane fueled engines are certified to 

a test cycle referred to as the Otto cycle. Consequently, the added sentence states that 

CHE powered by engines certified to a cycle other than the diesel cycle, such as the 

Otto cycle, are not subject to the CHE Regulation. 

2. Exemptions

Staff is proposing several new exemptions to title 13, CCR section 2479(c) to provide 

additional clarity to the CHE Regulation and flexibility to owners/operators. The 

proposed amendments also include a reorganization of the exemption paragraphs to 

delete repetitious language.

a. Construction Equipment and Equipment for Unexpected Repairs -

Section (c)(1)(D) and (G)

The proposed amendments would clarify the intent of the current regulation by including 

an exemption for equipment used solely to support construction activities at a port or 
III - 3

intermodal rail yard and an exemption for rented, leased, or contracted equipment 

brought onto a port or intermodal rail yard to perform repairs that are not anticipated. 

These are repairs that are not routine or predictable. These equipment types were 

never intended to be covered by the CHE Regulation and have been excluded based on 

the definition of cargo handling equipment. 

b. Personnel and Fuel Delivery Vehicles - Section (c)(2)

An exemption for personnel and fuel delivery vehicles has been clarified. Again, these 

vehicles were never intended to be covered by the CHE Regulation. 

c. Warranty Replacement of Engines - Section (c)(3)(A)

Under the current CHE Regulation, if an engine fails while still under warranty but a new 

engine standard has come into effect since the time of purchase, the engine must be 

replaced with an engine meeting the new standard. Staff is proposing to allow an 

owner/operator to replace the engine with the warranty engine, even if new engine 

emissions standards are in place at the time of replacement. This amendment is 

needed to protect owners from losing the value of their new engine warranties.

d. Transferring Non-Yard Truck Cargo Handling Equipment from One Terminal 

to Another - Sections (c)(3)(B) and (k)

The current CHE Regulation requires that any CHE that was not part of the in-use fleet 

as of January 1, 2007, that is brought onto a port or intermodal rail yard must meet the 

requirements of newly purchased, leased, or rented equipment. Consequently, any 

non-yard truck CHE that is powered by a diesel engine that does not meet current 

engine emission standards cannot be moved from an owner/operator’s terminal in one 

part of California to their terminal in another part of California. This results in added 

expense if an owner/operator must purchase additional equipment to meet operational 

needs at one facility while equipment sits idle at another facility. 

Staff is proposing an amendment that would allow owners/operators to transfer 

non-yard truck CHE equipment from one location in California to another location in 

California through an application/approval process. This exemption is needed in cases 

where there is unused equipment at an owner/operator’s one terminal and the need for 

that equipment at another of the same owner/operator’s terminal. This amendment 

provides a process by which the equipment can be approved for the move. Application 

requirements specified in a proposed new section (k), Executive Officer Approval to 

Transfer Non-Yard Truck Mobile Cargo Handling Equipment Between Two Facilities, 

include:

• Both the originating and destination facilities must be in California and must be 

under common control. 

• The move must not be used to meet compliance requirements at either of the two 

facilities. 
III - 4

• The equipment must be brought into compliance with the in-use requirements 

prior to it being put into use at the destination facility.

• The Executive Officer finds no significant adverse public health impact due to the 

action. The added regulatory language provides parameters to be considered in 

evaluating the public health impact.

3. Definitions

Staff is proposing to add 13 definitions in the Definitions section, title 13, CCR 

section 2479(d) to the current regulation. These 13 definitions support the other 

proposed changes to the CHE Regulation, including the exemptions previously 

discussed, proposed clarification of existing definitions, and other proposed changes 

that are discussed in the following sections. The proposed definitions listed were 

developed by staff, with input from the public during workshops and workgroup 

meetings. Staff working on the proposed amendments to the regulation also 

coordinated with staff working on other diesel PM regulations to provide consistency 

where it is practical. 

The new definitions are listed below by category:

Definitions added to support the proposed clarifications to existing definitions include; 

“cargo”, “Class I Railroad”, and “water-borne commerce.” 

Definitions added to support the proposed modifications to the exemptions include:

“two-year average annual cargo throughput”, “construction activities”, “low-throughput 

port”, “Otto cycle engine”, “urban area”, and “warranty period.”

Definitions added to support proposed changes to the requirements include: “Alternate 

PM Standard”, “Family Emissions Limits (FEL)”, “opacity”, and “safe.” 

Staff is also proposing to clarify the following seven definitions: “compression ignition 

engine”, ”intermodal rail yard”, “newly, purchased, leased, or rented cargo handling 

equipment”, “owner or operator”, “port”, “retirement or retire”, and “rubber-tired gantry 

crane or RTG crane.” These definitions were clarified based on questions that had 

come up during the first few years of implementation of the CHE Regulation.

4. Requirements

Staff is proposing a number of changes to the Requirements section, title 13, CCR 

section 2479(e) of the current regulation. Some of these changes are non-substantive 

changes to clarify the language while others are to provide flexibility. Some of the 

amendments apply to newly purchased, leased or rented equipment, some apply to inuse equipment, and some apply to both. Staff is also proposing to add requirements for 

an opacity based monitoring program. Additionally, staff is proposing to require engines 

certified to FEL Tier 4 alternate PM standards to be treated similarly to Tier 3 engines 

and require retrofit with highest level verified control within one year of purchase, lease, 

or rental. The proposed amendments to the compliance requirements of the current 

regulation are discussed below.
III - 5

a. Treat Engines Certified to the FEL Alternate PM Standard as a Tier 3 

Engine – Sections (e)(1)(B)2.a., (e)(3)(B)1.a., b., and c., 2.a., b., and c., 

and 3.a., b., and c.

When the CHE regulation was initially adopted in 2005/2006, ARB expected that most 

owners/operators electing to comply with the regulation’s performance standards would 

install new engines meeting the primary Tier 4 PM emission standards. ARB 

subsequently discovered, however, that at least some, if not many, non-yard truck 

equipment are equipped with engines certified to the less stringent alternative PM and 

NOx standards based on family emission limits (Tier 4 FEL engines). The Tier 4 FEL 

engine PM standard is at least ten times dirtier the primary Tier 4 PM standard and is 

similar in stringency to the primary Tier 3 PM standard.

To address this problem, staff is proposing to add language clarifying ARB’s initial intent 

– that engines meet the primary Tier 4 engine emission standards, not the FEL 

standards. The amendments specifically require that engines must meet the primary 

standards set forth at title 13, CCR section 2423(b)(1)(B). Additionally, staff is 

proposing that to the extent that owners/operators choose or are compelled to use FEL 

Tier 4 engines, because of limited availability of primary Tier 4 engines in the 

marketplace, such engines must be retrofitted with the highest level VDECS within one 

year of purchase, lease, or rental. As mentioned above, the Tier 4 FEL PM standards 

are essentially primary Tier 3 PM standards and do not achieve the PM emission 

reductions initially anticipated with the adoption of the CHE Regulation. The 

amendments insure that originally anticipated emission reductions are achieved while 

concurrently providing owners/operators with flexibility to meet short-term operational 

needs by using engines meeting less stringent emission standards.

b. Demonstration of Emissions Equivalency – Sections (e)(1)(B)4.d., 

(e)(3)(B)1.d., 2.d., and 3.d. and (n)

Staff is proposing an amendment that would allow alternative technology developed 

with an engine certified to a previous standard to be purchased, leased, or rented as 

new equipment if it can be demonstrated that the power system provides the same 

emission reductions that the use of an engine certified to the current, more stringent

standard would achieve with conventional technology. The proposed language requires 

a demonstration that the power system meets the interim or final Tier 4 NOx and PM 

off-road engine emissions standards for the rated horsepower and current model year. 

The amendment is needed to allow the use of hybrid and other energy efficient loweremission power systems that have been developed with Tier 3 engines after Tier 4 

engine emission standards have become effective. These would only be allowed if they 

achieve the same emission reductions as an engine certified to the current standards.

Five methods are provided in a new section (n), Test Methods, for determining this 

emissions equivalency. These are:

• results from using test methods specified in proposed new section (n), or an 

alternative test method approved by the Executive Office,
III - 6

• certification test data or other emissions test data of the engine manufacturer for 

that engine

• emissions test data derived from another in-use engine that has a similar 

configuration or use,

• emissions test data used to verify an emission control device through ARB’s 

Verification Program, or

• emissions test data used for U.S. EPA certification of a system for remanufacture 

to a cleaner standard.

The addition of approved test methods was necessary to support the proposed 

amendment to allow the use of equipment that could be demonstrated to meet the 

required emissions standards. 

 

c. Rental of Non-Compliant Non-Yard Truck Equipment due to Manufacturer 

Delivery Delays – Section (e)(1)(B)5.

The off-road engine emissions standards began transitioning from Tier 3 engine 

emissions standards to Tier 4 standards in January 2011, with Interim Tier 4 (Tier 4i) 

standards for engines with maximum horsepower of 175 and higher becoming effective 

early 2011. Tier 4i standards for engines from 75 to 175 horsepower will become 

effective in 2012. While the standards take effect at the beginning of the year, CHE with 

engines certified to Tier 4i may not be available until later in the year. Consequently, 

owners/operators who wish to buy new equipment with Tier 4i engines may experience 

manufacturer delivery delays. If an owner/operator needs the equipment prior to the 

anticipated delivery date, they would need to rent a piece of compliant non-yard truck 

equipment. However, compliant rental equipment, with engines meeting the Tier 4i 

standard, may not be available. 

This amendment would allow an owner/operator that has purchased new equipment but 

has not received it due to manufacturer delays to rent equipment not meeting the 

current standard for up to six months or until delivery of the compliant equipment, 

whichever is later. The new proposed regulatory language specifies an application 

process, which requires that the CHE owner/operator provide to the ARB Executive 

Officer information about the equipment purchased, including the predicted delivery 

date, and documentation from representatives of equipment and/or engine 

manufacturers supporting the claim of non-availability of compliant rental equipment and 

providing the anticipated date of availability. This amendment would allow 

owners/operators to meet their operational needs while waiting for the delivery of new 

equipment. 

d. Opacity Based Inspection Program – Sections (e)(2)(A)4., (e)(3)(A)3., and 

(i)(1)(D)

Engine exhaust opacity testing has been used for two decades to control excessive 

smoke emissions from heavy-duty on-road diesel trucks and buses. Truck and bus 

fleets are required to test their fleets for engine exhaust opacity on an annual basis and 
III - 7

repair engines that do not meet the set maximum opacity limit. Similarly, opacity testing 

is being used by VDECS manufacturers as a soot level indicator to determine whether

or not an engine is too dirty for their filter to operate properly. Currently proposed 

amendments to the ARB Verification Procedure, title 13, section 2700, would require 

that VDECS manufacturer set a maximum engine-out exhaust opacity level for their 

verified device. 

The amendment proposed here would require CHE fleets to measure the engine-out 

exhaust opacity of all CHE on an annual basis. The requirement would include a 

phase-in period that would allow time for fleets to obtain opacity meters and have their 

mechanics trained to perform the test. Training is available at community colleges. 

Specifications for opacity meters allowed for use are also included. Those fleets that 

choose not to have their mechanics perform the test could hire a third party to test their 

engines. Engines with VDECS installed could schedule their opacity test to coincide 

with normally scheduled VDECS removal for cleaning and inspection.

The amended language sets maximum opacity limits for non-retrofitted engines based 

on a correlation of opacity with measured PM emissions developed by ARB. Engines 

for which VDECS are installed would need to meet the limits set by the VDECS 

manufacturers for the verified device. Testing procedures are included in the amended 

language. Similar to the on-road engine fleet rule, engines that test dirtier than the 

maximum opacity limit would need to be repaired such that they meet the engine 

standards or the engine-out emission limits for the VDECS. Owners/operators will need 

to include the opacity test results as part of their on-site recordkeeping, as specified in 

proposed new section (i)(1)(D).

This amendment is needed to help the early identification of engine maintenance issues 

that result in excessive exhaust soot. This excess soot can result in higher than design 

emissions. This monitoring test can also identify failure of aftertreatment controls that 

are part of the certified engine system. These additional recordkeeping requirements 

would allow ARB to verify that the annual opacity testing is being conducted.

e. Modification of Compliance Schedule to Bring Older Engines into 

Compliance First- Section (e)(3)(C)1.c.

The compliance schedules in the CHE Regulation organizes the engines in fleets into 

model year groups and then requires a certain percentage of each group to be brought 

into compliance each year. In general, compliance for the older model year groups is 

initiated earlier than that for the newer model year groups. However, the phased 

compliance schedules overlap such that a certain number of newer model year engines 

are required to comply before all of the older model year engines have been brought 

into compliance. This amendment would allow owners/operators to modify their nonyard truck equipment engine compliance schedule such that older model year engines 

(that are not required to comply until later) are brought into compliance in place of 

newer model year engines (that are otherwise required to comply earlier). The newer 

engines would then be required to meet the compliance dates initially established for
III - 8

older engine compliance. The total number of engines that must come into compliance

each year for a specific fleet, however, would not change under the proposed 

amendment. This amendment is the result of a request by owners/operators that 

wanted to replace all of their older equipment before bringing their newer equipment into 

compliance. 

5. Compliance Extensions

Staff is proposing a number of changes to the Compliance Extensions section that is 

presented in title 13, CCR section 2479(f) of the current regulation. Staff’s proposed 

amendments for compliance extensions include:

• adding an additional two years to the “No VDECS Available “ compliance 

extension for non-yard truck equipment, 

• allowing owners/operators to file an extension request closer to the compliance 

deadline,

• requiring the compliance of an engine with a “No VDECS Available” extension 

within six months of being notified by ARB that a safe and feasible VDECS has 

become available,

• clarifying that reasons for determining that there are no VDECS available include 

safety considerations, 

• expanding the experimental controls extension to include cases where the 

installation is necessary to obtain data for verification regardless of whether there 

are other VDECS available, and 

• adding a two-year annual compliance extension for a limited number of non-yard 

truck equipment that operate less than 200 hours annually. 

These amendments are discussed in more detail below.

a. No Verified Diesel Emission Control Strategy- Section (f)(2)

The current regulation allows an annual compliance extension to be granted for two 

years for equipment for which there are no VDECS available. Staff is proposing to allow 

CHE owners/operators to apply for two additional one-year compliance extensions if the 

owner/operator can continue to demonstrate that there is no VDECS available for their 

equipment. These additional extension years are being proposed to provide 

compliance flexibility for specialty equipment for which VDECS are not yet verified. 

There are specialty equipment that is not frequently used but is expensive to replace. 

This may allow additional VDECS to become verified for this equipment. If VDECS do 

not become available, this adds an additional two years of life to this equipment. 

b. Allow Owners/Operators to Request Compliance Extensions Closer to the 

Compliance Date- Sections (f)(2)(A) and (3)(A)

Staff is also proposing to provide owners/operators with additional time before having to 

file an extension application. The current regulation requires owners/operators to 

request an extension six-months prior to the compliance deadline. The proposed 
III - 9

amendments would allow owners/operators to request extensions as late as 60 days 

prior to the compliance deadline. This would allow owners/operators more time to 

determine if there are VDECS available for their equipment or if there is an experimental 

control available. This provides more compliance flexibility without impacting emission 

reductions.

c. Clarify that Safety is a Consideration for VDECS AvailabilitySections (f)(2)(A)4., (f)(3)(B), and (f)(3)(D)

Staff proposes to add language to the “No VDECS Available” extension to clarify that 

safety is a consideration in determining if a VDECS is available for equipment. Similar 

clarifying language was also added to the section allowing for the use of experimental 

controls when VDCES are unavailable. This is a clarifying amendment. The safe 

operation of a VDECS has always been a consideration in determining VDECS 

availability. 

d. Require Retrofit of an Engine with a “No VDECS Available” Extension 

within Six Months of a VDECS Becoming Available-Section (f)(2)(B)

Staff is proposing to require that if, at any time while a “No VDECS Available” extension 

is in effect, a VDECS becomes available for an engine, an owner/operator must install 

the VDECS, or otherwise bring the engine into compliance, within six months of being 

notified by ARB that a VDECS has become available. This requirement is already 

included in section (e)(1)(B)3 which describes the requirements for the installation of 

VDECS on new equipment. This amendment clarifies that this requirement also applies 

to in-use equipment.

e. Allow Experimental Control Extension in Cases where Data is Necessary 

for Verification-Section (f)(3)

Staff is proposing to add language that would allow an extension to be granted for the 

use of a diesel emission control strategy that is not verified if the installation is 

necessary for collecting data to support verification for that control strategy. This would 

be granted regardless of whether there were other VDECS available for the equipment. 

This would allow the verification of a larger number of controls. This amendment was 

proposed to allow more opportunity for the verification of additional control strategies. 

f. Non-yard Truck Equipment Operated Less Than 200 Hours AnnuallySection (f)(6), (i)(2)(I), and (j)(3)(F)

Staff is proposing adding a low-use compliance extension. This would allow 

owners/operators with equipment that operates less than 200 hours per year a two-year 

compliance extension. This extension may be limited, at the Executive Officer’s 

discretion, to 2 percent of a fleet or two pieces of non-yard truck equipment, whichever 

is greater. This amendment was proposed to allow limited use of back-up equipment 

that is kept for use when another piece of equipment stops operating. Maintaining this 
III - 10

back-up equipment is essential for keeping a terminal or rail yard operating when a ship 

comes into dock or a train into the rail yard for loading or unloading. Additionally, it may 

be used for specialty equipment that is used infrequently but would be expensive to 

replace.

The following requirements would need to be met for this extension:

• install a non-resettable hour meter on the low-use engine,

• submit an application 60 days prior to the compliance deadline,

• identify the engine by manufacturer, serial number, model year, and engine 

family and series, 

• report hours of operation annually, as specified in proposed new section (j)(3)(F), 

and

• maintain record of engine use, as specified in proposed new section (i)(2)(I).

Owners/operators must provide documentation from the previous year that the engine 

had operated less than 200 hours. Since the hour meter may not have been on the 

engine the previous year, other methods for determining the previous year’s hours are 

allowed. These include fuel records or some other credible method upon approval of 

the Executive Officer. Owners/operators must also identify their fleet size. 

The Executive Officer would base the decision regarding limiting the number of 

extensions on an evaluation of the impact on public health. The parameters to consider 

would be the numbers of equipment requested, the hours of operation, estimated 

emissions levels, and the proximity of the equipment to off-site residences.

Amended section 2479(i)(2) specifies the information that must be kept in the vehicle to 

document that it is operating within the requirements of the low-use extension. This 

would allow ARB to verify that the equipment is in compliance with the requirements of 

the low-use extension. The proposed amendments would add annual reporting 

requirements regarding the operating hours for any equipment that are operating under 

the proposed low-use extension. These requirements are added to allow ARB to 

maintain records on equipment operating under this extension. 

In addition, this amendment would require that owners/operators notify ARB if engine 

operation exceeds 200 hours, and the owner/operator must stop operating the engine 

until it is brought into compliance with the in-use compliance requirements. 

6. Exempt Equipment at Low-Throughput Ports in Rural Areas - Section (l)

Staff is proposing to add a paragraph to exempt from the entire CHE Regulation any 

CHE equipment operating at low-throughput ports located in rural areas. The port must 

be at least 75 miles from an urban area, as defined by the U.S. Census Bureau.

(CB, 2010) An urban area is defined as containing 50,000 or more people. These 

values were chosen to represent a rural area. The port must have a two-year average 

annual throughput of less than one million tons excluding petroleum products. 

Petroleum products are excluded because they do not use CHE. The two-year average 
III - 11

annual throughput would be evaluated every year using the arithmetic average of 

throughput (as reported by the U.S, Army Corps of Engineers Waterborne Commerce 

Statistics Center) for the previous two years. A two-year average would be used to 

allow for an occasional high production year. The only California port that presently

meets, and is expected to meet in the foreseeable future, these criteria is the Port of 

Humboldt Bay. If the two-year average annual throughput exceeds the limit of one 

million tons or the surrounding community’s population grows to 50,000 or more then, 

within six month of the notification of exceeding the limit, the CHE owners/operators at 

the port would be required to submit a plan showing how they would come into 

compliance with the CHE Regulation within three years.

This amendment was needed for the Port of Humboldt Bay, the only California port that 

meets the throughput and location requirements. The North Coast and Humboldt Port 

Authority requested the exemption because compliance with the CHE Regulation would 

be economically infeasible for the businesses operating at the port. Additionally, the 

North Coast is in ozone attainment and does not contribute to any downwind ozone 

violations.
III - 12

REFERENCES:

(CB, 2010) Federal Register, Department of Commerce, Proposed Urban Area Criteria 

for the 2010 Census; Notice, August, 2010.
IV - 1

IV. AIR EMISSIONS AND HEALTH IMPACTS FROM PROPOSED AMENDMENTS

This chapter presents the most recent emissions inventory for diesel-fueled cargo CHE 

engines operating at ports and intermodal rail yards in California, the emissions 

impacts of the proposed amendments, as well as a discussion on the potential health 

risks that may occur due to exposures to emissions from CHE.

A. Emissions from Cargo Handling Equipment

Since the original CHE emissions inventory was developed (ARB, 2005a), a number of 

new data sources became available. A revised 2006 CHE baseline emissions 

inventory has been developed using those new data sources. The new sources 

include:

• data associated with CHE regulatory reporting requirements,

• annual emission inventories developed for the ports of Los Angeles and Long 

Beach (2005 through 2009),

• emissions inventory for the Port of San Diego (2006),

• emissions inventory for the port of Oakland (2005), and 

• rail yard health risk assessments (2005).

Baseline emission estimates of diesel PM and NOx for the year 2006 were developed 

and emission projections to 2014 and 2020 were developed using estimates of 

expected growth, effects of the economic downturn, and equipment turnover. In 

addition, staff updated key assumptions about engine load and annual activity. These 

updates, as well as the impacts from the proposed amendments are presented below. 

Details of the emissions inventory methodology and data sources can be found in 

Appendix B. The updated inventory and emissions model, Cargo Handling Emissions 

Inventory Model, or CHEI, and the CHEI Working Files are posted on ARB’s web site 

at http://www.arb.ca.gov/ports/cargo/cheamd2011.htm. (ARB, 2011f), (ARB,2011o) 

Table IV-1 presents the equipment population at ports and intermodal rail yards used in 

the original 2005 inventory and the updated 2006 baseline inventory for CHE. 
IV - 2

Table IV-1: Equipment Population for Baseline Inventory

Equipment Type Original 2005 Inventory Updated Inventory

Yard Tractor 2,441 2,368

Forklift 485 778

Container Handling 

Equipment 559 525

Crane 360 

(All Cranes)

342 

(RTG Only)*

Construction Equipment 135 195

Other General Industrial 

Equipment 46 164

Total 4,026 4,372

*Mobile cranes other than RTG cranes are now covered by either the Off-Road In-Use Equipment 

Regulation or the On-Road Truck and Bus Regulation. 

As shown in Table IV-1, approximately 4,400 pieces of CHE were operating at ports and 

intermodal rail yards in California in 2006. Of these, approximately 55 percent are yard 

trucks.

Updated 2006 Baseline Emission Estimates for Diesel-fueled CHE

The updated statewide 2006 diesel PM and NOx emissions inventory for cargo handling 

equipment are presented in Table IV-2. The updated 2006 baseline emission inventory 

for diesel-fueled CHE equipment is approximately 0.54 tons per day or 196 tons per 

year of diesel PM emissions and 13.4 tons per day of NOx, statewide. Yard trucks 

make up the majority of the emissions, representing approximately 55 percent of the 

diesel PM emissions and 52 percent of the NOx emissions for CHE. Combined, yard 

trucks, container handling equipment (top picks, sides picks, etc.), and cranes are 

responsible for approximately 85 percent of the emissions for all pollutants.

Table IV-2: Estimated Statewide 2006 Cargo Handling Equipment Emissions

Equipment Types

Updated 2006 Baseline Emissions

(tons per day)

PM NOx

Construction Equipment 0.046 1.03

Container Handling Equipment 0.094 3.06

Forklift 0.032 0.56

Other General Industrial 

Equipment

0.030 0.54

RTG Crane 0.038 1.23

Yard Tractor 0.298 6.98

Totals 0.538 13.4
IV - 3

The ARB staff also updated the district-specific emissions associated with CHE. The 

allocation of these estimates is based on the location of the port or intermodal rail yard. 

Table IV-3 presents a district-by-district estimate of emissions from CHE for the 2006 

baseline.

Table IV-3: Estimated 2006 Cargo Handling Equipment Emissions

by District (tons per day)8

District PM NOx

Bay Area AQMD 0.080 1.91

Yolo-Solano AQMD 0.001 0.02

San Diego County APCD 0.003 0.07

San Joaquin Valley Unified APCD 0.016 0.30

South Coast AQMD 0.436 11.06

Ventura County APCD 0.002 0.04

North Coast Unified AQMD 0.0009 0.02

Note: The following districts did not have emissions allocated to them; Amador, Antelope Valley, 

Butte, Calaveras, Colusa, El Dorado, Feather River, Glenn, Great Basin Unified, Imperial, Kern, 

Lake, Lassen, Mariposa, Mendocino, Modoc, Monterey Bay, Unified, Northern Sierra, Northern 

Sonoma, Placer, Sacramento, San Luis Obispo, Santa Barbara, Shasta, Siskiyou, Tehama, and 

Tuolumne. (The numbers may not match the statewide totals in Table IV-2 due to rounding.)

Projected 2014 and 2020 Emission Estimates for Cargo Handling

Equipment

The updated baseline (without the CHE Regulation) projected emission estimates for 

the years 2014 and 2020 are presented in Table IV-4. These estimates are based on 

updated annual growth rates which have been adjusted to reflect the impacts of the 

recent economic downturn. 

 8 The total emissions may vary slightly from the values shown in Table IV-2 due to rounding.
IV - 4

Table IV-4: Cargo Handling Equipment Engines Projected Year 2014 and 2020 

Baseline Emission Estimates (Without the CHE Regulation)

Equipment 

Types

2014 Emission, (tons 

per day)

2020 Emission, (tons 

per day)

Diesel PM NOx Diesel PM NOx

RTG Cranes 0.03 0.93 0.02 0.71

Construction 

Equipment 0.04 0.86 0.04 0.78

Forklifts 0.03 0.45 0.02 0.41

Container 

Handling 

Equipment

0.07 1.97 0.05 1.32

Other 

General 

Industrial 

Equipment

0.02 0.42 0.02 0.38

Yard Trucks 0.11 2.65 0.04 1.08

Total 0.30 7.3 0.20 4.7

Values have been rounded

Projected Equipment Inventory Growth

To forecast the impact of the recession on CHE activity, three recovery scenarios were 

considered to encompass the possible rates of growth of “fast”, “slow”, and “average”. 

These are shown in Figure IV-1. The fast recovery scenario assumes that total activity 

would return to projected historically average levels in 2017 and then grow at the 

historical average rate. For the slow recovery scenario, staff assumed that activity 

would be permanently depressed relative to historical levels, but continue to grow at 

historical rates. The average scenario is the average of the fast and slow scenarios. 

Given the uncertainty in forecasting emissions after such a deep recession, staff relied 

on the average recovery scenario. This scenario, for the years of interest for these 

regulatory amendments, was used for the recent ocean-going vessel regulation and is 

also supported by the most recent San Pedro Bay forecasts. The methodology is 

consistent with the On-Road Truck and Bus and Off-Road In-Use Equipment rules.
IV - 5

Figure IV-1: Economic Recovery Scenarios

The growth rates were aggregated according to ports and rail yards in the South Coast, 

San Diego, Bay Area, and Hueneme and are shown in Figure IV-2 below and in 

Appendix B. The growth rates are composed of two parts, the equipment inventory and 

equipment activity level. Staff assumed that both the equipment inventory and the 

equipment hours of use will increase, so the equipment inventory will grow at a factor 

less than this growth rate, with the increase in hours of use accounting for the 

remainder. The growth rates for the Bay Area and the South Coast range from 140 to 

175 percent in 2020. The equipment inventory projections result in approximately a 

140 percent growth compared to the 2006 inventory. 
IV - 6

Figure IV-2: Growth Factors for California Ports

B. Emission Impacts from the Proposed Amendments

Statewide Emission Impacts from Proposed Amendments 

Staff estimated the projected emission impacts from the current adopted CHE 

Regulation and from the proposed amendments for both statewide PM and NOx. The 

increased reductions in the years following the start of CHE Regulation implementation 

include benefits from the use of equipment retirement and replacement as the preferred 

compliance options used to date. Overall, we estimate a net impact of the amendments 

to be 5 percent more diesel PM reductions and 2 percent less NOx reductions between 

2012 and 2020 as compared to reduction estimates for the current rule. As seen in 

Figure IV-3 and IV-4, the proposed amendments will result in slightly less reductions of 

diesel PM and NOx emissions in 2012 through 2016 than originally anticipated. This is 

due to the delay in emission reductions associated with the proposed low-use and the 

“No VDECS Available” extensions. However, other proposed amendments will result in 

slightly more reductions in diesel PM in 2015 and beyond. These additional PM 

reductions are due to the Tier 4 Alt PM Engine requirement to retrofit with VDECS after 

one year of in-use service. These retrofits reduce PM but do not provide a NOx benefit. 
IV - 7

Figure IV-3: Projected Statewide PM Emission Estimates from CHE

Note: Baseline is without CHE Rule

Figure IV-4: Projected Statewide NOx Emission Estimates from CHE

Note: Baseline is without CHE Rule
IV - 8

A comparison of the Statewide emissions inventories for the 2006, 2011, 2014 and 

2020 calendar years is provided in Table IV-5 below for the baseline, current adopted 

CHE Regulation (noted as “Rule”), and the proposed amendments. It is apparent from 

this table that the statewide emissions inventories for the amendments compared to the 

rule are the same within about 3 percent for each of the reported years. The exception 

is benefit of increased reduction in the PM inventory in 2020 due to the amendment to 

require the retrofit of Tier 4 Alt PM standard engines.

Table IV-5: Emissions Inventory Statewide (tons per day)

Statewide

Calendar 

Year

PM (tons per day) NOX (tons per day)

Baseline* Rule Amendments Baseline* Rule Amendments

2006 0.54 0.54 0.54 13.4 13.4 13.4

2011 0.35 0.18 0.19 8.0 5.9 5.9

2014 0.30 0.08 0.08 7.3 4.2 4.3

2020 0.20 0.08 0.06 4.7 3.2 3.1

*Without Rule

The inventories for the South Coast Air Basin and the San Francisco Air Basin are 

provided in Tables IV-6 and IV-7. The impacts on these two air basins are similarly very 

small. 

Table IV-6: Emissions Inventory for South Coast Air Basin (tons per day)

South Coast Air Basin

Calendar 

Year

PM (tons per day) NOX (tons per day)

Baseline* Rule Amendments Baseline* Rule Amendments

2006 0.44 0.44 0.44 11.1 11.1 11.1

2011 0.28 0.15 0.15 6.6 4.9 4.9

2014 0.24 0.07 0.06 5.9 3.4 3.5

2020 0.15 0.06 0.05 3.7 2.6 2.5

*Without Rule

Table IV-7: Emissions Inventory for San Francisco Air Basin (tons per day)

San Francisco Air Basin

Calendar 

Year

PM (tons per day) NOX (tons per day)

Baseline* Rule Amendments Baseline* Rule Amendments

2006 0.08 0.08 0.08 1.9 1.9 1.9

2011 0.05 0.03 0.03 1.1 0.9 0.9

2014 0.05 0.01 0.01 1.1 0.7 0.7

2020 0.03 0.01 0.01 0.8 0.5 0.5

*Without Rule

The PM and NOx emission reductions due to the current adopted CHE Regulation and 

the emissions reductions impacts due to the proposed amendments are tabulated for 
IV - 9

the years 2006 through 2020 in Table IV-8 below. The total emission impacts from the 

proposed amendments are estimated to be a reduction of approximately 0.08 tpd of PM 

and a small increase of 0.4 tpd of NOx, as seen in Table IV- 8 below. This is 5 percent 

additional PM reduction and 2 percent loss in NOx benefits, as shown in Table IV-9 

below. As seen in Table IV-8, the initial delay in PM reductions due to the additional 

two years of compliance extensions is recovered when the requirement to apply VDECS 

to the FEL engines becomes effective. Consequently, the net emissions impacts of 

these amendments over the 2012 to 2020 would be a small reduction in PM emissions 

and a slight increase in NOx emissions compared to the original rule. 

Table IV-8: Statewide Emission Reductions Attributable to the Existing CHE 

Regulation and Reductions Attributable to the Proposed Amendments

Calendar Year

Reductions Under the Rule

(tons per day)

Reductions due to the 

Amendments

(tons per day)

PM NOx PM NOx

2006 0.00 0.00 0.000 0.00

2007 0.02 0.37 0.000 0.00

2008 0.04 0.55 0.000 0.00

2009 0.06 0.65 0.000 0.00

2010 0.10 1.37 0.000 0.00

2011 0.17 2.15 0.000 0.00

2012 0.19 2.34 -0.005 -0.13

2013 0.22 2.77 -0.004 -0.12

2014 0.23 3.07 -0.001 -0.13

2015 0.22 3.02 0.004 -0.11

2016 0.21 2.75 0.012 -0.05

2017 0.19 2.50 0.018 0.02

2018 0.16 2.17 0.020 0.05

2019 0.14 1.84 0.020 0.05

2020 0.12 1.50 0.019 0.05

Total 2.08 27.05 0.084 -0.37

Note: Positive numbers indicate emissions reduction. Negative numbers indicate emissions increase.
IV - 10

Table IV-9: Total PM Emissions Reductions and NOx Emissions Increases Due to

Proposed Amendments

Reductions PM NOx

Tons %* Tons %*

Emissions Reduced

2012 to 2020 (Tons) 31 5.0% -135 -1.7%

Annual Average 

Reductions (Tons per 

Year)

3 5.0% -15 -1.7%

*As compared to predicted reductions for current regulation from 2012 to 2020 of 616 tons of PM and 

8,015 tons of NOx 

Emission Impacts on Port of Humboldt Bay

One of the proposed amendments will exempt small ports with a throughput of less than 

one million tons of cargo handled per year and which are located no closer than 

75 miles to an urban area. The Port of Humboldt Bay is the only port in California 

meeting these requirements. While CHE at the Port would be exempt for the CHE 

Regulation, the equipment with off-road engines would then be subject to the ARB’s OffRoad In-Use Regulation for diesel engines. The equipment with on-road engines would 

be subject to ARB’s On-Road Truck and Bus Regulation. The total number of CHE at 

the Port of Humboldt Bay is small and the proposed amendment will have an 

insignificant environmental impact. (ARB, 2011n) Shown below in Table IV-10 are the 

potential estimated emission differences for the port due to the proposed amendments. 

The difference in the compliance requirements for the equipment is presented in detail 

in Chapter V on the economic impacts of the proposed amendments. These emissions 

increases represent less than a 0.5 percent increase in PM and NOx emissions due to 

mobile sources in the North Coast, based on the Almanac Emissions Projection data 

published in 2009. (ARB, 2009) Additionally, this air district is in attainment of the State 

and federal ozone standards and does not contribute to violations of State or federal 

ozone standards for air districts downwind. Consequently, this is determined to be an 

insignificant emissions increase.
IV - 11

Table IV-10: Comparison of Port of Humboldt Bay Emissions Inventory: 

Subject to CHE Regulation Compared to Subject to Off-Road In-Use 

Equipment Regulation 

Controlling Regulation 2006-2020 (tons per day)

PM NOx

Without Amendment:

CHE Regulation 0.006 0.18

With Amendment:

Off-Road In-Use Regulation 0.013 0.32

Total Potential Difference

in Emissions 0.007 0.14

Greenhouse Gas Emission Impacts

The accelerated replacement of older technology engines occurring as a result of the 

CHE Regulation should reduce greenhouse gas emissions (GHG). However, some 

actions allowed by the proposed amendments could result in a slight delay in those 

reductions. Two of the proposed amendments allow CHE owners/operators to delay 

compliance with the regulation for a year or two, but that delay does not have a 

significant impact on projected emissions reductions. This is the case with emissions of 

GHGs as well. One of the amendments, the requirement for an opacity based 

maintenance program, could result in a reduction in soot levels from CHE. This 

amendment would require owners/operators to test the exhaust opacity of all their 

non-yard truck equipment annually. A check of engine opacity would alert mechanics to 

needed maintenance that would reduce exhaust soot levels contributing to the inventory 

of carbon black. Overall, these proposed amendments are not anticipated to result in 

any significant increase or decrease in GHG’s. However there is potentially a small 

decrease in carbon black emissions. 

C. Public Health Impacts from the Proposed Amendments

Reducing diesel PM emissions from CHE at ports and intermodal rail yards will have 

public health and environmental benefits. The proposed amendments will continue to 

reduce localized potential cancer risks associated with emissions from CHE and will 

continue to contribute to the reduction of the general exposure to diesel PM that occurs 

on a region-wide basis due to collective emissions from diesel-fueled engines. 

Additional benefits associated with the proposed amendments include further progress 

in meeting the ambient air quality standards for PM10, PM 2.5, and ozone, and enhancing 

visibility. 

The proposed amendments will result in a temporary delay in diesel PM reductions 

anticipated in 2011 through 2014 under the original rulemaking. However, the proposed 

amendments will provide additional reductions in PM in 2015 and beyond. The 

proposed amendments will also result in a small increase in NOx emissions from 2012 

through 2016 compared to the reductions estimated in the original rulemaking. Staff 
IV - 12

does not expect any significant adverse health impacts due to the delay in diesel PM 

reduction or the projected increase in NOx emission due to the very small magnitude of 

the emissions and the limited time period over which the emission “increase” will occur. 

This section examines the exposures and potential cancer health risks associated with 

PM emissions from diesel-fueled CHE at ports and intermodal rail yards. This 

discussion is a brief recap of the discussion of potential exposures and risk presented in 

the ISOR for CHE Regulation in 2005. (ARB, 2005a) ARB staff believes that the 

results from the risk assessment presented in that ISOR remain substantially 

unchanged and are still applicable to the proposed amendments to the CHE regulation 

as only negligible emission impacts are expected before 2014 and increased emission 

reductions will occur after that year. 

Exposures to Diesel PM

The diesel PM emissions from cargo handling equipment contribute to ambient levels of 

diesel PM emissions. Based on the updated emissions inventory for the 2006 baseline, 

there are about 4,400 pieces of diesel-fueled CHE operating at ports and intermodal rail 

yards in California. The majority of ports and intermodal rail yards are in urban areas 

and, in most cases, are located near where people live, work, and go to school. This 

results in exposures to diesel PM emissions from the operation of diesel-fueled cargo 

handling equipment. 

Because analytical tools to distinguish between ambient diesel PM emissions from CHE 

and that from other sources of diesel PM do not exist, we are unable measure actual 

exposures to emissions from diesel-fueled cargo handling equipment. However, 

modeling tools have been be used to estimate potential exposures. In 2004, ARB staff 

used dispersion modeling to estimate the ambient concentration of diesel PM emissions 

that result from the operation of cargo handling equipment at the Ports of Los Angeles 

and Long Beach. The potential cancer risks from exposures to these estimated ambient 

concentrations of diesel PM were then determined. The complete results from this 

study and additional details on the methodology used to estimate the health risks are 

presented in Appendix C of the ISOR prepared for the CHE Regulation in 2005. 

Because the emission changes due to the proposed amendments were very small and 

of limited duration, staff did not find it necessary to do a new dispersion modeling 

analysis and health risk assessment.

The annual diesel PM emission changes due to the proposed amendments at the Ports 

of Los Angeles and Long Beach are shown in Table IV-6 (Emissions Inventory for South 

Coast Air Basin). As shown in the table, the annual percent change in diesel PM 

emissions due to the proposed amendments range from 1 to 2 percent of the annual 

emissions at the ports. A reasonable approximation of the change in potential cancer 

risk due to the changes would be on the same order as the percent change in emission. 

Thus, staff finds that the potential cancer risk impact of the proposed changes are not 

likely to result in a significant adverse health impact near the Ports of LA and Long 

Beach. And, by inference, the proposed changes will not have an adverse impact at 
IV - 13

other ports since the greatest potential for adverse impacts are at these ports, based on 

the health risk assessments of the Ports of LA and Long Beach and for West Oakland. 

(ARB, 2006), (ARB, 2008) 
IV - 14

REFERENCES:

(ARB, 2005a) California Air Resources Board, Staff Report: Initial Statement of Reason 

for Proposed Rulemaking, Regulation for Mobile Cargo Handling Equipment at Ports 

and Intermodal Rail Yards, October, 2005.

(ARB,2011f) California Air Resources Board. “Cargo Handling Emissions Inventory

Model”, July, 2011.

http://www.arb.ca.gov/ports/cargo/cheamd2011.htm.

(ARB,2011o) California Air Resources Board. “Cargo Handling Emissions Inventory 

Model Working Files”, July, 2011.

http://www.arb.ca.gov/ports/cargo/cheamd2011.htm.

(ARB, 2011n) California Air Resources Board, “Humboldt Emissions Worksheet 

062311,” June 2011.

http://www.arb.ca.gov/ports/cargo/cheamd2011.htm.

(ARB, 2009) California Air Resources Board. Almanac Emission Projection Data, 

2009.

http://www.arb.ca.gov/app/emsinv/emssumcat_query.php?F_YR=2008&F_SEASON=A

&SP=2009&F_DIV=-4&F_AREA=DIS&F_DIS=NCU

(ARB, 2006) California Air Resources Board. Diesel Particulate Matter Exposure 

Assessment Study for the Ports of Los Angeles and Long Beach, Final Report. April 

2006. http://www.arb.ca.gov/ports/marinevess/documents/portstudy0406.pdf

(ARB, 2008) California Air Resources Board. Diesel Particulate Matter Health Risk 

Assessment for the West Oakland Community. December 2008. 

http://www.arb.ca.gov/ch/communities/ra/westoakland/documents/westoaklandreport.pd

f
V - 1

V. ECONOMIC IMPACTS FROM PROPOSED AMENDMENTS

In this chapter, we present the estimated costs, savings, and resulting economic 

impacts associated with implementation of the proposed amendments to the CHE

Regulation. The costs and savings presented are the estimated incremental costs and 

savings associated with the proposed amendments relative to the costs under the 

original CHE Regulation, which is the cost of industry compliance with the current CHE 

Regulation. 

A. Summary of Statewide Economic Impacts

ARB staff estimates that the proposed amendments will result in a net savings of 

approximately $1 to $2 million to industry between 2011 and 2020. The proposed 

amendments are listed in Table V-1 below with a notation as to whether they would 

result in costs or a savings. Only two of the proposed amendments are anticipated to 

result in additional costs whereas the others either result in savings or no impact. The 

estimated cost or savings associated with each amendment is also shown in Table V-1. 

The savings anticipated from several of the amendments are difficult to estimate with a 

high level of confidence due to uncertainty as to how often the action allowed by the 

amendment would be needed. However, estimates were made and the assumptions 

are discussed in this chapter. The total net savings corresponds to about $100,000 to 

$200,000 annually on average for the years 2011 through 2020, expressed in 2011 

dollars. 

Table V-1: Costs or Savings Associated With Proposed Amendments over Years 

2011 through 2020 in 2011 Dollars

Amendment Description Costs Savings Costs/(Savings)

($ millions)

1. Additional time for equipment with no VDECS available X ($4.3)

2. Add safety as provision for no VDECS available extension 0

3. Low-use compliance extension X ($3.3)

4. Exempt equipment at low-throughput ports in NOx-exempt 

areas not within 75 miles of an urban area X ($1.0)

5. Require CHE opacity testing and set maximum allowable 

levels X $2.1 to $3.1

6. Allow demonstration of emissions equivalency X

7. Non-yard truck equipment transfers X ($1.4)

8. Manufacturer delays for new equipment 0

9. Warranty engine replacement X

10. Treat Tier 4 engines certified to FEL Alt PM emissions 

standards as Tier 3 engines X $6.0

11. Add flexibility to extension for experimental diesel PM 

emissions control X 0

12. Allow compliance schedule swapping NA* NA* 0

Net Costs/(Savings) X ($1) to ($2)

*Not applicable 
V - 2

B. Legal Requirements

In this section, we explain the legal requirements that must be satisfied in analyzing the 

economic impacts of the proposed amendments. 

Section 11346.3 of the Government Code requires State agencies to assess the 

potential for adverse economic impacts on California business enterprises and 

individuals when proposing to adopt or amend any administrative regulation. The 

assessment shall include a consideration of the impact of the proposed regulation on 

California jobs, business expansion, elimination or creation of, and the ability of 

California business to compete with businesses in other states. 

Also, State agencies are required to estimate the cost or savings to any State or local 

agency and school district in accordance with instructions adopted by the Department of 

Finance (DOF). The estimate shall include any non-discretionary cost or savings to 

local agencies and the cost or savings in federal funding to the State.

In addition, Health and Safety Code section 57005 requires the ARB to perform an 

economic impact analysis of submitted alternatives to a proposed regulation before 

adopting any major regulation. A major regulation is defined as a regulation that will 

have a potential cost to California business enterprises in an amount exceeding 10

million dollars in any single year. The criterion of exceeding 10 million dollars in cost is 

not met for the proposed amendments. However, we have conducted an economic 

analysis of two alternatives to the proposal. 

C. Methodology

In this section, ARB staff describes the methodology used to estimate the economic 

impacts from the proposed amendments. The methodology is based on an approach 

similar to that used when estimating the costs associated with the original 2005 

rulemaking. 

As mentioned previously, while a majority of the proposed amendments will provide a 

savings to affected industries, there is uncertainty in how often situations utilizing some 

of these amendments would arise. The assumptions used to estimate the frequency of 

these occurrences are presented in the following section. 

The costs or saving for each amendment was based on an evaluation of the action 

allowed by the amendment and estimating the cost or savings. Some amendments 

allow a delay in capital expenditure whereas others allow an avoidance of capital 

expenditure. In cases where costs are delayed, the savings is based on the capital 

expenditure and the cost of money for that expenditure over the delay time period. The 

cost of money is based on a real annual interest rate of 5 percent. 

Capital costs for purchasing equipment and retrofit costs were based on costs for 

similar off-road equipment used in the cost analysis for the Off-Road In-Use Equipment 

Regulation. (ARB, 2010a) The costs for the purchase of RTG cranes were based on 
V - 3

costs generated for the original CHE Regulation rulemaking. The equipment purchase 

costs include a premium cost for Tier 4 engines, as developed for the Off-Road In-Use 

Equipment Regulation, where it would be anticipated that Tier 4 engines would be 

purchased. 

The costs and savings were estimated as future costs in 2011 dollars and then 

converted to present value dollars. A real interest rate of 5 percent was used for this 

evaluation. 

All costs and savings were compared in present value dollars. This was calculated 

using the following equation:

Present Value = Future Cost x 1/(1+i)n

where i = real interest rate and n = future date – 2011. 

The cost estimate for each amendment is discussed in the following section. More 

detailed information on the cost estimations can be found in Appendix C. Worksheets 

with the calculations for the economic analysis are posted on ARB’s web site at 

http://www.arb.ca.gov/ports/cargo/cheamd2011.htm. (ARB, 2011g) 

D. Costs and Savings Estimated To Result From Proposed Amendments

The following paragraphs provide an explanation of the estimated costs and savings for 

each amendment listed in Table V-1 above. 

1. Additional time for equipment with no VDECS available 

This proposed amendment would allow an additional two years of annual compliance 

extension for in-use non-yard truck equipment for which there are currently no VDECS 

available. The regulation currently allows two years of annual compliance extension, 

and requires the in-use equipment to be brought into compliance by repower, 

replacement, or retirement if there are still no VDECS available when the current twoyear extension period expires.

This proposed amendment would allow manufacturers more time to develop VDECS for 

a wider range of CHE engines. As more VDECS become available, there is more 

opportunity for owners/operators to comply with the regulation by retrofitting non-yard 

truck equipment rather than replacing.

This proposed amendment delays the owner/operator’s capital expenditure of either 

replacing the engine or equipment or installing a retrofit. This would save 

owners/operators the time value of the capital expenditure over two years. The savings 

was estimated by comparing the cost to replace or retrofit the equipment at the end of

the initial two years extension to the cost at the end of the additional two year extension, 

all in 2011 dollars. This is shown in Table V-2 below. It was assumed that equipment 
V - 4

that would be required to comply in 2011 would become eligible for the two additional 

year extensions once the Board approves the amendments. 

It was estimated that about 300 pieces of equipment would be eligible for these 

additional two years of compliance extension based on the history of the equipment that 

have been granted extensions in the past and an evaluation of possible safety criteria. 

It is assumed that at the end of the second two years of extension some of the 

equipment would be replaced and some would be retrofitted to achieve compliance, 

depending on the type and age of the equipment. 

In order to determine the cost savings, assumptions had to be made as to whether 

equipment would be retrofitted or replaced at the end of the extension. It was assumed 

that the equipment would not be retired based on the large numbers of equipment that 

have already been retired due to the current recession. The compliance path for 

container handling equipment, construction equipment, and general industrial 

equipment (approximately 20 percent of the CHE identified for this extension) was 

assumed to be that half of the equipment would be retrofitted and half of the equipment 

replaced. The compliance path for forklifts (approximately 80 percent of the CHE 

identified for this extension) was assumed to be that 10 percent would be retrofitted and 

90 percent replaced. These assumptions were based on observed industry practices. 

Forklifts generally have low residual value near the end of their useful life and it is more 

cost effective to replace them rather than to retrofit. This analysis is provided in more 

detail in Appendix C, Table C-4. 

Table V-2: Savings from Delayed Expenditure Due to Additional Two Years of

“No VDECS Available” Amendment

Year

Equipment 

Eligible for 

“No 

VDECS 

Available” 

Extension

Compliance Cost Without 

Amendment*

Compliance Cost at End of 

Extension*

(Savings)*

Present Value Future Cost

in 2011 

Dollars

Present Value 

Future Cost

in 2011 

Dollars

Present Value 

2011 13 $2,770,000 $2,770,000 - ($260,000)

2012 42 $6,810,000 $6,480,000 - ($600,000)

2013 82 $13,860,000 $12,570,000 $2,770,000 $2,510,000 ($1,170,000)

2014 88 $14,710,000 $12,710,000 $6,810,000 $5,880,000 ($1,180,000)

2015 87 $14,500,000 $11,930,000 $13,860,000 $11,400,000 ($1,110,000)

2016 - $14,710,000 $11,530,000

2017 - $14,500,000 $10,820,000

2018 - -

Total 312 $52,650,000 $46,462,000 $52,650,000 $42,140,000 ($4,320,000)

*Values have been rounded

A savings of approximately $4.3 million, in present value dollars, was estimated for the 

312 pieces of equipment that are expected to qualify for this extension. 
V - 5

2. Add safety as a provision for evaluating VDECS availability

This proposed amendment would add language specific to safety considerations to the 

current “No VDECS Available” extension. This is a clarifying amendment and does not 

provide additional cost savings. 

3. Low-use compliance extension 

Adding a two year compliance extension for equipment that operate 200 hours per year 

or less would result in savings for owners/operators who keep back-up CHE for use 

when other equipment is out of service for maintenance. The number of extensions per 

fleet would be limited.

This proposed extension would save owners/operators the delayed cost of either 

retrofitting this equipment or purchasing a new piece of equipment for back-up 

operation. It was estimated that 176 pieces of equipment would be eligible for this 

extension. This was based on data from a survey of operators with low-use equipment. 

Assumptions for retrofit or replacement were similar to those made for the additional two 

years of compliance extension for equipment without VDECS available discussed in 

section 1. above. The cost to bring this equipment into compliance at the original 

compliance date was compared to the cost to bring it into compliance after the two-year 

extension. The cost savings are shown in Table V-3. 

The savings due to the delayed compliance costs for these 176 pieces of equipment are 

summarized in Table V-3 below. Compliance costs for this equipment would have 

occurred in 2011 through 2013. 

Table V-3: Savings from Delayed Expenditure Due to Low-Use Amendment

Year

Equipment 

Eligible for 

Low-Use 

Extension

Compliance Cost Without 

Amendment*

Compliance Cost at End of 

Extension* (Savings)*

Present Value Future Cost

in 2011 

Dollars

Present Value

Future Cost

in 2011 

Dollars

Present Value 

2011 86 $15,790,000 $15,790,000 ($1,470,000)

2012 57 $12,350,000 $11,760,000 ($1,090,000)

2013 33 $8,910,000 $8,080,000 $15,790,000 $14,320,000 ($750,000)

2014 $12,350,000 $10,670,000

2015 8 $8,910,000 $7,330,000

2016

2017

2018

Total 176 $37,050,000 $35,630,000 $37,050,000 $32,320,000 ($3,310,000)

*Values have been rounded
V - 6

A savings of approximately $3.3 million in present value dollars was estimated based on 

delaying the expenditure of capital for two years. Details are summarized in 

Appendix C.

4. Exempt equipment at low-throughput ports not within 75 miles of an urban 

area

The savings associated with the proposal to exempt equipment at small rural ports was 

estimated based on an analysis of the equipment at the Port of Humboldt Bay. The Port 

of Humboldt Bay is the only port that meets the criteria for this exemption. An inventory 

of equipment was generated based on a survey of the companies either operating or 

planning to operate at the port. Two compliance plans were generated, one for 

compliance with the CHE Regulation and another for if the equipment were exempted 

and become subject to the Off-Road In-Use Equipment Regulation. The net present 

value of the compliance costs for each scenario was estimated in 2011 dollars and 

compared to determine the cost savings. 

There are currently 17 non-compliant pieces of equipment at this port, either operating 

or planning to operate in the future, as shown in Table V-4 below. These equipment are 

from three different fleets, identified as fleets A, B, and C in the table. Under the 

proposed amendment, this equipment would become subject to either the Off-Road

In-Use Equipment or On-Road Truck and Bus Regulation, depending on if the 

equipment has an on-road or an off-road engine. An analysis of the equipment 

indicated that 16 pieces of equipment would fall under the Off-Road In-Use Equipment 

Regulation and one (a dump truck with an on-road engine) would fall under the 

On-Road Truck and Bus Regulation.
V - 7

Table V-4: Cost Savings for Small Port Equipment Exemption

Fleet Equipment

Engine 

Model

Year

Max.

Horsepower

CHE Compliance*** Off-Road Compliance***

Year

Cost in

2011 

Dollars

Present 

Value Year

Cost in 

2011 

Dollars

Present 

Value

A Loader 1981 200 2011 $177,000 $177,000 2021 $177,000 $109,000

A Loader 1981 375 2012 $317,000 $302,000 2022 $317,000 $185,000

A Loader 1982 200 2011 $177,000 $177,000 2025 $177,000 $90,000

A Loader 1987 215 2012 $189,000 $180,000 2026 $189,000 $91,000

B Loader 1995 235 2011 $205,000 $205,000 2021 $205,000 $126,000

B Loader 1987 410 2012 $354,000 $340,000 2022 $354,000 $209,000

B Loader 2003 180 2011 $25,000 $25,000 N/A** 0 0

B Loader 1990 250 2013 $217,000 $197,000 2028 $217,000 $95,000

B Loader 1973 170 2011 $147,000 $147,000 2019 $147,000 $100,000

C Loader 1981 375 2012 $317,000 $302,000 2019 $317,000 $214,000

C Loader 2004 260 2011 $25,000 $25,000 N/A** 0 0

C Log Loader 2005 135 2013 $18,000 $16,000 N/A** 0 0

C Bulldozer 2003 120 2011 $18,000 $18,000 2028 $153,000 $67,000

C Bulldozer 1985 300 2012 $370,000 $352,000 2022 $370,000 $216,000

C Backhoe 2003 85 2011 $18,000 $18,000 2028 $73,000 $32,000

C Dump 

Truck* 1996 400 2011 $15,000 $15,000 2012 $15,000 $14,000

C Fork Lift 1990 120 2011 $84,000 $84,000 2027 $84,000 $51,000

Total Fleet Cost (2011 dollars) $2,580,000 $1,599,000

Total Savings Under Off-Road vs. CHE Regulation ($981,000)

* The dump truck has an on-road engine and therefore would be subject to On-Road Truck and Bus 

Regulation.

** These pieces of equipment are not required to retrofit because the fleet meets its fleet average target 

and/or has sufficient BACT carry-over retrofit credit under the Off-Road In-Use Equipment Regulation.

*** Values have been rounded

A comparison of the capital costs to bring equipment at the Port of Humboldt Bay into 

compliance with the CHE Regulation versus the Off-Road In-Use Equipment Regulation 

is provided in Table V-4 above. The compliance dates required under each of the 

regulatory scenarios is given for each piece of equipment in the table. A compliance 

cost was estimated for each piece of equipment. Each compliance cost was then 

converted to present value using a 5 percent rate. A summation of the costs in 2011 

dollars was made to compare the costs under the two scenarios. The following 

paragraphs describe the different compliance paths. 

For compliance with the CHE Regulation, it was assumed that equipment with off-road 

engines of 1996 model year and older would be replaced after obtaining a two-year 

compliance extension, and that these engines would not be repowered or retrofitted. It 

was assumed that VDECS will be available for engines that are Tier 1 or newer (model 

year 1996 or newer). Most of the CHE in the identified Port of Humboldt Bay fleets 

have engines with 1970s and 1980s model years. These equipment were assumed to 
V - 8

be replaced. The five pieces of equipment that are model years 2003 to 2005 were 

assumed to be retrofitted. 

The Off-Road In-Use Equipment Regulation is a fleet rule that requires certain 

non-compliant engines to be replaced or retrofitted beginning in 2019 through 2028, 

depending on the model year of the engine. The net effect of exempting this equipment 

from the CHE Regulation and allowing them to comply with the Off-Road In-Use 

Equipment Regulation would be to delay bringing these pieces of equipment into 

compliance 7 to 16 years beyond the dates specified in the CHE regulation. All of the 

equipment under the Off-Road In-Use Equipment Regulation were assumed to be 

replaced for compliance. This was because the equipment would all be over 25 years 

old by the time that they were required to comply. Additionally, one of the fleet rule 

provisions exempts three of the newest engines (model years 2003, 2004 and 2005) 

from compliance requirements, which would otherwise be scheduled for 2028. The one 

piece of equipment with an on-road engine, the dump truck, would be required to be 

retrofitted in 2012 under the On-Road Truck and Bus Regulation. 

In summary, compliance costs for the 17 pieces of equipment would be a total of 

$2.6 million in 2011 dollars under the CHE Regulation. Under the Off-Road In-Use 

Regulation, the expenditures during 2019-2028 total $1.6 million in present value

dollars. The difference is a cost savings to the owners/operators of $981,000 in present 

value dollars.

5. Require CHE opacity monitoring 

This proposed amendment would require annual opacity monitoring of the engine-out 

exhaust for all CHE engines. Tests for equipment retrofitted with VDCES could be 

scheduled for when the VDECS is removed for cleaning and inspection. This 

amendment would result in incremental costs to owners/operators. 

Owners/operators may opt to purchase the test equipment and train their mechanics to 

test the equipment themselves or to hire consultants to test the equipment. 

The costs for in-house testing would include an initial capital investment of purchasing 

the test meter and training the mechanics to perform the tests in addition to the yearly 

cost to test each engine. Training costs include the class tuition plus the labor cost for 

the mechanics to attend class. Two one-day (eight-hour) classes are required for 

certification in the test procedure. Labor rates are estimated at $100 per hour. The 

tuition for the training classes is $175 per one-day class. The training costs are 

summarized in Table V-5 below. The total cost for training is estimate to be $1,950 per 

mechanic.
V - 9

Table V-5: Opacity Test Training Costs

Cost Category Cost Required Cost for two

8-hour classes

Class tuition $175/class 2 classes $350

Labor rate $100/hour 16 hours $1,600

Total costs $1,950

ARB staff assumed that each terminal would train two mechanics. It was assumed that 

there would be approximately 140 terminals and rail yards based on the initial number 

of facilities that reported under the CHE Regulation in 2005. Consequently, the total 

training costs for industry would be $546,000, as presented in Table V-6. 

Table V-6: Opacity Test Training Cost for Two Mechanics at 140 Facilities

Cost for two

8-hour classes

Mechanics Per 

Terminal

Number of 

Facilities

Training

Cost

$1,950 2 140 $546,000

ARB staff estimated the cost for an opacity meters at approximately $5,500 each based 

on the experience of the ARB staff performing the opacity correlation study. It was 

assumed that each of the 140 terminals and rail yards would purchase a meter for a 

total industry cost of $770,000. 

The total initial cost for training mechanics and purchasing opacity meters for each of 

the approximately 140 terminals and rail yards is $1.3 million as summarized below in 

Table V-7.

Table V-7: Initial Statewide Costs for Mechanic Training and Opacity Meters

Cost Category Initial Cost*

Mechanic Training $546,000

Opacity Meters $770,000

Total Initial Cost $1,316,000

Total Initial Cost, 2011$ $1,253,000

*Values have been rounded

Testing an engine is estimated to take approximately 30 minutes. At a labor rate of 

$100/hour, this results in a cost of $50 per engine per year. The total estimated fleet 

cost is summarized In Table V-8 below:
V - 10

Table V-8: Statewide Costs for Terminal Mechanics to Conduct Opacity Tests

Calendar 

Year

Non-Yard

Truck 

Engines

Yard 

Trucks 

Engines

Total 

Engines

Mechanic Testing

Cost Per Year*

Cost in

2011 Dollars Present Value

2012 1,585 2464 4,049 $202,000 $193,000

2013 1606 2502 4,108 $205,000 $186,000

2014 1707 2660 4,367 $218,000 $189,000

2015 1841 2853 4,694 $235,000 $193,000

2016 1979 3042 5,021 $251,000 $197,000

2017 2137 3256 5,393 $270,000 $201,000

2018 2256 3419 5,675 $284,000 $202,000

2019 2383 3590 5,973 $299,000 $202,000

2020 2487 3732 6,219 $311,000 $200,000

Total $1,763,000

*Values have been rounded

The total estimated costs for terminals or rail yards to perform the opacity testing inhouse would be the sum of the initial capital costs of $1.2 million plus the recurring cost 

of testing of $1.8 million dollars for a total of $3.1 million in present value dollars. 

The industry cost for opacity testing was also estimated based on consultant costs for 

testing. Consultant costs to run opacity tests range from $30 to $60 per engine. ARB 

staff used the higher value of $60 per engine to estimate the opacity test costs of about 

$2 million in present value dollars over the 2012 to 2020 period, as summarized in 

Table V-9 below:
V - 11

Table V-9: Cost for Consultants to Conduct Opacity Tests

Calendar 

Year

Non-Yard 

Truck 

Engines

Yard 

Trucks 

Engines

Total 

Engines

Consultant Testing

Cost Per Year*

Cost in

2011 Dollars Present Value

2012 1,585 2464 4,049 $243,000 $231,000

2013 1606 2502 4,108 $246,000 $224,000

2014 1707 2660 4,367 $262,000 $226,000

2015 1841 2853 4,694 $282,000 $232,000

2016 1979 3042 5,021 $301,000 $236,000

2017 2137 3256 5,393 $324,000 $241,000

2018 2256 3419 5,675 $340,000 $242,000

2019 2383 3590 5,973 $358,000 $243,000

2020 2487 3732 6,219 $373,000 $241,000

Total $2,116,000

*Values have been rounded

Opacity testing costs are estimated to range from $2.1 to $3.1 million in present value

dollars, based on the costs for terminals or rail yards to hire a consultant for the testing 

or the cost to perform the tests themselves. 

Engines with monitored opacity levels greater than the limit consistent with their 

certification level would be required to be repaired. However, this repair cost would not 

result in additional costs as this would be maintenance required to keep the engine well 

maintained to operate as originally designed and certified. 

6. Allow demonstration of emissions equivalency

Allowing owners/operators to purchase new technology that uses engines that can be 

demonstrated to achieve the applicable new or in-use emissions limits could possibly 

result in cost savings to the owners/operators. This proposed amendment would allow 

flexibility to owners/operators to use hybrid systems developed with Tier 3 engines 

which could result in fuel cost savings in the long term. Any economic impact is 

expected to result in savings by virtue of reducing fuel cost over the engine life in 

excess of any voluntary initial capital investment. These savings are not anticipated to 

be significant.
V - 12

7. Non-yard truck equipment transfers

Allowing owners/operators to move their non-yard truck equipment from port-to-port or 

rail yard-to-rail yard to provide operational flexibility will eliminate the need to purchase 

redundant equipment. This would result in a savings. The savings to industry would 

depend upon the number of transfers requested, the cost to purchase the equipment, 

and transportation costs if the equipment were moved. 

The cost savings is estimated to be the difference between the cost to purchase a new 

piece of equipment and the cost to transport the equipment. ARB staff assumed a 

purchase cost of approximately $200,000 based on current population of equipment and 

current replacement costs. The transportation costs would depend on the type and size 

of equipment and the distance between terminals. The transportation cost could be 

significant. It is reasonable to assume that an owner/operator would not transfer older 

equipment if the transfer costs were more than 50 percent of the purchase price. 

Therefore, ARB staff assumed that transportation costs were 50 percent of the 

purchase cost, or $100,000 per piece of equipment transferred. 

ARB staff assumed that two pieces of equipment are required to be moved each year, 

over the period from 2012 to 2020. This estimate was based on the assumption that 

there would be some need for transfers but that it would not be excessive. These 

transfers are estimated to result in a net savings of $200,000 per year as summarized in 

Table V-10 below. The total savings, in present value dollars, would be $1.4 million.

Table V-10: Savings Due to Equipment Transfer

Calendar 

Year

Annual 

Transfers Transfer Cost* Purchase Cost* (Savings)* in 2011 Dollars

(Savings)*

Present Value

2012 2 $200,000 ($400,000) ($200,000) ($190,000)

2013 2 $200,000 ($400,000) ($200,000) ($181,000)

2014 2 $200,000 ($400,000) ($200,000) ($173,000)

2015 2 $200,000 ($400,000) ($200,000) ($165,000)

2016 2 $200,000 ($400,000) ($200,000) ($157,000)

2017 2 $200,000 ($400,000) ($200,000) ($149,000)

2018 2 $200,000 ($400,000) ($200,000) ($142,000)

2019 2 $200,000 ($400,000) ($200,000) ($135,000)

2020 2 $200,000 ($400,000) ($200,000) ($129,000)

Total ($1,421,000)

*Values have been rounded
V - 13

8. Manufacturer delays for new equipment

This proposed amendment would allow owners/operators who are awaiting the delivery 

of newly purchased compliant equipment to rent equipment that does not meet current 

standards for up to six months or until the newly purchased equipment is delivered. 

This amendment would not result in any costs or savings to the owner/operator.

9. Warranty engine replacement

This proposed amendment would allow the replacement of an engine under warranty 

with the same engine type in cases of premature engine failure, even when newer 

engine standards are in place. This would result in a savings to owners/operators. 

Owners/operators would save the capital cost to acquire a new engine meeting the new 

emissions standards. However, as the number of engines expected to fail during the 

warranty is small, this savings is not expected to be significant. 

10. Treat Tier 4 engines certified to Alt PM emissions standards as Tier 3

engines

This proposed amendment would require Tier 4 engines certified to FEL Alternate PM 

(Alt PM) emission standards to be retrofitted with highest level VDECS within one year 

of acquisition. The FEL Alt PM emissions standards are essentially the same as Tier 3 

PM emission standards and do not require the use of original engine manufacturer 

diesel particulate filters to meet them. 

Engine manufacturers are allowed to certify a maximum of 20 percent of their U.S. 

production to the FEL Alt PM emission standards. Staff was unable to determine what 

portion of these engines would be delegated to cargo handling equipment. Therefore, it 

was assumed that 20 percent of all new CHE engines will be certified to the FEL Alt PM 

emission standards. This resulted in an estimated 224 FEL engines.

The cost for 224 FEL engines to be retrofitted with VDECS was estimated based on the 

cost as a function of engine horsepower. For this calculation, staff used the distribution 

of engine sizes predicted by the emissions inventory model for the 224 engines. A 

summary of the estimated costs per year is provided in Table V-11 below. Details of 

this calculation are provided in Appendix C. The cost to retrofit was estimated to be 

$7.0 million. This cost would be incurred during the 2012 to 2015 calendar years. This 

cost is estimated to be $6.0 million in present value dollars. 
V - 14

Table V-11: Cost for VDECS Retrofits for FEL Alternative PM Engines

Year Number of FEL Engines Cost to Retrofit* in 

2011 Dollars Present Value*

2011

2012 32 $1,070,000 $1,019,000

2013 34 $1,110,000 $1,012,000

2014 56 $1,760,000 $1,521,000

2015 53 $1,640,000 $1,348,000

2016 49 $1,460,000 $1,142,000

2017

2018

Total 224 $7,040,000 $6,042,000

*Values have been rounded

Only the initial cost to retrofit is being included for this estimate. Any VDECS 

maintenance costs would be similar to maintenance costs incurred if an owner/operator 

was to purchase a Tier 4 certified to the non-FEL standards. As such, these costs were 

included in the costs associated with the current CHE Regulation. 

The emissions benefit of this proposed amendment is tabulated by year in Appendix C. 

The total benefit for retrofitting the 224 engines was estimated to be a total of 48 tons 

over the 2012 to 2020 time period. This benefit results in a cost-effectiveness of $63

per pound of PM with all costs attributed to the PM reduction. 

The cost to retrofit FEL engines may be an avoidable cost as owners/operators may

request engines certified to the non-FEL Tier 4 standards in order to avoid the need to 

retrofit.

11. Add flexibility to the extension for experimental diesel PM emissions control

This proposed amendment would provide additional compliance flexibility by allowing 

extensions for use of experimental strategies for non-yard truck equipment when 

needed to generate information for verification regardless of whether or not there are 

VDECS available. This proposed amendment would enable the verification of additional 

control technologies and may result in cost savings. However, these cost savings are 

not anticipated to be significant. 

12. Allow compliance schedule swapping

This proposed amendment would allow CHE owners/operators to modify their non-yard 

truck compliance schedules such that older model year engines (that happen to have

later compliance dates) are brought into compliance in place of newer model year 
V - 15

engines (that are required to comply earlier). The number of engines required to comply 

each year would remain the same. There is not anticipated to be any cost or savings 

associated with this amendment.

E. Estimated Costs to Businesses

In this section, we summarize the costs, savings, and economic impacts on businesses. 

ARB staff estimated that while the proposed amendments would result in both costs and 

savings to businesses, the overall total statewide impact on businesses would be a net 

savings of $1 to $2 million in present value dollars. The annual net cost savings range 

from $100,000 to $200,000 over the time period of 2011 to 2020. 

It would be expected that the costs and savings associated with the different proposed 

amendments would impact the different sectors of the industry in a relatively uniform 

manner. The one exception to this would be the proposed amendment to exempt small 

rural ports. The approximately $1 million savings associated with this amendment 

would impact only those businesses operating at the Port of Humboldt Bay. 

A summary of the estimated year by year estimated costs is presented in Table V-12 

below. Both the minimum and maximum cost estimates are shown for the opacity 

monitoring program. 

Table V-12: Summary of Annual Costs/(Savings) Resulting from 

Proposed Amendments (Present Value)

Year

Additional 2 

Years for

VDECS*

Low-Use 

Extension*

Small Rural 

Ports

Off-Road*

Require Opacity 

Monitoring Non-Yard 

Truck

Transfers*

Allow

Tier 4 FEL 

Minimum* Maximum* Engines*

2011 ($257,000) ($1,468,000) ($303,000)

2012 ($603,000) ($1,094,000) ($560,000) $231,000 $1,446,000 ($190,000) $1,019,000

2013 ($1,169,000) ($751,000) ($118,000) $224,000 $186,000 ($181,000) $1,012,000

2014 ($1,181,000) $226,000 $189,000 ($173,000) $1,521,000

2015 ($1,109,000) $232,000 $193,000 ($165,000) $1,348,000

2016 - $236,000 $197,000 ($157,000) $1,142,000

2017 $241,000 $201,000 ($149,000)

2018 $242,000 $202,000 ($142,000)

2019 $243,000 $202,000 ($135,000)

2020 $241,000 $200,000 ($129,000)

Total ($4,319,000) ($3,313,000) ($981,000) $2,116,000 $3,016,000 ($1,421,000) $6,042,000

* Values have been rounded
V - 16

Costs to a Typical Business

Cost impacts on businesses that operate at ports or intermodal rail yards, and have 

diesel powered cargo handling equipment, will vary depending on the age, number, and 

type of equipment operated. 

While the costs associated with an opacity-based maintenance program are fairly 

predictable for a typical business, the savings provided by the additional two years of 

extensions for equipment with the proposed “No VDECS Available” or low-use 

equipment amendments, or savings due to the flexibility to move equipment when 

business needs arise, are less predictable. 

Additionally, the cost to retrofit Tier 4 engines certified to the FEL Alt PM standards may 

be an avoidable cost. Armed with the knowledge that Tier 4 engines certified to the FEL

Alt PM standards will need to be retrofitted, owners/operators may be able to specify an 

engine that meets the non-FEL standards when purchasing equipment. 

The assumptions made to determine estimated costs for a typical business are 

discussed in the following paragraphs. A typical port container terminal, evaluated for 

the initial CHE Regulation rulemaking, was selected as a typical business to evaluate. 

Costs and savings associated with the proposed amendments are tabulated in 

Table V-13 below for this typical business. 

Savings from the proposed No VDECS available and the low-use equipment extensions 

as well as costs for the proposed FEL engine amendment would be expected to impact 

this business. While smaller business would not be expected to benefit from the

proposed non-yard truck equipment transfers amendment, a container terminal with 77 

pieces of equipment may benefit from this amendment. The number of low-use engines 

was limited to no more than two per business based on the option for ARB to limit the 

use of this extension. 

The estimated equipment that could be affected by the amendments and associated 

costs and savings are shown in Table V-13 below. As discussed in the section on 

opacity costs above, the cost for opacity monitoring was estimated assuming 

compliance in two different ways. The first way is for terminals and rail yards to 

purchase the opacity measurement device and train employees to perform the 

monitoring. The other way is to hire a third party consultant to monitor the engines 

annually. Using in-house employees to monitor engines results in a higher initial cost, 

but slightly lower on-going costs of $50 per engine tested. The initial cost of purchasing 

an opacity meter and training two employees is estimated at $9,400. Hiring a third party 

was assumed to cost $60 per engine test. For the opacity testing, the typical container 

terminal business would be anticipated to purchase the opacity measurement device 

and train employees to perform this function, which results in a higher initial cost, but a 

slightly lower opacity test cost of $50 per engine per year. 
V - 17

Table V-13: Estimated Costs and Savings for Typical Businesses

in 2011 Dollars Over 2011 to 2020 Time Period

Business Typical Container Terminal*

Total Inventory 77

# of Equipment Affected by Amendment (2011 - 2020)

# No VDECS 4

# Low-Use 2

# Equipment Transfers 1

# FEL engines 4

Costs/(Savings) from 2011 to 2020

No VDECS ($55,000)

Low-Use ($38,000)

Equipment Transfers ($79,000)

FEL engine $108,000

Opacity $44,000

Total ($20,000)

 * Values have been rounded

The net impact on a typical business over the 2011 through 2020 time period is 

predicted to be a net savings ranging of $20,000. These costs and savings include both 

capital and on-going operation and maintenance (O&M) costs. The annual ongoing 

O&M costs for a typical business are based on the required opacity monitoring. The 

annual ongoing O&M costs for this typical business are $3,850 per year. 

Small Business Costs

Staff estimated the costs and savings for small business associated with the proposed 

amendments. A survey conducted for the original rulemaking estimated that a typical 

small business has an average of 11 CHE. The cost for a typical small business was 

based on this. 

For a small business, savings from the proposed non-yard truck equipment transfers 

amendment are not applicable. However savings from the proposed No VDECS 

available and the low-use equipment extensions as well as costs for the proposed FEL 

engine amendment would impact these businesses. The estimated equipment affected 

by these amendments and associated costs and savings are shown in Table V-14

below. For the typical small business with 11 pieces of equipment it was assumed that 

it would have two pieces of equipment impacted by the proposed No VDECS available 

extension and one piece each impacted by the proposed low-use extension and the 

proposed FEL engine amendment. Small business may have more need for these 

extensions due to their more limited resources. The opacity monitoring is estimated to 
V - 18

cost $60 per equipment per year. These costs are shown for the 2011 to 2020 time 

period in Table V-14. 

Table V-14: Estimated Costs and Savings for Typical Small Businesses

in 2011 Dollars Over 2011 to 2020 Time Period

Typical Small Business

Total Inventory 11

# of Equipment Affected by Amendment (2011 - 2020)

# No VDECS 2

# Low-Use 1

# Equipment Transfers 0

# FEL engines 1

Costs/(Savings) from 2011 to 2020*

No VDECS ($27,700)

Low-Use ($18,800)

Equipment Transfers

FEL engine $27,000

Opacity $5,940

Total ($13,600)

 * Values have been rounded

As shown in this table, the net costs over the 2011 to 2020 time period for this typical 

small business is estimated to be a cost savings of $12,500. These net costs include 

both capital and O&M costs. The O&M costs are estimated at $60 per engine per year 

for this typical small business, or $660 per year. 

Potential Business Impacts

In this section, we analyze the potential impacts of the estimated costs of the proposed 

amendments on business enterprises in California. Section 11346.3 of the 

Governments Code requires that, in proposing to adopt or amend any administrative 

regulation, state agencies shall assess the potential for adverse economic impact on 

California business enterprises and individuals. The assessment shall include a 

consideration of the impact of the proposed or amended regulation on the ability of 

California businesses to compete with businesses in other states, the impact on 

California jobs, and the impact of California business expansion, elimination, or 

creation. 

It is anticipated that there would be no overall impact on business competitiveness. A 

short delay in capital investment would be expected due to the proposed amendments 

that provide for a two year delay in compliance for equipment with no VDECS available 

and low-use equipment. This delay is expected to benefit equipment owners/operators 

and has no adverse impact on VDECS manufacturers because these manufacturers are 
V - 19

unable to supply a marketable VDECS for this equipment at this time. Overall, the 

proposed amendments are expected to result in cost savings to business, mitigating 

any negative impact that the original regulation might have on business or jobs. 

F. Potential Costs to Local, State, and Federal Agencies

With the exception noted below, this regulation does not directly affect any local and

State agencies, or Federal funding of state programs. We anticipate no increase in 

costs for ARB to assist in implementation of the regulation. Some local agencies 

established for the oversight of ports also own CHE. The proposed amendments would

impose a mandate on some local agencies established for the oversight of ports that 

also own CHE, but any costs incurred are not reimbursable under Government Code 

section 17500 et seq. ARB staff estimated that while the amendments would result in 

both costs and savings, the net impact on specific local agencies that own CHE would 

be a minor cost savings, similar to the impact on small and typical businesses. The 

specific agencies and fleets are provided in Appendix C. Table V-15 shows the overall 

potential costs to local agencies. 

Table V-15: Estimated Costs and Savings for Local Agencies

in 2011 Dollars Over the 2011 to 2020 Time Period

Business Total Equipment 

Total Inventory 37

# of Equipment Affected by Amendment (2011 - 2020)

# No VDECS 4

# Low-Use 3

# Equipment Transfers 0

# FEL engines 2

Costs/(Savings) from 2011 to 2020

No VDECS ($55,400)

Low-Use ($56,500)

Equipment Transfers

FEL engine $54,000

Opacity $20,000

Total ($37,900)

G. Analysis of Alternatives

In this section, we compare the proposed amendments to two alternatives: (1) provide 

an additional three years of annual extensions for equipment for which there are no 

VDECS instead of the proposal to add an additional two years, and (2) do nothing 

regarding Tier 4 engines certified to the FEL Alt PM emission standards. 
V - 20

Alternative 1: Three additional years extension for “No VDECS Available”

This alternative would be to provide three additional years of extension for engines for 

which there are no VDECS available instead of the proposal for two additional years 

extension. This alternative would extend the emissions reduction delay an additional 

year and provide additional savings of approximately $2 million. This delay would result 

in an additional 6 ton increase in the diesel PM emissions and an 81 ton increase in 

NOx emissions. The purpose of this amendment is to allow more time for technologies 

to become verified for use on CHE. Adding an additional year to the extension would 

extend the compliance delay out to 2018. Staff believes that this additional year of 

delay would not provide any significant benefits in terms of additional VDECS becoming 

verified. Tier 4 engines, which will not require retrofits for final compliance with the CHE 

Regulation if certified to the non-FEL standards, will be fully available by 2015 and the 

vast majority of CHE would have been brought into compliance. Consequently, there 

would be little incentive for VDECS manufacturers to continue verification efforts into 

this time frame. Therefore, staff rejected this alternative because it is not responsive to 

the purpose of the amendment.

Alternative 2: Do not require Tier 4 engines certified to FEL Alt PM standards to apply 

VDECS

This alternative would be to not require Tier 4 engines certified to FEL Alt PM standards 

to apply highest level VDECS within one year of acquisition. This alternative would 

save $6 million for the regulated industry. However, the PM emissions would be 

anticipated to increase by a total of 48 tons. This would result in a net PM emissions 

disbenefit for the amendments. This would possibly allow a significant population of 

engines not meeting the effective Tier 4 PM standards into the CHE inventory as new 

engines. Staff rejected this alternative because it would not meet the goals of the 

original CHE Regulation. 
V - 21

REFERENCES:

(ARB, 2010a) California Air Resources Board. Proposed Amendment to the Regulation 

for In-Use Off-Road Diesel-fueled Fleets and the Off-Road Large Spark Ignition Fleet 

Requirements, Appendix F: Cost Methodology. October 2010.

http://www.arb.ca.gov/regact/2010/offroadlsi10/offroadappf.pdf

(ARB, 2011g) California Air Resources Board. Economic Analysis Worksheets, 

http://www.arb.ca.gov/ports/cargo/cheamd2011.htm, July 2011.
V - 22

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VI - 1

VI. CEQA ENVIRONMENTAL IMPACTS ANALYSIS

In this chapter, ARB staff discusses potential significant adverse environmental impacts 

from the proposed amendments. This regulation and the associated amendments 

generally apply statewide. Typical locations where equipment subject to this regulation 

operate include, but are not limited to ports at Los Angeles, Long Beach, Oakland, 

Stockton, Hueneme, San Diego, San Francisco, Richmond, Sacramento, Redwood 

City, Humboldt, and other Bay Area ports, and intermodal rail yards located in Los 

Angeles, Long Beach, San Bernardino, San Diego, City of Commerce, Oakland, 

Stockton, Lathrop, City of Industry, Fresno, Richmond, and other Bay Area rail yards. 

Staff has identified a potential significant adverse impact on air quality due to the 

proposed amendments. Emissions of diesel PM and NOx will continue to decrease 

each year even with the proposed amendments. However, when compared to the 

emission reductions anticipated for the original rule, there is a potential for small 

increases in diesel PM emissions in 2012 thorough 2014 and NOx emissions in 2012 

through 2016. Overall, diesel PM emission reduction will be greater under the proposed 

amendment than the original rule. However, NOx emission reductions will be slightly 

less. At the Port of Humboldt Bay, diesel PM and NOx emissions will be slightly greater 

than under the original rule, but will remain well below the 2006 baseline levels due to 

decreased activity. Staff has not identified any other significant adverse environmental 

impacts due to the proposed action.

The following is a detailed discussion of the potential environmental impacts and 

feasible mitigation measures to address any significant adverse impacts due to the 

proposed amendments. Also discussed are feasible alternatives means of complying 

that would reduce or eliminate any significant adverse impacts. 

A. Legal Requirements 

The California Environmental Quality Act (CEQA) and ARB policy require an analysis to 

determine the potential environmental impacts of proposed regulations. Because the 

ARB's program involving the adoption of regulations has been certified by the Secretary 

of Resources pursuant to Public Resources Code section 21080.5, the CEQA 

environmental analysis requirements may be included in the ISOR for this rulemaking. 

In the ISOR, ARB must include a “functionally equivalent” document, rather than 

adhering to the format described in CEQA, consisting of an Initial Study, a Negative 

Declaration, and an Environmental Impact Report. In addition, staff will respond, in the 

Final Statement of Reasons for the regulation, to all significant environmental issues 

raised by the public during the public review period or at the Board public hearing.

Public Resources Code section 21159 requires that the environmental impact analysis 

conducted by ARB include the following:

• An analysis of reasonably foreseeable environmental impacts of the methods 

of compliance;

• An analysis of reasonably foreseeable feasible mitigation measures; and
VI - 2

• An analysis of reasonably foreseeable alternative means of compliance with 

the regulation.

B. Reasonably Foreseeable Environmental Impacts of Methods of 

Compliance

Since the proposed amendments do not require changes to the existing infrastructure at 

ports or intermodal rail yards, staff finds that, no new facilities, expansion of existing 

facilities, or changes in operations from the status quo are likely to occur. Therefore, 

ARB staff finds that there will be no adverse impacts on aesthetics, land-use/planning, 

population and housing, transportation, agricultural and forestry resources, cultural 

resources, mineral resources, public services, utility and service systems, geology and 

soils, hydrology and water quality, or recreation. 

Taking a conservative approach, ARB staff has, however, identified a potentially 

significant adverse environmental impact to air quality from compliance with the 

proposed amendments. Staff is making this determination even though the 

amendments will not impact the intended goals of the initially adopted CHE Regulation 

– to attain 85 percent diesel PM and 75 percent NOx emissions reductions relative to 

the 2006 baseline by 2020 – and there will be no actual increase in emissions due to 

the proposed amendments, merely that the emission reductions in the future will 

decrease at a slightly lower rate. Nonetheless, staff has concluded that potentially 

adverse impacts may result from a slight loss in emission reductions 2012 through 2016 

associated with the amendments when compared to the emission reductions anticipated 

from the initially adopted regulation. This is a due to the following proposed 

amendments: 

• Providing an additional two year extension times for compliance where no 

VDECS systems compatible with the in-use equipment are available.

• Allowing a two year low-use compliance extension.

• Providing an exemption of rural low-throughput ports. 

Less Diesel PM and NOx Emissions Reductions due to the Proposed Amendments for 

No VDECS Available, Low-Use Equipment, and the Low-Throughput Port Exemption

As discussed in Chapter IV, staff finds that there will potentially be a small decrease in 

diesel PM and NOx emission reductions, compared to the reductions anticipated in the 

original rule, due to the proposed amendments that provide a two year compliance 

extension when no VDECS are available, the low-use compliance extension, and the 

exemption for low-throughput ports. The magnitude of the potential decrease in 

emission reductions is shown in Table VI-1. 

The second column in Table VI-1, labeled, “Reductions Under the Rule”, shows the 

diesel PM and NOx emission reductions anticipated from the current rule without the 

proposed amendments. The third column labeled “Reductions due to the Amendments” 
VI - 3

show how much less reductions will be achieved with the proposed amendments. A 

negative value indicates that the proposed amendments will result in less reductions

compared to the original rule. 

Table VI-1 Statewide Emission Reductions Attributable to the Existing CHE 

Regulation and Reductions Attributable to the Proposed Amendments

 Note: Positive numbers indicate emissions reduction, 

 Negative numbers indicate emissions increase

Staff anticipates less emission reductions due to the proposed amendments for diesel 

PM in 2012 through 2014 and for NOx in 2012 through 2016. However, the magnitude 

of the change is very small. For example, looking at calendar year 2012 in Table VI-1, 

staff estimates that the proposed amendments would result in 0.005 tpd less diesel PM 

reductions and 0.13 tpd less NOx reductions. What this means is that in 2012, with the 

proposed amendments, diesel PM reductions would be 0.195 tpd instead of 0.20 tpd 

and NOx reductions would be 2.21 tpd instead of 2.34 tpd. 

The table also shows (in “Total” row) that future year emission reductions due to the 

proposed amendments will, overall, result in greater diesel PM reductions than 

anticipated in the original rule. Over the 2006 through 2020 time period, the proposed 

amendments will result in 0.084 tpd more diesel PM reductions but 0.37 less NOx

reductions compared to the original rule. However, from 2017 through 2020, annual 

NOx emissions will be greater in each year with the amendments than if the original rule 

were unchanged. 

Calendar 

Year

Reductions Under 

the Rule

(tpd)

Reductions due to 

the Amendments

(tpd)

PM NOx PM NOx

2006 0.00 0.00 0.000 0.00

2007 0.02 0.38 0.000 0.00

2008 0.04 0.55 0.000 0.00

2009 0.06 0.65 0.000 0.00

2010 0.11 1.37 0.000 0.00

2011 0.17 2.15 0.000 0.00

2012 0.20 2.34 -0.005 -0.13

2013 0.22 2.77 -0.004 -0.12

2014 0.23 3.07 -0.001 -0.13

2015 0.22 3.02 0.004 -0.11

2016 0.21 2.75 0.012 -0.05

2017 0.19 2.50 0.018 0.02

2018 0.16 2.17 0.020 0.05

2019 0.14 1.84 0.020 0.05

2020 0.12 1.50 0.019 0.05

Total 2.07 27.05 0.084 -0.37
VI - 4

C. Reasonably Foreseeable Mitigation Measures

CEQA requires an agency to identify and adopt feasible mitigation measures that would 

minimize any significant adverse environmental impact. In this section, ARB staff 

discusses the mitigation measures that were identified to achieve cost-effective 

emission reductions while providing CHE owners/operators with additional compliance 

flexibility.

Potential Mitigation Measures for the Proposed Amendments Allowing No VDECS 

Available and Low-Use Compliance Extensions

Staff has identified three feasible mitigation measures that will reduce or eliminate the 

adverse impacts due to the proposed amendments that provide a two year compliance 

extension when no VDECS are available and the low-use compliance extension. The 

mitigation measures include: limiting the duration of the extensions, allowing the 

Executive Officer (EO) to limit the number of low-use extensions per facility, and adding 

other proposed amendments that will provided emission reductions, beyond those 

anticipated in the original rule, which will “offset” the impacts of the proposed 

amendments that would be causing reductions in emission benefits. 

The current “No VDECS Available” extension is limited to two years. The proposed 

amendment would allow up to two additional years for situations where a suitable 

VDECS is not available. Limiting the duration of the extension to a maximum of four 

years will partially mitigate the air quality impact of the proposed amendment, because 

at the end of the extension period, the equipment will either need to be removed from 

service, replaced with a lower-emissions engine or equipment, or have a VDECS 

installed. Any of these options will significantly reduce emissions in the future. Further, 

extending the final compliance date of this equipment may in fact allow the installation 

of newer, cleaner engines that will become available in the future or new VDECS that 

may become available in the next few years. Thus, both the PM and NOx emissions 

would partially be mitigated by the compliance of equipment at the end of the extension 

period. Further, the proposed mitigation amendments would require that if a suitable 

VDECS becomes available during the time period of the extension, ARB would notify 

the equipment owner/operator, who would be required to install a VDECS within six 

months; or otherwise bring the equipment into compliance with the CHE Regulation. 

The low-use extension is also a limited duration extension. This extension is available 

for a maximum of two years. At the end of this time period, the owner of the equipment 

must retire the equipment, replace it with a new engine or equipment, or install a 

VDECS. As with the “No VDECS Available” extension, the duration of emissions 

increase is limited, which provides partial mitigation of any increase. Further, to mitigate 

the potential for numerous extensions at one location, the proposed amendments would 

incorporate an adaptive management approach to mitigation by giving the EO the 

authority to limit the number of low-use extensions allowed at individual locations. 

We have also included a proposed amendment that would provide additional emission 

reductions beyond what was required by the original rule. The original rule requires that 
VI - 5

in-use non-yard truck equipment comply with Tier 4 emission standards by specified 

dates. ARB subsequently learned that engine manufacturers are certifying some new 

engines used in CHE to Tier 4 family emission limits (FEL) that are certified to alternate 

(Alt) PM and Alt NOx emissions limits. The FEL Alt PM standards allow for emissions 

that are approximately ten times higher than the non-FEL Tier 4 PM standards. These 

Alt PM standards are essentially equivalent to Tier 3 PM standards. 

In estimating emission reductions from the CHE Regulation, as initially adopted, staff

assumed that all Tier 4 engines would be certified to the non-FEL Tier 4 PM standards. 

If engines certified to these Alt PM standards are introduced into California’s ports and 

intermodal rail yards as Tier 4 engines, emission reductions anticipated with the 

adoption of the original regulation will be lost. To address this problem, staff is 

proposing that if engines certified to the Alt PM standards are used at ports or 

intermodal rail yards, these engines would be treated as if they were Tier 3 engines, 

and owners/operators would be required to retrofit this equipment with the highest level 

VDECS available within one year of purchase, lease, or rental. The amendment 

requiring the use of VDECS on these engines would achieve additional emission 

reductions that would offset and mitigate potential emission increases from the abovedescribed exemptions for “No VDECS Available” and low-use equipment. The total PM 

emission reductions from this proposed amendment to require VDECS on FEL Alt PM 

Tier 4 engines, between the 2012 and December 31, 2020, will be greater than the 

potential “increase” in emission due to the extensions discussed above. 

Additionally, we are including a proposed amendment that would require 

owners/operators to annually monitor the engine exhaust opacity and provide 

restorative repair or maintenance if the measured opacity is higher than empirically 

derived levels for properly maintained engines. An ARB study showed that in-use 

engine PM emissions from diesel engine fleets that are not well maintained can be 

significantly higher than the certification levels would indicate. Measuring engine 

exhaust opacity is a tool that can be used to identify high levels of visible emissions that 

are an indication that the engine is not operating as designed and that engine 

maintenance or repair is needed. This proposed amendment would assist 

owners/operators keep diesel engine emissions within the anticipated design or 

certification level. While the reduction in diesel PM due to this amendment is not 

quantifiable, it would provide a measure of mitigation for the short term PM increases in 

the 2012 to 2014 time frame. 

Potential Mitigation Measures for Proposed Rural Low-Throughput Port Exemption

By exempting low-throughput ports in rural areas from the requirements of the CHE 

Regulation, future anticipated emissions reduction for the single ports that will qualify for 

the exemption would not be achieved. Two mitigation strategies have been identified to 

reduce the impact of this proposed amendment. The first mitigation measure would 

require off-road engines at an exempted port to be subject to ARB’s Off-Road In-Use 

Equipment Regulation. The second measure would require equipment with on-road 

engines to be subject to the On-Road Truck and Bus Regulation. However, the 
VI - 6

requirements of these regulations would not achieve the same level of emission 

reduction in the future or on the same timeline as if this equipment remained subject to 

the CHE Regulation. 

As part of the proposed amendments, staff is employing an adaptive management 

strategy for the port exemption. The proposed amendments would establish cargo 

throughput and community population trigger levels which, if exceeded, would require 

all CHE at the port to come into full compliance with the CHE Regulation within three 

years. If this were to occur, the emission reductions anticipated in the original rule 

would be fully realized.

Staff was unable to identify other reasonably foreseeable mitigation measures that 

could further lessen the potential environmental impacts while meeting the need to 

provide owners/operators at the Port of Humboldt Bay with needed economic and 

technical flexibility to comply with the purposes and objectives of the CHE Regulation. 

D. Reasonably Foreseeable Alternative Means of Compliance with the 

Proposed Amendments

Below staff discusses alternative means of compliance with the propose amendments. 

No Project Alternative

This alternative would eliminate the identified potential adverse impact associated with 

the two extension provisions and the low-throughput port exemption. It would, however, 

negatively impact overall diesel PM emission reductions by eliminating the proposed 

requirements on FEL engines that would achieve approximately 0.13 tons per day of 

emission reductions. Most importantly, the No Project Alternative would not address 

legitimate economic issues associated with equipment where control systems are not 

available and where equipment is used less than 200 hours per year. There are cases 

where specialty equipment is needed to unload certain cargo, such as steel and 

massive wire coils. This specialty equipment is used infrequently but is necessary for 

these cargos and would be very expensive to replace. Further, it does not address 

equity issues since a similar provision has been included in ARB’s on-road and off-road 

rules. Lastly, the no project alternative, also would not address the economic issues at 

the Port of Humboldt Bay. Both the local air district and the port authority have 

requested relief from the CHE Regulation due to the identified significant impact that the 

regulation, as initially adopted, will have on the Port of Humboldt Bay businesses. For 

these reasons, staff rejected this alternative.9

 9 While exemptions were provided in these other rules, the CHE Regulation is providing extensions rather 

than exemptions due to the environmental justice issues associated with a captive fleet surrounded by 

residential communities.
VI - 7

Reducing the Duration of the Extension Period

This alternative would limit the duration of the “No VDECS Available” extension to one 

additional year rather than two and limit the low-use extension to one year. This 

alternative would eliminate the potential adverse air quality impacts for both PM and 

NOx due to the proposed extensions because any increases in emissions due to a oneyear extension would be effectively off-set by the additional emission reductions from 

the Tier 4 FEL engine amendment requiring the retrofitting of such engines one-year 

after introduction at a port or intermodal rail yard. 

This alternative would reduce the economic relief that the two-year extensions would 

have provided by approximately 50 percent, from $7.6 million to $3.8 million, because 

equipment owners would have to purchase new equipment at the end of the one year. 

This could potentially have a significant adverse economic impact on some operators, 

particularly smaller operators. From a program administration and new product 

development standpoint, staff found that a one-year extension from the CHE Regulation 

compliance requirement would not be sufficient to address the needs of the regulation in 

that it would not provide sufficient time for development and verification of new emission 

control strategies, the underlying purpose of the additional extension years. In staff’s 

opinion, the two additional years provided by the proposed amendments would provide 

the time needed, for newer, cleaner engines and VDECS to come onto the market, 

which would result in additional long-term environmental benefits. 

The proposed alternative to shorten the “No VDECS Available” and low-use extensions 

to one year would not address the increased emissions that would result from granting 

the low-throughput port exemption that applies to the Port of Humboldt Bay and would 

not off-set any increased emissions resulting from exempting the port. Neither the 

proposed two-year extensions nor the alternative one-year extensions would address 

the special economic and environmental circumstances facing that port. Of course, it 

goes without saying that if the relief of the low-throughput exemption were not provided 

and the port were able to remain in operation, the limited one-year “No VDECS 

Available” and low-use extensions that Port of Humboldt CHE could use would 

substantially lessen the environmental impacts that would otherwise be incurred from 

granting the low-throughput exemption. 

Because the alternative limiting extensions to one year would not address the 

underlying purposes of the proposed amendments, staff rejected this alternative. 

Allow fleet averaging instead of extensions

This alternative would allow for a fleet-wide averaging program instead of allowing for 

extensions where no VDECS is available or for low-use equipment. This alternative 

would eliminate the potential adverse air quality impact associated with the “No VDECS 

Available” and low-use extensions, since, under this alternative, extensions would not 

be allowed. Instead under the fleet averaging alternative, owners/operators would be 
VI - 8

able to comply by managing the introduction of lower emissions equipment with higher 

emissions equipment to ensure that an overall fleet-wide average would be met. 

The level of economic relief may be less than under the proposed amendments but 

difficult to quantify. It may be an economically viable approach for some companies but 

not others, particularly since we are several years into the implementation of the rule. 

To allow fleet-wide averaging now, would require significant changes to the regulation 

and require significant time and effort to address a multitude of issues that would arise 

regarding compliance, including issues of equity for those owners/operators who have 

invested significant capital in meeting the originally adopted regulation. Moreover, the 

fleet average plan may not provide the emissions and flexibility benefits envisioned by 

the extensions, especially for smaller operators. Those benefits include time to allow 

new VDECS to come into the market and additional time to work through Cal OSHA 

safety issues. 

For the reasons, outlined above, this alternative would not be intended as an alternative 

to the low-throughput port exemption, would not address the special economic and 

environmental issues facing the Port of Humboldt Bay, and would not eliminate the 

potential adverse air quality impact associated with the low-throughput port exemption. 

For all of the above reasons, staff rejected this alternative. 

ARB staff concludes that the proposed amendments provide the most effective and 

least burdensome approach to reducing the public's exposure to diesel PM, NOx, and 

other air pollutants emitted from diesel-fueled cargo handling equipment and at the 

same time ensuring the action is technically and economically feasible. Additionally, the 

compliance responses to these alternatives would not be expected to have any greater 

or lesser impact on environmental factors other than air emissions. 

E. Summary

In summary, staff has determined that between 2012 and December 31, 2020, the 

proposed amendments, taken as a whole, would provide greater diesel PM reductions 

than the original rule, fully mitigating the potential adverse impacts of the proposed “No 

VDECS Available” and low-use extension amendments. However, the proposed 

mitigation will not fully offset the NOx emissions “increase” anticipated from the 

proposed extensions. 

Concerning the Low-Throughput Port Exemption, staff finds that the diesel PM and NOx

emission reductions anticipated by the initially adopted CHE Regulation will not be 

realized. The transfer of equipment at an exempted low-throughput port to the Off-Road

In-Use Equipment and On-Road Truck and Bus regulations and the adaptive 

management proposal may lessen the identified environmental impacts but will not fully 

avoid the significant or potentially significant impacts. The mitigation measures 

identified above for the “No VDECS Available” and low-use extensions would not 

mitigate the impacts at an exempted low-throughput port because the equipment at the 

port would no longer be subject to the CHE Regulation. 
VI - 9

Staff has also found that no reasonably foreseeable alternatives to the amendments 

proposed would be able to avoid or further lessen the emissions impact of the 

amendments without jeopardizing the compliance flexibility and potential long-term 

benefits from development of cleaner, more efficient engines and VDECS that would be 

achieved from the amendments. 

Because the NOx impacts due to the proposed extension amendments, and the diesel 

PM and NOx impacts due the low-throughput port exemption would not be fully 

mitigated, staff finds that there is a potential for a significant adverse air quality impact 

due to the proposed amendments. Prior to taking any formal action on the proposed 

amendments, ARB would have to determine whether overriding consideration exist 

meriting approval of the amendments. 

In balancing the benefits of the proposed amendments against the unavoidable adverse 

environmental effects, staff weighed the fact that there would be no actual increase in 

emissions due to the proposed amendments merely that the emission reductions in the 

future will decrease at a slightly lower rate. Staff weighed this impact against the 

flexibility that the amendments would provide for compliance and the benefits that would 

potentially result in both the near and long term. Staff estimates that the two extensions 

would result in a cost savings to CHE owners of approximated $7.6 million dollars over 

the next several years and provide flexibility for specialty equipment and small 

operators. Staff believes that this cost savings and needed flexibility would provide a 

level of relief, particularly to smaller operators. And, would provide additional time for 

development and refinement of cleaner, more durable engines and VDECS. 

In the case of the low-throughput port exemption, staff finds that the economic impact of 

taking this action would outweigh the small air quality disbenefit (0.007 tpd PM and 0.14 

tpd NOx). The only port that is likely to qualify for this exemption is the Port of Humboldt 

Bay. This port is operating well below its historic level due to the recession and it is not 

anticipated that the port will return to its historic levels for many years. The Port of 

Humboldt Bay handles approximately 0.2 percent of California’s annual port throughput. 

This port primarily serves the local lumber industry, has had a very difficult time 

responding to the impacts of the economic downturn due to the close tie of the lumber 

industry to housing. The North Coast Unified Air Quality Management District (North 

Coast) and the Humboldt Bay Harbor, Recreation, and Conservation District (Humboldt 

Bay District) have requested that ARB exempt the Port of Humboldt Bay from the 

current CHE Regulation. The North Coast is in attainment for ozone and does not 

contribute to any downwind violations. Staff estimates that the proposed exemptions 

would provide a saving of about $1 million for port owners/operators. Without the 

proposed amendment operations at this port would likely be further reduced or 

eliminated altogether. 
VI - 10

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