STAFF REPORT: INITIAL STATEMENT OF REASONS

FOR PROPOSED RULEMAKING

AIRBORNE TOXIC CONTROL MEASURE

FOR DIESEL-FUELED PORTABLE

ENGINES

Stationary Source Division

Project Assessment Branch

January 2004
State of California

AIR RESOURCES BOARD

STAFF REPORT: INITIAL STATEMENT OF REASONS

FOR PROPOSED RULEMAKING

Public Hearing to Consider

ADOPTION OF THE PROPOSED AIRBORNE TOXIC CONTROL MEASURE

FOR DIESEL PARTICULATE MATTER FROM PORTABLE ENGINES

GREATER THAN 50 HORSEPOWER

To be considered by the Air Resources Board on February 26, 2004 at:

California Environmental Protection Agency

Headquarters Building

1001 “I” Street

Central Valley Auditorium

Sacramento, California

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

Publication does not signify that the contents necessarily 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.
State of California

AIR RESOURCES BOARD

PROPOSED AIRBORNE TOXIC CONTROL MEASURE FOR DIESEL

PARTICULATE MATTER FROM PORTABLE ENGINES GREATER THAN

50 HORSEPOWER

Contributing Authors

Grant Chin

Marcelle Surovik

Ray Asregadoo

Heidi Green

Ada Komorniczak

Al Ghaffari

Reza Mondavi

Pingkuan Di

Art Diamond

STATIONARY SOURCE DIVISION

Peter D. Venturini, Chief

Robert Barham, Assistant Chief

Michael Tollstrup, Chief, Project Assessment Branch

Mike Waugh, Manager, Program Assistance Section

January 2004
TABLE OF CONTENTS

Section Page

Executive Summary...............................................................................i

Technical Document

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

II. Need for Reduction of Diesel Particulate Matter Emissions..................5

III. Diesel-Fueled Portable Engine Use and Existing Regulations .............11

IV. Emissions, Exposure, and Potential Risk from Diesel-Fueled Portable

Engines....................................................................................19

V. Summary of Proposed Control Measure..........................................22

VI. Regulatory Alternatives...............................................................39

VII. Environmental Impacts of Proposed ATCM.....................................42

VIII. Economic Impacts of Proposed ATCM...........................................54

IX. References..............................................................................72

Appendices

Appendix A: Proposed Regulation Order: Airborne Toxic Control

Measure for Diesel Particulate Matter from Portable

Engines Greater Than 50 Horsepower

Appendix B: Public Agency Survey

Appendix C: Off-Road Compression-Ignition Engine Standards

Appendix D: Summary of District Rules that Apply to Portable Engines

Appendix E: Portable Diesel Engine Emission Control Technologies

Appendix F: Exhaust Temperature Data Analysis for Portable

Diesel-Fueled Engines
TABLE OF CONTENTS (cont.)

Appendices (cont.)

Appendix G: Economic Impact Analysis Methodology

Appendix H: Cost Analysis Example for Typical Small Business

Appendix I: List of Acronyms and Abbreviations

Tables

Table I-1: Public Workgroup and Workshop Meetings.....................3

Table II-1: State and National PM Standards..................................9

Table II-2: State and National Ozone Standards............................10

Table III-1: Emission Standards That Will Be in Effect When

Off-Road Standards (Tier 3) Are Fully Implemented.........15

Table III-2: Proposed U.S. EPA Tier 4 Emission Standards

for Engines Greater than 50 hp....................................16

Table IV-1: Emission Estimates of Diesel-Fueled Portable

Engines (without ATCM Implementation)........................20

Table VII-1: Projected Annual Emissions for 2010 and 2020

with Implementation of the Proposed ATCM....................43

Table VIII-1: Cost and Key Assumptions Used in the Cost Analysis......58

Table VIII-2: Distribution of Total Costs for Private Businesses............64

Table VII-3: List of Industries with Affected Businesses.....................65

Table VIII-4: Summary of Annualized Costs for Public Agency

Compliance with the Proposed ATCM...........................67

Table VIII-5: Summary of Total and Annualized Costs for

Compliance with the Proposed ATCM...........................70
TABLE OF CONTENTS (cont.)

Figures

Figure V-1: Projected Diesel PM Emissions for Status Quo

and the Implementation of the Proposed ATCM...............34

Figure VII-1: Projection of NOx Emissions with and without

ATCM Implementation................................................43
i

Executive Summary

A. INTRODUCTION

The Air Resources Board (ARB or Board) staff is proposing an air toxic control

measure (proposed ATCM) to reduce the emissions of diesel particulate matter

(PM) from diesel-fueled portable engines. This proposed ATCM is one element

in the implementation of ARB’s “Risk Reduction Plan to Reduce PM Emissions

from Diesel-Fueled Engines and Vehicles” (Diesel Risk Reduction Plan). 

Diesel exhaust is a complex mixture of thousands of gases and fine particles that

contains more than 40 identified toxic air contaminants. These include many

known or suspected cancer-causing substances, such as benzene, arsenic and

formaldehyde. Diesel exhaust can irritate the eyes, nose, throat and lungs, and it

can cause coughs, headaches, light-headedness and nausea. Diesel exhaust is

a major source of ambient particulate matter pollution as well, and numerous

studies have linked elevated particle levels in the air to increased hospital

admission, emergency room visits, asthma attacks and premature deaths among

those suffering from respiratory problems.

In August 1998, following a 10-year scientific assessment process, the ARB

identified diesel PM as a Toxic Air Contaminant (TAC). Diesel PM is the number

one contributor to total ambient air toxic risk in California due to the large number

of diesel-fueled engines and the associated risk from these emissions. Diesel

PM emissions are estimated to be responsible for about 70 percent of the total

ambient air toxics risk in California. In September 2000, the Board approved the

Diesel Risk Reduction Plan, which outlined steps that would be taken to reduce

diesel emissions from both new and existing diesel-fueled engines and vehicles,

including portable engines. The ultimate goal of the Diesel Risk Reduction Plan

is to reduce California’s diesel PM emissions and associated cancer risks by 85

percent by 2020.

Portable engines are engines that may be moved easily from location to location.

The engines are used to power a variety of equipment, including: pumps, ground

support equipment at airports, cranes, oil-well drilling and workover rigs, power

generators, dredging equipment, rock crushing and screening equipment,

welding equipment, woodchippers, and compressors.

The proposed ATCM will satisfy the requirements in the Diesel Risk Reduction

Plan to reduce diesel PM emissions and associated risk from the use of

diesel-fueled portable engines in California. The staff estimates that the

proposed ATCM, when fully implemented in 2020, will reduce diesel PM

emissions from portable engines by 95 percent from year 2000 emission levels.

The proposed ATCM is one of several ATCMs considered by the Board in 2003

and 2004 to fulfill the goals of the Diesel Risk Reduction Plan. The other ATCMs
ii

include measures to reduce diesel PM emissions from residential and

commercial solid waste collection vehicles, stationary engines, and transport

refrigeration units.

B. PORTABLE ENGINE USE AND CURRENT REGULATIONS

1. What types of businesses and public agencies use portable engines?

Both private businesses and public agencies operate portable engines in

California and would be impacted by the proposed ATCM. Examples of

businesses that would be affected include motion picture studios, amusement

parks, air couriers, airlines, utilities, construction services, crushing, screening,

and recycling services, industrial cleaning services, marine construction and

dredging services, oil and gas companies, refineries, and rental services. A

variety of public agencies would also be affected, including public schools and

universities, local governments, county landfills, municipal utilities, wastewater

treatment facilities, prisons, the California Department of Transportation, and

other state agencies.

2. What regulations currently impact portable engines in California?

a. ARB/United States Environmental Protection Agency (U.S. EPA)

off-road engine emission standards

Since January 1, 1996, new portable engines sold in California have been

subject to ARB’s Off-Road Compression Ignition emission standards, which are

equivalent to the U.S. EPA emission standards for newly manufactured nonroad

engines. The standards are tiered (i.e., Tier 1, 2, 3), with each set of standards

more stringent than the previous set and, based on the power rating of the

engine, phased in over several years. In 2006, new portable engines of all sizes

will be subject to Tier 2 standards, and in 2008, new engines of all sizes will be

subject to Tier 3 standards. Tier 4 emission standards were proposed by U.S.

EPA in April 2003, and will, if adopted, require most engines to meet more

stringent particulate matter (PM) and oxides of nitrogen (NOx) limits in the

2011-2014 timeframe.

b. Statewide Portable Equipment Registration Program

Several of the 35 air districts in California have rules that specifically pertain to

portable engines. A portable-engine owner would have to obtain a permit from

each of these individual districts prior to operating the engines in these districts.

Instead of obtaining multiple permits from individual districts, a portable-engine

owner can register the engine with ARB’s Statewide Portable Equipment

Registration Program (PERP). Portable engine owners have registered over

14,500 engines under PERP, which represents nearly half of the estimated
iii

statewide inventory of portable engines. Most of the engines in PERP are dieselfueled.

The PERP regulations were designed to promote the use of clean portable

engines in California. By January 1, 2010, only engines certified to ARB/U.S.

EPA off-road engine emission standards (Tier 1, 2, or 3) can be registered under

PERP, meaning any engines currently in the program that do not meet at least

Tier 1 standards must be replaced with certified engines by that date. By 2010,

full implementation of the existing PERP requirements will result in reductions of

diesel PM emissions from currently registered portable engines in the State by an

estimated 30 percent. The proposed ATCM builds upon the success of the

existing PERP to achieve additional diesel PM reductions. For example, one of

the short-term goals of the proposed ATCM is to ensure that all portable engines

in California are certified engines by 2010, the same requirement engines

registered with the PERP program must satisfy.

c. Local air district permit programs

Several thousand portable engines that are not part of the PERP program are

subject to local air district permitting requirements. The ARB staff estimates that

there are approximately 3,000 portable engines in California that are permitted by

the districts. District permit requirements vary, depending on the severity of the

air quality in the district. Some districts may require engines to meet emission

limits that are equivalent to Best Available Control Technology (BACT) emission

limits. For some districts, BACT for portable engines means that the engine is

certified to ARB/U.S. EPA off-road engine emission standards. Districts may

also restrict the operating hours of portable engines to reduce the potential

excess cancer risks caused by diesel PM emissions.

d. Engines not currently under permit

In addition to the 3,000 portable diesel engines currently permitted by the local

air districts, ARB staff estimates that there are several thousand engines subject

to permitting requirements that are neither permitted nor registered in PERP.

The ARB will work with the local air districts to identify these engines and bring

them into the regulatory process.

Additionally, there are portable engines that are currently exempt from local air

district permitting requirements—due to size or application—that will be subject

to the proposed ATCM and will therefore need to apply for permits or State

registration. These engines will be identified and incorporated into the regulatory

process.
iv

3. What regulations currently impact diesel PM control technologies in

California?

In March 2002, the Board adopted the “Verification Procedure for In-Use

Strategies to Control Emissions from Diesel Engines” (Verification Procedure) to

support the ARB’s regulatory efforts to reduce diesel PM. The Verification

Procedure establishes a process through which manufacturers of emission

control equipment can demonstrate and verify the emission reduction capabilities

of control technologies. Examples of emission control technologies that can be

considered for verification include: diesel particulate filters, diesel oxidation

catalysts, exhaust gas re-circulation, selective catalytic reduction systems, fuel

additives and alternative diesel fuel systems. The Verification Procedure is

voluntary and applies to emission control technologies for on-road, off-road and

stationary applications. The multi-level verification system consists of three PM

reduction levels that are illustrated in the following table.

Verification Classifications for

Diesel Emission Control Strategies for PM

Pollutant Reduction Classification

< 25 percent Not Verified

> 25 percent Level 1

> 50 percent Level 2

PM

> 85 percent or

0.01 g/bhp-hr Level 3

C. EMISSIONS AND HEALTH IMPACTS FROM DIESEL-FUELED

PORTABLE ENGINES

1. What are the estimated emissions of diesel particulate matter from

portable engines?

The ARB staff estimated the diesel PM emissions from portable engines by using

the 2000 portable engine inventory and associated diesel PM emissions that

were presented in the Diesel Risk Reduction Plan. Based on this inventory, staff

estimates that there are 33,000 portable engines in California that emit a total of

4.2 tons per day or 1,533 tons per year of diesel PM, 67.1 tons per day of NOx

and 6.7 tons per day of reactive organic gases (ROG).
v

2. What is the risk posed from diesel-fueled portable engines?

Exposure to diesel PM emissions results in increased cancer risk and health

risks from other non-cancer health impacts, such as irritation to the eyes and

lungs, allergic reactions in the lungs, asthma exacerbation, blood toxicity,

immune system dysfunction, and developmental disorders. Because of the

variability in the use of portable diesel-fueled equipment and the mobile nature of

portable equipment, it is difficult to quantify the potential health risk resulting from

the operation of a portable diesel-fueled engine on any specific receptor.

However, qualitative conclusions can be drawn regarding potential exposures to

the emissions from diesel-fueled portable engines. Many Californians are

impacted by diesel PM emissions from the operation of diesel-fueled engines.

The emissions from these engines contribute toward the ambient concentration

of diesel PM. Based upon the emissions inventory for diesel PM, portable dieselfueled engines account for five percent of the ambient concentration. In addition,

many of the engines are used in urban locations where the probability of a

person living close to an engine is high.

The overall excess cancer risk can be significantly reduced by replacing older

portable diesel-fueled engines with new, cleaner diesel-fueled engines. For

example, if an older engine is replaced with a Tier 3 engine, the diesel PM

emissions and associated risk would be reduced by 55 to 70 percent.

Reductions of over 95 percent can be achieved if the older engine is replaced

with a Tier 4 engine, which is proposed to be available in the 2011-2014

timeframe.

D. PUBLIC OUTREACH

1. What action did staff take to consult with interested parties during the

development of the proposed ATCM?

The ARB staff developed the proposed ATCM and this report through extensive

consultations with industry, government agency representatives, environmental

organizations, and members of the public. In 2002, the ARB staff formed a

Portable Diesel Engine workgroup to assist with the development of the

proposed ATCM. The workgroup is comprised of over 60 representatives of

affected industry and associations, air pollution control and air quality

management districts’ (district) staff, and other interested members of the public.

The ARB staff held six public meetings with workgroup members between

January and September 2003. In addition, the ARB staff held numerous

individual meetings and conference calls with affected industry, associations,

engine manufacturers, and environmental groups during the development of the

proposed ATCM. Finally, the ARB staff held three public workshops in October,

November, and December 2003 to solicit ideas and comments from the public on

the proposed ATCM requirements.
vi

An e-mail list server was created to notify potentially affected industry and other

interested parties of the progress of the proposed ATCM. Approximately 500

individuals from government, environmental groups, industry, and associations

subscribe to the list server. The ARB staff created and has maintained a website

to facilitate the dissemination of up-to-date information on the progress of the

proposed ATCM at http://www.arb.ca.gov/diesel/ portdiesel.htm.

The ARB staff attended several California Air Pollution Control Officers

Association (CAPCOA) Engineering and Enforcement Managers Meetings to

brief district staff on the developments of the proposed ATCM requirements and

to solicit districts’ input. The staff also held several conference calls with district

staff during the development of the proposed ATCM to discuss the districts’

specific concerns with the proposed requirements. In addition, ARB staff

surveyed a cross-section of air districts to better understand the specific

requirements placed on portable diesel engines by the districts. The ARB staff

also surveyed city, county, and state facilities to solicit information on the types

and numbers of portable engines used by government agencies.

E. SUMMARY OF THE PROPOSED ATCM

1. What does the proposed ATCM require?

The proposed ATCM would affect all diesel-fueled portable engines that are

larger than 50 horsepower (hp). Included are engines that are registered under

ARB’s Portable Equipment Registration Program (PERP), engines that are

permitted by the districts, and engines that have historically been exempt from

district permits. The proposed ATCM would require all portable engines to be

certified to Tier 1, 2, or 3 U.S. EPA /ARB off-road engine standards by 2010.

After 2010, it would require all fleets of portable engines to meet diesel PM

emission averages that become more stringent in 2013, 2017, and 2020. The

owners/operators of these fleets will have flexibility in determining how the fleet

emission standards are to be satisfied. Options that are available to satisfy this

standard include: operating cleaner engines, replacing engines, using add-on

control devices, switching to alternative fuels or alternative diesel fuels, and

receiving credit for electrification.

By 2020, the proposed ATCM would require portable diesel-fueled engines to be

certified to proposed Tier 4 emission standards for U.S. EPA/ARB newly

manufactured off-road engines or be equipped with a Level-3 PM control

technology or a combination of verified control technologies to achieve 85

percent reduction.
vii

2. Are there exemptions to the proposed ATCM?

Engines that would be exempt from the proposed ATCM include: engines less

than or equal to 50 hp; engines used to propel mobile equipment; portable

equipment that is owned by the United States Department of Defense and used

in combat, combat support, tactical or relief operations, or training for such

operations (military tactical support equipment); and portable engines used at

San Clemente or San Nicolas Island.

3. What is the requirement for 2010?

The proposed regulation requires all diesel-fueled portable engines in California

to be certified engines by 2010, as is currently required for engines registered

under PERP. This provision would expand the certified engine requirement in

the PERP to engines permitted by districts and engines exempt from district

permit requirements.

4. What are the fleet requirements?

After 2010, owners of fleets of portable engines must satisfy progressively more

stringent diesel PM emission standards by 2013, 2017, and 2020. The purpose

of the diesel PM emission standards is to create additional diesel PM emission

reductions beyond those that would be achieved from normal engine turnover

after 2010.

A fleet includes portable engines registered with PERP, portable engines

permitted with local districts, and portable engines exempt from district permit

requirements. The fleet shall exclude portable engines that operate exclusively

outside of California, engines operated only within the Outer Continental Shelf

(OCS), engines used exclusively in emergency applications, and engines

qualifying as low-use (engines operating 80 hours or less per year). Portable

engines can also be exempt from the fleet requirements if equipped, as of

January 1, 2004, with a properly operating selective catalytic reduction (SCR)

system. Existing engines with SCR systems are excluded due to the current

technical challenge of installing both SCR and a diesel particulate filter (DPF) to

one engine. After January 1, 2004, SCR-equipped engines will be considered on

a case-by-case basis regarding installations of DPFs.

Standards are proposed for engines less than 175 horsepower, engines between

175 horsepower and 749 horsepower, and engines greater than or equal to 750

horsepower. The diesel PM standards (grams per brake horsepower-hour

(g/bhp-hr)) are illustrated below:
viii

Fleet Standard

Compliance

Date

 Engines <175

hp

(g/bhp-hr)

Engines >175 to

749 hp

(g/bhp-hr)

Engines > 750

hp

(g/bhp-hr)

1/1/13 0.3 0.15 0.25

1/1/17 0.18 0.08 0.08

1/1/20 0.04 0.02 0.02

Owners of portable engine fleets will determine compliance with the proposed

fleet standard by comparing the fleet's actual weighted diesel PM emission rate

with the fleet emission standard.

To encourage the use of cleaner technologies and to encourage repowering or

replacement of older engines with new, lower-emitting engines, the proposed

ATCM provides several incentives to promote these options as part of the fleet

reduction approach.

One incentive allows credit toward satisfying a fleet standard by adding

alternative fueled engines to the fleet. To obtain the credit, the engine must

operate at least 100 hours annually. The proposed ATCM also allows credit for

applications where grid power is used in lieu of using a diesel fuel. The credit is

granted where more than 200 hours of grid power is used for a given project and

the necessary recordkeeping and reporting requirements are satisfied. Finally, a

credit is included to encourage the purchase of proposed Tier 4 engines. (The

Tier 4 engines are proposed to be available in the 2011 to 2014 timeframe.) The

credit can be used when fleet owners purchase Tier 4 engines prior to January 1,

2015. In these cases, the owner can count the Tier 4 engine twice in the

calculations for the fleet-weighted diesel PM emission rates for compliance with

the 2013 and 2017 diesel PM standards.

5. What are the fleet requirements in 2013 and 2017 for emergency use and

low-use engines?

Engines that are used exclusively in emergency applications or are deemed lowuse engines are not subject to the fleet emission standards. Instead these

engines would be required by January 1, 2020, to be certified to proposed Tier 4

engines standards, or be equipped with a Level-3 PM control technology, or a

combination of verified control technologies to achieve a 85 percent diesel PM

reduction.

6. What are the requirements for school zones?

The ARB staff is continuing to work with the California Air Pollution Control

Officer’s Association (CAPCOA) and other stakeholders to determine if it is

feasible to develop provisions to address the operation of portable diesel-fueled

engines near schools during periods when children are present.
ix

7. What are the recordkeeping and reporting requirements?

For many fleets, the recordkeeping would only consist of keeping track of all the

engines in the fleet and their associated emission factors. Specific

recordkeeping requirements address only those engines in a fleet whose use is

based on minimum or maximum hourly limitations, fleets taking advantage of the

electrification incentive, and engines equipped with SCR.

All fleet owners will have to submit a status report to the ARB by March 1, 2011,

that includes the fleet’s average diesel PM emission rate for the 2010 calendar

year, information identifying each engine in the fleet, and each engine’s emission

rate. In addition, fleet owners must submit signed statements of compliance and

corroborating data indicating that they are meeting the fleet standards by

March 1 of each applicable year (i.e., 2013, 2017, 2020).

8. What are the enforcement requirements?

Health and Safety Code 39666 (d) requires the districts to implement and enforce

an ATCM that has been approved by the Board. Therefore, both the ARB and

the districts have the authority to review or seek enforcement action for violation

of the proposed regulation.

F. ENVIRONMENTAL AND ECONOMIC IMPACTS OF THE PROPOSED

ATCM

1. How does the proposed ATCM relate to ARB’s goals for Environmental

Justice?

The proposed ATCM is consistent with the ARB’s Environmental Justice policy to

reduce health risks from TACs in all communities, including low-income and

minority communities. Portable engines are used in both urban and rural

communities. Because they are used for a number of activities throughout the

State, the risk posed by these engines may potentially impact all communities in

California. Limiting diesel PM emissions from diesel-fueled portable engines in

California will provide air quality benefits to all communities, including minority

and low-income communities in the State.

2. What are the environmental impacts of the proposed ATCM?

The proposed ATCM will reduce diesel PM emissions and associated exposures

from portable engines throughout California. The table below provides ARB staff

estimates of diesel PM emissions reductions from portable engines resulting from

implementation of the proposed ATCM in addition to benefits from the PERP.

The estimates are based upon reductions from the year 2000 base year.

California’s air quality will also experience benefits from reduced criteria pollutant

emissions (e.g. NOx, ROG). The table also provides ARB staff estimates for
x

NOx and ROG reductions. By 2010, diesel PM emissions will be reduced by 2.2

TPD, or about 803 TPY, and NOx emissions will be reduced by 34 TPD, or about

12,400 TPY.

Year Diesel PM

Emissions

(TPD)

Percent

Reduction

NOx

Emissions

(TPD)

Percent

Reduction

ROG

Emissions

(TPD)

Percent

Reduction

2000 4.2 -- 67 -- 6.7 --

2010 2.0 52% 33 51% 4.6 30%

2015 1.3 69% 26 61% 2.9 57%

2020 0.2 95% 23 66% 1.2 78%

The ARB staff anticipates significant health cost savings due to reduced

mortality, incidences of cancer, PM-related cardiovascular effects, chronic

bronchitis, asthma, and hospital admissions from pneumonia and asthma-related

conditions. The diesel PM reductions are expected to reduce the number of

premature deaths in California. Although the implementation date for the final

diesel PM emission standards in the proposed regulation is 2020, the ARB staff

believes that the full benefits of the diesel PM standard requirements will extend

to 2037. (The ARB staff assumes that through a normal engine turnover rate, all

portable diesel-fueled engines would have been replaced by engines that are

certified to the proposed Tier 4 standards by approximately 2037. Therefore, the

costs and benefits of the proposed ATCM extend to 2037, despite the full

implementation by 2020.) The ARB staff estimates that by 2037, 768 premature

deaths will be avoided. Prior to 2037, cumulatively, it is estimated that 50

premature deaths would be avoided by 2010 and 339 by 2020. Additional health

benefits are expected from the reduction of NOx emissions, which give rise to

secondary PM from the conversion of NOx to PM2.5 nitrate. The ARB staff has

concluded that no significant adverse environmental impacts should occur from

adoption of, and compliance with, the proposed ATCM.

3. What are the economic impacts of the proposed ATCM?

The ARB staff estimates the total cost of the proposed ATCM to affected

businesses and government agencies to be between $350 and $420 million

discounted back to year 2002 or between $2 and $34 million per year, averaging

$15 million per year. The economic impact is distributed over a 30-year period to

2037.

The ARB staff estimates that the total cost, including capital and ongoing cost, to

a typical small business (a fleet of five or less engines) to be between $30,000

and $38,000 discounted back to year 2002, or about $2,000 per year. The total

cost to a typical business (a fleet of fifteen engines), including capital and

ongoing cost is estimated to be between $226,000 and $238,000, discounted
xi

back to year 2002, or about $8,200 per year. The cost for complying with the

proposed ATCM is affected by the number of engines in the fleet, the age of the

engine, and the horsepower size of the engines in the fleet.

The costs are attributable to early replacement of existing engines, the

installation of diesel PM reduction technologies, and registration fees for engines

previously not required to operate with a permit. The ARB staff assumed that an

existing engine would eventually be replaced at the end of its useful life and took

into account the remaining value of the existing engine at the time the proposed

ATCM requires the engine to be replaced with a new, cleaner engine. For

example, a typical rental fleet has a more frequent engine turnover rate—about

five to seven years—than other types of businesses. Consequently, the

proposed ATCM will not affect these types of businesses as much as other

industries that tend to keep their engines for longer periods of time. The

estimated annual ongoing costs to comply with the proposed ATCM include

annual costs for recordkeeping of $300 - $600, and $300 per engine for annual

maintenance of emission controldevices (diesel particulate filters). In addition,

staff estimates that the typical company will spend a total of $125 - $1,000 to

prepare the status report for compliance with the 2010 requirement and the three

compliance reports for the 2013, 2017, and 2020 fleet standards.

Overall, most affected businesses will be able to absorb the costs of the

proposed regulation with no significant adverse impacts on their profitability. This

finding is based upon staff’s estimated change in “return on owner’s equity”

(ROE) analysis. The analysis found that the overall change in ROE ranges from

negligible to a decline of about 7 percent. Because the proposed ATCM would

not alter significantly the profitability of most businesses, we do not expect a

noticeable change in employment, business creation, elimination, or expansion,

and business competitiveness in California. We also found no significant

adverse economic impacts on any local or State agencies.

The overall estimated cost effectiveness of the proposed ATCM, considering only

the benefits of reducing diesel PM is between $16 and $19 per pound of diesel

PM reduced. Since the proposed ATCM will also result in reductions of ROG

and NOx emissions, ARB staff allocated half of the costs of compliance against

these benefits, resulting in cost effectiveness values of $8-$10 per pound of

diesel PM reduced and less than $2 per pound of ROG and NOx reduced.

The estimated cost of control per premature death prevented by the proposed

ATCM is $ 275,000 in 2002 dollars. Using U.S. EPA’s established value for

avoiding a premature death, $2.44 million (using 2037 as the end year of

analysis) at seven-percent discount rate, and $4.78 million at three percent, both

values discounted back to year 2002, the cost range per death avoided because

of this proposed regulation is 9 to 17 times lower than the U.S. EPA’s benchmark

for value of avoided death. This rule is, therefore, a cost-effective mechanism to
xii

reduce premature deaths that would otherwise be caused by diesel PM

emissions without this proposed regulation.

G. NEXT STEPS

After the proposed ATCM is approved by the Board, the staff will continue its

outreach efforts by distributing information on the ATCM requirements—via

ARB’s portable-engine website and briefing papers—to the districts, trade

associates and organizations, engine manufacturers, engine repair services, and

control technology companies. The staff will also, with the districts, educate

owners of portable engines that are permitted with the districts of the ATCM

requirements. In addition, staff will educate owners of portable engines that are

registered with PERP. The ARB staff will work with the districts on identifying

portable engine owners that have not obtained permits or have registered with

PERP. These unregulated engines will need to be identified and brought into the

regulatory process so that all owners of portable engines in California are

ultimately complying with the proposed ATCM requirements. Finally, staff will

monitor the development of retrofit technologies and the availability of proposed

Tier 4 engines, and will conduct an assessment of this ATCM in the 2008

timeframe.

H. RECOMMENDATION

The staff recommends the Board approve the proposed ATCM presented in this

report (Appendix A). The ATCM will reduce diesel PM emissions from portable

engines by requiring the use of only the cleanest new engines and the most

stringent retrofit of existing portable engines. The proposed ATCM will provide

air quality benefits for all communities depending upon the number and duration

of portable use in those communities. The ARB staff believes that the proposed

ATCM is technologically feasible and necessary to carry out the Board’s

responsibilities under State law.
I. INTRODUCTION

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

overview of the Staff Report, discusses the purpose of the proposed air toxic

control measure for diesel-fueled portable engines (proposed ATCM), the

regulatory authority of the ARB to adopt the proposed ATCM, and the outreach

efforts by ARB staff while developing the proposed ATCM requirements.

A. Overview

This report presents the proposed ATCM to reduce the emissions of diesel

particulate matter (diesel PM) from diesel-fueled portable engines. A detailed

summary of the requirements of the proposed ATCM is found in Chapter V. The

report also shares the information that ARB staff used in developing the

proposed ATCM. This information includes:

• the health effects associated with exposure to diesel PM emissions

(Chapter II)

• the requirements of current regulations that are designed to reduce emissions

from diesel-fueled portable engines (Chapter III)

• the diesel PM emission inventory and the risk posed by diesel-fueled portable

engines (Chapter IV)

• the regulatory alternatives to the proposed ATCM and why they were not

chosen (chapter VI)

• the environmental impacts of implementing the proposed ATCM (Chapter VII)

• the economic impacts of the proposed ATCM (Chapter VIII)

The text of the proposed ATCM and other supporting information are found in the

Appendices.

B. Purpose

The primary purpose of the proposed ATCM is to reduce the general public's

exposure to diesel PM from diesel-fueled portable engines. Chapter V of this

Staff Report contains a plain English discussion of the key requirements of the

proposed ATCM, and Appendix A contains the full text of the proposed ATCM.

C. Regulatory Authority

Several sections of the California Health and Safety Code (HSC) provide the

ARB with authority to adopt the proposed ATCM. 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.
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More specifically, California's Air Toxics Program, established under California

law by Assembly Bill (AB) 1807 (Stats. 1983, Ch. 1047), and set forth in Health

and Safety Code sections 39650 through 39675, mandates the identification and

control of air toxics 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 toxic air contaminants (TACs). The ARB's

evaluation is made available to the public and is formally reviewed by the

Scientific Review Panel (SRP), established under Health and Safety Code

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, Health and Safety Code sections 39658 and 39665 require

the ARB, with the participation of the air pollution control and air quality

management 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 (risk management phase).

In August 1998, the Board identified diesel PM as a TAC, and in September

2000, the ARB adopted the "Risk Reduction Plan to Reduce Particulate Matter

Emissions from Diesel-fueled Engines and Vehicles" (Diesel Risk Reduction

Plan). The Diesel Risk Reduction Plan was the first formal product of the risk

management phase and serves as the needs assessment under the AB 1807

process. In the Diesel Risk Reduction Plan, the ARB identified the available

options to reduce diesel PM and the recommended control measures to achieve

reductions, including a measure to reduce diesel PM from diesel-fueled portable

engines.

In 1999, California’s Air Toxics Program was amended by Senate Bill 25 (Stats.

1999, Ch. 731) to provide additional requirements for further consideration of

health impacts to infants and children. As part of these requirements, OEHHA

was to identify up to five TACs as making children especially susceptible to

illness. OEHHA published the "Prioritization of Toxic Air Contaminants under the

Children's Environmental Health Protection Act" in October 2001, identifying

diesel PM as one of the five TACs. Additional requirements established by

Senate Bill 25 in Health and Safety Code section 39669.5 directs the ARB to

adopt control measures, as appropriate, to protect public health, particularly

infants and children, from these specially identified TACs.

This ATCM is being proposed to fulfill the goals of the Diesel Risk Reduction

Plan and to comply with the requirements of H&S Code section 39666 and

39669.5 to prevent an endangerment to public health.
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D. Public Outreach

An open public process is an essential part of the adoption of any air quality

regulation, including this proposed ATCM. The ARB staff made extensive efforts

to ensure that the public was aware of, and had an opportunity to participate in,

the rulemaking process for this proposed control measure.

Outreach Efforts

In 2002, ARB staff formed a Portable Diesel Engine workgroup to assist with the

development of the proposed ATCM. The workgroup is comprised of over 60

representatives of affected industry and associations, staff from the air pollution

control and air quality management districts (districts), and other interested

members of the public. All businesses with engines registered with ARB’s

Portable Equipment Registration Program (PERP) were notified of the formation

of the workgroup to solicit their participation in the development of the proposed

ATCM. These businesses would be directly impacted by the proposed ATCM.

The PERP is discussed in Chapter III. The ARB staff held six public meetings

with workgroup members between January and September 2003, with the option

to participate via conference call to further meet the convenience of others. The

ARB staff also held three public workshops in October, November, and

December of 2003 to solicit ideas and comments from the general public on the

proposed ATCM requirements. A summary of staff’s outreach meetings is

included in Table I-A below.

Table I-1: Public Workgroup and Workshop Meetings

Portable Diesel-Fueled Engines ATCM

Public Workshops

October 3, 2003

(Sacramento)

November 18, 2003

(Sacramento)

December 4, 2003

(El Monte)

Portable Diesel-Fueled Engines ATCM

Workgroup Meetings January 31, 2003

March 6, 2003

May 9, 2003

June 5, 2003

July 30, 2003

September 12, 2003
4

The ARB staff created an e-mail list server to notify potentially affected industries

and other interested parties of the workgroup meetings and the public workshop,

and to provide list server subscribers the opportunity to review draft versions of

the regulation. Approximately 500 individuals from government, environmental

groups, industries, and associations subscribe to the list server.

In addition to the public meetings, ARB staff held several individual meetings and

conference calls with affected industry, associations, engine manufacturers, and

environmental groups during the development of the proposed ATCM to address

their specific concerns regarding the proposed requirements.

Furthermore, as a way of generating public participation and to enhance the

information flow between ARB and interested persons, ARB staff has created

and maintained a website to facilitate the dissemination of up-to-date information

on the development of this proposed diesel PM control measure. The website is

located at http://www.arb.ca.gov/diesel/portdiesel.htm.

The ARB staff attended several California Air Pollution Control Officers

Association (CAPCOA) Engineering and Enforcement Manager Meetings to brief

district staff on the developments of the control measure requirements and to

solicit districts’ input. The staff also held several conference calls with district

staff during the development of the proposed ATCM to discuss the districts’

specific concerns with the proposed requirements. Furthermore, ARB staff

surveyed a cross-section of air districts through telephone calls and e-mails to

better understand the specific requirements placed on portable diesel-fueled

engines by the districts.

The staff also sent over 1,000 surveys to California cities, counties, colleges, and

state-owned facilities in 2002 to inform these agencies of the development of the

proposed ATCM and to solicit information on the types and numbers of portable

engines that are used in state and local government. A summary of the survey

results along with a copy of the survey that was sent to the agencies is included

in Appendix B.
5

II. NEED FOR REDUCTION OF DIESEL PARTICULATE MATTER

EMISSIONS

The primary goal of the Diesel Risk Reduction Plan is to reduce diesel PM

emissions and the associated cancer risk by 85 percent in 2020. This proposed

ATCM to reduce diesel PM emissions from diesel-fueled portable engines is one

of a large group of regulations being developed to achieve the Plan’s emissionand risk-reduction goals. The proposed ATCM will also reduce emissions of

reactive organic gases (ROG) and oxides of nitrogen (NOx), precursors to the

formation of ozone.

This chapter describes the physical and chemical characteristics of diesel PM,

the health effects of the pollutants emitted by diesel engines, and the

environmental benefits from implementing the proposed regulation. As

discussed below, it is important that steps be taken to reduce emissions from all

diesel-fueled engines, including diesel-fueled portable engines, to reduce public

exposures to diesel PM and ozone; to further assist the State with meeting the

ambient air quality standards; and to improve visibility.

A. Physical and Chemical Characteristics of Diesel PM

Diesel engines emit a complex mixture of inorganic and organic compounds that

exist in gaseous, liquid, and solid phases. The composition of this mixture will

vary depending on engine type, operating conditions, fuel, lubricating oil, and

whether or not an emission control system is present. The primary gas or vapor

phase components include typical combustion gases and vapors such as carbon

monoxide (CO), carbon dioxide (CO2), sulfur dioxide (SO2), NOx, ROG, water

vapor, and excess air (nitrogen and oxygen).

The emissions from diesel-fueled engines also contain potential cancer-causing

substances such as arsenic, nickel, benzene, formaldehyde, and polycyclic

aromatic hydrocarbons (PAHs). There are over 40 substances that are listed by

the United States Environmental Protection Agency (U.S. EPA) as hazardous air

pollutants and by the ARB as toxic air contaminants (TACs) in emissions from

diesel-fueled engines. Fifteen of these substances are listed by the International

Agency for Research as carcinogenic to humans, or as a probable or possible

human carcinogen. The list includes the following substances: formaldehyde,

acetaldehyde, 1,3-butadiene, antimony compounds, arsenic, benzene, beryllium

compounds, inorganic lead, mercury compounds, bis(2-ethylhexyl)phthalate,

dioxins and dibenzofurans, nickel, Polycyclic Organic Matter (including PAHs);

and styrene.

Diesel PM is either directly emitted from diesel-powered engines (primary

particulate matter) or is formed from the gaseous compounds emitted by a diesel

engine (secondary particulate matter). Diesel PM consists of both solid and
6

liquid material and can be divided into three primary constituents: the elemental

carbon fraction, the soluble organic fraction, and the sulfate fraction.

Many of the diesel particles exist in the atmosphere as a carbon core with a

coating of organic carbon compounds, or as sulfuric acid and ash, sulfuric acid

aerosols, or sulfate particles associated with organic carbon. The organic

fraction of the diesel particle contains compounds such as aldehydes, alkanes

and alkenes, and high-molecular weight PAH and PAH-derivatives. Many of

these PAHs and PAH-derivatives, especially nitro-PAHs, have been found to be

potent mutagens and carcinogens. Nitro-PAH compounds can also be formed

during transport through the atmosphere by reactions of adsorbed PAH with nitric

acid and by gas-phase radical-initiated reactions in the presence of oxides of

nitrogen. Fine particles may also be formed secondarily from gaseous

precursors such as SO2, NOx, or organic compounds. Fine particles can remain

in the atmosphere for days or weeks and travel through the atmosphere for

hundreds or thousands of kilometers, while coarse particles deposit to the earth

within minutes or hours and within tens of kilometers from the emission source.

Almost all of the diesel particle mass is in the fine particle range of 10 microns or

less in diameter (PM10). Approximately 94 percent of the mass of these particles

is less than 2.5 microns in diameter. Diesel PM can be distinguished from

noncombustion sources of PM2.5 by the high content of elemental carbon with the

adsorbed organic compounds and the high number of ultrafine particles (organic

carbon and sulfate).

The soluble organic fraction (SOF) consists of unburned organic compounds in

the small fraction of the fuel and atomized and evaporated lube oil that escape

oxidation. These compounds condense into liquid droplets or are adsorbed onto

the surfaces of the elemental carbon particles. Several components of the SOF

have been identified as individual toxic air contaminants.

B. Health Impacts of Exposure to Diesel PM, Ambient Particulate Matter,

and Ozone

The proposed ATCM will reduce the public’s exposure to diesel PM, as well as

reduce ambient particulate matter. In addition, the proposed ATCM is expected

to result in reductions in emissions of NOx and ROG, which are precursors to the

formation of ozone in the lower atmosphere. The primary health impacts of these

air pollutants are discussed below.

Diesel Particulate Matter

Diesel PM is of specific concern because it poses a lung cancer hazard for

humans as well as a hazard from noncancer respiratory effects such as

pulmonary inflammation. Because of their small size, the particles are readily

respirable and can effectively reach the lowest airways of the lung along with the
7

adsorbed compounds, many of which are known or suspected mutagens and

carcinogens. More than 30 human epidemiological studies have investigated the

potential carcinogenicity of diesel PM. On average, these studies found that

long-term occupational exposures to diesel exhaust were associated with a 40

percent increase in the relative risk of lung cancer (OEHHA, 1998). However,

there is limited specific information that addresses the variable susceptibilities to

the carcinogenicity of diesel exhaust within the general human population and

vulnerable subgroups, such as infants and children and people with preexisting

health conditions. Also, the genotoxicity of diesel exhaust and some of its

chemical constituents have been reported in a number of studies.

Diesel PM was listed as a toxic air contaminant (TAC) by ARB in 1998 after an

extensive review and evaluation of the scientific literature by OEHHA (CARB,

1998). Using the cancer unit risk factor developed by OEHHA for the TAC

program and modeled ambient concentrations of diesel PM, it was estimated that

for the year 2000, exposure to ambient concentrations of diesel PM (1.8 μg/m3)

represented a health risk of 540 potential cancer cases per million people

exposed over a 70-year lifetime.

Another significant health effect of diesel exhaust exposure is its apparent ability

to act as an adjuvant in allergic responses and possibly asthma (Diaz-Sanchez et

al. 1996, Takano et al. 1998, Diaz-Sanchez et al. 1999). However, additional

research is needed at diesel exhaust concentrations that more closely

approximate current ambient levels before the role of diesel PM exposure in the

increasing allergy and asthma rates is established.

Ambient Particulate Matter

Numerous epidemiological studies have shown that an increase in the ambient

PM concentration can, in fact, cause adverse health effects. The key health

effects associated with ambient particulate matter, of which diesel PM is a

component, are premature mortality; aggravation of respiratory and

cardiovascular disease (as indicated by increased hospital admissions and

emergency room visits, school absences, work loss days, and restricted activity

days); aggravated asthma; acute respiratory symptoms, including aggravated

coughing and difficult or painful breathing; chronic bronchitis; and decreased lung

function that can be experienced as shortness of breath (U.S. EPA 2000b, U.S.

EPA 2003a).

The health impacts from exposure to the fine particulate matter (PM2.5)

component of diesel exhaust have been calculated for California, using

concentration-response equations from several epidemiological studies. Both

mortality and morbidity effects are associated with exposure to both direct diesel

PM2.5 and indirect PM2.5, the latter of which arises from the conversion of diesel

NOx emissions to PM2.5 nitrates. It was estimated that 2000 and 900 premature

deaths resulted from long-term exposure to both 1.8 μg/m3 of direct PM2.5 and
8

0.81 μg/m3 of indirect PM2.5, respectively, for the year 2000. The mortality

estimates are likely to exclude cancer cases, but may include some premature

deaths due to cancer, because the epidemiological studies did not identify the

cause of death. Exposure to fine particulate matter, including diesel PM2.5, can

also be linked to a number of heart and lung diseases.

Ozone

Diesel exhaust consists of hundreds of gas-phase, particle-phase, and semivolatile organic compounds, including typical combustion products, such as CO2,

hydrogen, oxygen, and water vapor, as well as CO, VOCs, carbonyls, alkenes,

aromatic hydrocarbons, PAHs, PAH derivatives, and SOx—compounds resulting

from incomplete combustion. Ozone is formed by the reaction of ROG and NOx

in the atmosphere in the presence of heat and sunlight. The highest levels of

ozone are produced when both ROG and NOx emissions are present in

significant quantities on clear summer days. This pollutant is a powerful oxidant

that can damage the respiratory tract, causing inflammation and irritation, which

can result in breathing difficulties.

Studies have shown that there are impacts on public health and welfare from

ozone at moderate levels that do not exceed the national 1-hour ozone standard.

Short-term exposure to high ambient ozone concentrations has been linked to

increased hospital admissions and emergency visits for respiratory problems

(U.S. EPA, 2000b). Repeated exposure to ozone can make people more

susceptible to respiratory infection and lung inflammation and can aggravate

preexisting respiratory diseases, such as asthma. Prolonged (6 to 8 hours),

repeated exposure to ozone can cause inflammation of the lung, impairment of

lung defense mechanisms, and possibly irreversible changes in lung structure,

which over time could lead to premature aging of the lungs and/or chronic

respiratory illnesses such as emphysema and chronic bronchitis.

The subgroups most susceptible to ozone health effects include individuals

exercising outdoors and children and people with preexisting lung disease such

as asthma, and chronic pulmonary lung disease. Children are more at risk from

ozone exposure because they typically are active outside during the summer

when ozone levels are highest. Also, children are more at risk than adults from

ozone exposure because their respiratory systems are still developing. Adults

who are outdoors and moderately active during the summer months, such as

construction workers and other outdoor workers, are also among those most at

risk. These individuals, as well as people with respiratory illnesses such as

asthma, especially asthmatic children, can experience reduced lung function and

increased respiratory symptoms, such as chest pain and cough, when exposed

to relatively low ozone levels during prolonged periods of moderate exertion.
9

C. Health and Environmental Benefits from Implementation of the

Proposed Regulation

Reducing diesel PM emissions from diesel-fueled portable engines will have both

public health and environmental benefits. The proposed ATCM will reduce

localized potential cancer risks associated with diesel-fueled portable engines

that are near receptors and will 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 regulation include further progress in meeting the ambient air quality

standards for PM10, PM 2.5 , ozone, and visibility.

Reduced Diesel PM Emissions

The estimated reductions in diesel PM emissions and the associated health

benefits from reduced exposures and risk are discussed in detail in Chapter VII.

Reduced Ambient Particulate Matter Levels

Reducing diesel PM will help efforts to achieve the ambient air quality standards

for particulate matter. Both the State of California and the U.S. EPA have

established standards for the amount of PM10 in the ambient air. These

standards define the maximum amount of PM that can be present in outdoor air.

California's PM10 standards were first established in 1982 and updated June 20,

2002. The current PM10 standard is more protective of human health than the

corresponding national standard. Additional California and federal standards

were established for PM2.5 to further protect public health (Table II-1).

Table II-1: State and National PMStandards

California Standard National Standard

PM10

Annual Arithmetic Mean 20 μg/m3 Annual Arithmetic Mean 50 μg/m3

24-Hour Average 50 μg/m324-Hour Average 150

μg/m3

PM2.5

Annual Arithmetic Mean 12 μg/m3 Annual Arithmetic Mean 15 μg/m3

24-Hour Average No separate

State standard

24-Hour Average 65 μg/m3

Particulate matter levels in most areas of California exceed one or more of

current state PM standards. The majority of California is designated as nonattainment for the state PM10 standard (CARB, 2002a). Diesel PM emission

reductions from diesel-fueled engines will help protect public health and assist in
10

furthering progress in meeting the ambient air quality standards for both PM10

and PM 2.5.

The emission reductions obtained from the implementation of this proposed

ATCM will result in lower ambient particulate matter levels and significant

reductions of exposure to primary and secondary diesel PM. Lower ambient

particulate matter levels and reduced exposure mean reduction of the prevalence

of the diseases attributed to diesel PM, reduced incidences of hospitalizations,

and prevention of premature deaths.

Reduced Ambient Ozone Levels

Emissions of the ozone precursors NOx and ROG will also be reduced by the

proposed regulation. In California, most major urban areas and many rural areas

continue to be non-attainment for the State and federal 1-hour ambient air quality

standard for ozone. Controlling emissions of ozone precursors would reduce the

prevalence of respiratory problems associated with ozone exposure and would

reduce hospital admissions and emergency visits for respiratory problems.

Ozone can also have adverse health impacts at concentrations that do not

exceed the 1-hour National Ambient Air Quality Standards (NAAQS).

Table II-2: State and National Ozone Standards

California Standard National Standard

1 hour 0.09ppm (180 μg/m3) 0.12ppm (235 μg/m3)

8 hour _ 0.08 ppm (157 μg/m3)

Improved Visibility

In addition to the public health effects of fine particulate pollution, fine particulates

including sulfates, nitrates, organics, soot, and soil dust contribute to the regional

haze that impairs visibility.

In 1999, the U.S. EPA promulgated a regional haze regulation that calls for

states to establish goals and emission reduction strategies for improving visibility

in 156 mandatory Class I national parks and wilderness areas. California has 29

of these national parks and wilderness areas, including Yosemite, Redwood, and

Joshua Tree National Parks. Reducing diesel PM from diesel-fueled portable

engines will help improve visibility in these Class I areas.
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III. DIESEL-FUELED PORTABLE ENGINE USE AND EXISTING

REGULATIONS

This chapter describes the types of businesses that use portable engines and

associated equipment and describes existing regulations that currently impact

portable engines used in California.

A. Summary of Portable Engine Use and Activities

Portable engines are internal combustion engines that are designed and capable

of being carried or moved from one location to another. Unlike stationary

engines, portable engines may be moved to various locations on the same

facility, to other facilities within the same district, or throughout the State. The

engines are used to power a variety of equipment, including: pumps (e.g.,

agricultural irrigation pumps and other water pumps), ground support equipment

at airports, cranes, oil-well drilling and workover rigs, power generators, dredging

equipment, rock crushing and screening equipment, welding equipment,

woodchippers, and compressors.

Both private businesses and public agencies operate portable engines and

associated equipment in California. Examples of businesses that use portable

engines in their activities include motion picture studios, amusement parks,

agriculture, air couriers, airlines, utilities, construction services, crushing,

screening, and recycling services, industrial cleaning services, marine

construction and dredging services, oil and gas well service companies,

refineries, and rental services. Examples of public agencies that use portable

engines include public schools and universities, local governments, county

landfills, municipal utilities, wastewater treatment facilities, prisons, military

installations, the California Department of Transportation, and other state

agencies.

Portable engines and associated equipment can be categorized according to

business type. A description of the businesses and public agencies and the type

of equipment that is used in each category are provided below.

Rental

The businesses that are under the rental category specialize in the rental of

power generation for construction activities, maintenance and repair at industrial

sites, and emergency standby power. The portable equipment used by these

companies includes generators, compressors, and pumps.
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Oil and Gas Well Service

Businesses in this category specialize in drilling and maintaining oil and gas

wells. Portable equipment used by these companies includes drilling and

workover rigs, compressors, pumps, and generators.

Construction

Businesses in this category build roads, bridges, and structures, and are also

involved in the demolition of such structures. Portable equipment used by these

companies includes compressors, generators, booster pumps, cranes, rock

crushers, rock drills, pile drivers, and welders.

Government

The government category includes governmental agencies, such as the

California Department of Transportation, municipal governments, wastewater

treatment plants, and water districts. Air compressors, auxiliary engines for

street sweepers, brush chippers, drill rigs, emergency power generators,

hydraulic pumps, power shovels, road maintenance equipment, and water pumps

are some types of portable equipment that may be used by these agencies.

Industrial

This category includes businesses specializing in water-well drilling and pumping

services, and industrial cleaning services. Portable equipment used by these

companies includes compressors, sand blasters, drill rigs, pumps, and

emergency standby engines.

Electric Utilities

The electric utility category is made up of companies that provide natural gas and

electricity. The portable equipment used by utilities includes compressors, wood

chippers, and emergency standby equipment.

Telecommunication

Telecommunication companies primarily use generators to provide emergency

power at cell towers.

Wood Waste Recycling

Businesses in this category trim and remove trees and recycle tree parts. The

portable equipment used by these companies includes wood chippers and tub

grinders.
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Entertainment

Businesses in this category primarily use generators to produce power for

lighting, air conditioning, and other essential services at locations outside of the

movie studios.

Marine Construction and Dredging

Businesses in this category maintain waterways and harbors using barges

equipped with generators, large pumps, or cranes.

Ground Support

Businesses in this category use portable equipment to support the operation of

airports and aircraft. The equipment used includes air compressors, start carts,

and air-conditioning units.

Aggregate

Businesses in this category specialize in the crushing and sizing of gravel.

Generators, rock crushers and screeners are the primary portable equipment

used by these businesses.

Military

The military category includes military bases and military facilities that utilize

portable equipment. Generators and compressors are the primary portable

equipment used by the military.

Agriculture

Agriculture operations consist of the growing of crops or the raising of fowl or

animals. Irrigation pumps are the primary portable equipment used by these

businesses.

The above listing demonstrates the many diverse uses of portable diesel-fueled

engines. There is significant variation in the size of the engines and the way

these engines are used. The size of engines can range from about 50 hp to

3,000 hp. Due to the mobile nature of portable engines, the emissions typically

would not occur in one location, but would be spread out over many locations

over the course of a year. In addition, the actual operation of a specific engine

can vary significantly from the average. For example, engines used only for

emergency applications may operate less than 20 hours per year. Conversely,

some portable activities can operate more than 2,000 hours per year. The

average annual operating hours for portable diesel-fueled engines is about 450

hours per year. Finally, the engine’s load varies depending upon the application.
14

Similar to the variability in the hours of operation, an engine’s load can very

significantly from application to application, from 25 percent to 80 percent of

maximum load. The average load is typically 50 percent of maximum load.

In summary, the engines affected by this proposed ATCM represent a broad

array of diverse applications. As discussed throughout this report, the diversity in

the sizes and uses of portable diesel-fueled engines makes it a challenge to

develop an effective and enforceable regulatory proposal.

B. Existing Regulations

This section describes the federal preemption that limits the ARB’s and local

districts’ authority to regulate portable engines. It also describes specific federal,

state, and local programs that currently impact portable engines used in

California. These programs include the ARB/U.S. EPA emission standards for

newly manufactured off-road engines, the ARB’s Statewide Portable Equipment

Registration Program, and the local air pollution control and air quality

management district (district) permitting programs. All of these programs play a

role in the ARB’s and districts’ efforts to attain the State and federal ambient air

quality standards, particularly the ozone standards. Consequently, the focus of

the programs has been to reduce emissions of NOx and ROG, and to a lesser

extent reduce emissions of carbon monoxide (CO) and PM.

Federal Preemption

The Clean Air Act Amendments of 1990 generally preempted states from

adopting emission standards for new nonroad engines or vehicles. Under

section 209(e) of the Clean Air Act, all states are precluded from adopting

emissions standards and other requirements for new nonroad engines smaller

than 175 hp and used in construction or agricultural equipment or vehicles. As

for other new nonroad engines, California, in recognition of the longstanding

mobile source program already in place and the challenging air quality problems

it faces, was allowed to adopt and enforce emission standards after receiving an

authorization to do so from the U.S. EPA. California refers to engines called

nonroad by the U.S. EPA as offroad engines. Accordingly this report will use the

California terminology to describe such engines hereafter.

ARB/U.S. EPA New Engine Emission Standards

As mentioned above, the Clean Air Act Amendments provided for an

authorization for California to adopt and enforce emissions standards for offroad

engines (other than engines under 175 hp and used in construction or

agricultural equipment or vehicles). Since January 1, 1996, new portable

engines sold in California have been subject to ARB’s Off-Road Compression

Ignition emission standards (Title 13, California Code of Regulations, sections

2420 - 2427), which are equivalent to the U.S. EPA emission standards for newly
15

manufactured nonroad engines (40 Code of Federal Regulations, Part 89).

These engines will be referred to as “certified engines” throughout the remainder

of this report. The standards are tiered (i.e., Tier 1, 2, 3), with each set of

standards phased in over several years based on the power rating of the engine.

The Tier 1, 2, and 3 engine standards are presented in Appendix C. In 2006,

newly manufactured portable engines of all sizes will be subject to Tier 2

standards, and in 2008, newly manufactured engines of all sizes will be subject

to Tier 3 standards. Table III-1 illustrates the emission standards that will be in

place for portable engines greater than 50 horsepower when Tier 3 standards are

fully phased in.

Table III-1: Emission Standards (g/bhp-hr) That Will Be In Effect When OffRoad Standards (Tier 3) Are Fully Implemented

Rated Power

(hp) PM CO

When

Standards

Apply

NMHC +

NOx

When

Standards

Apply

Greater than or

equal to 50 but

less than 100

0.30 3.7 2004 3.5 2008

Greater than or

equal to 100 but

less than 175

0.22 3.7 currently 3.0 2007

Greater than or

equal to 175 but

less than 750

0.15 2.6 currently 3.0 2006

Greater than 750 0.15 2.6 2006 4.8 2006

Tier 4 emission standards were proposed by U.S. EPA in April 2003, and will, if

adopted, require most engines to meet more stringent PM and NOx limits.

These standards would be phased in during the 2011-2014 timeframe. As soon

as the U.S. EPA Tier 4 standards are adopted, the ARB plans to adopt new

engine standards that harmonize with the new federal standards. The proposed

Tier 4 emission standards are presented in Table III-2 below:
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Table III-2: Proposed U.S. EPA Tier 4 Emission Standards (g/hp-hr) for

Engines Greater than 50 hp

Rated Power First year that

Standards Apply

PM NOx

Greater than or equal to

25 but less than 75

2008

2013

0.221

0.02

3.52

0.3

Greater than or equal to

75 but less than 175

2012-2014 0.01 0.30

Greater than or equal to

175 but less than 750

2011-2013 0.01 0.30

Greater than 750 2011-2014 0.01 0.30

1 The manufacturer has the option of skipping the 2008 standards for all 50-75

hp engines; the 0.02 g/bhp-hr PM standard would then take effect one year

earlier for these engines (2012).

2 The 3.5 g/hp-hr standard includes both NOx and nonmethane

hydrocarbons.

These proposed Tier 4 standards would achieve diesel PM reductions of over 90

percent when compared to uncertified engine emission levels (i.e., engines not

meeting an ARB/ U.S. EPA off-road engine emission standard). Similarly,

replacing an uncertified engine with a proposed Tier 4 engine would result in

reductions of NOx of over 90 percent.

Statewide Portable Equipment Registration Program

All of California’s 35 air districts operate permit programs. In most cases,

portable engines are subject to permit requirements established by the local air

districts. Many portable engines—especially rental engines, dredging equipment,

and oil-well drilling and servicing rigs—operate in multiple districts. Instead of

obtaining multiple permits from individual districts, a portable engine owner can

register the engine with ARB’s Statewide Portable Equipment Registration

Program (PERP), which was established in 1997 (Title 13, California Code of

Regulations, sections 2450-2466; Health and Safety Code Section 41750-

41755). Portable-engine owners have registered over 14,500 engines under

PERP, which represents nearly half of the estimated statewide inventory of

portable engines. Most of the engines in PERP are diesel-fueled.

The PERP regulations were designed to promote the use of clean portable

engines in California. By January 1, 2010, all engines registered under PERP

must be certified to ARB/U.S. EPA off-road engine emission standards (Tier 1, 2,

or 3). Consequently, engines currently in the program that do not meet at least

Tier 1 standards (generally those manufactured before 1996) must be replaced

with certified engines—Tier 2 or Tier 3, depending on the year the engine is
17

purchased—by that date. By 2010, full implementation of the PERP

requirements will result in reductions of diesel PM emissions from portable

engines currently registered in the State by an estimated 30 percent or about 250

tons per year (0.7 tons per day) of diesel PM. The proposed portable dieselfueled engine ATCM expands the PERP to achieve additional diesel PM

reductions. For example, one of the short-term goals of the proposed ATCM is to

ensure that all portable engines in California, whether registered with PERP or

governed by district rules, are certified engines by 2010, the same requirement

engines registered with the PERP program must satisfy.

Local District Permit Programs

Portable engines are generally subject to local air district permitting

requirements, although some districts specifically exempt them. Owners of

portable engines and associated equipment, where exempt, are not required to

obtain construction or operating permits. Nor do they have to register their

equipment with PERP, as PERP registration is a voluntary program in lieu of

acquiring local air district permits.

The ARB staff estimates that there are approximately 3,000 portable engines in

California that are permitted by the districts. District permit requirements vary,

depending on the severity of the air quality in the district. The districts regulate

pollutants and their precursors for which there are ambient air quality standards

(NOx, PM, VOCs) as well as specific toxic air contaminants (e.g., benzene,

hexavalent chromium, and lead).

In addition to the portable diesel engines currently permitted by the local air

districts, ARB staff estimates that there are several thousand engines subject to

permitting requirements that are neither permitted nor registered in PERP. By

definition, portable engines may move continually from location to location, which

can make them difficult to identify as nonpermitted. The local air districts and the

ARB need to enhance outreach opportunities to engine owners, informing them

of their permitting requirements. Additionally, there are portable engines that are

currently exempt from local air district permitting requirement—due to size or

application—that will be subject to the proposed ATCM and will therefore need to

apply for permits or State registration.

Local air district permits for portable engines may contain a variety of operating

requirements and restrictions. The ARB staff reviewed district rules and surveyed

a cross-section of air districts to better understand the specific requirements

placed on portable engines by the districts. A summary of district rules that apply

to portable engines is included in Appendix D. One of the most common

requirements for new engines is the installation of Best Available Control

Technology (BACT). BACT is typically expressed as an emission level (e.g.,

grams per brake-horsepower hour), and the requirement is typically satisfied by

the applicant either selecting existing equipment or a technology that satisfies the
18

emission level or by installing add-on air pollution control equipment. For

portable diesel engines, however, the federal Clean Air Act amendments

preempt the districts from requiring add-on control equipment on new engines, so

many districts require new portable engines to meet ARB/U.S. EPA newly

manufactured off-road engine standards at the time a permit to construct is

issued.

Several districts also have source-specific regulations. For example, Ventura

County Air Pollution Control District regulates oilfield drilling operations by

requiring, if certain criteria are met, the use of electrified drilling equipment.

Several other districts require portable engines to satisfy the applicable

requirements of their internal combustion engine rules.

Currently, eight districts have adopted Toxics New Source Review rules and

many more districts have adopted policies regulating the potential toxic

emissions from a new project. These rules and policies require the application of

toxics BACT and require denial of the project if the project has the potential to

exceed specified thresholds for risk. Risk is typically evaluated based upon the

potential increases in cases of cancer. Based upon risk, some districts also limit

the hours of operation of a portable engine. The hours are limited so that the risk

posed by the engine does not exceed the potential risk level where a permit is

typically denied, usually at levels greater than 10 in a million potential cancer

cases.

Five districts—Antelope Valley, Northern Sierra, San Diego, San Joaquin Valley

Unified, and Yolo-Solano— have implemented registration programs specifically

for portable engines and associated equipment. Owners of portable engines in

these districts can register their engines with the district instead of obtaining an

individual permit by demonstrating their engines meet specific emission rates.
19

IV. EMISSIONS, EXPOSURE, AND POTENTIAL RISK FROM

DIESEL-FUELED PORTABLE ENGINES

This chapter presents the most recent emissions inventory for diesel-fueled

portable engines in California as well as a discussion on the potential cancer

health risks that may occur due to the operation of diesel-fueled portable

engines.

A. Estimated Emissions

In January 2000, the Board approved an emission inventory for large off-road

compression ignition engines using the Off-Road Emissions Model (Off-Road

Model), which establishes emission estimates for engines 25 horsepower and

larger used in off-road applications. The model was used to estimate the 2000,

2010, and 2020 portable engine inventory and associated diesel PM emissions

presented in the Diesel Risk Reduction Plan.

The ARB staff used the Off-Road Model to estimate the number of portable

engines greater than 50 horsepower in California and the associated diesel PM

emissions. The staff updated the inventory for diesel-fueled agricultural irrigation

pumps by using more recent engine estimates from agriculture representatives

and the local air districts.

Based on this inventory, staff estimates that there are 33,000 portable engines in

California with an estimated 4.2 tons per day or 1,500 tons per year of diesel PM

emissions. Estimates for current statewide diesel PM, NOx, and ROG emissions

from all diesel-fueled portable engines are included in Table IV-1.

Projected 2010 and 2020 Emission Estimates for Diesel-Fueled Portable

Engines

The projected emission estimates for 2010 and 2020 are also included in Table

IV-1. These estimates include benefits from the PERP, new engine standards,

and turnover in the engine population, but do not include the projected additional

reductions expected from implementation of the proposed ATCM. Expected

emission reductions from the implementation of the proposed ATCM are

discussed in Chapter V. As shown in Table IV-1, ARB staff predicts significant

decreases in diesel PM, NOx, and ROG emissions from diesel-fueled portable

engines between 2000 and 2020 due largely to PERP and engine turnover.
20

Table IV-1: Emission Estimates of Diesel-Fueled Portable Engines

(without ATCM Implementation), Tons per Day

Emissions, Tons per Day

Year Diesel PM NOx ROG

2000 4.2 67.1 6.7

2010 2.8 45.3 4.6

2020 1.8 34.1 3.1

B. Potential Exposure and Risk

This section examines the potential exposures and cancer health risks

associated with diesel PM emissions from diesel-fueled portable engines.

Diesel-fueled portable engines are used in a variety of applications. The majority

of applications using portable diesel-fueled engines are completed in a short

period of time. Examples of short-duration projects include the chipping of tree

trimmings or maintenance of sewage drains and utility electrical equipment.

These types of activities may use one or two portable diesel-fueled engines for a

few hours over one or two days. Conversely, a major maintenance activity to

update or replace existing infrastructure, such as electrical power lines or the

construction of a large office complex, can utilize several portable engines for six

months to several years. Because of the variability in the use of portable dieselfueled equipment and the mobile nature of portable equipment, it is difficult to

quantify the potential health risk resulting from the operation of a portable dieselfueled engine on any specific receptor

The current risk assessment methodology recommended by the Office of

Environmental Health Hazard Assessment (OEHHA) and used by ARB staff in

evaluating potential cancer risk is based upon exposure to the emissions of a

source for 70 years. We recognize that if this methodology is used to evaluate

portable applications, the resulting potential cancer risk is overly conservative in

that portable applications are short-term activities that are not likely to operate at

the same location year-after-year for 70 years.

However, qualitative conclusions can be drawn regarding potential exposures to

the emissions from diesel-fueled portable engines. Many Californians are

impacted by diesel PM emissions from the operation of over 33,000 portable

diesel-fueled engines in the State. The emissions from these engines contribute

toward the ambient concentration of diesel PM. For the year 2000, exposure to

ambient concentrations of diesel PM (1.8 μg/m3) represented a health risk of 540

potential cancer cases per million people exposed over a 70-year lifetime. Based

upon the emissions inventory for diesel PM, portable diesel-fueled engines
21

account for five percent of the ambient concentration. In addition, many of the

engines are used in urban locations where the probability of a person living close

to an engine is high.

The overall excess cancer risk can be significantly reduced by replacing older

portable diesel-fueled engines with new cleaner diesel-fueled engines. For

example, if an older engine is replaced with a Tier 3 engine, the diesel PM

emissions and associated risk would be reduced by 55 to 70 percent.

Reductions of over 95 percent can be achieved if the older engine is replaced

with a Tier 4 engine, which is proposed to be available in the 2011-2014

timeframe.
22

V. SUMMARY OF PROPOSED CONTROL MEASURE FOR PORTABLE

ENGINES

In this chapter, the ARB staff provides a discussion in plain English of the key

requirements of the proposed air toxic control measure (ATCM) for diesel-fueled

portable engines. After a general overview of the ATCM, the remainder of the

chapter is structured in accordance with the structure of the ATCM. This chapter

is intended to satisfy the requirements of Government Code section 11343.2,

which requires that a “plain English” summary of the regulation be made

available to the public.

A. Summary of Requirements

The proposed ATCM would affect all diesel-fueled portable engines that are

larger than 50 horsepower (hp). This includes engines that are registered under

the Portable Equipment Registration Program (PERP), engines that are subject

to district permits, and engines that have been exempt to date from district

permitting requirements. The proposed ATCM would reduce emissions of diesel

PM by first requiring all portable engines to be certified to Tier 1, 2, or 3 U.S. EPA

/ARB off-road engine standards by 2010, as is currently required for engines

registered under PERP. After 2010, it would require all fleets of portable engines

to meet diesel PM emission averages that become more stringent in 2013, 2017,

and 2020. Owners/operators of these fleets will have flexibility in determining

how the fleet emission standards are to be satisfied. Options that are available

to satisfy this standard include: operating cleaner engines, replacing engines,

using add-on control devices, switching to alternative diesel fuels or alternative

fuels, and receiving credit for electrification.

To meet the proposed diesel PM standard for 2020, all engines in a fleet would

either: a) be certified to the proposed Tier 4 newly manufactured off-road engine

emission standards; or b) be equipped with a Level-3 PM control technology; or

c) be a certified engine equipped with a combination of verified control

technologies which achieve an emission of 0.04 g/bhp-hr for engines that are

less than 175 horsepower or 0.02 g/bhp-hr for engines that are 175 horsepower

and larger. As discussed previously, proposed Tier 4 off-road engine standards

refer to emission standards expected to be finalized by the U.S. EPA in 2004 that

would require the use of efficient PM reduction technologies, such as particulate

filters, to be an integral part of the manufactured engine. Level-3 PM control

technology refers to a control technology that has been verified to achieve PM

reductions of at least 85 percent under ARB’s Verification Procedure, Warranty

and In-Use Compliance Requirements for In-Use Strategies to Control Emission

from Diesel Engines 1 (Verification Program). The ARB Verification Program for

diesel PM control technologies is explained in more detail in Appendix E.

 

1

 Approved by the Board in May 2002. Title 13, California code of Regulations, sections 2700-

2710.
23

1. Applicability of the Proposed ATCM

The proposed ATCM would affect diesel-fueled portable engines greater than 50

hp. For the engine to be portable, the engine must not reside at any one location

for more than 12 consecutive months. A location is any place of operation or

single site at a building, structure, facility, installation, or well site. An engine that

remains at one location for more than 12 consecutive months would be

considered a stationary engine.

Staff is proposing not to include smaller engines at this time because these

engines represent a small fraction of total emissions from portable engines in

California. Furthermore, since these engines are currently exempt from district

permit requirements—making identification, location, and compilation of

operating data for these engines difficult and resource-intensive—a separate

rulemaking effort may be necessary at a later date. While the proposed ATCM

would not regulate these smaller portable engines, both the ARB and U.S. EPA

have promulgated emission standards for new engines manufactured after 1995

for engines less than 25 hp and standards for engines manufactured after 1999

for engines 25 to 50 hp. Therefore, as natural attrition occurs—newer engines

replacing older ones—the emissions from this category of smaller portable

engines will diminish over time.

The proposed ATCM would also affect portable agricultural irrigation pumps that

were previously exempt from regulations under Health and Safety Code section

42310. Senate Bill 700 which was chapter on September 22, 2003, and

becomes effective on January 1, 2004, removes the exemption for equipment

used in the raising of fowl or animals or the growing of crops. Consequently,

agricultural irrigation pumps, whether in stationary location or used as portable

equipment, that were previously exempt from district permits will now fall under

district jurisdiction.

2. Exemptions to the Proposed ATCM

There are certain types of diesel-fueled engines that would be exempt from the

proposed ATCM. The exemptions are as follows:

Engines Used In Mobile Applications

Engines used to propel mobile equipment and motor vehicles would not be

regulated by this proposed ATCM. The ARB expects to regulate these engines

through mobile-source regulations being developed for public and private onroad and off-road fleets. These engines include dual-use engines that both

propel the equipment and operate the attached equipment. Examples of a dualuse engines would include cranes and cherry pickers. Power Take-Off (PTO)

applications would also not be subject to the proposed ATCM. PTO refers to a
24

piece of equipment attached to a motor vehicle that is powered by the same

engine that is used to propel the vehicle. An example would be a welder on a

utility truck that is powered by the truck’s engine.

Dual-Fuel Diesel Pilot Engines

Duel-fuel diesel pilot engines using an alternative fuel or an alternative diesel fuel

would not be subject to this proposed ATCM. These engines use a small amount

of diesel fuel, typically less than 5% of the total fuel used by the engine, and

therefore the emissions of diesel PM would be a small portion of the engine's

total emissions.

Military TSE

Military tactical support equipment (TSE) would not be regulated by this

proposed ATCM. TSE refers to portable equipment that is owned by the United

States Department of Defense and its allies and used in combat, combat support,

tactical or relief operations, or training for such operations. Section 41754 of the

Health and Safety Code specifically exempts TSE from control technology

requirements and in-use operational controls. Portable diesel-fueled engines

that are not considered TSE at military installations in California would be subject

to this proposed ATCM.

Ground Support Equipment

Ground support equipment (GSE) refers to mobile and portable equipment used

to support the operation of an airport. Portable equipment typically represents a

small fraction (10 - 15 percent) of the total ground support equipment at an

airport. This equipment includes ground power units, air conditioners, and startcarts.

To address emissions from GSE in the South Coast Air Quality Management

District (SCAQMD), the ARB, the air district, and the major air carriers at the five

major airports within the SCAQMD recently signed a Memorandum of

Understanding (MOU), which requires the air carriers to reduce the emissions of

diesel PM and ozone precursors from their GSE fleets over a specific timetable.

In recognition of the commitments made under the MOU, ARB staff is proposing

a mechanism that, upon a finding that equivalent or greater overall PM

reductions is achieved under the MOU, would exempt the portable diesel-fueled

equipment subject to this MOU from the proposed ATCM. Should similar MOUs

be executed at other major airports across the State, the portable equipment

portion of the affected GSE could also qualify for exemption from this proposed

ATCM.
25

Other Categories

Portable engines that use an alternative fuel—such as natural gas, propane,

butane, and gasoline— are not subject to the proposed ATCM as it only applies

to portable engines that are fueled with diesel. Portable engines used at San

Clemente or San Nicolas Island are also not subject to the requirements of the

proposed ATCM. This exemption is consistent with the SCAQMD and Ventura

County Air Pollution Control District internal combustion engine regulations,

which exempt engines on these islands from the requirements of the regulation.

3. Fuel Requirements for Diesel-Fueled Portable Engines

The proposed ATCM requires portable engines to use ARB diesel fuel.

The regulations for ARB diesel fuel were recently revised to limit the sulfur

content of diesel fuel to 15 parts per million (ppm)2. The revised ARB diesel fuel

regulations, which require the widespread availability of low-sulfur diesel fuel by

mid-summer 2006, will help promote the use of the most efficient diesel PM

control devices: diesel particulate filters.

The revised fuel regulations also allow mixtures of up to 50 percent biodiesel or

100 percent Fischer-Tropsch fuels to qualify as CARB diesel fuel as long as

specific requirements are satisfied. While the use of biodiesel or

Fischer-Tropsch fuels have been shown to reduce diesel PM, neither these fuels

themselves or mixtures of these types of fuels have been verified under ARB’s

Verification Program for PM control technologies. The proposed ATCM allows

only technologies or techniques, such as alternative diesel fuels or fuel additives,

whose emission reductions have been verified by the ARB to be used for diesel

PM reductions.

The requirements for verification differ depending on whether the diesel PM

reduction strategy is considered an alternative diesel fuel or a control technology.

A fuel additive can be treated in the verification process as an alternative diesel

fuel or as a specific additive, which would be considered a control technology. If

the additive is supplied to the engine fuel by an on-board dosing mechanism, is

directly mixed into the fuel, or is added to the fuel at the time of refueling, then

the additive is considered a control technology, not an alternative diesel fuel.

4. Requirements for 2010

The proposed regulation requires all portable diesel-fueled engines greater than

50 hp in California to be certified engines (engines certified to ARB/U.S. EPA

newly manufactured off-road engine emission standards) by 2010, as is currently

required for engines registered with the PERP. The 2010 requirement would

 

2

 Approved by the Board in July 2003. Revisions to section 2281, Title 13, California Code of

Regulations.
26

expand the certified engine requirement in the PERP to engines permitted by

districts and engines previously exempt from district permit requirements.

After 2006, the proposed ATCM requires all portable diesel-fueled engines

greater than 50 hp initially registering or applying for permits from the local air

districts to be certified engines. By 2010, all portable diesel-fueled engines

greater than 50 hp—registered, permitted, or neither—must be certified engines

(that is, the engine is certified to either a Tier 1,2 or 3 off-road emission standard)

to operate legally in California. About 20,000 engines would need to be

replaced, including about 6,000 registered with the PERP.

Recognizing that some portable engines are operated on a limited basis

annually, an exception to the 2010 requirement is included in the proposed

ATCM for engines used strictly for emergency purposes and low-use engines

(engines operated 80 hours or less in a calendar year, including time for

maintenance and testing). These engines are exempt from the 2010

requirements if a fleet owner commits to replacing the engines with engines

certified to the proposed Tier 4 standards within two years from when Tier 4

engines become available. If the fleet owner does not commit to early

replacement of these engines with Tier 4 engines, then the engines must be

certified engines by 2010.

By requiring engine replacement by 2010, the proposed ATCM uses technology

available either today or in the next few years to reduce diesel PM in the shortterm. Verified add-on technologies are not yet available for off-road diesel

engines, and the availability of Tier 4 engines will not occur until after 2011, if the

U.S. EPA’s 2003 proposal is approved in 2004. Setting an engine replacement

schedule that would take effect significantly sooner than 2010 would be less

effective in the long run, as many of the cleaner Tier 3 engines will not yet be

commercially available. These engines will be available in the 2006-2008

timeframe. Staff believes that requiring the engines to be replaced by 2010

allows sufficient time for the engine manufacturers to satisfy the demand caused

by the ATCM’s proposed 2010 requirement.

5. Requirements for 2013, 2017, and 2020

After 2010, owners of fleets of portable engines must satisfy progressively more

stringent diesel PM emission standards by 2013, 2017, and 2020. The purpose

of the diesel PM emission standards is to create additional diesel PM emission

reductions beyond those that would be achieved from normal engine turnover

after 2010.

Definition of Fleet

A fleet includes portable engines registered with PERP, those permitted with

local districts, and those that have been previously exempt from district permit
27

requirements. The fleet shall exclude portable engines that operate exclusively

outside of California, engines operated only within the Outer Continental Shelf

(OCS), engines used exclusively in emergency applications, and engines

qualifying as low-use. Portable engines can also be exempt from the fleet

requirements if equipped, as of January 1, 2004, with a properly operating

selective catalytic reduction (SCR) system.

A fleet is defined in the proposed ATCM as an engine or group of engines either

under the same ownership or owned by entities under the control of a

Responsible Official. The Responsible Official refers to an individual who has the

authority to certify that portable engines under his/her jurisdiction comply with the

applicable requirements of the proposed ATCM, has authority to manage the use

of the portable equipment, and may be involved in the purchase of the

equipment.

A company or public agency can have more than one fleet if each fleet is under

the control of different Responsible Officials. For example, companies owned by

the same holding company could be considered to have separate fleets if each

fleet's operation and composition are controlled by separate Responsible

Officials. In the case of military installations, each installation is considered a

separate fleet instead of one fleet under the control of the Department of

Defense. Conversely, if several companies were under the common control of

one Responsible Official, then all the portable engines in each of the companies

would be considered one fleet.

As discussed later in this chapter, companies and public agencies are required to

submit status reports to the Executive Officer prior to the implementation of the

fleet emission standards. Based upon the information submitted, ARB staff will

work with the Responsible Official to resolve any issues in determining the

composition of each fleet prior to the first fleet emission standard becoming

effective.

Fleet Diesel PM Standards

The ARB staff is proposing diesel PM standards for three ranges of engine sizes:

engines less than 175 horsepower, engines between 175 horsepower and 749

horsepower, and engines greater than or equal to 750 horsepower. The diesel

PM standards (grams per brake horsepower-hour (g/bhp-hr)) are illustrated

below:

Fleet Standard

Compliance

Date

 Engines <175

hp

(g/bhp-hr)

Engines >175 to

749 hp

(g/bhp-hr)

Engines > 750

hp

(g/bhp-hr)

1/1/13 0.3 0.15 0.25

1/1/17 0.18 0.08 0.08

1/1/20 0.04 0.02 0.02
28

Three sets of diesel PM standards are proposed to address the difference

between off-road engine emission standards for engines less than 175 hp and

emission standards for larger off-road engines. Emission standards for certified

off-road engines less than 175 hp are less stringent than the standards for the

larger class of engines; thus, the proposed diesel PM standards are less than for

engines greater or equal to 175 hp. In addition, a third set of fleet standards is

being proposed for engines greater than or equal to 750 hp. Staff is proposing

this set of standards because these large engines are expensive to replace and

have a much longer useful life than smaller engines. Owners of these larger

engines are given more time for engine replacement; therefore, their 2013

standard is less stringent than the standard for 175-749 hp engines.

The proposed fleet emission standards take into account the potential

commercial availability of Tier 4 engines, which should become available in the

2011 - 2014 timeframe. They also take into account the availability of verified

Level-3 PM control technologies. The proposed 2013 standards are intended to

force replacement of Tier 1 engines <750 hp with either Tier 3 or proposed Tier 4

engines. The PM standard for Tier 3 and Tier 4 off-road engines are significantly

lower than the Tier 1 engine PM standard. At this time, most Tier 1 engines

being replaced would have operated 10 to 17 years. Owners who had replaced

uncertified engines with Tier 2 or Tier 3 engines prior to 2010 would probably not

be subject to additional requirements until 2017.

The proposed 2017 standards are likely to result in half of the engines in a fleet

being replaced with engines certified to the proposed Tier 4 standard or equipped

with Level-3 control technology or a combination of verified control technologies

to achieve 85% reduction. At this time, the affected engines would have

operated 6 to 17 years. The proposed 2020 standards are likely to result in all

engines in the fleet being certified to the proposed Tier 4 standard or equipped

with Level-3 verified technology or a combination of verified control technologies

to achieve 85% reduction.

Weighted Fleet Average

Owners of portable engine fleets will determine compliance with the proposed

fleet standard by comparing the fleet's actual weighted diesel PM emission rate

with the fleet emission standard. The fleet's actual weighted emission rate shall

be determined by using the following formula:

∑ Summation for each engine in the fleet (bhp x emission factor)

∑Summation for each engine in the fleet (bhp)

 Where: bhp = horsepower at maximum rated capacity

 Emission factor = diesel PM emission rate
29

For example: A fleet owner has five certified engines with the following

horsepower and PM emission factors:

 75 hp emission rate of 0.30 g/bhp-hr

 75 hp emission rate of 0.30 g/bhp-hr

100 hp emission rate of 0.22 g/bhp-hr

150 hp emission rate of 0.22 g/bhp-hr

150 hp emission rate of 0.22 g/bhp-hr

(75 X 0.30) + (75 X 0.30) +(100 X 0.22) + (150 X 0.22) + (150 X 0.22)

75 + 75 + 100 + 150 + 150

 Fleet’s weighted diesel PM emission rate = 0.24 g/bhp-hr

Emission factors can be used that are derived from results of emission tests used

to certify the engine to U.S. EPA /ARB off-road engine standards. This

information can be accessed from the U.S. EPA’s Engine Certification

Information Center (www.epa.gov/otaq/certdata.htm) or from the ARB’s California

Certification Data Website (www.arb.ca.gov/msprog/mvcert/mvcert.htm). These

emission factors can be modified using the emissions reductions for the control

technologies that have been verified through the ARB Verification Procedure.

For example, if an engine owner installs a diesel particulate filter that has been

verified to an 85 percent control effectiveness, the engine’s emission factor would

be the certified value multiplied by 0.15.

Emergency and Low-Use Engines

As discussed above, engines that are used exclusively in emergency

applications or are deemed low-use engines are not subject to the fleet emission

standards of the proposed ATCM. These engines would be required, by January

1, 2020, to: 1) be certified to the proposed Tier 4 newly manufactured off-road

engine emission standards, or 2) be equipped with a Level-3 PM control

technology, or 3) be a certified engine equipped with a combination of verified

control technologies to achieve an emission of 0.04 g/bhp-hr for engines < 175

hp or 0.02 g/bhp-hr for engines that are >175 hp. Compliance for these engines

was delayed until January 1, 2020, because these engines emit less than one

percent of the total diesel PM emissions from portable engines and requiring

these engines to meet the interim fleet averages would not be cost-effective.
30

Engines Equipped with SCR

As was mentioned earlier, portable engines may be exempt from the fleet

requirements if equipped, as of January 1, 2004, with a properly operating SCR

system. This provision was included for a number of reasons. Source test

results have shown that an SCR system, typically used to reduce NOx, also

significantly reduces diesel PM emissions. In addition, the pressure drop

requirements for engines makes it technically challenging today to add additional

control technologies, such as a diesel particulate filter, to an engine already

equipped with SCR. The proposed ATCM provisions also allow engines

equipped with SCR systems after the January 1, 2004, date to be exempted from

fleets on a case-by-case basis. To qualify for the exemption, engine owners

must submit specific information to the Executive Officer indicating that the SCR

system is operating properly.

Owners of portable engines equipped with SCR may chose to include these

engines in the fleet weighted diesel PM standard. Engine-specific source tests

from these engines must be used to determine diesel PM emission rates. PM

measurements can be performed using ARB Test Method 5 front-half (filter and

probe wash) or equivalent district methods. Requiring only the front-half of ARB

Test Method 5 is consistent with the recommendations of the Test Method

Working Group that was created during the development of the Stationary

Compression Ignition Engines ATCM and consistent with test methods used to

certify engines to off-road engine standards. The Test Method Working Group

was formed to evaluating different test methods for measuring PM from dieselfueled engines and to recommend the most appropriate measuring technique for

diesel PM.

6. Incentives

To encourage the use of cleaner technologies and to encourage repowering or

replacement of older engines with new, lower-emitting engines, the proposed

ATCM provides for several incentives to promote these options as part of the

fleet reduction approach.

One incentive allows credit toward satisfying a fleet standard by allowing, under

certain circumstances, alternative-fueled engines into the fleet. To obtain the

credit, the engine must operate at least 100 hours annually. The proposed

ATCM also allows credit for applications where grid power is used in lieu of using

a portable diesel-fueled engine. The credit is granted where more than 200

hours of grid power is used for a given project and the necessary recordkeeping

and reporting requirements are satisfied. Finally, a credit is included to

encourage the purchase of engines certified to the proposed Tier 4 standard.

The credit can be used when fleet owners purchase Tier 4 engines prior to

January 1, 2015. In these cases, the owner can count the Tier 4 engine twice in

the calculations for the fleet weighted diesel PM emission rates. To use the
31

credit for the 2013 standard, the engine must be in the fleet prior to January 1,

2013. Double counting the Tier 4 engines will result in lower fleet weighted

diesel PM rates for compliance with the 2013 and 2017 diesel PM standards.

The double counting of Tier 4 engines is not allowed for compliance with the

diesel PM standards for 2020 because all engines must be certified to the

proposed Tier 4 standards or retrofitted with verified control devices to achieve

85 percent reduction by that date.

7. Requirements Near Schools

The ARB staff is continuing to work with the California Air Pollution Control

Officer’s Association (CAPCOA) and other stakeholders to determine if it is

feasible to develop provisions to restrict the operation of portable diesel-fueled

engines near schools during periods when children are present. At the February

Board meeting, staff will present a proposal to limit the emissions of diesel PM

near schools.

8. Recordkeeping and Reporting Requirements

As discussed below, the proposed ATCM specifies recordkeeping and reporting

requirements to enhance the enforceability of the proposed ATCM. These

recordkeeping and reporting requirements may be in addition to requirements

that are specified in applicable registration or permit requirements for a portable

engine.

In developing the proposed ATCM, staff intended that the recordkeeping and

reporting requirements be the minimum necessary to ensure that the proposed

regulation is enforceable. To this end, recordkeeping and reporting requirements

are not specified in the proposed ATCM for determining a company’s or agency’s

compliance with the 2010 requirement. Staff believes that compliance with the

2010 requirement can be enforced through the existing PERP and district permit

programs.

Recordkeeping

For many fleets, the recordkeeping would only consist of keeping track of all the

engines in the fleet and their associated emission factors. If the fleet's diesel PM

emission rate average satisfies the 2020 fleet standards, then all the engines in

the fleet are not subject to the recordkeeping or reporting requirements of the

proposed ATCM. To satisfy the 2020 fleet standards, all the portable dieselfueled engines in the fleet must either be certified to the proposed Tier 4 off-road

engine emission standards or be equipped with a Level-3 PM control technology

or a combination of verified control technologies that achieve 85 percent

reduction.
32

The recordkeeping requirements address only those engines in a fleet whose

use is based on minimum or maximum hourly limitations, fleets taking advantage

of the electrification incentive, engines equipped with SCR, and engines

operating near schools. Engines with hourly limitations would include alternativefueled portable engines that are run for at least 100 hours per year, engines

operating 80 hours or less per year (low-use engines), and engines used

exclusively in emergency applications where yearly use would be limited. These

engines must be equipped with a non-resettable hour meter and the operator

must maintain records on the engines’ annual hours of operation. The proposed

ATCM requires the company to maintain the records at a central place for five

years. In addition, a company is required to forward copies of records within

three business days, if requested by either the ARB or local district staff.

Recordkeeping requirements are also required if electrification is used to satisfy

a fleet requirement and for all engines equipped with SCR. If electrification is

used to determine the fleet average, the ARB must be notified in advance of

projects that will rely on electrification instead of using diesel engines. The

notification shall identify each engine that will be affected by the electrification

project and shall include information on the electrification activity. For engines

equipped with SCR, records must be maintained to demonstrate that the SCR

system is operating properly. The records must be retained for five years. In

addition, a company is required to forward copies of these records within three

business days, if requested by either the ARB or local district staff.

Status Report

The proposed ATCM requires the responsible official of the fleet to submit a

status report by March 1, 2011, and subsequent compliance statements by

March 1 of each applicable year when a fleet emission standard becomes

effective.

The purpose of the status report is to provide the ARB and local air districts

specific information on the composition of the fleet. The 2011 status report will

include the fleet's average diesel PM emission rate for the 2010 calendar year,

as well as a summary of each engine’s emission rate, in g/bhp-hr. The status

report should indicate the number of fleet(s) in each company or agency and the

Responsible Official in charge of each fleet. The status report must identify

whether each engine in each fleet within a company or agency is registered with

ARB’s PERP program or permitted with local districts. Alternative fueled engines

must be identified by fuel type. Sufficient information should be provided for

each engine to be able to identify the engine, including the make, model, serial

number, year of manufacture, and district permit or state registration number.

Additionally, the status report must identify each engine that the owner commits

to replacing with an engine certified to the proposed Tier 4 standards, engines

used exclusively in emergency applications, engines satisfying the low-use
33

engine requirements, and must include documentation for engines equipped with

SCR demonstrating that the SCR system is operating properly.

Compliance Statements

The Responsible Official of the company must provide a signed statement of

compliance indicating the applicable fleet emission standard is being achieved

and identifying each engine in the fleet and the associated emission rate. The

statement of compliance is due March 1 of the year the fleet emission standard

becomes effective (i.e. 2013, 2017, 2020). Compliance is based upon the

composition of the fleet as of January 1 of that year. Sufficient information should

be provided for each engine in the fleet to be able to identify the engine, including

the make, model, serial number and year of manufacture. The compliance report

shall identify engines used exclusively in emergency application, low-use engines

and engines excluded from the fleet because the engine operated exclusively

outside of California or operated only within the OCS. If electrification was used

for the calculating the fleet average, documentation must be included in the

report supporting the credit claimed for electrification. As part of the compliance

report, the responsible official shall certify the following:

• All alternative-fueled engines included in the fleet average operated at least

100 hours in the previous calendar year;

• engines designated as emergency were only used for emergency

applications;

• engines designated as low-use were operated no more than 50 hours in the

previous calendar year; and

• engines equipped with SCR comply with applicable district or PERP

requirements.

The proposed ATCM allows the ARB and the district staff to require additional

information from a fleet owner, beyond the submittal of compliance reports, that

demonstrates the fleets are in compliance with the applicable fleet standards.

The fleet owner must provide the information requested within 30 days.

9. Enforcement Requirements

Health and Safety Code 39666 (d) requires the districts to implement and enforce

an ATCM that has been approved by the Board. Therefore, both the ARB and

the districts have the authority to review or seek enforcement action for violation

of the fleet emission standards. Despite this overlapping jurisdiction, it is not the

intent of the ATCM to place engine owners in “double jeopardy.” Appropriate

enforcement action will be taken by either the ARB or the local air districts, as

necessary.
34

B. Evaluation of Proposed ATCM

The purpose of the proposed ATCM is to achieve the goal of the Diesel Risk

Reduction Plan, which is an 85 percent reduction in diesel PM by 2020. The

ARB staff estimates that the proposed ATCM will go beyond that goal by

reducing diesel PM emissions by approximately 95 percent, as compared to the

2000 base year.

The proposed ATCM reduces diesel PM emissions in two ways: requiring older,

dirtier engines to be replaced by newer, cleaner engines before the end of the

useful life of the older engines, and requiring the installation of add-on control

technologies. Without the proposed ATCM, emissions reductions would occur as

seen in the “status quo” line in Figure V-1, below. The “status quo” reductions

are achieved through PERP (to 2010), then a routine replacement of engines

over a period of time (i.e., natural attrition). The expedited emissions reductions

of the proposed ATCM are also illustrated in Figure V-1; the benefits of the

ATCM are quantified by the area between the two curves.

The reductions peak by 2020, at 1.6 tons per day or 584 tons per year, when the

proposed ATCM is fully implemented and then decreases until 2037. Overall,

the proposed ATCM will result in cumulative diesel PM reductions of 4,700 tons

by 2020 and 10,800 tons by 2037. At this time, the emissions from the status

quo case are nearly equivalent to the emissions generated by the proposed

ATCM. This is not unexpected, as natural attrition would have eventually (by

~2040) resulted in a replacement of all existing engines with engines certified to

the proposed Tier 4 standard.

Figure V-1: Projected Diesel PM Emissions for Status Quo and the

Implementation of the Proposed ATCM

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Jan-03Jan-06Jan-09Jan-12Jan-15Jan-18Jan-21Jan-24Jan-27Jan-30Jan-33Jan-36

TPD

Status

Quo

 ATCM
35

The reductions resulting from the PERP program are an important portion of the

reductions that occur prior to January 1, 2010. As discussed previously, by

January 1, 2010, engines registered with PERP must be certified to an emission

standard for off-road engines. The PERP program has about 30 percent of the

portable diesel-fueled engines operating in California, and by January 1, 2010,

the program is expected to reduce diesel PM emissions by 250 tons per year or

about 0.7 tons per day. The current PERP reductions are significant in that it

represents about 75 percent of the reduction for the status quo case by 2010 and

about 30 percent of the reductions from the 2000 base year.

C. Complying with Federal Preemption For New Farm and Construction

Off-Road Engines

As discussed in Chapter III, the Clean Air Act preempts all states from adopting

emissions standards for new offroad engines smaller than 175 hp and used in

farm and construction equipment and vehicles. The U.S. EPA has determined by

regulation that such preemption applies to engines used “primarily” (51%) in farm

and construction equipment. The proposed ATCM has been designed to

conform with this preemption.

The proposed ATCM does not impose emission standards. The ATCM is largely

predicated on the standards imposed by U.S EPA for newly manufactured offroad engines. The proposed ATCM can be satisfied by replacing older engines

with newer, cleaner engines. These engines would not need to be modified,

such as adding air pollution control equipment to reduce emissions. The

proposed ATCM reduces diesel PM emissions by requiring all engines, by

January 1, 2010, to be certified to U.S. EPA emission standards for newly

manufactured off-road engines. Fleet owners would satisfy this requirement by

replacing older engines with new engines manufactured to meet off-road

emission standards. Subsequent diesel PM reductions are achieved with the use

of fleet emission standards. For the fleet emission standard that becomes

effective January 1, 2013, staff expects fleet owners to replace Tier 1 engines,

the oldest engines in the fleet, with the cleanest engine available. Similarly, to

satisfy the proposed 2017 and 2020 fleet emission standards, fleet owners will

need to replace about half of the engines not yet certified to the proposed Tier 4

standard in 2017 with proposed Tier 4 engines and replace the remaining

engines in 2020.

The proposed ATCM also allows owners of portable-diesel fueled engines to

comply by retrofitting portable engines with air pollution control systems that

reduce diesel PM. As discussed previously, these control systems will need to

be verified through the ARB Verification program. For example, to meet the 2017

fleet standard, owners of these engines would either replace the engine with a

engine certified to the proposed Tier 4 standards or consider adding verified
36

control technologies. At this time, these Tier 2/3 engines will be seven to sixteen

years old.

D. Technical Feasibility of The Proposed ATCM

The proposed ATCM requires all diesel-fueled portable engines to be certified

engines (Tier 1, 2, or 3) by 2010. It also requires a fleet to meet progressively

more stringent fleet weighted diesel PM standards by 2013, 2017, and 2020.

The standards rely on the availability of cleaner off-road engines and verified

Level-3 PM control technologies. Currently no Level-3 PM control technology

has been approved by ARB for off-road applications nor have U.S. EPA Tier 4

off-road engine standards been approved.

Since the commercial availability of verified Level-3 PM control technologies and

Tier 4 engines is uncertain, staff developed the proposed ATCM to obtain the

initial diesel PM reductions by relying on proven technologies: replacing older,

higher-emitting engines with newer engines that emit considerably less diesel

PM. Although PM standards for off-road diesel engines become fully effective for

all sizes of engines by January 1, 2006, greater NOx benefits can be realized if

the proposed ATCM takes advantage of Tier 3 engines, which are fully

implemented by January 1, 2008. To take advantage of this NOx benefit, and

because of the time necessary to replace nearly 20,000 engines, the ARB staff is

proposing that the initial requirements of the regulation take effect January 1,

2010. This schedule also harmonizes with the current PERP requirements.

Retrofit technologies can be used to satisfy the fleet standards in 2013, 2017,

and 2020. Consequently, emission-control technology manufacturers will have

many years to develop the desired retrofit technologies. In addition, prior to

2010, the ARB staff plans to review the status of verified retrofit technologies and

other applicable activities that affect portable diesel-fueled engines, and to

propose changes, as necessary, for the Board’s approval.

While there are several technologies available to reduce diesel PM emissions,

only one of these technologies have been verified for use on off-road engines.

The proposed ATCM requires all control technologies to be verified through the

ARB verification program. The available technologies include particulate filters,

diesel oxidation catalysts (DOCs), fuel additives, and alternative diesel fuels. A

brief description of these technologies and ARB’s Verification Program for these

technologies is given in Appendix E. ARB verification is based on whether a

control technology can be applied to off-road or on-road diesel engines and on

the level of PM control that can be achieved by the technology. Presently, only

DOCs have been verified for off-road application. The DOC was verified to a

Level-1, which means the technology achieves up to a 25 percent reduction in

diesel PM.
37

Many of these technologies discussed above have been used primarily on onroad engines. DOC and passive particulate filters have been verified for on-road

application. The other technologies listed, such as alternative diesel fuels, have

been tested primarily on on-road fleets. Of these technologies, the one with the

most promise to help ARB achieve the 85% reduction in 2020 is the diesel

particulate filter. For example, several passive diesel particulate filters (DPFs)

have been verified as Level-3 technologies—achieving at least 85% reduction of

diesel PM—for on-road engines. The passive DPF is an attractive retrofit

technology. The emission reductions are high, and since it regenerates itself

during use, it is a relatively hands-off type of technology. Unfortunately, the

currently verified passive DPFs are only applicable to cleaner engines that

maintain exhaust temperatures sufficient for regeneration (greater than 225-300

degrees Celsius, depending on the DPF manufacturer).

To gain a better understanding of the applicability of particulate filters on portable

engines a stack-temperature-profile test was conducted during 2002-2003. The

University of California at Riverside’s Center for Environmental Research and

Technology (CE-CERT) conducted the test in coordination with ARB staff.

Eighty engines and associated equipment ranging from 77 hp to 2150 hp were

tested. The equipment included generators, compressors, wood chippers,

pumps, and grinders that are used by a variety of industries. A temperature

sensor was inserted into the exhaust stream of each engine and the temperature

was recorded for 20 hours of engine use. The test data illustrated a wide

variation of results. The ability of an engine to sustain the minimum temperature

required for a DPF to function effectively depends on the engine’s duty cycle.

That is, if the engine idles for most of it’s operating time, runs primarily at partial

load, or generally runs constantly at full load when operated. A DPF will not

operate well if there is significant idle time or the engine is run primarily at a low

partial load—characteristics that describe the operating pattern of many portable

engines. Consequently, the test results demonstrate DPF would not be effective

for many portable engines. A detailed discussion of the stack-temperatureprofile test and results is included in Appendix F.

In contrast to on-road applications, developing control techniques for portable

equipment is likely to prove more challenging due to: 1) the large number of

different applications for portable engines; 2) the number of different engine

manufacturers and models; and 3) the varying duty cycles of each application.

Consequently, for the reasons stated above, staff has not relied on the

availability of retrofits to assist in complying with the ATCM provision in 2010.

As discussed above, the proposed regulation has been crafted to rely on early

engine replacement and has allowed a longer timeframe for the development of

retrofit technologies for off-road applications. For example, many control

technologies will be required for on-road engines by 2007, and some of these

technologies may be adapted to portable equipment at a later date.
38

In summary, the proposed ATCM relies initially on existing off-road engine

standards to generate the initial diesel PM reductions. To achieve the goal of

85% reduction by 2020, the proposed ATCM anticipates the development of

Level-3 verified technologies for the off-road category and the availability of Tier

4 off-road engines beginning in 2013. Affected owners of portable diesel-fueled

engines have expressed concern regarding the availability of Level-3 verified

technologies for the off-road category as well as the widespread availability of

Tier 4 off-road engines within the 2011-2014 timeframe. The ARB staff believes

that the proposed ATCM has provided for sufficient time for the development of

the Level-3 verified technologies. Staff will monitor the development of these

technologies, and if necessary, propose revisions to the ATCM.
39

VI. REGULATORY ALTERNATIVES

The ARB staff evaluated alternative strategies to the current proposal. Based on

the analysis, none of the alternative control strategies were considered more

effective than the proposed regulation. Full implementation of the proposed

regulation is necessary to achieve ARB’s goal, as described in the Diesel Risk

Reduction Plan, to reduce diesel PM emissions and associated potential cancer

risks by 85 percent by 2020. The proposed regulation provides owners or

operators of diesel-fueled portable engines with flexibility in determining the most

cost-effective control strategy that will meet the proposed emission limits and/or

operational requirements for their fleet.

A. Do Not Adopt This Regulation

With full implementation of the proposed regulation, diesel PM emissions will be

reduced from portable diesel-fueled engines in California by 95 percent in 2020,

relative to the 2000 baseline. If the regulation is not adopted and implemented,

PM reductions—achieved through PERP, local air district permitting

requirements, and natural engine attrition—would only be 57 percent by 2020.

Because of the number and size of the engines currently in PERP and the

requirement for PERP participants to have only certified engines by 2010, PERP

alone would achieve a 50 percent diesel PM reduction by 2020. The proposed

ATCM is designed to build upon the success of PERP. Currently, because of the

Clean Air Act preemption for non-road engines, which was discussed in

Chapter III, local air districts have limited authority to regulate portable engines.

Therefore, if the proposed regulation is not fully implemented, substantial

emission reductions will be forgone.

These estimated reductions in diesel PM from portable engines are an important

element in the Diesel Risk Reduction Plan. This proposed ATCM, along with

other diesel PM control measures to be adopted by the ARB, will result in

reducing cancer and noncancer health risks to the public from inhalation

exposure to diesel PM emissions. Short-term exposure to diesel PM emissions

may cause acute or chronic noncancer respiratory effects such as irritation of the

eyes, throat, and bronchial passages. Furthermore, inhalation of diesel PM

emissions can cause neurophysiological symptoms, such as lightheadedness or

nausea.

The ARB is required by H&SC Section 39658 to establish ATCMs for toxic air

contaminants. Further, H&SC Section 39666 requires the ARB to adopt ATCMs

to reduce emissions of TACs from nonvehicular sources. Considering the

recognized detrimental public health impacts from exposure to diesel PM, and

ARB’s statutory requirements to protect public health, this alternative is not a

reasonable option.
40

B. Risk Assessment Approach

One of the approaches ARB staff discussed with stakeholders was a concept to

limit the hours of operation at a specific location, thereby capping the potential

health risk at that location to less-than-significant risk levels. The operating-hour

limits were based upon the potential risk posed by an engine using standard risk

assessment procedures, which includes a 70-year exposure duration. All

engines used on a specific project would have to share the available operating

hours. The intent of this approach was to promote engine turnover, as cleaner

engines received higher allowable operating hours per project.

This approach was abandoned because the operating restrictions were too

restrictive for many projects, particularly projects using larger diesel-fueled

portable engines; the recordkeeping requirements would have been substantial

and onerous; and field enforcement would have been difficult and resourceintensive.

C. BACT Approach

Another approach considered in other ARB diesel-risk-reduction regulations was

requiring the implementation of best available control technology (BACT). Fleet

operators would be required to equip all diesel-fueled portable engines with

BACT by a certain date. There would also be interim dates requiring a certain

percentage of the fleet to meet the BACT requirement. For example, in the

recently adopted ATCM for on-road heavy-duty residential and commercial solid

waste collection vehicles, BACT was defined as: 1) an engine certified to an

emission rate of 0.01 g/bhp-hr; 2) an alternative-fuel engine, and 3) a control

system that has been approved by the Executive Officer via the verification

procedure for in-use strategies to control emissions from diesel engines.

While this approach is workable for on-road applications, staff did not pursue the

approach for portable engines, primarily due to the lack of available emissionreduction options for the off-road categories. For the on-road category, the

control technologies are readily available. There are verified Level-3 control

technologies commercially available, and new engines equipped with particulate

filters at time of manufacture will be available in the near term. As discussed in

the previous chapter, only one control technology has been verified for the offroad category—a diesel oxidation catalyst (DOC)—that achieves between 20-30

percent diesel PM reductions. New engines equipped with particulate filters at

the time of manufacture will not be available until 2011 or later. Due to the wide

range of portable diesel-fueled engine applications—from small compressors or

pumps to large dredging or oil field workover engines—DOCs may not be

applicable in many cases. Consequently, to achieve the 85 percent reduction

goal identified in the Diesel Risk Reduction Plan, the BACT approach would force

engine owners to initially retrofit some engines by a specific date with

technologies that achieve only 20-30 percent reduction and then, by 2020,
41

require these retrofit engines to either be replaced with an engine certified to the

applicable proposed Tier 4 off-road emission standard or be retrofitted again with

a Level-3 control device or technique. This was not considered to be a costeffective alternative to the proposed ATCM.
42

VII. ENVIRONMENTAL IMPACTS OF PROPOSED ATCM

This chapter describes the potential impacts that the proposed ATCM may have

on air quality, wastewater treatment, and hazardous waste disposal. Based

upon available information, the ARB staff has determined that no significant

adverse environmental impacts should occur as a result of adopting the

proposed ATCM.

A. Legal Requirements Applicable to the Environmental Impact

Analysis

The California Environmental Quality Act (CEQA) and ARB policy require an

analysis to determine the potential environmental impacts of proposed

regulations. ARB's program for adopting regulations has been certified by the

Secretary of Resources, pursuant to Public Resources Code section 21080.5.

Consequently, the CEQA environmental analysis requirements may be included

in the Initial Statement of Reasons (ISOR) for this rulemaking. In the ISOR, the

ARB must include a functionally equivalent document, rather than adhering to the

format described in CEQA 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 proposed ATCM, 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

• An analysis of reasonably foreseeable alternative means of compliance

with the ATCM.

Compliance with the proposed ATCM is expected to directly affect air quality and

potentially affect other environmental media as well. Our analysis of the

reasonable foreseeable environmental impacts of the methods of compliance is

presented below.

B. Effects on Air Quality from Implementing the ATCM Requirements

The proposed ATCM will provide diesel PM emission reductions throughout

California, including urban areas and those areas that are non-attainment for the

State and federal ambient air quality standards for PM10 and PM 2.5. Air quality

benefits will result from the reduction of NOx and ROG emissions as well. The

projected emission reductions from the implementation of this ATCM are
43

presented in Table VII-1. The percent reductions presented in Table VII-1 are the

percent reductions from the 2000 base year. For example, the 2010 estimate for

NOX emissions as a result of implementing the proposed ATCM is 33 TPD,

which is a 51 percent reduction from the 2000 base year NOx emissions of 67

TPD.

Table VII-1: Projected Annual Emissions for 2010 and 2020 with

Implementation of the Proposed ATCM

Year Diesel PM

Emissions

(TPD)

Percent

Reduction

NOx

Emissions

(TPD)

Percent

Reduction

ROG

Emissions

(TPD)

Percent

Reduction

2000 4.2 -- 67 -- 6.7 --

2010 2.0 52% 33 51% 4.6 30%

2015 1.3 69% 26 61% 2.9 57%

2020 0.2 95% 23 66% 1.2 78%

2037 0.2 95% 14 79% 1.2 78%

Figure VII-1 illustrates the projected emission reductions to year 2037 for NOx

that are associated with the implementation of the ATCM. A similar figure for

diesel PM reductions is given in Chapter V. The projected emission reductions is

the difference between the NOx emissions from the status quo case (i.e.,

considering only the benefits of full PERP implementation and engine turnover)

and the NOx emissions from implementing the proposed ATCM. As discussed

previously, the NOx reductions realized are based upon the early replacement of

engines with cleaner engines. Early engine replacement is expected to be the

Figure VII-1: Projection of NOx Emissions with and without ATCM

Implementation

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Jan-03Jan-06Jan-09Jan-12Jan-15Jan-18Jan-21Jan-24Jan-27Jan-30Jan-33Jan-36

TPD

Status Quo

 ATCM
44

primary method to comply with the 2010 and 2013 requirements. Consequently,

the peak reductions for NOx will occur between 2010 and 2020, with the greatest

reduction in any one year occurring during 2013. Overall, the proposed ATCM

will result in cumulative NOx reductions of 56,200 tons by 2020 and 81,000 tons

by 2037. These reductions are in addition to the reductions achieved through

PERP and natural attrition of older engines.

The proposed ATCM’s NOx reductions are largely based upon replacing

uncertified engines with Tier 2 and Tier 3 engines. Staff expects that these

engines would subsequently be retrofitted with diesel PM emission reduction

technologies that will not result in further NOx reductions. Greater reductions in

NOx can be realized if fleet owners take advantage of the Tier 4 incentives in the

proposed ATCM.

C. Health Benefits of Reductions of Diesel PM Emissions

The emission reductions obtained from this regulation will result in lower ambient

diesel PM levels and significant reductions of exposure to primary and secondary

PM. Lower ambient PM levels and reduced exposure, in turn, would result in a

reduction of the prevalence of the diseases attributed to PM and diesel PM

including, reduced incidences of hospitalizations for cardio-respiratory disease,

and prevention of premature deaths.

Primary Diesel PM

Lloyd and Cackette (2001)3 estimated that ambient diesel PM2.5 exposures at a

level of 1.8 μg/m3 resulted in a mean estimate of 1,985 (974-2,991 as 95 percent

confidence interval (95% CI)) cases of premature deaths per year in California.

This result is based on calculations using Appendix D of U.S. EPA's report to the

U.S. Congress on the benefits and costs of air pollution regulations (U.S. EPA,

1999) and on the relative risk value for mortality from PM2.5 exposure reported by

Krewski et al.(Krewski, 2000). In Table 31 of Part II of Krewski's publication, a

relative risk of 1.12 (all causes of death) for PM2.5 exposure is reported. This risk

is associated with a mean change of 24.5 μg/m3 in PM concentration, as stated

on page 97 of the report. These values were used in equation (5) of Appendix D

of the U.S. EPA document, which states the relationship between the coefficient

beta, relative risk, and change in PM concentration. For these calculations, the

 

3

 Although there are two mortality estimates in the report by Lloyd and Cackette – one based on

work by Pope et al. (1995) and the other based on Krewski et al. (2000), we selected the

estimate based on the Krewski’s work. For Krewski et al. (2000), an independent team of

scientific experts commissioned by the Health Effects Institute conducted an extensive

reexamination and reanalysis of the health effect data and studies, including Pope et al. The

reanalysis resulted in the relative risk being based on changes in mean levels of PM2.5, as

opposed to the median levels from the original Pope et al. study. The Krewski et al. (2000)

reanalysis includes broader geographic areas than the original study (63 cities vs. 50 cities).

Further, the U.S. EPA has been using Krewski’s study for its regulatory impact analyses since

2000.
45

health risks from diesel PM exposure are assumed to be the same as the health

risks from ambient PM2.5. This assumption is supported by the fact that almost

all diesel PM is 2.5 μg or smaller in size, and by the many studies in numerous

cities that show a strong association between mortality and exposure to a wide

range of combustion-related PM2.5, including those considered markers of

pollution from diesel exhaust (CARB, 2002b). The diesel PM emissions

corresponding to the direct diesel ambient population-weighted PM concentration

of 1.8 μg/m3 is 28,000 tons per year (CARB, 2000b). Based on this information,

we estimate that reducing 14 tons per year of diesel PM emissions would result

in one fewer premature death.

Although the implementation date for the final diesel PM emission standards in

the proposed regulation is 2020, the ARB staff believes that the full benefits of

the diesel PM standard requirements will extend to 2037. Comparing the diesel

PM2.5 emissions before and after full implementation of this regulation, the

proposed regulation is expected to reduce emissions, cumulatively, by 10,800

tons by the end of year 2037, and therefore prevent an estimated 770 premature

deaths (377-1,158,95% CI) by year 2037. Prior to 2037, cumulatively, it is

estimated that 50 premature deaths (25-76, 95% CI) would be avoided by 2010

and 339 (166-511, 95% CI) by 2020. Additional health benefits are expected

from the reduction of NOx emissions, which give rise to secondary PM from the

conversion of NOx to PM2.5 nitrate.

To estimate the cost of control per premature death prevented, we multiply the

estimated tons of diesel PM that would result in one fewer premature deaths

(14 tons per year) by the average present value of cost-effectiveness ($9.76 per

pound diesel PM or $19,500 per ton). The resulting estimated cost of control per

premature death prevented is about $275,000 in 2002 dollars. The U.S. EPA

has established $6.3 million (in year 2000 dollars) for a 1990 income level as the

mean value of avoiding one death (U.S. EPA, 2003a). As real income increases,

the value of a life may rise. U.S. EPA further adjusted the $6.3 million value to

$8 million (in 2000 dollars) for a 2020 income level. Assuming that real income

grew at a constant rate from 1990 and will continue at the same rate to 2037, we

adjusted the value of avoiding one death for the income growth. Since the

control cost is expressed in 2002 discounted value, accordingly, we discounted

values of avoiding a premature death in the future back to the year 2002. In U.S.

EPA’s guidance of social discounting, it recommends using both three and seven

percent discount rates (U.S. EPA, 2000a). Using these rates, and the annual

avoided deaths as weights, the weighted average value of reducing a future

premature death discounted back to year 2002 is $2.44 million (using 2037 as

the end year of analysis) at seven percent discount rate, and $4.78 million at

three percent. The cost range per death avoided because of this proposed

regulation (i.e., $275,000) is 9 to 17 times lower than the U.S. EPA’s benchmark

for value of avoided death. Based on this analysis, the proposed rule is a costeffective mechanism to reduce premature deaths that would otherwise be caused

by diesel PM emissions.
46

The benefits of reducing diesel emissions are based on a statewide average

diesel emission value, such as in the Lloyd and Cackette analysis, which

contains off-road emissions from a number of categories that occur well away

from population centers. Portable diesel-fueled engines and their diesel

emissions are more concentrated in urban areas, thus a greater reduction of the

emissions as a result of the proposed regulation are expected to occur in urban

areas, as compared to rural areas. Emission reductions are, therefore, likely to

have greater benefits than those estimated by Lloyd and Cackette. Thus, the

proposed ATCM is likely to be more cost-effective than the above estimate would

suggest.

Secondary PM

Lloyd and Cackette also estimated that PM2.5 exposures due to diesel NOx

emissions at a level of 0.81 μg/m3 resulted in a mean estimate of 895 additional

premature deaths per year in California, above those caused by directly emitted

diesel PM. The NOx emission levels corresponding to the indirect diesel ambient

PM concentration of 0.81 μg/m3 is 1,640 tpd (599,000 tpy). Following the same

approach as described above, we estimate that reducing 670 tons of NOx

emissions would result in one fewer premature death (890 deaths* 670

tons/599,000 tons). Therefore, with the 82,600-ton reduction of NOx that is

expected by the end of 2037, an estimated 124 (61-186, 95% CI) deaths would

be avoided.

If we multiply 670 tons of NOx emissions by the average present value of costeffectiveness of $1.30 per pound NOx (or $2,600 per ton), the estimated cost of

control per premature death prevented is about $1.74 million. The cost is again

lower than the U.S. EPA’s present value of an avoided death by 1.4 to 2.7 times.

Reduced Ambient Ozone Levels

Emissions of NOx and ROG are precursors to the formation of ozone in the lower

atmosphere. Exhaust from diesel engines contributes a substantial fraction of

ozone precursors in any metropolitan area. Therefore, reductions in NOx and

ROG from diesel engines would make a considerable contribution to reducing

exposures to ambient ozone. Controlling emissions of ozone precursors would

reduce the prevalence of the types of respiratory problems associated with ozone

exposure and would reduce hospital admissions and emergency visits for

respiratory problems.

D. Analysis of Reasonably Foreseeable Environmental Impacts of the

Methods of Compliance

The proposed ATCM sets diesel PM emission rates that are based on a fleetweighted emissions average. The proposed requirements provide the fleet
47

owner flexibility with choosing options to reduce diesel PM emissions from an

individual fleet to meet the required standards. An owner may choose to retrofit

existing engines using a number of control technologies. These technologies

include diesel oxidation catalysts (DOC), diesel particulate filters (DPF), and

alternative diesel fuel. The ARB staff evaluated the potential impacts that these

control technologies may have on wastewater treatment and hazardous waste

disposal. As described below, options are available to mitigate these potential

adverse impacts.

Diesel Oxidation Catalyst (DOC)

Two potential adverse environmental impacts of the use of diesel oxidation

catalysts have been identified. First, as is the case with most processes that

incorporate catalytic oxidation, the formation of sulfates increases at higher

temperatures. Depending on the exhaust temperature and sulfur content of the

fuel, the increase in sulfate particles may offset the reductions in soluble organic

fraction emissions. Using low sulfur diesel fuel can minimize this effect. Second,

a diesel oxidation catalyst could be considered a “hazardous waste” at the end of

its useful life depending on the materials used in the catalytic coating. Because

catalytic converters have been used on gasoline powered on-road vehicles for

many years, there is a very well established market for these items (see, for

example, http://www.pacific.recycle.net – an Internet posting of buyers and

sellers of various scrap materials). In the recycling process, the converters are

broken down, and the metal is added to the scrap-metal stream for recycling,

while the catalysts (one or a combination of the platinum group metals) are

extracted and reused.

Because of platinum’s high activity as an oxidation catalyst, it is the predominant

platinum group metal used in the production of diesel oxidation catalysts. There

is a very active market for reclaimed platinum for use in new catalytic converters,

jewelry, fuel cells, cathode ray tube screens, catalysts used during petroleum

refining operations, dental alloys, oxygen sensors, platinum electrode spark

plugs, medical equipment, and platinum-based drugs for cancer treatment, to

name a few (Kendall, 2002; Kendall, 2003).

Catalyzed Diesel Particulate Filters

These devices are composed of a ceramic diesel particulate filter along with a

platinum catalyst to catalyze the oxidation of carbon-containing emissions and

significantly reduce diesel PM emissions. This is an obvious positive

environmental impact.

However, there are also inorganic solid particles present in diesel exhaust, which

are captured by diesel particulate filters. These inorganic materials are metals

derived from engine oil, diesel fuel, or engine wear and tear. While the PM filter
48

is capable of capturing inorganic materials, these materials are not oxidized into

a gaseous form and expelled.

Because these materials would otherwise be released into the air, the filters are

benefiting the environment by capturing these metallic particles, known as “ash.”

However, the ash that is collected in the PM filter must be removed from the filter

periodically to maintain the filter’s effectiveness.

Ash collected from a diesel engine using a typical lubrication oil and no fuel

additives has been analyzed and is primarily composed of oxides of the following

elements: calcium, zinc, phosphorus, silicon, sulfur, and iron. Zinc is the element

of primary concern because, if present in high enough concentration, it can make

a waste a hazardous waste. Title 22, CCR, section 66261.24 establishes two

limits for zinc in a waste: 250 milligrams per liter for the Soluble Threshold Limit

Concentration and 5,000 milligrams per kilogram for the Total Threshold Limit

Concentration. The presence of zinc at or above these levels would cause a

sample of ash to be characterized as a hazardous waste.

Under California law, it is the generator's responsibility to determine whether their

waste is hazardous or not. Applicable hazardous waste laws are found in the

H&SC, division 20; title 22, CCR, division 4.5; and title 40 of the Code of Federal

Regulations. Staff recommends owners that install a diesel particulate filter on

an engine to contact both the manufacturer of the diesel emission control system

and the California Department of Toxic Substances Control (DTSC) for advice on

proper waste management.

ARB staff has consulted with personnel of the DTSC regarding management of

the ash from diesel particulate filters. DTSC personnel have advised ARB that it

has a list of facilities that accept waste from businesses that qualify as a

conditionally exempt small quantity generator. Such a business can dispose of a

specific quantify of hazardous waste at certain Household Hazardous Waste

events, usually for a small fee. An owner who does not know whether or not he

qualifies or who needs specific information regarding the identification and

acceptable disposal methods for this waste should contact the California DTSC.4

High-pressure water and detergent is sometimes used to remove ash from DPFs.

However, this practice would generate wastewater containing metal oxides,

possibly being hazardous waste, that could not be discharged to the sanitary

sewer or storm drains. Technology exists to reclaim zinc from waste. For

example, the Swedish company MEAB has developed processes for extracting

zinc and cadmium from various effluents and industrial waste streams (MEAB,

2003). Whether reclamation for reuse will be economically beneficial remains to

be seen. Some DPF cleaning techniques can cause ash to be illegally released

 

4

 Information can be obtained from local duty officers and from the DTSC web site at

http://www.dtsc.ca.gov.
49

directly into the air/or work environment potentially exposing the public and/or

workers to zinc and other metal oxides.

Because of the time and costs associated with filter maintenance, there are also

efforts by industry to reduce the amount of ash formed. Most of the ash is

formed from the inorganic materials in engine oil, particularly from zinc-containing

additives necessary to control acidification of engine oil—due in part to sulfuric

acid derived from sulfur in diesel fuel. As the sulfur content of diesel fuel is

decreased, the need for acid neutralizing additives in engine oil should also

decrease. A number of technical programs are ongoing to determine the impact

of changes in oil ash content and other characteristics of engine oil on exhaust

emission control technologies and engine wear and performance.

It may also be possible to reduce the ash level in diesel exhaust by reducing oil

consumption from diesel engines. Diesel engine manufacturers over the years

have reduced engine oil consumption in order to reduce PM emissions and to

reduce operating costs for engine owners. Further improvements in oil

consumption may be possible in order to reduce ash accumulation rates in diesel

particulate filters.

In addition, measurements of NOx emissions for heavy-duty diesel vehicles

equipped with passive catalyzed filters have shown an increase in the NO2

portion of total NOx emissions, although the total NOx emissions remain

approximately the same. In some applications, passive catalyzed filters can

promote the conversion of nitrogen oxide (NO) emissions to NO2 during filter

regeneration. More NO2 is created than is actually being used in the

regeneration process; and the excess is emitted. The NO2 to NOx ratios could

range from 20 to 70 percent, depending on factors such as the diesel particulate

filter systems, the sulfur level in the diesel fuel, and the duty cycle (DaMassa,

2002).

Formation of NO2 is a concern because it irritates the lungs and lowers

resistance to respiratory infections. Individuals with respiratory problems, such

as asthma, are more susceptible to the effects. In young children, nitrogen

dioxide may also impair lung development. In addition, a higher NO2/NOx ratio in

the exhaust could potentially result in higher initial NO2 concentrations in the

atmosphere which, in turn, could result in higher ozone concentrations.

Model simulations have shown that a NO2 to NOX emission ratio of approximately

20 percent would nearly eliminate any impact of increased NO2 emissions

(DaMassa, 2002). According to the model, at the NO2 to NOx ratio of 20 percent,

there will be a decrease of the 24-hour ozone exposure (greater than 90 parts

per billion) by two percent while an increase of the peak 1-hour NO2 by six

percent (which is still within the NO2 standard).
50

The health benefits derived from the use of PM filters are immediate and offset

the possible adverse effects of increases in NO2 emissions. For this reason, a

cap of 20 percent NO2 to NOx emission ratio was established for all diesel

emission control systems through ARB’s Verification Procedure. The proposed

ATCM allows only verified PM control technology to be used on portable engines

in order to meet the diesel PM emission standards.

In addition, DPFs can emit carbon dioxide (CO2), a greenhouse gas, as a result

of oxidizing PM. The contribution of CO2 emissions from diesel-fueled portable

engines using DPFs, and how much these emissions contribute to global

warming, is unknown.

Alternative Fuels

Alternative fuels and alternative diesel fuels can also be used to reduce diesel

PM emissions. Alternative fuels can include natural gas, propane, methanol, or

ethanol. Alternative diesel fuels include biodiesel and Fischer-Tropsch fuels.

No significant negative environmental impacts have been determined from the

use of alternative fuels; however, the use of biodiesel can result in a slight

increase in NOx emissions (Hofman/Solseng, 2002).

To ensure there are no adverse impacts from the use of alternative diesel fuels,

the proposed ATCM requires any alternative diesel-fuel or fuel additives used in

a diesel-fueled portable engine to be verified under the ARB's Verification

Procedure, which is discussed in Appendix E. The Verification Procedure

permits a control technology to be verified only if a multimedia evaluation of the

use of the alternative diesel fuel or additive has been conducted. In addition,

verification requires a determination by the California Environmental Policy that

such use will not cause a significant adverse impact on public health or the

environment pursuant to Health and Safety Code section 43830.8 (see Public

Resource Code, section 71017).

Potential Impacts from Proposed Incentives

The proposed ATCM provides several incentives to encourage repowering or

replacement of higher-emitting engines as part of the fleet reduction approach.

The ARB staff evaluated the potential environmental impacts that these

incentives may create.

One proposed incentive provides a credit toward satisfying a fleet-weighted

standard by allowing, under certain circumstances, alternative-fueled engines to

be included in the fleet-weighted diesel PM emissions calculations. Alternative

fuels could include methane, butane and gasoline. The ARB staff expects limited

use of this credit because these engines, which are mostly spark ignited, are

generally more expensive, have a shorter useful life than diesel-fueled

(compression ignition) engines, and are more difficult to refuel in field operations.
51

In the limited cases where alternative-fueled engines are added to the fleet, staff

would expect a reduction in diesel PM emissions and would expect minimal

change to NOx emissions. The NOx emission standards for large spark ignition

engines are comparable to Tier 3 off-road engine standards but are slightly

higher than the proposed Tier 4 off-road engine standards.

Another incentive allows credit for applications where grid power is used in lieu of

operating a portable diesel-fueled engine. The emission rate for those engines

replaced with electrification can be reduced in the fleet-weighted diesel PM

emissions calculations based on the amount of hours per year grid power is used

as compared to the hours per year the diesel-fueled engine is operated.

Staff does not expect to see wide-use of this credit because electrification is

likely to be used in only limited applications such as in dredging activities, ground

support activities at airports, and cement and aggregate operations. When

electrification is used, it would increase demand on the grid, which in turn would

increase emissions from power plants, primarily NOx emissions. However, NOx

emissions from power plants are much cleaner than NOx emissions from

diesel-fueled engine. Thus, staff would expect a reduction in diesel PM

emissions and a slight reduction in NOx emissions when electrification is used to

comply with the fleet-weighted diesel PM emissions calculations.

E. Reasonably Foreseeable Mitigation Measures

CEQA requires an agency to identify and adopt feasible mitigation measures that

would minimize any significant adverse environmental impacts described in the

environmental analysis. The ARB staff has concluded that no significant adverse

environmental impacts should occur from adoption of and compliance with the

proposed ATCM. Therefore, no mitigation measures would be necessary.

F. Reasonably Foreseeable Alternative Means of Compliance with the

Proposed Airborne Toxic Control Measure

Alternatives to the Proposed ATCM are discussed in Chapter V of this Staff

Report. The ARB staff has concluded that the proposed ATCM provides the

most effective and least burdensome approach to reducing the public's exposure

to diesel PM and other air pollutants emitted from diesel-fueled portable engines.

G. Environmental Justice

The 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. Environmental Justice is defined as the fair treatment of

people of all races, cultures, and incomes with respect to the development,
52

adoption, implementation, and enforcement of environmental laws, regulations,

and policies. These policies apply to all communities in California, but recognize

that environmental justice issues have been raised more in the context of lowincome and minority communities.

The Environmental Justice Policies are intended to promote the fair treatment of

all Californians and cover the full spectrum of the ARB's activities. Underlying

these Policies is a recognition that the agency needs to engage community

members in a meaningful way as it carries out its activities. People should have

the best possible information about the air they breathe and what is being done

to reduce unhealthful air pollution in their communities. The ARB recognizes its

obligation to work closely with all communities, environmental and public health

organizations, industry, business owners, other agencies, and all other interested

parties to successfully implement these Policies.

During the ATCM development process, the ARB staff proactively identified and

contacted representatives from engine and diesel emission control associations,

portable fleet owners and associations, environmental organizations, and other

parties interested in portable engines. These individuals participated by

providing data, reviewing draft regulations, and attending public forum meetings,

in which staff directly addressed their concerns.

The proposed ATCM is 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. Portable engines are used in urban

and rural communities. Because they are used for a number of activities

throughout the State, the risk posed by these engines may potentially impact all

communities in California. Limiting diesel PM emissions from diesel-fueled

portable engines in California will provide air quality benefits to all communities in

the State, including low-income and minority communities.

H. Use of CEQA to Further Mitigate Diesel PM Emissions from Portable

Diesel-Fueled Engines

Implementation of the proposed ATCM will result in significant reduction of diesel

PM throughout the State, and therefore will reduce the public's exposure to diesel

PM. Nevertheless, for situations where numerous diesel-fueled portable

engines or very large engines are used for a long-term project, additional

mitigation should be considered. For example, large construction projects would

likely use numerous pieces of portable equipment, such as welders,

compressors, and generators on-site for several weeks or months. Although the

proposed ATCM will reduce diesel PM for all portable diesel-fueled engines

larger than 50 horsepower in California, local air districts can further address the

impacts of these large projects through the CEQA (California Environmental

Quality Act) process.
53

CEQA provides a public process where a project's potential environmental

impacts are discussed and, as necessary, potential mitigation measures are

identified and implemented for the project. A major benefit provided by the

CEQA process is that the impacts and the necessary mitigation measures are

identified prior to beginning the project. This is where the local air districts can

comment on the air-quality impacts of portable diesel-fueled engines and

recommend specific mitigation measures.

Although many times the emissions from portable engines comprise a small

percentage of the total diesel PM emissions from a construction project,

additional mitigation measures for these engines can include: requiring only

newer, cleaner diesel engines to be used on the project; expediting the electrical

hookup to the grid as soon as practicable to minimize the need for diesel-fueled

portable equipment; and requiring the use of alternative-fueled portable engines,

such as propane.

Since each large construction project may have its unique circumstances, and

the regulatory management of 33,000 engines statewide must necessarily be

broad, the CEQA process is appropriate for addressing specific air-quality issues

related to large projects that employ numerous and/or large portable dieselfueled engines.

The ARB staff will continue to work with the local air districts on identifying airquality impacts of large projects and recommending possible mitigation

measures through the CEQA process.
54

VIII. ECONOMIC IMPACTS OF PROPOSED ATCM

In this chapter ARB staff presents an analysis of the estimated costs and impacts

associated with implementation of the proposed ATCM. The expected capital

and recurring costs for the potential compliance options are presented, as well as

an analysis of the cost effectiveness of the proposed ATCM. The costs and

associated impacts are presented for private companies and governmental

agencies.

A. Summary of the Economic Impacts

ARB staff estimates the total cost of the proposed ATCM to affected businesses

and government agencies to vary between $2 to $34 million per year, averaging

$15 million per year. The economic impact is distributed over a 30-year period

to 2037.

Overall, most affected businesses will be able to absorb the costs of the

proposed regulation with no significant adverse impacts on their profitability. This

finding is based upon staff's estimated change in "return on owner's equity"

(ROE) analysis. The analysis found that the overall change in ROE ranges from

negligible to a decline of about 7 percent. Because the proposed ATCM would

not alter significantly the profitability of most businesses, we do not expect a

noticeable change in employment, business creation, elimination, or expansion,

and business competitiveness in California. We also found no significant

adverse economic impacts on local or State agencies.

The overall estimated cost effectiveness of the proposed ATCM, considering only

the benefits of reducing diesel PM is between $16/lb and $19/lb. Since the

proposed ATCM will also result in reductions of ROG and NOx emissions, ARB

staff allocated half of the costs of compliance against these benefits, resulting in

cost effectiveness values of between $8/lb and $10/lb for diesel PM and less

than $2/lb of ROG and NOx reduced.

The estimated cost of control per premature death prevented by the proposed

ATCM is $ 275,000 in 2020 dollars. Using U.S. EPA’s established value for

avoiding a premature death, $2.44 million (using 2037 as the end year of

analysis) at seven-percent discount rate, and $4.78 million at three percent, both

values discounted back to year 2002, the cost range per death avoided because

of this proposed regulation is 9 to 17 times lower than the U.S. EPA’s benchmark

for value of avoided death. Based on this analysis, the proposed rule is a costeffective mechanism to reduce premature deaths that would otherwise be caused

by diesel PM emissions.
55

B. Legal Requirements

In this section, we explain the legal requirements that must be satisfied in

analyzing the economic impacts of the ATCM.

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, and the

ability of California businesses to compete with businesses in other states.

Also, State agencies are required to estimate the costs 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

costs or savings to local agencies and the costs or savings in federal funding to

the State.

Finally, 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 in any single year. Because the estimated cost of

the ATCM exceeds $10 million in a single year, the proposed ATCM is a major

regulation. Following is a description of the methodology used to estimate costs

and ARB staff’s analysis of the economic impacts on California businesses and

State and local agencies.

C. Methodology for Estimating Costs Associated with Implementation

This section provides the general methodology and assumptions used to

estimate the costs associated with the ATCM. In this section, we describe how

we estimated the number and types of engines, and the costs of bringing these

engines into compliance with the proposed ATCM.

Overview

As discussed in Chapter V, compliance with the proposed ATCM would be

phased in over a period beginning 2008-2009 with full compliance by January 1,

2020. However, both the emissions reductions and the costs associated with

satisfying the proposed ATCM requirements occur over a longer period of time.

The reductions associated with complying with the proposed ATCM begin before

2010 and continue through 2037. These reductions result from the early

replacement of the existing portable engine fleet with cleaner engines and the

subsequent retrofitting of additional engines. Anticipated costs associated with
56

the proposed ATCM will begin in 2005, with fees associated with the

permitting/registration of engines previously exempted from district permit

requirements. The costs associated with the proposed ATCM continue beyond

January 1, 2020, when the regulation is fully implemented, and do not end until

2037, when the costs and benefits associated with the proposed ATCM have

been fully achieved.

The initial economic impact of the proposed ATCM is associated with the lost

economic value from replacing engines prior to the end of their useful life (for

compliance with the 2010 and 2013 requirements). Subsequent costs to satisfy

the fleet emission goals of 2017 and 2020 are associated with add-on retrofit

systems.

A more detailed discussion of the methodology used to determine the economic

impact of the proposed ATCM is given below. Table VIII-1 summarizes the major

assumptions used in this cost analysis.

Treatment of Costs Associated with Proposed ATCM

The major factors affecting the economic impact of the proposed ATCM are: 1)

the number and characteristics (i.e., horsepower rating, emission rate, age of the

affected engines) of engines affected; 2) changes in the overall portable dieselfueled engine population due to implementation of the proposed ATCM; 3) the

cost and timing of early replacement of engines before the end of their useful

lives; and 4) the cost and timing associated with the addition of diesel PM control

technologies.

The number of affected engines is based upon the engine populations used to

estimate the emissions for 2000 for large off-road compression-ignition engines.

Information for engines registered with ARB’s Portable Equipment Registration

Program (PERP) was used to characterize the affected engines. Additional

details on the affected engines are given in Appendix G.

As discussed previously, the proposed regulation will require the early

replacement of existing portable diesel-fueled engines with newer, cleaner

engines. The cost attributed to engine replacement or repower would be the

economic value to the owner for each year the engine has been prematurely

replaced. Information for expected engine life used for the emissions inventory

suggests that the useful life of a diesel-fueled portable engine is about 25

years—which is also supported by the age of engines that are registered with the

PERP. The lost useful life would be the difference between 25 years and the

average age of the affected engines at the time a standard becomes effective

that forces the replacement of the engines. The average age of each affected

group of engines was based upon the age of engines for similar types of engines

registered with the PERP. For example, to comply with the 2010 requirement,

the average age of the affected portable engines being replaced will be 20
57

years—the affected engines will then be replaced about five years before the end

of their useful life. Conversely, for the purposes of this analysis, engines that are

more than 25 years old have reached the end of their useful life, and no cost was

include in the economic impact of the proposed ATCM for the replacement of this

group of engines.

To estimate the economic impact caused by early replacement of portable

engines, staff estimates the annual value for each year of lost useful life as the

cost of the engine annualized over a 25-year period. The cost to replace or

repower a portable engine is expected to range between $135-$220/horsepower.

In the case of a 100 horsepower engine, the capital cost at the high end of the

range would be $22,000 and the annualized cost for a 25-year period would be

$1,600. The cost would apply initially in the year the emission standard became

effect and for successive years for each year of lost useful life. Since the

example engine was replaced to satisfy the proposed 2010 requirement, the

economic impact would occur from 2010 through 2014 and the total cost is about

$5,000, in 2002 dollars.

As discussed previously, all engines registered with PERP must be certified to

off-road engine emission standards by January 1, 2010. Consequently, the costs

and benefits for the ATCM do not include replacement requirements for engines

registered with the PERP.

The use of verified Level-3 control technologies will provide an option to satisfy

the proposed fleet standards that become effective by January 1, 2017. For the

purposes of evaluating the economic impact associated with these standards, the

cost is based upon retrofitting the engines with diesel PM particulate filters. The

cost of a filter is estimated at $40/horsepower and this cost would be annualized

over a 10-year period. Based upon current manufacturer’s guarantees of 8,000

hours of use for a particulate trap and the average operation of a portable dieselfueled engine, the particulate trap could have a useful life of up to 16 years. In

some cases, an additional particulate trap was included in the cost analysis.

The cost analysis was calculated using 2002 dollars. Where future costs are

mentioned, they have been discounted back to 2002 dollars using standard

accepted economic procedures. An annual real interest rate of five percent is

used. This is consistent with California Department of Finance recommendations

for this type of analysis. Additional details on the cost analysis can be found in

Appendix G.

D. Potential Compliance Options and Related Capital and Recurring

Costs

The compliance costs for the proposed ATCM will vary depending upon the

method used to satisfy each proposed fleet emission standard. A brief
58

Table VIII-1: Cost and Key Assumptions Used in the Cost Analysis

Category Assumptions

All ß An annual 5% real interest rate is basis of all economic

impacts, assuming 7% nominal interest rate and 2% inflation

rate

ß Total capital costs for control equipment are amortized over

10 years and useful life control equipment is 15 years

ß Useful life for an engine is 25 years; cost due to early

replacement of engine is based upon: 1) number of years

displaced due to early replacement and 2) economic value for

each year is based the annual payments for the case where

the capital cost of engine is amortized over 25 years

ß Engines older than 25 years at time of forced replacement is

assumed to be at the end of its useful life

ß Cost of replacing or repowering equipment is $135-

220/horsepower

ß Cost of diesel particulate trap is $40/horsepower; useful life is

16 years

Agriculture ß Cost is based upon value lost due to early replacement of

engine.

ß Engine hp is 100 and at time of replacement, five years of

useful life left

Government ß Engines in this group is evaluated based upon both value lost

due to early replacement of engine and the fiscal impact from

purchasing equipment

ß Both information from engines registered with PERP and

results of a survey to public agencies were used to

characterize the affected engines

ß Over 60% of equipment would be considered emergency or

low-use engines

ß For the fiscal impact, the annual costs are the sum of the

amortized capital cost and the annual maintenance and

operation costs.

ß For engines registered with PERP, the cost for compliance

with the 2010 requirement is not included in the economic

impact of the proposed ATCM

Private Business ß Cost is based upon value lost due to early replacement of

engine.

ß For engines not registered with PERP, assume statistical

information from PERP (excluding engines used in dredging,

oil well servicing, and rental) is representative (engine size

and age of engine).

ß For engines registered with PERP, the cost for compliance

with the 2010 requirement is not included in the economic

impact of the proposed ATCM
59

discussion of the proposed compliance options that may be used to comply with

each of the proposed fleet emission standards, the estimated capital and

recurring costs, and the assumptions used in the cost analysis follows.

Proposed 2010 Requirement

The proposed ATCM requires all portable diesel-fueled engines to be certified to

an off-road engine emission standard by January 1, 2010. Engines that are

registered with PERP are already subject to this requirement. The proposed

ATCM would require all portable diesel-fueled engines to meet the same

requirement.

Staff estimates that about 11,500 engines will be affected by this requirement.

By the beginning of 2010, these engines will have operated for an average of 20

years. Staff anticipates most portable engine fleet owners will replace these

engines predominately with Tier 3 engines for engines that are less than 750

horsepower and Tier 2 engines for engines that are 750 horsepower and larger.

For engines less than 750 horsepower, Tier 2 engines have been available since

2003. Tier 3 engines—available by 2008 in all size categories less than 750

horsepower—will have the same PM standard as the Tier 2 engines; however,

Tier 3 engines are expected to emit about 30 percent less NOx, which is a

significant consideration for reducing ozone concentrations.

For the engines that are 750 horsepower and larger, manufacturers are not

required to satisfy more stringent PM standards until 2006. Requiring all engines

to be certified by 2010 allows this group of engines sufficient time such that all

uncertified engines can be replaced with the Tier 2 engine instead of a Tier 1

engine. The Tier 2 engines are 60 percent cleaner than a Tier 1 engine on a PM

basis and 35 percent cleaner on a NOx basis.

Proposed 2013 Fleet Standard

The initial fleet standard becomes effective January 1, 2013. While the fleet

standard provides flexibility to owners of portable diesel-fueled engines to use a

range of options to satisfy the fleet standards, this analysis is based on the use of

engine replacements or repowers. The standards are set such that most Tier 1

engines less than 750 horsepower will need to be replaced, which would affect

about 6,000 engines. By the beginning of 2013, these engines will have

operated 9-17 years, or would have a remaining useful life of 8-16 years.

For engines that are less than 175 horsepower, the Tier 1 engines would be

replaced mainly with Tier 3 engines. For engines rated from 175 horsepower to

749 horsepower, staff expects the Tier 1 engines would be replaced with engines

certified to the proposed Tier 4 standards. Based upon the U.S. EPA proposal,

Tier 4 engines would be available in this classification beginning in 2011.
60

For engines rated at 750 horsepower or larger, the proposed 2013 fleet

standards are not expected to cause most owners to replace or retrofit engines of

this size.

Proposed 2017 and 2020 Fleet Standards

The 2017 and 2020 fleet standards represent a significant reduction in emissions

from the 2010 fleet standard—a reduction in diesel PM of 50 percent or more.

About 30,000 engines will be affected by these standards. This analysis is based

on fleet owners relying on retrofits with Level-3 verified technologies to satisfy

these standards.

Maintenance

Maintenance costs in the economic impact analysis for the proposed ATCM

include the cost associated with maintaining the diesel particulate filters. On

average, this cost was estimated to be $300 per engine on an annual basis,

based on a qualified mechanic taking 2-3 hours to perform the maintenance.

Staff did not take any credit for the assumed decrease in maintenance resulting

from the older engines being replaced with new engines.

Recordkeeping and Reporting Requirements

Costs associated with recordkeeping will depend upon the number of engines, if

any, in the fleet that are subject to individual recordkeeping requirements. Staff

believes that most portable diesel-fueled engines will not be subject to individual

recordkeeping requirements. In addition, the recordkeeping and reporting

requirements of the proposed ATCM will not begin until January 1, 2010.

For fleets that do not have any engines subject to recordkeeping, the

recordkeeping consists of tracking the composition of the fleet and the emission

factors associated with the engines in the fleet. Staff estimates that companies

and public agencies would use between one to two hours a month to maintain

the information for the fleet. For larger fleets, initial development of the system to

track the necessary information may take up to 10 hours. Based on these

assumptions, the annual cost for recordkeeping would be between $300 to $600

per year with initial set up costing no more than $250.

Recordkeeping will be required for: alternative-fueled engines used to comply

with fleet standards, engines affected by electrification if electrification is used to

comply with the fleet standards, and engines designated as either emergency

application only or low-use. For these engines, the owner/operator will be

required to maintain the hours of operation for the engine on an annual basis.

For this level of recordkeeping, staff believes one to two hours per year would be

adequate to maintain this level of recordkeeping for a small- to moderate-sized
61

fleet (3 to 15 engines) at a cost of $50 a year. In a few cases, daily

recordkeeping may be necessary. Four to twenty hours per year may be

expended for each engine to adequately maintain daily records, at a cost of $100

to $500 per year.

Fleet owners/operators will be required to submit a status report to the Executive

Officer of the ARB in 2011 and a compliance report for each year a new fleet

emission standard becomes effective. The reports will require the submittal of

information on the fleet to demonstrate compliance with any applicable emission

standard, and requires the Responsible Official to certify that certain

requirements are satisfied. Staff estimates that the typical company or agency

(with fleets of 15 engines) will expend five hours preparing the reports, and up to

40 hours for larger fleets to prepare the information, resulting in costs of $125 to

$1,000.

E. Potential Costs and Impacts to Private Companies

In this section, we estimate the costs and impacts on private companies from

complying with the proposed ATCM. The analysis estimates the overall total

statewide cost to private businesses, as well as the cost to a typical individual

business, a typical small business, and the total costs to different sectors of the

industry.

Description of Private Fleets

The ARB staff does not have access to financial records for most of the

companies that would be affected by the proposed ATCM. Based upon

information for companies registered with PERP, about 70 percent of the affected

businesses would be considered small businesses. These small businesses own

10 percent of the engines registered with PERP.

Total Costs

We estimate the statewide total costs to private companies to be approximately

$290-$340 million. Annually, the costs are expected to vary from $2 million to

$29 million. The total statewide costs to private businesses are a combination of

costs due to early replacement of existing engines, the installation of diesel PM

reduction technologies, and registration fees for engines previously not required

to operate with a permit. The costs of the diesel PM reduction technologies are

derived from the combined present value capital, installation costs, equipment

lifetime, and maintenance costs.

Costs to a Typical Small Business

Based on information for small businesses registered with PERP, small

businesses typically own five or fewer engines, with the average small business
62

owning three engines. For a fleet of three engines, the total cost associated with

complying with the proposed ATCM, including capital and ongoing costs, to a

typical small business is estimated to be between $30,000 and $38,000. This

cost would be distributed over a 19-year period, from 2010 through 2028. Annual

costs would vary between $400 and $5,200 per year, with the average cost of

$2,000 per year over this time period. There would be an additional cost for

permitting fees of $270 per year, or $4,000 for the period the proposed ATCM is

reducing diesel PM emissions, if the engines have not been previously subject to

district permit requirements and therefore would need to be registered with

PERP. An example of a cost analysis for a typical small business is included in

Appendix H.

The cost to a typical small private business is derived from the average size, age,

and number of engines owned. This cost can vary significantly depending upon

the characteristics of the engines in the fleet. In the case of the example, the

fleet consists of a certified 78 hp engine and two uncertified engines rated at 129-

and 360-hp. The cost for compliance with the proposed ATCM would be higher if

all the engines were newer engines being replaced with a significant portion of

their useful life available. Conversely, the cost would be lower if the engines, at

the time of replacement, were at the end of their useful life.

Recurring costs include costs associated with recordkeeping, reporting and

maintenance. Cost associated with recordkeeping and reporting is dependent

upon the type of engines in the fleet. No expenditure will be necessary for

recordkeeping until after January 1, 2010. If none of the engines are subject to

recordkeeping requirements for individual engines, recordkeeping will only be

necessary for preparing submittals of reports to the ARB. Costs would be

expected to be less than $100 per year. Similarly, maintenance costs will not be

applicable until a control technology is added to the portable engine, sometime

after 2010. Costs for maintaining a diesel particulate filter is estimated at $300

per year per filter, or about $900 for the typical small business.

The ARB staff estimates that overall, small businesses will incur a cost of $60-70

million to satisfy the requirements of the proposed ATCM.

Costs to a Typical Business

The total costs to a typical business complying with the proposed ATCM,

including capital and ongoing costs, are estimated to be between $226,000 and

$238,000. This cost would be distributed over a 28-year period, from 2010 to

2037. Annual costs would vary between $1,500 and $17,000 per year, with the

average cost of $8,200 per year over this time period. In addition, typical

businesses are already subject to district permitting requirements, and therefore

no additional costs for permitting are included. The cost to a typical private

business is derived from the average size, age, and number of engines owned.

Based on information for businesses registered with PERP, a typical business
63

owns 15 engines. The cost for complying with the requirements of the proposed

ATCM would be for the early replacement of these portable engines as well as

the subsequent addition of retrofit technology. As discussed above, this cost can

vary significantly depending upon the characteristics of the engines in the fleet.

Recurring costs include costs associated with recordkeeping, reporting and

maintenance. Costs associated with recordkeeping and reporting are

dependent upon the type of engines in the fleet. No expenditure will be

necessary for recordkeeping until after January 1, 2010. If none of the engines

are subject to recordkeeping requirements for individual engines, recordkeeping

will only be necessary for preparing submittals of reports to the ARB. Costs

would be expected to be less than $100 per year. Similarly, maintenance costs

will not be applicable until a control technology is added to the portable engine,

sometime after 2010. Costs for maintaining a diesel particulate filter is estimated

at $300 per year per filter, or about $4,500 for the typical business.

Some companies registered with PERP own as many as 700 engines. However,

the majority of these large engine fleets are owned by rental companies. The

practice of most rental companies is to replace engines within their fleets over a

short time period. Consequently, rental companies are generally expected to

comply with the proposed requirements without any significant impact on their

normal business practices. Other industry sectors with large fleets are the oil well

services industry, large construction firms, and utilities. Most of these companies

are registered with PERP and, as discussed above, are required to replace their

engines as necessary such that all engines in the fleet are certified to off-road

engine emission standards by January 1, 2010. ARB staff expects that most

fleets subject to the proposed ATCM will have fewer engines than the typical fleet

used to illustrate the impact of the proposed ATCM.

Costs and Impacts to Various Industry Sectors

ARB staff categorized the private businesses impacted by the proposed ATCM

into nine categories. The industry categories are largely based upon the

industries registered with PERP. These categories are agriculture, marine

construction (including dredging), ground support equipment at airports, general

industry applications, land-based construction, oil-well services industry, rental

industry (including entertainment industry), utilities (including telecommunication),

and recycling of wood wastes. The costs by industry are given in Table VIII-2

and the total costs to private businesses are expected to be about $290 to $340

million over the life of the regulation. Nearly 70 percent of the total costs of

complying with the proposed ATCM will be in the construction, oil well services,

and general-industry categories.

The methodology used to estimate the costs in Table VIII-2 is the same used to

estimate the total statewide costs of the proposed ATCM, except that the

individual industry sectors are analyzed separately. Once again, the costs
64

include only those directly caused by the proposed ATCM. Costs associated

with complying with requirements of the PERP are not included. Finally, the

proposed regulation provides a significant time period for the regulation to be

fully implemented. The economic analysis reflects this by evaluating the impact

of the proposed ATCM over a 30-year period.

Table VIII-2: Distribution of Total Costs for Private Businesses

(Millions of Dollars)

Business Category Estimated Total

Statewide Costs

Agriculture $21-27

Marine Construction $5-6

Ground Support

Equipment

$4-5

General Industry

Applications

$43-51

Construction $121-142

Oil Well Services Industry $33-36

Rental $19-22

Utilities $14-17

Recycling of Wood Waste $26-31

Potential Business Impacts

In this section we will analyze the potential impacts of the estimated costs of the

proposed ATCM on private enterprises in California pursuant to the California

Clean Air Act (CCAA). Section 11346.3 of the Government 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 on California business expansion, elimination, or creation.

This analysis is based on a comparison of the annual return on owner's equity

(ROE) for affected businesses before and after the inclusion of the equipment

costs, associated recurring costs, and fees. The analysis also uses publicly

available information to assess the impacts on competitiveness, jobs, and

business expansion, elimination, or creation. The purpose of this analysis is to

indicate whether or not the annual costs would have significant adverse impacts

on California businesses and individuals.

A wide range of businesses use diesel-fueled portable engines. The types of

businesses that may be impacted include agribusiness, electric utilities,
65

telecommunication, motion picture and television, refiners, landfills, construction,

manufacturing, oil-well servicing, military bases, airports, and industrial cleaning.

The staff estimates that there are 2,800 businesses operating 33,000 dieselfueled portable engines. A list of the affected industries is presented in Table

VIII-3 along with their Standard Industrial Classification (SIC) Codes.

Table VIII-3: List of Industries with Affected Businesses

SIC Code Industry

783 Ornamental shrub and tree services

1389 Oil and gas field services

1442 Construction sand and gravel

1542 General contractors—nonresidential buildings,

other than industrial

1649 Heavy construction, not elsewhere classified

1795 Wrecking and demolition work

2951 Asphalt paving mixtures and blocks

3531 Construction machinery and equipment

4581 Airports, flying fields, and airport terminal services

4813 Telephone communications, except radiotelephone

4911 Electrical services

4931 Electric & other services combined

7812 Motion picture and video tape production

The approach used in evaluating the potential economic impact of the proposed

ATCM on California businesses is as follows:

(1) All affected facilities are identified from companies registered with PERP. SIC

codes identified by these businesses are listed in Table VIII-3.

(2) A sample of one to three typical businesses was selected from the facility list

for each category.

(3) Annual costs for the proposed ATCM are estimated for each of these

businesses based on the assumptions previously discussed.

(4) The total annual cost for each business is adjusted for both federal and states

taxes.

(5) These adjusted costs are subtracted from net profit data and the results used

to calculate the Return on Owners Equity (ROE). The resulting ROE is then

compared with the ROE before the subtraction of the adjusted costs to

determine the impact on the profitability of the businesses. A reduction of

more than 10 percent in profitability is considered to indicate a potential for
66

significant adverse economic impacts. This threshold is consistent with the

thresholds used by the U.S. EPA and others.

Using Dun and Bradstreet financial data from 2000 to 2002, staff calculated the

ROEs, before and after the subtraction of the adjusted annual costs, for the

selected businesses from each category. These calculations were based on the

following assumptions.

ß All affected businesses are subject to federal and state tax rates of 35 percent

and 9.3 percent, respectively.

ß Affected businesses neither increase the prices of their products nor lower

their costs of doing business through cost-cutting measures because of the

proposed ATCM.

These assumptions, though reasonable, might not be applicable to all affected

businesses.

California businesses are affected by the annual cost of the proposed ATCM to

the extent that the implementation of the proposed ATCM reduces their

profitability. Using ROE to measure profitability, we found that the change in

ROE for selected businesses from all categories range from negligible to a

decline of about 7 percent in 2006. The average decline over all categories is

less than 3 percent. This represents a small decline in the average profitability of

the affected businesses. Overall, most affected businesses will be able to

absorb the costs of the proposed ATCM with no significant impact on their

profitability.

Potential Impact on Business Competitiveness

The proposed ATCM may affect the ability of some California businesses to

compete with businesses outside the State due to the cost to satisfy the

requirements of the proposed ATCM. Only businesses competing against

products imported into the State may be affected. Most businesses use portable

engines to perform maintenance, provide capability for emergency response,

provide power in locations where grid power is not available, or render a service.

The affected businesses provide a service as opposed to producing a product.

Consequently, staff expects the ATCM to minimally impact the ability of

California's businesses to compete with businesses outside the State.

In addition, the proposed ATCM would require businesses outside the State, if

the companies wish to operate portable diesel-fueled engines in California, to

satisfy the same requirements as California businesses.
67

Potential Impact on Employment, Business Competitiveness, Elimination

or Expansion

The proposed ATCM applies to, and uses technology from, existing businesses,

but may create new or expand business. Businesses that manufacture, sell,

install, repair, or perform maintenance on diesel particulate emission control

systems or diesel-fueled engines may experience an increase in demand for their

products or services, resulting in an expansion of those businesses or the

creation of new businesses.

ARB staff believes jobs will not be eliminated as a result of the proposed ATCM,

but may lead to the augmentation or alteration of job duties, leading to no net

result change in the number of jobs. Staff believes additional training may be

required for these additional duties. Staff expects jobs will be created to install,

repair, or perform maintenance on particulate filters and diesel-fueled engines.

F. Potential Costs to Local and State Agencies

In this section, we estimate the total costs to governmental agencies. The

analysis also estimates the total fiscal costs to local and state agencies. Table

VIII-4 shows two economic assessments. As discussed above, the most

applicable assessment is determining the economic impact due to the early

replacement of portable diesel-fueled engines owned by public agencies. Based

on this methodology, the ARB staff estimates the total costs to public agencies to

be approximately $62 to $79 million. Additionally, staff has also estimated the

capital outlay necessary for public agencies to satisfy the requirements of the

proposed ATCM. For this analysis, the capital costs were amortized over a 10-

year period at a 5 percent real interest rate. Information for the engine

populations were based in part on the results of an ARB survey sent to public

agencies and on information from PERP. This type of analysis does not consider

that public agencies may have budgeted funding to replace engines at the end of

their useful life.

Table VIII-4: Summary of Annualized Costs for Pubic Agency

Compliance with the Proposed ATCM

(Millions of Dollars)

Category Economic Impact

Based on Useful

Life Approach

Total Fiscal

Impact

Fiscal Impact on

an Annual Basis

Federal $1.0-1.3 $2-2.9 $0.03-0.25

State $4.4-5.6 $6.9-11.1 $0.1-1.0

City $30-38 $55-79 $1-10

County $5.5-7.1 $10-14.2 $0.2-1.7

Other Local $21-27 $38-55 $0.7-6.5
68

Local Public Agencies

The majority of local governments use diesel-fueled portable engines in

emergency applications, for maintenance, and to operate equipment at landfills.

Emergency applications are one of the most common uses of portable engines

by local governments. These applications include providing power for public

safety purposes or to prevent flooding. Another major area of portable engine

use is maintenance activities. Example of some of these activities includes road

maintenance or tree trimming. Finally, diesel-fueled engines are often used in

specialized equipment at landfills. Staff estimates that there are about 5,900

diesel-fueled portable engines used in these activities at the local level. The cost

for complying with the proposed ATCM, based upon the value lost due to early

replacement of engines and the addition of retrofit technology, is estimated to be

$56 to $72 million. Actual capital outlay will total $102 to $147 million, the

majority of which would be spent from 2008 through 2029. Annual outlay of

capitol will vary between $2 to $13 million for all affected public agencies.

Maintenance and recordkeeping costs can be as much as $1.8 million annually,

although these costs will not be realized until after 2010.

Because the initial requirements of the proposed ATCM become effective

January 1, 2010, there will be no initial fiscal impact on local agencies. Staff

expects most agencies to modify their fleets during FY2008-2009 and FY2009-

2010. To meet the 2010 requirement, staff estimates that on average, a fleet

operator will need to replace about 50 percent of the fleet’s engines. Based on

this estimate, compliance cost for the fiscal years leading up to January 1, 2010

will be between $57 million and $93 million, or $7 to $11 million annually. We

note that some public agencies have registered equipment with PERP, and

therefore are subject to replacing their engines with an engine certified to an offroad engine emission standard by January 1, 2010. These engines are not

included in the economic impact analysis of the ATCM.

Additionally, portable engines that are used exclusively in emergency

applications or are designated low-use would not be subject to additional

requirements (e.g., install retrofit technologies) until January 1, 2020. Staff

estimates that about 65 percent of portable diesel-fueled engines used by local

public agencies would be able to take advantage of these provisions. Owners

that take advantage of these provisions will be required to maintain annual

records for each engine designated as emergency or low-use. Cost of this

recordkeeping should not exceed $200 a year for most public fleets.

Fiscal Effect on State Government

Several state agencies use portable diesel-fueled engines, including the

Department of Transportation, the University of California and State College

education systems, and the state prison system. The Department of
69

Transportation uses a variety of portable equipment to maintain California’s

highway and bridge system. Other state departments use portable engines for

either emergency applications or maintenance purposes. Staff estimates that

650 engines may be impacted at the State government level by this proposed

regulation. The cost for complying with the proposed ATCM, based upon the

value lost due to early replacement of engines and the addition of retrofit

technology is estimated to be $4.4 to $5.6 million. Actual capital outlay will total

$7 to $11 million, the majority of which would be spent from 2008 through 2028.

Annual outlay of capital will vary between $0.1 to $1 million for all affected state

agencies. Maintenance and recordkeeping costs can be as much as $200,000

annually, although these costs will not be realized until after 2010.

Similarly, because the initial requirements of the proposed ATCM become

effective January 1, 2010, there will be no initial fiscal impact. To meet the 2010

requirement, staff estimates that on average, a fleet operator will need to replace

about 80 percent of the fleet’s engines, and that these replacements will occur

during FY2008-2009 and FY2009-2010 for most state agencies. Based on this

estimate, compliance cost for the above fiscal years leading up to January 1,

2010 will be between $3.7 and 6.0 million, or $0.5 million to $0.7 million annually.

We note that some public agencies have registered equipment with the PERP,

and therefore are subject to replacing their engines with engines certified to offroad engine emission standards by January 1, 2010. These engines are not

included in the economic impact analysis of the ATCM.

Fiscal Impacts on Federal Agencies

Military bases are the major federal users of portable diesel-fueled engines.

Similar to other government entities, the military use portable engines for either

emergency applications or maintenance purposes. Staff estimates that 150

federally-owned engines may be impacted by this proposed regulation. The cost

for complying with the proposed ATCM, based upon the value lost due to early

replacement of engines and the addition of retrofit technology, is estimated to be

about $1 to $1.3 million. Actual capital outlay will total $2 to $2.9 million, the

majority of which would be spent from 2008 through 2028. Annual outlay of

capital will vary between $30,000 and $250,000 for all affected federal agencies.

Maintenance and recordkeeping costs can be as much as $50,000 annually,

although these costs will not be realized until after 2010.

Similarly, because the initial requirements of the proposed ATCM become

effective January 1, 2010, there will be no initial fiscal impact. To meet the 2010

requirement, staff estimates that on average, a fleet operator will need to replace

about 75 percent of the fleet’s engines, and that these replacements will occur

during FY2008-2009 and FY2009-2010. Based on this estimate, compliance

cost for the fiscal years leading up to January 1, 2010 will be between $1.2 and

2.0 million, or $150,000 to $250,000 annually. We note that some public

agencies have registered equipment with PERP, and therefore are subject to
70

replacing their engines with an engine certified to an off-road engine emission

standard by January 1, 2010. These engines are not included in the economic

impact analysis of the ATCM.

G. Summary of Total and Annual Costs for Compliance with the

Proposed ATCM

Under this section, the total cost of the proposed ATCM to both private

companies and governmental agencies is estimated. The total costs, based

upon the value lost due to early replacement of engines, and annualized

statewide costs are listed below in Table VIII-5. As discussed previously, the

proposed ATCM provides a significant time period for the regulation to be fully

implemented. The economic analysis reflects this by evaluating the impact of the

proposed ATCM over a 30-year period. As shown in the table, the

corresponding annualized costs will be much lower.

 Table VIII-5: Summary of Total and Annualized Costs for

 Compliance with the Proposed ATCM

 (Millions of Dollars)

Category Total Costs Annualized Costs

Private $290-$340 $2-$29

Federal $1.0-$1.3 $0.03-$0.25

State $4.4-$5.6 $0.1-$1.0

City $30-$38 $1-$10

County $5.5-$7.1 $0.2-$1.7

Other Local $21-$27 $0.7-$6.5

Total $350-$420 $4-$48

H. Cost-Effectiveness

In this section, the cost-effectiveness of the proposed ATCM is estimated. Cost

effectiveness is expressed in terms of control costs (dollars) per air emissions

reduced (pounds). As described below, for the proposed ATCM, the cost

effectiveness is determined by dividing the total discounted capital costs plus the

annual operation and maintenance costs by the annual pounds of diesel PM

reduced. The discounted capital cost is based upon the value lost due to early

replacement of engines plus the cost of retrofitting. As discussed earlier, staff

estimates the proposed ATCM would result in a reduction of 11,000 tons of diesel

PM emissions over the life of the ATCM. This reduction is based upon the

additional reductions the ATCM achieves over the status quo. The status quo

situation includes the reductions achieved through the current PERP. In addition,

both the reductions and the anticipated costs of the proposed ATCM occur over a

time period spanning 2005 to 2037.
71

The overall cost effectiveness of the proposed ATCM is $16 to $19 per pound

diesel PM reduced. This estimate assumes all the costs of compliance are

allocated to diesel PM reduction. Because the ATCM will also result in significant

reductions in hydrocarbons and oxides of nitrogen emissions due to the early

replacement of older engines with cleaner new engines, staff allocated half of the

cost of compliance against these benefits, resulting in cost effectiveness values

between $8/lb and $10/lb for diesel PM and less than $2/lb for NOx and ROG

reduced. Based on this methodology, the proposed ATCM is also a costeffective NOx measure.

Staff expects the overall cost effectiveness to improve over time, since the

economic impact discussed above is based upon the technologies that are

currently available today. As discussed previously, the major option available to

reduce diesel PM emissions from portable diesel-fueled engines is replacing

older diesel-fueled engines with new engines that emit less diesel PM. No

control devices have been certified to Level-3 for off-road applications. The

proposed ATCM allows a long lead-time for these technologies to be developed.

As these technologies become available, staff expects the costs for the

technologies to drop. For example, in the preamble for the proposed Tier 4 offroad engine standards, U.S. EPA staff estimated that diesel particulate traps will

drop down to a cost of $15 per horsepower when on-road diesel-fueled vehicles

are required to be equipped with diesel particulate traps beginning in 2007. In

addition, staff expects many diesel-fueled portable engines that are used

sparingly will not be replaced. Instead, staff expects occasional users of portable

engines to rent the equipment as necessary.
72

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on the Proposed Identification of Diesel Exhaust as a Toxic Air Contaminant;

Appendix III, Part A, Exposure Assessment. Sacramento, California. April 22,

1998.

CARB, 2000a. California Air Resources Board. Public Meeting to Consider

Approval of California’s Emissions Inventory for Off-Road Large CompressionIgnited (CI) Engines (> 25 HP). January 2000.

CARB, 2000b. California Air Resources Board. Risk Reduction Plan to Reduce

Particulate Matter Emissions from Diesel-Fueled Engines and Vehicles.

Sacramento, California. October 2000.

CARB, 2001. California Air Resources Board. Policies and Actions for

Environmental Justice. Sacramento, California. April 2001.

CARB 2002a. California Air Resources Board. The 2002 California Almanac of

Emission and Air Quality. 2002.

CARB 2002b. California Air Resources Board. Public Hearing to Consider

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Sulfates. May 2002.

CARB, 2003. California Air Resources Board. Proposed Airborne Toxic Control

Measure for Stationary Compression-Ignition Engines, Appendix G. Sacramento,

California. September 2003.

CEC, 2002. California Energy Commission. Gas-to-Liquid (GTL) Fuel Fact

Sheet. Sacramento, California. June 2002

DaMassa, 2002. DaMassa, John. Presentation: Air Quality Effects of TrapRelated Emissions (Updated). California Air Resources Board. February 6, 2002.

Diaz-Sanchez et al, 1996. Diaz-Sanchez, D.; Tsien, A.; Casillas, A.; Dotson,

A. R.; Saxon, A. Enhanced Nasal Cytokine Production in Human Beings after in

vivo Challenge with Diesel Exhaust Particles; J. Allergy Clin. Immunol. 1996.

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