STAFF REPORT:

INITIAL STATEMENT OF REASONS FOR

PROPOSED Rulemaking

PROPOSED REGULATION FOR COMMERCIAL HARBOR CRAFT

Stationary Source Division

Emissions Assessment Branch

September 2007
State of California

AIR RESOURCES BOARD

STAFF REPORT:

INITIAL STATEMENT OF REASONS

FOR THE PROPOSED RULEMAKING

Public Hearing to Consider

REGULATIONS TO REDUCE EMISSIONS FROM DIESEL ENGINES ON 

COMMERCIAL HARBOR CRAFT OPERATED WITHIN CALIFORNIA WATERS

AND 24 NAUTICAL MILES OF THE CALIFORNIA BASELINE

To be considered by the Air Resources Board on October 25 and 26, 2007, at:

California Environmental Protection Agency

Headquarters Building

Byron Sher Auditorium

1001 I Street

Sacramento, California

Stationary Source Division

Robert Fletcher, Chief

Robert Barham, Ph.D., Assistant Chief

Emissions Assessment Branch

Daniel E. Donohoue, Chief

Health and Exposure Assessment Branch (RD)

Linda Smith, Ph.D., Chief

Control Strategies Section

Cherie Rainforth, Manager

Regulatory Support Section

Todd Sax, Ph.D., Manager

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

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

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

endorsement or recommendation for use. 
State of California

AIR RESOURCES BOARD

REGULATIONS TO REDUCE EMISSIONS FROM DIESEL ENGINES ON 

COMMERCIAL HARBOR CRAFT OPERATED WITHIN CALIFORNIA WATERS

AND 24 NAUTICAL MILES OF THE CALIFORNIA BASELINE

Principal Author

Todd Sterling

Contributing Authors

Kirk Rosenkranz

John Lee

Kathleen Truesdell

Pingkuan Di, Ph.D.

Lisa Williams

Bonnie Soriano

Doug Grandt

Chengfeng Wang, Ph.D. 

Reza Mahdavi, Ph.D.

Hien Tran

Joe Calavita 

Legal Counsel

Floyd Vergara, P.E., Office of Legal Affairs

Supporting Divisions

Planning and Technical Support Division (PTSD)

Research Division (RD)

Mobile Source Control Division (MSCD)

Acknowledgements

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

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

assistance and cooperation that we have received from many individuals and 

organizations. 
i

TABLE OF CONTENTS

Contents Page

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

1. Introduction........................................................................................................................1

2. Emissions Inventory.........................................................................................................3

3. Health Risk ........................................................................................................................5

4. Summary of Proposed Regulation.................................................................................7

5. Emissions Reductions....................................................................................................14

6. Risk Reduction................................................................................................................18

7. Environmental Impacts ..................................................................................................20

8. Impact on Global Warming............................................................................................20

9. Economic Impacts ..........................................................................................................20

10. Cost to Local, State, and Federal Agencies...............................................................21

11. Cost-Effectiveness..........................................................................................................22

12. Feasibility of Proposed of Proposed Regulation.......................................................23

13. Alternatives Considered ................................................................................................23

14. Key Issues .......................................................................................................................24

15. Outreach..........................................................................................................................25

16. Environmental Justice....................................................................................................26

17. Implementation and Enforcement................................................................................26

18. Recommendation............................................................................................................27

References ..................................................................................................................................28

Appendix A: Proposed Regulations for Commercial Harbor Craft
ii

Contents Page

List of Tables 

Table 1: Commercial Harbor Craft Vessels and Engines (2004) .......................................3

Table 2: Commercial Harbor Craft Vessels Emissions Inventory (2004)..........................3

Table 3: U.S. EPA Marine Engine Categories Used in Harbor Craft.................................8

Table 4: U.S. EPA Marine Engine Standards Effective Dates and Emission Limits for 

Category 1 and Category 2 Engines Used in Harbor Craft .................................8

Table 5: Compliance Dates for Vessels with Homeports Outside SCAQMD.................10

Table 6: Compliance Dates for Vessels with Homeports in SCAQMD............................11

Table 7: Projected Statewide PM Benefits from All Actions ..............................................16

Table 8: Projected Statewide NOx Benefits from All Actions ............................................16

Table 9: Projected SCAQMD NOx and PM Benefits in 2014............................................17

Table 10: Summary of Average Cost-Effectiveness for the Period 2009-2022................22

Table 11: Diesel PM Cost-Effectiveness of the Proposal and Other 

Regulations/Measures (WhenAll Costs are Attributed to PM Reduction) .......22

List of Figures

Figure 1: 2004 Vessel-Specific Diesel PM Emissions by Proximity to Shore....................4

Figure 2: Projected Statewide PM Emissions for Harbor Craft Diesel Engines ..............15

Figure 3: Projected Statewide NOx Emissions Harbor Craft Diesel Engines ..................15

Figure 4: South Coast AQMD PM Benefits With Accelerated and Statewide In-Use 

Harbor Craft Engine Compliance Schedules .......................................................17

Figure 5: South Coast AQMD NOx Benefits With Accelerated and Statewide In-Use 

Harbor Craft Engine Compliance Schedules .......................................................18

Figure 6: Reduction Due to Proposed Harbor Craft Regulation in Residential Areas 

Impacted by Increased Potential Cancer Risk (POLA/LB) ................................19

Figure 7: Reduction Due to Proposed Harbor Craft Regulation in Population Impacted 

by Increased Potential Cancer Risk (POLA/LB)..................................................19
ES 1

EXECUTIVE SUMMARY

The California Air Resources Board (ARB or Board) staff is proposing two essentially 

identical regulations to reduce diesel particulate matter (PM) and oxides of nitrogen 

(NOx) emissions from commercial harbor craft in California. For the remainder of this 

report, the regulations will collectively be referred to as “the regulation.” The proposed 

Harbor Craft Regulation (regulation) is part of ARB’s ongoing effort to reduce PM and 

NOx emissions from diesel-fueled engines and vehicles and improve air quality 

associated with goods movement. A copy of the proposed regulation is provided in 

Appendix A of this report. 

Commercial harbor craft include a variety of vessel types including ferries, excursion 

vessels, tugboats, towboats, crew vessels, work boats, commercial and charter fishing 

boats, and other types of harbor craft. Staff estimates that there are about 4,200 harbor 

craft vessels and 8,300 harbor craft engines currently in use in California. Of these, 

there are nearly 600 ferries, excursion vessels, tugboats, and towboats equipped with 

about 1,900 propulsion and auxiliary engines that would be subject to the in-use engine 

requirements of this regulation. Approximately 80 percent of all harbor craft engines are 

unregulated diesel engines. These unregulated engines are also referred to as Tier 0 

(or “pre-Tier 1”) engines. Currently, about 3.3 tons per day (tpd) of diesel PM and 

73 tpd of NOx are emitted from diesel engines on commercial harbor craft operating in 

California. 

Diesel PM was identified as a toxic air contaminant in 1998. Long-term exposures to 

diesel PM increase the risk of developing lung cancer. Non-cancer impacts, including 

premature death and respiratory disease, are associated with exposure to directly 

emitted diesel PM and secondary diesel PM formed when NOx emissions from diesel 

engines react in the atmosphere to form nitrates. A recent ARB exposure study at the 

ports of Los Angeles and Long Beach found harbor craft to be the third highest source 

of diesel PM emissions contributing to the cancer risk from port activity. The study 

found that over 1.5 million people were exposed to potential cancer risk levels of greater 

than 10 in a million. Staff estimates that direct and secondary diesel PM from harbor 

craft are currently responsible for about 90 premature deaths per year. 

The proposed regulation includes requirements for both new and in-use (existing) 

engines used on commercial harbor craft operating in Regulated California Waters. 

“Regulated California Waters” include all California internal waters; estuarine waters, 

ports, and coastal waters within 24 nautical miles of the California coastline. The 

proposal would establish in-use emission limits for both auxiliary and propulsion diesel 

engines on ferries, excursion vessels, tugboats, and towboats consistent with the 

United States Environmental Protection Agency (U.S. EPA) marine engine standards. 

All new harbor craft engines and replacement engines purchased for in-use harbor craft 

would have to meet emission limits equal to, or more stringent than, the U.S. EPA 
ES 2

marine engine standards in effect at the time the new vessel or engine is purchased. 

The propulsion engines on new ferries would also have to install the best available 

aftertreatment technology. All commercial harbor craft vessels would also be subject to 

monitoring (must have non-resettable hour meters on engines), recordkeeping, and 

reporting requirements.

The compliance schedule would require that the oldest and highest-use engines on inuse ferries, excursion vessels, tugboats, and towboats comply first, beginning in 

December 2009. For harbor craft with homeports in the South Coast Air Quality 

Management District (SCAQMD), the compliance schedule also begins in 2009, but is 

accelerated by two years for future compliance deadlines. This would provide early 

benefits for the South Coast Air Basin, which is in non-attainment for the federal annual 

PM2.5 and PM10 ambient air quality standards and 8-hour ozone standard. 

The proposed regulation emphasizes engine replacement (repower), rather than 

retrofits with diesel emission control strategies, because applying retrofits to marine 

engines presents multiple challenges. While there are several projects underway 

demonstrating retrofit strategies on marine applications, there are currently no verified 

strategies for marine engines. Marine applications present challenges due to the 

uniqueness of each application, the harsh marine operating environment, and safety 

concerns. In addition, the relatively small size of the marine retrofit market provides 

fewer incentives for investment by emission control system manufacturers. Safety 

concerns, including the impact of the additional weight of the emission control 

equipment, line of sight concerns, and the need for high engine reliability will be 

important considerations in the design of aftertreatment systems. The requirement for 

multiple agency review and approval whenever marine vessels are modified, particularly 

from the U.S. Coast Guard, adds another level of complexity. While staff believes that 

development of retrofit strategies for marine applications is likely, the market is not 

sufficiently mature at this time to require retrofits. With that said, the proposal allows for 

the use of appropriate retrofit technologies as a viable option for those vessel owners 

and operators that choose to retrofit their engines to comply with the regulation.

Staff estimates that about 80 percent of the diesel engines on commercial harbor craft 

are Tier 0 engines, based on a 2004 engine inventory conducted by ARB staff. 

Replacing these Tier 0 engines with lower-emission Tier 2 engines (currently available) 

would provide a 60 to 65 percent reduction in both PM and NOx. Replacing Tier 0 

engines with Tier 3 engines (available starting 2009 through 2014) would provide a 

70 to 80 percent reduction in both PM and NOx. In 2025, after full implementation of 

the regulation, the diesel PM emissions from commercial harbor craft would be reduced 

from baseline 2004 levels by nearly 2.5 tpd (75 percent reduction), and NOx emissions 

would be reduced by 45 tpd (60 percent reduction). 

The emission reductions from the proposed regulation would result in lower ambient PM 

levels and reduced exposure to diesel PM. Staff estimates that approximately 

310 premature deaths statewide would be avoided by year 2025 from implementation of 

the proposed regulation. The estimated cost benefit of the avoided premature deaths 
ES 3

and other health benefits due to the emission reductions are estimated to range from 

$1.3 to $2.0 billion.

The reduction in potential cancer risk was assessed based on the overall projected 

reduction in harbor craft emissions between 2004 and 2020. It was estimated that the 

population impacted by a risk of 10 in a million would be reduced by over 60 percent 

due to these emission reductions. 

Staff estimates that the regulatory costs for complying with the proposed regulation 

would be approximately $140 million (2006 dollars), or about $10 million annually over 

the 2009 through 2022 compliance time period for in-use engines. The regulatory costs 

are the incremental costs of regulation compliance and include those costs associated 

with the early replacement of engines (the residual value of the engine being replaced, 

the residual value of the most recent engine rebuild work, and the time value of money 

associated with the early engine replacement), aftertreatment costs for new ferries, and 

recordkeeping and reporting costs. 

Staff also estimated the total out-of-pocket costs, or new equipment costs, that will 

occur over the 2009 through 2022 time period related to early engine replacement, 

aftertreatment costs for new ferries, and recordkeeping and reporting. These costs 

include both the regulatory costs, such as reporting and recordkeeping and aftertreatment costs for new ferries, and normal and routine business costs such as 

replacing an engine at the end of its service life. The new equipment costs are 

estimated to be approximately $460 million (2006 dollars) over the 2009 to 2022 time 

period. 

Staff evaluated the economic impact of complying with the in-use engine requirements 

on the affected ferry, excursion, tugboat, and towboat vessel businesses by evaluating 

the impact of the regulatory cost on typical business’s “return on owner’s equity” (ROE). 

We found that the overall change in ROE ranges from a negligible decline of about 

0.5 percent for a typical tow company, to a decline of about 3.5 percent for a ferry or tug 

company. A decrease in ROE within this range is not considered to represent a 

significant impact on profitability. 

Staff has determined that multiple federal, State, and local agencies would be impacted 

by the proposed regulation. The majority of the agencies would not be affected by the 

in-use compliance requirements and would only be subject to the reporting requirement, 

resulting in costs of approximately $100 per engine. One State agency, the California 

Department of Transportation (Caltrans), and three local agencies operating passenger 

ferries would be impacted by the in-use engine requirements. The affected local 

agencies include the City of Vallejo, which operates the Baylink Ferry; the Golden Gate 

Bridge and Highway Transportation District; and the Port of Los Angeles. Regulatory 

costs to these local agencies and Caltrans range from about $2,000 to $2 million over 

the life of the regulation. 
ES 4

The cost-effectiveness of the regulation is estimated, based on the regulatory costs, to 

be about $29 per pound of diesel PM reduced if all the cost is attributed to diesel PM 

reductions. The cost effectiveness for this regulation is consistent with those of other 

recent regulations, such as the Cargo Handling Equipment regulation at $41 per pound 

of PM and the Solid Waste Collection Vehicle Regulation at $28 per pound. If the costs 

are split evenly between diesel PM and NOx, the cost effectiveness is estimated at 

about $14 per pound for diesel PM and $1,800 per ton of NOx. If the costs are 

attributed to the combined PM and NOx reductions, cost effectiveness would be about 

$1.70 per pound. 
1

1. INTRODUCTION

This Initial Statement of Reasons (Staff Report) presents an evaluation of the need for 

emission reductions from commercial harbor craft including the corresponding health 

impacts, a summary of the proposed regulation (two essentially identical regulations 

collectively referred to hereinafter in the singular), and the projected emissions 

reductions along with the associated reduction in health risk. The estimated costs for 

regulation compliance are presented, for both industry and State and local 

governments, along with the alternative proposals considered. A copy of the proposed 

regulation is provided in Appendix A. The Technical Support Document, an addendum 

to the Staff Report, provides more detailed analyses of these subjects and supporting 

documentation for the proposal. The Technical Support Document is provided under 

separate cover. 

The California Air Resources Board’s (ARB or Board) mission is to protect public health, 

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

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

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

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

pollution. To help achieve this, ARB has adopted numerous regulations to control 

emissions from many different sources, including diesel engines. Diesel engine exhaust 

is a significant health concern because it is a source of unhealthful air pollutants 

including gaseous and particulate-phase toxic air contaminants (TAC), particulate 

matter (PM), oxides of nitrogen (NOx), carbon monoxide, and hydrocarbons. 

In 1998, the Board identified diesel PM as a TAC with no Board-specified threshold 

exposure level, pursuant to Health and Safety Code (HSC) sections 39650 through 

39675. A needs assessment for diesel PM was conducted between 1998 and 2000

pursuant to HSC sections 39658, 39665, and 39666. This resulted in ARB staff 

developing and the Board approving the Risk Reduction Plan to Reduce Particulate 

Matter Emissions from Diesel-Fueled Engines and Vehicles (Diesel RRP) in 2000. The 

Diesel RRP presented information on the available options for reducing diesel PM and 

recommended regulations to achieve these reductions. The Diesel RRP’s scope was 

broad, addressing all categories of mobile and stationary engines. It included control 

measures for all off-road diesel sources, such as those covered by the proposed 

regulation. The ultimate goal of the Diesel RRP is to reduce, by 2020, California’s 

diesel PM emissions and associated cancer risks by 85 percent from the 2000 levels.

In January 2005, the Goods Movement Cabinet Workgroup – created by Governor 

Schwarzenegger and led by the California Environmental Protection Agency and the 

Business, Transportation and Housing Agency – established a policy for goods 

movement and ports to improve and expand California’s goods movement industry and 

infrastructure while improving air quality and protecting public health. The workgroup 

worked collaboratively with the logistics industry, local and regional governments, 

neighboring communities, business, labor, environmental groups, and other interested 
2

stakeholders to create a two-phased Goods Movement Action Plan (Action Plan), which 

outlines a comprehensive strategy to address the economic and environmental issues 

associated with moving goods via the state’s highways, railways, and ports. In 

April 2006, the Board approved the Emissions Reduction Plan for Ports and Goods 

Movement in California as part of the Action Plan. The final phase of the Action Plan 

was completed in January 2007 and includes a framework that identifies the key 

contributors to goods movement-related emissions. The Action Plan emission reduction 

goals for existing harbor craft engines are 25 percent reductions for both diesel PM and 

NOx compared to baseline 2001 levels by 2010, 30 percent reductions compared to 

2001 baseline levels by 2015, and 40 percent reduction by 2020. 

The federal Clean Air Act (CAA) requires U.S. EPA to establish National Ambient Air

Quality Standards (standards) for pollutants considered harmful to public health,

including fine particulate matter (PM2.5) and ozone. The South Coast and San Joaquin 

Valley Air Basins are the two areas in the State that exceed the annual PM2.5 

standards. These areas are required by federal law to develop State Implementation 

Plans (SIPs) describing how they will attain the standards by2015. The U.S. EPA 

further requires that all necessary emission reductions be achieved one calendar year 

sooner – by 2014 – in recognition of the annual average form of the standard. 

Reductions of NOx emissions are needed because NOx contributes to the formation in 

the atmosphere of both ozone and PM2.5; diesel PM emission reductions are needed 

because diesel PM contributes to ambient concentrations of PM2.5. The San Joaquin 

Valley and South Coast air basins are also in non-attainment for the federal ozone 

standard. However, they are expected to have until 2023 to attain the federal ozone 

standard, by invoking the “bump-up” provision in the CAA. The ARB and the districts 

are working to complete the PM2.5 and ozone SIPs and expect to submit them to the 

U.S EPA by April 2008 and this fall, respectively. 

While all sources of NOx emissions are important, marine vessels play an especially 

significant role in California’s efforts to reach attainment. Emissions from marine 

vessels, which include commercial harbor craft engines, collectively represent one of

several key contributors to ambient PM2.5 levels, the successful control of which will 

determine whether California is able to meet the 2014 deadline for PM2.5 attainment in 

the South Coast Air Basin.

Staff is proposing a regulation to reduce diesel PM and NOx emissions from harbor craft 

vessel engines. Such vessels include but are not limited to, ferries, excursion vessels, 

tugboats, towboats, crew vessels, work boats, commercial and charter fishing boats, 

and other types of harbor craft. 

The regulation is expected to significantly reduce emissions of diesel PM from in-use 

harbor craft engines. Diesel PM emission reductions are needed to reduce premature 

mortality, cancer risk, and other adverse impacts from exposure to this TAC. The 

regulation would achieve the 2015 and 2020 goals for harbor craft in the Goods 

Movement Action Plan. By 2020, staff projects that in-use harbor craft diesel PM 

emissions would be reduced about 70 percent and NOx emissions about 60 percent 
3

from the 2004 baseline. These emission reductions would occur in areas along 

waterways, near ports, and in those communities surrounding these areas, as well as 

further inland. 

The regulation would also reduce diesel PM and NOx emissions that contribute to 

exceedances throughout the State of ambient air quality standards for both PM2.5 and 

ozone. These reductions would assist California in its goal of achieving state and 

federal air quality standards.

2. EMISSIONS INVENTORY 

Approximately 8,300 marine engines currently operate on about 4,200 harbor craft in 

California. These vessels are located mostly along the California coastline, with some 

on inland waterways. Harbor craft emit approximately 3.3 tpd of diesel PM and 73 tpd 

of NOx statewide. A summary of the estimated number of vessels and engines in each 

category and the emissions contributed are provided in Table 1 and Table 2 below. 

Table 1: Commercial Harbor Craft Vessels and Engines (2004)

Vessel Category Number of Vessels Number of Engines

Commercial Fishing 2,727 4,308

Charter Fishing 563 1,419

Ferries/Excursion 416 1,348

Tug 128 450

Tow 35 115

Crew and Supply 64 230

Pilot 27 50

Workboats 89 158

Other 136 214

Total 4,185 8,291

Table 2: Commercial Harbor Craft Vessels Emissions Inventory (2004)

2004 Pollutant Emissions, Tons/Day

Vessel Category PM NOx HC CO

Commercial Fishing 0.8 17.4 1.3 4.8

Charter Fishing 0.6 12.7 0.9 3.3

Ferries/Excursion 0.9 21.0 1.4 5.6

Tug 0.6 15.3 1.0 3.8

Tow 0.1 3.0 0.2 0.7

Crew and Supply 0.1 1.4 0.1 0.4

Pilot 0 0.4 0 0.1

Workboats 0 0.5 0 0.1

Other 0.1 1.5 0.1 0.4

Total 3.3 73.2 5.0 19.2
4

The vessel categories targeted for engine emission reductions are ferries, excursion 

vessels, tugboats, and towboats. These vessels comprise about 23 percent of the 

engine inventory, yet generate about 50 percent of the emissions from all harbor craft. 

These vessels also work within the harbor and generally close to shore, as shown in 

Figure 1 below. 

Figure 1: 2004 Vessel-Specific Diesel PM Emissions by Proximity to Shore

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Ferry/Excursion

Tug

Tow

Pilot

Work

Crew and Supply

Charter Fishing

Commercial Fishing

Vessel Type

Tons per Day

Harbor (0-3 nm)

3-24 nm

>24 nm

Figure 1 shows that about 70 percent of harbor craft diesel engines are on fishing 

vessels. However, they generate only about 40 percent of the harbor craft emissions. It 

is also important to note from Figure 1 that a large portion of the fishing vessel 

emissions occur more than 24 nautical miles off shore. Emissions released far offshore 

present a lesser health risk than near-shore emissions. In addition, the commercial 

fishing industry has been in decline for the last decade. Available data show that the 

number of working fishing vessels and tonnage of fish landings are declining about 

six percent per year. Reduced catch and increased competition from foreign markets 

make the fishing industry less able to bear the costs of regulatory compliance than other 

commercial harbor craft industries. Because of the lower health risk from the fishing 

vessels’ offshore emissions, as compared to the near-shore emissions of the targeted 

industries, and the steady decline in the commercial fishing industry, staff is not 

proposing to require emission reductions from in-use engines on fishing vessels in the 

current proposal. 
5

From ARB surveys and local district and port inventory data, we estimate that about 

35 percent of harbor craft emissions are in the Bay Area Air Quality Management 

District (BAAQMD), 25 percent are in the SCAQMD, and just over 10 percent in the 

San Diego County Air Pollution Control District. The remaining 30 percent are 

distributed over other coastal districts and districts with major inland waterways. 

As described in the Technical Support Document, staff projected the commercial harbor 

craft population for the current and future years using air districts’ fleet growth rates 

adjusted as appropriate by other available information. Staff assumed tugboat growth 

rate to be flat since these vessels are generally over-powered and are capable of 

handling larger vessels. The six percent per year decline in commercial fishing vessels 

was assumed to continue through 2009. From 2010 on, the growth was assumed flat. 

Engine population for current and future years was estimated based on the projected 

vessel population, the assumption that vessels in future years would have the same 

number of engines per vessel and the same average size as the base year and an 

engine attrition rate based on ARB’s OFFROAD model. 

3. HEALTH RISK 

A. Cancer Risk

To estimate potential cancer risks from harbor craft, ARB staff conducted a risk 

assessment for the Ports of Los Angeles and Long Beach (POLA/LB). The POLA/LB 

health risk assessment estimated that commercial harbor craft are responsible for the 

third highest impact on cancer risk from port activities. Based on a 2002 POLA/LB 

inventory, over 1.5 million people are exposed to a cancer risk of greater than 10 in a 

million due to harbor craft diesel PM emissions in the Los Angeles/Long Beach area. 

Staff adjusted the potential cancer risk for the 2002 inventory to reflect the ARB 2004 

inventory for the SCAQMD. This potential risk based on the 2004 inventory provides a 

consistent baseline with which to compare the estimated risk using the projected 

controlled emissions. The adjustment to the 2004 baseline inventory increased the 

number of people exposed to a 10 in a million risk from 1.5 million to 1.7 million. 

Estimates of potential cancer risks from harbor craft activity at these two ports would 

represent the upper range of cancer risks, given the magnitude of harbor craft 

emissions in the San Pedro Bay area and the proximity of the emissions to highly 

urbanized areas. Qualitative estimates of the relative impact of harbor craft emissions 

for other areas can be made based on a comparison of the relative magnitude of 

emissions and the proximity of the emissions to urbanized areas. For example, one 

would expect that the potential cancer risk estimate associated with harbor craft activity 

in the Bay Area would be similar to the estimate for the POLA/LB, while the cancer risk 

estimates for San Diego would be about 50 percent lower. 
6

B. Non-Cancer Risk

Staff estimates that exposures to direct and secondary diesel PM emissions from harbor 

craft can be associated with about 90 premature deaths per year. Approximately half of 

these premature deaths are due to direct diesel PM and half from secondary diesel PM. 

All of these estimates are rounded to the tens digit.

Using the 2004 statewide estimate of directly emitted diesel PM emissions (3.3 tpd) and 

the association between ambient PM exposure and mortality derived from Pope et al. 

(2002), we estimate approximately 50 premature deaths (a range of 10 to 80, with a 

95 percent confidence interval (95% CI), for ages 30 and older) per year statewide can 

be associated with uncontrolled, directly emitted diesel PM from harbor craft. 

These estimates were developed using basin-specific factors relating the non-cancer 

health impacts to direct diesel PM emissions from harbor craft for the year 2000. After 

adjusting for population changes between 2000 and 2004 and adjusting for lower onshore impacts from emissions released off-shore, staff estimates that the public was 

exposed to about 590 tons of direct diesel PM emissions from harbor craft in 2004. We 

estimate that approximately 50 annual premature deaths (10 to 80, 95% CI) are 

associated with this exposure.1 Estimates of other health impacts, such as 

hospitalizations and asthma symptoms, were calculated using basin-specific factors 

developed from other health studies. Details on the methodology used to calculate 

these estimates, including the adjustment for off-shore PM emissions in the 3 to 

24 nautical mile domain, can be found in Appendix A of the Emission Reduction Plan for 

Ports and Goods Movement in California (ARB, 2006).

In addition to directly emitted PM, diesel exhaust contains NOx, which is a precursor to 

nitrates, a secondary diesel-related PM formed in the atmosphere. Lloyd and Cackette

(2001) estimated that secondary diesel PM2.5 exposures from NOx emissions can lead 

to additional health impacts beyond those associated with directly emitted diesel PM2.5. 

(Lloyd and Cackette, 2001) To quantify such impacts, staff developed populationweighted nitrate concentrations for each air basin, as described in the Technical 

Support Document, Chapter IV. 

Using the 2004 statewide estimate of NOx emissions from harbor craft and the 

relationship of NOx/nitrate to PM-mortality discussed below, we estimated 

approximately an additional 50 (10 to 80, 95% CI) premature deaths (for ages 30 and 

older) per year statewide can be associated with uncontrolled, secondary diesel PM 

from harbor craft. 

 

1

To account for the differing impact of diesel PM emission from off-shore sources, CARB staff developed 

a South Coast and a statewide diesel PM emissions impact adjustment factor. For the South Coast, the 

adjustment factor for ship diesel PM emissions released off-shore was estimated to be 0.1, based on 

dispersion modeling. For the rest of the state, the adjustment factor was estimated to be 0.25. 
7

In addition to PM-mortality, we estimate that the 2004 estimated emissions (directly 

emitted and secondary sources) from harbor craft will result in the following statewide 

non-cancer health impacts:

• 20 hospital admissions due to respiratory causes (10 to 30, 95% CI) 

• 40 hospital admissions due to cardiovascular causes (20 to 60, 95% CI)

• 2,400 cases of asthma-related and other lower respiratory symptoms 

(940 to 3,900, 95% CI)

• 200 cases of acute bronchitis (0 to 430, 95% CI)

• 16,000 work loss days (13,000 to 18,000, 95% CI)

• 90,000 minor restricted activity days (74,000 to 110,000, 95% CI)

4. SUMMARY OF THE PROPOSED REGULATION

Staff is proposing the Board approve adoption of a regulation, pursuant to its authority 

under HSC sections 43013 and 43018, which would apply to the emissions from diesel 

engines on commercial harbor craft operating within any of the Regulated California 

Waters. As a companion to the proposed regulation, staff is proposing that the Board 

also approve adoption of identical provisions as an airborne toxic control measure

(ATCM), pursuant to its authority under HSC section 39666, which would complement 

the regulation and provide maximum notice to the regulated community of the regulatory 

requirements on commercial harbor craft. The regulation and ATCM are hereinafter 

collectively referred to in the singular. The following sections provide more details about 

the proposed regulation. 

A. Emission Standards for Marine Engines

Under the staff’s proposal, the emissions of diesel PM and NOx from a regulated diesel 

engine (both new and in-use) would be identical to those specified by the U.S. EPA 

marine engine standards for new engines in effect at the time compliance is required. 

The U.S. EPA marine engine emission standards have phased effective dates and 

emission levels dependent on the engine size. 

The U.S. EPA classifies marine engines as either Category 1, 2, or 3, depending on 

engine size or cylinder displacement, with the engine size increasing with the higher 

category number. All of the engines used in California’s commercial harbor craft are 

Category 1 or 2 engines, with about 90 percent of the engines being Category 1 

engines. The engine size and approximate maximum horsepower (hp) rating for 

Category 1 and 2 engines are provided in Table 3. Category 1 engines are rated at less 

than 5.0 liters per cylinder and can range as high as 2,500 hp. Category2 engines 

range in size from 5.0 liters per cylinder to 30 liters per cylinder and can range from 

about 750 to 5,000 hp. Most propulsion engines used in harbor craft operating in 

California are Category1 engines. Auxiliary engines are exclusively Category1 

engines. Harbor craft Category 2 engines are generally used in tugboat, towboat, and 

some ferry applications.
8

Table 3: U.S. EPA Marine Engine Categories Used in Harbor Craft

Category Liters per Engine 

Cylinder Approximate Horsepower

Category 1 < 5.0A50B to <~2500 hp

Category 2 5.0 to 30A>750 to <5000 hp

A

The U.S. EPA has proposed Tier 3 and Tier 4 standards, which, if adopted, will 

update Category 1 to < 7.0 L/cyl. and Category 2 to 7.0 to 30 L/cyl.

B

The proposed Category 1 Tier 3 standards include engines rated less than 50 hp. 

The emission limits for Category1 and 2 engines used in commercial harbor craft are 

summarized in Table 4. 

Table 4: U.S. EPA Marine Engine Standards Effective Dates and Emission Limits

for Category 1 and Category 2 Engines Used in Harbor Craft

Category Tier Level Adoption Date Effective 

Date

PM

(g/bhp-hr)

NOx

(g/bhp-hr)

1

IMO 1997

U.S EPA 2003

2000

2004 N/A 7.3 – 12.7 B

2 U.S. EPA 1999 2004-2007 0.15-0.3 5.4-5.6C

3

U.S. EPA proposed 

2007 2009-2114 0.08-0.3 3.5-5.6C

1

4

A U.S. EPA proposed 

2007 2017 0.03 1.3

1

IMO 1997 

U.S EPA 2003

2000

2004 N/A 7.3 – 12.7 B

2 U.S. EPA 1999 2007 0.2 5.8C

3

U.S. EPA proposed 

2007 2013 0.1 4.6C

2

4

A U.S. EPA proposed 

2007 2016-2017 0.03 1.3

(40 CFR Part 94) 

A

Applies only to engines with maximum horsepower rating of 800 hp (600 kW) or more.

B

 Standard is a function of engine speed, revolutions per minute (rpm). Standard=12.7 for engines with 

engine speed = 2000 rpm. Standard=7.3 for engines with engine speed =130 rpm. For engines 

between 130 and 2000 rpm, standard = 33.57 X rpm-0.2.

C NOx is NOx + total HC.

The U.S. EPA has proposed but not finalized its rulemaking for establishing Tier 3 and 

Tier 4 marine engine standards. The limits and effective dates shown in Table 3 are 

based on the proposal set forth in their April 3, 2007, Draft Locomotive and Marine 

Notice of Proposed Rule Making (U.S. EPA, 2007). The U.S. EPA proposal would 

initiate Tier 3 standards between 2009 and 2014 for most commercial harbor craft 

engines. The Tier 3 standards are expected to be achievable without after-treatment;

however, the Tier 4 standards will require after-treatment technology. The U.S. EPA 

has proposed Tier 4 standards only for engines over about 800 horsepower (hp) starting 
9

in 2016 for the largest commercial harbor craft engines and a year later, 2017, for 

800 to 1,880 hp engines. 

The U.S. EPA is expected to finalize their Tier 3 and Tier 4 marine engine standards by 

the end of 2007. These proposed standards are incorporated by reference in the 

proposed commercial harbor craft regulatory language. If these standards are not 

adopted as proposed, it will be necessary for staff to return to the Board to amend the 

regulatory language such that the standards incorporated by reference are consistent 

with those in the U.S. EPA’s final rulemaking. 

B. In-Use Requirements

Compliance Options

Staff is proposing that in-use Tier 0 (pre-Tier 1) and Tier 1 marine engines on ferries, 

excursion vessels, tugboats, and towboats meet emission limits equal to or cleaner than 

the U.S. EPA marine engine Tier 2 or Tier 3 emission standards applicable on the 

compliance date. The proposed regulation does not require compliance with Tier 4

(after-treatment based) standards for in-use engines due to issues with the additional 

weight and space requirements associated with applying after-treatment technologies to 

existing vessels. 

While we expect the primary method for compliance with the proposal is the 

replacement of in-use engines with certified Tier 2 or Tier 3 engines, the proposed 

regulation includes other options for compliance. These options include:

o demonstrating that the current engine meets the applicable U.S. EPA marine 

engine standards; 

o demonstrating that the current engine has not been operating 300 hours or 

more per calendar year and will continue to operate at this low usage rate in 

the future. 

If the engine is replaced with a Tier 2 or 3 engine or can be shown to meet the 

applicable standards, all compliance requirements for that engine will have been met. 

The ARB staff anticipates that, in most cases, engine replacement will be the option 

chosen by vessel owners and operators to meet the proposed emission standards for 

vessels. Ferries, excursion vessels, tugboats, and towboats are good candidates for 

repowering because these vessel types have an extensive history of being repowered. 

Almost 50 ferries, excursion vessels, tugboats, and towboats statewide have been 

repowered over the last six years through the Carl Moyer Program. 
10

Compliance Schedule

The compliance schedules in the proposed regulation are shown in Table 5 and 

Table 6. Compliance dates are based on the model year of the engine and the hours of 

operation. 

The engine model year would be determined by one of three methods. In most cases, 

the engine’s actual model year of manufacture would be used to determine the required 

compliance date. However, if certain steps have been taken to reduce the emissions of 

the engine, an “effective model year” may be calculated based on the following: 

o implementing an emission control strategy that obtains at least a 25 percent 

reduction in either PM or NOx, would extend the engine model year by 

five years. This is referred to as the “Engine’s Model Year + 5” method. The 

date at which the engine must meet the U.S. EPA marine engine standards 

would be based on the engine model year plus five years;

o demonstrating that the engine has been rebuilt to Tier 1 standards or cleaner 

prior to January 1, 2008 would allow the date of rebuild to be used as the 

engine’s model year for determining when the engine must meet the 

U.S. EPA marine engine standards. This is referred to as the “Engine’s Tier 1 

Rebuild Model Year.”

Table 5 shows the statewide schedule for compliance. This compliance schedule 

applies to all ferries, excursion vessels, tugboats, and towboats operating in regulated 

California waters, except those with homeports in SCAQMD. The compliance schedule 

for vessels with homeports in SCAQMD is shown in Table 6. 

Table 5: Compliance Dates for Vessels with Homeports outside SCAQMD

[Note: For example, if a 1982-model year diesel engine on a tugboat operating in 

Regulated California Waters is used for 750 hours in 2011, the owner or operator must 

bring the engine into compliance with the emission standards by December 31, 2012.]

Engine Model Year Total Annual Hours of 

Operation Compliance Year

1975 and earlier = 1500 12/31/ 2009

1975 and earlier = 300 and < 1500 12/31/ 2010

1976 - 1985 =1500 12/31/ 2011

1976 - 1985 = 300 and < 1500 12/31/ 2012

1986 - 1995 = 1500 12/31/ 2013

1986 - 1995 = 300 and < 1500 12/31/ 2014

1996 - 2000 =1500 12/31/ 2015

1996 - 2000 = 300 and < 1500 12/31/ 2016

2001 - 2002 = 300 12/31/ 2017

2003 = 300 12/31/ 2018

2004 = 300 12/31/ 2019

2005 = 300 12/31/ 2020

2006 = 300 12/31/ 2021

2007 = 300 12/31/ 2022
11

Table 6: Compliance Dates for Vessels with Homeports in SCAQMD

[Note: For example, if a 1982-model year diesel engine on a tugboat operating in 

Regulated California Waters is used for 300 or more hours in 2009, the owner or 

operator must bring the engine into compliance with the emission standards by 

December 31, 2010.]

Early compliance dates for the SCAQMD are proposed in order to provide emission 

reduction commitments for harbor craft, as contained in the 2003 Statewide Strategy of 

the California State Implementation Plan (SIP), and to assist the SCAQMD in meeting 

its attainment goals. The South Coast Air Basin is non-attainment for the federal annual 

PM2.5 and PM10 ambient air quality standards and 8-hour ozone standard. 

For harbor craft with homeports in the SCAQMD, the compliance schedule begins 

December 31, 2009, similar to the statewide schedule, but it is accelerated by two years 

for future compliance deadlines. Engines brought into compliance the first year also 

include a wider range of model years, through 1979, than the statewide schedule. 

Accelerating the compliance schedule for SCAQMD would provide early benefits for the 

South Coast Air Basin to assist in meeting their air quality attainment goals. 

C. Newly Acquired and New Harbor Craft Engines and Vessels – All 

Harbor Craft

The proposed regulation includes requirements regarding newly acquired and new 

harbor craft and engines that apply to all harbor craft vessel types. 

Acquisition of Engines for All In-Use Harbor Craft

A newly acquired engine for any in-use harbor craft would be required to meet the 

U.S. EPA marine engine emission standards in effect on the date that the vessel owner 

acquires the engine. This provision ensures that retired engines are replaced with the 

cleanest engines available. 

Engine Model Year Total Annual Hours of 

Operation Compliance Date

1979 and earlier > 300 12/31/2009

1980 – 1985 > 300 12/31/2010

1986 – 1990 > 300 12/31/2011

1991 – 1995 > 300 12/31/2012

1996 – 2000 > 300 12/31/2013

2001 > 300 13/31/2014

2002 > 300 12/31/ 2015

2003 > 300 12/31/2016

2004 > 300 12/31/2017

2005 > 300 12/31/2018

2006 > 300 12/31/2019

2007 > 300 12/31/2020
12

Acquisition of In–Use Harbor Craft 

The acquisition of in-use harbor craft is unrestricted; however, engine compliance, 

monitoring, reporting, and recordkeeping requirements apply. 

Acquisition of New Harbor Craft

The engines on all new harbor craft vessels would be required to meet the U.S. EPA 

marine engine standard in effect at the time of vessel acquisition. The propulsion 

engines on new ferries would be subject to additional requirements. The propulsion 

engines on all new ferries, with the capacity of more than 75 passengers and built after 

January1, 2009, would be required to meet the U.S. EPA marine engine standard in 

effect at the time of vessel acquisition and would also be required to be equipped with 

the best available control technology (BACT) for the engine and application. New build 

ferries would be required to submit a plan to the ARB defining the emission reduction 

technology and expected emission reductions for the ferry to be built. The ARB 

Executive Officer would make a case-by-case determination as to whether the planned 

control technology meets the BACT requirement. 

D. In-Use Requirements for All Harbor Craft

There are additional in-use requirements in the regulation that apply to all harbor craft. 

These include a requirement for harbor craft to use clean fuel, as discussed in the next 

section, and mandatory monitoring, reporting, and recordkeeping requirements. 

Fuel Use Requirement

This proposal would require that harbor craft diesel engine be fueled with CARB diesel 

or an approved alternative diesel fuel. Examples of alternative fuels that could be used 

are biodiesel, biodiesel blends, Fischer-Tropsch fuel, emulsions of water in diesel fuel, 

and fuels with an additive. This provision would also allow alternative diesel fuels and 

CARB diesel fuel used with a fuel additive that meet the requirements of the ARB 

Verification Procedure. 

Monitoring, Reporting, and Recordkeeping

Owners and operators of harbor craft operating in Regulated California Waters would be 

required to keep records for each vessel and install a non-resettable hour meter on 

each engine. Vessel owners/operators would also need to keep a copy of the initial 

reporting form and the yearly records on the vessel or in a central dockside location to 

be made available upon request of the ARB enforcement staff. Initial reporting would 

be required for all vessels starting February28, 2009. The initial reporting would 

provide ARB staff with information including contact information, and vessel and engine 

information. Compliance reporting would be required for ferries, excursion vessels, 

tugboats, and towboats in the commercial harbor craft fleet. Ferry, excursion vessel, 

tugboat, and towboat operators would specify how they plan to comply with the 
13

proposed regulation in the initial report, and how they have complied in the final 

reporting. 

Historically, harbor craft engines have not been subject to statewide or local air district 

permitting or registration programs. As a result, limited data on the marine engines 

used aboard harbor craft are available from district permitting programs. The 

mandatory reporting required by the proposed regulation would provide more complete 

information on California’s harbor craft fleet for both implementing the current regulation 

and developing any further regulatory requirements. 

E. Compliance Extensions

The proposed regulation includes a provision by which the ARB Executive Officer may 

grant a vessel owner or operator a compliance extension beyond the deadlines 

specified in the regulation. The reasons included in the proposed regulation for granting 

an extension are: 

o change in hours of operation of vessel during the year prior to the anticipated 

engine compliance date such that the effective compliance date would be 

accelerated by one year; 

o no suitable engine replacement for a particular engine; 

o delay in engine delivery due to the engine manufacturer; 

o installation difficulties; and, 

o owner with multiple vessels whose engines would need to comply in the same 

year.

If an extension is required because there is no suitable engine replacement for a 

particular engine, the owner or operator is required to apply for this extension at least 

six months prior to the engine regulatory compliance date. The approval process for 

this extension includes a public review and comment period. 

F. Exemptions

The proposed regulation includes a low-use exemption from the engine compliance 

requirements for ferries, excursion vessels, tugboats, and towboats for engines that are 

not operated more than 300 hours per year within Regulated California Waters. These 

low-use engines would be subject to the other requirements of the proposed regulation, 

including the clean fuel use, a mandatory non-resettable hour meter, and reporting and 

recordkeeping. Increased operation of a low-use engine on a ferry, excursion vessel, 

tugboat, or towboat would make the engine subject to the engine compliance 

requirements. 

Vessels traveling through Regulated California Waters without entering California 

internal or estuarine water or calling at a port are provided an exemption from the 

requirements of the proposed regulation. 
14

Temporary replacement vessels and registered historic vessels are also exempt from 

the engine compliance requirements. A temporary replacement vessel must be a 

vessel whose homeport is not within California and is brought into California to be used 

for no longer than 12 months to perform the work of a California vessel that has been 

temporarily taken out of service. A California vessel with a homeport outside the 

SCAQMD may also be brought into the SCAQMD as a temporary replacement vessel to 

perform the work of an out of service vessel for a limited term and remain subject to the 

statewide schedule rather than the SCAQMD accelerated schedule. 

Vessel types that are exempt from the regulation in its entirety include: 

o recreation vessels;

o ocean-going vessels, except ocean-going tugboats or towboats;

o military tactical support vessels; 

o all Coast Guard vessels; and,

o temporary emergency rescue/recovery vessels.

A temporary emergency rescue/recovery vessel is defined as a vessel whose homeport 

is outside California and is brought into California for the immediate use of emergency 

rescue or recovery and returns to its homeport outside of California at the conclusion of 

its rescue/recovery mission. 

Engines that are exempt from the regulation either in portion or in entirety include:

o vessel engines with a maximum horsepower rating of less than 50 hp -

exempt from the in-use engine compliance requirements, 

o vessel engines currently registered with the ARB’s Portable Engine 

Registration Program (sections 2450 through 2465, title 13, CCR) - exempt 

from the regulation in its entirety, and

o vessel engines on a vessel that is to be retired within one year of the engines’ 

compliance date are exempt from the in-use engine compliance 

requirements.

Low horsepower engines are being exempted for administrative reasons and their 

minimal contribution to the emission inventory. 

5. EMISSION REDUCTIONS

The ARB staff has estimated that by requiring early engine replacement for these vessel 

types and implementing an accelerated schedule for the SCAQMD, the reductions 

necessary for meeting the Goods Movement Action Plan goals for harbor craft can be 

met and significant early benefits for the South Coast can be achieved. As shown in 

Figure 2 and Figure 3, in 2025, after full implementation of the proposed regulation, the 

statewide diesel PM emissions from commercial harbor craft would be reduced from the 

2004 baseline by nearly 2.5 tpd and NOx emissions would be reduced by about 45 tpd. 
15

Figure 2: Projected Statewide PM Emissions for Harbor Craft Diesel Engines

Commercial Harbor Craft Statewide PM Emissions

0

0.5

1

1.5

2

2.5

3

3.5

2004 2007 2010 2013 2016 2019 2022 2025

Calendar Year

Tons/day

Baseline Controlled with Proposed Regulation

Ferry - Excursion - Tug - Tow 

PM Baseline and Cotnrolled Including SC Accelerated Schedule

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

2004 2007 2010 2013 2016 2019 2022 2025

Year

Tons per Day

Baseline Ferry - Excursion - Tug - Tow

Emissions 

Ferry - Excursion - Tug - Tow Controlled with

Proposed Regulation

Figure 3: Projected Statewide NOx Emissions Harbor Craft Diesel Engines

Commercial Harbor Craft Statewide NOx Emissions

0

10

20

30

40

50

60

70

80

2004 2007 2010 2013 2016 2019 2022 2025

Calendar Year

Tons/day

Baseline Contolled with Proposed Regulation

Ferry - Excursion - Tug - Tow 

NOx Baseline and Controlled Including SC Accelerated Schedule

0

5

10

15

20

25

30

35

40

45

2004 2007 2010 2013 2016 2019 2022 2025

Year

Tons per Day

Baseline Ferry - Excursion - Tug - Tow Emissions 

Ferry - Excursion - Tug - Tow Controlled with

Proposed Regulation

Both the overall harbor craft fleet projected emission and those generated specifically 

from the vessel engines subject to the in-use engine compliance schedule are shown in 

the figures above. The baseline projected emissions decrease over time due to the 

following efforts and factors: 

• U.S. EPA cleaner marine new engine standards; 

• California’s requirement for the sale of ultra low sulfur diesel fuel for 

harbor craft; 

• port clean air plans; 

• engine replacement incentive programs; and, 

• a negative growth factor for California’s fishing fleet. 

ARB staff estimates that the proposed measure, in conjunction with these other efforts 

and factors, would reduce diesel PM emissions from harbor craft diesel engines by 
16

about 50 percent by 2015 and nearly 70 percent by 2020. The ARB staff also estimates 

that NOx emissions would be reduced by about 45 percent by 2015 and nearly 60 

percent by 2020. Both the baseline and controlled projected emissions include the 

benefit of the U.S. EPA proposed Tier 3 and Tier 4 marine engine standards for new 

engines. The U.S.EPA is expected to finalize these standards by the end of 2007. The 

projected reduction in both the baseline and controlled emissions are dependent on the 

U.S. EPA adopting standards at least as stringent as those they proposed in April 2007. 

Although both PM and NOx uncontrolled emissions are projected to drop through 2025, 

the proposed regulation would accelerate the anticipated emission reductions. For 

example, without the proposed regulation, we would not achieve the 50 percent drop 

(relative to 2004) in PM emissions projected for the 2015 inventory until about 2021

(see Table 7 below). The reductions from all actions, including the proposed regulation, 

are summarized in Table 7 and Table 8 below. 

Table 7: Projected Statewide PM Benefits for Harbor Craft from All ActionsA

Year

PM without 

Regulation 

(tons/day)

PM with 

Regulation 

(tons/day)

Emission 

Reductions 

from 2004 

(tons/day)

% Emission 

Reductions 

from 2004

2004 3.3 3.3 0.0 0%

2010 2.6 2.5 0.7 22%

2015 2.3 1.6 1.6 50%

2020 1.7 1.0 2.2 68%

2025 1.2 0.9 2.4 74%

A All actions include the proposed regulation, U.S. EPA marine new engine standards, 

low sulfur fuel requirement, port clean air plans, incentive programs, and negative 

growth factor for fishing fleet.

Table 8: Projected Statewide NOx Benefits for Harbor Craft from All ActionsA

Year

NOx without 

Regulation 

(tons/day)

NOx with 

Regulation 

(tons/day)

Emission 

Reductions 

from 2004 

(tons/day)

% Emission 

Reductions 

from 2004

2004 73 73 0 0%

2010 61 59 14 19%

2015 54 41 32 44%

2020 41 31 42 58%

2025 32 28 45 62%

A All actions include the proposed regulation, U.S. EPA marine new engine standards, 

low sulfur fuel requirement, port clean air plans, incentive programs, and negative 

growth factor for fishing fleet.
17

The SCAQMD accelerated schedule would provide early NOx and PM benefits, with an 

estimated 35 percent reduction inPM emissions and 25 percent reduction in NOx 

emissions, due to the proposed regulation, in 2014. These projections are shown in 

Table 9. 

Table 9: Projected SCAQMD NOx and PM Benefits for Harbor Craft in 2014

South Coast NOx and PM Emissions in 2014 (tons/day)

Pollutant PM NOx

Year 2014 2014

Without regulation 0.63 14.4

With regulation 0.40 10.4

Benefits of regulation 0.2 3.9

Percent reduction due to regulation 36% 27%

 Note: Numbers may not add up due to rounding

The regulation benefits in 2014 would be significantly less if the SCAQMD in-use engine 

compliance schedule were not accelerated and aligned with the statewide schedule. 

This is illustrated by Figure 4 and Figure 5, below. 

Figure 4: South Coast AQMD PM Benefits with Accelerated and Statewide In-Use 

Harbor Craft Engine Compliance Schedules

South Coast Commercial Harbor Craft PM Emissions

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

2004 2007 2010 2013 2016 2019 2022 2025

Calendar Year

Tons/day

Baseline

Controlled with accelerated schedule for SC

Controlled with statewide schedule

Additional reduction in 2014 

due to accelerated schedule
18

Figure 5: South Coast AQMD NOx Benefits with Accelerated and Statewide 

In-Use Harbor Craft Engine Compliance Schedules

South Coast Commercial Harbor Craft NOx Emissions

0

2

4

6

8

10

12

14

16

18

20

2004 2007 2010 2013 2016 2019 2022 2025

Calendar Year

Tons/day

Baseline

Controlled with accelerated schedule for SC

Controlled with statewide schedule

Additional reduction in 2014 

due to accelerated schedule

6. RISK REDUCTION

A. Cancer Risk

The emission reductions obtained from the proposed regulation would result in lower 

ambient PM levels and reductions in exposure to diesel PM. These reductions would 

result in a corresponding reduction in potential cancer risk. Based upon our analysis of 

harbor craft in the Ports of Los Angeles and Long Beach, the estimated reduction in 

cancer risk is shown on a residential area impacted basis in Figure 6 and, on a 

population basis, in Figure 7. The population impacted by a risk of 10 in a million would 

be reduced from 1.7 million persons, in 2004, down to 0.6 million persons by 2020, due 

to reductions from the proposed regulation as well as other factors. 
19

Figure 6: Reduction Due to Proposed Harbor Craft Regulation in Residential 

Areas Impacted by Increased Potential Cancer Risk (POLA/LB)

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Residential Area (Acres)

2004 Baseline

2015 with Reg

2020 with Reg

2004 Baseline 140,790 1,977 89 0

2015 with Reg 69,703 69 0 0

2020 with Reg 47,869 0 0 0

Risk > 10 Risk > 100 Risk > 200 Risk > 500

Figure 7: Reduction Due to Proposed Harbor Craft Regulation in Population 

Impacted by Increased Potential Cancer Risk (POLA/LB)

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

Number of Persons

2004 Baseline

2015 with Reg

2020 with Reg

2004 Baseline 1,722,364 44,155 7,651 0

2015 with Reg 943,280 6,267 0 0

2020 with Reg 629,594 0 0 0

Risk > 10 Risk > 100 Risk > 200 Risk > 500
20

B. Non-Cancer Risk

The emission reductions obtained from this regulation will result in lower ambient PM 

levels and reduced exposure to diesel PM. Staff estimates that, based on the 

incremental benefits of the proposed regulation, approximately 310 premature deaths 

[(90 to 530, 95 percent confidence interval (95% CI)] statewide will be avoided by the 

year 2025 from the implementation of the commercial harbor craft regulation. Estimates 

of other health effects avoided statewide include:

• 70 hospital admissions due to respiratory causes (40 to 90, 95% CI) 

• 120 hospital admissions due to cardiovascular causes (80 to 190, 95% CI)

• 8,100 cases of asthma-related and other lower respiratory symptoms (3,100 to

13,000, 95% CI)

• 670 cases of acute bronchitis (0 to 1,500, 95% CI)

• 53,000 work loss days (45,000 to 61,000, 95% CI)

• 300,000 minor restricted activity days (250,000 to 360,000, 95% CI)

7. ENVIRONMENTAL IMPACT

No significant adverse environmental impacts are expected to occur from adoption of, 

and compliance with, the proposed requirements for commercial harbor craft engines. 

Implementation from the proposed amendments would reduce directly emitted and 

secondarily formed PM levels, provide both near source and regional risk reduction, and 

contribute to the overall effort of reducing PM mortality, hospital admissions, and lost 

work days. 

8. IMPACT ON GLOBAL WARMING

Some actions required by the proposed regulations could result in slightly increased 

carbon dioxide (CO2) for some applications. For example, the design for new ferries 

would be required to include the best available control technology (after-treatment) to be 

used with propulsion engines. An increase in CO2 could occur if vessel operators 

choose to comply by using exhaust treatment technologies that use vessel power (e.g., 

scrubbers, selective catalytic reduction), increase the weight of the vessel, or require a 

larger engine to be installed on the vessel. However, other actions required by the rule 

will likely offset this effect. For instance, the accelerated phase-in of newer engines, 

which employ modern, less polluting technologies, should reduce greenhouse gas 

emissions from each new engine relative to the older, in-use engines. In addition, the 

proposed regulations will reduce emissions of black carbon (a component of diesel PM 

and a likely contributor to global warming), which will further offset the minor increases 

in CO2 emissions that may occur in some applications. Thus, staff expects the 

proposed regulations to have an overall negligible effect on global warming.

9. ECONOMIC IMPACTS

In assessing the costs associated with the proposed regulation, ARB staff developed 

two different estimates, one for regulatory costs and another for new equipment costs. 
21

Regulatory costs are the estimated costs resulting from the proposed regulations due to 

the early replacement of in-use engines, the additional costs associated with adding 

aftertreatment to new ferry propulsion engines, and recordkeeping and reporting. The 

costs considered for the early replacement of engines includes the residual value of the 

engine being replaced, the residual value of the most recent engine rebuild work, and 

the time value of money. These regulatory costs are those directly attributable to 

compliance with the proposed regulation. New equipment costs are the estimated total 

out-of-pocket costs for purchasing and installing a new engine (engine replacement 

cost), new ferry costs associated with adding aftertreatment technology, and 

recordkeeping and reporting. A large portion of the new equipment costs, primarily the 

engine replacement costs, are an existing cost of doing business that would occur with 

or without the regulation when an engine reaches the end of its service life. 

Staff estimates the regulatory cost for complying with the proposed regulation to be 

approximately $140 million (2006 dollars). This corresponds to about $10 million 

annually from 2009 through 2022. Industry costs for new equipment are estimated at 

approximately $460 million dollars (2006 dollars) over the lifetime of the proposed 

regulation (2009 – 2022). 

Staff evaluated the economic impact of complying with the in-use engine requirements 

on the affected ferry, excursion, tugboat, and towboat businesses by evaluating the 

impact of the regulatory cost on typical business’s “return on owner’s equity” (ROE). 

Using the ROE approach, we found that the overall change in ROE ranges from a

negligible decline of about 0.5 percent for a typical tow company, to a decline of 

3.5 percent for a ferry or tug company. Staff’s analysis indicates that the change in 

ROE could be larger for small businesses. A decline of 0.5 to 3.5 percent in ROE is not 

considered to represent a significant impact on profitability. Additionally, businesses 

with compliance dates in the future may be eligible for incentive grant funds if they 

choose to comply early. Incentive funding opportunities are discussed in the Technical 

Support Document, Chapter VIII. 

10. COST TO LOCAL, STATE, AND FEDERAL AGENCIES

Multiple federal, State, and local agencies would be impacted by the proposed 

regulation. The majority of the agencies would not be affected by the in-use compliance 

requirements and would only be subject to the reporting requirement, resulting in costs 

of approximately $100 per engine. One State agency, the California Department of 

Transportation (Caltrans), and three local agencies would be impacted by the in-use 

engine requirements. Regulatory costs to these agencies range from about $2,000 to 

$2 million. 

There would be significant costs to the ARB to implement and enforce the regulation. 

Staff estimates that ARB’s cost to implement the reporting program (initial report) would 

be approximately $25 to $50 per engine. An additional annual cost of $10 to $100 per 

engine (after the first year) is estimated to cover an inspection and report update at the 
22

time of final compliance with the regulation. These total costs are estimated to be 

$200,000 to $400,000 over the life of the regulation. The ARB’s administrative costs for 

outreach, educational efforts, and technical assistance would be absorbed within 

existing budgets and resources. 

11. COST-EFFECTIVENESS

Cost-effectiveness is expressed in terms of costs in dollars per unit of emissions 

reduced (pounds or tons). The cost-effectiveness for the proposed regulation is 

determined by dividing the regulatory costs (cost specifically due to compliance with the 

proposed regulation) by the total pounds of diesel PM reduced during the years 2009 to 

2022. All costs are in 2006 equivalent expenditure dollars. Table 10 shows the costeffectiveness estimate for the proposed regulation expressed three ways. 

Table 10: Summary of Average Cost-Effectiveness for the Period 2009-2022

Emissions

Total Regulatory 

Cost

2009 – 2022

Total Emissions 

Reduced 

2009 - 2022

Total CostEffectiveness

All Costs Assigned to PM 

PM $140,000,000 4,900,000 lbs $29/lb

Divide Costs Equally Between PM and NOx

PM $70,000,000 4,900,000 lbs $14.50/lb

NOx $70,000,000 39,000 tons $1,800/ton

Combine PM and NOx Emissions

PM + NOx $140,000,000 83,000,000 lbs $1.70/lb

All values rounded

The cost-effectiveness values are well within the range of cost effectiveness for other 

diesel engine regulations adopted by the Board, as shown in Table 11. 

Table 11: Diesel PM Cost-Effectiveness of the Proposal and Other 

Regulations/Measures (When All Costs Attributed to PM Reduction)

Regulation or Diesel PM Cost-Effectiveness

Airborne Toxic Control Measure Dollars/ Pound PM

Commercial Harbor Craft $29

Cargo Handling Equipment $41

Solid Waste Collection Vehicle Rule $28

Stationary Diesel Engine ATCM $4 - $26

Transport Refrigeration Unit ATCM $10 - $20

The estimated value of the health benefits associated with the proposed regulation is 

substantial. Following standard U.S. EPA practice, ARB staff estimates the statewide 

benefits to be nearly $2.0 billion using a 3 percent discount rate, or $1.3 billion using a 
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7 percent discount rate. Nearly all of the monetized benefits result from avoiding 

premature death. 

12. FEASIBILITY OF PROPOSED REGULATION

The ARB staff believes that engine replacement will be the primary compliance option 

chosen to meet the proposed in-use engine requirements. As of the 2003-2004 fiscal 

year, about 400 propulsion and 50 auxiliary engines have been replaced in 

approximately 300 harbor craft through California’s Carl Moyer Memorial Air Quality 

Standards Attainment Program. Almost 50 of these vessels have been ferries, 

excursion vessels, tugboats, and towboats, illustrating the feasibility of repowering these 

vessels. 

Staff has determined that the number of engine replacements that likely would occur 

due to the proposed regulation’s compliance schedule would be achievable with the 

State’s current capacity for engine replacements. Staff estimates that, under the 

proposed compliance schedule, an average of 128 replacements of both auxiliary and 

propulsion engines per year will occur over the 14-year compliance period. Of the 

128 engine replacements, over 60 percent, or about 80, are propulsion engine 

replacements. Because auxiliary engine replacements are less involved and do not 

necessarily require a dry dock facility, staff assumed dry docking for the propulsion 

engine replacements would be the limiting factor for the State’s capacity. While the 

14-year average for propulsion engine replacement is 80 engines, the maximum 

number of propulsion engine repowers required in one year (2015) is estimated to be 

about 150. 

Staff conducted a phone survey of boat yards, boat building, and boat repair facilities in 

California to determine the annual statewide capacity for harbor craft engine 

replacements. Based on the survey, staff has estimated the State’s current capacity at 

about 220 to 270 repowers per year. However, capacity is also required for routine 

engine maintenance, repowers due to natural engine attrition, and repowers funded 

through incentive programs. Because the maximum 150 repowers required in a single 

year (2015) is between 60 and 70 percent of the maximum capacity, we believe there is 

sufficient remaining capacity even at the maximum repower rate to still allow current 

facilities to conduct other repowering and non-repowering activities. Additional facilities 

and capacity that may be built in response to this regulation would further ensure that 

the State will have sufficient capacity to conduct the expected number of repowers. 

13. ALTERNATIVES CONSIDERED

The ARB staff considered two alternatives to the proposed harbor craft regulation. The 

first alternative would make all Tier 0 and Tier 1 diesel engines on ferries, excursion 

vessel, tugboats, and towboats throughout the State subject to a single statewide

compliance schedule, as provided in Table 5. This compliance schedule replaces 

engines at a 15 year service life. The estimated regulatory cost for this alternative is 

$135 million. The total PM emissions reduced with this alternative would be about 
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10 percent less than with the proposed schedule, 4.4 million pounds during the 14 years 

from 2009 to 2022. The resulting cost-effectiveness for this alternative is slightly higher 

than the proposed regulation, $30 per pound of diesel PM reduced. The total NOx 

reduction of this same time period would be 36,000 tons, about 7 percent less than with 

the proposed regulation. However, this alternative would reduce the number of 

SCAQMD engine replacements in the first six years. Consequently, as previously 

shown in Figure 4 and Figure 5, SCAQMD would not receive the early reductions with 

this alternative that are necessary to help meet its PM2.5 attainment goals by 2014. 

The second alternative would require that all Tier 0 and Tier 1 diesel engines on ferries, 

excursion vessel, tugboats, and towboats throughout the State be subject to the 

accelerated SCAQMD compliance schedule, as provided in Table 6. This compliance 

schedule replaces engines at a 13 year service life. This alternative would result in 

many engines replaced earlier than the proposed regulation. The estimated regulatory

cost to the equipment owners, $170 million, from this alternative is greater than the 

proposed regulation’s $140 million regulatory cost. Additionally, this alternative’s cost 

affects the rest of the State two years earlier. The total PM emissions reduced with this 

alternative would be significantly more than with the proposed schedule, 6.0 million 

pounds during the 14 years from 2009 to 2022. The resulting cost-effectiveness for this 

alternative is nearly identical to that of the proposed regulation, $29 per pound of diesel 

PM reduced. The total NOx reduction of this same time period would be 46,000 tons, 

nearly 20 percent more than with the proposed regulation. This alternative would 

produce earlier reductions than the current proposal, with a cost-effectiveness similar to 

the current proposal. However, staff determined that this alternative would not be 

feasible because it would require more engines to be replaced in some years than 

statewide capacity would allow. 

14. KEY ISSUES

A. BACT Requirement for New Ferries

The proposed regulation requires that all new build ferries comply with an additional 

propulsion engine requirement. The engines must be equipped with BACT for the 

engine and application. Staff is recommending that a case-by-case BACT 

determination be made by ARB for the new ferry propulsion engines rather than setting 

a specific reduction level in the proposed regulation. Staff is recommending this 

approach because of the unique features of each ferry and limited data on successful

application of aftertreatment on ferries similar to those used in California. 

The San Francisco Bay Area Water Transit Authority (WTA) has instituted a 

requirement for all ferries under their jurisdiction that the propulsion engines must be 

85 percent cleaner than U.S. EPA marine engine standards. The 85 percent reduction 

can be met through a combination of NOx or PM reductions. A new ferry is currently 

under construction that is expected to meet this requirement through the use of compact 

selective catalytic reduction technology (SCR) combined with a diesel oxidation catalyst 

(DOC). 
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Staff considered including a similar 85 percent reduction requirement for new ferries in 

the proposed regulation. However, staff was not able to locate data that would support 

a successful durability demonstration of the required technology on smaller passenger 

ferries that are typical for California use. The recent failure of an SCR demonstration 

unit on a small high speed ferry, typical of many California ferries that would be subject 

to this requirement, illustrates the need for successful durability demonstration data. 

B. Ocean-Going Tugboats

The proposed regulation includes all ocean-going tugboats in its engine compliance 

requirements. These tugboats are the same size and have similar operational 

characteristics as harbor tugboats and may be used interchangeably as an ocean-going 

tugboat or a harbor tugboat. We estimate that there are about 25 out-of-state oceangoing tugboats operating in California. 

Owner and operators of out-of-state ocean-going tugboats that provide service to 

California have requested that their vessels not be included in the regulation and 

instead remain subject to the auxiliary engine rule for ocean-going vessels

(13 CCR 2299.1, 17 CCR 93118). Under that regulation’s definition for “ocean-going 

vessel” (see 13 CCR 2299.1(d)(21)(A)), these tugboats would be classified as “oceangoing vessel” only because they have a foreign trade registry. However, as noted 

before, these ocean-going tugboats are functionally equivalent or otherwise very similar 

to their harbor tugboat counterparts. Therefore, staff has proposed to include oceangoing tugboats in the proposed harbor craft regulation because of their functional 

equivalence to harbor tugboats and the frequency of their visits to California ports. 

Based on available data, we estimate these ocean-going tugboats made over 500 visits 

to California ports last year. 

C. U.S. EPA Tier 4 Engines on In-Use Vessels

During our public workshops, engine owners and manufacturers raised an issue about 

the proposed regulation’s originally proposed requirement to install Tier 4 engines on 

existing vessels. The U.S. EPA’s proposed marine engine standards would require 

Tier 4 engines to have exhaust after-treatment (i.e., selective catalytic reduction and 

diesel particulate filter). Owners and manufacturers stated that installing Tier 4 engines 

and the additional exhaust aftertreatment equipment would create space, weight, and 

stability issues on existing vessels. After consideration of these issues, staff modified 

the proposal so that engines meeting Tier 4 standards are not required for engine 

repowers (i.e., on in-use vessels), but they would be required for new vessels. 

15. OUTREACH

ARB has worked extensively with the various stakeholders over the past four years to 

identify issues, find ways to address these issues, and develop appropriate regulatory 

language. The proposed regulation has been discussed with the California Air Pollution 

Control Officers Association (CAPCOA) during several joint CAPCOA-ARB conference 
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calls. Additionally, ARB staff made extensive contacts with industry representatives, 

local air districts, environmental/pollution prevention and public health advocates, and 

other interested parties through meetings, telephone calls, and electronic mail. Staff 

has held 12 public workshops and 3 community outreach meetings (some specifically 

geared to fishermen and their concerns) to discuss the proposed regulation. Further, 

staff made several visits to vessel owners, representing a variety of vessel types. 

Finally, staff made information available via ARB’s web site

(http://www.arb.ca.gov/harborcraft) to further expand public outreach opportunities and 

reach the widest possible audience. 

16. ENVIRONMENTAL JUSTICE

A public process that involves all parties affected by the proposed regulation is an 

important component of ARB rulemaking activities. The proposal is consistent with the 

ARB’s environmental justice policy to reduce health risks from toxic air contaminants in 

all communities, including low-income and minority communities. The proposed 

regulation would reduce diesel PM and other emissions from harbor craft engine in all 

areas of the State where these engines are located. However, the vast majority of 

these engines operate within the Los Angeles/Long Beach and Bay Area ports, which 

are surrounded by densely populated areas, including some in low-income and minority 

communities. Therefore, the proposal will help address environmental justice concerns 

by reducing emissions and health risks in the areas where harbor craft emissions have 

the greatest impacts.

17. IMPLEMENTATION AND ENFORCEMENT

We believe that ARB staff needs to take the following actions to efficiently and 

effectively implement the proposed regulation: 

• develop an outreach program to inform harbor craft owners and operators and 

suppliers of the requirements of the proposed regulation, as well as provide 

information about incentive programs such as the Carl Moyer programs, the Port 

of Los Angeles Air Quality Mitigation Funds, and the upcoming Proposition 1B air 

quality mitigation funds;

• develop recordkeeping and reporting guidance; and,

• provide implementation guidance and assistance as needed. 
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18. RECOMMENDATION

We recommend the Board approve the proposed harbor craft regulation presented in 

Appendix A of the staff report. The early turnover of in-use, pre-Tier 1 and Tier-1 

certified ferries, excursion vessels, tugboats, and towboats to lower emitting Tier 2 and 

Tier 3 engines would reduce diesel PM, NOx, and other air pollutant emissions, 

exposure, and health risk across California, particularly along the shoreline. The ARB 

staff believes the proposed regulation is technologically feasible, cost-effective, and 

necessary to carry out the Board’s responsibilities under State law and implement 

provisions of the Emission Reduction Plan for Ports and Goods Movement approved by 

the Board in April 2006. 
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_________________________________

REFERENCES:

(40 CFR Part 94) U.S. Environmental Protection Agency, Control of Emissions from 

Marine Compression – Ignition Engines.

(U.S. EPA, 2007) U.S. Environmental Protection Agency, Control of Emissions of Air 

Pollution from Locomotive Engines and Marine Compression-Ignition Engines Less 

Than 30 Liters Per Cylinder, 72 Fed.Reg. 15937 et seq. (April 3, 2007).

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

Matter Emission fro Diesel-Fueled Engines and Vehicles, October 2000.

(ARB, 2006) California Air Resources Board, Emission Reduction Plan for Ports and 

Goods Movement in California; March 2006.