# Control of Emissions from Marine SI and Small SI Engines, Vessels, and Equipment
Final Regulatory Impact Analysis

# Control of Emissions from Marine SI and Small SI Engines, Vessels, and Equipment
Final Regulatory Impact Analysis

Assessment and Standards Division Office of ransportation and Air Quality U.S. Environmental Protection Agency

EPA420-R-08-014 September 2008

## Table of Contents

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ES-1
CHAPTER 1: Industry Characterization 1.1 Manufacturers of Small SI Engines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-1 1.2 Manufacturers of Marine Spark-Ignition Engines . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-2 1.3 Fuel System Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-6
CHAPTER 2: Air Quality, Health, and Welfare Concerns 2.1 Ozone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 2 2.2 Particulate Matter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-1 3 2.3 Air Quality Modeling Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-3 2 2.4 Air Toxics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-3 8 2.5 Carbon Monoxide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-4 3 2.6 Acute Exposure to Air Pollutants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-4 6
CHAPTER 3: Emission Inventory 3.1 Overview of Small Nonroad and Marine SI Engine Emissions Inventory Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-2 3.2 Baseline Emission Inventory Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-4 3.3 Contribution of Small Nonroad and Ma rine SI Engines to National Emissions Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-19 3.4 Controlled Nonroad Small Spark-Ignition and Marine Engine Emission Inventory Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-26 3.5 Projected Emissions Reductions from the New Standards . . . . . . . . . . . . . . . . . . . . . 3-34 3.6 Emission Inventories Used for Air Quality Modeling . . . . . . . . . . . . . . . . . . . . . . . . 3-43
CHAPTER 4: Feasibility of Exhaust Emission Control 4.1 General Description of Spark-Ignition Engine Technology . . . . . . . . . . . . . . . . . . . . . 4-1 4.2 General Description of Exhaust Emission Control Technologies . . . . . . . . . . . . . . . . 4-8 4.3 Feasibility of Small SI Engine Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-2 2 4.4 Feasibility of Outboard/Personal Watercraft Marine Engine Standards . . . . . . . . . . 4-38 4.5 Feasibility of Sterndrive/Inboard Marine Engine Standards . . . . . . . . . . . . . . . . . . . 4-43 4.6 Feasibility of Standard for Marine Generator Sets . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-55 4.7 Test Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-56 4.8 Impacts on Safety, Noise, and Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-72 APPENDIX 4A: Normalized Modal Emissions for a 7.4 L MPI SD/I . . . . . . . . . . . . . . . 4-8 4
CHAPTER 5: Feasibility of Evaporative Emission Control 5.1 Diurnal Breathing Loss Evaporative Emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-2 5.2 Running Loss Emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-26 5.3 Fuel Tank Permeation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-29 5.4 Fuel/Vapor Hose Permeation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-70 5.5 Other Evaporative Emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-89 5.6 Evaporative Emission Test Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-91 5.7 Impacts on Noise, Energy, and Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-109

### APPENDIX 5A: Diurnal Temperature Traces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-112 APPENDIX 5B: Emission Results for Small SI Equipment Fuel Tanks Showing Effect of Venting on Diffusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-115 APPENDIX 5C: Diurnal Emission Results: Canister and Passive-Purge . . . . . . . . . . . 5-120 APPENDIX 5D: Material Properties of Common Fuel System Materials . . . . . . . . . . . 5-121 APPENDIX 5E: Diurnal Test Temperature Traces . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-125

CHAPTER 6: Costs of Control 6.1 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-1 6.2 Exhaust Emission Control Costs for Small SI Engines . . . . . . . . . . . . . . . . . . . . . . . . 6-2 6.3 Exhaust Emission Control Costs for Outboard and Personal Watercraft Engines . . . 6-44 6.4 Exhaust Emission Control Costs for Sterndrive/Inboard Marine Engines . . . . . . . . . 6-56 6.5 Evaporative Emission Control Costs for Small SI Equipment . . . . . . . . . . . . . . . . . . 6-64 6.6 Costs of Evaporative Emission Controls for Marine Vessels . . . . . . . . . . . . . . . . . . . 6-7 7 6.7 Cost Sensitivity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-9 0

CHAPTER 7: Cost Per Ton 7.1 30-Year Net Present Value Cost effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-1 7.2 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-2
CHAPTER 8: Cost-Benefit Analysis 8.1 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 1 8.2 Air Quality Impacts for Benefits Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 4 8.3 PM-Related Health Benefits Estimation - Methods and Inputs . . . . . . . . . . . . . . . . . . 8- 6 8.4 Health Impact Functions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 8 8.5 Economic Values for Health Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-2 6 8.6 Benefits Analysis Results for the Final Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-3 4 8.7 Comparison of Costs and Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-4 4 Appendix 8A: Sensitivity Analyses of Key Parameters in the Benefits Analysis . . . . . . . 8-5 1 Appendix 8B: Health-Based Cost-Effec tiveness of Reductions in Ambient O 3 

### and PM 2.5 

### Associated with the Final Small SI and Recreational Marine Engine Rule . . . . . . . . 8- 5
CHAPTER 9: Economic Impact Analysis 9.1 Overview and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-1 9.2 Economic Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-16 9.3 EIM Data Inputs and Model Solution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-3 5 9.4 Methods for Describing Uncertainty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-6 4 Appendix 9A: Impacts on Small SI Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-7 3 Appendix 9B: Impacts on Marine SI Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-9 1 Appendix 9C: Time Series of Social Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-10 3 Appendix 9D: Overview of Model Equations and Calculation . . . . . . . . . . . . . . . . . . . . 9-10 7 Appendix 9E: Elasticity Parameters for Economic Impact Modeling . . . . . . . . . . . . . . . 9-11 2 Appendix 9F: Derivation of Supply Elasticity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-12 6 Appendix 9G: Initial Market Equilibrium - Price Forecasts . . . . . . . . . . . . . . . . . . . . . . 9-12 8 Appendix 9H: Sensitivity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-13 0
CHAPTER 10: Small-Business Flexibility Analysis 10.1 Overview of the Regulatory Flexibility Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-1

### 10.2 Need for and Objective of the Rulemaking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-2 10.3 Summary of Significant Public Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-3 10.4 Definition and Description of Small Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-4 10.5 Type and Numbers of Small Entities Affected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-5 10.6 Reporting, Recordkeeping, and Compliance Requirements . . . . . . . . . . . . . . . . . . . 10-7 10.7 Steps Taken to Minimize the Impact on Small Entities . . . . . . . . . . . . . . . . . . . . . . 10-8 10.8 Projected Economic Effects of the Rulemaking . . . . . . . . . . . . . . . . . . . . . . . . . . 10-1 
CHAPTER 11: Regulatory Alternatives 11.1 Identification of Alternative Program Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-1 11.2 Cost per Engine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-7 11.3 Emission Reduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-1 6 11.4 Cost Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-20 11.5 Summary and Analysis of Alternative Program Options . . . . . . . . . . . . . . . . . . . . 11-2 0 APPENDIX 11A: Emission Factors for the Less Stringent Alternative . . . . . . . . . . . . . 11-2 4 APPENDIX 11B: Emission Factors for the More Stringent Alternative . . . . . . . . . . . . 11-27

### Executive Summary


# Executive Summary

The Environmental Protection Agency (EPA) is establishing new requirements to reduce emissions of hydrocarbon (HC) and oxides of n itrogen (NOx) from nonroad small spark ignited engines below 19kW (“Small SI engines”) and marine spark ignited engines (“Marine SI engines”). This rule includes exhaust and evaporative emission standards for these engines as well as related gasoline fuel tanks and fuel lines.
This executive summary describes the relevant air-quality issues, highlights the new exhaust and evaporative emission standards, and gives an overview of the analyses in the rest of this document.
Air Quality Background and Environmental Impact of the Rule
Emissions from Small SI engines and equipment and Marine SI engines and vessels contribute to a number of serious air pollution problems and will continue to do so in the future absent further reduction measures. Such emissions lead to adverse health and welfare effects associated with ozone, particulate matter (PM), nitrogen oxides (NOx), volatile organic compounds (VOC) including toxic compounds, and carbon monoxide (CO). These emissions also cause significant public welfare harm, such as damage to crops and regional haze.
Millions of Americans continue to live in areas with unhealthy air quality that may endanger public health and welfare. As of March 2008 approximately 139 million people live in the 72 areas that are designated as nonattainment for the 8-hour ozone National Ambient Air Quality Standards (NAAQS). In addition, approximately 88 million people live in areas that are designated as nonattainment for the PM 2.5 

### NAAQS. Federal, state, and local governments are working to bring ozone and PM levels into attainment with the NAAQS. The reductions included in this rule will be useful to states in attaining and maintaining the ozone, CO, and PM NAAQS.
In 2002, emissions from land-based nonroad Small SI engines and Marine SI engines were estimated to be about 26 percent of the total mobile-source inventory of VOC emissions and 1 percent of the NOx inventory. As presented in Figures 1 and 2, this rule will significantly reduce future Small SI and Marine SI emission inventories.

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### Final Regulatory Impact Analysis
Figure 1: Small Spark Ignition VOC+NOx Baseline and Phase 3 Control Emission Inventory

0 200,000 400,000 600,000 800,000 1,000, 000 1,200,000 1,400, 000

2000 2005 201 0 2015 202 0 2025 20 30 2035 20 40
YearTons

Baseline Control



### Figure 2: Marine Spark Ignition VOC+NOx Baseline and Phase 3 Control Emission Inventory

0 200,000 400,000 600,000 800,000 1,000,000 1,200,000

2000 2005 2010 2015 2020 2025 2030 2 035 2040
YearTons Baseline Control

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### Executive Summary

Exhaust and Evaporative Emission Standards
Tables 1 through 4 show the exhaust and evaporative emission standards and when they will apply. For Small SI nonhandheld engines, the standards are expected to result in the use of engine modificiations, aftertreatment systems, a nd some use of electronic fuel injection in Class II engines. As shown in Tables 1 through 4, we are phasing in many of the standards over time to address considerations of lead time, workload, and overall feasibility. In addition, the rule includes other provisions designed to address the transition to meeting the standards.
Table 1: Small SI Nonhandheld Engine Exhaust Emission Standards and Schedule

Engine Class Model Year HC+NOx [g/kW-hr] CO a [g/kW-hr] Class I (>80cc to <225cc) b 2012 10.0 610 Class II ( $ 225cc) 2011 8.0 610

a 5 g/kW-hr CO for Small SI engines powering marine generators.
b Nonhandheld engines at or below 80cc will be subject to the emission standards for handheld engines.



### Table 2: Small SI Equipment Evaporative Emission Standards and Schedule

Fuel Line Permeation Tank Permeation Running Loss

Standard Level 15 g/m 2 /day 1.5 g/m 2 /day Design Standard

Handheld 2012 a,b 2009-2013 c NA

Class I 2009 2012 2012

Class II 2009 2011 2011

a 2013 for small-volume families.
b A separate set of declining fuel line permeation st andards applies for cold-weather equipment from 2012 through 2016. A standard of 225 g/m 2 /day for cold-weather equipment fuel lines applies for 2016 and later.

c 2009 for families certified in California, 2013 for small-vol ume families, 2011 for structurally integrated nylon fuel tanks, and 2010 for remaining families.

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### Final Regulatory Impact Analysis
Table 3a: Outboard/PWC Marine SI Engine Exhaust Standards and Schedule a

Pollutant Power b Emission Standard b Model Year

HC+NOx P < 4.3 kW 30.0 2010

P> 4.3 kW 2.1 + 0.09 × (151 + 557/P 0.9 ) 2010

CO P < 40 kW 500 – 5.0 × P 2010

P> 40 kW 300 2010

a These engines are also subj ect to not-to-exceed standards
b P = maximum engine power in kilowatts (kW).



### Table 3b: Sterndrive/Inboard Marine SI Engine Exhaust Standards and Schedule

Power a Model Year HC+NOx [g/kW-hr] CO [g/kW-hr]

P < 373 kW b 2010 c 5.0 75

High-performance engines < 485 kW d 2010 20.0 350

2011 25.0 350

High-performance engines < 485 kW d 2010 16.0 350

2011 22.0 350

a P = maximum engine power in kilowatts (kW).
b These engines are also subject to not-to-exceed standard s. This category also includes engines >373 kW that do not otherwise meet the definition of “high-performance.”

c 2011 for small-businesses and for engines built us ing the 4.3L or 8.1L GM engine blocks.
d For small businesses, the 2010 standards do not apply and the 2011 standards are delayed until 2013.



### Table 4: Marine SI Engine Evapor ative Emissions Standards and Schedule

Fuel Line Permeation Tank Permeation Diurnal
Standard Level 15 g/m 2 /day 1.5 g/m 2 /day 0.40 g/gal/day

Portable Tanks 2009 a 2011 2010 b

PWC 2009 2011 2010

Other Installed Tanks 2009 a 2012 2011 c,d

a 2011 for primer bulbs. Phase-in for under cowl fuel lines, by length, on OB engines: 30% 2010, 60% 2011, 90% 2012, 100% 2015.
b Design standard.

c Fuel tanks installed in nontrailerable boats (> 26 ft. in length or >8.5 ft. in wi dth) may meet a standard of 0.16 g/gal/day over an alternative test cycle.
d The standard is effective July 31, 2011. For boats with installed fuel tanks, this standard is phased-in 50%/100% over the first two years. As an alternative, small ma nufacturers may participate in a diurnal allowance program.

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### Executive Summary

EPA has also taken steps to ensure that engines built to these standards achieve more accurate emissions reductions and is upgrading the test requirements to those listed in 40CFR1065 as outlined in Preamble Section IX General Test Procedures.
Feasibility of Meeting the Small SI Engine Exhaust Emission Standards
Since 1997, exhaust emission control development for Small SI engines has concentrated on engine redesign including carburetor design, impr oved engine combustion and engine cooling. The primary technical focus of the new emission standards will be engine upgrades as needed, catalyst application to the majority of Small SI engines and electronic fuel injection on some Class II engines. Related information is in Chapter 4.
We are finalizing, more stringent exhaust HC+NOx standards for Class I and II Small SI engines. We are also establishing a new CO standard for Small SI engines used in marine generator applications. The standards differ by engine size. Class I engines have a total engine displacement of < 225cc. Class II engines have a total engine displacement of 

### $ 225cc.
In the 2008 model year, manufacturers certified nearly 235 Class I and II engine families to the Phase 2 standards using a variety of engine designs and emission control technology. All Class I engines were produced using carbureted air-fuel induction systems and are air cooled. An extremely small number of engines used catalyst-based emission control technology. Similarly, Class II engines were predominantly carbureted and air cooled. A limited number of these engines used catalyst technology, electronic engine controls and fuel injection, and/or water cooling.
The market focus has a large part to play in the engine design and quality. The large number of residential and commercial applications have led to a wide variety of engine qualities and designs in the marketplace today. Some of the more durable engine designs already incorporate the base design requirements needed to incorporate a catalyst to meet the Phase 3 emission standards. In addition, a number of engine families in both classes are currently certified at levels that would comply with the Phase 3 standards.
Based on our own testing of advanced technology for these engines, our engineering assessments, and statements from the affected industry, we believe the requirements will lead many engine manufacturers to adopt exhaust af tertreatment technology using catalyst-based systems. Other likely engine changes include improvements in engine designs, cooling system designs and fuel delivery systems. The addition of electronic controls and/or fuel injection systems to some Class II engine families may obviate the need for catalytic aftertreatment, with the most likely candidates being multi-cylinder engine designs.
Information herein on the feasibility assessment of exhaust emissions on Small SI engines includes the emission evaluation of current pr oduct and advanced technology engines. Areas covered include laboratory and field evaluations, review of patents of existing catalyst/muffler

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### Final Regulatory Impact Analysis
designs for Class I engines, discussions with engine manufacturers and suppliers of emission control-related engine components regarding recent and expected advances in emissions performance, and an analysis of catalyst/muffler units that were already in mass production by an original equipment manufacturer for use on European walk-behind lawn mowers.
EPA used this information to design, build and emission test prototype catalyst-based emission control systems that were capable of effectively and safely achieving the Phase 3 emission standards on both Class I and Class II engines. Chapter 4 projects that in some cases manufacturers of Class I and Class II engines may need to improve the durability of their basic engine designs, cooling system designs, igniti on systems, or fuel metering systems for some engines in order to comply with the Phase 3 emission regulations over the useful life. EPA also built and tested electronic fuel injection systems on two twin cylinder Class II engines and emission tested them with and without catalysts. EFI improves the management of air-fuel mixtures and ignition spark timing and each of the engines achieved the requisite emission limit for HC+NOx (e.g., 8.0 g/kW-hr). Based on this work and information from one manufacturer of emission controls, we believe that either a catalyst-based system or electronic engine controls appear sufficient to meet the standard. Manufacturers adopting the EFI approach will likely realize other advantages such as easier starting, more stable and reliable engine operation, and reduced fuel consumption.
We also used the information and the results of our engine testing to assess the potential need for improvements to engine, cooling and fuel syst em designs. A great deal of this effort was conducted in association with our more in-depth study regarding the efficacy and safety of implementing advanced exhaust emission controls on Small SI and recreational Marine SI engines, as well as new evaporative requirements for these engines, equipment, and vessels. The results of that study are also discussed in Chapter 4.
There are a number of Class II engines that use gaseous fuels (i.e., liquid propane gas or compressed natural gas). Based on our engineering evaluation of current and likely emission control technology for these engines, we conclude that these engines will use catalysts, or larger catalysts than current, in order to achieve the Phase 3 HC+NOx standard. Some engines currently meet the Phase 3 emission standards.
Regarding the marine generator CO standard, two manufacturers that produce the majority of marine generators have announced that as a result of boat builder demand, they are converting their marine generator product lines to new designs which can achieve more than a 99 percent reduction in CO emissions in order to reduce the risk of CO poisoning. These low CO emission designs used closed-loop electronic fuel injec tion and catalytic control on engines which are water cooled using the lake or sea water. Both of these manufacturers have certified some low CO engines and have expressed their intent to convert their full product lines in the near future. These manufacturers also make use of electronic controls to monitor catalyst function.
Feasibility of Meeting the Marine SI Exhaust Emission Standards
The technology is available for marine engine manufacturers to use to meet the new

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### Executive Summary
standards. This technology is the same that manufacturers are anticipated to use to meet the California ARB standards in 2008. For outboards and personal watercraft (OB/PWC) this largely means extended use of lower-emitting engine technology widely used today. For sterndrive and inboard (SD/I) marine engines, this means the use of catalytic converters in the exhaust system. Chapter 4 includes detailed descriptions of low emission technologies for marine engines, including emissions test data on these technologies.

OB/PWC
Over the past several years, manufacturers have demonstrated their ability to achieve significant HC+NOx emission reductions from OB/PWC engines. This has largely been accomplished through the introduction of two-stroke direct injection engines in some applications and conversion to four-stroke engines. Current certification data for these types of engines show that these technologies may be used to achieve emission levels significantly below the existing exhaust emission standards. In fact, California has adopted standards requiring a 65 percent reduction beyond the current federal standards beginning in 2008.
Our own analysis of recent certification data shows that most four-stroke outboard engines and many two-stroke direct injection outboa rd engines currently meet the new HC+NOx standard. Similarly, although PWC engines tend to have higher HC+NOx emissions, presumably due to their higher power densities, many of these engines also meet the new HC+NOx standard. Although there is currently not a CO emission standard for OB/PWC engines, OB/PWC manufacturers are required to report CO emissions from their engines. These emissions are based on test data from new engines and do not consider deterioration or compliance margins. Based on this data, all of the two-stroke direct injection engines show emissions well below the new standards. In addition, the majority of four-stroke engines meet the CO standards as well.
We therefore believe the HC+NOx and CO emission standards can be achieved by phasing out conventional carbureted two-stroke engines and replacing them with four-stroke engines or two-stroke direct injection engines. This ha s been the market-driven trend over the last five years. Chapter 4 compares recent certification data to the new standards.

SD/I
Engine manufacturers can adapt readily available technologies to control emissions from SD/I engines. Electronically controlled fuel in jection gives manufacturers more precise control of the air/fuel ratio in each cylinder, thereby gi ving them greater flexibility in how they calibrate their engines. With the addition of an oxygen sensor, electronic controls give manufacturers the ability to use closed-loop control, which is especially valuable when using a catalyst. In addition, manufacturers can achieve HC+NOx reductions through the use of exhaust gas recirculation. However, the most effective t echnology for controlling emissions is a three-way catalyst in the exhaust stream.
In SD/I engines, the exhaust manifolds are water-jacketed and the water mixes with the

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### Final Regulatory Impact Analysis
exhaust stream before exiting the vessel. Manufacturers add a water jacket to the exhaust manifold to meet temperature-safety protocol. They route this cooling water into the exhaust to protect the exhaust couplings and to reduce engine noise. Catalysts must therefore be placed upstream of the point where the exhaust and water mix-this ensures the effectiveness and durability of the catalyst. Because the catalyst must be small enough to fit in the exhaust manifold, potential emission reductions are not likely to exceed 90 percent, as is common in land-based applications. However, as discussed in Chapter 4 of the Final RIA, data on catalyst-equipped SD/I engines show that emi ssions may be reduced by 70 to 80 percent for HC+NOx and 30 to 50 percent for CO over the test cycle. Larger reductions, especially for CO, have been achieved at lower-speed operation.
Chapter 4 discusses issues that have been addressed in catalyst designs for SD/I engines such as sustained operation at high load, potential saltw ater effects on catalyst efficiency, and thermal shock from cold water contacting a hot catalyst. Test programs have been performed to evaluate catalysts in the laboratory and on the water. Th ree SD/I engine manufacturers have certified SD/I engines to the California ARB standards, and so me catalyst-equipped engines are available for purchase nationwide. Manufacturers have indicated that they have successfully completed durability testing, including extended in-use testing on saltwater.
Feasibility of Meeting the Evaporative Emission Standards
There are many feasible control technologies that manufacturers can use to meet the evaporative emission standards. We have collected emission test data on a wide range of technologies for controlling evaporative emissions. Chapter 5 presents a description of the evaporative emission sources which include permeation, diurnal, running loss, hot soak, and refueling emissions. In addition, Chapter 5 presents evaporative emission test data for current Small SI and marine fuel systems and on a wide range of evaporative emission control technologies. Below is an overview of technologies that are available for meeting the evaporative emission standards.
Low-permeation fuel lines are in production today. One fuel line design, already used in some marine applications, uses a thermoplastic layer between two rubber layers to control permeation. This thermoplastic barrier may either be nylon or ethyl vinyl acetate (EVOH). Barrier approaches in automotive applications include fuel lines with fluoroelastomers such as FKM and fluoroplastics such as Teflon and THV. In addition to presenting data on low-permeation fuel lines, Chapter 5 lists several fuel-system materials and their permeation rates. Molded rubber fuel line components, such as primer bulbs and some handheld fuel lines, could meet the standard by using a fluoroelastomer such as FKM.
Plastic fuel tanks used in Small SI and Marine SI applications can be molded using several processes. While no fuel tank permeation control strategy will work for all production processes and materials, there are multiple control strategies available for fuel tanks manufactured witheach of the molding processes. These molding processes include blow-molding, injectionmolding, thermoforming, rotational-molding, and hand built constructions (fiberglass).

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### Executive Summary
Multi-layer fuel tanks can be formed using most of these molding processes. These fuel tank constructions include a barrier layer of a low permeation material such as ethylene vinyl alcohol (EVOH) or nylon. This technology has been used in blow-molded fuel tanks for automotive applications for many years and can achieve emission levels well below the new standard. For thermoformed fuel tanks, a similar barrier formed into the plastic sheet that is later molded into a fuel tank. Rotationally-molded fuel tanks can be produced with an inner barrier layer such as nylon. As an alternative, in the blow-molding process, a low-permeable resin can be blended with polyethylene and extruded it with a single screw. Although the barrier is not continuous, this strategy can still be used to meet the permeation standard. A similar strategy may be used for fiberglass fuel tank where the barrier materi al is clay nanocomposites. Finally, fuel tanks may be formed entirely out of a low permeation material such as nylon or an acetal copolymer. Many fuel tanks used with handheld equipment use nylon fuel tanks.
Another approach to producing fuel tanks that meet the permeation standards would be to create permeation barrier through a post-processing step. Regardless of the molding process, another type of low-permeation technology for high-density polyethylene fuel tanks would be to treat the surfaces with a barrier layer. Two wa ys of achieving this are known as fluorination and sulfonation. In these processes, the tanks are exposed to a gas which forms a permeation barrier on the surfaces of the fuel tank. Either of these processes can be used to reduce gasoline permeation by more than 95 percent. Additionally, a barrier layer can be put onto a fuel tank with the use of an epoxy barrier coating.
There are several technologies that can be used to reduce diurnal emissions from marine fuel tanks. The simplest approach is to seal the fuel tank. Portable fuel tanks currently use manual valves that can be closed to seal the fuel tank. PWC typically use sealed fuel systems with pressure relief valves that open at pressures ranging from 0.5 to 4.0 psi. For other vessels with installed fuel tanks, manufacturers have commented that even 1.0 psi of pressure would be too high for their applications. Through the use of a carbon canister in the vent line, diurnal emissions can be controlled from these fuel tanks without creating significant pressure in the fuel tank. With this technology, vapor generated in the tank is vented to a canister containing activated carbon. The fuel tank must be sealed such that the only venting that occurs is through the carbon canister. The activated carbon collects and stores the hydrocarbons. The activated carbon bed in the canister is refreshed by purging the vapors with air flow. The standard is based on the air flow being generated by the natural breathing of the fuel tank as it heats and cools.
Running loss emissions can be controlled from Small SI equipment by sealing the fuel cap and routing vapors from the fuel tank to the engine intake. In doing so, vapors generated by heat from the engine will be burned in the engine’s combustion chamber. It may be necessary to use a valve or limited-flow orifice in the purge line to prevent too much fuel vapor from reaching the engine and to prevent liquid fuel from entering the line if the equipment flips over. Depending on the configuration of the fuel system and purge line, a one-way valve in the fuel cap may be desired to prevent a vacuum in the fuel tank during engine operation. We anticipate that a system like this would eliminate running loss emissions. However, higher temperatures during operation and the additional length of vapor line would slightly increase permeation.

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### Final Regulatory Impact Analysis
Considering these effects, we still believe that the system described here would reduce running losses from Small SI equipment by more than 90 percent.
Many manufacturers today use fuel caps that by their design effectively limit the diffusion of gasoline from fuel tanks. In any case, we expect that the new running loss design standard will limit any diffusion emissions from this equipment. As discussed in Chapter 5, venting a fuel tank through a tube (rather than through an open orifice) greatly reduces diffusion.
Estimated Costs and Cost-Effectiveness for Small SI Engines and Equipment
There are approximately 410 nonroad equipment manufacturers using Small SI engines in over a thousand different equipment models. There are more than 50 engine manufacturers certifying Small SI engine families for these applications. Fixed costs consider engine research and development, engine tooling, engine certifi cation, and equipment redesign. Variable costs include estimates for new emission-control hardware. Near-term and long-term costs for some example pieces of equipment are shown in Table 5. Also shown in Table 5 are typical prices for each piece of equipment for reference. See Chapter 6 for detailed information related to our engine and equipment cost analysis.
Table 5: Estimated Costs for Several Example Pieces of Equipment ($2005) a 

### Over the Range of Useful Life Categories for Small SI Engines b

Class I Class II Handheld (Class III-V)

Exhaust Near Term Long Term $10 to $26 $10 to $12 $17 to $60 $12 to $30 $0.28 $0.00

Evaporative Near Term Long Term $3.05 $2.20 $6.73 $5.16 $0.82 $0.69 Total (without fuel savings) Near Term Long Term $14 to $26 $11 to $17 $46 to $92 $27 to $52 $1.12 $0.69 Total (with fuel savings) c Near Term Long Term $13 to $25 $10 to $16 $1-$48/$40-$86 -$18-$6/$21-$46 Engines w/ and w/o EFI $0.72 $0.29

Estimated Equipment Price Range $100-$2,800 $300-$6800 $210 avg

a Near-term costs include both variable costs and fixed costs; long-term costs include only variable costs and represent those costs that remain following recovery of all fixed costs.
b Class I (125,250, or 500 hours), Class II (250, 500, or 1000 hours)

c Class I, Class II and handheld have fuel savings from ev aporative measures. Class II engines with EFI have fuel savings of $39 based on the lifetime savings in the use of a residential ride on mower. There are no fuel savings related to compliance with the exhaust emission standard for Class I, handheld, or Class II engines without EFI.



### Chapter 6 presents aggregate costs of compliance for the new exhaust and evaporative

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### Executive Summary
emission standards for Small SI engines. Table 6 presents the annualized aggregate costs and fuel savings for the period from 2008-2037. The a nnualized fuel savings for Small SI engines are due to reduced fuel costs form the sue of el ectronic fuel injection on Class II engines as well as fuel savings from evaporative measures on all Small SI engines.
Table 6: Estimated Annualized Cost to manufacturers and Annualized Fuel Savings for Small SI Engines and Equipment at a 7% Discount Rate (2005$)

Annualized Cost to Manufacturers (millions/yr) Annualized fuel savings (millions/yr)

Exhaust $182 $24
Evaporative $65 $53
Aggregate $247 $77



### Chapter 7 describes the cost effectiveness analysis. In this analysis, the aggregate costs of compliance are determined for the period 2008-2037. The discounted aggregate costs for the period are divided by the discounted a ggregate HC_NOx emission reductions.
Table 7: Aggregate Cost per Ton for Small SI Engines and Equipment 2008-2037 Net Present Values at 7% Discount Rate ($2005)

Pollutant NOx+HC Aggregate Discounted Lifetime Cost per ton Without Fuel Savings Aggregate Discounted Lifetime Cost per ton

With Fuel Savings

7% $978 $650



### Estimated Costs and Cost-Effectiveness for Marine SI Engines
According to the US Coast Guard there are well over a thousand different boat builders using Marine SI engines. There are about 10 engine manufacturers certifying to the current OB/PWC exhaust emission standards. We have identified more than 30 companies manufacturing SD/I marine engines. Fixed cost s consider engine research and development, engine tooling, engine certification, and equipm ent redesign. Variable costs include estimates for new emission-control hardware. Near-term a nd long-term costs for three different Marine SI applications are shown in Table 8. Also shown in Table 8 are typical prices for these types of marine vessels. See Chapter 6 for detailed information related to our engine and equipment cost analysis.

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### Final Regulatory Impact Analysis
Table 8: Estimated Average Incremental Cost s for SI Marine Engines and Vessels ($2005) a

Engine Category (Fuel Storage System) Outboard (Portable) PWC SD/I (Installed) Exhaust Near Term Long Term $291 $224 $359 $272 $355 $266 Evaporative Near Term Long Term $12 $8 $17 $11 $74 $62 Total (without fuel savings) b Near Term Long Term $433 $336 $376 $283 $487 $376 Total (with fuel savings) b Near Term Long Term $245 $148 $165 $72 $348 $237

Estimated Vessel Price Range $10,000-50,000 $6,000-12,000 $20,000-200,000

a Near-term costs include both variable costs and fixed costs; long-term costs include only variable costs and represent those costs that remain following recovery of all fixed costs. b Total costs are presented as an average per boat and consider that many boats have multiple engines.



### Chapter 6 presents aggregate costs of compliance for the new exhaust and evaporative emission standards for Marine SI engines. Tabl e 9 presents the annualized aggregate costs and fuel savings for the period from 2008-2037. The a nnualized fuel savings for Marine SI engines are due to reduced fuel costs from the use of mo re fuel efficient engines as well as fuel savings from evaporative measures.

Table 9: Estimated Annualized Cost to Manufacturers and Annualized Fuel Savings for Marine SI Engines and Vessels at a 7% Discount Rate (2005$)

Annualized Cost to Manufacturers (millions/yr) Annualized Fuel Savings (millions/year)

Exhaust $123 $56
Evaporative $22 $22
Aggregate $144 $78



### Chapter 7 describes the cost effectiveness analysis. In this analysis, the aggregate costs of compliance are determined for the period 2008-2037. The discounted aggregate costs for the period are divided by the discounted aggregat e HC+NOx emission reductions over that same period. Table 10 presents the cost per ton estimates with and without fuel savings.

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### Executive Summary
Table 10: Aggregate Cost per Ton for SI Marine Engines and Vessels 2008-2037 Net Present Values at 7% Discount Rate ($2005)

Pollutant Aggregate Discounted Aggregate Discounted NOx+HC Lifetime Cost per ton Lifetime Cost per ton Without Fuel Savings With Fuel Savings

7% $780 $360



### Economic Impact Analysis
We prepared a final Economic Impact Analysis estimate the market and social welfare impacts of the new standards. This analysis can be found in Chapter 9. According to this analysis, the average price of a Marine SI engine in 2030 is projected to increase by less than 2 percent ($213) as a result of the new standards, and the average price of a Marine SI vessel is projected to increase by between 0.7 percent and 2.4 percent ($218 to $702), depending on the type of vessel. The average price of a Small SI engine in 2030 is projected to increase by about 7.4 percent ($12), and the average price of Small SI nonhandheld equipment is projected to increase by between 2.2 percent and 5.6 percent ($15 to $20), depending on equipment class. Changes in quantity produced are expected to be small, at less than 2 percent. The exceptions are PWC (4.8 percent) and Class II equipment (2.4 percent).
The net social costs of the program in 2030 are estimated to be $186 million. This includes $459 million of direct social costs and $273 million on fuel savings for the end users of these products. Overall, the consumers of Marine SI vessels and Small SI equipment are expected to bear the majority of the costs of complying with the program: 76 percent of the Marine SI program social costs in 2030, and 91 percent of the Small SI program social costs. However, when the fuel savings are considered, the social costs burden for consumers of Marine SI equipment becomes a net benefit (the fuel savings are greater than the compliance costs of the program), while the end-user share of the Small SI program drops to 86 percent.

Benefits
We estimate that the requirements in this rulemaking will result in substantial benefits to public health and welfare and the environment, as described in Chapter 8. The benefits analysis performed for this rulemaking uses sophisticated air quality and benefit modeling tools and is based on peer-reviewed studies of air quality and health and welfare effects associated with improvements in air quality and peer-reviewed studies of the dollar values of those public health and welfare effects.
The range of benefits associated with this program are estimated based on the risk of several sources of PM- and ozone-related mortality effect estimates, along with all other PM and ozone non-mortality related benefits information. These benefits are presented in Table 11. The benefits reflect two different sources of inform ation about the impact of reductions in PM on

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### Final Regulatory Impact Analysis
reduction in the risk of premature death, including an estimate of mortality derived from the epidemiological literature (the American Can cer Society (ACS) cohort study - Pope et al., 2002) and an expert elicitation study conducted by EPA in 2006. In order to provide an indication of the sensitivity of the benefits estimates to alternative assumptions, in Chapter 8 of the RIA we present a variety of benefits estimates based on two epidemiological studies (including the ACS Study and the Six Cities Study) and the expert elicitation. EPA intends to ask the Science Advisory Board to provide additional advice as to which scientific studies should be used in future RIAs to estimate the benefits of reductions in PM.
The range of ozone benefits associated with the final standards is also estimated based on risk reductions estimated using several sources of ozone-related mortality effect estimates. There is considerable uncertainty in the magnitude of the association between ozone and premature mortality. This analysis presents four alternative estimates for the association based upon different functions reported in the scientific literature. We use the National Morbidity, Mortality and Air Pollution Study (NMMAPS), which was used as the primary basis for the risk analysis in the ozone Staff Paper and reviewed by the Clean Air Science Advisory Committee (CASAC). We also use three studies that synthesize ozone mortality data across a large number of individual studies. Note that there are uncertainties within each study that are not fully captured by this range of estimates. Chapter 8 of the RIA presents the results of each of the ozone mortality studies separately.
In a recent report on the estimation of ozone-related premature mortality published by the National Research Council (NRC), a panel of experts and reviewers concluded that ozone-related mortality should be included in estimates of the health benefits of reducing ozone exposure. The report also recommended that the estimation of ozone-related premature mortality be accompanied by broad uncertainty analyses while giving little or no weight to the assumption that there is no causal association between ozone exposure and premature mortality. Because EPA has yet to develop a coordinated response to the NRC report's findings and recommendations, however, we have retained the approach to estimating ozone-related premature mortality used in RIA for the final Ozone NAAQS. EPA will specifically address the report's findings and recommendations in future rulemakings.
The range of total ozone- and PM-related benefits associated with the final standards is presented in Table 11. We present total benefits based on the PM- and ozone-related premature mortality function used. The benefits ranges therefore reflect the addition of each estimate of ozone-related premature mortality (each with its own row in Table 11) to estimates of PM-related premature mortality, derived from either the epidemiological literature or the expert elicitation.

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### Executive Summary

Table 11: Estimated Monetized PM- and Ozon e-Related Health Benefits of the Small SI and Marine SI Engine Standards

2030 Total Ozone and PM Benefits - PM Mo rtality Derived from Epidemiology Studies a Premature Ozone Mortality Function or Assumption Reference Mean Total Benefits (Billions, 2005$, 3% discount rate) c,d

NMMAPS Bell et al., 2004 $2.4
Meta-analysis Bell et al., 2005 $3.7
Ito et al., 2005 $4.4
Levy et al., 2005 $4.4
Assumption that association is not causal e $1.8

2030 Total Ozone and PM Benefits - PM Mo rtality Derived from Expert Elicitation b
Premature Ozone Mortality Function or Assumption Reference Mean Total Benefits (Billions, 2005$, 3% discount rate) c,d

NMMAPS Bell et al., 2004 $1.7 to $9.7
Meta-analysis Bell et al., 2005 $3.0 to $11
Ito et al., 2005 $3.7 to $12
Levy et al., 2005 $3.7 to $12
Assumption that association is not causal e $1.1 to $9.1

a Total includes ozone and PM2.5 benefits. Range was developed by adding the estimate from the ozone premature mortality function to an estimate of PM2.5-related premature mortality derived from the ACS (Pope et al., 2002) study.
b Total includes ozone and PM2.5 benefits. Range was developed by adding the estimate from the ozone premature mortality function to both the lower and upper ends of the range of the PM2.5 premature mortality functions characterized in the expert elicitation. The effect estimates of five of the twelve experts included in the elicitation panel fall within the empirically-derived range provided by the ACS and Six-Cities studies. One of the experts fall below this range and six of the experts are above this range. Although the overall range across experts is summarized in this table, the full uncertainty in the estimates is reflected by the results for the full set of 12 experts. The twelve experts' judgments as to the likely mean e ffect estimate are not evenly distributed across the range illustrated by arraying the highest and lowest expert means.

c Note that total benefits presented here do not include a number of unquantified benefits categories. A detailed listing of unquantified health and welfar e effects is provided in Table 8.4-1.
d Results reflect the use of a 3 percent discount rate. M onetary results presented in Table 8.6-2 use both a 3 and 7 percent discount rate, as recommended by EPA's Guidelin es for Preparing Economic Analyses and OMB Circular A-4. Results are rounded to two significant di gits for ease of presentation and computation.

e A recent report published by the National Research Council (NRC, 2008) recommended that EPA "give little or no weight to the assumption that there is no causal associati on between estimated reductions in premature mortality and reduced ozone exposure."

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### Final Regulatory Impact Analysis
We estimate that by 2030, the annual emission reductions associated with these more stringent standards will annually prevent 230 PM-related premature deaths (based on the ACS cohort study), between 77 and 350 ozone-related premature deaths (assuming a causal relationship between ozone and mortality), 1,700 hospital admissions and emergency room visits, 23,000 work days lost, and approximately 590,000 minor restricted-activity days.

Impact on Small Businesses
Chapter 10 discusses our Small Business Flexibility Analysis, which evaluates the impacts of the emission standards on small entities. As a part of this analysis, we interacted with several small entities representing the various affected sectors and convened a Small Business Advocacy Review (SBAR) Panel to gain feedback and advice from these representatives. The small entities that participated in the process included engine manufacturers, equipment manufacturers, vessel manufacturers, fuel tank manufacturers, a nd fuel hose manufacturers. The feedback from these companies was used to develop regulatory options which could address the impacts of the rule on small businesses. Small entities raised general concerns related to potential difficulties and costs of meeting the new standards.
The SBAR Panel consisted of representatives from EPA, the Office of Management and Budget, and the Small Business Administration. Th e Panel developed a wide range of regulatory flexibilities to mitigate the impacts of the standards on small entities, and recommended that we propose and seek comment on the flexibilities. Chapter 10 discusses the flexibilities recommended by the Panel, and the flexibilities we are finalizing with today’s rule. We are establishing several provisions that give affected small entities several compliance options aimed specifically at reducing their compliance burdens. In general the options are similar to small entity provisions adopted in prior rulemakings where EPA set standards for other types of nonroad engines. The provisions include extra lead time for complying with the new standards, reduced testing requirements for demonstrating compliance with the new standards, and hardship provisions to address significant economic impacts and unusual circumstances related to the new standards. These provisions are intended to reduce the burden on small entities that will be required to meet the new emission standards when they are implemented. Given all of the flexibilities being adopted for small entities, we believe that this action will not have a significant economic impact on a substantial number of small entities.
Alternative Program Options
In developing the emission standards, we considered several alternatives including less and/or more stringent options. The paragraphs below summarize the information considered in Chapter 11 of the Draft RIA.
Small SI Engines
For Small SI engines, we considered what was achievable with catalyst technology. Our technology assessment work indicated that the emission standards are feasible in the context of

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### Executive Summary
provisions for establishing emission standards pres cribed in section 213 of the Clean Air Act. We also considered what could be achieved with larger, more efficient catalysts and improved fuel induction systems. In particular, Chapte r 4 of the Draft RIA presents data on Class I engines with more active catalysts and on Class II engines with closed-loop control fuel injection systems in addition to a catalyst. In both cases larger emission reductions were achieved.

Based on this work we considered HC+NOx standards which would have involved a 50 percent reduction for Class I engines and a 65-70 percent reduction for Class II engines. Chapter 11 of the Draft RIA evaluates these alternatives, including an assessment of the overall technology and costs of meeting more stringent standards. For Class I engines a 50 percent reduction standard would require base engine changes not necessarily involved with the new standards and the use of a more active catalyst. For Class II engines this would require the widespread use of closed loop control fuel in jection systems rather than carburetors, some additional engine upgrades, and the use three-way catalysts. We believe it is not appropriate at this time to establish more stringent exhaust emission standards for Small SI engines. Our key concern is lead time. More stringent standards would require several years (3-5) more lead time beyond the 2011 model year start date. We believe it would be more effective to implement the Phase 3 standards we are finalizing today to achieve near-term emission reductions needed to reduce ozone precursor emissions and to minimize growth in the Small SI exhaust emissions inventory in the post 2010 time frame. More efficient catalysts, engine improvements, and closed loop electronic fuel injection could be the basis for more stringent emission standards at some point in the future.
Marine SI Engines
In developing the final emission standards for SD/I engines, we considered both what was achievable without catalysts and what could be achieved with larger, more efficient catalysts than those used in our test programs. Without catalysts, we believe exhaust gas recirculation is a technologically feasible and cost-effective approach to reducing emissions from SD/I marine engines. However, we believe greater reductions could be achieved through the use of catalysts. We considered basing an interim standard on EGR, but were concerned that this will divert manufacturers' resources away from catalyst deve lopment and could have the effect of delaying emission reductions from this sector.
Several of the marine engines with catalysts that were tested as part of the development of the standards had HC+NOx emission rates appreciably lower than 5 g/kW-hr, even with consideration of expected in-use emissions deterioration associated with catalyst aging. We considered a 2.5 g/kW-hr HC+NOx standard in our analysis of alternatives. However, we believe a standard of 5 g/kW-hr is still appropriate given the potential variability of in-use performance and in test data.
For OB/PWC engines, we considered a level of 10 g/kW-hr HC+NOx for OB/PWC engines greater than 40 kW with an equivalent percent reduction below the new standards for engines less than 40 kW. This second tier of standards could apply in the 2012 or later time frame. Such a standard would be consistent with currently certified emission levels from a significant number

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### Final Regulatory Impact Analysis
of four-stroke outboard engines. We have three concerns with adopting this second tier of OB/PWC standards. First, while some four-stroke engines may be able to meet a 10 g/kW-hr standard with improved calibrations, it is not clear that all engines could meet this standard without applying catalyst technology. As descri bed in Section IV.H.3 of the preamble, we believe it is not appropriate to base standards in this rule on the use of catalysts for OB/PWC engines. The technology is yet to be adequately demonstrated. Second, certification data for personal watercraft engines show somewhat higher exhaust emission levels, so setting the standard at 10 g/kW-hr would likely require catal ysts for many models. Third, two-stroke direct injection engines operate with lean air-fuel ratios, so reducing NOx emissions with any kind of aftertreatment is challenging.
Therefore, unlike the standards for SD/I engines, we are not pursuing OB/PWC standards that will require the use of catalysts. Cataly st technology would be necessary for significant additional control of HC+NOx and CO emissions. While there is good potential for eventual application of catalyst technology to OB/PWC engines, we believe the technology is not adequately demonstrated at this point.
Evaporative Emission Controls
We considered both less and more stringent evaporative emission control alternatives for fuel systems used in Small SI equipment and Marine SI vessels. Chapter 11 of the Draft RIA presents details on this analysis of regulatory alternatives. The results of this analysis are summarized below. We believe that the permeation standards are reflective of available technology and represent a step change in emissions performance. Therefore, we consider the same permeation control scenario in the less stringent and more stringent regulatory alternatives.
For Small SI equipment, we considered a less stringent alternative without running loss emission standards for Small SI engines. However, we believe that controlling running loss emissions from non-handheld equipment is feasible at a relatively low cost. Running loss emissions can be controlled by changing the fuel tank and cap venting scheme and routing vapors from the fuel tank to the engine intake. Not requiring these controls would be inconsistent with section 213 of the Clean Air Act. For a more stringent alternative, we considered applying a diurnal emission standard for all Small SI equipment. We believe that passively purging carbon canisters could reduce diurnal emissions by 50 to 60 percent from Small SI equipment. However, we believe there would be significant costs to add carbon canisters to all Small SI equipment nationwide, especially when taking packaging and vibration into account. The cost sensitivity is especially noteworthy given the relatively low emissions levels (on a per-equipment basis) from such small fuel tanks.
For Marine SI vessels, we considered a less stringent alternative, where there would be no diurnal emission standard for vessels with installed fuel tanks. However, installed fuel tanks on marine vessels are much larger in capacity than those used in Small SI applications. Our analysis indicates that traditional carbon canisters are feasible for boats at relatively low cost. While packaging and vibration are also issues with marine applications, we believe these issues have been addressed. Carbon canisters were installed on fourteen boats by industry in a pilot

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### Executive Summary
program. The results demonstrated the feasibility of this technology. The standards would be achievable through engineering design-based certification with canisters that are very much smaller than the fuel tanks. In addition, sealed systems, with pressure control strategies would be accepted under the engineering design-based certif ication. For a more stringent scenario, we consider a standard that would require boat builders to use an actively purged carbon canister. This means that, when the engine is operating, it would draw air through the canister to purge the canister of stored hydrocarbons. However, we rejected this option because active purge occurs infrequently due to the low hours of operation per year seen by many boats. The gain in overall efficiency would be quite small relative to the complexity active purge adds into the system in that the engine must be integrated into a vessel-based control strategy. The additional benefit of an actively purged diurnal control system is small in comparison to the cost and complexity of such a system.

Conclusion
We believe the new emission standards reflect what manufacturers can achieve through the application of available technology. We believe the lead time is necessary and adequate for manufacturers to select, design, and produce emission control strategies that will work best for their product lines. We expect that meeting these requirements will pose a challenge, but one that is feasible when taking into consideration the availability and cost of technology, lead time, noise, energy, and safety.

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### Industry Characterization


# CHAPTER 1: Industry Characterization

The information contained in this chapter on the Small SI engine and Marine SI engine industries was assembled by RTI International, a Health, Social and Economics Research firm in cooperation with EPA. RTI prepared one report each on the Small SI and Marine SI industries, “Industry Profile for Small Nonroad Spark Ignition Engines and Equipment” 1 

### and “Industry Profile for Marine SI Industry” 2 

### report. The following sections provide a brief report overview. The reader is encouraged to refer to the reports for greater detail. In addition, this chapter includes an overview of production practices for fu el system component manufacturers. Chapter 10 provides more information on businesses that would be affected by new standards.



## 1.1 Manufacturers of Small SI Engines

The nonroad spark-ignition (SI) industry includes a wide variety of handheld and nonhandheld equipment. Nonhandheld equipment is powered mainly by four-stroke gasoline engines; handheld equipment is powered mainly by two-stroke gasoline engines. Comprising much of what the general public considers "lawn and garden (L&G) equipment," this industry also produces significant numbers of generators, compressors, and construction and maintenance equipment. The industry often refers to itself as the "outdoor power equipment" industry.
The industry profile report prepared by RTI for Small SI provides background information on the engines and equipment that make up the small nonroad SI industry, defined as those products rated less than or equal to 19 kilowatt (kW) (roughly equivalent to 25 horsepower [hp]). The profile describes markets for engines and equipment, and discusses their use in both consumer and commercial applications. In each market, producers and consumers are described, along with product attributes and th e effect of those attributes on production cost and demand. The market analysis emphasizes assessing suppliers' cost of production and industry structure, along with demanders' price responsiveness and consumption alternatives.
The variety of products in this industry is usefully partitioned by both application categories and engine type. Figure 1-1 illustrates the links between the market segments of the Small SI engine supply chain included in the profile, from engine manufacturing and sale to equipment production, and on to purchase by consumers and commercial customers. Although more than 98 percent of total unit sales in the L&G equipment sector go to households, other sectors' sales are dominated by commercial equipment. Because of the significantly higher prices of commercial units, commercial sales represent a considerable share of the total value of production.
It should be noted that there is a fair amount of vertical integration in the handheld industry, with the same parent firm making both engines and the equipment in which those engines are used. Handheld equipment includes string trimmers, leaf blowers, and chainsaws. This situation is known as "captive" engine production; data on internal consumption of engines and transfer prices are typically not availabl e outside the firm. The makers of non-handheld

1-1

### Final Regulatory Impact Analysis
engines typically sell their engines to independent equipment manufacturers in a merchant engine market, where prices and quantities exchanged can be directly observed.
The industry profile report prepared by RTI for Small SI presents information on product characteristics, supply-side considerations, consumer demand, and market structure for small nonroad SI engines. The report also includes similar types of information on equipment markets, broken down by application category. Considerations related to consumer and commercial markets are included in the report.
Figure 1-1: The Nonroad Small SI Industry C o n s u m e r s

N o n i n t e g r a t e d

E q u i p m e n t M a n u f a c t u r e rs I m p o rt s • E n gin es • E q u ip m e n t In te g ra te d E q u i p m e n t M a n u f a c t u r e r s

C a p tiv e E n gin e M a n u f a c t u r e r s M erc h a nt

E n gin e M a n u f a c t u r e rs S m a ll S I E n g i n e M a rk e t s • C l a s s • S iz e C o m m e rc ia l U s e r s

E q u i p m e n t M a r k e ts • L a w n m o w e r s • H a n d h e l d L a w n a n d G a r d e n • O t h e r L a w n a n d G a r d e n • G e n e ra to rs a n d W e ld e rs • C o m p r e s s o rs a n d P u m p s

• R e c r e a t io n a l P r o d u c t s • S n o w B lo w e r s • O t h e r S m a l l S I



## 1.2 Manufacturers of Marine Spark-Ignition Engines

The Marine SI industry is dominated by recreational applications with some commercial use and includes markets for several types of boats, personal watercraft (PWC), and SI engines that power them. The industry profile presented in the “Industry Profile for Marine SI Industry” report by RTI describes producers and consumers for each market segment; product attributes and the effects of these attributes on production costs and demand are described as well. As part of the market characterization, particular emphasis is placed on assessing suppliers’ industrial organization and cost of production and demanders’ price responsiveness and substitution possibilities. The Marine SI industry is divided into three applications areas: outboard (OB) boats, sterndrive and inboard (SD/I) boats, and PWC.

1-2

### Industry Characterization

1.2.1 OB Boats
An OB boat is a vessel powered by one or more gasoline engines, which are located outside the hull at the back of the boat. The engine and drive unit are combined in a single package. An engine can easily be removed from the boat for inspection or repair, and it is quite common for the boat owner to change engines during the life of the vessel. The OB boat segment is the largest of the three application areas; in 2002, 213,000 units were sold, which is more than the combined sales of SD/I and PWC.
The OB application area can be further divided into “recreational” and “luxury” categories. The luxury category includes more-expensive vessels, for which the engine constitutes only a small portion of the cost of the entire vessel. The NMMA distinguishes between 14 types of OB vessels, 10 of which are considered recreational and 4 luxury.

1.2.2 SD/I Boats
SD/I vessels have an engine installed inside the hull of the vessel. An inboard vessel is a boat in which the engine is located inside the hull at the center of the boat with a propeller shaft going through the rear of the boat. A sterndrive (or inboard/outboard) vessel is a boat in which the engine is located inside the hull at the back of the boat with a drive assembly couple directly to the propeller. propeller shaft going through the rear of the boat. In contrast to OB vessels, SD/I vessels’ engine is an integral part. Removal or replacement is significantly more difficult, so most repair work is done with the engine in place. Just like OBs, the SD/I application area is divided into recreational and luxury categories.

1.2.3 PWC
According to the Personal Watercraft Industry Association (PWIA), a PWC is defined as a “vessel with an inboard motor powering a water jet pump as its primary source of motive power, and which is designed to be operated by a person sitting, standing, or kneeling on the vessel.”
The PWC application area is divided into the entry level, high end, and performance categories based on the horsepower ratings of the vessel. These categories correspond to 50 to 100 hp, 100 to 175 hp, and over 175 hp accordingly. Our study considers two categories that were available in 2002: entry level and high end. The performance category was introduced in 2003.

1.2.4 Marine SI Engines
Some OB engine manufacturers specifically build their engines to be incorporated into boats produced by another division within the same parent company. Other manufacturers produce and sell their engines to independent OB boat builders or consumers who need a replacement engine. SD/I engine manufacturers typically build custom engines for SD/I boats by marinizing automotive engines. All PWC vessel manufacturers build their own engines for

1-3

### Final Regulatory Impact Analysis

their vessels
Marine SI engines sold today are a mix of three primary technologies: crankcase scavenged two-stroke engines, direct-injection two-stroke engines, and four-stroke engines. Table 6.2.2-11 in Chapter 6 presents our best estimate of the technology mix for OB and PWC engines by power class. This technology mix is based on data submitted by manufacturers when the certify to our existing HC+NOx exhaust emission standards. Prior to the implementation of the existing standards, the vast majority of outboard and PWC engines were crankcase scavenged two-stroke engines.
The following Figures show the flow of engines from the engine manufacturer to the consumer for the different engine types.

Figure 1-2. OB Marine Economic Model Conceptual Flow Chart



### Consumers New Boats



### Equipment Market

Nonintegrated

Equipment Manufacturers Imports • Engines • Equipment Integrated Equipment Manufacturers

Captive Engine Manufacturers Merchant

Engine Manufacturers 

### Consumers Loose Engines

Marine SI Engine Markets

1-4

### Industry Characterization
Figure 1-3: PWC Economic Model Conceptual Flow Chart

Consumer

Equipment Market

Integrated Equipment Manufacturers

Captive Engine Manufacturers



### Figure 1-4: Inboard Marine Economic Model Conceptual Flow Chart

Consumers

Equipment Market

Nonintegrated

Equipment Manufacturer Integrated Equipment Manufacturer

Captive Engine Marinizer

Merchant Engine Marinizer

Automotive Engine Market

Merchant

Engine Manufacturer Marinized Engine Market

1-5

### Final Regulatory Impact Analysis



## 1.3 Fuel System Components

The primary fuel system components that would be affected by the rule are the fuel tanks and fuel lines on affected equipment and vessels. This section gives an overview of the production practices for these products.

1.3.1 Fuel Tank Production Practices
Plastic fuel tanks are either blow-molded, injection-molded, or rotational-molded. Generally, portable, PWC, and mid-sized Small SI fuel tanks are blow-molded. Blow-molding involves forming polyethylene in large molds using air pressure to shape the tank. Because this has high fixed costs, blow molding is only used where production volumes are high. This works for portable fuel tanks where the volumes are high and a single shape can be used for most applications. For portable tanks, the fuel tank manufacturer will generally design the tank, then send it out to a blow molder for production.
Smaller fuel tanks used in Small SI equipment are often injection-molded. In the injection molding process, fuel tanks are formed by forcing heated plastic into molds at high pressure. Generally, two fuel tank halves are formed, which are later fused together. This process requires high tooling costs, but lower to tal fixed costs than blow-molding. Injectionmolding is typically used for smaller fuel tanks and has the advantage of giving manufacturers the ability to work with complex tank designs.
Larger fuel tanks used on Class II equipment and in boats with installed fuel tanks are typically rotational-molded out of cross-link polyethylene. Rotational-molding is a lower cost alternative for smaller production volumes. In this method, a mold is filled with a powder form of polyethylene with a catalyst material. The mold is rotated in an oven; the heat melts the plastic and activates the catalyst which causes a strong cross-link material structure to form. This method is used for Class II fuel tanks where the tanks are unshielded on the equipment. These fuel tanks also used meet specific size and shape requirements for boats and are preferredbecause they do not rust like metal tanks, but at the same time are more fire resistant than highdensity polyethylene fuel tanks.
Metal fuel tanks are also used on both Small SI equipment and boats. Typically, metal tanks on Small SI equipment are made of steel. These tanks are typically stamped out in two pieces and either welded or formed together with a seal. Aluminum fuel tanks are also used primarily for installed marine fuel tanks because aluminum is more resistant to oxidation than steel. In the marine industry, tank manufacturers generally custom make each tank to meet the boat manufacturers needs. Generally, sheet aluminum is used and is cut, bent, and welded into the required configuration.

1.3.2 Fuel Hose Production Practices
Marine hose is designed to meet the Coast Guard performance requirements as defined by the Society of Automotive Engineer’s recommended practice SAE J 1527. For fuel supply

1-6

### Industry Characterization
lines, this includes a permeation rate of 100 g/m 2 

### /day at 23°C (Class 1). For other fuel hose not normally continuously in contact with fuel (vent and fuel fill neck), the permeation standard is 300 g/m 2 

### /day (Class 2). In general, boat builders will use Class 1 hose for both fuel supply and vent lines for simplicity. Some boat builders use low permeation barrier hose, for which, specifications are now included in SAE J 1527. For fuel fill necks, boat builders generally use Class 2 hose. Small SI hose is typically produced to manufacturer specifications. However, manufacturers may specify hose based on industry standards such as those listed in SAE J30.
Most fuel supply and vent hose is extruded nitrile rubber with a coating for better wear and flame resistance. Hose may also be reinfor ced with fabric or wire. (In contrast, plastic automotive fuel lines are extruded without reinforcement and are generally referred to as “tubing.”) Hose manufacturers offer a wide variety of fuel hoses including those with a barrier layer of low permeability material, such as nyl on, THV, FKM or ethyl vinyl alcohol, either on the inside surface or sandwiched between layers of nitrile rubber. These technologies are discussed in more detail in Chapter 5.
Fuel fill hose used on boats is generally manufactured by hand wrapping layers of rubber and reinforcement materials around a steel mandril. This hose is then heated to cure the rubber. Fuel fill hose generally has a much larger diameter than fuel supply and vent hose and this process offers an effective method of producing this larger diameter hose.
Pre-formed fuel lines are made in two ways. The first, and more common method, is to cut lengths of extruded hose, before it is vulcanized, and slip them over a contoured mandril. The hose is then vulcanized in the oven on the mandril to give it a preformed shape. The second way, primarily used on handheld equipment, but also for some outboard engine fuel system components, is to injection-mold small parts. To make the parts hollow, they are molded with a mandril inside. To remove the mandril, the part is typically inflated with air for just long enough to pull it off the mandril. Primer bulbs are also made in this manner.

1-7

### Final Regulatory Impact Analysis 

## Chapter 1 References

1. “Industry Profile for Small Nonroad Spark-Ignition E ngines and Equipment,” RTI International, October 2006.

2. “Industry Profile for Marine SI I ndustry,” RTI International, October 2006.

1-8

### Final Regulatory Impact Analysis 

## CHAPTER 2: Air Quality, Health, and Welfare Concerns

The standards finalized in this action will reduce emissions of hydrocarbons (HC), oxides of nitrogen (NOx), carbon monoxide (CO) a nd air toxics from the engines, vessels and equipment subject to this rule. Emissions of these pollutants contribut e to ozone, PM and CO nonattainment and to adverse hea lth effects associated with ai r toxics. The emissions from these engines, vessels and equipment also contribute to adverse environmental effects.

The health and environmental effects associat ed with emissions from Small SI engines and equipment and Marine SI engines and ve ssels are a classic example of a negative externality (an activity that imposes uncompens ated costs on others). With a negative externality, an activity’s social cost (the cost on society imposed as a result of the activity taking place) exceeds its private cost (the cost to those directly engaged in the activity). In this case, as described in this chapter, emi ssions from Small SI engines and equipment and Marine SI engines and vessels impose public h ealth and environmental costs on society. The market system itself cannot correct this exte rnality. The end users of the equipment and vessels are often unaware of the environmen tal impacts of their use for lawn care or recreation. Because of this, c onsumers fail to send the market a signal to provide cleaner equipment and vessels. In addition, producers of these engines, equipment, and vessels are rewarded for emphasizing other aspects of these products (e.g., total powe r). To correct this market failure and reduce the nega tive externality, it is necessary to give producers social cost signals. The standards EPA is finalizing will accomplish this by mandating that Small SI engines and equipment and Marine SI engine s and vessels reduce their emissions to a technologically feasible limit. In other words, with this rule the costs of the services provided by these engines and equipment will account for social costs more fully.
In this Chapter we will discuss the impacts of the pollutants emitted by Small SI engines and equipment and Marine SI engines and vessels on health and welfare, National Ambient Air Quality Standard (NAAQS) attain ment, and personal exposure. Air quality modeling and monitoring data presented in this chapter indicate that a large number of people live in counties that are designa ted as nonattainment for either or both of the 8-hour ozone or PM 2.5 

### NAAQS. Figure 2-1 illustrates the wi despread nature of the ozone and PM 2.5 

### nonattainment areas and also depicts mandatory cl ass I areas. The emission standards in this rule will help reduce HC, NOx, PM, air toxic an d CO emissions and their associated health and environmental effects.

2-1

### Air Quality, Health and Welfare Concerns

Figure 2-1: 8-Hour Ozone and PM 2.5 

### Nonattainment Areas and Mandatory Class I Federal Areas



## 2.1 Ozone

In this section we review the health and welfare effects of ozone exposure. We also describe the air quality mon itoring and modeling data that indicates people in many areas across the country are exposed to levels of ambient ozone above the 1997 and 2008 ozone NAAQS. The data also indicates that in the future people will continue to live in counties with ozone levels above the NAAQS without add itional federal, state or local measures. Emissions of volatile organic compounds (VOCs), of which HC are a subset, and NOx from the engines, vessels and equipment subject to this rule contribute to these ozone concentrations. Information on air quality was gathered from a variety of sources, including monitored ozone concentrations , air quality modeling forecasts conducted for this rulemaking, and other state and local air quality information.

2-2

### Final Regulatory Impact Analysis



### 2.1.1 Science of Ozone Formation
Ground-level ozone pollution is formed by the reaction of VOCs and NOx in the atmosphere in the presence of heat and sunlight . These pollutants, often referred to as ozone precursors, are emitted by many types of pollution sources such as highway vehicles and nonroad engines (including those subject to th is rule), power plants, chemical plants, refineries, makers of consumer and commercial products, industrial facilities, and smaller area

sources.
The science of ozone formation, tran sport, and accumulation is complex. 1 

### Groundlevel ozone is produced and destroyed in a cyc lical set of chemical reactions, many of which are sensitive to temperature and sunlight. Wh en ambient temperatures and sunlight levels remain high for several days and the air is re latively stagnant, ozone and its precursors can build up and result in more ozone than typi cally would occur on a single high-temperature day. Ozone can be transported hundreds of m iles downwind of precursor emissions, resulting in elevated ozone levels even in ar eas with low VOC or NOx emissions.
The highest levels of ozone are produ ced when both VOC and NOx emissions are present in significant quantitie s on clear summer days. Relatively small amounts of NOx enable ozone to form rapidly when VOC leve ls are relatively high, but ozone production is quickly limited by removal of the NOx. Under these conditions NOx reductions are highly effective in reducing ozone while VOC reductions have little effect. Such conditions are called “NOx-limited”. Because the contributi on of VOC emissions fr om biogenic (natural) sources to local ambient ozone concentrations can be significant, even some areas where manmade VOC emissions are rela tively low can be NOx-limited.

Ozone concentrations in an area also can be lowered by the reac tion of nitric oxide (NO) with ozone, forming nitrogen dioxide (NO 2 

### ); as the air moves downwind and the cycle continues, the NO 2 

### forms additional ozone. The importance of this reaction depends, in part, on the relative concentrations of NOx, VOC, and ozone, all of which change with time and location. When NOx levels are relatively hi gh and VOC levels relatively low, NOx forms inorganic nitrates (i.e., particles) but relatively little ozone. Such conditions are called “VOClimited”. Under these conditions, VOC reductions are effective in reducing ozone, but NOx reductions can actually increase local ozone under certain circumstan ces. Even in VOClimited urban areas, NOx reductions are not exp ected to increase ozone levels if the NOx reductions are sufficiently large.
Rural areas are usually NOx-limited, due to the relatively large amounts of biogenic VOC emissions in such areas. Urban areas can be either VOC- or NOx-limited, or a mixture of both, in which ozone levels exhibit moderate sensitivity to changes in either pollutant.



### 2.1.2 Health Effects of Ozone Pollution
Exposure to ambient ozone contributes to a wide range of adverse health effects A



### .

A Human exposure to ozone varies o ver time due to changes in ambient ozone concentration and because people move between locations which have notable different ozone concentrations. Also, the amount of ozone



### 2-3

### Air Quality, Health and Welfare Concerns

These health effects are well documented and ar e critically assessed in the EPA ozone air quality criteria document (ozone AQCD) and EPA staff paper. 2,3 

### We are relying on the data and conclusions in the ozone AQCD and staff pape r, regarding the health effects associated with ozone exposure.
Ozone-related health effects include lung f unction decrements, respiratory symptoms, aggravation of asthma, increas ed hospital and emergency room visits, increased asthma medication usage, and a variety of other respir atory effects. Cell-le vel effects such as, inflammation of lungs, have been documented as well. In addition, there is suggestive evidence of a contribution of ozone to cardiov ascular-related morbidity and highly suggestive evidence that short-term ozone exposure directly or indirectly contri butes to non-accidental and cardiopulmonary-related mortality, but add itional research is needed to clarify the underlying mechanisms causing these effects. In a recent report on the estimation of ozonerelated premature mortality published by the National Resear ch Council (NRC), a panel of experts and reviewers concluded that short-term exposure to ambient ozone is likely to contribute to premature deaths and that ozone-related mort ality should be included in estimates of the health benef its of reducing ozone exposure. 4 

### People who appear to be more susceptible to effects associated with exposur e to ozone include child ren, asthmatics and the elderly. Those with greater exposures to ozone, for instance due to time spent outdoors (e.g., children and outdoor workers), are also of concern.
Based on a large number of scientific studi es, EPA has identified several key health effects associated with exposure to levels of ozone found today in many areas of the country. Short-term (1 to 3 hours) and prolonged exposures (6 to 8 hours) to higher ambient ozone concentrations have been linked to lung functio n decrements, respiratory symptoms, increased hospital admissions and emergency room visits for respiratory problems. 5, 6, 7, 8, 9, 10 

### Repeated exposure to ozone can increase susceptibility to respiratory infection and lung inflammation and can aggravate preexisting respiratory diseases, such as asthma. 11, 12, 13, 14, 15 

### Repeated exposure to sufficient concentrations of ozone can also cause inflammation of the lung, impairment of lung defense mechanisms, and possi bly irreversible changes in lung structure, which over time could affect premature aging of the lungs and/or the development of chronic respiratory illnesses, such as emphysema and chronic bronchitis. 16, 17, 18, 19



### Children and adults who are outdoors and act ive during the summer months, such as construction workers, are among those most at risk of elevated ozone exposures. 20 

### Children and outdoor workers tend to have higher ozone exposure because they typically are active outside, working, playing and exercising, duri ng times of day and seasons (e.g., the summer) when ozone levels are highest. 21 

### For example, summer camp studies in the Eastern United States and Southeastern Canada have reported statistically significant reductions in lung function in children who are active outdoors. 22, 23, 24, 25, 26, 27, 28, 29 

### Further, children are more at risk of experiencing health effects from ozone exposure than adults be cause their respiratory systems are still developing. These individuals (as well as people with respiratory illnesses such as asthma, especially asthmatic childre n) can experience reduced lung function and increased respiratory symptoms, such as chest pa in and cough, when exposed to relatively low

delivered to the lung is not only influenced by the ambient concentration but also by the individuals breathing route and rate.



### 2-4

### Final Regulatory Impact Analysis

ozone levels during prolonged pe riods of moderate exertion. 30, 31, 32, 33



### 2.1.3 Current Ozone Levels
The small SI and marine SI engine emission reductions will assist ozone nonattainment areas in reaching the standard by each area’s respective attainment date and/or assist in maintaining the ozone standard in th e future. In this and the following section we present information on current and m odel-projected future ozone levels.

A nonattainment area is defined in the CAA as an area that is viol ating a NAAQS or is contributing to a nearby area th at is violating the NAAQS. EPA designated nonattainment areas for the 1997 ozone NAAQS in June 2004. Th e final rule on Air Quality Designations and Classifications for the 1997 Ozone NAAQS (69 FR 23858, April 30, 2004) identifies the criteria that EPA considered in making the 1997 8-hour ozone nonattainment designations, including 2001-2003 measured data, air quality in adjacent areas, and other factors. B



### As of March 12, 2008 there are approximate ly 140 million people living in 72 areas designated as nonattainment with the 1997 8-hour ozone NAAQS. There are 337 full or partial counties that make up the 8-hour ozone nonattainment areas. These numbers do not include the people living in areas where there is a future risk of failing to maintain or attain the 8-hour ozone NAAQS. The 1997 8-hour ozone nonattainment areas, nonattainment counties, and populations are listed in Appendix 2A to this RIA.
EPA has recently amended the ozone NAA QS (73 FR 16436, March 27, 2008). The final ozone NAAQS rule addresses revisions to the primary and secondary NAAQS for ozone to provide increased protection of public health and welfare, re spectively. With regard to the primary standard for ozone, EPA has revised the level of the 8-hour standard to 0.075 parts per million (ppm), expressed to three decimal pla ces. With regard to the secondary standard for ozone, EPA has revised the current 8-hour st andard by making it identical to the revised primary standard.

States with ozone nonattainment areas are re quired to take action to bring those areas into compliance in the future. The attainment da te assigned to an ozone nonattainment area is based on the area’s classification. Most ozone nonattainment areas will be required to attain the 1997 8-hour ozone NAAQS in the 2007 to 20 13 time frame and then be required to maintain it thereafter. C 

### The attainment dates associated with the potential nonattainment areas

B An ozone design value is the conc entration that dete rmines whether a monitoring site meets the NAAQS for ozone. Because of the way they are defined, design values are determined based on three consecutive-year monitoring periods. For example, an 8-hour ozone design value is the fourth highest daily maximum 8-hour average ozone concentration measured over a three-year period at a given monitor. The full details of these determinations (including accounting for missing values and other complexities) are given in Appendices H and I of 40 CFR Part 50. For a county, the design value is the highest design value from among all the monitors with valid design values within that county. If a county does not contain an ozone monitor, it does not have a design value. However, readers should note that ozone design values generally represent air quality across a broad area and that absence of a design value do es not imply that the county is in compliance with the ozone NAAQS.

C The Los Angeles South Coast Air Basin 8-hour ozone nonattainment area is designated as severe and will have to attain before June 15, 2021. The South Coast Air Basi n has recently applied to be redesignated as an extreme



### 2-5

### Air Quality, Health and Welfare Concerns

based on the 2008 8-hour ozone NAAQS will likely be in the 2013 to 2021 timeframe, depending on the severity of the problem. Table 2-1 provides an estimate, based on 2004-06 air quality data, of the countie s with design values greater than the 2008 ozone NAAQS. We expect many of the ozone nonattainment areas will need to adopt additional emissions reduction programs to attain and maintain the ozone NAAQS. The expected VOC and NO
x 

### reductions from these standards, which take e ffect between 2009 and 2013, will be useful to states as they seek to either at tain or maintain the ozone NAAQS.
Table 2-1 Counties with Design Va lues Greater Than the 2008 Ozone NAAQS Based on 2004-2006 Air Quality Data Number of Counties Population a



### 1997 Ozone Standard: counties within the 72 areas currently designa ted as nonattainment 337 139,633,458

2008 Ozone Standard: additional counties that would not meet the 2008 NAAQS b 

### 74 15,984,135

Total 411 155,617,593
Notes:

a Population numbers are from 2000 census data. b Attainment designations for the 2008 ozone NAAQS have not yet been made. Nonattainment for the 2008 Ozone NAAQS will be based on three years of air quality da ta from later years. Also, the county numbers in the table include only the counties with monitors violating the 2008 Ozone NAAQS. The numbers in this table may be an underestimate of the number of counties and populations that will eventually be included in areas with multiple counties designated nonattainment.



### 2.1.4 Projected Ozone Levels
In conjunction with this rulemaking, we pe rformed a series of air quality modeling simulations for the continental U.S. The m odel simulations were performed for several emissions scenarios including the following: 2002 baseline projection, 2020 baseline projection, 2020 baseline projec tion with small SI/marine SI engine controls, 2030 baseline projection, and 2030 baseline projection with small SI/marine SI engine controls. Information on the air quality modeling met hodology is contained in Section 2.3 as well as the air quality modeling technical support document (AQ TSD). In the following sections we describe our modeling of 8-hour ozone levels in the future with a nd without the controls being finalized in this action.

2.1.4.1 Projected 8-Hour Ozone Levels without this Rulemaking
EPA has already adopted many emission contro l programs that are e xpected to reduce ambient ozone levels. These control programs include the Locomotive and Marine Rule (73 FR 25098, May 6, 2008), Clean Air Interstate Rule (70 FR 25162, May 12, 2005), the Clean Air Nonroad Diesel rule (69 FR 38957, June 29, 2004), and the Heavy Duty Engine and Vehicle Standards and Highway Diesel Fuel Sulfur Control Requirements (66 FR 5002, Jan. 18, 2001). As a result of these programs, the num ber of areas that continue to violate the 8- hour ozone NAAQS in the future is expected to decrease.

nonattainment area which will make their attainment date June 15, 2024.



### 2-6

### Final Regulatory Impact Analysis

The baseline air quality m odeling completed for this ru le predicts that without additional local, regional or national controls ther e will continue to be a need for reductions in 8-hour ozone concentrations in some areas in the future. The determination that an area is at risk of exceeding the 8-hour ozone standard in the future was made for all areas with current design values greater than or equal to 85 ppb (or within a 10 per cent margin) and with modeling evidence that concentrations at and abov e these levels will persist into the future. D 

### Those interested in greater detail should re view the air quality modeling TSD which is included in the docket for this rule. 34



### The baseline inventories that underlie the modeling conducted for this rulemaking include emission reductions from existing federa l, state and local controls. There was no attempt to examine the prospects of areas attain ing or maintaining the standard with future possible controls. We expect many of the areas to adopt additional emission reduction programs, but we are unable to quantify or rely upon future reductions from additional programs since they have not yet been promul gated. With reductions from programs already in place (but excluding the emission reductions from this rule), the number of counties in 2020 with projected 8-hour ozone design values at or above 85 ppb is expected to be 8 with a population of 22 million people. In additi on, in 2020, 37 counties where 27 million people are projected to live, will be within 10 percent of violating the 1997 8-hour ozone NAAQS. The results should therefore be interpreted as indica ting counties at risk for violating the ozone NAAQS in the future without additional federal, state or local measures in addition to this rulemaking.

2.1.4.2 Projected 8-Hour Ozone Levels with this Rulemaking

This section summarizes the results of our modeling of ozone air quality impacts in the future due to the reductions in small SI and marine SI emi ssions finalized in this action. Specifically, we compare baseline scenarios to scenarios with controls. Our modeling indicates that the reductions from this rule will provide nationwide improvements in ambient ozone concentrations and minimize the risk of ex posures in future years. Since some of the VOC and NO
x 

### emission reductions from this rule go in to effect during the period when some areas are still working to attain the 8-hour ozone NAAQS, the projec ted emission reductions will assist state and local agencies in their effort to attain the 8-hour ozone standard and help others maintain the standard. Emissions reducti ons from this rule will also help to counter potential ozone increases due to climate change , which are expected in many urban areas in the United States, but are not refl ected in the modeling shown here. 35



### On a population-weighted basis, the averag e modeled future-year 8-hour ozone design values will decrease by 0.57 ppb in 2020 and 0.76 ppb in 2030. Table 2-2 shows the average change in future year eight-hour ozone design values for: (1) all c ounties with 2002 baseline design values, (2) counties with baseline desi gn values that exceeded the standard in 2000- 2004 (“violating” counties), (3) counties that di d not exceed the standar d, but were within 10 percent of it in 2000-2004, (4) counties with futu re year design values that exceeded the

D Ozone design values are reported in parts per million (ppm) as specified in 40 CFR Part 50. Due to the scale of the design value changes in this action results have been presented in parts per billion (ppb) format.



### 2-7

### Air Quality, Health and Welfare Concerns

standard, and (5) counties with fu ture year design values that di d not exceed the standard, but were within 10 percent of it in 2020 and 2030. Counties within ten percent of the standard are intended to reflect counties that meet the standard, but will likely benefit from help in maintaining that status in the face of growth. All of these metrics show a decrease in 2020 and 2030, indicating in five different ways th e overall improvement in ozone air quality.

Table 2-2 Average Change in Projected Future Year 8-hour Ozone Design Value as a Result of the Small SI and Marine SI controls Average a 

### Number of US Counties Change in 2020 design value b 

### (ppb) Change in 2030 design value b 

### (ppb) All 660 -0.47 -0.66 All, population-weighted 660 -0.57 -0.76 Counties whose base year is violating the 1997 8-hour ozone standard 261 -0.62 -0.88
Counties whose base year is violating the 1997 8-hour ozone standard, population-weighted 261 -0.61 -0.80
Counties whose base year is within 10 percent of the 1997 8-hour ozone standard 223 -0.42 -0.61
Counties whose base year is within 10 percent ofthe 1997 8-hour ozone standard, populationweighted 223 -0.55 -0.78

Counties whose future year is violating the 1997 8-hour ozone standard 8 (2020) 6 (2030) -0.13 -0.10
Counties whose future year is violating the 1997 8-hour ozone standard, population-weighted 8 (2020) 6 (2030) -0.17 -0.13
Counties whose future year is within 10 percent of the 1997 8-hour ozone standard 37 (2020) 23 (2030) -0.71 -1.05
Counties whose future year is within 10 percent of the 1997 8-hour ozone standard, populationweighted 37 (2020) 23 (2030) -0.54 -0.79

Notes:

a averages are over counties with 2002 modeled design values b Ozone design values are reported in parts per million (ppm) as specified in 40 CFR Part 50. Due to the scale of the design value changes in this action results have been presented in parts per billion (ppb) format.



### Table 2-3 lists the counties w ith projected 8-hour ozone desi gn values that violate or are within 10 percent of the 1997 8-hour ozone standard in 2020after application of the small SI and marine SI controls. Counties are marked with a “V” in the table if their projected design values are greater than or equal to 85 ppb. Counties are marked with an “X” in the table if their projected annual de sign values are greater than or equal to 76.5 ppb, but less than 85 ppb. The counties marked “X” are not projected to violate the standar d, but to be close to it, so the rule will help assure that these count ies continue to meet the standard. The current design values are also presented in Table 2-3. Recall that we project fu ture design values only for counties that have current design values, so this list is limited to those counties with ambient monitoring data sufficient to cal culate current 3-ye ar design values.

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### Final Regulatory Impact Analysis

Figure 2-2 illustrates the geographic impact of the small SI and marine SI engine controls on 8-hour ozone design values in 2020. Some of the most significant decreases will occur in the great lakes region, the gulf coast re gion, the northeast corrid or and in the Seattle region. The maximum decreases in a 2020 de sign values is 2.0 ppb in Cape Cod, Massachusetts.

2-9

### Air Quality, Health and Welfare Concerns

Table 2-3 Counties with 2020 8-hour Ozone Design Values in Violation or Within 10 percent of the 1997 Ozone Standard as a Result of the Small SI and Marine SI Controls

State County 2000-2004 Average 8-Hour Ozone DV (ppb) a 2020 modeling projections of 8-Hour Ozone DV 2020 Population CA El Dorado 105.0 X 236,310 CA Fresno 110.0 X 1,066,878 CA Kern 114.3 X 876,131 CA Kings 95.7 V 173,390
CA Los Angeles 121.3 X 10,376,013 CA Madera 91.0 V 173,940 CA Merced 101.7 V 277,863 CA Nevada 97.7 V 131,831 CA Orange 85.3 V 3,900,599 CA Placer 98.3 V 451,620 CA Riverside 115.0 X 2,252,510 CA Sacramento 99.0 V 1,640,590 CA San Bernardino 128.7 X 2,424,764 CA San Diego 92.3 V 3,863,460 CA Stanislaus 95.0 V 607,766 CA Tulare 105.7 X 477,296 CA Tuolumne 91.0 V 70,570 CT Fairfield 98.3 V 962,824 CT New Haven 98.3 V 898,415 IN Lake 88.3 V 509,293 LA East Baton Rouge 87.0 V 522,399 MD Harford 100.3 V 317,847 NJ Camden 99.7 V 547,817 NJ Gloucester 98.0 V 304,105 NJ Mercer 97.7 V 392,236 NJ Ocean 105. 7 V 644,323 NY Suffolk 97.0 V 1,598,742 OH Ashtabula 95.7 V 108,355 OH Geauga 99.0 V 114,438 PA Bucks 99.0 V 711,275 PA Philadelphia 96.7 V 1,394,176 TX Brazoria 94.0 V 322,385 TX Harris 102.0 X 4,588,812 TX Jefferson 91.0 V 272,075 WI Kenosha 98.3 V 184,825 WI Racine 91.7 V 212,351 WI Sheboygan 97.0 V 128,777 Notes:

a Ozone design values are reported in parts per million (ppm) as specified in 40 CFR Part 50. Due to the scale of the design value changes in this action results have been presented in parts per billion (ppb) format.



### 2-10Final Regulatory Impact AnalysisNumber of Counties169186360Legend<= -2.0> -2.0 to -1.0> -1.0 to -0.5= 0.0> 0.0> -0.5 to -0.14402020cc_bond impactFigure 2-2 Impact of Small SI and Marine SI controls on 8-hour OzoneDesign Values in 2020 (units are ppb)2-11

### 2.1.5 Environmental Effects of Ozone Pollution
There are a number of public welfare effects associated with the presence of ozone in the ambient air. 36 

### In this section we discuss the imp act of ozone on plants, including trees, agronomic crops and urban ornamentals.

2.1.5.1 Impacts on Vegetation
The Air Quality Criteria Document for Ozone and related Photochemical Oxidants notes that “ozone affects ve getation throughout the United States, impairing crops, native vegetation, and ecosystems more than any othe r air pollutant. Like carbon dioxide (CO 2 

### ) and other gaseous substances, ozone enters plant tissues primarily through apertures (stomata) in leaves in a process called “uptake”. 37 

### Once sufficient levels of ozone, a highly reactive substance, (or its reaction products ) reaches the interior of plant cells, it can inhibit or damage essential cellular components and functions, including enzyme activities, lipids, and cellular membranes, disrupting the plant's osmotic (i .e., water) balance and energy utilization patterns. 38,39 

### This damage is commonly manifested as vi sible foliar injury such as chlorotic or necrotic spots, increased leaf senescence (accelerated leaf ag ing) and/or reduced photosynthesis. All these eff ects reduce a plant’s capacity to form carbohydrates, which are the primary form of energy used by plants. 40 

### With fewer resources available, the plant reallocates existing resources away from root growth and storage, above ground growth or yield, and reproductive processes, toward leaf repair and main tenance. Studies have shown that plants stressed in these ways may exhibi t a general loss of vigor , which can lead to secondary impacts that modify pl ants' responses to other environmental factors. Specifically, plants may become more sensitive to other air po llutants, more susceptible to disease, insect attack, harsh weather (e.g., drought , frost) and other environmen tal stresses. Furthermore, there is evidence that ozone can interfere w ith the formation of mycorrhiza, essential symbiotic fungi associated with the roots of most te rrestrial plants, by re ducing the amount of carbon available for transfer fr om the host to the symbiont. 41,42



### Ozone can produce both acute and chronic in jury in sensitive species depending on the concentration level and the duration of the e xposure. Ozone effects also tend to accumulate over the growing season of the plant, so that even lower concentrations experienced for a longer duration have the potential to create chronic stress on sensitive vegetation. Not all plants, however, are equally sensitive to ozone. Much of the variation in sensitivity between individual plants or whole species is related to the plant’s abilit y to regulate the extent of gas exchange via leaf stomata (e.g., avoidance of O 3 

### uptake through closure of stomata). 43,44,45 

### Other resistance mechanisms may involve th e intercellular produc tion of detoxifying substances. Several biochemical substances capab le of detoxifying ozone have been reported to occur in plants including the antioxidants ascorbate and glutathione. After injuries have occurred, plants may be capable of re pairing the damage to a limited extent. 46



### Because of the differing sens itivities among plants to oz one, ozone pollution can also exert a selective pressure that leads to changes in plant co mmunity composition. Given the range of plant sensitivities and the fact that numerous other environmental factors modify plant uptake and response to ozone, it is not po ssible to identify threshold values above which

2-12Regulatory Impact Analysis



### ozone is consistently toxic for all plants. The next few paragraphs present additional information on ozone damage to trees, ecosyst ems, agronomic crops and urban ornamentals.
Ozone also has been conclusively shown to cause discernible injury to forest trees. 47,48 

### In terms of forest productivity and ecosystem diversity, ozone may be the pollutant with the greatest potential for regional-scale forest impact s. Studies have demonstrated repeatedly that ozone concentrations commonly observed in poll uted areas can have substantial impacts on plant function. 49, 50



### Because plants are at the center of the food web in many ecosystems, changes to the plant community can affect associated organism s and ecosystems (including the suitability of habitats that support th reatened or endangered species a nd below ground organisms living in the root zone). Ozone impacts at the community and ecosystem level vary widely depending upon numerous factors, includi ng concentration and temporal variation of tropospheric ozone, species composition, soil prope rties and climatic factors. 51 

### In most instances, responses to chronic or recurrent exposure in forested eco systems are subtle and not observable for many years. These injuries can cause stand-le vel forest decline in sensitive ecosystems. 52,53,54 

### It is not yet possible to predict ecosystem respons es to ozone with much certainty; however, considerable knowledge of pot ential ecosystem responses ha s been acquired through longterm observations in highly dama ged forests in the United States.
Laboratory and field experime nts have also shown reductions in yields for agronomic crops exposed to ozone, includi ng vegetables (e.g., lettuce) an d field crops (e.g., cotton and wheat). The most extensive field experi ments, conducted under the National Crop Loss Assessment Network (NCLAN) examined 15 speci es and numerous cultivars. The NCLAN results show that “several economically importa nt crop species are sens itive to ozone levels typical of those found in the Unites States.” 55 

### In addition, economic studies have shown reduced economic benefits as a result of pred icted reductions in crop yields associated with observed ozone levels. 56, 57, 58



### Urban ornamentals represent an additional vegetation category likely to experience some degree of negative effects associated with exposure to ambient ozone levels. It is estimated that more than $20 billion (1990 dol lars) are spent annually on landscaping using ornamentals, both by private property owners/tenants and by governmental units responsible for public areas. 59 

### This is therefore a potentially costly environmental effect. However, in the absence of adequate exposure-response func tions and economic damage functions for the potential range of effects relevant to these type s of vegetation, no direct quantitative analysis has been conducted.



## 2.2 Particulate Matter

In this section we review th e health and welfare effects of PM. We also describe air quality monitoring and modeling da ta that indicate many areas acr oss the country continue to be exposed to levels of ambient PM above the NAAQS. Emissions of PM, HCs and NOx from the engines, vessels and equipment subj ect to this rule contribute to these PM concentrations. Information on air quality was gathered from a variety of sources, including

2-13

### monitored PM concentrations, air quality m odeling forecasts conducted for this rulemaking, and other state and local air quality information.



### 2.2.1 Science of PM Formation
Particulate matter (PM) repr esents a broad class of chem ically and physically diverse substances. It can be principally characterized as discrete partic les that exist in the condensed (liquid or solid) phase spanning severa l orders of magnitude in size. PM 10 

### refers to particles generally less than or equal to 10 micrometers ( F m) in aerodynamic diameter. PM 2.5 

### refers to fine particles, generally less than or equal to 2.5 F m in aerodynamic diameter. Inhalable (or "thoracic") coarse particles refer to th ose particles generally greater than 2.5 F m but less than or equal to 10 F m in aerodynamic diameter. Ultrafine PM refers to particles generally less than 100 nanometers (0.1 F m) in aerodynamic diameter. Larger particles (>10 F m) tend to be removed by the respiratory clearance mechanis ms, whereas smaller particles are deposited deeper in the lungs.
Fine particles are produce d primarily by combustion processes and by transformations of gaseous emissions (e.g., SOx, NOx and VOCs) in the atmosphere. The chemical and physical properties of PM 2.5 

### may vary greatly with time, region, meteorology and source category. Thus, PM 2.5 

### , may include a complex mixture of different pollutants including sulfates, nitrates, organic compounds, elem ental carbon and metal compounds. These particles can remain in the atmosphere for days to weeks and travel through the atmosphere hundreds to thousands of kilometers.
Particles span many sizes and shapes and c onsist of hundreds of different chemicals. Particles are emitted directly from sources and are also formed through atmospheric chemical reactions; the former are often re ferred to as “primary” particle s, and the latter as “secondary” particles. In addition, there are also physic al, non-chemical reaction mechanisms that contribute to secondary particles. Particle pollution also vari es by time of year and location and is affected by several weathe r-related factors, such as temperature, clouds, humidity, and wind. A further layer of complexity comes fr om a particle’s abili ty to shift between solid/liquid and gaseous phases, which is influenced by concentration, meteorology, and temperature.



### 2.2.2 Health Effects of PM

As stated in EPA’s Part iculate Matter Air Quality Criteria Document (PM AQCD), available scientific findings “demonstrate well that human health outcomes are associated with ambient PM.” E 

### We are relying on the data and conclusions in the PM AQCD and PM Staff Paper, which reflects EPA’s analysis of policy-relevant scienc e from the PM AQCD, regarding the health effects asso ciated with particulate matter. 60,61 

### We also present additional

E Personal exposure includes contrib utions from many different types of particles, from many sources, and in many different environments. Total personal exposure to PM includes both ambient and nonambient components; and both components may contribute to adverse health effects.



### 2-14Regulatory Impact Analysis



### recent studies published after the cut-off date for the PM AQCD. F62 

### Taken together this information supports the conclusion that PM-related emissions such as those controlled in this action are associated with adverse health eff ects. Information on PM-related mortality and morbidity is presented first, followed by in formation on near-roadway exposure studies, marine ports and rail yard exposure studies.

2.2.2.1 Short-term Exposure Mortality and Morbidity Studies
As discussed in the PM AQCD, short-term exposure to PM 2.5 

### is associated with mortality from cardiopulmonary diseases (PM AQCD, p. 8-305), hospitalization and emergency department visits for cardiopulmona ry diseases (PM AQCD, p. 9-93), increased respiratory symptoms (PM AQC D, p. 9-46), decreased lung f unction (PM AQCD Table 8-34) and physiological changes or biomarkers fo r cardiac changes (PM AQCD, Section 8.3.1.3.4). In addition, the PM AQCD describes a limited body of new evidence from epidemiologic studies for potential relationships between shor t term exposure to PM and health endpoints such as low birth weight, pr eterm birth, and neonatal and infant mortality. (PM AQCD, Section 8.3.4).
Among the studies of effects from short-term exposure to PM 2.5 

### , several specifically address the contribution of mob ile sources to short-term PM 2.5 

### effects on daily mortality. These studies indicate that there are statisti cally significant associat ions between mortality and PM related to mobile source emissions (PM AQCD, p.8-85). The analyses incorporate source apportionment tools into daily mortal ity studies and are br iefly mentioned here. Analyses incorporating source a pportionment by factor analysis with daily time-series studies of daily death indicated a relati onship between mobile source PM 2.5 

### and mortality. 63,64 

### Another recent study in 14 U.S. c ities examined the effect of PM 10 

### exposures on daily hospital admissions for cardiovascular disease. This study found that the effect of PM 10 

### was significantly greater in areas w ith a larger proportion of PM 10 

### coming from motor vehicles, indicating that PM 10 

### from these sources may have a greate r effect on the toxi city of ambient PM 10 

### when compared with other sources. 65 

### These studies provide evidence that PM-related emissions, specifically from mobile sources, ar e associated with adverse health effects
Long-term Exposure Mortality and Morbidity Studies
Long-term exposure to elevated ambient PM 2.5 

### is associated with mortality from cardiopulmonary diseases and lung cancer (PM AQCD, p. 8-307), and effects on the respiratory system such as decreased lung func tion or the development of chronic respiratory disease (PM AQCD, pp. 8-313, 8-314). Of speci fic importance to this rulemaking, the PM AQCD also notes that the PM components of gasoline and diesel engine exhaust represent

F These additional studies are includ ed in the 2006 Provisional Assessment of Recent Studies on Health Effects of Particulate Matter Exposure. The provisional assessment did not and could not (given a very short timeframe) undergo the extensive critical review by EPA, CASAC, and the public, as did the PM AQCD. The provisional assessment found that the “new” studies expand the scientific information and provide important insights on the relationship between PM exposure and health effects of PM. The provisional assessment also found that “new” studies generally strengthen the evidence that acute and chronic exposure to fine particles and acute exposure to thoracic coarse particles are asso ciated with h ealth effects.



### 2-15

### one class of hypothesized likely important contributors to the observed ambient PM-related increases in lung cancer incidence and mortality (PM AQCD, p. 8-318).
The PM AQCD and PM Staff Paper emphasi ze the results of two long-term studies, the Six Cities and American Cancer Societ y (ACS) prospective cohort studies, based on several factors – the inclusion of measured PM data, the fact that the study populations were similar to the general populati on, and the fact that these st udies have undergone extensive reanalysis (PM AQCD, p. 8-306, Staff Paper, p.3-18). 66,67,68 

### These studies indicate that there are significant associations for all-cause, cardiopulmonary, and lung cancer mortality with long-term exposure to PM 2.5 

### . One analysis of a subset of the ACS cohort data, which was published after the PM AQCD was finalized bu t in time for the 2006 Provisional Assessment, found a larger association than had previ ously been reported between long-term PM 2.5 

### exposure and mortality in the Los Angeles area using a new exposure estimation method that accounted for variations in c oncentration within the city. 69



### As discussed in the PM AQCD, the morbidity studies that combine the features of cross-sectional and cohort stud ies provide the best evidence fo r chronic exposure effects. Long-term studies evaluating the effect of ambient PM on children’s development have shown some evidence indicating effects of PM 2.5 

### and/or PM 10 

### on reduced lung function growth (PM AQCD, Section 8.3.3.2.3). In anothe r recent publication included in the 2006 Provisional Assessment, investigators in southe rn California reported th e results of a crosssectional study of outdoor PM 2.5 

### and measures of atherosclero sis in the Los Angeles basin. 70 

### The study found significant associati ons between ambient residential PM 2.5 

### and carotid intima-media thickness (CIMT), an indicator of subclinical atherosclerosis, an underlying factor in cardiovascular disease.

2.2.2.3 Roadway-Related PM Exposure and Health Studies
A recent body of studies examines traffic -related PM exposures and adverse health effects. These studies are relevant to this rule because highway SI vehicles and nonroad SI engines, vessels and equipment have similar chemical and physical exhaust properties. However, this comparison is qualitative in nature since the near-road environment is influenced by both gasoline (SI) and diesel vehicles, as well as re-entrained road dust and brake and tire wear. One study was done in No rth Carolina looking at concentrations of PM 2.5 

### inside police cars and correspondi ng physiological changes in th e police personnel driving the cars. The authors report signifi cant elevations in markers of cardiac risk associated with concentrations of PM 2.5 

### inside police cars on Nort h Carolina state highways. 71 

### Other studies have found associations between traffic-generated particle con centrations at residences and adverse effects, including all-cause mortalit y, infant respiratory symptoms, and reduced cognitive functional development. 72,73,74,75 

### There are other pollutants present in the near roadway environment, including air toxics wh ich are discussed in Section 2.4. Additional information on near-roadway health effects can be found in the recent Mobile Source Air Toxics rule (72 FR 8428, February 26, 2007).

2-16Regulatory Impact Analysis



### 2.2.3 Current and Proj ected PM Levels

The emission reductions from this rule will assist PM nonattainment areas in reaching the standard by each area’s resp ective attainment date and assist PM maintenance areas in maintaining the PM standards in the future. In this and the following section we present information on current and model-projected future PM levels.

2.2.3.1 Current PM 2.5 

### Levels
The small SI and marine SI engine emissi on reductions will assist PM nonattainment areas in reaching the standard by each area’s re spective attainment date and/or assist in maintaining the PM standard in the future. In this and the following section we present information on current and model-projected future PM levels.

A nonattainment area is defined in the Cl ean Air Act (CAA) as an area that is violating an ambient standard or is contributing to a n earby area that is violating the standard. In 2005, EPA designated 39 nonattainment areas for the 1997 PM 2.5 

### NAAQS based on air quality design values and a number of othe r factors (70 FR 943, January 5, 2005; 70 FR 19844, April 14, 2005). G 

### These areas are comprised of 208 fu ll or partial counties with a total population exceeding 88 million. The 1997 PM 2.5 

### nonattainment counties, areas and populations, as of March 2008, are listed in Appendix 2B to this RIA.
EPA has recently amended the NAAQS for PM 2.5 

### (71 FR 61144, October 17, 2006). The final PM NAAQS rule addressed revisions to the primary and secondary NAAQS for PM 2.5 

### to provide increased protection of public h ealth and welfare, respectively. The primary PM 2.5 

### NAAQS includes a short-term (24-hour) and a long-term (annua l) standard. The level of the 24-hour PM 2.5 

### NAAQS has been revised from 65 μ g/m 3 

### to 35 μ g/m 3 

### to provide increased protection against health effects associated with short-term exposures to fine particles. The current form of the 24-hour PM 2.5 

### standard was retained (e.g., based on the 98th percentile concentration averaged over three years). The leve l of the annual PM 2.5 

### NAAQS was retained at 15 μ g/m 3 

### , continuing protection against health effects associated with long-term exposures. The current form of the annual PM 2.5 

### standard was retained as an annual arithmetic mean averaged over three years, however, the following two aspects of the spatial averaging criteria were narrowed: (1) the annual mean concentratio n at each site will now be within 10 percent of the spatially averaged annual mean, and (2) the daily values for each monitoring site pair will now yield a correlation coefficient of at least 0.9 for each calendar quarter.
With regard to the secondary standards for PM 2.5 

### , EPA has revised these standards to be identical in all respects to the revised primary standards. Specifically, EPA has revised the current 24-hour PM 2.5 

### secondary standard by making it id entical to the revised 24-hour PM 2.5 

### primary standard and retained the annual PM 2.5 

### secondary standard. This suite of secondary PM 2.5 

### standards is intended to pr ovide protection against PM-rel ated public welfare effects, including visibility impairment, effects on ve getation and ecosystems, and material damage and soiling.

G The full details involved in calcula ting a PM 2.5 design value are given in Appendix N of 40 CFR Part 50.



### 2-17

### States with PM 2.5 

### nonattainment areas will be require d to take action to bring those areas into compliance in the future. Most PM 2.5 

### nonattainment areas will be required to attain the 1997 PM 2.5 

### NAAQS in the 2010 to 2015 time frame a nd then be required to maintain the 1997 PM 2.5 

### NAAQS thereafter. H 

### Nonattainment areas will be designated with respect to the 2006 PM 2.5 

### NAAQS in early 2010. The attainment dates associated with the potential nonattainment areas based on the 2006 PM 2.5 

### NAAQS will likely be in the 2014 to 2019 timeframe. Table 2-4 provides an estimate, ba sed on 2003-05 air quality data, of the counties with design values gr eater than the 2006 PM 2.5 

### NAAQS. The emission standards being finalized in this action will become eff ective between 2009 and 2013. The expected PM 2.5 

### inventory reductions will be useful to st ates in attaining or maintaining the PM 2.5 

### NAAQS.
Table 2-4 Counties with Design Va lues Greater Than the 2006 PM 2.5 

### NAAQS Based on 2003- 2005 Air Quality Data Number of Counties Population a



### 1997 PM 2.5 

### Standards: counties within the 39 areas currently designa ted as nonattainment 208 88,394,000

2006 PM 2.5 

### Standards: additional counties that would not meet the 2006 NAAQS b 

### 49 18,198,676

Total 257 106,592,676
Notes:

a Population numbers are from 2000 census data. b Attainment designations for the 2006 PM 2.5 NAAQS have not yet been made. Nonattainment for the 2006 PM 2.5 NAAQS will be based on th ree years of air quality data from later years. Also, the county numbers in the table include only the counties with monitors violating the 2006 PM 2.5 NAAQS. The numbers in this table may be an underestimate of the number of counties and populations that will eventually be included in areas with multiple counties designated nonattainment.

H The EPA finalized PM 2.5 attainment and nonattainment areas in April 2005. The EPA finalized the PM Implementation rule in March 2007.



### 2-18Regulatory Impact Analysis



### 2.2.3.2 Current PM 10 

### Levels
EPA designated PM 10 

### nonattainment areas in 1990. I 

### As of March 2008, approximately 28 million people live in the 47 areas that are designated as PM 10 

### nonattainment, for either failing to meet the PM 10 

### NAAQS or for cont ributing to poor air quality in a nearby area. There are 46 fu ll or partial counties that make up the PM 10 

### nonattainment areas. J



### 2.2.3.3 Projected PM 2.5 

### Levels
In conjunction with this rulemaking, we pe rformed a series of air quality modeling simulations for the continental U.S. The m odel simulations were performed for several emissions scenarios including the following: 2002 baseline projection, 2020 baseline projection, 2020 baseline projec tion with small SI/marine SI engine controls, 2030 baseline projection, and 2030 baseline projection with small SI/marine SI engine controls. Information on the air quality modeling met hodology is contained in Section 2.3 as well as the air quality modeling technical support document (AQ TSD). In the following sections we describe projected PM 2.5 

### levels in the future with and without th e controls being finalized in this action.

2.2.3.2.1 Projected PM 2.5 

### Levels without this Rulemaking

Even with the implementation of all current state and federal re gulations, including the Locomotive and Marine Rule, CAIR Rule, the NO
x 

### SIP call, nonroad and on-road diesel rules and the Tier 2 rule, there are projecte d to be U.S. counties violating the PM 2.5 

### NAAQS well into the future. The model outputs from the 2002, 2020 and 2030 baselines, combined with current air quality data, were used to identify areas expected to exceed the PM 2.5 

### NAAQS in the future.
The baseline air quality mode ling conducted for this final rule projects that in 2020, with all current controls in effect, up to 11 counties, with a population of 25 million people, may not attain the annual standard of 15 μg/m 3. 

### This does not account for additional areas that have air quality measurements within 10 percent of the PM 2.5 

### standard. These areas, although not violating the standard, will also be nefit from the emissions reductions, ensuring long term maintenance of the PM NAAQS. For example, in 2020, an additional 16 million people are projected to live in 13 counties th at have air quality measurements within 10 percent of the 2006 PM NAAQS. This modeling supports the conclusion that there are a substantial number of counties acros s the US projected to experience PM 2.5 

### concentrations at or above the PM 2.5 

### NAAQS into the future. Emission reduc tions from small SI and marine SI engines will be helpful for these countie s in attaining and maintaining the PM 2.5 

### NAAQS.

I A PM 10 design value is the concen tration that determin es whether a monitoring site meets the NAAQS for PM 10 . The full details involved in calculating a PM 10 design value are given in Appendices H and I of 40 CFR Part 50.

J The PM 10 nonattainment areas are listed in Appendix 2C to this RIA.



### 2-19

### 2.2.3.2.2 Projected PM 2.5 

### Levels With this Rulemaking

The impacts of the small SI and marine SI engine controls were determined by comparing the model results in the future year control runs against the baseline simulations of the same year. On a population-weighted basi s, the average modeled future-year annual PM 2.5 

### design value (DV) for all countie s is expected to decrease by 0.02 μg/m 3 

### in 2020 and 2030. There are areas with larger decr eases in their future-year annual PM 2.5 

### DV, for instance the Chicago region wi ll experience a 0.08 μg/m 3 

### reduction by 2030. Figure 2-3 illustrates the geographic impact of the small SI and ma rine SI engine controls on annual PM 2.5 

### design values in 2020.

2-20Regulatory Impact Analysis0003Number of Counties>= -0.09 to -0.05>= -0.24 to -0.10>= -0.49 to -0.25<= -0.50Legend>= -0.04 to 0.0553> 0.002020cc_bond impactFigure 2-3 Impact of Small SI andMarine SI controls on annual PM2.5Design Values (DV) in 2020 (units are μg/m3)2-21

### Table 2-5 lists the counties with projected annual PM 2.5 

### design values that violate or are within 10 per cent of the annual PM 2.5 

### standard in 2020. Counties are marked with a “V” in the table if their projected design values are greater than or equal to 15.05 μg/m 3 

### . Counties are marked with an “X” in the table if their pr ojected annual design values are greater than or equal to 13.55 μg/m 3 

### , but less than 15.05 μg/m 3 

### . The counties marked “X” are not projected to violate the sta ndard, but to be close to it, so the rule will help assure that these counties continue to meet the standard. The current design values are also presented in Table 2-5. Recall that we project future design values only for counties that have current design values, so th is list is limited to those counties with ambient monitoring data sufficient to cal culate current 3-ye ar design values.
Table 2-5 Counties with 2020 Projected Annual PM 2.5 

### Design Values in Violation or Within 10 percent of the Annual PM 2.5 

### Standard as a Result of the Small SI and Marine SI Controls

State County 2000­ 2004 Average annual PM 2.5 

### DV (ug/m 3 

### ) 2020 modeling projections of annual PM 2.5 

### DV 2020 Population Alabama Jefferson Co 18.36 V 681,549 California Fresno Co 20.02 X 1,066,878 California Imperial Co 14.44 V 161,555 California Kern Co 21.77 X 876,131 California Kings Co 18.77 X 173,390 California Los Angeles Co 23.16 X 10,376,013 California Merced Co 16.47 X 277,863 California Orange Co 18.27 X 3,900,599 California Riverside Co 27.15 X 2,252,510 California San Bernardino Co 24.63 X 2,424,764 California San Diego Co 15.65 V 3,863,460 California San Joaquin Co 14.84 V 743,469 California Stanislaus Co 16.49 V 607,766 California Tulare Co 21.33 X 477,296 Georgia Fulton Co 18.29 V 929,278 Illinois Cook Co 17.06 V 5,669,479 Illinois Madison Co 17.27 V 278,167 Kentucky Jefferson Co 16.58 V 726,257 Michigan Wayne Co 19.32 X 1,908,196 Montana Lincoln Co 15.85 V 20,147 New York New York Co 17.16 V 1,700,384 Ohio Cuyahoga Co 18.36 V 1,326,680 Pennsylvania Allegheny Co 20.99 X 1,242,587 West Virginia Hancock Co 17.30 V 30,539

2-2 2Regulatory Impact Analysis



### 2.2.4 Environmental Effects of PM Pollution

In this section we discuss some of the public welfare effects of PM and its precursors, including NOx, such as visibili ty impairment, atmospheric deposition, and materials damage and soiling.

2.2.4.1 Visibility Impairment
Visibility can be defined as the degree to which the atmosphere is transparent to visible light. 76 

### Visibility impairment manifests in tw o principal ways: as local visibility impairment and as regional haze. 77 

### Local visibility impairment may take the form of a localized plume, a band or layer of discolor ation appearing well above the terrain as a result of complex local meteorological c onditions. Alternatively, local visibility impairment may manifest as an urban haze, sometimes referred to as a “brown cloud.” This urban haze is largely caused by emissions from multiple sources in the urban area and is not typically attr ibutable to only one nearby source or to long-range transport. The second type of visibility impairment, re gional haze, usually results from multiple pollution sources spread over a large geogr aphic region. Regional haze can impair visibility over large re gions and across states.
Visibility is important becau se it has direct significan ce to people’s enjoyment of daily activities in all parts of the country. Individuals value good vi sibility for the wellbeing it provides them directly, where they live and work and in places where they enjoy recreational opportunities. Visi bility is also highly valued in significant natural areas such as national parks and wild erness areas, and special emphasis is given to protecting visibility in these areas.
Fine particles are the major cause of re duced visibility in parts of the United States. To address the welfare effects of PM on visibility, EPA sets secondary PM 2.5 

### standards which work in conjunction with the regional haze program. The secondary (welfare-based) PM 2.5 

### NAAQS is equal to the suite of primary (health-based) PM 2.5 

### NAAQS. The regional haze rule (64 FR 35714, July 1999) was put in place to protect the visibility in mandatory class I federal areas. These areas are defined in Section 162 of the Act as those national parks exceeding 6,000 acres , wilderness areas and memorial parks exceeding 5,000 acres, and all in ternational parks which were in existence on August 7, 1977. A list of the mandatory cla ss I federal areas is included in Appendix 2D. Visibility is impaired in both PM 2.5 

### nonattainment areas and mandato ry class I federal areas.
Control of small SI and marine SI emissions will improve visibility. The small SI and marine SI engines subject to this rule emit PM and PM precursors and thus contribute to visibility impairment. In the next s ections we present current information and projected estimates about visibility impairment related to ambient PM 2.5 

### levels across the country and visibility impairment in mandatory class I federal areas. We conclude that visibility will continue to be impaired in the future and the emission reductions from this rule will help improve visibility conditions across the country and in mandatory class I

2-2 3

### federal areas. For more information on visi bility see the PM AQCD as well as the 2005 PM Staff Paper. 78,79



### 2.2.4.1.1 Current Visibility Impairment in PM 2.5 

### Nonattainment Areas As mentioned above, the secondary PM 2.5 

### standards were set as equal to the suite of primary PM 2.5 

### standards. Almost 90 million people live in the 208 counties that are in nonattainment for the 1997 PM 2.5 

### NAAQS, (see Appendix 2A for the complete list of current nonattainment areas). These populations, as well as la rge numbers of individuals who travel to these areas can e xperience visibility impairment.

2.2.4.1.2 Current Visibility Impairment at Mandatory Class I Federal Areas

Detailed information about current and historical visibility conditions in mandatory class I federal areas is summari zed in the EPA Report to Congress and the 2002 EPA Trends Report. 80,81 

### The conclusions draw upon the Interagency Monitoring of Protected Visual Environments (IMPROVE) netw ork data. One of the objectives of the IMPROVE monitoring network program is to provide regional haze monitoring representing all mandatory cl ass I federal areas where pr actical. The National Park Service report also describes the state of national park visi bility conditions and discusses the need for improvement. 82



### The regional haze rule requires states to establish goals for each affected mandatory class I federal area that 1) improve s visibility on the haziest days (20% most impaired days), 2) ensures no degradati on occurs on the cleanest days (20% least impaired days), and 3) achieves natural background visibility levels by 2064. Although there have been general trends toward improve d visibility, progress is still needed on the haziest days. Specifically, as discussed in the 2002 EPA Trends Report, without the effects of pollution a natural visual range in the United States is approximately 75 to 150 km in the East and 200 to 300 km in the West. In 2001, the mean visual range for the worst days was 29 km in the East and 98 km in the West. 83



### 2.2.4.1.3 Future Visibility Impairment

Additional emission reductions will be needed from a broad set of sources, including those in this action, as part of the overall strategy to achieve the visibility goals of the Act and the regional haze program.

Modeling was used to project visibilit y conditions in 133 mandatory class I federal areas across the US in 2020 and 2030 as a result of the small SI and marine SI engine standards. The AQ modeling TS D and Section 2.3 of this RIA provide information on the modeling methodology. Ta ble 2-6 below indicates the current monitored deciview values, th e natural background levels each area is attempting to reach, and also the projected deciview va lues in 2020 and 2030 with and without the standards. In 2030, the greates t visibility improvement due to this rule (0.14 deciview) will occur at Brigantine, New Jersey.

2-2 4Regulatory Impact Analysis

Table 2-6 Current (2002) and Future (2020 and 203 0) Projected Visibility Conditions With and Without Small SI and Marine SI Rule in Mandatory Class I Federal Areas (20% Worst Days)

Class 1 Area State Baseline Visibility 2020 Base 2020 Bond Rule 2030 Base 2030 Bond Rule Natural Background

Sipsey Wilderness AL 29. 03 23.73 23.72 23.66 23.64 10.99 Caney Creek Wilderness AR 26.36 22.05 22.03 21.92 21.89 11.58 Upper Buffalo Wilderness AR 26.27 22.35 22.33 22.19 22.17 11.57 Chiricahua NM AZ 13.43 13.09 13.09 13.09 13.09 7.21 Chiricahua Wilderness AZ 13.43 13.09 13.09 13.09 13.09 7.21 Galiuro Wilderness AZ 13.43 13.07 13.06 13.09 13.09 7.21 Grand Canyon NP AZ 11. 66 11.09 11.09 11.08 11.08 7.14 Mazatzal Wilderness AZ 13.35 12.72 12.71 12.73 12.71 6.68 Petrified Forest NP AZ 13.21 12.83 12.82 12.75 12.75 6.49 Pine Mountain Wilderness AZ 13.35 12.58 12.56 12.54 12.53 6.68 Saguaro NM AZ 14.83 14.47 14.48 14.44 14.45 6.46 Sierra Ancha Wilderness AZ 13.67 13.20 13.20 13.15 13.14 6.59 Sycamore Canyon Wilderness AZ 15.25 14.94 14.93 14.93 14.93 6.69 Agua Tibia Wilderness CA 23.50 21.14 21.13 20.94 20.94 7.64 Caribou Wilderness CA 14.15 13.60 13.60 13.51 13.51 7.31 Cucamonga Wilderness CA 19.94 17.36 17.38 17.10 17.10 7.06 Desolation Wilderness CA 12.63 12.13 12.13 12.12 12.12 6.12 Dome Land Wilderness CA 19.43 18.34 18.34 18.11 18.11 7.46 Emigrant Wilderness CA 17.63 17.21 17.20 17.19 17.19 7.64 Hoover Wilderness CA 12. 87 12.72 12.72 12.74 12.74 7.91 Joshua Tree NM CA 19.62 17.93 17.97 17.71 17.72 7.19 Lassen Volcanic NP CA 14.15 13.54 13.54 13.43 13.43 7.31 Lava Beds NM CA 15.05 14.42 14.42 14.32 14.32 7.86 Mokelumne Wilderness CA 12.63 12.30 12.30 12.31 12.30 6.12 Pinnacles NM CA 18.46 17.36 17.34 17.09 17.09 7.99 Point Reyes NS CA 22.81 21.99 21.98 21.79 21.79 15.77 Redwood NP CA 18.45 17.86 17.86 17.79 17.78 13.91 San Gabriel Wilderness CA 19.94 17.25 17.25 16.93 16.93 7.06 San Gorgonio Wilderness CA 22.17 20.22 20.24 19.70 19.71 7.30 San Jacinto Wilderness CA 22.17 19.87 19.90 19.55 19.52 7.30 South Warner Wilderness CA 15.05 14.59 14.59 14.52 14.52 7.86 Thousand Lakes Wilderness CA 14.15 13.52 13.52 13.41 13.40 7.31 Ventana Wilderness CA 18. 46 17.64 17.63 17.62 17.62 7.99 Yosemite NP CA 17.63 17.14 17.14 17.11 17.11 7.64 Black Canyon of the Gunnison NM CO 10.33 9.79 9.79 9.77 9.77 6.24 Eagles Nest Wilderness CO 9.61 9.03 9.03 8.96 8.95 6.54 Flat Tops Wilderness CO 9.61 9.25 9.25 9.24 9.24 6.54 Great Sand Dunes NM CO 12.78 12.35 12.35 12.34 12.34 6.66



### 2-2 5Class 1 Area State Baseline Visibility 2020 Base 2020 Bond Rule 2030 Base 2030 Bond Rule Natural Background

La Garita Wilderness CO 10.33 9.89 9.89 9.88 9.87 6.24 Maroon Bells-Snowmass Wilderness CO 9.61 9.21 9.21 9.20 9.20 6.54 Mesa Verde NP CO 13.03 12.39 12.39 12.37 12.37 6.83 Mount Zirkel Wilderness CO 10.52 10.05 10.05 10.04 10.03 6.44 Rawah Wilderness CO 10.52 10.04 10.03 10.04 10.02 6.44 Rocky Mountain NP CO 13.83 13.08 13.06 13.01 12.99 7.24 Weminuche Wilderness CO 10.33 9.85 9.85 9.85 9.84 6.24 West Elk Wilderness CO 9.61 9.15 9.15 9.14 9.14 6.54 Chassahowitzka FL 26.09 21.94 21.92 21.91 21.88 11.21 Everglades NP FL 22. 30 19.77 19.76 19.94 19.91 12.15 St. Marks FL 26.03 21.82 21.81 21.83 21.81 11.53 Cohutta Wilderness GA 30.30 23.33 23.32 23.28 23.26 11.14 Okefenokee GA 27.13 23.42 23.41 23.40 23.39 11.44 Wolf Island GA 27.13 23.37 23.35 23.32 23.29 11.44 Craters of the Moon NM ID 14.00 12.97 12.96 12.82 12.80 7.53 Sawtooth Wilderness ID 13.78 13.63 13.63 13.63 13.63 6.43 Mammoth Cave NP KY 31.37 25.48 25.47 25.44 25.42 11.08 Acadia NP ME 22.89 19. 77 19.75 19.81 19.78 12.43 Moosehorn ME 21.72 18. 63 18.62 18.64 18.62 12.01 Roosevelt Campobello International Park ME 21.72 18.45 18.44 18.47 18.45 12.01 Isle Royale NP MI 20.74 19.10 19.08 19.04 19.01 12.37 Seney MI 24.16 21.72 21.70 21.66 21.63 12.65 Voyageurs NP MN 19.27 17.58 17.56 17.43 17.41 12.06 Hercules-Glades Wilderness MO 26.75 22.93 22.92 22.81 22.78 11.30 Anaconda-Pintler Wilderness MT 13.41 13.14 13.13 13.11 13.11 7.43 Bob Marshall Wilderness MT 14.48 14.13 14.12 14.08 14.07 7.74 Cabinet Mountains Wilderness MT 14.09 13.54 13.53 13.46 13.44 7.53 Gates of the Mountains Wilderness MT 11.29 10.91 10.91 10.87 10.86 6.45 Medicine Lake MT 17.72 16.19 16.19 16.09 16.09 7.90 Mission Mountains Wilderness MT 14.48 14.04 14.04 13.99 13.99 7.74 Scapegoat Wilderness MT 14.48 14.16 14.15 14.12 14.11 7.74 Selway-Bitterroot Wilderness MT 13.41 13.04 13.04 12.99 12.99 7.43 UL Bend MT 15.14 14.64 14.63 14.58 14.57 8.16 Linville Gorge Wilderness NC 28.77 22.45 22.44 22.41 22.39 11.22 Swanquarter NC 25.49 21. 15 21.11 21.15 21.10 11.94 Lostwood ND 19.57 17.70 17.70 17.60 17.60 8.00 Theodore Roosevelt NP ND 17.74 16.49 16.48 16.34 16.34 7.79



### 2-2 6Regulatory Impact Analysis

Class 1 Area State Baseline Visibility 2020 Base 2020 Bond Rule 2030 Base 2030 Bond Rule Natural Background

Great Gulf Wilderness NH 22.82 19.45 19.43 19.46 19.43 11.99 Presidential Range-Dry River Wilderness NH 22.82 19.45 19.43 19.46 19.43 11.99 Brigantine NJ 29.01 24.85 24.75 24.91 24.77 12.24 Bandelier NM NM 12.22 11.35 11.35 11.29 11.28 6.26 Bosque del Apache NM 13.80 12.85 12.85 12.73 12.73 6.73 Gila Wilderness NM 13.11 12.54 12.54 12.54 12.53 6.69 Pecos Wilderness NM 10. 41 9.97 9.97 9.97 9.97 6.44 Salt Creek NM 18.03 16.59 16.58 16.52 16.52 6.81 San Pedro Parks Wilderness NM 10.17 9.43 9.43 9.40 9.40 6.08 Wheeler Peak Wilderness NM 10.41 9.88 9.88 9.87 9.87 6.44 White Mountain Wilderness NM 13.70 12.88 12.89 12.87 12.86 6.86 Jarbidge Wilderness NV 12.07 11.86 11.85 11.85 11.85 7.87 Wichita Mountains OK 23. 81 20.62 20.60 20.55 20.53 7.53 Crater Lake NP OR 13. 74 13.27 13.25 13.20 13.18 7.84 Diamond Peak Wilderness OR 13.74 13.20 13.19 13.12 13.11 7.84 Eagle Cap Wilderness OR 18.57 17.83 17.82 17.71 17.70 8.92 Gearhart Mountain Wilderness OR 13.74 13.37 13.37 13.33 13.33 7.84 Hells Canyon Wilderness OR 18.55 17.20 17.19 17.04 17.01 8.32 Kalmiopsis Wilderness OR 15.51 14.98 14.97 14.93 14.92 9.44 Mount Hood Wilderness OR 14.86 14.13 14.12 14.14 14.12 8.44 Mount Jefferson Wilderness OR 15.33 14.77 14.76 14.76 14.75 8.79 Mount Washington Wilderness OR 15.33 14.75 14.74 14.72 14.71 8.79 Mountain Lakes Wilderness OR 13.74 13.24 13.23 13.17 13.16 7.84 Strawberry Mountain Wilderness OR 18.57 17.73 17.72 17.60 17.59 8.92 Three Sisters Wilderness OR 15.33 14.82 14.81 14.79 14.78 8.79 Cape Romain SC 26.48 22.74 22.72 22.71 22.68 12.12 Badlands NP SD 17.14 15.84 15.83 15.74 15.74 8.06 Wind Cave NP SD 15.84 14.91 14.91 14.87 14.86 7.71 Great Smoky Mountains NP TN 30.28 23.93 23.92 23.86 23.85 11.24 Joyce-Kilmer-Slickrock Wilderness TN 30.28 23.43 23.42 23.37 23.35 11.24 Big Bend NP TX 17.30 16.13 16.13 16.15 16.14 7.16 Carlsbad Caverns NP TX 17.19 15.89 15.89 15.87 15.87 6.68 Guadalupe Mountains NP TX 17.19 15.87 15.86 15.84 15.84 6.68 Arches NP UT 11.24 11.11 11.11 11.03 11.01 6.43 Bryce Canyon NP UT 11. 65 11.34 11.34 11.31 11.31 6.86



### 2-2 7Class 1 Area State Baseline Visibility 2020 Base 2020 Bond Rule 2030 Base 2030 Bond Rule Natural Background

Canyonlands NP UT 11. 24 10.81 10.81 10.82 10.85 6.43 Zion NP UT 13.24 12.92 12.95 12.81 12.83 6.99 James River Face Wilderness VA 29.12 23.34 23.31 23.26 23.23 11.13 Shenandoah NP VA 29.31 22.80 22.78 22.76 22.73 11.35 Lye Brook Wilderness VT 24.45 21.08 21.06 21.11 21.08 11.73 Alpine Lake Wilderness WA 17.84 16.71 16.69 16.60 16.57 8.43 Glacier Peak Wilderness WA 13.96 13.60 13.60 13.67 13.66 8.01 Goat Rocks Wilderness WA 12.76 12.05 12.03 12.03 12.02 8.36 Mount Adams Wilderness WA 12.76 12.01 12.00 11.97 11.96 8.36 Mount Rainier NP WA 18. 24 17.24 17.23 17.21 17.18 8.55 North Cascades NP WA 13.96 13.57 13.57 13.67 13.66 8.01 Olympic NP WA 16.74 15.82 15.82 15.89 15.86 8.44 Pasayten Wilderness WA 15.23 14.84 14.84 14.81 14.81 8.26 Dolly Sods Wilderness WV 29.04 22.35 22.34 22.33 22.31 10.39 Otter Creek Wilderness WV 29.04 22.29 22.28 22.27 22.25 10.39 Bridger Wilderness WY 11. 12 10.80 10.80 10.79 10.78 6.58 Fitzpatrick Wilderness WY 11.12 10.85 10.85 10.84 10.84 6.58 Grand Teton NP WY 11. 76 11.35 11.35 11.31 11.31 6.51 North Absaroka Wilderness WY 11.45 11.16 11.16 11.13 11.12 6.86 Red Rock Lakes WY 11.76 11.43 11.42 11.39 11.39 6.51 Teton Wilderness WY 11. 76 11.40 11.39 11.36 11.36 6.51 Washakie Wilderness WY 11.45 11.17 11.16 11.14 11.14 6.86 Yellowstone NP WY 11.76 11.38 11.37 11.34 11.33 6.51

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



### 2.2.4.2 Particulate Matter Deposition

Particulate matter contributes to advers e effects on vegetatio n and ecosystems, and to soiling and materials damage. Thes e welfare effects result predominately from exposure to excess amounts of specific chemi cal species, regardless of their source or predominant form (particle, gas or liquid). Reflecting this fact, the PM AQCD concludes that regardless of size fractions , particles containing nitrates and sulfates have the greatest potential for widespread envi ronmental significance, while effects are also related to other chemical constituents found in ambient PM , such as trace metals and organics. The following characterizations of the nature of these welf are effects are based on the information contained in the PM AQCD and PM Staff Paper.

2-2 8Regulatory Impact Analysis



### 2.2.4.2.1 Deposition of Nitrates and Sulfates

At current ambient levels, risks to vege tation from short-term exposures to dry deposited particulate nitrate or sulfate are low. Howe ver, when found in acid or acidifying deposition, such particles do have th e potential to cause di rect leaf injury. Specifically, the responses of forest trees to acid precipitation (rain, snow) include accelerated weathering of leaf cuticular surfaces, increased pe rmeability of leaf surfaces to toxic materials, water, and disease agents ; increased leaching of nutrients from foliage; and altered reproductive processe s—all which serve to weaken tr ees so that they are more susceptible to other stresses (e.g., extreme w eather, pests, pathogens). Acid deposition with levels of acidity associ ated with the leaf effects described above ar e currently found in some locations in the eastern U.S. 84 

### Even higher concentrations of acidity can be present in occult depositions (e.g., fog, mist or clouds) whic h more frequently impacts higher elevations. Thus, the ri sk of leaf injury occurring from acid deposition in some areas of the eastern U.S

. is high. Nitrogen deposition has also been shown to impact ecosystems in the western U.S. A study conducted in the Columbia River Gorge National Scenic Area (CRGNSA), located along a portion of the Oregon/Washington border, indicates that lichen communities in the CRGNSA have shifted to a higher proportion of nitrophilous species and the nitr ogen content of lichen tissue is elevated. 85 

### Lichens are sensitive indicator s of nitrogen deposition effect s to terrestrial ecosystems and the lichen studies in the Columbia Rive r Gorge clearly show that ecological effects from air pollution are occurring.
Some of the most significant detrimental effects associated with excess reactive nitrogen deposition are those associated with a syndrome known as n itrogen saturation. These effects include: (1) d ecreased productivity, increased mortality, and/or shifts in plant community composition, often leading to decreased biodiversity in many natural habitats wherever atmospheric reactive nitrogen deposition increas es significantly and critical thresholds are exceeded; (2) leaching of excess nitrate and associated base cations from soils into streams, lakes, and rivers , and mobilization of soil aluminum; and (3) fluctuation of ecosystem proce sses such as nutrient and energy cycles through changes in the functioning and species compositi on of beneficial soil organisms. 86



### In the U.S. numerous forests now show se vere symptoms of nitrogen saturation. These forests include: the northern hard woods and mixed conifer forests in the Adirondack and Catskill Mountains of New York; the red spruce forests at Whitetop Mountain, Virginia, and Great Smoky Mountai ns National Park, North Carolina; mixed hardwood watersheds at Fernow Experimental Forest in West Virginia; American beech forests in Great Smoky Mountains National Pa rk, Tennessee; mixed conifer forests and chaparral watersheds in southern California and the southwestern Sierra Nevada in Central California; the alpine tundra/subalpine conifer fo rests of the Colorado Front Range; and red alder forests in th e Cascade Mountains in Washington.
Excess nutrient inputs into aquatic ecos ystems (i.e. streams, rivers, lakes, estuaries or oceans) either from direct at mospheric deposition, surface runoff, or leaching from nitrogen saturated soils in to ground or surface waters ca n contribute to conditions of

2- 29

### severe water oxygen depletion; eutrophi cation and algae blooms; altered fish distributions, catches, and physiological states; loss of biodive rsity; habitat degradation; and increases in the incidence of disease.
Severe and persistent eutr ophication often directly impacts human activities. For example, losses in the nation’s fishery resour ces may be directly caused by fish kills associated with low dissolved oxygen and toxic blooms. Declines in tourism occur when low dissolved oxygen causes noxious smells a nd floating mats of algal blooms create unfavorable aesthetic conditions . Risks to human health increase when the toxins from algal blooms accumulate in edible fish and sh ellfish, and when toxins become airborne, causing respiratory problems due to inhalati on. According to a NOAA report, more than half of the nation’s estuaries have moderate to high expressions of at least one of these symptoms – an indication that eutrophication is well developed in more than half of U.S. estuaries. 87



### 2.2.4.2.2 Deposition of Heavy Metals
Heavy metals, including cadmium, copper, lead, chromium, mercury, nickel and zinc, have the greatest pote ntial for influencing forest growth (PM AQCD, p. 4-87). 88 

### Investigation of trace metals near roadways and industrial facilities indicate that a substantial load of heavy metals can accumu late on vegetative surfaces. Copper, zinc, and nickel have been documented to cause direct toxicity to vegetation under field conditions (PM AQCD, p. 4-75). Little re search has been conducted on the effects associated with mixtures of contaminants found in ambient PM. While metals typically exhibit low solubility, limiting their bioava ilability and direct toxicity, chemical transformations of metal co mpounds occur in the environm ent, particularly in the presence of acidic or other oxidizing speci es. These chemical changes influence the mobility and toxicity of metals in the environment. Once taken up into plant tissue, a metal compound can undergo chemical changes, accumulate and be passed along to herbivores or can re-enter the soil and furt her cycle in the environment. Although there has been no direct evidence of a physiological association between tree injury and heavy metal exposures, heavy metals have been im plicated because of similarities between metal deposition patterns and forest declin e (PM AQCD, p. 4-76). This hypothesized relationship/correlation was further explored in high elevation forest s in the northeastern U.S. These studies measured levels of a group of intracellular co mpounds found in plants that bind with metals and are produced by plants as a response to subl ethal concentrations of heavy metals. These studies indicate d a systematic and significant increase in concentrations of these compounds associated with the extent of tr ee injury. These data strongly imply that metal stress causes tree inju ry and contributes to forest decline in the northeastern United States (PM AQCD 4-76,77). 89 

### Contamination of plant leaves by heavy metals can lead to elevated soil leve ls. Trace metals absorbed into the plant frequently bind to the leaf tissue, and then are lost when the leaf drops (PM AQCD, p. 4- 75). As the fallen leaves decompose, the h eavy metals are transferred into the soil. 90,91



### The environmental sources and cycling of mercury are curren tly of particular concern due to the bioaccumulation and bi omagnification of this metal in aquatic

2-3 0Regulatory Impact Analysis



### ecosystems and the potent toxic na ture of mercury in the forms in which is it ingested by people and other animals. Mercury is unusual compared with other metals in that it largely partitions into the gas phase (in elemental form), and therefore has a longer residence time in the atmosphere than a metal found predominantly in the particle phase. This property enables mercury to travel far from the primary source before being deposited and accumulating in the aquatic ecosy stem. The major source of mercury in the Great Lakes is from atmospheric depositi on, accounting for approximately eighty percent of the mercury in Lake Michigan. 92,93 

### Over fifty percent of the mercury in the Chesapeake Bay has been attributed to atmospheric deposition. 94 

### Overall, the National Science and Technology Council identifies atmo spheric deposition as the primary source of mercury to aquatic systems. 95 

### Forty-four states have issu ed health advisories for the consumption of fish contaminated by mercury; however, most of these advisories are issued in areas without a mercury point source.

Elevated levels of zinc and lead have b een identified in streambed sediments, and these elevated levels have been correlate d with population density and motor vehicle

use. 96,97 

### Zinc and nickel have also been identi fied in urban water and soils. In addition, platinum, palladium, and rhodium, metals found in the catalyst s of modern motor vehicles, have been measured at elevated levels along roadsides. 98 

### Plant uptake of platinum has been obser ved at these locations.

2.2.4.2.3 Deposition of Polycyclic Organic Matter
Polycyclic organic matter (POM) is a byproduct of incomplete combustion and consists of organic compounds with more than one benzene ring and a boiling point greater than or equal to 100 degrees centigrade. 99 

### Polycyclic aromatic hydrocarbons (PAHs) are a class of POM that contains compounds which are known or suspected carcinogens.
Major sources of PAHs include mobile sour ces. PAHs in the environment may be present as a gas or adsorbed ont o airborne particulat e matter. Since the majority of PAHs are adsorbed onto particles less than 1.0 μm in diameter, long ra nge transport is possible. However, studies have shown that PAH compounds adsorbed onto diesel exhaust particulate and exposed to ozone have half lives of 0.5 to 1.0 hours. 100



### Since PAHs are insoluble, the compounds generally are particle reactive and accumulate in sediments. Atmospheric deposition of particles is believed to be the major source of PAHs to the sediments of Lake Michigan. 101,102 

### Analyses of PAH deposition in Chesapeake and Galveston Bay indicate that dry deposition and gas exchange from the atmosphere to the surface water predominate. 103,104 

### Sediment concentrations of PAHs are high enough in some segments of Tampa Bay to pose an environmental health threat. EPA funded a study to better characterize the sources and loading rates for PAHs into Tampa Bay. 105 

### PAHs that enter a water body throu gh gas exchange likely partition into organic rich particles and can be biologically recycled, wh ile dry deposition of aerosols containing PAHs tend to be more resistant to biological recycling. 106 

### Thus, dry deposition is likely the main pathway for PAH concentrations in sediments while gas/water exchange at the surface may lead to PAH distribution into the food web,

2-3 1

### leading to increased health risk concerns.
Trends in PAH deposition levels are difficu lt to discern because of highly variable ambient air concentrations, lack of consistency in m onitoring methods, and the significant influence of local sources on deposition levels. 107 

### Van Metre et al. noted PAH concentrations in urban reservoir sediment s have increased by 200-300% over the last forty years and correlate with increases in automobile use. 108



### Cousins et al. estimate that more than ninety percent of semi-volatile organic compound (SVOC) emissions in the United Kingdom deposit on soil. 109 

### An analysis of PAH concentrations near a Czechoslovakian ro adway indicated that concentrations were thirty times greater than background. 110



### 2.2.4.2.4 Materials Damage and Soiling

The effects of the deposition of atmosphe ric pollution, including ambient PM, on materials are related to both physical damage and impaired aesthetic qualities. The deposition of PM (especially su lfates and nitrates) can physica lly affect materials, adding to the effects of natural weat hering processes, by potential ly promoting or accelerating the corrosion of metals, by degrading paints, and by deteriorating building materials such as concrete and limestone. Only chemically active fine particles or hygroscopic coarse particles contribute to these physical effects. In addition, the deposition of ambient PM can reduce the aesthetic app eal of buildings and cultura lly important articles through soiling. Particles consisting primarily of carbonaceous compounds cause soiling of commonly used building materi als and culturally important items such as statues and works of art.



## 2.3 Air Quality Modeling Methodology
In this section we present information on the air quality modeling, including the model domain and modeling inputs. Furt her discussion of the modeling methodology, including evaluations of mode l performance, is included in the Air Quality Modeling Technical Support Document (AQM TSD). 111



### 2.3.1 Air Quality Modeling Overview
A national scale air quality modeling analys is was performed to estimate future year 8-hour ozone concentrations, annual PM 2.5 

### concentrations, and visibility levels. These projections were used as inputs to th e calculation of expected benefits from the small SI and marine SI emissions controls c onsidered in this assessment. The 2002-based CMAQ modeling platform was used as the tool for the air quality modeling of future baseline emissions and control scenarios. It should be noted that the 2002-based modeling platform has recently been finali zed and the 2001-based modeling platform was used as the tool for the air quality modeli ng performed for the proposal. In the next paragraph we discuss some of the differences between the 2001-base d platform used for the proposal and the 2002-based platform used for this final rule.

2-3 2Regulatory Impact Analysis



### The 2002-based modeling platform in cludes a number of updates and improvements to data and tools compared to the 2001-based platform that was used for the proposal modeling. For the final rule modeling we used the new 2002 National Emissions Inventory along with updated versions of the models used to project future emissions from electric generating units (E GUs) and onroad and nonroad vehicles. The proposal modeling was based on the 2001 Na tional Emissions Inventory. The new platform also includes 2002 meteorology and more recent ambient design values which were used as the starting point for projecting future air quality. For proposal, we used meteorology for 2001 for modeling the East and 2002 for modeling the West. The updates to CMAQ between proposal and final in clude (1) an in-cloud sulfate chemistry module that accounts for the nonlinear sensitivit y of sulfate formation to varying pH; (2) improved vertical convective mixing; (3) heterogeneous reaction involving nitrate formation; (4) an updated gas-phase chem istry mechanism, Carbon Bond 2005 (CB05); and (5) an aqueous chemistry mechanism th at provides a comprehensive simulation of aerosol precursor oxidants.
The CMAQ model is a three-dimensional gr id-based Eulerian air quality model designed to estimate the formation and fate of oxidant precursors, primary and secondary particulate matter concentrati ons and deposition over regional and urban spatial scales (e.g., over the contiguous U.S.). 112,113,114 

### Consideration of the different processes that affect primary (directly emitted) and secondary (formed by atmospheric processes) PM at the regional scale in different locations is fundamental to understan ding and assessing the effects of pollution control measures that aff ect PM, ozone and deposition of pollutants to the surface. In addition to the CMAQ model, the modeling platform includes the emissions, meteorology, and initial/boundary co ndition data which are inputs to this model. The CMAQ model was peer-reviewed in 2003 for EPA as reported in “Peer Review of CMAQ Model”. 115 

### The latest version of CMAQ (Version 4.6.1) was employed for this modeling analysis. This ve rsion reflects updates, as mentioned above, in a number of areas to improve the underlyi ng science which include (1) use of a stateof-the science inorganic and organic aerosol module, (2) an in-cloud sulfate chemistry module that accounts for the nonlinear sensitivit y of sulfate formation to varying pH, (3) improved vertical convective mixing, (4) heterogeneous reaction involving nitrate formation and (5) an updated Carbon Bond 05 (CB05) gas-phase chemistry mechanism and aqueous chemistry mechanism that provid es a comprehensive simulation of aerosol precursor oxidants.



### 2.3.2 Model Domain and Configuration
The CMAQ modeling domain encompasses all of the lower 48 States and portions of Canada and Mexico. The modeling domain is made up of a large continental U.S. 36 km grid and two 12 km grids (an Eastern US and a Western US domain), as shown in Figure 2-4. The modeling domain contains 14 vertical layers w ith the top of the modeling domain at about 16,200 meters, or 100 millibars (mb).

2-3 3

### Figure 2-4. Map of the CMAQ modeling domain



### 2.3.3 Model Inputs
The key inputs to the CMAQ model incl ude emissions from anthropogenic and biogenic sources, meteorological data, and initial and boundary conditions. The CMAQ meteorological input files were derived fr om a simulation of the Pennsylvania State University / National Center for At mospheric Research Mesoscale Model 116 

### for the entire year of 2002. This model, commonly re ferred to as MM5, is a limited-area, nonhydrostatic, terrain-following system that solves for the full set of physical and thermodynamic equations which govern atmospheric motions. The meteorology for the national 36 km grid and the 12 km Eastern U.S. grid were deve loped by EPA and are described in more detail within the AQM TSD. The meteorology for the 12 km Western U.S. grid was developed by the Western Regional Air Partnership (WRAP) Regional Planning Organization. The mete orological outputs from MM5 were processed to create model-ready inputs for CMAQ using the Me teorology-Chemistry Interface Processor (MCIP) version 3.1 to derive the specific inputs to CMAQ, for ex ample: horizontal wind components (i.e., speed and direction), temperat ure, moisture, vertical diffusion rates, and rainfall rates for each grid cell in each vertical layer. 117



### The lateral boundary and init ial species concentrations are provided by a threedimensional global atmospheric chem istry model, the GEOS-CHEM model. 118 

### The global GEOS-CHEM model simulates atmos pheric chemical and physical processes driven by assimilated meteorological observations from the NASA’s Goddard Earth

2-3 4Regulatory Impact Analysis



### Observing System (GEOS). This model wa s run for 2002 with a grid resolution of 2 degree x 2.5 degree (latitude-long itude) and 20 vertical layers. The predictions were used to provide one-way dynamic boundary conditions at three-hour intervals and an initial concentration field for the 36 km CMAQ simula tions. The future base conditions from the 36 km coarse grid modeling were used as the initial/boundary stat e for all subsequent 12 km finer grid modeling.
The emissions inputs used for the 2002 base year and each of the future year base cases and control scenarios are summarized in Chapter 3 of this RIA.



### 2.3.4 CMAQ Evaluation
An operational model performance evaluation for PM 2.5 

### and its related speciated components (e.g., sulfate, nitrate, elemen tal carbon, organic carbon, etc.) was conducted using the 2002 data in order to estimate th e ability of the CMAQ modeling system to replicate base year concentrations. In summary, model performance statistics were calculated for observed/predicte d pairs of daily/monthly/seas onal/annual concentrations. Statistics were generated for the followi ng geographic groupings: domain wide, Eastern vs. Western (divided along the 100th meridian), and each Regional Planning Organization (RPO) region. K 

### The “acceptability” of model performance was judged by comparing our results to thos e found in recent regional PM 2.5 

### model applications for other, non-EPA studies. L 

### Overall, the performance fo r the 2002 modeling platform is within the range of these other applicati ons. A detailed summary of the 2002 CMAQ model performance evaluation is available within the AQM TSD.



### 2.3.5 Model Simulation Scenarios
As part of our analysis for this rule making the CMAQ modeling system was used to calculate 8-hour ozone concentrations, annual PM 2.5 

### concentrations, and visibility estimates for each of the following emissions scenarios:
2002 base year 2020 base line projection 2020 base line projection with small SI and marine SI controls 2030 base line projection 2030 base line projection with small SI and marine SI controls

K 

### Regional Planning Organization regions includ e: Mid-Atlantic/Nor theast Visibility Union (MANE-VU), Midwest Regional Planni ng Organization – Lake Michigan Air Directors Consortium (MWRPO-LADCO), Visi bility Improvement State and Tribal Association of the Southeast (VISTAS), Ce ntral States Region al Air Partnership (CENRAP), and Western Regiona l Air Partnership (WRAP).

L 

### These other modeling studies represent a wide range of modeling an alyses which cover various models, model configurations, dom ains, years and/or episodes, chemical mechanisms, and aerosol modules.

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### It should be noted that the emission contro l scenarios used in the air quality and benefits modeling are slightly different than the emission control program being finalized. The differences reflect further re finements of the regulatory program since we performed the air quality modeling for this ru le. Chapter 3 of this RIA describes the changes in the inputs and resulting emi ssion inventories between the preliminary assumptions used for the air quality m odeling and the final regulatory scenario. These refinements to the program would not significan tly change the results summarized here or our conclusions drawn from this analysis.
We use the predictions from the model in a relative sense by combining the 2002 base-year predictions with predictions from each future-year scenario and applying these modeled ratios to ambient air quality observations to estimate annual PM 2.5 

### concentrations, 8-hour ozone concentrations, and visibility levels for each of the 2020 and 2030 scenarios. The ambient air quality observations are average conditions, on a site by site basis, for a period centered around the model base year (i.e., 2000-2004). After completing this process, we then calcula ted the effect of changes in PM, ozone and visibility air quality metric s resulting from this rulema king on the health and welfare impact functions of the benefits analysis.
The projected annual PM 2.5 

### design values were calculated using the Speciated Modeled Attainment Test (SMAT) approac h. The SMAT uses an Federal Reference Method FRM mass construction methodology that re sults in reduced nitr ates (relative to the amount measured by routine speciation ne tworks), higher mass associated with sulfates (reflecting water in cluded in FRM measurements), and a measure of organic carbonaceous mass that is derived from the difference between measured PM 2.5 

### and its non-carbon components. This characterization of PM 2.5 

### mass also reflects crustal material and other minor constituents. The resulting characterization provides a complete mass balance. It does not have any unknown mass that is sometimes presented as the difference between measured PM 2.5 

### mass and the characterized chemical components derived from routine speciation measurements . However, the assumption that all mass difference is organic carbon has not been vali dated in many areas of the US. The SMAT methodology uses the following PM 2.5 

### species components: sulf ates, nitrates, ammonium, organic carbon mass, elemental carbon, crustal, water, and bl ank mass (a fixed value of 0.5 μg/m 3 

### ). More complete details of the SMAT procedures can be found in the report "Procedures for Estimating Future PM 2.5 

### Values for the CAIR Final Rule by Application of the (Revised) Speciated Mode led Attainment Test (SMAT)". 119 

### For this latest analysis, several datasets and techniques were updated. These changes are fully described within the AQM TSD. The pr ojected 8-hour ozone design values were calculated using the approach identified in EPA's guidance on air quality modeling attainment demonstrations.



### 2.3.6 Visibility Modeling Methodology
The modeling platform described in this se ction was also used to project changes in visibility. The estimate of visibility be nefits was based on the projected improvement in annual average visibility at mandatory cla ss I federal areas. There are 156 Federally

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### mandated Class I areas which, under the Regi onal Haze Rule, are required to achieve natural background visibility levels by 2064. These mandatory class I federal areas are mostly national parks, national monuments, and wilderness areas. There are currently 116 Interagency Monitoring of Protected Vi sual Environments (IMPROVE) monitoring sites (representing all 156 mandatory class I federal areas) collecting ambient PM 2.5 

### data at mandatory class I federal areas, but not all of these sites have complete data for 2002. For this analysis, we quantified visibility improvement at the 133 mandatory class I federal areas which have complete IMPROVE ambient data for 2002 or are represented by IMPROVE monitors with complete data. M



### Visibility impairment is quantified in ex tinction units. Visibility degradation is directly proportional to decreases in light tr ansmittal in the atmos phere. Scattering and absorption by both gases and particles decrease light transmittance. To quantify changes in visibility, our analysis comput es a light-extinction coefficient (b ext 

### ) and visual range. The light extinction coefficien t is based on the work of Sisler, which shows the total fraction of light that is decreased per unit distance. This coefficient accounts for the scattering and absorption of light by both particles and gases and accounts for the higher extinction efficiency of fine particles compared to coarse particles. Fine particles with significant light-extinc tion efficiencies include sulf ates, nitrates, organic carbon, elemental carbon, and soil. 120



### Visual range is a measure of visibility th at is inversely related to the extinction coefficient. Visual range can be define d as the maximum distance at which one can identify a black object against the horizon sky. Visual range (in units of kilometers) can be calculated from b ext 

### using the formula: Visual Range (km) = 3912/b ext 

### (b ext 

### units are inverse megameters [Mm -1 

### ]) The future year visibility impairment wa s calculated using a methodology which applies modeling results in a relative sense similar to the Speciated Modeled Attainment Test (SMAT).
In calculating visibility impairment, th e extinction coefficient is made up of individual component species (s ulfate, nitrate, organics, etc) . The predicted change in visibility is calculated as the percent change in the extinction coefficient for each of the PM species (on a daily average basis). The individual daily species extinction coefficients are summed to get a daily to tal extinction value. The daily extinction coefficients are converted to vi sual range and then averaged across all days. In this way, we can calculate annual average extinction and visual range at each IMPROVE site. Subtracting the annual average control case visu al range from the base case visual range gives a projected improvement in visual rang e (in km) at each mandatory class I federal area. This serves as the visibility inpu t for the benefits analysis (See Chapter X).

M There are 100 IMPROVE sites wi th complete data for 2002. Many of these sites collect data that is “representative” of other nearby unmonitored mandatory class I federal areas. There are a total of 133 mandatory class I federal areas that are represented by the 100 sites. The matching of sites to monitors is taken from “Guidance for Tracking Progress Under the Regional Haze Rule”.



### 2-3 7

### For visibility calculations, we are continuing to use the IMPROVE program species definitions and visibility formul as which are recommended in the modeling guidance. 121 

### Each IMPROVE site has measurements of PM 2.5 

### species and therefore we do not need to estimate the species fractions in the same way that we did for FRM sites (using interpolation techniques and other assumptions concerning volatilization of species).



## 2.4 Air Toxics

Small SI and Marine SI emissions contri bute to ambient levels of air toxics known or suspected as human or animal car cinogens, or that have noncancer health effects. The population experiences an elevated risk of cancer and other noncancer health effects from exposure to air toxics. 122 

### These compounds include, but are not limited to, benzene, 1,3-butadiene, formaldehyde, acetal dehyde, acrolein, polycyclic organic matter (POM), and naphthalene. These compounds, except acetaldehyde, were identified as national or regional risk drivers in th e 1999 National-Scale Air Toxics Assessment (NATA) and have significant inventory contributions from mobile sources.

Table2-7 Mobile Source Inve ntory Contribution to 1999 Em issions of NATA Risk Drivers a

1999 NATA Risk Driver Percent of Emissions Attributable to All Mobile Sources Percent of Emissions Attributable to Non-road Sources

Benzene 68% 19% 1,3-Butadiene 58% 17% Formaldehyde 47% 20% Acrolein 25% 11% Polycyclic organic matter (POM) b 5% 2% Naphthalene 27% 6% Diesel PM and Diesel exhaust organic gases 100% 62%

a This table is generated from data contained in the pollutant specific Microsoft Access database files found in the County-Level Emission Summaries section of the 1999 NATA webpage (http://www.epa.gov/ttn/atw/nata1999/tables.html). b This POM inventory includes the 15 POM compounds: benzo[b]fl uoranthene, benz[a]anthracene, indeno(1,2,3-c,d)pyrene, benzo[k]fluoranthene, chryse ne, benzo[a]pyrene, dibenz(a,h)anthracene, anthracene, pyrene, benzo(g,h,i)perylene, fluoranthene, acenaphthylene, phenanthrene, fluorine, and acenaphthene.



### According to NATA for 1999, mobile sources were responsible for 44 percent of outdoor toxic emissions and almost 50 percent of the cancer risk. Benzene is the largest contributor to cancer risk of all 133 pollutants quantitative ly assessed in the 1999 NATA and mobile sources were responsible for 68 percent of benzene emissions in 1999. In

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### response, EPA has recently finalized vehicle and fuel controls that address this public health risk. N



### People are exposed to toxics from spark- ignition engines as a result of operating these engines and from intrusion into the hom e of emissions that occur in residential attached garages. A study of aldehyde exposures among lawn and garden equipment operators found formaldehyde and acetal dehyde exposure concentrations, during approximately 30 to 120 minutes of engine use, that were one to two orders of magnitude greater than those measured at an upwind monitor. 123 

### The study also reported measurable concentrations of transition metals emitted from most test engines, in addition to high organic carbon concentrations in PM 2.5 

### samples. Analyses of organic material emitted from hand-held engines have detected PAHs and other compounds, suggesting that exposures to hand-held engine emissions ar e similar in composition to those found in motor vehicle-affected environments, such as near major roadways. 124 

### Numerous studies have reported elevated benzene concentr ations in residentia l attached garages. 125,126,127 

### These studies indicate the potential for elev ated exposures as a result of the use and storage of small spark-ignition engines.
Noncancer health effects can result from chronic, O 

### subchronic, P 

### or acute Q 

### inhalation exposures to air toxi cs, and include neurological, car diovascular, liver, kidney, and respiratory effects as well as eff ects on the immune and reproductive systems. According to the 1999 NATA, nearly the en tire U.S. population was exposed to an average concentration of air toxics that has the potential for adverse noncancer respiratory health effects. This will continue to be the case in 2030, even though toxics concentrations will be lower. Mobile sources were responsible for 74 percent of the noncancer (respiratory) risk fr om outdoor air toxics in 1999. The majority of this risk was from exposure to acrolein. The confiden ce in the RfC for acrolein is medium and confidence in NATA estimates of population noncancer hazard from ambient exposure to this pollutant is low. 128,129



### The NATA modeling framework has a num ber of limitations which prevent its use as the sole basis for sett ing regulatory standards. These limitations and uncertainties are discussed on the 1999 NATA website. 130 

### Even so, this modeling framework is very

N U.S. EPA (2007) Control of Hazar dous Air Pollutants from Mobile So urces. 72 FR 8428; February 26, 2007.

O Chronic exposure is defined in the glossary of the Integrated Risk Information (IRIS) database (http://www.epa.gov/iris) as repeated exposure by the oral, dermal, or inhalation route for more than approximately 10% of the life span in humans (more than approximately 90 days to 2 years in typically used laboratory animal species).

P Defined in the IRIS database as repeated exposure by the oral, dermal, or inhalation route for more than 30 days, up to approximately 10% of the life span in humans (more than 30 days up to approximately 90 days in typically used laboratory animal species)..

Q Defined in the IRIS database as exposure by the oral, dermal, or inhalation route for 24 hours or less.



### 2- 39

### useful in identifying air t oxic pollutants and sources of greatest concern, setting regulatory priorities, and inform ing the decision making process.

Benzene: The EPA’s IRIS database li sts benzene as a known human carcinogen (causing leukemia) by all routes of exposure, and concludes that e xposure is associated with additional health effects, including genetic changes in both humans and animals and increased proliferation of bone marrow cells in mice. 131,132,133 

### EPA states in its IRIS database that data indicat e a causal relationship between benzene exposure and acute lymphocytic leukemia and suggest a relations hip between benzene exposure and chronic non-lymphocytic leukemia and chronic lymphocy tic leukemia. The In ternational Agency for Research on Carcinogens (IARC) has determined that benzene is a human carcinogen and the U.S. Department of Health and Human Services (DHHS) has characterized benzene as a known human carcinogen. 134,135



### A number of adverse noncancer health eff ects including blood disorders, such as preleukemia and aplastic anemia, have also been associated with long-term exposure to benzene. 136,137 

### The most sensitive noncancer effect observed in humans, based on current data, is the depression of the ab solute lymphocyte count in blood. 138,139 

### In addition, recent work, including studies sponsored by th e Health Effects Institute (HEI), provides evidence that biochemical responses are occu rring at lower levels of benzene exposure than previously known. 140,141,142,143 

### EPA’s IRIS program has not yet evaluated these new data.
1,3-Butadiene: EPA has characterized 1,3-butadiene as carci nogenic to humans by inhalation. 144,145 

### The IARC has determined that 1,3-butadiene is a human carcinogen and the U.S. DHHS has characterized 1,3-but adiene as a known human carcinogen. 146,147 

### There are numerous studies consistently dem onstrating that 1,3-butad iene is metabolized into genotoxic metabolites by experiment al animals and humans. The specific mechanisms of 1,3-butadiene-induced car cinogenesis are unknown; however, the scientific evidence strongly suggests that the carcinogenic effects are mediated by genotoxic metabolites. Animal data suggest that females may be more sensitive than males for cancer effects associated with 1,3- butadiene exposure; there are insufficient data in humans from which to draw conc lusions about sensitive subpopulations. 1,3- butadiene also causes a variety of reproducti ve and developmental effects in mice; no human data on these effects are available. Th e most sensitive effect was ovarian atrophy observed in a lifetime bioassay of female mice. 148



### Formaldehyde: Since 1987, EPA has classified formaldehyde as a probable human carcinogen based on evidence in humans and in rats, mice, hamsters, and monkeys. 149 

### EPA is currently reviewing recently published epidemiological data. For instance, research conducted by the National Cancer Instit ute (NCI) found an increased risk of nasopharyngeal cancer and lymphohematopoietic mali gnancies such as leukemia among workers exposed to formaldehyde. 150,151 

### NCI is currently performing an update of these studies. A recent National Institute of Occupational Safety and Health (NIOSH) study of garment workers also found increased risk of death due to leukemia among

2-4 0Regulatory Impact Analysis



### workers exposed to formaldehyde. 152 

### Extended follow-up of a cohort of British chemical workers did not find evidence of an increase in nasopharyngeal or lymphohematopoietic cancers, but a continuing statistically si gnificant excess in lung cancers was reported. 153



### In the past 15 years there has been substantial resear ch on the inhalation dosimetry for formaldehyde in rodents and primates by the CIIT Centers for Health Research (formerly the Chemical Industry Inst itute of Toxicology), with a focus on use of rodent data for refinement of the qua ntitative cancer dose -response assessment. 154,155,156 

### CIIT’s risk assessment of formaldehyde incorporated mechanistic and dosimetric information on formaldehyde.
Based on the developments of the last decade, in 2004, the working group of the International Agency for Research on Can cer (IARC) concluded that formaldehyde is carcinogenic to humans (Group 1), on the basis of sufficient evidence in humans and sufficient evidence in experimental animals - a higher classification than previous IARC evaluations. After reviewing the currently available epidemiological evidence, the IARC (2006) characterized the human evidence for formaldehyde carcinogenicity as “sufficient,” based upon the data on nasopharyngeal cancers; the epid emiologic evidence on leukemia was characterized as “strong.” 157 

### EPA is reviewing the recent work cited above from the NCI and NIOSH, as well as th e analysis by the CIIT Centers for HealthResearch and other studies, as part of a reassessment of the human hazard and doseresponse associated with formaldehyde.
Formaldehyde exposure also causes a range of noncancer health effects, including irritation of the eyes (burning and watering of the eyes), nose and throat. Effects from repeated exposure in humans include respir atory tract irritation, chronic bronchitis and nasal epithelial lesions such as metaplasia and loss of cilia. Animal studies suggest that formaldehyde may also cause airway inflamma tion – including eosinophil infiltration into the airways. There are severa l studies that suggest that formaldehyde may increase the risk of asthma – particularly in the young. 158,159



### Acetaldehyde: Acetaldehyde is classified in EPA’s IRIS database as a probable human carcinogen, based on nasal tumors in rats, and is considered toxic by the inhalation, oral, and intravenous routes. 160 

### Acetaldehyde is reasonably anticipated to be a human carcinogen by the U.S. DHHS in the 11 th 

### Report on Carcinogens and is classified as possibly carcinogenic to humans (Group 2B) by the IARC. 161,162 

### EPA is currently conducting a reassessment of cancer risk fr om inhalation exposure to acetaldehyde.
The primary noncancer effects of expos ure to acetaldehyde vapors include irritation of the eyes, sk in, and respiratory tract. 163 

### In short-term (4 week) rat studies, degeneration of olfactory epith elium was observed at various concentration levels of acetaldehyde exposure. 164,165 

### Data from these studies were used by EPA to develop an inhalation reference concentra tion. Some asthmatics have been shown to be a sensitive subpopulation to decrements in functiona l expiratory volume (FEV1 test) and bronchoconstriction upon acetaldehyde inhalation. 166 

### The agency is currently conducting a reassessment of the health hazards from inhalation e xposure to acetaldehyde.

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### Acrolein: EPA determined in 2003 th at the human carcinogenic potential of acrolein could not be determined because th e available data were inadequate. No information was available on the carcinogeni c effects of acrolein in humans and the animal data provided inadequa te evidence of carcinogenicity. 167 

### The IARC determined in 1995 that acrolein was not classifiable as to it s carcinogenicity in humans. 168



### Acrolein is extremely acrid and irrita ting to humans when inhaled, with acute exposure resulting in upper respiratory tract irritation, mucu s hypersecretion and congestion. Levels considerab ly lower than 1 ppm (2.3 mg/m 3 

### ) elicit subjective complaints of eye and nasal irritation and a decrease in the respiratory rate. 169,170 

### Lesions to the lungs and upper respirator y tract of rats, rabbits, and hamsters have been observed after subchronic exposure to acrolein. Based on animal data, individuals with compromised respiratory function (e.g., emphys ema, asthma) are expected to be at increased risk of developing adverse responses to strong respirator y irritants such as acrolein. This was demonstrated in mice with allergic airway-disease by comparison to non-diseased mice in a study of the acute re spiratory irritant e ffects of acrolein. 171



### EPA is currently in the process of co nducting an assessment of acute exposure effects for acrolein. The intense irritancy of this carbonyl has been demonstrated during controlled tests in human subjects, who suffe r intolerable eye and nasal mucosal sensory reactions within minutes of exposure. 172



### Polycyclic Organic Matter (POM): POM is generally defined as a large class of organic compounds which have multiple benzen e rings and a boiling point greater than 100 degrees Celsius. Many of the compounds included in the cl ass of compounds known as POM are classified by EPA as probabl e human carcinogens based on animal data. One of these compounds, naphthalene, is disc ussed separately below. Polycyclic aromatic hydrocarbons (PAHs) are a subset of POM that contain only hydrogen and carbon atoms. A number of PAHs are known or suspected carcinogens. Recent studies have found that maternal exposures to PAHs (a subclass of POM) in a population of pregnant women were associated with se veral adverse birth outcomes, including low birth weight and reduced length at birth, as well as impaired cognitive development at age three. 173,174 

### EPA has not yet evaluated these recent studies.
Naphthalene: Naphthalene is found in sm all quantities in gasoline and diesel fuels. Naphthalene emissions have been meas ured in larger quantities in both gasoline and diesel exhaust compared with evaporativ e emissions from mobile sources, indicating it is primarily a product of combustion. EPA recen tly released an extern al review draft of a reassessment of the inhalation carcinogenic ity of naphthalene based on a number of recent animal carcinogenicity studies. 175 

### The draft reassessment recently completed external peer review. 176 

### Based on external peer review comments received to date, additional analyses are being undertaken. This external review draft does not represent official agency opinion and was released solely for the purposes of external peer review and public comment. Once EPA evaluates public and peer reviewer comments, the document will be revised. The National Toxicology Program listed naphthalene as

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### "reasonably anticipated to be a human car cinogen" in 2004 on the basis of bioassays reporting clear evidence of carci nogenicity in rats and some evidence of carcinogenicity in mice. 177 

### California EPA has released a new ri sk assessment for naphthalene, and the IARC has reevaluated naphthalene and re-classified it as Group 2B: possibly carcinogenic to humans. 178 

### Naphthalene also causes a number of chronic non-cancer effects in animals, including abnormal cell ch anges and growth in respiratory and nasal tissues. 179



### The small SI and marine SI standards will reduce air toxics emitted from these engines, vessels and equipment, thereby helping to mitigate some of the adverse health effects associated with their operation. The assumption that toxic reductions track reductions in HC are supported by results from numerous test programs, including recent testing on small nonroad gasoline engi nes with and without controls. 180



## 2.5 Carbon Monoxide
Unlike many gases, CO is odorless, colorl ess, tasteless, and nonirritating. Carbon monoxide results from incomplete combustion of fuel and is emitted directly from vehicle tailpipes. Incomplete combustion is mo st likely to occur at low air-to-fuel ratios in the engine. These conditions are common during vehicle starting when air supply is restricted (“choked”), when vehicles are not tuned properly, and at high altitude, where “thin” air effectively reduces the amount of oxygen availabl e for combustion (except in engines that are designed or adjusted to comp ensate for altitude). High concentrations of CO generally occur in areas with elevated mobile-source emissions. Carbon monoxide emissions increase dramatically in cold weather. This is because engines need more fuel to start at cold temperatures and because some emission control devices (such as oxygen sensors and catalytic converters) operate le ss efficiently when they are cold. Also, nighttime inversion conditions are more frequent in the colder months of the year. This is due to the enhanced stability in the atmospheric boundary laye r, which inhibits vertical mixing of emissions from the surface.



### 2.5.1 Health Effects of CO Pollution
We are relying on the data and conclu sions in the EPA Air Quality Criteria Document for CO (CO Criteri a Document), which was published in 2000, regarding the health effects associated with CO exposure. R181 

### Carbon monoxide enters the bloodstream through the lungs and forms carboxyhemoglobin (COHb), a compound that inhibits the blood’s capacity to carry oxyge n to organs and tissues. 182,183 

### Carbon monoxide has long been known to have substantial adverse effects on human health, including toxic effects on blood and tissues, and effects on organ f unctions. Although th ere are effective compensatory increases in blood flow to the brain, at some concentrations of COHb, somewhere above 20 percent, these compen sations fail to maintain sufficient oxygen delivery, and metabolism declines. 184 

### The subsequent hypoxia in brain tissue then

R 

### The NAAQS review process is underway fo r CO and the CO Integrated Science Assessment is scheduled to be completed in 2010.

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### produces behavioral effects, including d ecrements in continuous performance and reaction time. 185



### Carbon monoxide has been li nked to increased risk for people with heart disease, reduced visual perception, c ognitive functions and aerobic capacity, and possible fetal effects. 186 

### Persons with heart disease are es pecially sensitive to carbon monoxide poisoning and may experience chest pain if they breathe the gas while exercising. 187 

### Infants, elderly persons, and i ndividuals with respiratory dise ases are also particularly sensitive. Carbon monoxide can affect he althy individuals, impai ring exercise capacity, visual perception, manual dext erity, learning functions, and ability to perform complex tasks. 188



### Several epidemiological studies have shown a link between CO and premature morbidity (including angina, conge stive heart failure, and other cardiovascular diseases). Several studies in the United States and Ca nada have also repo rted an association between ambient CO exposures and freque ncy of cardiovascula r hospital admissions, especially for congestive hear t failure (CHF). An asso ciation between ambient CO exposure and mortality has also been reported in epidemio logical studies, though not as consistently or specifically as with CHF admi ssions. EPA reviewed these studies as part of the CO Criteria Document review proce ss and noted the possibility that the average ambient CO levels used as exposure indi ces in the epidemiology studies may be surrogates for ambient air mixes impact ed by combustion sources and/or other constituent toxic components of such mixes. More research will be needed to better clarify CO’s role. 189



### As noted above, CO has been linked to numerous health effects. In addition to health effects from chronic exposure to am bient CO levels, acute exposures to higher levels are also a problem. Acute exposures to CO are discussed further in Section 2.6.



### 2.5.2 Attainment and Main tenance of the CO NAAQS
On July 3, 1995 EPA made a finding that small land-based spark-ignition engines cause or contribute to CO nonattainment (60 FR 34581, July 3, 1995). Marine sparkignition engines, which have relatively hi gh per engine CO emissions, can also be a source of CO emissions in CO nonattainment areas. In the preamble for this proposed rule EPA makes a finding that recreationa l marine engines and vessels cause or contribute to CO nonattainment and we provide information showing CO emissions from spark-ignition marine engines and vessels in the CO nonatta inment areas in 2005. Sparkignition marine engines and ve ssels contribute to CO nonattain ment in more than one of the CO nonattainment areas.

A nonattainment area is defined in the Cl ean Air Act (CAA) as an area that is violating an ambient standard or is contributing to a near by area that is violating the standard. EPA has designated nonattainment areas for the CO NAAQS by calculating air quality design values and considering other factors. S

S The full details involved in calcula ting a CO design value are given in 40 CFR Part 50.8.



### 2-4 4Regulatory Impact Analysis



### There are two CO NAAQS. The 8-hour av erage CO NAAQS is 9 ppm, not to be exceeded more than once per year, and the 1-hour average CO NAAQS is 35 ppm, not to be exceeded more than once per year. As of March 12, 2008, there are approximately 850 thousand people living in 4 areas (which in clude 5 counties) that are designated as nonattainment for CO, see Table 2-8. The emission reductions in this rule will help areas to attain and mainta in the CO NAAQS.

Table 2-8: Classified Ca rbon Monoxide Nonattainment Areas as of March 2008 a
Area Classification Population (1000s) Las Vegas, NV serious 479 El Paso, TX moderate <= 12.7 ppm 62 Reno, NV moderate <= 12.7 ppm 179 Total 719.5

a This table does not include Salem, OR which is an unclassified CO nonattainment area.



### In addition to the CO nonattainment areas , there are areas that have not been designated as nonattainment where air quality monitoring may indicate a need for CO control. For example, areas like Birmi ngham, AL and Calexico, CA have not been designated as nonattainment although monitors in these areas have recorded multiple exceedances since 1995. 190



### There are also almost 69 million people living in CO maintenance areas, see Table 2-9. T 

### Carbon monoxide maintenance areas may remain at risk for high CO episodes especially in geographic areas w ith unusually challengi ng meteorological and topographical conditions and in areas with high population growth a nd increasing vehicle miles traveled.

Table 2-9: Carbon Monoxide Ma intenance Areas as of March 2008
N umber of Areas N umber of Counties Population (1000s) Serious 6 15 20,496,077 Moderate > 12.7ppm 4 19 17,575,606 Moderate <= 12.7ppm 30 62 23,371,653

Unclassified 33 38 7,480,907

Total 73 127 68,924,243



### A 2003 NAS report found that in geogr aphical areas that have achieved attainment of the NAAQS, it might still be possi ble for ambient concentrations of CO to sporadically exceed the standard under unfa vorable conditions such as strong winter

T The CO nonattainment and mainte nance areas are listed in Appendix 2E to this RIA.



### 2-4 5

### inversions. Areas like Alaska are prone to winter inversions due to their topographic and meteorological conditions. The report furthe r suggests that additional reductions in CO are prudent to further reduce the risk of violations in regions with problematic topography and temporal variability in meteorology. 191 

### The reductions in CO emissions from this rule will assist areas in maintaining the CO standard.
As discussed in the preamble, Small SI engines and equipment and Marine SI engines and vessels do contribu te to CO nonattainment. Th e CO emission benefits from this rule will help states in their strategy to attain the CO NAAQS. Maintenance of the CO NAAQS is also challenging and many ar eas will be able to use the emissions reductions from this rule to assist in maintaining the CO NAAQS into the future.



## 2.6 Acute Exposure to Air Pollutants
Emissions from Small SI engines and equipment and Marine SI engines and vessels contribute to ambient concentrations of ozone, CO, air toxics and PM and acute exposures to air toxics, CO and PM. The sta ndards being finalized in this action can help reduce acute exposures to emissions from Ma rine SI engines and vessels and Small SI engines and equipment.



### 2.6.1 Exposure to CO from Ma rine SI Engines and Vessels
In recent years, a substantial number of CO poisonings and deaths have occurred on and around recreational boats across th e nation. The actual number of deaths attributable to CO poisoning while boating is difficult to estimate because CO-related deaths in the water may be labeled as drow ning. An interagency team consisting of the National Park Service, the U.S. Department of Interior, and the National Institute for Occupational Safety and Health maintains a record of published CO-related fatal and nonfatal poisonings. 192 

### Between 1984 and 2004, 113 CO-related deaths and 458 nonfatal CO poisonings have been identified ba sed on hospital record s, press accounts, and other information. Deaths have been attri buted to exhaust from both onboard generators and propulsion engines. House boats, cabin cruisers, and ski boats are the most common types of boats associated with CO poisoning ca ses. These incidents have prompted other federal agencies, including the United States Coast Guard and National Park Service, to issue advisory statements and other interventions to boaters to avoid activities that could lead to excessive CO exposure. 193



### CO concentrations can be extremely elevat ed within several meters of the exhaust port. Engineers and industri al hygienists from CDC/NIOSH and other state and federal agencies have conducted field studies of CO concentrations on and around houseboats. In one study of houseboat concentrations, CO concentrations immediately at the point of generator exhaust discharge on one house boat averaged 0.5% (5,000 ppm), and ranged from 0.0% to 1.28% (12,800 ppm). 194 

### With both propulsion and generators running, time-averaged concentrations on the swim deck were 0.2 - 169 ppm at different locations on one boat's swim platform, 17-570 ppm on another's, and 0-108 on another. Other studies also show the poten tial for high concentrations with extreme peaks in CO

2-4 6Regulatory Impact Analysis



### concentrations in locations where boaters and swimmers can be exposed during typical boating activities, such as standing on a swim deck or swimming near a boat.



### 2.6.2 Exposure to CO and PM from Small SI Engines and Equipment
A large segment of the population uses small, gasoline-powered SI lawn and garden equipment on a regular basis. Emi ssions from many of the Small SI engines powering this equipment may lead to elevat ed air pollution exposur es for a number of gaseous and particulate compounds , especially for individuals such as landscapers, whose occupations require the daily use of these engines and equipment.
Emission studies with lawn and garden equipment suggest a potential for high exposures during the Small SI engine operation. 195,196 

### Studies investigating air pollutant exposures during small engine use did report elevated personal exposure measurements related to lawn and garden equipment use. 197,198 

### Bunger et al. reported elevated CO personal measurements related to chainsaw use, with short-term concentrations exceeding 400 ppm for certain cutting ac tivities. This study evalua ted personal exposures during the use of uncontrolled chainsaws. Baldauf at al. evaluated the use of lawnmowers, chainsaws and string trimmers meeting US EPA Phase 2 standards. In this study, shortterm exposures during lawnmower and chai nsaw use exceeded 120 ppm of CO, while string trimmer use resulted in some short-te rm exposures approach ing 100 ppm of CO. This study also indicated that short-term PM 2.5 

### exposures could exceed 100 F g/m 3



### . Pollutant exposures were highly dependent on th e operator’s orientation to the engine and wind direction, as well as the activities being conducted.

These studies indicate th at emissions from some lawn and garden equipment meeting EPA's current Phase 2 standards may c ontribute to elevated exposures to certain pollutants. The potential for elevated exposure to CO and PM 2.5 

### for operators of Small SI engines and equipment will be reduced by this rule.

1 U.S. EPA. Air Quality Criteria for Ozone and Rela ted Photochemical Oxidants (Final). U.S. EPA, Washington, DC, EPA/600/R-05/004aF-cF, 2006. 

### Error! Main Document Only. This document is contained in Docket Identification EPA-HQ-OAR-2004-0008-0455 to 0457.

2 U.S. EPA. Air Quality Criteria for Ozone and Rela ted Photochemical Oxidants (Final). U.S. EPA, Washington, DC, EPA/600/R-05/004aF-cF, 2006. 

### Error! Main Document Only. This document is contained in Docket Identification EPA-HQ-OAR-2004-0008-0455 to 0457.

3 U.S. EPA, Review of the National Ambient Air Quality Standards for Ozone: Policy Assessment of Scientific and Technical Information, OAQPS Staff Paper, Washington, DC, EPA-452/R-07-003, January



### 2-4 7- 2007. 

### Error! Main Document Only. This document is available in Docket EPA-HQ-OAR-2004 0008.

4 National Research Council (NRC), 2008. Estimating Mortality Risk Reduction and Economic Benefits from Controlling Ozone Air Pollution. The National Academies Press: Washington, D.C.

5 Bates, D.V.; Baker-Anderson, M.; Sizto, R. (1990) Asthma attack periodicity: a study of hospital emergency visits in Vancouver. Environ. Res. 51: 51-70.

6 Thurston, G.D.; Ito, K.; Kinney, P.L.; Lippmann, M. (1992) A multi-year study of air pollution and respiratory hospital admissions in three New York State metropolitan areas: results for 1988 and 1989 summers. J. Exposure Anal. Environ. Epidemiol. 2:429-450.

7 Thurston, G.D.; Ito, K.; Hayes, C.G.; Bates, D.V. ; Lippmann, M. (1994) Respiratory hospital admissions and summertime haze air pollution in Tor onto, Ontario: consideration of th e role of acid aerosols. Environ. Res. 65: 271-290.

8 Lipfert, F.W.; Hammerstrom, T. (1992) Temporal patterns in air pollution and hospital admissions. Environ. Res. 59: 374-399.

9 Burnett, R.T.; Dales, R.E.; Rai zenne, M.E.; Krewski, D.; Summers, P.W.; Roberts, G.R.; Raad-Young, M.; Dann,T.; Brook, J. (1994) Effects of low ambient levels of ozone and sulfates on the frequency of respiratory admissions to Ontario hospitals. Environ. Res. 65: 172-194.

10 U.S. EPA. Air Quality Criteria for Ozone and Rela ted Photochemical Oxidants (Final). U.S. EPA, Washington, DC, EPA/600/R-05/004aF-cF, 2006. This document is contained in Docket Identification EPA-HQ-OAR-2004-0008-0455 to 0457.

11 U.S. EPA. Air Quality Criteria for Ozone and Rela ted Photochemical Oxidants (Final). U.S. EPA, Washington, DC, EPA/600/R-05/004aF-cF, 2006. This document is contained in Docket Identification EPA-HQ-OAR-2004-0008-0455 to 0457.

12 Devlin, R. B.; McDonnell, W. F.; Mann, R.; Becker, S. ; House, D. E.; Schreinem achers, D.; Koren, H. S. (1991) Exposure of humans to ambient levels of ozone for 6.6 hours causes cellullar and biochemical changes in the lung. Am. J. Respir. Cell Mol. Biol. 4: 72-81.

13 Koren, H. S.; Devlin, R. B.; Becker, S.; Perez, R.; McDonnell, W. F. (1991) Time-dependent changes of markers associated with inflammation in the lungs of humans exposed to ambient levels of ozone. Toxicol. Pathol. 19: 406-411.

14 Koren, H. S.; Devlin, R. B.; Graham, D. E.; Mann, R.; McGee, M. P.; Horstman, D. H.; Kozumbo, W. J.; Becker, S.; House, D. E.; McDonnell, W. F.; Bromberg, P. A. (1989a) Ozone-induced inflammation in the lower airways of human subjects. Am. Rev. Respir. Dis. 139: 407-415.

15 Schelegle, E.S.; Siefkin, A.D.; McDonald, R.J. (199 1) Time course of ozone-induced neutrophilia in normal humans. Am. Rev. Respir. Dis. 143:1353-1358.

16 U.S. EPA (1996). Air Quality Criteria for Ozone and Related Photochemical Oxidants, EPA600-P-93- 004aF; (See page 7-171). This document is contained in Docket Identification EPA-HQ-OAR-2004-0008- 0455 to 0457.

17 Hodgkin, J.E.; Abbey, D.E.; Eule r, G.L.; Magie, A.R. (1984) COPD prevalence in nonsmokers in high and low photochemical air pollutio n areas. Chest 86: 830-838.



### 2-4 8Regulatory Impact Analysis

18 Euler, G.L.; Abbey, D.E.; Hodgkin, J.E.; Magie, A.R. (1988) Chronic obstructive pulmonary disease symptom effects of long-term cumulative exposure to ambient levels of total oxidants and nitrogen dioxide in California Seventh-day Adventist residents. Arch. Environ. Health 43: 279-285.

19 Abbey, D.E.; Petersen, F.; Mills, P.K.; Beeson, W.L. (1993) Long-term ambient concentrations of total suspended particulates, ozone, and sulfur dioxide and respiratory symptoms in a nonsmoking population. Arch. Environ. Health 48: 33-46.

20 U.S. EPA, Review of the National Ambient Air Quality Standards for Ozone: Policy Assessment of Scientific and Technical Information, OAQPS Staff Paper, Washington, DC, EPA-452/R-07-003, January 2007. This document is available in Docket EPA-HQ-OAR-2004-0008.

21 U.S. EPA. Air Quality Criteria for Ozone and Rela ted Photochemical Oxidants (Final). U.S. EPA, Washington, DC, EPA/600/R-05/004aF-cF, 2006. This document is contained in Docket Identification EPA-HQ-OAR-2004-0008-0455 to 0457.

22 U.S. EPA. Air Quality Criteria for Ozone and Rela ted Photochemical Oxidants (Final). U.S. EPA, Washington, DC, EPA/600/R-05/004aF-cF, 2006. This document is contained in Docket Identification EPA-HQ-OAR-2004-0008-0455 to 0457.

23 Avol, E. L.; Trim, S. C.; Little, D. E.; Spier, C. E.; Smith, M. N.; Peng, R.-C.; Linn, W. S.; Hackney, J. D.; Gross, K. B.; D'Arcy, J. B.; Gibbons, D.; Higgins, I. T. T. (1990) Ozone exposure and lung function in children attending a southern California summer camp. Pr esented at: 83rd annual meeting and exhibition of the Air & Waste Management Association; June ; Pittsburgh, PA. Pittsburgh, PA: Air & Waste Management Association; paper no. 90-150.3.

24 Higgins, I. T. T.; D'Arcy, J. B.; Gibbons, D. I.; Avol , E. L.; Gross, K. B. (1990) Effect of exposures to ambient ozone on ventilatory lung function in children. Am. Rev. Respir. Dis. 141: 1136-1146.

25 Raizenne, M. E.; Burnett, R. T.; Stern, B.; Frank lin, C. A.; Spengler, J. D. (1989) Acute lung function responses to ambient acid aerosol exposures in children. Environ. Health Perspect. 79: 179-185.

26 Raizenne, M.; Stern, B.; Burnett, R.; Spengler, J. (1987) Acute respiratory function and transported air pollutants: observational studies. Presented at: 80th annual meeting of the Air Pollution Control Association; June; New York, NY. Pittsburgh, PA: Air Pollution Control Association; paper no. 87-32.6.

27 Spektor, D. M.; Lippmann, M. (1991) Health effects of ambient ozone on healthy children at a summer camp. In: Berglund, R. L.; Lawson, D. R.; McKee, D. J., eds. Tropospheric ozone and the environment: papers from an international conference; March 1990; Los Angeles, CA. Pittsburgh, PA: Air & Waste Management Association; pp. 83-89. (A&WMA transaction series no. TR-19).

28 Spektor, D. M.; Thurston, G. D.; Mao, J.; He, D.; Hayes, C.; Lippmann, M. (1991) Effects of single- and multiday ozone exposures on respiratory function in active normal children. Environ. Res. 55: 107-122.

29 Spektor, D. M.; Lippman, M.; Lioy, P. J.; Thurston, G. D.; Citak, K.; James, D. J.; Bock, N.; Speizer, F. E.; Hayes, C. (1988a) Effects of ambient ozone on respiratory function in active, normal children. Am. Rev. Respir. Dis. 137: 313-320.

30 U.S. EPA. Air Quality Criteria for Ozone and Rela ted Photochemical Oxidants (Final). U.S. EPA, Washington, DC, EPA/600/R-05/004aF-cF, 2006. This document is contained in Docket Identification EPA-HQ-OAR-2004-0008-0455 to 0457.

31 Hazucha, M. J.; Folinsbee, L. J.; Seal, E., Jr. (1992) Effects of steady-state and variable ozone concentration profiles on pulmonary function. Am. Rev. Respir. Dis. 146: 1487-1493.



### 2- 4932 Horstman, D.H.; Ball, B.A.; Folin sbee, L.J.; Brown, J.; Gerrity, T. (1995) Comparison of pulmonary responses of asthmatic and nonasthmatic subjects perfor ming light exercise while exposed to a low level of ozone. Toxicol. Ind. Health.

33 Horstman, D.H.; Folinsbee, L.J.; Ives, P.J.; Ab dul-Salaam, S.; McDonnell, W.F. (1990) Ozone concentration and pulmonary response relationships for 6.6-hour exposures with five hours of moderate exercise to 0.08, 0.10, and 0.12 ppm. Am. Rev. Respir. Dis. 142: 1158-1163.

34 AQ modeling TSD (EPA Doc #)

35 Intergovernmental Panel on Climate Change (2007). Fourth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press, NY.

36 U.S. EPA. 1999. The Benefits and Costs of the Cl ean Air Act, 1990-2010. Prepared for U.S. Congress by U.S. EPA, Office of Air and Radiation, Office of Policy Analysis and Review, Washington, DC, November; EPA report no. EPA410-R-99-001. 

### Error! Main Document Only. This document is contained in Docket Identification EPA-HQ-OAR-2004-0008-0485.

37 Winner, W.E., and C.J. Atkinson. 1986. “Absorption of air pollution by plants, and consequences for growth.” Trends in Ecology and Evolution 1:15-18.

38 U.S. EPA. Air Quality Criteria for Ozone and Rela ted Photochemical Oxidants (Final). U.S. EPA, Washington, DC, EPA/600/R-05/004aF-cF, 2006. This document is contained in Docket Identification EPA-HQ-OAR-2004-0008-0455 to 0457.

39 Tingey, D.T., and Taylor, G.E. 1982. “Variation in plant response to ozone: a conceptual model of physiological events.” In: Effects of Gaseous Air Pollution in Agriculture and Horticulture (Unsworth, M.H., Omrod, D.P., eds.) London, UK: Butterworth Scientific, pp.113-138.

40 U.S. EPA. Air Quality Criteria for Ozone and Rela ted Photochemical Oxidants (Final). U.S. EPA, Washington, DC, EPA/600/R-05/004aF-cF, 2006. This document is contained in Docket Identification EPA-HQ-OAR-2004-0008-0455 to 0457.

41 U.S. EPA. Air Quality Criteria for Ozone and Rela ted Photochemical Oxidants (Final). U.S. EPA, Washington, DC, EPA/600/R-05/004aF-cF, 2006. This document is contained in Docket Identification EPA-HQ-OAR-2004-0008-0455 to 0457.

42 U.S. EPA. Air Quality Criteria for Ozone and Rela ted Photochemical Oxidants (Final). U.S. EPA, Washington, DC, EPA/600/R-05/004aF-cF, 2006. This document is contained in Docket Identification EPA-HQ-OAR-2004-0008-0455 to 0457.

43 U.S. EPA. Air Quality Criteria for Ozone and Rela ted Photochemical Oxidants (Final). U.S. EPA, Washington, DC, EPA/600/R-05/004aF-cF, 2006. This document is contained in Docket Identification EPA-HQ-OAR-2004-0008-0455 to 0457.

44 Ollinger, S.V., J.D. Aber and P.B. Reich. 1997. “Simulating ozone effects on forest productivity: interactions between leaf canopy and stand level processes.” Ecological Applications 7:1237-1251.

45 Winner, W.E., 1994. “Mechanistic analysis of plan t responses to air pollution.” Ecological Applications, 4(4):651-661.

46 U.S. EPA. Air Quality Criteria for Ozone and Rela ted Photochemical Oxidants (Final). U.S. EPA, Washington, DC, EPA/600/R-05/004aF-cF, 2006. This document is contained in Docket Identification EPA-HQ-OAR-2004-0008-0455 to 0457.



### 2-5 0Regulatory Impact Analysis

47 U.S. EPA. Air Quality Criteria for Ozone and Rela ted Photochemical Oxidants (Final). U.S. EPA, Washington, DC, EPA/600/R-05/004aF-cF, 2006. This document is contained in Docket Identification EPA-HQ-OAR-2004-0008-0455 to 0457.

48 Fox, S., and R. A. Mickler, eds. 1996. Impact of Air Pollutants on Southern Pine Forests. SpringerVerlag, NY, Ecol. Studies, Vol. 118, 513 pp.

49 De Steiguer, J., J. Pye, C. Love. 1990. “Air Pollutio n Damage to U.S. Forests.” Journal of Forestry, Vol 88 (8) pp. 17-22.

50 Pye, J.M. 1988. “Impact of ozone on the growth and yield of trees: A review.” Journal of Environmental Quality 17 pp.347-360.

51 U.S. EPA. Air Quality Criteria for Ozone and Rela ted Photochemical Oxidants (Final). U.S. EPA, Washington, DC, EPA/600/R-05/004aF-cF, 2006. This document is contained in Docket Identification EPA-HQ-OAR-2004-0008-0455 to 0457.

52 U.S. EPA. Air Quality Criteria for Ozone and Rela ted Photochemical Oxidants (Final). U.S. EPA, Washington, DC, EPA/600/R-05/004aF-cF, 2006. This document is contained in Docket Identification EPA-HQ-OAR-2004-0008-0455 to 0457.

53 McBride, J.R., P.R. Miller, and R. D. Laven. 1985. “Effects of oxidant air pollutants on forest succession in the mixed conifer forest type of southern California.” In: Air Pollutants Effects On Forest Ecosystems, Symposium Proceedings, St. P, 1985, p. 157-167.

54 Miller, P.R., O.C. Taylor, R.G. Wilhour. 1982. Ox idant air pollution effects on a western coniferous forest ecosystem. Corvallis, OR: U.S. Environm ental Protection Agency, Environmental Research Laboratory (EPA600-D-82-276).

55 U.S. EPA. Air Quality Criteria for Ozone and Rela ted Photochemical Oxidants (Final). U.S. EPA, Washington, DC, EPA/600/R-05/004aF-cF, 2006. This document is contained in Docket Identification EPA-HQ-OAR-2004-0008-0455 to 0457.

56 Kopp, R. J.; Vaughn, W. J.; Hazilla, M.; Carson, R. 1985. “Implications of environmental policy for U.S. agriculture: the case of ambient ozone standards.” J. Environ. Manage. 20:321-331.

57 Adams, R. M.; Hamilton, S. A.; McCarl, B. A. 1 986. “The benefits of pollution control: the case of ozone and U.S. agriculture.” Am. J. Agric. Econ. 34: 3-19.

58 Adams, R. M.; Glyer, J. D.; Johnson, S. L.; McCa rl, B. A. 1989. “A reassessment of the economic effects of ozone on U.S. agriculture.” JAPCA 39:960-968.

59 Abt Associates, Inc. 1995. Urban ornamental plants: sensitivity to ozone and potential economic losses. U.S. EPA, Office of Air Quality Planning and Standa rds, Research Triangle Park. Under contract to RADIAN Corporation, contract no. 68-D3-0033, WA no. 6. pp. 9-10.

60 U.S. EPA (2004) Air Quality Criteria for Partic ulate Matter (Oct 2004), Volume I Document No. EPA600/P-99/002aF and Volume II Document No. EPA600/P-99/002bF. 

### Error! Main Document Only. This document is available in Docket EPA-HQ-OAR-2004-0008-0042 and EPA-HQ-OAR-2004- 0008-0043.



### 2-5 161 U.S. EPA (2005) Review of the National Ambient Air Quality Standard for Particulate Matter: Policy Assessment of Scientific and Technical Information, OAQPS Staff Paper. EPA-452/R-05-005. 

### Error! Main Document Only. This document is available in Docket EPA-HQ-OAR-2004-0008-0454.

62 U.S. EPA 2006. Provisional Assessment of Recent St udies on Health Effect s of Particulate Matter Exposure. EPA/600/R-06/063. 

### Error! Main Document Only. This document is available in Docket EPA-HQ-OAR-2004-0008-0461.

63 Laden F; Neas LM; Dockery DW; et al. 2000. “Association of fine particulate matter from different sources with daily mortality in six U.S. cities. ” Environ Health Perspectives 108(10):941-947.

64 Schwartz J; Laden F; Zanobetti A. 2002. “The concentration-response relation between PM(2.5) and daily deaths.” Environ Health Perspect 110(10): 1025-1029.

65 Janssen NA; Schwartz J; Zanobetti A.; et al. 2002. “Air conditioning and source-specific particles as modifiers of the effect of PM10 on hospital admissions for heart and lung disease.” Environ Health Perspect 110(1):43-49.

66 Dockery, DW; Pope, CA, III; Xu, X; et al. 1993. “An association between air pollution and mortality in six U.S. cities.” N Engl J Med 329:1753-1759.

67 Pope, CA, III; Burnett, RT; Thun, MJ; Calle, EE; et al. 2002. “Lung cancer, cardiopulmonary mortality, and long-term exposure to fine particulate air pollution.” J Am Med Assoc 287: 1132-1141.

68 Krewski, D; Burnett, RT; Goldberg, M S; et al. 2000. “Reanalysis of the Harvard Six Cities study and the American Cancer Society study of particulate air pollu tion and mortality. A special report of the Institute's Particle Epidemiology Reanalysis Project.” Cambridge, MA: Health Effects Institute.

69 Jerrett, M; Burnett, RT; Ma, R; et al. 2005. “Spatial Analysis of Air Pollution and Mortality in Los Angeles.” Epidemiology. 16(6):727-736.

70 Künzli, N.; Jerrett, M.; Mack, W.J.; et al.(2004) Ambient air pollution and atherosclerosis in Los Angeles. Environ Health Perspect doi:10.1289/ehp.7523 [Available at http://dx.doi.org/].

71 Riediker, M.; Cascio, W.E.; Griggs, T.R.; et al. 2004 . "Particulate matter exposure in cars is associated with cardiovascular effects in healthy young men." Am J Respir Crit Care Med 169: 934-940.

72 Maynard, D.; Coull, B.A.; Gryparis, A.; Schwartz, J. (2007) Mortality risk associated with short-term exposure to traffic particles and sulfates. E nvironmental Health Perspectives 115: 751-755.

73 Ryan, P.H.; LeMasters, G.K.; Biswas, P.; Levin, L. ; Hu, S.; Lindsey, M.; Bernstein, D.I.; Lockey, J.; Villareal, M.; Khurana Hershey, G.K.; Grinshpun, S.A. (2007) A comparison of proximity and land use regression traffic exposure models and wheezing in infants. Environ Health Perspect 115: 278-84.

74 Morgenstern, V.; Zutavern, A.; Cyrys, J.; Brockow, I.; Gehring, U.; Koletzko, S.; Bauer, C.P.; Reinhart,D; Wichmann, H-E.; Heinrich, J. (2007) Respiratory health and individual estimated expousure to trafficrelated air pollutant in a cohort of young children. Occupational and Environmental Medicine 64: 8-16.

75 Franco Suglia, S.; Gryparis, A.; Wright, R.O.; Schwartz, J.; Wright, R.J. (2007) Association of black carbon with cognition among children in a prospective birth cohort study. American Journal of Epidemiology 167: 280-286.



### 2-5 2Regulatory Impact Analysis

76 National Research Council, 1993. Protecting Visi bility in National Parks and Wilderness Areas. National Academy of Sciences Committee on Haze in National Parks and Wilderness Areas. National Academy Press, Washington, DC. This book is available electronically at http://www.nap.edu/books/0309048443/html/ and is available in Docket EPA-HQ-OAR-2004-0008.

77 U.S. EPA , National Ambient Air Quality Standards for Particulate Matter; Proposed Rule; January 17, 2006, Vol71 p 2676. 

### Error! Main Document Only. This document is available in Docket EPAHQ-OAR-2004-0008-0466. This information is ava ilable electronically at: http://epa.gov/fedrgstr/EPAAIR/2006/January/Day-17/a177.pdf

78 U.S. EPA (2004) Air Quality Criteria for Partic ulate Matter (Oct 2004), Volume I Document No. EPA600/P-99/002aF and Volume II Document No. EPA600/P-99/002bF. This document is available in Docket EPA-HQ-OAR-2004-0008.

79 U.S. EPA (2005) Review of the National Ambient Air Quality Standard for Particulate Matter: Policy Assessment of Scientific and Technical Information, OAQPS Staff Paper. EPA-452/R-05-005. This document is available in Docket EPA-HQ-OAR-2004-0008.

80 U.S. EPA. 1993. Effects of the 1990 Clean Air Ac t Amendments on Visibility in Class I Areas: An EPA Report to Congress. EPA452-R-93-014. 

### Error! Main Document Only. This document is available in Docket EPA-HQ-OAR-2004-0008-0483.

81 U.S. EPA (2002) Latest Findings on National Air Qu ality – 2002 Status and Trends. EPA 454/K-03-001. 

### Error! Main Document Only. This document is available in Docket EPA-HQ-OAR-2004-0008- 0482.

82 National Park Service. Air Quality in the National Pa rks, Second edition. NPS, Air Resources Division. D 2266. September 2002. 

### Error! Main Document Only. This document is available in Docket EPA-HQ-OAR-2004-0008-0481.

83 U.S. EPA (2002) Latest Findings on National Air Qu ality – 2002 Status and Trends. EPA 454/K-03-001. This document is available in Docket EPA-HQ-OAR-2004-0008-0482.

84 Environmental Protection Agency (2003). Response of Surface Wa ter Chemistry to the Clean Air Act Amendments of 1990. National Health and Environmenta l Effects Research Laboratory, Office of Research and Development, U.S. Environmental Protection Agency. Research Triangle Park, NC. EPA 620/R– 03/001.

85 Fenn, M.E. and Blubaugh, T.J. (2005) Winter Depos ition of Nitrogen and Sulfur in the Eastern Columbia River Gorge National Scenic Area, USDA Forest Service.

86 Galloway, J. N.; Cowling, E. B. (2002). Reactive nitrogen and the world: 200 years of change. Ambio 31: 64–71.

87 Bricker, Suzanne B., et al., National Estuarine Eutrophication Assessment, Effects of Nutrient Enrichment in the Nation’s Estuaries, National Ocean Service, National Oceanic and Atmospheric Administration, September, 1999.

88 Smith, W.H. 1991. “Air pollution and Forest Damage.” Chemical Engineering News, 69(45): 30-43.

89 Gawel, J.E.; Ahner, B.A.; Friedlan d, A.J.; and Morel, F.M.M. 1996. “Role for heavy metals in forest decline indicated by phytochelatin measurements.” Nature, 381: 64-65.



### 2-5 390 Cotrufo, M.F.; DeSanto, A.V.; Alfani, A.; et al. 1995. “Effects of urban heavy metal pollution on organic matter decomposition in Quercus ilix L. woods.” Environmental Pollution, 89: 81-87.

91 Niklinska, M.; Laskowski, R.; Maryanski, M. 1998 . “Effect of heavy metals and storage time on two types of forest litter: basal respiration rate and exchangeable metals.” Ecotoxicological Environmental Safety, 41: 8-18.

92 Mason, R.P. and Sullivan, K.A. 1997. “Mercury in Lake Michigan.” Environmental Science & Technology, 31: 942-947. (from Delta Report “Atmospheric deposition of toxics to the Great Lakes”).

93 Landis, M.S. and Keeler, G.J. 2002. “Atmospheric mercury deposition to Lake Michigan during the Lake Michigan Mass Balance Study.” Environmental Science & Technology, 21: 4518-24.

94 U.S. EPA. 2000. EPA453/R-00-005, “Deposition of Ai r Pollutants to the Great Waters: Third Report to Congress,” Office of Air Quality Planning and Sta ndards, Research Triangle Park, North Carolina. 

### Error! Main Document Only. This document is available in Docket EPA-HQ-OAR-2004-0008.

95 NSTC 1999

96 Callender, E. and Rice, K.C. 2000. “The Urban Environmental Gradient: Anthropogenic Influences on the Spatial and Temporal Distributions of Lead and Zinc in Sediments.” Environmental Science & Technology, 34: 232-238.

97 Rice, K.C. 1999. “Trace Element Concentrations in Streambed Sediment Across the Conterminous United States.” Environmental Science & Technology, 33: 2499-2504.

98 Ely, JC; Neal, CR; Kulpa, CF; et al. 2001. “Imp lications of Platinum-Group Element Accumulation along U.S. Roads from Catalytic-Converter Attrition.” Environ. Sci. Technol. 35: 3816-3822.

99 U.S. EPA. 1998. EPA454/R-98-014, “Locating and Estimating Air Emissions from Sources of Polycyclic Organic Matter,” Office of Air Quality Plan ning and Standards, Research Triangle Park, North Carolina. 

### Error! Main Document Only. This document is available in Docket EPA-HQ-OAR2004-0008.

100 U.S. EPA. 1998. EPA454/R-98-014, “Locating and Estimating Air Emissions from Sources of Polycyclic Organic Matter,” Office of Air Quality Plan ning and Standards, Research Triangle Park, North Carolina. 

### Error! Main Document Only. This document is available in Docket EPA-HQ-OAR2004-0008.

101 Simcik, M.F.; Eisenreich, S.J.; Golden, K.A.; et al. 1996. “Atmospheric Loading of Polycyclic Aromatic Hydrocarbons to Lake Michigan as Recorded in the Sediments.” Environmental Science and Technology, 30: 3039-3046.

102 Simcik, M.F.; Eisenreich, S.J.; and Lioy, P.J. 1999. “Source apportionment and source/sink relationship of PAHs in the coastal atmosphere of Chicago and Lake Michigan.” Atmospheric Environment, 33: 5071- 5079.

103 Arzayus, K.M.; Dickhut, R.M.; and Canuel, E.A. 20 01. “Fate of Atmospherically Deposited Polycyclic Aromatic Hydrocarbons (PAHs) in Chesapeake Bay.” Environmental Science & Technology, 35, 2178- 2183.

104 Park, J.S.; Wade, T.L.; and Sweet, S. 2001. “Atmospheric distribution of polycyclic aromatic hydrocarbons and deposition to Galv eston Bay, Texas, USA.” Atmospheric Environment, 35: 3241-3249.



### 2-5 4Regulatory Impact Analysis

105 Poor, N.; Tremblay, R.; Kay, H.; et al. 2002. “Atm ospheric concentrations and dry deposition rates of polycyclic aromatic hydrocarbons (PAHs) for Tampa Bay, Florida, USA.” Atmospheric Environment 38: 6005-6015.

106 Arzayus, K.M.; Dickhut, R.M.; and Canuel, E.A. 20 01. “Fate of Atmospherically Deposited Polycyclic Aromatic Hydrocarbons (PAHs) in Chesapeake Bay.” Environmental Science & Technology, 35, 2178- 2183.

107 U.S. EPA. 2000. EPA453/R-00-005, “Deposition of Ai r Pollutants to the Great Waters: Third Report to Congress,” Office of Air Quality Planning and Standard s, Research Triangle Park , North Carolina. This document is available in Docket EPA-HQ-OAR-2004-0008.

108 Van Metre, P.C.; Mahler, B.J.; an d Furlong, E.T. 2000. “Urban Sprawl Leaves its PAH Signature.” Environmental Science & Technology, 34: 4064-4070.

109 Cousins, I.T.; Beck, A.J.; and Jones, K.C. 1999. “A review of the processes involved in the exchange of semi-volatile organic compounds across the air-soil inte rface.” The Science of the Total Environment, 228: 5-24.

110 Tuhackova, J. et al. (2001) Hydrocarbon deposition an d soil microflora as affect ed by highway traffic. Environmental Pollution, 113: 255-262.

111 U.S. EPA, Technical Support Document for the Fi nal Small SI/Marine SI Rule: Air Quality Modeling, Research Triangle Park, NC

112 U.S. EPA, Byun, D.W., and Ching, J.K.S., Eds, 1999. Science algorithms of EPA Models-3 Community Multiscale Air Quality (CMAQ modeling system, EPA/600/R-99/030, Office of Research and Development).

113 Byun, D.W., and Schere, K.L., 2006. Review of the Governing Equations, Computational Algorithms, and Other Components of the Models-3 Community Mu ltiscale Air Quality (CMAQ) Modeling System, J. Applied Mechanics Reviews, 59 (2), 51-77.

114 Dennis, R.L., Byun, D.W., Novak, J.H., Galluppi, K.J., Coats, C.J., and Vouk, M.A., 1996. The next generation of integrated air quality modeling: EPA’s Models-3, Atmospheric Environment, 30, 1925-1938.

115 Amar, P., Bornstein, R., Feldman, H., Jeffries, H ., Steyn, D., Yamartino, R., Zhang, Y., 2004. Final Report Summary: December 2003 Peer Review of the CMAQ Model. p. 7.

116 Grell, G., J. Dudhia, and D. Stauffer, 1994: A De scription of the Fifth-Generation Penn State/NCAR Mesoscale Model (MM5), NCAR/TN-398+STR., 138 pp, National Center for Atmospheric Research, Boulder CO.

117 U.S. Environmental Protection Agency, Byun, D.W., and Ching, J.K.S., Eds, 1999. Science algorithms of EPA Models-3 Community Multiscale Air Quality (CMAQ) modeling system, EPA/600/R-99/030, Office of Research and Devel opment). Please also see: http://www.cmascenter.org/

118 Yantosca, B., 2004. GEOS-CHEMv7-01-02 User’s Guide, Atmospheric Chemistry Modeling Group, Harvard University, Cambridge, MA, October 15, 2004.

119 U.S. EPA, (2004), “Procedures for Estimating Fu ture PM2.5 Values for the CAIR Final Rule by Application of the (Revised) Speciated Modeled Attainment Test (SMAT)- Updated 11/8/04”.

120 Sisler 1996



### 2-5 5121 U.S. EPA, Guidance on the Use of Models and Ot her Analyses For Demonstrating Attainment of Air Quality Goals for Ozone, PM2.5, and Regional Haze; EPA-454/B-07-00 2; Research Triangle Park, NC; April 2007.

122 U. S. EPA. 1999 National-Scale Air Toxics Assessment. http://www.epa.gov/ttn/atw/nata1999/risksum.html

123 Baldauf, R.; Fortune, C.; Weinstein, J.; Wheeler, M.; Blanchard, F. (2006) Air contaminant exposures during the operation of lawn and garden equipment. J Exposure Sci & Environ Epidemiol 16: 362-370.

124 Volckens, J.; Olson, D.A.; Hays, M.D. (2008) Carbonaceous species emitted from handheld two-stroke engines. Atmos Environ 42: 1239-1248.

125 Isbell, M.; Ricker, J.; Gordian, M.E. ; Duff, L.K. (1999) Use of biomarkers in an indoor air study: lack of correlation between aromatic VOCs with respective urinary biomarkers. Sci Total Environ 241: 151- 159.

126 Batterman, S.; Jia, C.; Hatzivasilis, G. (2007) Migration of volatile organic compounds from attached garages to residences: a major exposure source. Environ Res 104: 224-240.

127 Philips, M.L.; Esmen, N.A.; Hall, T.A.; Lynch, R. (2005) Determinants of exposure to volatile organic compounds in four Oklahoma cities. J Exposure Anal Environ Epidemiol 15: 35-46.

128 U.S. EPA (2003) Integrated Risk Information System File of Acrolein. National Center for Environmental Assessment, Office of Research and Development, Washington, D.C. 2003. This material is available electronically at h ttp://www.epa.gov/iris/subst/0364.htm.

129 U.S. EPA (2006) National-Scale Air Toxics A ssessment for 1999. This material is available electronically at http://www.epa.gov/ttn/atw/nata1999/risksum.html.

130 U.S. EPA (2006) National-Scale Air Toxics Assessment for 1999. http://www.epa.gov/ttn/atw/nata1999.

131 U.S. EPA. 2000. Integrated Risk Information System File for Benzen e. This material is available electronically at: http://www.epa.gov/iris/subst/0276.htm.

132 International Agency for Research on Cancer, IARC monographs on the evaluation of carcinogenic risk of chemicals to humans, Volume 29, Some industrial chemicals and dy estuffs, International Agency for Research on Cancer, World Health Organi zation, Lyon, France, p. 345-389, 1982.

133 Irons, R.D.; Stillman, W.S.; Colagiovanni, D.B.; He nry, V.A. (1992) Synergistic action of the benzene metabolite hydroquinone on myelopoietic stimulati ng activity of granulocyt e/macrophage colonystimulating factor in vitro, Proc. Natl. Acad. Sci. 89:3691-3695.

134 International Agency for Research on Cancer (IARC). 1987. Monographs on the evaluation of carcinogenic risk of chemicals to humans, Volume 29, Supplement 7, Some industrial chemicals and dyestuffs, World Health Organization, Lyon, France.

135 U.S. Department of Health and Human Services National Toxicology Program 11th Report on Carcinogens available at: http://ntp.niehs.nih.gov/go/16183.
136 Aksoy, M. (1989). Hematotoxicity and carcinogenicity of benzene. Environ. Health Perspect. 82: 193-197.



### 2-5 6Regulatory Impact Analysis

137 Goldstein, B.D. (1988). Benzene toxicity. Occupational medicine. State of the Art Reviews. 3: 541- 554.

138 Rothman, N., G.L. Li, M. Dosemeci, W.E. Bechtold, G.E. Marti, Y.Z. Wang, M. Linet, L.Q. Xi, W. Lu, M.T. Smith, N. Titenko-Holland, L.P. Zhang, W. Blot , S.N. Yin, and R.B. Hayes (1996) Hematotoxicity among Chinese workers heavily exposed to benzene. Am. J. Ind. Med. 29: 236-246.

139 U.S. EPA 2002 Toxicological Review of Benzen e (Noncancer Effects). Environmental Protection Agency, Integrated Risk Information System (IRIS), Research and Development, National Center for Environmental Assessment, Washington DC. This material is available electronically at http://www.epa.gov/iris/subst/0276.htm

.

140 Qu, O.; Shore, R.; Li, G.; Jin, X.; Chen, C.L.; Cohe n, B.; Melikian, A.; Eastmond, D.; Rappaport, S.; Li, H.; Rupa, D.; Suramaya, R.; Songnian, W.; Huifant, Y.; Meng, M.; Winnik, M.; Kwok, E.; Li, Y.; Mu, R.; Xu, B.; Zhang, X.; Li, K. (2003). HEI Report 115, Validation & Evaluation of Biomarkers in Workers Exposed to Benzene in China.

141 Qu, Q., R. Shore, G. Li, X. Jin, L.C. Chen, B. Cohen, et al. (2002). Hematological changes among Chinese workers with a broad range of benzene exposures. Am. J. Industr. Med. 42: 275-285.

142 Lan, Qing, Zhang, L., Li, G., Vermeulen, R., et al. (2004). Hematotoxically in Workers Exposed to Low Levels of Benzene. Science 306: 1774-1776.

143 Turtletaub, K.W. and Mani, C. (2003). Benzene metabolism in rodents at doses relevant to human exposure from Urban Air. Research Repo rts Health Effect Inst. Report No.113.

144 U.S. EPA. 2002. Health Assessment of 1,3-Butadiene. Office of Research and Development, National Center for Environmental Assessment, Washington Office, Washington, DC. Report No. EPA600-P-98 001F. This document is available electronically at http://www.epa.gov/iris /supdocs/buta-sup.pdf.

145 U.S. EPA. 2002 “Full IRIS Summary for 1,3-butadiene (CASRN 106-99-0)” Environmental Protection Agency, Integrated Risk Information System (IRIS), Research and Development, National Center for Environmental Assessment, Washington, DC http://www.epa.gov/iris/subst/0139.htm

.

146 International Agency for Research on Cancer (IARC) (1999) Monographs on the evaluation of carcinogenic risk of chemicals to humans, Volume 71, Re-evaluation of some organic chemicals, hydrazine and hydrogen peroxide and Volume 97 (in preparation), World Health Organization, Lyon, France.

147 U.S. Department of Health and Human Services National Toxicology Program 11th Report on Carcinogens available at: http://ntp.niehs.nih.gov/go/16183.

148 Bevan, C.; Stadler, J.C.; Elliot, G.S.; et al. (1996) Subchronic toxicity of 4-vinylcyclohexene in rats and mice by inhalation. Fundam. Appl. Toxicol. 32:1-10.

149 U.S. EPA. 1987. Assessment of Health Risks to Garment Workers and Certain Home Residents from Exposure to Formaldehyde, Office of Pesticides and Toxic Substances, April 1987.

150 Hauptmann, M..; Lubin, J. H.; St ewart, P. A.; Hayes, R. B.; Blai r, A. 2003. Mortality from lymphohematopoetic malignancies among workers in formaldehyde industries. Journal of the National Cancer Institute 95: 1615-1623.

151 Hauptmann, M..; Lubin, J. H.; Stewart, P. A.; Haye s, R. B.; Blair, A. 2004. Mortality from solid cancers among workers in formaldehyde industries. American Journal of Epidemiology 159: 1117-1130. -



### 2-5 7152 Pinkerton, L. E. 2004. Mortality among a cohor t of garment workers exposed to formaldehyde: an update. Occup. Environ. Med. 61: 193-200.

153 Coggon, D, EC Harris, J Poole, KT Palmer. 2003. Extended follow-up of a cohort of British chemical workers exposed to formaldehyde. J National Cancer Inst. 95:1608-1615.

154 Conolly, RB, JS Kimbell, D Janszen, PM Schlosse r, D Kalisak, J Preston, and FJ Miller. 2003. Biologically motivated computational modeling of formaldehyde carcinogenicity in the F344 rat. Tox Sci 75: 432-447.

155 Conolly, RB, JS Kimbell, D Janszen, PM Schlosser, D Kalisak, J Preston, and FJ Miller. 2004. Human respiratory tract cancer risks of inhaled formaldehyde: Dose-response predictions derived from biologically-motivated computational modeling of a combined rodent and human dataset. Tox Sci 82: 279- 296.

156 Chemical Industry Institute of Toxicology (CIIT).199 9. Formaldehyde: Hazar d characterization and dose-response assessment for carcinogenicity by the route of inhalation. CIIT, September 28, 1999. Research Triangle Park, NC.

157 International Agency for Research on Cancer (2006) Formaldehyde, 2-Butoxyethanol and 1-tertButoxypropan-2-ol. Monographs Volume 88. World Health Organization, Lyon, France.

158 Agency for Toxic Substances and Disease Registry (ATSDR). 1999. Toxicological profile for Formaldehyde. Atlanta, GA: U.S. Department of Health and Human Services, Public Health Service. http://www.atsdr.cdc.gov/to xprofiles/tp111.html

159 WHO (2002) Concise International Chemical Assessment Document 40: Formaldehyde. Published under the joint sponsorship of the United Nations Environment Programme, the International LabourOrganization, and the World Health Organization, and produced within the framework of the InterOrganization Programme for the Sound Management of Chemicals. Geneva.

160 U.S. EPA (1988). Integrated Risk Informatio n System File of Acetaldehyde. Research and Development, National Center for Environmental Assessm ent, Washington, DC. This material is available electronically at http://www.e pa.gov/iris/subst/0290.htm.

161 U.S. Department of Health and Human Services National Toxicology Program 11th Report on Carcinogens available at: http://ntp.niehs.nih.gov/go/16183.

162 International Agency for Research on Cancer (IARC). 1999. Re-evaluation of some organic chemicals, hydrazine, and hydrogen peroxide. IARC Monographs on the Evaluation of Carcinogenic Risk of Chemical to Humans, Vol 71. Lyon, France.

163 U.S. EPA (1988). Integrated Risk Information System File of Acetaldehyde. This material is available electronically at http://www.epa.gov/ir is/subst/0290.htm

.

164 U.S. EPA. 2003. Integrated Risk Information Syst em File of Acrolein. Research and Development, National Center for Environmental Assessment, Washingt on, DC. This material is available electronically at http://www.epa.gov/iris/subst/0364.htm.

165 Appleman, L.M., R.A. Woutersen, and V.J. Feron. (1982). Inhala tion toxicity of acetaldehyde in rats. I. Acute and subacute studies. Toxicology. 23: 293-297.



### 2-5 8Regulatory Impact Analysis

166 Myou, S.; Fujimura, M.; Nishi K.; Ohka, T.; and Mats uda, T. (1993) Aerosolized acetaldehyde induces histamine-mediated bronchoconstriction in asthmatics. Am. Rev. Respir.Dis. 148(4 Pt 1): 940-943.

167 Integrated Risk Information System File of Acrole in. Research and Development, National Center for Environmental Assessment, Washington, DC. This material is available at http://www.epa.gov/iris/subst/0364.htm

168 International Agency for Research on Cancer (IARC). 1995. Monographs on the evaluation of carcinogenic risk of chemicals to humans, Volume 63, Dry cleaning, some chlorinated solvents and other industrial chemicals, World Hea lth Organization, Lyon, France.

169 Weber-Tschopp, A; Fischer, T; Gierer, R; et al. (1977) Experimentelle reizwirkungen von Acrolein auf den Menschen. Int Arch Occup Environ Hlth 40(2):117-130. In German

170 Sim, VM; Pattle, RE. (1957) Effect of possible smog irritants on human subjects. J Am Med Assoc 165(15):1908-1913.

171 Morris JB, Symanowicz PT, Olsen JE, et al. 2003 . Immediate sensory nerv e-mediated respiratory responses to irritants in healthy and allergic airway-diseased mice. J Appl Physiol 94(4):1563-1571.

172 Sim VM, Pattle RE. Effect of possible smog irritants on human subjects JAMA165: 1980-2010, 1957.

173 Perera, F.P.; Rauh, V.; Tsai, W-Y.; et al. (2002) Effect of transplacental ex posure to environmental pollutants on birth outcomes in a multiethnic population. Environ Health Perspect. 111: 201-205.

174 Perera, F.P.; Rauh, V.; Whyatt, R.M.; Tsai, W.Y.; Ta ng, D.; Diaz, D.; Hoepner, L.; Barr, D.; Tu, Y.H.; Camann, D.; Kinney, P. (2006) Effect of prenatal exposure to airborne polycyclic aromatic hydrocarbons on neurodevelopment in the first 3 years of life among inner-city children. Envi ron Health Perspect 114: 1287-1292.

175 U. S. EPA. 2004. Toxicological Review of Naph thalene (Reassessment of the Inhalation Cancer Risk), Environmental Protection Agency, In tegrated Risk Information Syst em, Research and Development, National Center for Environmental Assessment, Washingt on, DC. This material is available electronically at http://www.epa.gov/iris/subst/0436.htm

.

176 Oak Ridge Institute for Science and Education. (2004). External Peer Review for the IRIS Reassessment of the Inhalation Carcinogenicity of Naphthalene. August 2004. http://cfpub.epa.gov/ncea/cfm/ recordisplay.cfm?deid=84403

177 National Toxicology Program (NTP). (2004). 11th Report on Carcinogens. Public Health Service, U.S. Department of Health and Human Services, Research Triangle Park, NC. Available from: http://ntp server.niehs.nih.gov.

178 International Agency for Research on Cancer (IARC). (2002). Monographs on the Evaluation of the Carcinogenic Risk of Chemicals for Humans. Vol. 82. Lyon, France.

179 U. S. EPA. 1998. Toxicological Review of Naphth alene, Environmental Prot ection Agency, Integrated Risk Information System, Research and Development, National Center for Environmental Assessment, Washington, DC. This material is available electronically at http://www.epa.gov/ir is/subst/0436.htm

180 US EPA (2004) Characterization of Emissions from Small, Hand-Held,In-Use 2-Cycle Engines Internal Report, EPA/600/X-04/191.



### 2- 59 -181 U.S. EPA (2000). Air Quality Criteria for Carbon Monoxide. EPA600-P-99-001F. June 1, 2000. U.S. Environmental Protection Agency , Office of Research and Development, National Center for Environmental Assessment, Washington, D.C. This document is available online at http://www.epa.gov/ncea/pdfs/coaqcd.pdf. A copy of this document is av ailable in Docket Identification EPA-HQ-OAR-2004-0008-0050.

182 U.S. EPA (2000). Air Quality Criteria for Carbon Monoxide. EPA600-P-99-001F. June 1, 2000. U.S. Environmental Protection Agency , Office of Research and Development, National Center for Environmental Assessment, Washington, D.C. This document is available online at http://www.epa.gov/ncea/pdfs/coaqcd.pdf. A copy of this document is av ailable in Docket Identification EPA-HQ-OAR-2004-0008-0050.

183 Coburn, R.F. (1979) Mechanisms of carbon monoxide toxicity. Prev. Med. 8:310-322.

184 Helfaer, M.A., and Traystman, R.J. (1996) Cerebrovascular effects of carbon monoxide. In: Carbon Monoxide (Penney, D.G., ed). Boca Raton, CRC Press, 69-86.

185 Benignus, V.A. (1994) Behavioral effects of car bon monoxide: meta analyses and extrapolations. J. Appl. Physiol. 76:1310-1316.

186 U.S. EPA (2000). Air Quality Criteria for Carbon Monoxide. EPA600-P-99-001F. June 1, 2000. U.S. Environmental Protection Agency , Office of Research and Development, National Center for Environmental Assessment, Washington, D.C. This document is available online at http://www.epa.gov/ncea/pdfs/coaqcd.pdf. A copy of this document is av ailable in Docket Identification EPA-HQ-OAR-2004-0008-0050.

187 U.S. EPA (2000). Air Quality Criteria for Carbon Monoxide. EPA600-P-99-001F. June 1, 2000. U.S. Environmental Protection Agency , Office of Research and Development, National Center for Environmental Assessment, Washington, D.C. This document is available online at http://www.epa.gov/ncea/pdfs/coaqcd.pdf. A copy of this document is av ailable in Docket Identification EPA-HQ-OAR-2004-0008-0050.

188 U.S. EPA (2000). Air Quality Criteria for Carbon Monoxide. EPA600-P-99-001F. June 1, 2000. U.S. Environmental Protection Agency , Office of Research and Development, National Center for Environmental Assessment, Washington, D.C. This document is available online at http://www.epa.gov/ncea/pdfs/coaqcd.pdf. A copy of this document is av ailable in Docket Identification EPA-HQ-OAR-2004-0008-0050.

189 U.S. EPA (2000). Air Quality Criteria for Carbon Monoxide. EPA600-P-99-001F. June 1, 2000. U.S. Environmental Protection Agency , Office of Research and Development, National Center for Environmental Assessment, Washington, D.C. This document is available online at http://www.epa.gov/ncea/pdfs/coaqcd.pdf. A copy of this document is av ailable in Docket Identification EPA-HQ-OAR-2004-0008-0050.

190 National Academy of Sciences (2003). Managing Carbon Monoxide Pollution in Meteorological and Topographical Problem Areas. The National Academie s Press, Washington, D.C. This document is available on the internet at http://www.nap.edu.

191 National Academy of Sciences (2003). Managing Carbon Monoxide Pollution in Meteorological and Topographical Problem Areas. The National Academie s Press, Washington, D.C. This document is available on the internet at http://www.nap.edu.

192 National Park Service: Department of Interior; National Institute fo r Occupational Safety and Health. (2004) Boat-related carbon monoxide (CO) poisonings. Updated: October 2004 [Online at



### 2-6 0Regulatory Impact Analysis

http://safetynet.smis.doi.gov/thelistbystate10-19-04.pdf] A copy of this document is available in Docket Identification EPA-HQ-OAR-2004-0008-0106.

193 U.S. Department of Interior. (2004) Carbon monoxide dangers from generators and propulsion engines. On-board boats - compilation of materials. [Online at http://safetynet.smis.doi.gov/COhouseboats.htm] A copy of this document is available in Dock et Identification EPA-HQ-OAR-2004-0008-0110.

194 Letter dated April 5, 2001 to Mr. John Stenseth, Fun Country Marine Industries, Inc., from Ronald M. Hall, NIOSH.

195 Gabele, P. (1997) Exhaust emissions from four-stroke lawn mower engines. Air Waste Manage Assoc

. 47: 945-952.

196 Priest, M.W.; Williams, D.J.; and Bridgman, H.A. (2000) Emissions from in-use lawn-mowers in Australia. Atmos Environ . 34:657-664.

197 Bunger, J.; Bombosch, F.; Mesecke, U.; and Hallier, E. (1997) Monitoring and analysis of occupational exposure to chain saw exhausts. Am Ind Hyg Assoc J . 58:747-751.

198 Baldauf, R.; Fortune, C.; Weinstein, J.; Wheeler, M.; and Blanchard, F. (2006) Air contaminant exposures during the operation of lawn and garden equipment. Journal of Exposure Science and Environmental Epidemiology. 16(4):362-370.



### 2-6 1

### Emission Inventory


# CHAPTER 3: Emission Inventory

This chapter presents our analysis of the emission impact of the final Phase 3 standards for spark ignition (SI) small nonroad engines ( 

## # 25 horsepower (hp) or 

## # 19 kilowatts (kW) used in land-based or auxiliary marine applications (hereafter collectively termed small nonroad SI engines) and marine SI engines. The control requirements include exhaust and evaporative emission standards for small non-handheld SI engines (Class I <225 cubic centimeters (cc) and Class II 

## $ 225 cc), an evaporative emission standards for small handheld SI engines (Classes IIIV), and exhaust and evaporative emission standards for all marine SI engines.
Section 3.1 presents an overview of methodology used to develop the emission inventories for the small nonroad and marine engines that are subject to the final rulemaking. Section 3.2 identifies the specific modeling inputs that were used to develop the baseline scenario emission inventories. The resulting baseline emission inventories are also presented in that section. Section 3.3 then describes the contribution of the small nonroad and marine SI engines to national baseline inventories. Section 3.4 describes the development of the controlled inventories, specifically the changes made to the baseline modeling inputs to incorporate the new standards. The control inventories are also presented in this section. Section 3.5 follows with the projected emission reductions resulting from the final rule. Section 3.6 describes the emission inventories used in the air quality modeling described in Chapter 2. This discussion includes a description of the changes in the inputs and resulting emission inventories between the preliminary baseline and control scenarios used for the air quality modeling and the slightly refined baseline and control scenarios reflected in the actual final rule.
The emission inventory estimates contained in Sections 3.2, 3.4, 3.5, and 3.6, for small nonroad and marine SI engines are reported for the 50-state geographic area that comprises the United States (including the District of Columbia). These inventories reflect the emissions from the engines subject to the final Phase 3 standards, i.e., federal engines. As such, they exclude the emissions from engines that are regulated by th e State of California as provided for by section 209 of the Clean Air Act.
More specifically, California has been granted a waiver under the Clean Air Act to regulate the emissions from all nonroad SI engines, except for engines with less than 175 horsepower that are used in farm and construction equipment. Therefore, these latter engines are subject to federal regulation and are included in our 50-state inventories. By contrast, we do not include any of the emissions from California marine SI engines in these inventories. As with certain nonroad engine classes, the State has been granted a waiver to regulate the exhaust emissions from all marine SI engines and ev aporative emissions from outboard and personal watercraft SI engines. That State also has indicated its intent to adopt the final Phase 3 standards for evaporative emissions from sterndrive engines. Therefore, the 50-state inventories presented in Sections 3.2, 3.4, 3.5, and 3.6 only reflect the emissions from small nonroad and marine SI engines that are subject to federal regulation.

3-1

### Final Regulatory Impact Analysis
Section 3.3 presents a nationwide comparison of the emissions from small nonroad and marine SI engines to those from other source cat egories, i.e., stationary, area, and other mobile sources. Unlike the 50-state inventories described earlier, these inventories reflect the emissions from all sources, whether they are separately regulated by a state government or the federal government, e.g., all of California’s small SI and marine SI engines are included.
Inventories are generally presented for the following pollutants: exhaust and evaporative hydrocarbons reported as total hydrocarbons (THC) and volatile organic compounds (VOC), oxides of nitrogen (NO
x 

### ), particulate matter (PM 2.5 

### and PM 10 

### ), and carbon monoxide (CO). The VOC category is a broader class of hydrocarbon compounds than THC that is primarily important for air quality modeling purposes. The additional compounds that comprise this category are reactive oxygenated species repr esented by aldehydes (RCHO) and alcohols (RCOH), and less reactive species represented by methane (CH 4 

### ) and ethane (CH 3 

### CH 3 

### ). The PM inventories for particle sizes of 

### # 2.5 microns or 

### # 10 microns in diameter include directly emitted PM only, although secondary sulfates are taken into account in the air quality modeling as noted below. Toxic pollutant inventories are also presented because the final Phase 3 requirements will reduce hazardous air pollutants such as benzene, formaldeyde, acetaldehyde, 1,3-butadiene, acrolein, napthalene, and 15 other compounds grouped together as polycyclic organic matter (POM).
Finally, none of the controlled inventory estimates include the potential uses of the averaging, banking, and trading (ABT) program for engine manufacturers, since these are flexibilities that would be difficult to predict and model. More information regarding these provisions can be found in the preamble for this final rule that is published in the Federal Register

. 

## 3.1 Overview of Small Nonroad and Mari ne SI Engine Emissions Inventory Development

This section describes how the final emission inventories were modeled for the small nonroad and marine SI engines that are affected by the Phase 3 standards. Generally, the inventories were generated using a modifi ed version of our NONROAD2005 model. More specifically, we started with the most recent public version of the model, i.e., NONROAD2005a, which was released in February 2006. A copy of that model and the accompanying technical reports that detail of the modeling inputs (e.g., populations, activity, etc.) are available in the docket for this final rule. 1 

### They can also be accessed on our website at: http://www.epa.gov/otaq/nonrdmdl.htm.
The NONROAD2005a model was modified to incorporate new emission test data and other improvements for this rulemaking. This special version is named NONROAD2005d. A copy of the model and the accompanying documentation are available in the docket. 2,3,4 

### The inputs we used to model the effects of the Phase 3 standards are also described in Chapter 4 for exhaust emissions and Chapter 5 for evaporative emissions. Finally, the modifications we made to NONROAD2005a to reflect the baseline and control scenarios related to the final rule are

3-2

### Emission Inventory
summarized in Sections 3.2 and 3.4, respectively.
The nonroad model estimates emission inventories of important air pollutant species from a diverse universe of nonroad equipment. The model’s scope includes all off-highway sources with the exception of locomotives, aircraft and commercial marine vessels. The model can distinguish emissions on the basis of equipm ent type, horsepower, and technology group. For the engines subject to the final rule, the nonroad model evaluates numerous equipment types with each type containing multiple horsepower categories and technology groups. A central feature of the model is the projection of past, present, or future emissions between 1970 and 2050.
The chemical species NOx, PM, and CO are exhaust emissions, i.e., pollutants emitted directly as exhaust from the combustion of fuel (both liquid and gaseous fuels) in the engine. Hydrocarbon species, e.g., THC and VOC, consist of both exhaust and evaporative emissions. The exhaust component represents hydrocarbons emitted as products of combustion, which can also include emissions vented from the crankcase. The evaporative hydrocarbon component includes compounds from unburned fuel that are emitted either while the engine is being operated or when the equipment is not in use. The various categories of evaporative emissions that are included in the nonroad model are:
Diurnal. These emissions result from changes in temperature during the day. As the day gets warmer there is a concomitant rise in the temperature of the liquid fuel in the fuel tank. This causes the vapor pressure inside the tank to increase, forcing vaporized fuel to escape into the atmosphere. For modeling purposes, this category also includes diffusion losses that come from fuel vapor exiting the orifice of a vented fuel tank cap regardless of temperature.
Permeation. These emissions occur when fuel molecules transfuse through plastic or rubber fuel-related components (fuel lines and fuel tanks) into the atmosphere.
Hot Soak. These emissions occur after the engine is shut off and the engine’s residual heat causes fuel vapors from the fuel tank or fuel metering device to be released into the atmosphere.
Running Loss. Similar in form to diurnal losses, these emissions are caused from the engine’s heat during equipment operation.
Vapor Displacement or Refueling Loss. These are vapors displaced from the fuel tank when liquid fuel is being added during a refueling event.
Liquid Spillage. This refers to the liquid fuel that is spilled when equipment is refueled either from a portable fuel container or fuel pump, which subsequently evaporates into the atmosphere.
Equipment fueled by compressed natural gas, li quified petroleum gas, or diesel fuel are assumed to have zero evaporative emissions. Consequently, all evaporative emissions are from

3-3

### Final Regulatory Impact Analysis
gasoline or gasoline blends, i.e., ethanol and gasoline.
The control scenario analyzed in Section 3.4 reflects the final Phase 3 standards for exhaust hydrocarbons, CO, and NOx from sma ll nonhandheld nonroad and marine SI engines. a 

### New standards to control evaporative emissions from hose permeation and tank permeation from these engine classes and handheld equipment are also included. Further, the final requirements also establish new standards for running loss and diffusion emissions from small nonhandheld nonroad SI engines and diurnal emissions from marine SI engines. Finally, we expect that the technology necessary to achieve the final exhaust emission standards will indirectly lower exhaust PM. All of these effects are reflected in the controlled emission inventories presented in this chapter.



## 3.2 Baseline Emission Inventory Estimates

This section describes more specifically how we developed the baseline exhaust and evaporative inventories for small nonroad and marine SI engines. The resulting baseline inventories are also presented. Section 3.2.1 provides this information for exhaust and evaporative emissions.
The inventory estimates presented throughout this section include only equipment that would be subject to the final standards. Fo r small nonroad SI equipment, California’s Air Resources Board (ARB) has promulgated standard s that are roughly equivalent in stringency overall to final Phase 3 federal standards, although some of the specific requirements and test procedures are different. However, the Clean Air Act prohibits California from regulating engines used in farm and construction equipment with maximum power levels below 175 hp or 130 kW. Therefore, the requirements contained in this final rule for small nonroad SI engines will apply in California to the above farm and construction equipment power levels. As a result, these engines are included in the inventories presented in this chapter. However, the majority of the small nonroad SI equipment in California is s ubject to ARB regulations, so the effect of the federal Phase 3 standards for these engines in that State is rather limited.
For marine SI engines, ARB also has its ow n exhaust emission standards that are roughly equivalent overall to the final Phase 3 federal standards. In addition, ARB has stated its intend to develop evaporative emissions standards for ma rine SI equipment in California. Therefore, the exhaust and evaporative inventory estimates for marine SI engines/equipment completely exclude California

.
3.2.1 Baseline Exhaust and Evaporative Emissions Estimates for THC, VOC, NOx, PM 2.5 

### , PM 10 

### , and CO
The baseline exhaust and evaporative emission inventories for small nonroad and marine SI engines include the effects of all existing applicable federal emission standards. We

a The CO standard applies to small nonhandheld SI engines used in auxiliary marine applications.

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### Emission Inventory
generated these inventories by starting with the NONROAD2005a emissions model, which was released to the public in February 2006. That model was then modified to incorporate new emission test data and other improvements for this rulemaking. This special version of the model is named NONROAD2005d. The modifications to the base model are described below.

3.2.1.1 Changes from NONROAD2005a to NONROAD2005d
As already mentioned, a number of improvements to the most publically available nonroad emissions inventory model were ma de to develop the NONROAD2005d, which is used in this final rulemaking. These revisions were based on recent testing programs, other information, and model enhancements. The changes are summarized below for small nonroad and marine SI engines. Many of the most important revisions are discussed in greater detail in the following sections.

3.2.1.1.1 Revisions for Small SI Engines
The modifications that we made to the NONROAD2005a model for Small SI engines that are most relevant to the final rule are summarized below:

1. Revised fuel tank and hose permeation emission factors; 2. Added new fuel tank diffusion losses to the diurnal emission estimates; 3. Updated or corrected exhaust emission factors and deterioration rates, and technology-type sales fractions for Phase 2 engines; 4. Adjusted equipment populations to properly account for the application of federal emission requirements to engines in California; 5. Added the ability to specifically model the effects of ethanol blends on exhaust emissions and on fuel tank and hose permeation losses; 6. Added hot soak and running losses for handheld equipment; 7. Corrected snowblower technology types to include 4-stroke engines; and 8. Corrected running loss emission factors for Class 1 snowblowers to account for cold weather applications.

3.2.1.1.2 Revisions for Recreation Marine SI Engines
The modifications that we made to the NONROAD2005a model for marine SI engines that are most relevant to the final rule are summarized below:

1. Revised brake-specific fuel consumption factors; 2. Revised PM emission factors for 2-stroke technology engines; 3. Revised fuel tank and hose permeation em ission factors and temperature effects; 4. Updated modeling inputs for high performance sterndrive and inboard (SD/I) engines; and 5. Added the ability to specifically model the effects of ethanol blends on exhaust emissions and fuel tank and hose permeation losses.

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### Final Regulatory Impact Analysis

3.2.1.2 Baseline Exhaust Emission Calculations

3.2.1.2.1 Small SI Exhaust Calculations
We revised the Phase 2 exhaust emission factors in the NONROAD2005d inventory model to reflect new information and our better understanding of the in-use emissions of these engines, as discussed further below.
The nonroad model estimates exhaust emissions in a given year by applying an appropriate emission factor based on the engines ag e or hours of use. This reflects the fact that an engine’s exhaust emissions performance degrades over its lifetime due to normal use or misuse (i.e., tampering or neglect). More specifi cally, the emission factor is a combination of a “zero-hour” emission level (ZHL) and a deterioration factor (DF). The ZHL represents the emission rate for recently manufactured engines, i.e., engines with few operating hours. The DF to the degree of emissions degradation per unit of activity. Nonroad engine activity is expressed in terms of hours of use or fraction of its median lif e. This later term refers to the age at which 50 percent of the engines sold in a given year ceased to function and have been scrapped. The following formula describes the basic form of the calculation:

EF aged 

### = ZHL × DF

where: EF aged 

### is the emission factor for an aged engine ZML is the zero hour emission factor for a new engine DF is the deterioration factor
The form of the DF for nonroad SI engines is as follows:
DF = 1 + A × (Age Factor) b 

### for Age Factor 

### # 1 DF = 1 + A for Age Factor > 1
where: Age Factor = [Cumulative Hours × Load Factor] Median Life at Full Load, in Hours

A, b 

### = constants for a given technology type; b 

### # 1.
The constants A and b can be varied to approximate a wide range of deterioration patterns. "A" can be varied to reflect differences in maximum deterioration. For example, setting A equal to 2.0 would result in emissions at the engine’s median life being three times the emissions when new. The shape of the deterioration function is determined by the second constant, b. This constant can be set at any level between zero and 1.0; currently, the NONROAD model sets b equal to either 0.5 or 1.0. The first case results in a curvilinear deterioration rate in which most of the deterioration occurs in the early part of an engine's life. The second case results in a linear deterioration pattern in which the rate of deterioration is constant throughout the median life of an engine. In both cases, we previously decided to cap deterioration at the end of an engine's median life, under the assumption that an engine can only

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### Emission Inventory
deteriorate to a certain point beyond which it becomes inoperable. For spark ignition engines at or below 25 horsepower, which are the subject of this final rule, the nonroad model sets the constant b equal to 0.5. The emission factor inputs for Phase 2 small nonroad SI engines used in this analysis are shown in Table 3.2-1.
Table 3.2-1: Phase 2 Modeling Emission Factors for Small SI Engines(g/kW-hr) b Class/ Technology THC ZML THC "A" NOx ZML NOx "A" CO ZML CO "A" PM10 ZML PM10 "A" Class I - SV 10.30 1.753 2. 57 0.180 386.53 0.070 0.35 1.753 Class I - OHV 8.73 1.753 3. 28 0.180 392.93 0.070 0.05 1.753 Class II 5.58 1.095 3.71 0.000 472.80 0.080 0.08 1.095


### Some of the values shown in Table 3.2-1 have been updated from the NONROAD2005a inventory model based on data collected by EPA on in-use engines as well as manufacturer-supplied certification data. The ZHL emission factors for Class I engines were updated based on testing performed by EPA on 16 in-use walk-behind lawnmowers. The Class I side-valve engine A values were revised to be the same as the Class I overhead engine A values based on the same in-use testing of lawnmowers which showed similar in-use deterioration characteristics between overhead valve and sidevalve Class I engines. The Class I and Class II engine A values for CO emissions were revised to better reflect the level of deterioration seen in both the in-use lawnmower testing noted above as well as certification data provided by manufacturers to EPA. Finally, based on data co llected from another test program of in-use lawnmowers, the assumption that there was no deterioration of Class I and II emissions after the median life was reached was revised to reflect further continued emissions deterioration after that point.
Also, the model was modified to acknowledge the continued use of side-valve engine designs in Class I nonhandheld engines meeting Phase 2 standards. In the rulemaking that established those regulatory requirements, side-valve technology was assumed to be superceded by overhead valve designs and was modeled accordingly. In reality, side-valve technology has continued to be used in small nonroad SI engines. The resulting technology mixture is shown in Table 3.2-2. The estimated sales fractions by engine class and technology are based on sales information provided by engine manufacturers to EPA for the 2005 model year. A full description of the emission modeling information for Phase 2 engines and the basis for the estimates can be found in the docket for this rule.

b The nonroad model calculates VOC by multiplying THC by an adjustment factor depending on engine and fuel type for exhaust emissions as follows: 2-str oke gasoline = 1.034; 4-stroke gasoline = 0.933; liquified petroleum (LPG) = 0.995; and compressed natural gas (CNG) = 0.004. Crankcase and evaporative VOC for all fuels other than CNG is assumed to be equivalent to THC. CNG fueled equipment do not emit crankcase and evaporative VOC emissions because CNG is comprised almost exclusively of methane. PM 2.5 is calculated by multiplying PM 10 0.92.

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### Final Regulatory Impact Analysis
Table 3.2-2: Phase 3 Small Nonroad SI Engine Technology Classes Engine Class Technology Class Percent Sales (%)

Class I Side Valve 60
Class I Overhead Valve 40
Class II Overhead Valve 100

3.2.1.2.2 Marine SI Exhaust Calculations
The NONROAD2005a model included a number of updates to the emission rates and technology mix of marine SI engines. 5 

### These updates were largely based on data submitted to EPA by marine engine manufacturers as part of the certification process and on new test data collected by EPA. 6 

### However, NONROAD2005a did not incl ude high-performance SD/I marine engines. High-performance marine engines are niche product and were not included in the data set used to develop the engine populations for the NONROAD2005a model.
Manufacturers have more recently commented that approximately 1,500 highperformance engines are produced in the U.S. per year. These engines range from 500 to 1500 horsepower and are used in both racing and non -racing applications. Based on conversations with individual high-performance engine manufact urers, we estimate that about two thirds of these engines are sold for use in the U.S. with an average power of about 650 horsepower. These engines are designed to sacrifice service life for power, but with rebuilds, generally are used for 7-8 years (we use 8 years for our modeling). Based on these estimates and the growth rate in the NONROAD2005a model, we estimate a 1998 population of SD/I engines >600 horsepower of 7500 units. One manufacturer stated that they performed a survey on the annual use of these engines for warranty purposes and the result was an average annual use of about 30 hours per year. We also updated the baseline emission factors for high performance marine engines based on the emission data presented in Chapter 4. Note that no changes were made to the PM emission factors because no new data was available. Table 3.2-3 presents the updated emission factors for high-performance SD/I marine engines.
Table 3.2-3: Emission Factors for High- Performance Marine Engines [g/kW-hr]
Pollutant Carbureted Engines (MS4C, Bin 12) Fuel-Injected Engines (MS4D, Bin 12)

HC CO NOx PM BSFC 13.8 253 8.4 0.08 400 13.8 207 6.8 0.08 362

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### Emission Inventory

3.2.1.3 Baseline Evaporative Emission Calculations
Chapter 5 presents a great deal of information on evaporative emission rates from fuel systems used in nonroad equipment. Much of this information was incorporated into the NONROAD2005a model. 7 

### However, we have continued to collect evaporative emission data and incorporate the new information into our evaporative emission inventory calculations. These updates are described below. A technical memorandum that documents the methodology and input values for modeling the effects of ethanol blends on nonroad engine fuel hose and tank permeation is also available in the docket for this final rulemaking. 8



### 3.2.1.3.1 Fuel Ethanol Content
Currently, about 55 percent of fuel sold in the U.S. contains ethanol. With the recent establishment of the Energy Policy Act of 2005, 9 

### this percentage is expected to increase. The significance of the use of ethanol in fuel, for the i nventory calculations, is that ethanol in fuel can affect both exhaust and evaporative emissions from nonroad equipment. The oxygen content of the ethanol tends to make combustion mixtures leaner, which can decrease exhaust HC and CO emissions while increasing NOx. Also, fuel bl ends containing ethanol typically increase the permeation rate for most materials used in gasoline fuel systems. This is discussed in more detail below.
Title XV, section 1501, of the Energy Policy Act requires that the total volume of renewable fuel increase from 4.0 to 7.5 billion gallons per year from 2006 to 2012, and the Energy Information Administration (EIA) predicts that production will actually surpass 11 billion gallons per year by then. Based on these figures and projected gasoline sales from the Energy Information Administration, 10,11 

### we estimate that about three-fourths of gasoline sold in 2009 and later will contain ethanol. Table 3.2-4 presents our estimates for ethanol blended fuels into the future. The blend market shares shown in the last column of this table assume 10 percent for ethanol content of blended gasoline in all areas except California, where it is 5.7 volume percent until switching to 10 percent in 2010.

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### Final Regulatory Impact Analysis
Table 3.2-4: Estimated Fraction of Gasoline Containing Ethanol
Calendar Year U.S. Gasoline Sales [10 9 

### gal.] U.S. Ethanol Sales [10 9 

### gal.] Fraction of Gas with Ethanol

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 129.9 132.0 135.6 137.0 140.1 140.2 142.2 141.7 142.5 144.1 145.4 147.1 149.0 1.6 1.8 2.1 2.8 3.5 4.0 5.5 6.1 7.6 10.0 10.9 11.0 11.2 12.5% 13.4% 15.7% 22.2% 27.3% 31.0% 41.5% 46.3% 57.5% 75.1% 78.8% 78.8%* 78.8%* * ethanol fraction projected to be constant after 2010



### 3.2.1.3.2 Hose Permeation
We developed hose permeation emission factors based on the permeation data and hose requirements presented in Chapter 5. Because permeation is a function of surface area and because hose lengths and inner diameters are defining parameters, hose permeation rates are based on g/m 2 

### /day. These emission factors incorporate a more complete set of data than those in the NONROAD2005a model. In addition, distinctions are now made between permeation rates for liquid fuel versus fuel vapor exposure and between permeation rates for gasoline versus ethanol-blend fuels. The updated hose emission factors are discussed below and presented in Table 3.2-5.
Fuel hoses in small nonroad SI applications vary greatly in construction depending on the individual specifications of the engine and equi pment manufacturers. However most fuel hose used on non-handheld equipment meets the SAE J30 R7 hose requirements which includes a permeation requirement of 550 g/m 2 

### /day on Fuel C at 23°C. 12 

### Chapter 5 presents data on several hose constructions that range from 190 to 450 g/m 2 

### /day on Fuel C. As discussed in Chapter 5, permeation is typically lower on gasoline than on Fuel C. At the same time, blending ethanolinto the fuel increases permeation. Based on data presented in Chapter 5, we estimate that nonhandheld fuel hose permeation rates range from 27 to 180 g/m 2 

### /day on gasoline and 80-309 g/m 2 

### /day on gasoline blended with 10 percent ethanol (E10). Of the data presented in Chapter 5, the lowest two permeation rates for SAE J30 R7 hose were from an unknown fuel hose construction and from a hose (used in some small nonroadSI applications) that was specially constructed of fuel resistant materials to facilitate painting. Dropping the unknown hose construction (which is not known to be used in Small SI applications), we get average permeation rates of 122 g/m 2 

### /day on gasoline and 222 g/m 2 

### /day on E10 at 23 

### / C.

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### Emission Inventory
Chapter 5 also presents permeation data on fuel lines used in handheld equipment tested using E10 fuel. Based on this data, we estimate an average permeation rate at 23 

### / C, on fuel containing 10 percent ethanol of 255 g/m 2 

### /day. To determine an emission factor for handheld fuel lines on gasoline, we used the ratio of permeation rates for NBR rubber samples on E10 versus gasoline. The resulting permeation rate for handheld hose on gasoline was estimated to be 140 g/m 2 

### /day at 23 

### / C.
Fuel hose for portable marine fuel tanks is not subject to any established recommended practice. For this reason, we consider fuel hose used on portable marine fuel tanks to be equivalent to the hose used in Small SI applications. The supply hose for each portable marine fuel tank is modeled to include a primer bulb with the same permeation rate as the hose.
Recommended practices for marine hose on SD/I vessels include a permeation rate of 100 g/m 2 

### /day on Fuel C and 300 g/m 2 

### /day on fuel CM15 (15 percent methanol). 13,14 

### Accordingly, these vessels have fuel hose with lower permeation. Rather than using the recommended permeation rate limits for this hose, we base the permeation emission factors for this hose on the data presented in Chapter 5 on gasoline with ethanol which is more representative of in-use fuels. Chapter 5 also includes data on commercially available low permeation fuel hose which is used by some manufacturers. However, we do not include this in the baseline emission factor calculation because its use is primarily in anticipation of upcoming permeation standards and would therefore not be expected to remain in the baseline without enactment of this final rule.
For other vessels with installed fuel tanks (OB and PWC), we based the permeation emission factors on the test data in Chapter 5 on marine hose not certified to Coast Guard Class I requirements.
The Coast Guard specifications for fill neck hose call for a permeation limit of 300 g/m 2 

### /day on Fuel C and 600 on Fuel CM15. However, fill neck hose are not usually exposed to liquid fuel. Therefore, we used the vapor line data presented in Chapter 5 for both fill neck and vent line permeation rates. Hose permeation rates for both gasoline and E10 are presented in Table 3.2.-5.

Table 3.2-5: Hose Permeation Emission Factors at 23 

### / C [g/m 2 

### /day] Hose Type Gasoline E10 Handheld equipment fuel hose Non-handheld equipment fuel hose 140 122 255 222 Portable fuel tank supply hose* Installed system OB/PWC fuel lines Installed system SD/I fuel lines Fill necks and vent lines (vapor exposure) 122 42 22 2.5 222 125 40 4.9 * this permeation rate is used for primer bulbs as well

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### Final Regulatory Impact Analysis
The above permeation rates do not include any effects of deterioration. Over time, the fuel can draw some of the plasticizers out of the rubber in the hose, making it more brittle and subject to cracking. This is especially true for higher permeation fuel hoses which are generally less fuel resistant. Exposure to ozone over time can also deteriorate the hose. This deterioration would presumably increase the permeation rate over time. However, we do not have any data to quantify this effect and are not including deterioration in this analysis at this time. Lower permeation fuel hose, such as that designed to meet the final standard would likely have much lower deterioration due to the use of more fuel resistant materials. Therefore, this analysis may underestimate the inventory and benefits associated with the final fuel permeation standards.

3.2.1.3.3 Hose Lengths
The hose lengths used in NONROAD2005a are based primarily on confidential information supplied by equipment manufacturers. Hose lengths for handheld equipment are based on survey data provided by the Outdoor Power Equipment Institute. 15 

### Recently, we received comment from a boatbuilder using outboard motors that the hose lengths in our calculations were too short. 16 

### Because our existing data set did not include outboard boats with installed fuel tanks, we updated the hose lengths for these vessels based on the data supplied by this boat builder. In addition, the vent line lengths in the NONROAD2005a were divided by two to account for a vapor gradient throughout the fuel line caused by diurnal breathing and diffusion. This factor has been removed in lieu of the new emission factors for vent lines based on vapor exposure. Table 3.2-6 presents the updated hose lengths for outboard boats with installed fuel tanks.
Table 3.2-6: Updated Hose Lengths for Outboard Boats with Installed Fuel Systems

Engine Power Category Fill Neck Length [m] Fuel Supply Hose Length [m] Vent Hose Length [m]

18.7-29.8 kW 29.9-37.3 kW 37.4-74.6 kW 74.7-130.5 kW 130.6+ kW 1.8 2.4 3.1 3.7 4.3 1.8 2.4 3.1 3.7 4.3 1.5 1.8 2.1 2.4 2.7

3.2.1.3.4 Tank Permeation
For fuel tanks, the NONROAD2005a model does not include a fuel ethanol effect on permeation. Data in Chapter 5 suggest that even polyethylene fuel tanks see a small increase in permeation on E10 compared to gasoline. This increase is much larger for nylon fuel tanks like those used in handheld equipment with structurally-integrated fuel tanks. Table 3.2-7 presents the updated emission factors on E10 fuel and compares them to the emission factors based on gasoline permeation rates. The primary difference between the permeation rates for installed marine tanks, compared to smaller HDPE fuel tanks, is largely due to the wall thickness of the different constructions rather than material permeation properties. Permeation rate is a function

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### Emission Inventory
of wall thickness, so as tank thickness doubles, permeation rate halves. The model considers permeation from metal fuel tanks to be zero.

Table 3.2-7: Tank Permeation Emission Factors at 29 

### / C [g/m 2 

### /day] Tank Type Gasoline E10 Nylon handheld fuel tanks Small SI HDPE <0.25 gallons Small SI HDPE 

### $ 0.25 gallons 1.25 6.5 9.7 2.5 7.2 10.7
Portable and PWC HDPE fuel tanks Installed non-metal marine fuel tanks 9.9 8.0 10.9 8.8
Metal tanks 0 0

3.2.1.3.5 Diffusion
The NONROAD2005a model includes an adjustment factor to diurnal emissions to account for diffusion. The data used to create this adjustment factor is included in Chapter 5. This adjustment factor is applied to all small nonroad SI equipment in the NONROAD2005a model. However, we believe that handheld equipment are all produced with either sealed fuel tanks or slosh/spill resistant fuel caps. Ther efore, we do not include diffusion emissions for handheld equipment in this analysis.

3.2.1.3.6 Modeling of Nonlinear Ethanol Blend Permeation Effects
Based on the limited available test data it appears that the effect of alcohol-gasoline blends on permeation is nonlinear, tending to increase permeation at lower alcohol concentrations up to about 20 percent ethanol, but then decreasing permeation at higher alcohol concentrations. 17



### Starting with the zero and 10 percent ethanol points described above, a simple exponential curve was selected to connect the zero and 10 percent points continuing up to the 20 percent ethanol level. Then to get a nonlinear decreasing curve above 20 percent a simple decreasing exponential curve was used. Since effects above 85 percent are especially uncertain, and no such fuels are foreseen for use in nonroad equipment, the effect above 85 percent was set equal to the E85 effect. The equations used are shown here, and an example curve based on these equations is shown in Figure 3.2-1.

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### Final Regulatory Impact Analysis
Hose and Tank Permeation for zero to 20 percent ethanol volume percent:
Permeation EF = GasEF + GasEF × (E10fac - 1) × [ (EthVfrac / 0.10) ^ 0.4 ]
Hose and Tank Permeation for ethanol volume percent greater than 20 percent:
Permeation EF = GasEF × { 1 + (E10fac - 1) × [ (20 / 10) ^ 0.4 ] } × { 1 - [ (MIN(EthVfrac, 0.85) - 0.20 ) / 0.80 ] ^ (1 / 0.4 ) }

where: Permeation EF = Permeation emission factor for modeled fuel (grams per meter 2 

### per day) GasEF = Gasoline hose permeation emission factor from input EF data files (grams per meter 2 

### per day) E10fac = permeation emission adjustment factor for E10 relative to gasoline. This is the ratio of the E10 to gasoline permeation emission factors (unitless) EthVfrac = Volume fraction ethanol in the fuel being modeled. E10 = 0.10 0.4 = exponent chosen to yield a reasonable shape of curve.
Figure 3.2-1: Ethanol Blend Hose Permeation Example Curve

It should be noted that all ethanol blends currently modeled with the NONROAD model are less than or equal to E10, so no parts of this curve above E10 are used. Also, the value of E10fac used in the modeling of the control case is 2.0 for all the tank and hose permeation sources listed above in Tables 3.2-6 and 3.2-7.

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### Emission Inventory

3.2.1.3.7 Modeling Effect of Ethanol Blend Market Share on Permeation
The effect of ethanol blend market share is modeled linearly. In most areas the ethanol blend market share is either zero or 100 percent, but in areas where it is between those two market shares, or when doing a nationwide model run, the effect is calculated as a simple proportion. For instance a 30 percent market share of E10 would be modeled using a permeation rate 30 percent of the way between the E0 permeation rate and the E10 permeation rate.

3.2.1.4 Baseline Exhaust and Evaporative Inventory Results for THC, VOC, NOx, PM 2.5 

### , PM 10 

### , and CO
Table 3.2-8 presents the 50-state baseline emission inventories, respectively, for small nonroad SI engines. Table 3.2-9 provides the same information for marine SI engines.

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### Final Regulatory Impact Analysis

Table 3.2-8: Baseline 50-State Annual Exhaust and Evaporative Emissions for Small Nonroad Spark-Ignition Engines (short tons)
Year THC VOC NOx PM2.5 PM10 CO 2002 1,064,625 1,047,374 106,804 23,382 25,416 15,091,835 2003 1,026,922 1,009,822 106,852 23,480 25,522 14,351,829 2004 963,709 945,601 106,610 23,483 25,525 13,690,337 2005 886,524 867,081 106,847 23,417 25,453 12,923,819 2006 825,413 804,926 109,233 23,498 25,541 12,252,479 2007 768,239 747,552 109,439 23,804 25,874 11,711,607 2008 718,564 700,010 111,235 24,335 26,451 10,861,441 2009 682,088 665,890 116,329 24,882 27,045 9,992,801 2010 665,762 650,954 118,376 25,402 27,611 9,623,727 2011 663,620 649,358 119,424 25,888 28,139 9,568,610 2012 665,666 651,743 120,820 26,364 28,657 9,579,040 2013 671,328 657,539 122,506 26,832 29,165 9,644,512 2014 679,634 665,819 124,400 27,291 29,664 9,751,728 2015 689,045 675,131 126,395 27,747 30,160 9,879,027 2016 699,225 685,164 128,468 28,202 30,654 10,020,040 2017 709,899 695,658 130,573 28,655 31,146 10,169,185 2018 720,944 706,498 132,701 29,107 31,638 10,324,079 2019 732,284 717,615 134,846 29,558 32,128 10,483,706 2020 743,755 728,853 137,002 30,009 32,618 10,645,870 2021 755,254 740,118 139,160 30,460 33,109 10,808,929 2022 766,782 751,412 141,317 30,911 33,599 10,972,659 2023 778,333 762,727 143,475 31,362 34,089 11,136,954 2024 789,900 774,056 145,636 31,813 34,579 11,301,731 2025 801,493 785,411 147,806 32,265 35,070 11,467,292 2026 813,217 796,890 150,003 32,718 35,563 11,634,934 2027 824,971 808,397 152,209 33,173 36,057 11,803,402 2028 836,736 819,915 154,418 33,627 36,551 11,972,207 2029 848,508 831,439 156,628 34,081 37,045 12,141,251 2030 860,287 842,970 158,840 34,535 37,538 12,310,505 2031 872,069 854,504 161,053 34,990 38,032 12,479,899 2032 883,856 866,042 163,266 35,444 38,526 12,649,385 2033 895,645 877,583 165,479 35,898 39,020 12,818,940 2034 907,437 889,126 167,692 36,353 39,514 12,988,554 2035 919,232 900,672 169,906 36,807 40,008 13,158,228 2036 931,029 912,219 172,119 37,261 40,502 13,327,954 2037 942,828 923,769 174,332 37,716 40,995 13,497,732 2038 954,629 935,321 176,546 38,170 41,489 13,667,556 2039 966,431 946,874 178,759 38,625 41,983 13,837,424 2040 978,235 958,429 180,973 39,079 42,477 14,007,335

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### Emission Inventory

Table 3.2-9: Baseline 50-State Annual Exhaust and Evaporative Emissions for Marine Spark-Ignition Engines (Short Tons)
Year THC VOC NOx PM2.5 PM10 CO 2002 906,318 931,132 46,311 15,092 16,404 2,472,251 2003 873,287 896,969 49,694 14,417 15,670 2,407,992 2004 836,493 858,916 53,397 13,679 14,869 2,346,538 2005 796,279 817,340 57,862 12,886 14,007 2,266,733 2006 756,781 776,480 63,366 12,090 13,142 2,170,374 2007 717,924 736,303 67,730 11,311 12,295 2,103,059 2008 680,702 697,795 73,894 10,553 11,470 2,007,804 2009 645,730 661,588 82,123 9,824 10,678 1,885,970 2010 612,180 626,901 87,140 9,149 9,945 1,823,844 2011 580,750 594,415 90,516 8,525 9,266 1,788,830 2012 553,441 566,191 93,662 7,983 8,678 1,758,115 2013 530,682 542,671 96,528 7,534 8,189 1,732,653 2014 511,166 522,503 99,197 7,144 7,766 1,710,005 2015 495,178 505,981 101,703 6,823 7,416 1,690,755 2016 481,650 492,000 104,022 6,549 7,118 1,673,978 2017 470,667 480,648 106,158 6,324 6,874 1,660,415 2018 462,602 472,308 108,084 6,156 6,691 1,650,631 2019 455,864 465,336 109,885 6,012 6,535 1,642,841 2020 451,176 460,481 111,525 5,908 6,422 1,638,114 2021 447,624 456,799 113,063 5,826 6,333 1,635,047 2022 445,371 454,457 114,479 5,768 6,270 1,634,065 2023 443,951 452,972 115,802 5,726 6,224 1,634,672 2024 443,203 452,179 117,052 5,696 6,191 1,636,603 2025 443,196 452,151 118,228 5,680 6,174 1,639,914 2026 443,770 452,720 119,344 5,675 6,168 1,644,492 2027 444,806 453,764 120,401 5,678 6,172 1,650,159 2028 446,152 455,126 121,411 5,687 6,182 1,656,748 2029 447,768 456,766 122,387 5,701 6,197 1,663,933 2030 449,626 458,656 123,335 5,719 6,217 1,671,627 2031 451,666 460,733 124,260 5,741 6,240 1,679,753 2032 453,836 462,943 125,166 5,765 6,266 1,688,228 2033 456,159 465,310 126,052 5,792 6,296 1,697,074 2034 458,592 467,790 126,922 5,821 6,327 1,706,229 2035 461,115 470,363 127,777 5,851 6,360 1,715,675 2036 463,691 472,990 128,621 5,883 6,394 1,725,343 2037 466,323 475,674 129,454 5,915 6,429 1,735,210 2038 468,999 478,403 130,278 5,948 6,465 1,745,240 2039 471,706 481,164 131,095 5,982 6,502 1,755,400 2040 474,437 483,949 131,907 6,016 6,539 1,765,651

3-17

### Final Regulatory Impact Analysis

3.2.2 Baseline Hazardous Air Pollutant Estimates
The analysis of toxic air pollutants from small nonroad and marine SI engines focuses on seven major pollutants: benzene, formaldehyde, acetaldehyde, 1,3-butadiene, acrolein, naphthalene, and 15 other compounds grouped together as polycyclic organic matter (POM) for this analysis. c 

### All of these compounds, except acetaldehyde, were identified as national or regional cancer or noncancer "risk" drivers in the 1999 National Scale Air Toxics Assessment (NATA) 18 

### and have significant inventory contributions from mobile sources. That is, for a significant portion of the population, these compounds pose a significant portion of the total cancer or noncancer risk from breathing outdoor air toxics. The health effects of these hazardous pollutants are specifically discussed in Chapter 2. Many of these compounds are also part of the THC and VOC inventories. An exception is formaldehyde, which is not measured by the analytic technique used to measure THC, and part of the mass of other aldehydes as well. However, all are included in the VOC inventories presented in this chapter.
The baseline inventories for each of the toxic air pollutants described above were developed using EPA’s National Mobile Inventory Model (NMIM). This model is an analytical framework that links a county-level database to our NONROAD model and collates the output into a single database table. The resulting estimates for small nonroad and marine SI engines account for local differences in fuel characteristics and temperatures on a much finer scale than is possible when running the standalone NONROAD model. Emissions were modeled for all of the small nonroad and marine SI equipment categories in the continental United States, including California. Hence, the hazardous emission inventories presented here include the emissions from engines that are regulated by that State. As a result, the emission inventories are slightly overstated relative to the those from the small nonroad and marine SI engines subject to the federal Phase 3 requirements.
Table 3.2-10 presents the 50-state baseline inventories for toxic air emissions from small nonroad SI engines in 2002, 2020, 2030. Table 3.2-11 provides the same information for marine SI engines.

Table 3.2-10: Baseline 50-State Air Toxic Emissions for Small Nonroad Spark-Ignition Engines (short tons)

Year Benzene 1,3 Butadiene Formaldehyde Acetaldehyde Acrolein Naphthalene POM

2002 35,086 5,561 8,664 2,900 505 447 97

2020 23,216 3,468 5,802 2,792 291 638 131

2030 26,776 3,999 6,691 3,217 336 739 152

c The 15 POMs summarized in this chapter ar e acenaphthylene, anthracene, benz(a)anthracene, benzo(a)pyrene, benzo(b)fluoranthene, benzo(g,h,i)perylene, beno(k)fluoranthen e, chrysene, dibenzo(a,h)anthracene, fluoranthene, fluorene, ideno(1,2,3-c, d)pyrene, phenanthrene, and pyrene.

3-18

### Emission Inventory

Table 3.2-11: Baseline 50-State Air Toxic Emissions for Marine Spark-Ignition Engines (short tons)

Year Benzene 1,3 Butadiene Formaldehyde Acetaldehyde Acrolein Naphthalene POM

2002 23,110 2,053 2,153 1,543 211 37 31

2020 8,417 763 535 818 27 42 16

2030 8,476 751 525 811 27 46 16



## 3.3 Contribution of Small Nonroad and Marine SI Engines to National Emissions Inventories

This section describes the nationwide contribution of small nonroad and marine SI engines to the emissions of other source categories. Information is presented for the pollutants that are directly controlled by the final standards, i.e., VOC, NO
x 

### , and CO, and those that are indirectly reduced by some of the requisite control technology, i.e., PM 2.5 

### and PM 10 

### . The VOC inventories includes both exhaust and evaporative hydrocarbon emissions.
The national inventories are presented for 2002, 2020, and 2030 for all 50-states and the District of Columbia. 19 

### The stationary, highway, and aircraft inventories were taken directly from EPA’s National Emissions Invent ory (NEI) modeling platform for 2002. 20 

### The emission inventories for locomotives, and Classes 1 and 2 commercial marine engines were taken from our recent final rule for these mobile source categories. 21 

### The inventories for Class 3 commercial marine engines was take from our recent advance notice of final rulemaking for that category of engines. 22 

### The emission estimates for portable fuel containers was taken from the recent final MSAT rule. 23 

### All of the land-based nonroad engine emission inventories was developed using the NONROAD2005d model, as previously described. d 

### Finally, these inventories account for the future use of renewable fuels as required by the Energy Policy Act of 2005.

3.3.1 VOC Emissions Contribution
Table 3.3-1 provides the contribution of small nonroad SI engines, marine SI engines and other source categories to nationwide VOC emissions. The emissions from small nonroad (<19kW) and marine SI engines are 26 percent of the mobile source inventory and 12 percent of the total manmade VOC emissions in 2002. These percentages decrease slightly to 23 percent and 10 percent, respectively, by 2030.

d The modeling inputs for diesel nonroad engines that were used in NONROAD2005d for this final rule are the same as those contained in the NONROAD2005a public.

3-19

### Final Regulatory Impact Analysis

3.3.2 NOx Emissions Contribution
Table 3.3-2 provides the contribution of nonroad small nonroad SI engines, marine SI engines and other source categories to nationwid e NOx emissions. The emissions from small nonroad and marine SI engines are about 1 percent of the mobile source inventory and about 1 percent of the total manmade NOx emissions in 2002. These percentages increase to 6 percent and 3 percent, respectively, by 2030.

3.3.3 PM Emissions Contribution
Table 3.3-3 and 3.3-4 provide the contribution of small nonroad SI engines, marine SI engines and other source categories to nationwide PM 2.5 

### and PM 10 

### emissions, respectively. Both particle size categories from small nonroad and ma rine SI engines are about 8 percent of the mobile source inventory and approximately 1 percent of the total manmade PM 2.5 

### emissions in 2002. The mobile source percentage increases to about 12 percent and the total manmade percentage stay about the same at 1 percent by 2030.

3.3.4 CO Emissions Contribution
Table 3.3-5 provides the contribution of small nonroad SI engines, marine SI engines, and other source categories to nationwide CO emissions. The emissions from small nonroad and marine SI engines are 23 percent of the mobile source inventory and 10 percent of the total manmade CO emissions in 2002. These percentages decrease to 30 percent and increase to 25 percent, respectively, by 2030.

3-20Table 3.3-1: 50-State Annual VOC Baseline Emission Levels forMobile and Other Source CategoriesCategory200220202030short tons% ofmobile% of totalshort tons% ofmobile% of totalshort tons% ofmobile% of totalSmall Nonroad SI total1,165,25714.0%6.6%808,87319.6%6.3%935,61923.1%7.3%NonHandheld Small SI675,3118.1%3.8%590,18614.3%4.6%684,05716.9%5.4%Handheld Small SI489,9465.9%2.8%218,6885.3%1.7%251,5626.2%2.0%Recreational Marine SI1,003,32512.1%5.7%496,18312.0%3.9%494,21712.2%3.9%Locomotive50,6650.6%0.3%27,9740.7%0.2%17,7220.4%0.1%Recreational Marine Diesel1,5380.0%0.0%2,4850.1%0.0%2,9120.1%0.0%Commercial Marine (C1 & C2)17,2290.2%0.1%11,4780.3%0.1%6,9110.2%0.1%Land-Based Nonroad Diesel184,8682.2%1.0%76,8171.9%0.6%63,3421.6%0.5%Commercial Marine (C3)26,1750.3%0.1%53,2041.3%0.4%79,6972.0%0.6%SI Recreational Vehicles551,2856.6%3.1%442,12110.7%3.4%382,4689.5%3.0%Large Nonroad SI (>25hp)134,9501.6%0.8%11,9570.3%0.1%9,9530.2%0.1%Portable Fuel Containers243,9942.9%1.4%38,1850.9%0.3%43,3751.1%0.3%Aircraft52,6510.6%0.3%63,2511.5%0.5%67,7301.7%0.5%Total Off Highway3,431,93841.3%19.3%2,032,53049.2%15.8%2,103,94752.0%16.5%Highway Diesel191,5142.3%1.1%129,3213.1%1.0%140,9593.5%1.1%Highway Non-Diesel4,684,39156.4%26.4%1,973,18047.7%15.3%1,800,85644.5%14.1%Total Highway4,875,90458.7%27.5%2,102,50150.8%16.3%1,941,81548.0%15.2%Total Diesel (distillate) Mobile445,8145.4%2.5%248,0756.0%1.9%231,8475.7%1.8%Total Mobile Sources8,307,843100%46.8%4,135,030100%32.1%4,045,762100%31.6%Stationary Point and Area Sources9,433,356-53.2%8,740,057-67.9%8,740,057-68.4%Total Man-Made Sources17,741,198-100%12,875,088-100%12,785,819-100%Table 3.3-2: 50-State Annual NOx Baseline Emission Levelsfor Mobile and Other Source Categories200220202030% of% of% ofmobilemobilemobileCategoryshort tonssource% of totalshort tonssource% of totalshort tonssource% of totalSmall Nonroad SI119,8330.9%0.6%153,8722.7%1.3%178,4063.4%1.6%NonHandheld Small SI116,7430.9%0.5%148,0042.6%1.3%171,6503.2%1.6%Handheld Small SI3,0900.0%0.0%5,8670.1%0.1%6,7560.1%0.1%Recreational Marine SI49,9020.4%0.2%120,1722.1%1.0%132,8982.5%1.2%Locomotive1,118,7868.8%5.2%669,40511.7%5.8%437,2458.3%4.0%Recreational Marine Diesel40,4370.3%0.2%43,5790.76%0.38%43,6650.8%0.4%Commercial Marine (C1 & C2)834,0256.5%3.9%499,7988.77%4.36%308,6145.8%2.8%Land-Based Nonroad Diesel1,555,81212.2%7.3%683,48112.0%5.96%435,7748.2%3.9%Commercial Marine (C3)745,2245.9%3.5%1,368,42024.00%11.93%2,023,97438.3%18.3%SI Recreational Vehicles10,6140.1%0.0%30,1080.5%0.3%34,3180.6%0.3%Large Nonroad SI (>25hp)336,2922.6%1.6%48,2700.8%0.42%47,7660.9%0.4%Aircraft103,5910.8%0.5%132,2782.32%1.15%143,9862.7%1.3%Total Off Highway4,914,51538.6%23.0%3,749,38265.8%32.7%3,786,64571.6%34.2%Highway Diesel3,529,04627.7%16.5%681,14211.9%5.9%355,8176.7%3.2%Highway Non-Diesel4,293,73333.7%20.1%1,270,26922.3%11.1%1,144,19921.6%10.3%Total Highway7,822,77961.4%36.6%1,951,41134.2%17.0%1,500,01628.4%13.6%Total Diesel (distillate) Mobile7,078,10555.6%33.2%2,577,40445.2%22.5%1,581,11529.9%14.3%Total Mobile Sources12,737,294100%59.7%5,700,793100%49.7%5,286,661100%47.8%Stationary Point and Area Sources8,613,718-40.3%5,773,927-50.3%5,773,927-52.2%Total Man-Made Sources21,351,012-100%11,474,721-100%11,060,589-100%Table 3.3-3: 50-State Annual PM2.5Baseline Emission Levelsfor Mobile and Other Source Categories200220202030% of% of% ofmobilemobilemobileCategoryshort tonssource% of totalshort tonssource% of totalshort tonssource% of totalSmall Nonroad SI25,7005.2%0.7%32,90510.0%1.0%37,87810.7%1.1%NonHandheld Small SI4,8411.0%0.1%6,9572.1%0.2%8,0652.3%0.2%Handheld Small SI20,8594.2%0.6%25,9477.9%0.8%29,8138.4%0.9%Recreational Marine SI16,2623.3%0.5%6,3671.9%0.2%6,1631.7%0.2%Locomotive29,6605.99%0.84%15,1454.59%0.45%8,5842.42%0.25%Recreational Marine Diesel1,0960.22%0.03%9730.29%0.03%1,0530.30%0.03%Commercial Marine (C1 & C2)28,7305.80%0.82%15,7874.78%0.47%10,0172.82%0.29%Land-Based Nonroad Diesel159,11132.1%4.52%46,05613.9%1.36%17,9025.0%0.53%Commercial Marine (C3)54,66711.04%1.55%110,99333.61%3.29%166,16146.78%4.88%SI Recreational Vehicles13,7102.8%0.4%11,9013.6%0.4%10,0902.8%0.3%Large Nonroad SI (>25hp)1,6520.3%0.05%2,4210.7%0.07%2,8440.8%0.08%Aircraft17,9793.63%0.51%22,1766.72%0.66%24,0586.77%0.71%Total Off Highway348,56870.4%9.9%264,72280.2%7.8%284,74980.2%8.4%Highway Diesel94,98219.2%2.7%20,1456.1%0.6%18,8025.3%0.6%Highway non-diesel51,69410.4%1.5%45,32913.7%1.3%51,62114.5%1.5%Total Highway146,67629.6%4.2%65,47419.8%1.9%70,42319.8%2.1%Total Diesel (distillate) Mobile313,58163.3%8.9%98,10629.7%2.9%56,35815.9%1.7%Total Mobile Sources495,245100%14.1%330,196100%9.8%355,172100%10.4%Stationary Point and Area Sources3,025,244-85.9%3,047,714-90.2%3,047,714-89.6%Total Man-Made Sources3,520,488-100%3,377,911-100%3,402,887-100%Table 3.3-4: 50-State Annual PM10Baseline Emission Levelsfor Mobile and Other Source Categories200220202030% of% ofmobilemobile% of mobileCategoryshort tonssource% of totalshort tonssource% of totalshort tonssource% of totalSmall Nonroad SI27,9354.9%0.7%35,7668.5%1.0%41,1729.0%1.1%NonHandheld Small SI5,2620.9%0.1%7,5621.8%0.2%8,7671.9%0.2%Handheld Small SI22,6734.0%0.6%28,2046.7%0.8%32,4067.1%0.9%Recreational Marine SI17,6763.1%0.5%6,9201.7%0.2%6,6991.5%0.2%Locomotive30,5785.33%0.82%15,6133.73%0.43%8,8491.93%0.24%Recreational Marine Diesel1,1300.20%0.03%1,0030.24%0.03%1,0860.24%0.03%Commercial Marine (C1 & C2)29,6195.17%0.79%16,2753.89%0.45%10,3272.25%0.28%Land-Based Nonroad Diesel164,03228.6%4.40%47,48011.3%1.31%18,4554.0%0.51%Commercial Marine (C3)59,40910.36%1.59%120,61728.83%3.34%180,56639.32%4.94%SI Recreational Vehicles14,9022.6%0.4%12,9363.1%0.4%10,9672.4%0.3%Large Nonroad SI (>25hp)1,6720.3%0.04%2,4410.6%0.07%2,8660.6%0.08%Aircraft24,6224.30%0.66%30,2117.22%0.84%32,7147.12%0.90%Total Off Highway371,57564.8%10.0%289,26369.1%8.0%313,70268.3%8.6%Highway Diesel109,09719.0%2.9%32,7337.8%0.9%34,7467.6%1.0%Highway non-diesel92,53116.1%2.5%96,38023.0%2.7%110,79624.1%3.0%Total Highway201,62835.2%5.4%129,11330.9%3.6%145,54231.7%4.0%Total Diesel (distillate) Mobile334,45658.3%9.0%113,10527.0%3.1%73,46416.0%2.0%Total Mobile Sources573,203100%15.4%418,376100%11.6%459,244100%12.6%Stationary Point and Area Sources3,158,011-84.6%3,194,610-88.4%3,194,610-87.4%Total Man-Made Sources3,731,215-100%3,612,986-100%3,653,854-100%Table 3.3-5: 50-State Annual CO Baseline Emission Levelsfor Mobile and Other Source Categories200220202030% of% ofmobilemobile% of mobileCategoryshort tonssource% of totalshort tonssource% of totalshort tonssource% of totalSmall Nonroad SI16,943,26719.9%17.6%11,934,65425.5%20.6%13,803,66826.8%22.1%NonHandheld Small SI15,884,85418.7%16.5%11,084,47223.7%19.2%12,826,96524.9%20.5%Handheld Small SI1,058,4131.2%1.1%850,1811.8%1.5%976,7031.9%1.6%Recreational Marine SI2,663,9323.1%2.8%1,765,1223.8%3.1%1,801,2343.5%2.9%Locomotive123,2100.1%0.1%167,4880.4%0.3%195,8820.4%0.3%Recreational Marine Diesel6,4670.0%0.0%9,3740.0%0.0%10,9300.0%0.0%Commercial Marine (C1 & C2)151,3310.2%0.2%139,7120.3%0.2%143,7910.3%0.2%Land-Based Nonroad Diesel860,2571.0%0.9%310,2500.7%0.5%155,5760.3%0.2%Commercial Marine (C3)59,5150.1%0.1%120,8890.3%0.2%181,0320.4%0.3%SI Recreational Vehicles1,741,7022.0%1.8%1,910,0304.1%3.3%1,916,1023.7%3.1%Large Nonroad SI (>25hp)1,801,1042.1%1.9%289,3820.6%0.5%270,8270.5%0.4%Aircraft557,8200.7%0.6%677,9301.4%1.2%723,8421.4%1.2%Total Off Highway24,908,60529.3%25.8%17,324,82937.0%29.9%19,202,88337.3%30.7%Highway Diesel940,8981.1%1.0%260,2380.6%0.4%219,5940.4%0.4%Highway non-diesel59,178,84769.6%61.4%29,211,71662.4%50.5%32,038,63562.3%51.3%Total Highway60,119,74570.7%62.4%29,471,95563.0%50.9%32,258,22962.7%51.6%Total Diesel (distillate) Mobile2,082,1642.4%2.2%887,0611.9%1.5%725,7721.4%1.2%Total Mobile Sources85,028,351100%88.2%46,796,783100%80.9%51,461,112100%82.3%Stationary Point and Area Sources11,354,201-11.8%11,049,239-19.1%11,049,239-17.7%Total Man-Made Sources96,382,552-100%57,846,022-100%62,510,350-100%

### Final Regulatory Impact Analysis



## 3.4 Controlled Nonroad Small Spark-Ignition and Marine Engine Emission Inventory Development

This section describes how the controlled emission inventories were developed for the small nonroad and marine SI engines that are subject to the Phase 3 standards. The resulting controlled emission inventories are also presen ted. Section 3.4.1 provides this information for exhaust and evaporative emissions.
Once again, the inventory estimates presented throughout this section only include equipment that would be subject to the final sta ndards. Specifically for California, this includes small nonroad SI engines used in farm and construction equipment with maximum power levels below 175 hp or 130 kW. For marine SI engines, our analysis assumes that the final standards have no effect because that state already ha s equivalent exhaust emission standards and is expected to adopt equivalent evaporative hydrocarbon requirements.

3.4.1 Controlled Exhaust and Evaporative Em issions Estimates for THC, VOC, NOx, PM 2.5 

### , PM 10 

### , and CO
The controlled exhaust and evaporative emission inventories for small nonroad and marine SI engines were generated by modi fying the input files for NONROAD2005d to account for the engine and equipment controls associated with the Phase 3 standards. (See the baseline emission inventory discussion in Section 3.2 for the changes we made to the publically available NONROAD2005a model to develop NONROAD2005d.) Th e modifications that were made to estimate the controlled emissions inventories are described below.

3.4.1.1 Controlled Exhaust Emission Standard s, Zero-Hour Emission Factors and Deterioration Rates

3.4.1.1.1 Small SI Exhaust Emission Calculations
The final Phase 3 emission standards and implementation schedule are shown in Table 3.4-1. While the new standards take effect in 2011 for Class II engines and 2012 for Class I engines, we providing a number of flexibilities for engine and equipment manufacturers that will allow the continued production and use of Class II engines meeting the Phase 2 standards in limited numbers over the first four years of the Phase 3 program. The implementation schedule shown in the table is used for modeling purposes only. It is based on our assumption that engine and equipment manufacturers take full advantage of these flexibilities.

3-26

### Emission Inventory
Table 3.4-1: Phase 3 Emission Standards and Estimated Implementation Schedule for Class I and II Small SI Engines a 

### (g/kW-hr or Percent) Engine Class Requirement 2011 2012 2013 2014 2015+

HC+NOx

-- 10 10 10 10

Class I CO (marine generator sets only)

-- 5 5 5 5

Estimated Sales Percentage

-- 95 95 100 100

HC+NOx 8 8 8 8 8

Class II CO (marine generator

s ets only) 5 5 5 5 5

Estimated Sales Percentage 83 83 93 93 100

a Reflects maximum use of compliance flexibilities by engine and equipment manufacturers. Used for modeling purposes only.



### The modeled emission factors corresponding to the final Phase 3 standards are shown in Table 3.4-2. (See Section 3.2.1.2.1 for a discussion of how the model uses zero hour emission levels (ZML) and deterioration rates (A values.) We developed these new emission factors based on testing of catalyst-equipped engines both in the laboratory and in-use. A full description of the emission factor information for Phase 3 engines and the basis for the estimates can be found in the docket for this rule.
Table 3.2-2: Phase 3 Modeling Emission Fa ctors for Small SI Engines (g/kW-hr)
Class/ Technology HC ZML HC "A" NOx ZML NOx "A" CO ZML CO "A" PM10 ZML PM10 "A"

Class I - SV 5.60 0.797 1. 47 0.302 319.76 0.070 0.24 1.753 Class I - OHV 5.09 0.797 1. 91 0.302 325.06 0.070 0.05 1.753 Class II 4.25 0.797 1.35 0.302 431.72 0.080 0.08 1.095


### We left the proportion of sales in each technology classification unchanged from those used for Phase 2 engines. The technology mix was previously shown Table 3.2-2.
Finally, as discussed in more detail in Chapter 6, were developed a new brake-specific fuel consumption (BSFC) estimate for Class II engines to reflect the expected fuel consumption benefit associated with the use of additional electronic fuel injection technology on Phase 3 compliant engines. The resulting BFSC for Phase 3 Class II engines is 0.735 pounds per horsepower-hour (lb/hp-hr).

3-27

### Final Regulatory Impact Analysis

3.4.1.1.2 Marine SI Exhaust Emission Calculations
For the control case, we developed new technology classifications for engines meeting the final standards. For outboards and personal watercraft, we no longer will attempt to determine the technology mix between low emitting technology options (such as DI 2-stroke versus 4 stroke). The new technology classifica tions for these engines are simply tied to the standard. These new technology classifications are titled MO09 and MP09 for outboards and personal watercraft, respectively. In determining the combined HC+NOx emission factor, we used the final emission standards with a 10 percent compliance margin (with deterioration factor applied). To determine the NOx emission factors, we used certification data to determine the sales weighted average NOx for low emission technologies in each power bin. HC was then determined as the difference between the HC+NOx and the NOx emission factors. Because we are establishing the same standards for OB and PWC and because they use similar engines, we use the same HC+NOx emission factors and de terioration factors for both engine types.
Because the final CO standard primarily acts as a cap on CO, the CO emission factors were determined based on the emission factors for existing low emission engines in each power bin. Fuel consumption factors were calculated in the same manner. Therefore, some differences are seen between the projected CO and BSFC factors for OB and PWC. No changes were made to the PM emission factors. Also, the existi ng deterioration factors for 4-stroke carbureted engines were applied to the control case (1.05 for HC, NOx, and CO). Table 3.4-3 presents the zero-hour OB/PWC emission factors for the control case.
Table 3.4-3: Control Case Emission Factors for OB/PWC (g/kW-hr)
Power Bin HC NOx CO OB PWC BSFC OB PWC
0-2.2 kW 2.3-4.5 kW 4.6-8.2 kW 8.3-11.9 kW 12.0-18.6 kW 18.7-29.8 kW 29.9-37.3 kW 37.4-55.9 kW 55.9-74.6 kW 74.7-130.5 kW 130.6+ kW 20.9 22.1 15.5 11.6 12.5 10.2 9.3 9.2 9.2 9.2 10.2 4.8 3.6 5.6 6.8 4.3 5.7 5.9 5.4 5.4 5.0 3.7 542 357 292 248 205 189 167 169 169 173 137 640 538 243 231 218 206 206 206 206 202 178 563 560 555 552 543 528 507 471 471 415 387 563 560 555 552 543 528 507 486 486 394 380

For sterndrive and inboards, we developed a new engine classification similar to the OB/PWC discussion above. SD/I engines at or below 373 kW are modeled to meet the final standard through the use of aftertreatment. HC and NOx emission factors are based on test data presented in Chapter 4 for SD/I engines equipped with catalysts. High performance engines have two tiers of standards that can be achieved through the use of engine-based technology. Although the standards distinguish between two power ranges for high-performance, a single

3-28

### Emission Inventory
weighted EF is used here. CO emission factor s are based on meeting the final standard at the end of useful life (with the deterioration factor applied). No emission reductions are modeled for PM. The fuel consumption factor for fuel-injected 4-stroke SD/I engines is applied to the control case. Deterioration factors for catalyst-equipped engines are the same as those used in the NONROAD2005a model for catalyst-equipped large SI engines. Table 3.4-4 presents the zerohour emission factors and the accompanying deterioration factors for the control case.
Table 3.4-4: Control Case EFs (g/kW-hr) and DFs for SD/I

Engine Category HC NOx CO BSFC EF DF EF DF EF DF
kW 

### # 373 kW 1.80 1.64 1.60 1.15 55.0 1.36 345 > 373 kW, Tier 1 11.80 1.69 6.70 1.38 207 1.81 362 > 373 kW, Tier 2 8.58 1.69 6.80 1.38 207 1.81 362

3.4.1.2 Controlled Evaporative Emission Rates
Below, we present the effect of the final Phase 3 evaporative emission standards on hose permeation, tank permeation, diurnal, and running loss emission inventories.

3.4.1.2.1 Hose Permeation
Similar to the baseline case, hose permeation rates are based on g/m 2 

### /day and are modeled as a function of temperature. The fuel hose test procedures are based on Fuel CE10 as atest fuel. Based on data presented in Chapter 5, we would expect in-use emissions on gasolinebased E10 to be about half of the measured level on Fuel CE10. In addition, we believe that hose designed to meet the final 15 g/m 2 

### /day standard on 10 percent ethanol fuel will permeate at least 50 percent less when gasoline is used. Therefore, we model permeation from hoses designed to meet 15 g/m 2 

### /day on Fuel CE10 to be 3.75 g/m 2 

### /day on gasoline at 23°C. Consistent with the baseline emission case, we weight the gasoline and E10 emission factors by our estimates of gasoline sales with and without ethanol added. The same correction factors used to account for the effect of ethanol on permeation are used in the control and baseline cases.
Fill neck and vent hose containing vapor rather than liquid fuel are not subject to the final standards. No emission reductions are modeled for these hose types. In addition, no emission reductions are modeled for hose on handheld equipment used in cold weather applications (e.g. Class V chainsaws).

3.4.1.2.2 Tank Permeation
Similar to the baseline case, fuel tank permeation rates are based on units of g/m 2 

### /day and are modeled as a function of temperature. We believe that fuel tanks using alternative materials

3-29

### Final Regulatory Impact Analysis
to meet the final 1.5 g/m 2 

### /day standard on 10 percent ethanol fuel will typically permeate at least 50 percent less when gasoline is used. Therefore, we model permeation from fuel tanks to be 0.75 g/gal/day at 29°C on gasoline. Consistent with the baseline emission case, we weight the gasoline and E10 emission factors by our estimates of gasoline sales with and without ethanol added. The same correction factors used to account for the effect of ethanol on permeation are used in the control and baseline cases.
One exception to the above discussion is metal tanks. For these fuel tanks, we do not include any emissions reductions from baseline.

3.4.1.2.3 Diurnal
We are not establishing a diurnal emission requirement for small nonroad SI equipment. Therefore, we do not model direct reductions in diurnal emissions. However, we are placing alimit on diffusion emissions. As a result, we set the diffusion multiplier to 1.0 for all nonhandheld Small SI equipment for the control case. Note that this multiplier was already set to 1.0 for handheld equipment in the baseline case. This is equivalent to applying a 32 percent reduction to the diurnal emission factors.
In the control case for marine SI engines, we model portable fuel tanks as having 90 percent lower diurnal emissions than an open vent system. Also, we set the diffusion multiplier to 1.0 because the tanks would be sealed. Presumably, the diurnal temperature cycles would build some pressure in the fuel tank causing hydrocarbons to be released when the tank is opened. Therefore, we do not model these tanks as having zero diurnal emissions. For PWC, we use the baseline scenario of sealed systems with a 1.0 psi pressure relief valve. For installed fuel tanks, we model a 60 percent reduction due to a carbon canister in the fuel line with passive purge. This reduction is based on data presented in Chapter 5. As in the baseline case, no diffusion is modeled for PWC and installed fuel tanks.

3.4.1.2.4 Running Loss
For Class I engines, we believe that the final running loss control requirement will be met by routing vapor from the fuel take to the engine air intake system. Therefore, all vapor generated in the fuel tank should be consumed by the engine, thereby eliminating running loss emissions. However, there may be some inefficiencies in the system such as vapor escaping out the intake at idle. Therefore, we model the running loss emission reduction as only 90 percent. For Class II equipment, we believe that some equipment will inherently meet the final standard because they will have low enough temperature fluctuation in the fuel tanks during operation to certify by design. Based on the data presented in Chapter 5 on fuel tank temperatures during operation, we estimate an 80 percent reduction in running loss for Class II equipment.

3.4.1.3 Controlled Exhaust and Evaporative Inventory Results for THC, VOC, NOx, PM 2.5 

### , PM 10 

### , CO and SO 2 

### Tables 3.4-5 presents the 50-state controlled emission inventories for small nonroad SI

3-30

### Emission Inventory
engines. Tables 3.4-6 provides the same information for marine SI engines.

Table 3.4-5: Controlled 50-State Annual Ex haust and Evaporative Emissions for Small Nonroad Spark-Ignition Engines (short tons)
Year THC VOC NOx PM2.5 PM10 CO 2002 1,064,625 1,047,374 106,804 23,382 25,416 15,091,835 2003 1,026,922 1,009,822 106,852 23,480 25,522 14,351,829 2004 963,709 945,601 106,610 23,483 25,525 13,690,337 2005 886,524 867,081 106,847 23,417 25,453 12,923,819 2006 825,413 804,926 109,233 23,498 25,541 12,252,479 2007 768,239 747,552 109,439 23,804 25,874 11,711,607 2008 713,266 694,712 111,235 24,335 26,451 10,861,441 2009 669,782 653,584 116,329 24,882 27,045 9,992,801 2010 646,659 631,851 118,376 25,402 27,611 9,623,727 2011 618,463 604,977 107,135 25,888 28,139 9,427,359 2012 573,611 562,317 96,222 26,364 28,445 9,240,448 2013 535,035 525,722 86,623 26,832 28,747 9,125,886 2014 509,895 501,985 81,011 27,291 29,071 9,107,104 2015 495,565 488,517 76,412 27,747 29,473 9,135,515 2016 486,951 480,492 73,517 28,202 29,896 9,201,411 2017 484,102 477,989 72,202 28,655 30,336 9,298,167 2018 485,460 479,510 71,768 29,107 30,795 9,415,010 2019 488,969 483,092 71,822 29,558 31,259 9,543,762 2020 493,763 487,905 72,175 30,009 31,727 9,679,462 2021 499,618 493,736 72,848 30,460 32,198 9,820,562 2022 506,071 500,141 73,667 30,911 32,671 9,964,572 2023 512,988 506,990 74,592 31,362 33,146 10,110,794 2024 520,130 514,054 75,564 31,813 33,622 10,258,216 2025 527,386 521,227 76,578 32,265 34,098 10,406,862 2026 534,763 528,516 77,629 32,718 34,576 10,557,631 2027 542,202 535,864 78,700 33,173 35,055 10,709,373 2028 549,676 543,246 79,782 33,627 35,534 10,861,555 2029 557,179 550,657 80,875 34,081 36,013 11,014,081 2030 564,711 558,094 81,977 34,535 36,492 11,166,921 2031 572,261 565,549 83,086 34,990 36,971 11,319,980 2032 579,823 573,015 84,197 35,444 37,450 11,473,166 2033 587,396 580,492 85,312 35,898 37,929 11,626,453 2034 594,978 587,978 86,429 36,353 38,408 11,779,824 2035 602,567 595,471 87,547 36,807 38,887 11,933,276 2036 610,167 602,974 88,669 37,261 39,366 12,086,826 2037 617,776 610,486 89,795 37,716 39,845 12,240,473 2038 625,391 618,003 90,922 38,170 40,324 12,394,188 2039 633,010 625,525 92,051 38,625 40,803 12,547,962 2040 640,633 633,050 93,181 39,079 41,282 12,701,792

3-31

### Final Regulatory Impact Analysis

Table 3.4-6: Controlled 50-State Annual Ex haust and Evaporative Emissions for Marine Spark-Ignition Engines (short tons)
Year THC VOC NOx PM2.5 PM10 CO 2002 906,318 931,132 46,311 15,092 16,404 2,472,251 2003 873,287 896,969 49,694 14,417 15,670 2,407,992 2004 836,493 858,916 53,397 13,679 14,869 2,346,538 2005 796,279 817,340 57,862 12,886 14,007 2,266,733 2006 756,781 776,480 63,366 12,090 13,142 2,170,374 2007 717,924 736,303 67,730 11,311 12,295 2,103,059 2008 680,702 697,795 73,894 10,553 11,470 2,007,804 2009 644,330 660,187 82,123 9,824 10,678 1,885,970 2010 593,432 607,656 84,822 8,832 9,600 1,808,304 2011 543,080 555,760 85,353 7,891 8,577 1,755,638 2012 495,189 506,468 85,673 7,035 7,647 1,707,370 2013 452,028 462,066 85,732 6,275 6,820 1,664,442 2014 412,280 421,190 85,609 5,577 6,062 1,624,423 2015 376,203 384,108 85,334 4,951 5,381 1,587,889 2016 342,807 349,793 84,890 4,376 4,756 1,553,983 2017 312,281 318,441 84,279 3,856 4,191 1,523,443 2018 285,067 290,507 83,468 3,399 3,695 1,496,863 2019 259,742 264,519 82,546 2,978 3,237 1,472,528 2020 238,704 242,957 81,398 2,640 2,869 1,452,196 2021 219,826 223,621 80,081 2,341 2,545 1,433,655 2022 203,027 206,427 78,657 2,081 2,262 1,417,440 2023 188,065 191,121 77,197 1,851 2,012 1,403,195 2024 175,954 178,752 75,802 1,673 1,818 1,391,146 2025 166,147 168,751 74,424 1,534 1,668 1,380,739 2026 157,943 160,391 73,057 1,419 1,542 1,371,913 2027 151,063 153,384 71,713 1,323 1,438 1,364,592 2028 145,397 147,624 70,421 1,247 1,355 1,358,936 2029 140,670 142,822 69,236 1,185 1,288 1,354,638 2030 136,990 139,083 68,639 1,137 1,236 1,353,989 2031 134,079 136,124 68,339 1,099 1,194 1,355,439 2032 131,797 133,803 68,148 1,067 1,160 1,357,905 2033 130,067 132,045 68,038 1,043 1,134 1,361,273 2034 128,766 130,723 67,985 1,024 1,113 1,365,343 2035 127,853 129,798 67,975 1,010 1,098 1,370,010 2036 127,275 129,212 68,009 1,001 1,088 1,375,199 2037 126,952 128,888 68,077 995 1,081 1,380,822 2038 126,816 128,753 68,174 991 1,077 1,386,805 2039 126,828 128,769 68,302 989 1,075 1,393,116 2040 126,959 128,906 68,461 989 1,075 1,399,715

3-32

### Emission Inventory

3.4.2 Controlled Hazardous Air Pollutant Estimates
The final hydrocarbon emission standards for small nonroad and marine SI engines will also reduce toxic air pollutants. To calculate the controlled toxic air emission inventories, we multiplied the baseline hazardous air pollutant estimates (Section 3.2.2) by the ratio of control and baseline emission inventories (Section 3.2.1.4 and 3.4.1.3, respectively) for VOC or PM, as appropriate. More specifically, we used the VOC ratio for all toxic pollutant species that are found in the gas phase. The gas phase pollutants are all the species described below, except for naphthalene and the polycyclic organic matter (POM) compounds that are found in both the gas and particulate phase. In these cases, we used the PM ratio to estimate the controlled inventories.
Controlled inventories were calculated for the seven major types of air toxic emissions: benzene, formaldeyde, acetaldehyde, 1,3-butadiene, acrolein, naphthalene, and 15 other compounds grouped together as POM for this analysis. e 

### Table 3.4-7 presents the 50-state controlled inventories, respectively, small nonroa d SI engines. Table 3.4-8 provides the same information for marine SI engines.

Table 3.4-7: Controlled 50-State Air Toxic Emissions for Small Nonroad Spark-Ignition Engines (short tons)

Year Benzene 1,3 Butadiene Formaldehyde Acetaldehyde Acrolein Naphthalene POM

2002 35,086 5,561 8,664 2,900 505 447 97

2020 15,413 2,504 4,189 2,015 210 620 128

2030 17,577 2,859 4,784 2,300 240 718 147



### Table 3.4-8: Controlled 50-State Air Toxic Emissions for Marine Spark-Ignition Engines (short tons)

Year Benzene 1,3 Butadiene Formaldehyde Acetaldehyde Acrolein Naphthalene POM

2002 23,110 2,053 2,153 1,543 211 37 31

2020 4,453 390 273 418 14 19 7

2030 2,582 216 151 234 8 9 3

e The 15 POMs summarized in this chapter ar e acenapthylene, anthracene, benz(a)anthracene, benzo(a)pyrene, benzo(b)fluoranthene, benzo(g,h,i)perylene, beno(k)fluoranthen e, chrysene, dibenzo(a,h)anthracene, fluoranthene, fluorene, indeno(1,2,3-c, d)-pyrene, phenanthrene, and pyrene.

3-33

### Final Regulatory Impact Analysis



## 3.5 Projected Emissions Reductions from the Final Rule

This section presents the projected total emission reductions associated with the final Phase 3 standards. We calculated the reductions by subtracting the baseline inventories from Section 3.2 by the controlled inventories from Section 3.4.

3.5.1 Results for THC, VOC, NOx, PM 2.5 

### , PM 10 

### , and CO
Tables 3.5-1 presents the 50-state exhaust and evaporative emission inventories and percent reductions, respectively, for small nonroad SI engines. Tables 3.5-2 provides the same information for marine SI engines. Tables 3.5-3 summarizes the combined emission reductions for the final rule. The earliest Phase 3 evaporative standards for small nonroad SI engines begin in 2008. Similar final evaporative standards affect Marine SI engines one year later. Therefore the emission reductions are shown beginning in 2008 for small nonroad SI engines and 2009 for Marine SI engines. Figures 3.5-1 though 3.5-5 show the combined baseline, controlled, and by contrast the reduction emission inventories over time for small nonroad and Marine SI engines.

3-34Table 3.5-1: Total 50-State Annual Exhaust and Evaporative Emission Reductionsfor Small Spark-Ignition Engines (short tons)YearTHCVOCNOxPM2.5PM10COTons%Tons%Tons%Tons%Tons%Tons%20085,29815,298100000000200912,306212,306200000000201019,103319,103300000000201145,157744,381712,289100000141,2511201292,0551489,4261424,5982019512121338,59242013136,29320131,8172035,8822938514191518,62552014169,73925163,8342543,3893554625942644,62472015193,47928186,6142849,9834063226872743,51282016212,27430204,6723054,9514369727582818,62882017225,79732217,6693258,3714574538103871,01992018235,48333226,9883360,9334677638433909,06892019243,31533234,5233363,0244780038703939,94492020249,99134240,9483464,8274782038923966,40792021255,63634246,3823466,3124883839113988,36792022260,71134251,2713467,65048854392831,008,08892023265,34534255,7373468,88348868394331,026,16192024269,77034260,0023470,07248881395831,043,51592025274,10734264,1853471,22848894397231,060,43092026278,45534268,3753472,37448908398731,077,30392027282,76934272,5333473,5094892231,00231,094,02892028287,06034276,6683474,6354893631,01731,110,65292029291,32834280,7823475,7534894931,03231,127,17092030295,57634284,8763476,8634896331,04731,143,58492031299,80834288,9553477,9674897731,06231,159,92092032304,03334293,0273479,0684899031,07631,176,21992033308,25034297,0913480,167481,00431,09131,192,48792034312,46034301,1483481,264481,01831,10631,208,73092035316,66534305,2013482,359481,03131,12131,224,95392036320,86234309,2463483,450481,04531,13631,241,12892037325,05234313,2843484,537481,05931,15131,257,25992038329,23834317,3183485,623481,07231,16631,273,36892039333,42135321,3493586,708491,08631,18131,289,46292040337,60235325,3793587,792491,10031,19531,305,5439Table 3.5-2: Total 50-State Annual Exhaust and Evaporative Emission Reductionsfor Marine Spark-Ignition Engines (short tons)YearTHCVOCNOxPM2.5PM10COTons%Tons%Tons%Tons%Tons%Tons%20091,40001,400000000000201018,748319,24532,31833173344315,5401201137,670638,65675,16366347689733,1922201258,2521159,723117,9899948121,0311250,7453201378,6541580,6051510,796111,259171,3691768,2114201498,88619101,3131913,588141,567221,7032285,58252015118,97424121,8732416,369161,872272,03527102,86762016138,84329142,2072919,131182,173332,36233119,99572017158,38634162,2073421,879212,468392,68339136,97282018177,53538181,8013824,617232,756452,99645153,76792019196,12243200,8184327,340253,034503,29850170,313102020212,47147217,5244730,128273,269553,55355185,917112021227,79851233,1785132,981293,485603,78860201,392122022242,34554248,0305535,822313,688644,00864216,625132023255,88658261,8515838,605333,875684,21268231,477142024267,24860273,4286041,250354,023714,37371245,457152025277,04963283,4006343,803374,146734,50673259,174162026285,82864292,3296546,286394,256754,62675272,579172027293,74366300,3796648,689404,355774,73477285,568172028300,75567307,5036850,990424,440784,82678297,811182029307,09769313,9446953,151434,516794,90979309,295192030312,63670319,5737054,696444,582804,98180317,638192031317,58870324,6097055,921454,642815,04681324,313192032322,03971329,1407157,018464,698815,10781330,323202033326,09271333,2657258,015464,749825,16282335,801202034329,82672337,0677258,937464,797825,21482340,886202035333,26172340,5657259,802474,841835,26283345,665202036336,41773343,7787360,611474,882835,30683350,145202037339,37173346,7867361,377474,920835,34883354,388202038342,18373349,6497362,104484,957835,38883358,435212039344,87873352,3957362,793484,993835,42783362,283212040347,47773355,0437363,445485,027845,46484365,93621Table 3.5-3: Total 50-State Annual Exhaust and Evaporative Emission Reductionsfor Small Nonroad and Marine Spark-Ignition Engines (short tons)YearTHCVOCNOxPM2.5PM10COTons%Tons%Tons%Tons%Tons%Tons%20085,29805,298000000000200913,706113,706100000000201037,851338,34832,31813171344115,5400201182,827783,037717,451863426892174,44422012150,30712149,1491232,587151,14331,2433389,33732013214,94718212,4221846,679211,64451,7875586,83652014268,62523265,1472256,977252,11362,2976730,20662015312,45426308,4872666,353292,50472,7227846,37972016351,11730346,8792974,082322,87083,1208938,62382017384,18333379,8753280,250343,21393,49391,007,99192018413,01935408,7893585,550363,532103,839101,062,83692019439,43737435,3403790,363373,834114,168111,110,25892020462,46339458,4723994,954384,089114,444111,152,32592021483,43340479,5604099,293394,323124,698121,189,759102022503,05642499,30141103,472404,541124,936121,224,712102023521,23143517,58843107,488414,743135,155131,257,637102024537,01844533,43044111,322424,905135,331131,288,972102025551,15644547,58444115,031435,040135,479131,319,604102026564,28245560,70445118,660445,164135,613131,349,882102027576,51245572,91345122,198455,277145,736141,379,596102028587,81446584,17146125,625465,376145,843141,408,463102029598,42646594,72646128,904465,465145,940141,436,465102030608,21146604,44946131,559475,545146,027141,461,222102031617,39647613,56547133,888475,619146,107141,484,233102032626,07247622,16747136,087475,688146,183141,506,542112033634,34247630,35647138,182475,753146,253141,528,288112034642,28647638,21547140,201485,814146,320141,549,616112035649,92647645,76647142,161485,872146,383141,570,618112036657,27947653,02447144,061485,927146,442141,591,273112037664,42347660,06947145,914485,979146,499141,611,647112038671,42147666,96747147,727486,029146,554141,631,803112039678,29947673,74447149,501486,079146,607141,651,746112040685,07947680,42247151,237486,127146,660141,671,47911.

### Final Regulatory Impact Analysis

3-38 Fi g ure 3.5-1: 50-State Annual THC Exhaust and Eva p orative Emissions for Small SI and Marine SI Engines

0 500,000 1,000,000 1,500,000 2,000,000 2,500,000

2000 2005 2010 2015 2020 2025 2030 2035 2040 YearTons /Year

Baseline Controlled

Fi g ure 3.5-2: 50-State Annual VOC Exhaust and Evaporative Emissions for Small SI and Marine SI Engines

0 500,000 1,000,000 1,500,000 2,000,000 2,500,000

2000 20 05 2010 2015 2020 2025 2030 2035 2040 YearTons /Year

Baseline
Controlled

### Emission Inventory

3-39 Figure 3.5-2: 50-State Annual NOx Exhaust Emissions for Small SI and Marine SI Engines

0 50,000 100,000 150,000 200,000 250,0 00 300,000 350,000

2000 2005 2010 2015 2020 2025 2030 203 5 2040 YearTons /Year

Baseline
Controlled

Figure 3.5-3: 50-State Annual PM2.5 Exhaust Emissions for Small SI and Marine SI Engines

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

2000 2005 2010 2015 2020 2025 2030 2035 2040 YearTons /Year

Baseline Controlled

### Final Regulatory Impact Analysis

Figure 3.5-4: 50-State Annual PM10 Emissions for Small SI and Marine SI Engines

0 10,000 20,000 30,000 40,000 50,000 60,000

2000 2005 2010 2015 2020 2025 2030 2035 2040 YearTons /Year

Baseline Controlled

Fi g ire 3.5-5: 50-State CO Exhaust Emission for Small SI and Marine SI Engines

0 2,000,000 4,000,000 6,000,00 0 8,000,00 0 10,000,0 00 1 2,000,000 1 4,0 00,000 1 6,0 00,000 1 8,0 00,000 2 0,0 00,000

20 00 2005 20 10 2015 2020 2025 2030 2035 2040 YearTons

Baseline
Controlled

3-40

### Emission Inventory

3.5.2 Results for Hazardous Air Pollutants
Table 3.5-4 presents the 50-state exhaust and evaporative hazardous air pollutant emission reductions for small nonroad SI engines that are expected as a result of the final standards. Table 3.5-5 provides the same information for marine SI engines. Table 3.5-6 summarizes the combined hazardous air pollutant reductions for the final rule. These results are displayed for 2020 and 2030, when most or all of the engines subject to the standards are represented in the respective fleets.

3-41Table 3.5-4: 50-State Air Toxic Emission Reductions forSmall Nonroad Spark-Ignition Engines (short tons)YearBenzene1,3 ButadieneFormaldehydeAcetaldehydeAcroleinNapthalenePOMTons%Tons%Tons%Tons%Tons%Tons%Tons%20207,80334965281,614287772881281734320309,200341,140291,90729917299629212943Table 3.5-5: 50-State Air Toxic Emission Reductions forMarine Spark-Ignition Engines (short tons)YearBenzene1,3 ButadieneFormaldehydeAcetaldehydeAcroleinNapthalenePOMTons%Tons%Tons%Tons%Tons%Tons%Tons%20203,964473734926149400491349235595520305,89370535713747157771197137801380Table 3.5-6: 50-State Air Toxic Emission Reductions forSmall Nonroad and Marine Spark-Ignition Engines (short tons)YearBenzene1,3 ButadieneFormaldehydeAcetaldehydeAcroleinNapthalenePOMTons%Tons%Tons%Tons%Tons%Tons%Tons%202011,767371,338321,875301,176339430416911203015,093431,675352,281321,49437115325775710

### Emission Inventory



## 3.6 Emission Inventories Used for Air Quality Modeling
This section briefly summaries the methodology we used for air quality modeling purposes and to develop the emission inventories for that modeling. It also describes the changes to our emission inventory modeling input s and resulting emission inventories that were made between the preliminary baseline and control scenarios used for the air quality modeling, and the updated final baseline and control scenarios for the final Phase 3 rule. These differences often occur because the emission inputs for the air quality modeling are required early in the analytical process to ensure there is adequate time to complete the analysis and incorporate the results into the rulemaking. Given that lead time requirement, air quality modeling is often based on analytical methods and inputs that may be superceded, or on a control scenario that does not specifically match the final set of emission standards.

3.6.1 General Description of the Air Quality Modeling
Air quality modeling was performed for th e 48 contiguous states and the District of Columbia to estimate the effect of the final ru le on future annual fine particulate matter (PM 2.5 

### ) concentrations, 8-hour oz one concentrations, and visibility le vels. The analysis was performed for calendar years 2002, 2020, and 2030 using th e Community Multiscale Air Quality (CMAQ) model. The model simulates the multiple physi cal and chemical processes involved in the formation, transport, and destructi on of fine particulate and ozone.
The air quality modeling for the final rule was predominately taken directly from the work performed for EPA’s recent final rulema king to control air emissions from locomotive engines and marine compressi on-ignition engines less than 20 liters per cylinder (the locomotive/marine rule). This approach was adopt ed to ensure that the air quality modeling for this rule included the effects all EPA’s most recent air pollution control regulations and to conserve resources by ta king advantage of the existing invent ory preparation (i.e., input files), analytical methods, and results.
More specifically, we used the locomotive/marine rule’s “contro l” scenario as our starting point. The resulting baseline for the Phase 3 fina l rule was then modified to include more recent modeling updates for small nonroad and mari ne SI engines based on the NONROAD2005d core model and a set of input files that closely matches those used in th is final rule. (The differences in the input files used in the preliminary invent ories and those for the final rule, which also used NONROAD 2005d core model, are specifically describe d later in this section.) For air quality modeling purposes, the nonroad model was executed within the framework of EPA’s National Mobile Inventory Model (NMIM) th at links a county-level database to the model and collates the output into a single database table. The resu lting NMIM inventory es timates for nonroad and marine SI engines account for local differences in fuel characteristics and temperatures. By contrast, if NONROAD2005d is run as a stand alone model, results are based on a somewhat less accurate, but much less resource intensive approach that uses national average daily temperatures and fuel characteristics.

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### Final Regulatory Impact Analysis

The NMIM emissions inventor y methodology and results for th e highway vehicles and all nonroad sources (including those for small nonroad and marine SI engi nes) that were used in the air quality assessment are in th e docket for this final rule. 24



### 3.6.2 Methodology for Comparing the Preliminary Air Quality Emission Inventories and the Final Inventories
The simplest method for comparing the preliminary emission inventories and the inventories represented in the final rule is to compare the emission results from using the NONROAD2005d core model with the national average inputs for temperature and fuel that reflect the modeling assumptions for the preliminary and final rule inventories. This is possible because of the similarities in the underlying use of the NONROAD2005d model. More specifically, even though the two modeling approaches, i.e., NMIM and the stand alone NONROAD2005 model, use different temperature and fuel characteristics, the computational method is the same. f 

### This consistency means that the results of the two modeling approaches will be proportional in nature, i.e., the relative changes in the inventories will be similar. Also, as is explained in more detail later, the other basic modeling scenario inputs, e.g., emission factors and deterioration rates, are nearly identical. Taken together, the modeling results from using the NONROAD2005d model with national average inputs for temperature and fuels will closely mirror the differences in inventories produced with NMIM. This avoids the more time and resource intensive approach of rerunning the NMIM model for the final rule scenarios, while still providing a good comparison of the differences in the absolute inventories, i.e., tons, and more importantly for air quality considerations, the percent reduction between the baseline and control cases. Therefore, the comparisons of the preliminary and final emission scenarios that are presented in the following sections are based on comparing 50-state inventories using the nonroad model with national average inputs.

3.6.3 Comparison of the Baseline Scenario Emission Inventories

As described in Section 3.2., the final emission inventories for the Phase 3 rule are based on the use of a special version of the nonroad model, i.e., NONROAD2005d. Similarly, the preliminary emission inventories for air quality modeling were also constructed using the same version NONROAD2005d core model. Therefore, the only difference between the preliminary and final baseline scenarios are the modeling inputs. These differences and a comparison of the respective inventory results are presented below.

3.6.3.1 Differences Between the Preliminary and Final Baseline Scenarios
The modeling inputs for the final baseline scenario are described in Section 3.2.1. The only difference in the inputs for small nonroad SI engines between the preliminary and the final baseline scenarios is that the preliminary results did not include correction of the running loss

f The difference between the preliminary emission inventories using NMIM and final rule emission inventories using NONROAD2005d is that the NMIM results, wh ich use county-level data for temperatures and fuel characteristics, are generally 10-15 per cent greater depending on the pollutant.

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### Emission Inventory

emission factors for Class 1 snowblowers to account for cold weather applications as described in Section 3.2.1.1.1, number 8. There were no differences in the inputs for marine SI engines.

3.6.3.2 Comparison of Preliminary and Final Baseline Emission Inventories
Table 3.6-1 compares the preliminary and final 50-state baseline scenario inventories for small nonroad and marine SI engines. As shown, the differences in the baseline scenarios are insignificant.

3-45Table 3.6-1: Comparison of 50-State Baseline Scenario Emissions forPreliminary Air Quality Modeling and Final RuleApplicationsYearVOC [short tons]NOx[short tons]PM2.5[short tons]FinalPreliminaryDifferenceFinalPreliminaryDifferenceFinalPreliminaryDifferenceSmall NonroadSI Subject tothe Final rule2020728,853729,235(382)137,002137,002030,00930,00902030842,970843,410(440)158,840158,840034,53534,5350Marine SI2020460,481460,4810111,525111,52505,9085,90802030458,656458,6560123,335123,33505,7195,7190Total20201,189,3341,189,716(382)248,527248,527035,91735,917020301,301,6261,302,066(440)282,175282,175040,25440,2550

### Emission Inventory

Table 3.6-1 (Cont’d) Comparison of 50-State Baseline Scenario Emissions for Preliminary Air Quality Modeling and Final Rule

Applications Year PM 10 [short tons] CO [short tons]

Final Preliminary Difference Final Preliminary Difference

Small Nonroad SI Subject to the Final rule 2020 32,618 32,618 0 10,645,870 10,645,870 0

2030 37,538 37,538 0 12,310,505 12,310,505 0

Marine SI 2020 6,422 6,422 0 1,638,114 1,638,114 0

2030 6,217 6,217 0 1,671,627 1,671,627 0

Total 2020 39,041 39,041 0 12,283,983 12,283,983 0

2030 43,755 43,755 0 13,982,132 13,982,132 0



### 3.6.4 Comparison of the Control Scenario Emission Inventories
As noted above, the preliminary and final emission inventories for the Phase 3 rule are based on the same version of the nonroad model, i.e., NONROAD2005d. Therefore, the only difference between the scenarios are the modeling inputs. These differences and a comparison of the respective inventory results are presented below.

3.6.4.1 Differences Between the Preliminary and Final Control Scenarios
The modeling inputs for the final control scenario are described in Section 3.4.1. The only difference in the inputs for small nonroad SI engines between the preliminary and the final control scenarios is that the preliminary results excluded the following:

1. Update of the Phase 3 Class II zero-hour emission factor for CO from 391.13 to 431.72 g/kW-hr (321.9 g/hp-hr); and 2. Update of the Phase 3 Class II brake specific fuel consumption values from 0.666 to 0.735 lb/hp-hr to reflect a lower use of electronic fuel injection systems.
For marine SI engines, the only difference in the inputs between the preliminary and the final control scenarios is that the preliminary results excluded the following:

1. Revised several of the HC and NOx emission factors for outboards, personal watercraft, and sterndrive/inboards; 2. Revised the Phase 3 standard phase-in dates for high performance sterndrive/inboards (>600 hp); 3. Delayed by one year the implementation dates for outboards, personal watercraft, and stern drive/inboards; and

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### Final Regulatory Impact Analysis

4. Delayed by one year the implementation of diurnal Phase 3 controls for portable fuel tanks to 2010 and installed fuel tanks to 2011.

3.6.4.2 Comparison of Preliminary and Final Control Emission Inventories
Table 3.6-2 compares the preliminary and final 50-state control scenario inventories for small nonroad and marine SI engines. As shown, the difference in the control scenarios are insignificant.

3-48Table 3.6-2: Comparison of 50-StateControlScenario Emissions forPreliminary Air Quality Modeling Scenario and Final Rule (Tons/Year)ApplicationsYearVOC [short tons]NOx[short tons]PM2.5[short tons]FinalPreliminaryDifferenceFinalPreliminaryDifferenceFinalPreliminaryDifferenceSmall NonroadSI Subject tothe Final rule2020487,905487,66324272,17572,175029,18929,18902030558,094557,80528981,97781,977033,57233,5720Marine SI2020242,957241,2161,74181,39881,1622362,6402,64002030139,083136,6502,43368,63968,5381011,1371,1370Total2020730,862728,8791,983153,573153,33623731,82931,82902030697,177694,4552,722150,616150,51510134,70934,7090

### Final Regulatory Impact Analysis

Table 3.6-2 (Cont’d) Comparison of 50-State Control Scenario Emissions for Preliminary Air Quality Modeling and Final Rule

Applications Year PM 10 [short tons] CO [short tons]

Final Preliminary Difference Final Preliminary Difference

Small Nonroad SI Subject to the Final rule 2020 31,727 31,727 0 9,679,462 9,029,001 650,461

2030 36,492 36,492 0 11,166,921 10,393,508 773,413

Marine SI 2020 2,869 2,869 0 1,452,196 1,447,553 4,643

2030 1,236 1,236 0 1,353,989 1,345,079 8,910

Total 2020 34,596 34,596 0 11,131,658 10,476,554 655,104

2030 37,728 37,728 0 12,520,910 11,738,587 782,323



### 3.6.5 Comparison of the Em ission Reduction Inventories



### Table 3.6-3 compares the emission reductions for preliminary and final 50-state inventories for small nonroad and marine SI engines. As shown, the differences are insignificant.

3-50Table 3.6-3: Comparison of50-State Emissions Reductions forPreliminary Air Quality Modeling Scenario and Final Rule (Tons/Year)ApplicationsYearVOC [short tons]NOx[short tons]PM2.5[short tons]FinalPreliminaryDifferenceFinalPreliminaryDifferenceFinalPreliminaryDifferenceSmall NonroadSI Subject tothe Final rule2020240,948241,572(624)64,82764,827082082002030284,876285,605(729)76,86376,86309639630Marine SI2020217,524219,265(1,741)30,12830,364(236)1,2873,269(1,982)2030319,573322,006(2,433)54,69654,797(101)3,2694,582(1,313)Total2020458,472460,837(2,365)94,95595,191(236)4,0824,089(7)2030604,449607,611(3,162)131,559131,660(101)5,5455,5450

### Final Regulatory Impact Analysis

Table 3.6-3 (Cont’d) Comparison of 50-State Emission Reductions for Preliminary Air Quality Modeling and Final Rule

Applications Year PM 10 [short tons] CO [short tons]

Final Preliminar y Difference Final Preliminar y Difference

Small Nonroad SI Subject to the Final rule 2020 892 892 0 966,407 1,616,868 (650,461)

2030 1,047 1,047 0 1,143,584 1,916,997 (773,413)

Marine SI 2020 3,553 3,553 0 185,917 190,560 (4,643)

2030 4,981 4,981 0 317,638 326,548 (8,910)

Total 2020 4,445 4,445 0 1,152,325 1,807,428 (655,103)

2030 6,028 6,028 0 1,461,222 2,243,545 (782,323)

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### Emission Inventory


# Chapter 3 References

1. “NONROAD2005a Emissions Inventory Model and Do cumentation,” Memorandum and attachment from Richard S. Wilcox to Docket EPA-HQ-OAR-2004-0008, U.S. Environmental Protection Agency, Office ofTransportation and Air Quality, Ann Arbor, Michigan, February 5, 2007. Docket Identification EPA-HQ-OAR2004-0008-0517.

2. “NONROAD2005d missions Inventory Model,” Memorandum and attachment from Richard S. Wilcox to Docket EPA-HQ-OAR-2004-0008, U.S. Environmental Protection Agen cy, Office of Transportation and Air Quality, Ann Arbor, Michigan, February 5, 2007. Do cket Identification EPA-HQ-OAR-2004-0008-0719.

3. “Updates to Phase 2 Technology Mix, Emission Factor s, and Deterioration Rates for Spark-Ignition Nonroad Nonhandheld Engines at or below 19 Kilowatts fo r the NONROAD Emissions Inventory Model,” Memorandum from Phil Carlson to Docket EPA-HQ-OAR-2004-0008, U. S. Environmental Protection Agency, Office of Transportation and Air Quality, Ann Arbor, Michigan, March 6, 2000. Docket Identification EPA-HQ-OAR-2004- 0008-0543.

4. “Phase 3 Technology Mix, Emission Factors, and De terioration Rates for Spark-Ignition Nonroad Nonhandheld Engines at or below 19 Kilowatts for the NONROAD Emi ssions Inventory Model,” Memorandum from Phil Carlson to Docket EPA-HQ-OAR-2004-0008, U.S. Environmental Pr otection Agency, Office of Transportation and Air Quality, Ann Arbor, Michigan, May 21, 2008. Docket Identification EPA-HQ-OAR-2004-0008-0842.

5. “Exhaust Emission Factors for Nonroad Engine Modeling; Spark-Ignition, Report No. 010e,” U.S. Environmental Protection Agency, Office of Transportation and Air Quality, Ann Arbor, Michigan, EPA420-R-05-019, December 2005. Docket Identification EPA-HQ-OAR-2004-0008-0398.

6. “Updates to Technology Mix, Emissions Factors, Deteri oration Rates, Power Distribution, and Fuel Consumption Estimates for SI Marine Engines in the NONROAD Em issions Inventory Model,” Memorandum from Michael Samulski to Docket EPA-HQ-OAR-2004-0008, U.S. Envir onmental Protection Agency, Office of Transportation and Air Quality, Ann Arbor, November 30, 2005. Docket Identification EPA-HQ-OAR-2004-0008-0361.

7. “Nonroad Evaporative Emission Rates, Report No. 012c,” U.S. Environmental Protection Agency, Office of Transportation and Air Quality, Ann Arbor, Michigan, December 2005. Docket Identification EPA-HQ-OAR-2004- 0008-0362.

8. “Modeling of Ethanol Blend Effects on Nonroad Fuel Hose and Tank Permeation - Updated,” Memorandum from Craig Harvey to Docket EPA-HQ-OAR-2004-0008, U. S. Environmental Protection Agency, Office of Transportation and Air Quality, Ann Arbor, Michigan, Fe bruary 22, 2008. Docket Identification EPA-HQ-OAR2004-0008-0698.

9. “Domenici-Barton Energy Policy Act of 2005,” 109 th Congress, U.S. House of Representatives and U.S. Senate, July 26, 2005. Docket Identification EPA-HQ-OAR-2004-0008-0268.

10. “Annual Energy Outlook 2007; With Projections to 2030, Table 11: Liquid Fuels Supply and Disposition," Energy Information Administration, U.S. Depart ment of Energy, Report # DOE/EIA-0383(2007), 2007. Http://www.eia.doe.gov/oiaf/archive/aeo07/pdf/aeota b_11.pdf. Docket Identification EPA-HQ-OAR-2004-0008- 0695.

11. “Annual Energy Outlook 2007; With Projections to 2030, Table 17: Renewable Energy, Consumption, by Sector and Source," Energy Information Administ ration, U.S. Department of Energy, Report # DOE/EIA-0383(2007), 2007. Http://www.eia.doe.gov/oiaf/archive/aeo07/pdf/aeotab_17.pdf

. Docket Identification EPA-HQ-OAR-2004-0008-0696.

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### Final Regulatory Impact Analysis

12. “Fuel and Oil Hoses,” Recommended Practice J30, Society of Automotive Engineers, June 1998. Docket Identification EPA-HQ-OAR-2004-0008-0176.

13. “Personal Watercraft Fuel Systems,” Recommended Practice J2046, Society of Automotive Engineers, January, 19, 2001. Docket Identification EPA-HQ-OAR-2004-0008-0179.

14. “Marine Fuel Hoses,” Recommended Practice J1527, So ciety of Automotive Engineers, Revised February 1993. Docket Identification EPA-HQ-OAR-2004-0008-0177.

15. “Handheld Fuel Lines,” email from William Guerry, re presenting Outdoor Power Equipment Institute, to Glenn Passavant and Mike Samulski, U.S. Environmental Prot ection Agency, Office of Transportation and Air Quality, Ann Arbor, Michigan, July 6, 2005. Do cket Identification EPA-HQ-OAR-2004-0008-0126.

16. Letter from Jim Hardin, Grady-White Boats, to Phil Ca rlson, U.S. Environmental Protection Agency, Office of Transportation and Air Quality, Ann Arbor, Michigan, July 25, 2006. Docket Identification EPA-HQ-OAR-2004- 0008-0437.

17. "Permeation of Gasoline and Gasoline-Alcohol Fu el Blends Through High-Density Polyethylene Fuel Tanks with Different Barrier Technologies," D. Kathios a nd R. Ziff, SAE Paper 920164, 1992, Docket Identification EPA-HQ-OAR-2004-0008-0172.

18. “List of 177 Pollutants in the Assessment,” Na tional-Scale Air Toxics Assessment for 1999, U. S. Environmental Protection Agency, 2006. Http://www.epa.gov/ttn/atw/nata1999/177poll.html.

19. “Comparison of Small Nonroad and Marine Spark-Ignition Emissions to Stationary and Other Mobile Source Emission Inventories,” Memorandum and attachment from Ri chard Wilcox, U.S. Environmental Protection Agency, Office of Transportation and Air Quality, Ann Arbor, Mi chigan, March 12, 2007. Docket Identification EPA-HQOAR-2004-0008-0540.

20. “Technical Support Document: Preparation of Emissi ons Inventories for the 2002-Based Platform, Version 3, Criteria Pollutants,” U.S. Environmental Protection Agency , Office of Air Quality Planning and Standards, Research Triangle Point, North Carolina, January 2008. Http://www.epa.gov/scram001/reports/Emissions%20TSD% 20Vol1_02-28-08.pdf. Docket Identification EPA-HQOAR-2004-0008-0699.

21. “Regulatory Impact Analysis: Control of Emissions or Air Pollution from Locomotives and Marine Compression-Ignition Engines Less Than 30 Liters per Cyli nder,” U.S. Environmental Protection Agency, Office of Transportation and Air Quality, Ann Arbor, Michigan , May 2008. EPA Report Number: EPA420-R-08-001a.

22. “Control of Emissions From New Marine Compression -Ignition Engines at or Above 30 Liters per Cylinder,” Advanced Notice of Proposed Rulemaking, U.S. Envir onmental Protection Agency, Office of Transportation and Air Quality, Ann Arbor, Michigan, 72 Federal Register 69521, December 7, 2007.

23. “Control of Hazardous Air Pollutants from Mobile Sour ces: Regulatory Impact Analysis,” U.S. Environmental Protection Agency, Office of Transportation and Air Qu ality, Ann Arbor, Michigan, February 2007. EPA Report Number: EPA420-R-07-002.

24. “Electronic Media Supporting Development of Air Quality Modeling Emissions Inventories for the Small Nonroad and Marine Spark-Ignition Engine Final Rulemaking,” Memorandum and attachments from Harvey Michaels, U.S. Environmental Protection Agency, Office of Transportation and Air Quality, Ann Arbor, Michigan, July 22, 2008. Docket Identification EPA-HQ-OAR-2004-0008-0694.

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### Feasibility of Exhaust Emission Control


# CHAPTER 4: Feasibility of Exhaust Emission Control

Section 213(a)(3) of the Clean Air Act presents statutory criteria that EPA must evaluate in determining standards for nonroad engines and vehicles including marine vessels. The standards must "achieve the greatest degree of emission reduction achievable through the application of technology which the Administrator determines will be available for the engines or vehicles to which such standards apply, giving appropriate consideration to the cost of applying such technology within the period of time available to manufacturers and to noise, energy, and safety factors associated with the application of such technology." This chapter presents the technical analyses and information that form the basis of EPA's belief that the exhaust emission standards are technically achievable accounting for all the above factors.
The exhaust emission standards for Small SI engines and Marine SI engines are summarized in the Executive Summary. This chapter begins with a current state of technology for spark-ignition (SI) engines and the emission control technologies expected to be available for manufacturer and continues with a presentation of available emissions data on baseline emissions and on emission reductions achieved through the application of emission control technology. In addition, this chapter provides a description of new test procedures including not-to-exceed requirements.



## 4.1 General Description of Spark-Ignition Engine Technology

The two most common types of engines are gasoline-fueled engines and diesel-fueled engines. These engines have very different combustion mechanisms. Gasoline-fueled engines initiate combustion using spark plugs, while diesel fueled engines initiate combustion by compressing the fuel and air to high pressures. Thus these two types of engines are often more generally referred to as "spark-ignition" and "compression-ignition" (or SI and CI) engines, and include similar engines that use other fuels. SI engines include engines fueled with liquid petroleum gas (LPG) and compressed natural gas (CNG).

4.1.1 Basics of Engine Cycles
Spark ignition engines may be of two-stroke or four-stroke which refers to the number of piston strokes per combustion cycle. Handheld Small SI equipment typically use two-stroke engines while larger non-handheld equipment use four-stroke engines. Outboard and personal watercraft (OB/PWC) engines, until the adve nt of recent environmental regulations, were generally two-stroke engines. They are now a mi x of two- and four-stroke engines. Sterndrive and inboard (SD/I) engines are primarily SI four-stroke engines.

4.1.1.1 Two-Stroke Engines
“Two-stroke” refers to the number of piston strokes per combustion cycle. These two strokes, compression and expansion, occur in one revolution of the crankshaft. During the

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### Final Regulatory Impact Analysis
expansion stroke the piston moves downward. As the piston nears its lowest position, the intake and exhaust ports are opened. While these ports are open, a fresh charge of fuel and air is pushed into the cylinder which, in turn, helps force the burned gases from the previous cycle out of the exhaust port. During the compression stroke, the intake and exhaust ports close and the fresh charge is compressed. As the piston approaches its highest position, a spark-plug ignites the fresh charge to generate combustion. The force from the combustion acts on the piston to move it downward, thereby causing the expansion stroke and generating power.
In traditional two-stroke engine designs, the engines are crankcase-scavenged and carbureted with intake and exhaust ports on the cylinder walls. The advantage of this engine design is simplicity (low number of moving parts) and a high power to weight ratio of the engine. In this design, the carburetor meters fuel into the intake air which is then routed to the crankcase. The motion of the drive shaft then pr essurizes the charge. Oil is typically blended into the fuel to provide cylinder and reciprocati ng assembly lubrication. When the piston lowers, it exposes the intake port on the side of the cylinder wall which allows the pressurized fuel/air charge to enter the cylinder. At the same time, the exhaust port is exposed allowing burned gases to escape the cylinder. Because both ports are open at the same time, some of the fresh charge can exit the exhaust port. These fuel losses are known as “short-circuiting” or “scavenging” losses and can result in 25 percent or more of the fuel passing through the cylinder unburned. As the piston moves up, the intake and exhaust ports are covered and combustion is initiated.
An emerging technology for reducing emissions and scavenging losses from two-stroke engines is direct-injection. This is used primarily on larger outboard and personal watercraft engines (37 kW and up) to meet exhaust emission standards. In a direct-injected engine, charge air is used to scavenge the exhaust gases. Once the exhaust valve closes, fuel is injected into the charge air and ignited with a spark-plug. Because the exhaust valve is closed during most or all of the injection event, short-circuiting losses are minimized. Also, because the fuel is not used to lubricate the crankcase, oil does not need to be blended into the fuel. As a result, much less oil is used.

4.1.1.2 Four-Stroke Engines
Four-stroke engines are used in many different applications. Virtually all gasolinepowered highway motorcycles, automobiles, trucks and buses are powered by four-stroke engines. Four-stroke engines are also common in off-road motorcycles, all-terrain vehicles (ATVs), boats, airplanes, and numerous nonroad applications such as lawn mowers, lawn and garden tractors, and generators, pressure washers and water pumps to name just a few.
A “four-stroke” engine gets its name from the fact that the piston makes four passes or strokes in the cylinder to complete an entire cycle. The strokes are intake, compression, expansion or power, and exhaust. Two of the strokes are downward (intake & expansion) and two of the strokes are upward (compression & exhaust). The four strokes are completed in two revolutions of the crankshaft. Valves in the combustion chamber open and close to route gases into and out of the combustion chamber or create compression.

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### Feasibility of Exhaust Emission Control

Figure 4.1-1: 4-Stroke Cycle

The first step of the cycle is for an intake valve to open during the intake stroke allowing a mixture of air and fuel to be drawn into the cylinder while an exhaust valve is closed and the piston moves down the cylinder. The piston moves from top dead center (TDC) or the highest piston position to bottom dead center (BDC) or lowest piston position. This displacement of the piston draws air and fuel past the open intake valve into the cylinder.
During the compression stroke, the intake valve closes and the momentum of the crankshaft moves the piston up the cylinder from BDC to TDC, compressing the air and fuel mixture. As the piston nears TDC, at the very end of the compression stroke, the air and fuel mixture is ignited by a spark plug and the air and fuel mixture begins to burn. As the air and fuel mixture burns, pressures and temperatures increase and the products of combustion expand in the cylinder, which causes the piston to move back down the cylinder, transmitting power to the crankshaft during the expansion or power stroke. Near the bottom of the expansion stroke, an exhaust valve opens and as the piston moves back up the cylinder, exhaust gases are pushed out through the exhaust valve to the exhaust manifold to complete the exhaust stroke, finishing a complete four-stroke cycle.

4.1.2 Exhaust Emissions from Nonroad SI Engines
Hydrocarbon (HC) and carbon monoxide (CO) emissions are products of incomplete combustion. The level of CO exhaust emissions is primarily a function of the air-to-fuel ratio at which an engine is operated. Hydrocarbon emissions formation mechanisms are somewhat more complex, and appear to be primarily related to:

1. Quenching of the air/fuel mixture at the walls of the combustion chamber 2. Filling of crevice volumes with the air/fuel mixture that remains unburned due to flame quenching at the entrance to the crevice 3. Lubricant absorption and desorption of fuel compounds 4. Partial combustion during an operating cycle or even complete misfiring of the air/fuel mixture during the cycle 5. Entrainment and incomplete combustion of lubricant

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### Final Regulatory Impact Analysis

As a result, a number of design and operational variables have an impact on HC emissions, including air-to-fuel ratio; combustion chamber design and geometry; homogeneity of the air/fuel charge; intake port geometry and the degree of induced air/fuel charge motion; ignition energy, dwell, and timing; the effectiveness of the cooling system; and oil consumption.
NOx emissions from SI engines are primarily emissions of nitric oxide (NO). Nitrogen in the intake air reacts with oxygen at high temperatures primarily via the Zeldovich mechanism to form NO. Thus variables that impact combustion temperatures can have a significant impact on NO formation and NOx exhaust emissions. Thes e include air-to-fuel ratio, spark timing and the quantity of residual exhaust gases carried over between engine firing cycles (either through external exhaust gas recirculation or inefficient cylinder scavenging).
Particulate matter (PM) emissions from SI engines consists primarily of semi-volatile organic compounds from the engine lubricant t ogether with elemental-carbon soot formed from pyrolysis of fuel and lubricant during combustion.

4.1.2.1 Air-to-fuel ratio
The calibration of engine air-to-fuel ra tio affects torque and power output, fuel consumption (often indicated as Brake Sp ecific Fuel Consumption or BSFC), engine temperatures, and emissions for SI engines. The effects of changing the air-to-fuel ratio on emissions, fuel consumption and torque (indicated as Brake Mean Effective Pressure or BMEP, which is torque corrected for engine volumetric displacement) are shown in Figure 3-1. 1



### In the past, manufacturers have calibrated fuel systems of nonroad SI engines for rich operation. This was done in part to reduce the risk of lean misfire due to imperfect mixing of the fuel and air and variations in the air-fuel mixture from cylinder to cylinder. Rich operation at between approximately 12.5:1 and 13:1 air-to-fuel ratio also generally increased engine torque output (figure 4.1-1) and prevented lean air-to-fuel ratio excursions during application of transient loads to the engine. Rich operation also has been used to reduce piston, combustion chamber, cylinder and exhaust port temperatures, thus reducing the thermal load on the cooling system, a particularly important issue with air-c ooled engines. Operation at air-to-fuel ratios richer than approximately 13:1 or 13.5:1 can limit the effectiveness of, or pose design challenges for, post-combustion catalytic exhaust emission c ontrols for HC and CO emissions but work well for catalytic reduction of NOx. At the same time, because a rich mixture lacks sufficient oxygen for complete combustion, it results in increased fuel consumption rates and higher HC and CO emissions.
As can be seen from the figure, the best fuel consumption rates occur when the engine is running lean of the stoichiometric air-to-fuel ratio (approximately 14.6:1 air-to-fuel ratio for typical gasolines), but lean operational limits are bounded by the onset of abnormal combustion (e.g., lean misfire and combustion knock), the ability to pick up load, and exhaust port temperatures (particularly with air-cooled engines). Many air-cooled engines are limited by heat-rejection to operation that starts approximately at stoichiometry for light loads, and is rich

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### Feasibility of Exhaust Emission Control
of stoichiometry as load is increased.
With the use of more advanced fuel systems, manufacturers would be able to improve control of the air-fuel mixture in the cylinder. This improved control allows for leaner operation that is closer to a stoichimetric air-to-fuel ratio without increasing the risk of abnormal combustion. This can be enhanced through careful selection of intake port geometry andcombustion chamber shape to induce turbulence into the air/fuel cylinder charge. The leaner airto-fuel ratios (e.g., operating just rich of stoichiometry) resulting from advanced fuel systems and intake charge turbulence can significantly reduce HC and CO emissions and fuel consumption, and can provide more oxygen in the exhaust for improved catalytic control of HC and CO. Leaner air-to-fuel ratios, however, can increase NOx emissions due to higher combustion temperatures, particularly for engines that are not equipped with exhaust catalysts. More advanced fuel systems would allow tailoring of the air to fuel ratio to allow good transient response and to add enrichment at higher load conditions for engine and catalyst protection and to reduce engine-out NOx emissions. High-load enrichment is particularly important for aircooled engines, since high-load operation at leaner air-to-fuel ratios could also increase hydrocarbon emissions and PM emissions if the higher cylinder temperatures encountered result in a significant increase in cylinder-bore distortion and lubricating oil consumption.

Figure 4.1-2: Effects of Air-to-Fuel Ratio on Torque Output, Fuel Consumption and Emissions for Naturally Aspirated Spark Ignition Engines.

4.1.2.2 Spark-timing
For each engine speed and air-fuel mixture, there is an optimum spark-timing that results in peak torque (“Maximum Brake Torque” or “MBT” timing). If the spark is advanced from MBT, more combustion occurs during the compression stroke. If the spark is retarded from MBT, peak cylinder pressure is decreased because too much combustion occurs later in the expansion stroke generating less useable torque. Timing retard may be used as a strategy for reducing NOx emissions, because it suppresses peak cylinder temperatures that lead to high NOx levels. Timing retard also results in higher exhaust gas temperatures, because less mechanical work is extracted from the available energy. This may have the benefit of warming catalyst material to more quickly reach the temperatures needed to operate effectively during light-load operation. 2 

### Some automotive engine designs rely on timing retard at start-up to reduce cold-start

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### Final Regulatory Impact Analysis

emissions.
Advancing the spark-timing at higher speeds gives the fuel more time to burn. Retarding the spark timing at lower speeds and loads avoids misfire. With a mechanically controlled engine, a fly-weight or manifold vacuum system adjusts the timing. Mechanical controls, however, limit the manufacturer to a single timing curve when calibrating the engine. This means that the timing is not completely optimized for most modes of operation.

4.1.3 Marinization
Gasoline sterndrive and inboard (SD/I) engines are generally derived from land-based counterparts. Engine marinizers buy automotive engine blocks and modify them for use on boats. Because of the good power/weight ratio of gasoline engines, most SD/I engines are not modified to produce more power than the base engines were originally designed to produce. In some airboat applications, aircraft engines are used.

4.1.3.1 Typical SD/I marinization process
Marine SI engines are typically built from base engines designed for use in cars and trucks. Currently, the vast majority of base engines are General Motor (GM) engines that range in size from a 3.0 L in-line four cylinder engine to an 8.1 L V8 engine and range in power from about 100 to 300 kW. These engines are sold without front accessory drives or intake and exhaust manifolds. Also, no carbureted versions of these engines are offered; they are either sold with electronic fuel injection, or no fuel sy stem at all. Relatively small numbers of custom blocks and Mazda rotary engines are also used.
Marinizers convert the base engines into marine engines in the following ways:

- Choose and optimize the fuel management system.

- Configure a marine cooling system. - Add intake and exhaust manifolds, and accessory drives and units.
Fuel and air management : Historically, Marine SI engines have been carbureted. Today this technology seems to be going away but is still offered as cheaper alternative to electronic fuel injection. Less than half of new engines are sold with carburetors. GM does not offer carburetors or their associated intake manifolds because they are not used in the higher volum e, automotive applications. Therefore, marinizer s who produce carbureted engines must purchase the fuel systems and intake manifolds elsewhere.
The 3.0 L and 4.3 L base engines are offered with throttle body fuel injection systems as an option. All of the larger engines are offered with multi-port fuel injection as an option. Although GM offers a base marine calibration for its electronic control module, it also offers software allowing marinizers to perform their own engine calibrations. For most engines sold, the marinizers will alter the calibrations to optimize engine operation. Except for some small market niches, the marinizers do not calibrate the engines for more power.

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### Feasibility of Exhaust Emission Control
Cooling system : Marine SI engines are generally packaged in small compartments without much air flow for cooling. In addition, Coast Guard safety regulations require that surface temperatures be kept cool on the engi ne and exhaust manifold. Typically, marine exhaust systems are designed with surface temperatures below 93°C (200°F). To do this, manufacturers use ambient (raw) water to cool the engine and exhaust. Most sterndrive and inboard engines use raw water to cool the engine. This water is then used, in a water jacket, to cool the exhaust manifold. Finally, the water is dumped into the exhaust stream.
Most Marine SI engines are cooled with raw water. This means that ambient water is pumped through the engine, to the exhaust manifold, and mixed with the exhaust. The exhaust/water mixture is then dumped under water. Mixing the water with exhaust has three advantages:
- cools the exhaust and protects rubber couplings in sterndrives

- acts as a muffler to reduce noise - helps tune the exhaust back pressure
An alternative to raw water cooling is fresh water cooling. In a fresh water system, raw water is used to cool the recirculated engine coolant (“fresh water”). The raw water is generally still used to cool the exhaust manifold and exits the engine with the exhaust. However, some systems use the engine coolant to cool the exhaust manifold.
Some gasoline engines, mostly inboards, have fresh water cooling systems which provide two advantages. 1) Engine corrosion problems are reduced, especially when the boat is used in saltwater. Fresh water systems keep saltwater, which can be corrosive, out of the engine. Because salt emulsifies at about 68°C, thermostats in fresh water systems are set around 60- 62°C. 2) Marinizers can achieve much better control of the engine temperature. By reducing variables in engine operation, combustion can be better optimized. 3



### There are trade-offs with using a fresh water system. The fresh water system costs more because of the added pump and heat exchanger. Also, this system is not as efficient for cooling the engine as pumping raw water directly to the engine

Other additions : As mentioned above, marinizers add intake manifolds to carbureted engines. As part of the cooling system, mari nizers must add water jacketed exhaust manifolds, pumps, and heat exchangers. SD/I engines may also have larger oil pans to help keep oil temperatures down. Because of the unique marine engine designs, marinizers also add their own front accessory drive assembly. Finally, sterndrive engines also must be coupled with the lower drive unit.

4.1.3.2 High performance SD/I marinization process
There is a niche in the SD/I market where customers are willing to sacrifice engine durability for a high power to weight ratio. Marinizers who address this niche do so by increasing the fueling of the engine, optimizing the spark-timing for power, increasing the peak

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### Final Regulatory Impact Analysis
engine speed (rpm), and modifying the exhaust manifold for better tuning. In some cases, the marinizers may actually increase the displacement of the engine by boring out the cylinders. Other components such as camshafts and pistons may also be modified. Superchargers may also be added. As an example, GM’s largest base engine for this market is rated at 309 kW. One high performance SD/I engine with a bored cylinder, a high performance fuel injection calibration, and a supercharger achieves more than 800 kW.

4.1.4 Gaseous Fuels
Engines operating on LPG or natural gas carry compressed fuel that is gaseous at atmospheric pressure. The technical challenges for gasoline related to an extended time to vaporize the fuel do not apply to gaseous-fuel engines. Typically, a mixer introduces the fuel into the intake system. Manufacturers are pursuing new designs to inject the fuel directly into the intake manifold. This improves control of the air-fuel ratio and the combustion event, similar to the improvements in gasoline injection technology.



## 4.2 General Description of Exhaust Emission Control Technologies

HC and CO emissions from spark-ignition engines are primarily the result of poor incylinder combustion. This is intensified in carbureted two-stroke engines with the very high HC emissions due to short-circuiting losses. Higher levels of NOx emissions are the result of leaner air-fuel ratios and the resulting higher combustion temperatures. Combustion chamber modifications can help reduce HC emission levels, while using improved air-fuel ratio and spark timing calibrations, as discussed in Sections 4.1.2.1 and 4.1.2.2, can further reduce HC emissions and lower CO emissions. The conversion from car buretor to electronic fuel injection will also help reduce HC and CO emissions. Exhaust ga s recirculation could be used to reduce NOx emissions. The addition of secondary air into the exhaust can significantly reduce HC and CO emissions. Finally, the use catalytic converters can further reduce all three emissions.

4.2.1 Combustion chamber design
Unburned fuel can be trapped momentarily in crevice volumes (especially the space between the piston and cylinder wall) before being released into the exhaust. Reducing crevice volumes decreases this amount of unburned fuel, which reduces HC emissions. One way to reduce crevice volumes is to design pistons with piston rings closer to the top of the piston. HC may be reduced by 3 to 10 percent by reducing crevice volumes, with negligible effects on NOx emissions. 4



### HC emissions also come from lubricating oil that leaks into the combustion chamber. The heavier hydrocarbons in the oil generally do not burn completely. Oil in the combustion chamber can also trap gaseous HC from the fuel and prevent it from burning. For engines using catalytic control, some components in lubricating oil can poison the catalyst and reduce its effectiveness, which would further increase emissions over time. To reduce oil consumption, manufacturers can tighten tolerances and improve surface finishes for cylinders and pistons, improve piston ring design and material, and improve exhaust valve stem seals to prevent

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### Feasibility of Exhaust Emission Control
excessive leakage of lubricating oil into the combustion chamber.

4.2.2 Fuel injection
Fuel injection has proven to be an effectiv e and durable strategy for controlling emissions and reducing fuel consumption from highway ga soline engines. Comparable upgrades are also available for gaseous fuels. This section describes a variety of technologies available to improve fuel metering.
Throttle-body gasoline injection : A throttle-body system uses the same intake manifold as a carbureted engine. However, the throttle body replaces the carburetor. By injecting the fuel into the intake air stream, the fuel is better atomized than if it were drawn through with a venturi. This results in better mixing and more efficient combustion. In addition, the fuel can be more precisely metered to achieve benefits for fuel economy, performance, and emission control.
Throttle-body designs have the drawback of potentially large cylinder-to-cylinder variations with multi-cylinder engines. Like a carburetor, TBI injects the fuel into the intake air at a single location upstream of all the cylinders. Because the air-fuel mixture travels different routes to each cylinder, and because the fuel “wets” the intake manifold, the amount of fuel that reaches each cylinder will vary. Manufacturers account for this variation in their design and may make compromises such as injecting extra fuel to ensure that the cylinder with the leanest mixture will not misfire. These compromises affect emissions and fuel consumption.
Port gasoline injection : As the name suggests, port (single cylinder) or multi-port (multicylinder-port) fuel injection means that a fuel inj ector is placed in close proximity to each of the intake ports. The intake manifold, if used, flows only air. Sequentially-timed systems inject a quantity of fuel each time the intake valve opens for each cylinder, but multi-port injection systems can also be “batch fired” (all injectors pulsed simultaneously on a multicylinder engine) or continous (e.g., the Bosch CIS automotive systems of the 1970's and 80's). Port injection allows manufacturers to more precisely control the amount of fuel injected for each combustion event. This control increases the manufacturer’s ability to optimize the air-fuel ratio for emissions, performance, and fuel consumption. Because of these benefits, multi-port injection is has been widely used in automotive applications for decades.
Sequential injection has further improved these systems by more carefully timing the injection event with the intake valve opening. This improves fuel atomization and air-fuel mixing, which further improves performance and control of emissions.
A newer development to improve injector performance is air-assisted fuel injection. By injecting high pressure air along with the fuel spray, greater atomization of the fuel droplets can occur. Air-assisted fuel injection is especially helpful in improving engine performance and reducing emissions at low engine speeds. In addition, industry studies have shown that the short burst of additional fuel needed for responsive, smooth transient maneuvers can be reduced significantly with air-assisted fuel injection due to a decrease in wall wetting in the intake manifold. On a highway 3.8-liter engine with seque ntial fuel injection, the air assist was shown

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### Final Regulatory Impact Analysis
to reduce HC emissions by 27 percent during co ld-start operating conditions. At wide-openthrottle with an air-fuel ratio of 17, the HC reduction was 43 percent when compared with a standard injector. 5



### 4.2.3 Exhaust gas recirculation
Exhaust gas recirculation (EGR) has been in use in cars and trucks for many years. The recirculated gas acts as a diluent in the air-fuel mixture, slowing reaction rates and absorbing heat to reduce combustion temperatures. These lower temperatures can reduce the engine-out NOx formation rate by as much as 50 percent. 6 

### HC is increased slightly due to lower temperatures for HC burn-up during the late expansion and exhaust strokes.
Depending on the burn rate of the engine and the amount of recirculated gases, EGR can improve fuel consumption. Although EGR slows the burn rate, it can offset this effect with some benefits for engine efficiency. EGR reduces pumping work of SI engines because the addition of nonreactive recirculated gases forces larger throttle openings for the same power output. Because the burned gas temperature is decreased, there is also less heat loss to the exhaust and cylinder walls. In effect, EGR allows more of the chemical energy in the fuel to be converted to useable work. 7



### Electronic EGR control : Many EGR systems in today’s automotive applications utilize a control valve that requires vacuum from the inta ke manifold to regulate EGR flow. Under partthrottle operation where EGR is needed, engine vacuum is sufficient to open the valve. However, during throttle applications near or at wide-open throttle, engine vacuum is too low to open the EGR valve. While EGR operation only dur ing part-throttle driving conditions has been sufficient to control NOx emissions for vehicles in the past, more stringent NOx standards and emphasis on controlling off-cycle emission levels may require more precise EGR control and additional EGR during heavy throttle operation to reduce NOx emissions. Automotive manufacturers now use electronic control of EGR. By using electronic solenoids to directly open and close the EGR valve or by modulating the vacuum signal to vacuum actuated valves, the flow of EGR can be precisely controlled.
Stratified EGR : Another method of increasing the engine’s tolerance to EGR is to stratify the reicirculated gases in the cylinder. This stratification allows high amounts of dilution near the spark plug for NOx reduction while making undiluted air available to the crevices, oil films, and deposit areas so that HC emissions may be reduced. Stratification may be induced radially or laterally through control of air and mixture motion determined by the geometry of the intake ports. Research on a one cylinder engine has shown that stratified EGR will result in much lower fuel consumption at moderate speed and load (6 percent EGR at 2400 rpm, 2.5 bar BMEP) while maintaining low HC and NOx emissions when compared to homogeneous EGR. 8



### For catalyst systems with high conversion efficiencies, the benefit of using EGR becomes proportionally smaller, although it can offer cost savings by reducing catalyst rhodium loadings. Including EGR as a design variable for optimizing the engine can add significantly to the development time needed to fully calibrate the electronic controls of engines or vehicles.

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### Feasibility of Exhaust Emission Control

4.2.4 Multiple valves and variable valve timing
Four-stroke engines generally have two valves for each cylinder, one for intake of the airfuel mixture and the other for exhaust of the combusted mixture. The duration and lift (distance the valve head is pushed away from its seat) of valve openings is constant regardless of engine speed. As engine speed increases, the aerodynamic resistance to pumping air in and out of the cylinder for intake and exhaust also increases. Automotive engines have started to use two intake and two exhaust valves to reduce pumping losses and improve their volumetric efficiency and useful power output.
In addition to gains in volumetric efficiency, four-valve designs allow the spark plug to be positioned closer to the center of the combustion chamber, which decreases the distance the flame must travel inside the chamber. This decreases the likelihood of flame-quenching conditions in the areas of the combustion chamber farthest from the spark plug. In addition, the two streams of incoming gas can be used to achieve greater mixing of air and fuel, further increasing combustion efficiency and lowering engine-out emissions.
Control of valve timing and lift take full adva ntage of the four-valve configuration for even greater improvement in combustion efficiency. Engines normally use fixed-valve timing and lift across all engine speeds. If the valve timing is optimized for low-speed torque, it may offer compromised performance under higher-speed operation. At light engine loads, for example, it is desirable to close the intake valve early to reduce pumping losses. Variable-valve timing can enhance both low-speed and high-speed performance with less compromise. Variable-valve timing can allow for increased swirl and intake charge velocity, especially during low-load operating conditions where this is most problematic. By providing a strong swirl formation in the combustion chamber, the air-fuel mixture can mix sufficiently, resulting in a faster, more complete combustion, even under lean air-fuel conditions, thereby reducing emissions. Automotive engines with valve timing have also replaced external EGR systems with “internal EGR” accomplished via variable valve overlap, generally with improved EGR rate control over external systems and improved engine-out NOx emissions.

4.2.5 Secondary air
Secondary injection of air into exhaust ports or pipes after cold start (e.g., the first 40-60 seconds) when the engine is operating rich, coupled with spark retard, can promote combustion of unburned HC and CO in the exhaust manifold and increase the warm-up rate of the catalyst. By means of an electrical or mechanical pump, or by using a passive venturi or check-valve, secondary air is injected into the exhaust system, preferably in close proximity of the exhaust valve. Together with the oxygen of the secondary air and the hot exhaust components of HC and CO, net oxidizing conditions ahead of the catalyst can bring about an efficient increase in the exhaust temperature which helps the catalyst to heat up quicker. The exothermic reaction that occurs is dependent on several parameters (secondary air mass, location of secondary air injection, engine A/F ratio, engine air mass, i gnition timing, manifold and headpipe construction, etc.), and ensuring reproducibility demands detailed individual application for each vehicle or engine design.

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### Final Regulatory Impact Analysis
Secondary air injection was first used as an emission control technique in itself without a catalyst, and still is used for this purpose in many highway motorcycles and some off-highway motorcycles to meet federal and California emission standards. For motorcycles, air is usually provided or injected by a system of check valves which uses the normal pressure pulsations in the exhaust manifold to draw in air from outside, rather than by a pump. 9


### Secondary air injection can also be used in continuous operation with rich-jetted carbureted engines to a achieve an exhaust chemistry just rich of stoichiometry to improve the efficiency of 3-way catalysts. 10,11



### 4.2.6 Catalytic Aftertreatment
Over the last several years, there have been tremendous advances in exhaust aftertreatment systems. Catalyst manufacturers have increased the use of palladium (Pd), particularly for close-coupled positions in automotive catalyst applications. 12 

### Improvements to catalyst thermal stability and washcoat technologies, the design of higher cell densities, and the use of two-layer washcoat applications are just some of the advances made in catalyst technology. 13 

### Current Pd catalysts are capable of withstanding prolonged exposure to temperatures approaching 1100°C. 14 

### The light-off temperature of these advanced catalysts is in the range of 250 to 270°C.
There are two types of catalytic converters commonly used: oxidation and three-way. Oxidation catalysts use platinum and/or palladium to increase the rate of reaction between oxygen in the exhaust and unburned HC and CO. Ordinarily, this reaction would proceed very slowly at temperatures typical of engine exhaust. The effectiveness of the catalyst depends on its temperature, on the air-fuel ratio of the mixture, and on the mix of HC present. Highly reactive species such as formaldehyde and olefins are oxidized more effectively than less-reactive species. Short-chain paraffins such as methane, ethane, and propane are among the least reactive HC species, and are more difficult to oxidize.
Three-way catalysts use a combination of platinum and/or palladium and rhodium. In addition to promoting oxidation of HC and CO, these metals also promote the reduction of NO to nitrogen and oxygen. In order for the NO reduction to occur efficiently, an overall rich or slightly-rich of stoichiometric air-fuel ratio is required. The NOx efficiency drops rapidly as the ai-fuel ratio becomes leaner than stoichiometric. If the air-fuel ratio can be maintained precisely at or just rich of stoichiometic, a three-way catalyst can simultaneously oxidize HC and CO and reduce NOx. The window of air-fuel ratios within which this is possible is very narrow and there is a trade-off between NOx and HC/CO control even within this window. The window can be broadened somewhat through the use of oxygen storage components, such as cerium oxide, within the catalyst washcoating. Cerium oxide also promotes CO and HC removal via steam reformation with water vapor in the exhaust, and the hydrogen liberated by these reactions promotes further NOx reduction.
Manufacturers are developing catalysts with substrates that utilize thinner walls in order to design higher cell density, low thermal mass catalysts for close-coupled applications

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### Feasibility of Exhaust Emission Control
(improves mass transfer at high engine loads and increase catalyst surface area). The cells are coated with washcoat which contain the noble metals which perform the catalysis on the exhaust pollutants. The greater the number of cells, the more surface area with washcoat that exists, meaning there is more of the catalyst available to convert emissions (or that the same catalyst surface area can be put into a smaller volume). Cell densities of 900 cells per square inch (cpsi) have already been commercialized, and research on 1200 cpsi catalysts has been progressing. Typical cell densities for conventional automotive catalysts are 400 to 600 cpsi.
There are several issues involved in designing catalytic control systems for the engines covered by this rule. The primary issues are the cost of the system, packaging constraints, and the durability of the catalyst. This section addresses these issues.

4.2.6.1 System cost
Sales volumes of recreational vessels are small compared to automotive sales and while sales of Small SI engines <19kW are similar, the price of equipment is much less than automotive. Manufacturers therefore have a limited ability to recoup large R&D expenditures for these applications. For these reasons, we believe it is not appropriate to consider highly refined catalyst systems that are tailored specifically to nonroad applications. Catalyst manufacturers have assured us that automotive-type catalysts can easily be built to any size needed for Small SI and marine applications. We are considering catalyst packaging designs that do not require the manufactures to incur the costs of reworking the entire exhaust system and, for Marine SI engines, the lower power unit. The cost of these systems will decrease substantially when catalysts become commonplace. Chapter 6 describes the estimated costs for nonroad catalyst systems for Small SI and Marine SI engines.

4.2.6.2 Differences in emission control syst em application and design by engine category
One challenge in the use of catalytic control for Small SI and Marine SI engines lies in acceptable design and packaging of the exhaust catal ysts onto a wide variety of different types of equipment. This section discusses specific issues related to these applications.

4.2.6.2.1 Small SI Class I engines
Class I engines typically are equipped with integral exhaust and fuel systems and are air-cooled. Significant applications include walk-behind lawn mowers (largest segment), pressure washers, generator sets and pumps. There are both overhead valve (OHV) and side-valve (SV) engines used in Class I, but side -valve engines are the predominant type in Class I, particularly in lawn mower applications. They currently represent about 60 percent of Class I sales. Exhaust catalyst design for Class I engines must take into account several important factors that differ from automotive applications:

1. Air-cooled engines run rich of stoichiometry to prevent overheating when under load. Because of this, CO and HC emissions can be high. Catalyst induced oxidation of a high

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### Final Regulatory Impact Analysis
percentage of available reactants in the exhaust in the presence of excess oxygen (i.e., lean of stoichiometric conditions) can result in highly exothermic exhaust reactions and increase heat rejection from the exhaust. For example, approximately 80 to 90 percent of the energy available from catalyst-promoted exhaust reactions is via oxidation of CO. 2. Air-cooled engines have significant HC a nd NOx emissions that are typically much higher on a brake-specific basis than water-cooled automotive engine types. Net heat available from HC oxidation and NOx reduction at rich of stoichiometric conditions is considerably less than that of oxidation of CO at near stoichiometric or lean of stoichiometric conditions due to the much lower concentrations of NO and HC in the exhaust relative to CO. 3. Most Class I engines do not have 12-volt DC electrical systems to power auxiliaries and instead are pull start. Electronic controls relying on 12-volt DC power would be difficult to integrate onto Class I engines without a significant cost increase. 4. Most Class I engines use inexpensive stampe d mufflers with internal baffles. Mufflers are typically integrated onto the engine and may or may not be placed in the path of cooling air from the cooling fan. 5. The regulatory emission test cycles (A-cycle, B-cycle), manufacturer's durability cycles and some limited in-use operation data indicate that emissions control should focus primarily on light and part load operation for the highest volume applications (lawnmowers).
These factors would lead to exhaust catalyst designs for small engines that should differ somewhat from those of light duty gasoline ve hicle exhaust catalyst designs. Design elements specific to Class I Phase 3 exhaust catalysts would include:

1. Catalyst substrate volume would be sized relatively small so as to be space-velocity limited. Catalyst volume for Class I Phase 3 engines would be approximately 18 to 50 percent of the engine cylinder displacement, depending on cell count, engine-out emission levels, and oil consumption. Catalyst substrate sizes would be compact, with typical catalyst substrate volumes of approximately 2 to 5 cubic inches. This would effectively limit mass transport to catalyst sites at moderate-to-high load conditions and reduce exothermic reactions occurring when exhaust temperature is highest. This is nearly the opposite of the case of typical automotive catalyst designs. Automotive catalyst volume is typically 50 to 100 percent of cylinder displacement, with the chief constraints on catalyst volume being packag ing and cold-start light-off performance. 2. Catalyst precious metal loading (Pt-platinum, Pd-palladium, Rh-rhodium) would be kept relatively low, and formulations would favor NOx and HC selectivity over CO selectivity. We estimate that typical loading ratios for Phase 3 would be approximately in the range of 40 to 50 g/ft3 (approximately 50 percent of typical automotive loadings at light-duty vehicle Tier 2 emission levels) and can be Pt:Rh, Pd:Rh or tri-metallic. Tri-metallic platinum group metal (PGM) loadings that replace a significant fraction of Pt with Pd would be less selective for CO oxidation and would also reduce the cost of the catalyst. Loading ratios would be similar or higher in Rh than what is typically used for automotive applications (20-25 percent of the total PGM mass in Small SI) to improve NOx selectivity, improve rich of stoichiometry HC reactions and reduce CO selectivity.

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### Feasibility of Exhaust Emission Control

3. Catalysts would be integrated into the muffler design. Incorporating the catalyst into the muffler would reduce surface temperatures, and would provide more surface area for heat rejection. This is nearly the opposite of design practice used for automotive systems, which generally try to limit heat rejection to improve cold-start light-off performance. The muffler design for Class I Phase 3 engines would have somewhat higher surface area and somewhat larger volume than many current Class I muffler designs in order to promote exhaust heat rejection and to package the catalyst, but would be similar to some higher-end "quiet" Class I muffler designs. Appropriately positioned stamped heat-shielding and touch guards would be integrated into Class I Phase 3 catalyst-muffler designs in a manner similar to many Class I Phase 2 mufflers. A degree of heat rejection would be available via forced convection from the cooling fan, downstream of cooling for the cylinder and cylinder head. This is the case with many current muffler designs. Heat rejection to catalyst muffler surfaces to minimize "hot spots" can also be enhanced internally by turning the flow through multiple chambers and baffles that serve as sound attenuation within the muffler, similar to the designs used with catalyst-equipped lawn mowers sold in Sweden and Germany. 4. Many Class I Phase 3 catalysts would include passive secondary air injection to enhance catalyst efficiency and allow the use of smaller catalyst volumes. Incorporation of passive secondary air allows halving of catalyst substrate volume for the same catalyst efficiency over the regulatory cycle. A system for Class I Phase 3 engines would be sized small enough to provide minimal change in exhaust stoichiometry at high load conditions so as to limit heat rejection, but would be provide approximately 0.5 to 1.0 points of air-to-fuel ratio change at conditions of 50 percent of peak torque and below in order to lower HC emissions effectively in engines operating at air-to-fuel ratios similar to those of current Class I Phase 2 engines. Passive secondary air systems are preferred. Mechanical or electrical air pumps are not necessary. Passive systems include stamped or drawn venturis or ejectors integrated into the muffler, some of which may incorporate an air check-valve, depending on the application. Pulse-air injection is also a form of passive secondary air injection. Pulse air draws air into the exhaust port through a check-valve immediately following the closure of the exhaust valve. Active secondary air (air pump) systems were not considered in this analysis since they may be cost prohibitive for use in Class I applications due to the need for a mechanical accessory drive or 12-volt DC power. 5. Catalyst durability in side valve engines can be enhanced through two catalyst design ideas. First, the use of a pipe catalyst upstream of the main catalyst brick can “catch” the oil in the exhaust thereby limiting the amount seen in the catalyst and thereby catalyst poisoning. Second, the catalyst brick can be lengthened to allow poisoning to some degree yet allow for catalyst conversion for the regulatory life of the engine. 6. Class I engines are typically turned off via a simple circuit that grounds the input side of the ignition coil. Temperature fail-safe capability could, if appropriate, be incorporated into the engine by installing a bimetal thermal switch in parallel with the ignition grounding circuit used for turning the engine off. The switch can be of the inexpensive bimetal disc type in wide-spread use in numerous consumer products (furnaces, water-heaters, ovens, hair dryers, etc.). To reduce cost, the bimetal switch could be a non-contact switch mounted to the engine imme diately behind the muffler, similar to the

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### Final Regulatory Impact Analysis
installation of bimetal sensors currently used to actuate automatic chokes on current Phase 2 Class I lawn mower engines.

4.2.6.2.2 Small SI Class II engines
Almost all Class II engines are air-cooled. Unlike Class I engines, Class II engines are not typically equipped with integral exhaust sy stems and fuel tanks. Significant applications include lawn tractors (largest segment), commercial turf equipment, generator sets and pumps. Overhead valve engines have largely replaced side-valve engines in Class II, with the few remaining side-valve engines certifying to the Phase II standards using emissions credits or being used in snow thrower type applications where the HC+NOx standards do not apply. Class II engines are typically built more robustly than Class I engines. They often use cast-iron cylinder liners, may use either splash lubri cation or full-pressure lubrication, employ high volume cooling fans and in some cases, use signifi cant shrouding to direct cooling air. Exhaust catalyst design practice for Class II engines will differ depending on the level of emission control. Class II engine designs are more suitable for higher-efficiency emission control systems than most Class I engine designs. The design factors are somewhat similar to Class I:

1. Class II engines are mostly air-cooled, and t hus must run rich of stoichiometry at high loads. The ability to operate at air-to-fuel ratios rich of stoichiometry at high load may be more critical for some Class II engines than for Class I engines due to the longer useful life requirements in Class II. The larger displacement Class II engines have better efficiency combustion and some engines incorporate more advanced fuel metering and spark control than is typical in Class I, in order to meet the more stringent Class II Phase 2 emission standards (12.1 g/kW-hr HC+NOx in Class II versus 16.1 g/kW-hr in Class I). The heat energy available from CO oxidation is typically somewhat less than the case in Class I because of slightly lower average emission rates. 2. Class II engines have HC and NOx emissions that are generally in more equal portions, or have the potential to be, in the total regulated HC+NOx emissions and lower CO emissions than is the case for Class I engines. 3. Most Class II engines are equipped with 12-volt DC electrical systems for starting. Electronic controls relying on 12-volt DC power could be integrated into Class II engine designs. Low-cost electronic engine management systems are extensively used in motor scooter applications in Europe and Asia. Both Kohler and Honda have introduced Class II engines in North America that use electronic engine management systems. 4. Class II engines use inexpensive stamped mufflers with internal baffles similar to Class I, but the mufflers are often not integrated onto the engine design and may be remote mounted in a manner more typical of automotive mufflers. Class II mufflers are often not placed in the direct path of cooling air from the cooling fan. 5. As with Class I, the regulatory cycles (A-cycle, B-cycle), manufacturer's durability cycles and some limited in-use operation data indicate that emissions control should focus primarily on light and part load operation for the high volume sales of garden tractor equipment.
Taking these factors into account would point towards exhaust catalyst designs that differ

4-16

### Feasibility of Exhaust Emission Control
from those of light duty gasoline exhaust catalysts and differ in some cases from Class I systems. Elements specific to Class II Phase 3 emissi on control system design using carburetor fuel systems would include:

1. Catalyst substrate volume would be sized relatively small so as to be space-velocity limited. Catalyst volume for Class II Phase 3 engines would be approximately 33-50 percent of the engine cylinder displacement, depending on cell count, engine-out emission levels, oil consumption and the useful life hours to which the engine's emissions are certified. Catalyst substrate sizes would be very compact within typical mufflers used in Class II, with typical catalyst substrate volumes of approximately 8 to 10 cubic inches (based on sales weighting within useful life categories). This would effectively limit mass transport to catalyst sites at moderate-to-high load conditions and reduce exothermic reactions occurring when exhaust temperature is highest. 2. Catalyst precious metal loading would be kept relatively low, and formulations would favor NOx and HC selectivity over CO selectivity to minimize heat concerns. We estimate that typical loading ratios for Phase 3 would be approximately in the range of 30 to 50 g/ft3 (approximately 50 percent of typical automotive loadings) and could be Pt:Rh, Pd:Rh or tri-metallic. Tri-metallic PGM loadings that replace a significant fraction of Pt with Pd would be less selective for CO oxidation and would also reduce the cost of the catalyst. Loading ratios would be similar or higher in Rh than what is typically used for automotive applications (20-25 percent of the total PGM mass in Small SI). 3. Catalysts would be integrated into the muffler design. Incorporating the catalyst into the muffler would reduce surface temperatures relative to the use of a separate catalyst component. The catalyst for Class II Phase 3 engines would be integrated into mufflers that are similar in volume to today's Class II Phase 2 mufflers. Appropriately positioned stamped heat-shielding and touch guards would be integrated into Class II Phase 3 catalyst-muffler designs in a manner similar to current product. Class II engines typically have a much higher volume of cooling air available downstream of the cylinder than Class I engines. Heat rejection from the cylinder and cylinder head increases the temperature of the cooling air, but it is still sufficiently below the temperature of exhaust system components to allow its use for forced cooling. Thus a degree of heat rejection would be available via forced convective cooling of exhaust components via the cooling fan. However, this would require some additional ducting to supply cooling air to exhaust system surfaces along with careful layout of engine and exhaust components within the design of the equipment that it is used to power. Integrated catalyst-mufflers can also use exhaust energy for ejector cooling (see chapter 6). Heat rejection to catalyst muffler surfaces to minimize "hot spots" can also be enhanced internally by turning the flow through multiple chambers and baffles that serve as sound attenuation within the muffler. 4. Some applications may include secondary air injection to enhance catalyst efficiency. Incorporation of passive secondary air allows halving of catalyst substrate volume for the same catalyst efficiency over the regulatory cycle. In many cases, this may not be necessary due to the lower engine-out emissions of Class II engines. In cases where secondary air is used, it could either be a passive system similar to the previously described Class I systems, or an active system with an engine driven pump. Pump drive for active systems could be either 12-volt DC electric or via crankcase pulse, and pump

4-17catalyst 

### Final Regulatory Impact Analysis
actuation could be actively controlled using an electric solenoid or solenoid valve. The use of active systems is an option but seems unlikely. The most likely control scenario for Class II would be a combination of engine out emission control, use of a small catalyst, and no use of secondary air.
Higher catalyst efficiency, considerably lower exhaust emissions levels, and improved fuel consumption are possible with Class II engines, but heat rejection and safety considerations might necessitate the use of electronic engi ne management and open-loop fuel injections systems. In such a case, the design and integration of the emission control system would more closely resemble automotive applications with the use of electronic engine management and larger catalyst volumes with higher precious metal loadings.

4.2.6.2.3 Marine SI
Due to the design of marine exhaust systems, fitting a catalyst into the exhaust system raises unique application issues for many boat/engine designs. Often boat builders will strive to minimize the space taken up in the boat by the engine compartment. In addition, these exhaust systems are designed, for safety reasons, to avoid hot surface temperatures. For most Marine SI engines, the surface temperature is kept low by running raw water through a jacket around the exhaust system. This raw water is then mixed with the exhaust before being passed out of the engine. To avoid a major redesign of the exhaust system, the catalyst must be placed upstreamof where the water and exhaust mix. In addition, the catalyst must be insulated and/or waterjacketed to keep the surface temperatures of the exhaust low.
As discussed later in this chapter, Figure 4.2-1: Placement of Marine Catalyst testing has been performed on prototype systems where small catalysts have been placed in the exhaust manifolds of SD/I engines. Figure 4.2-1 illustrates one installation design. For outboard engines, this packaging arrangement would be less straightforward because of the very short exhaust path between the cylinder exhaust ports and where the cooling water and exhaust mix. However, it may be possible to engineer a packaging solution for outboards as well similar to that shown for SD/I in Figure 4.2-1.
Several marine engine manufacturers are now producing engines with water jacketed catalysts in the exhaust. As discussed later in this chapter, one manufacturer has certified personal watercraft engines with catalysts packaged in the exhaust system. These are small oxidation catalysts used in conjunction with two-stroke engines. Two manufacturers are selling marine generators with catalysts. Also, one SD /I engine marinizer has recently added an engine with catalysts in the exhaust to its product line.

4-18 

## exhaust

water

### Feasibility of Exhaust Emission Control
Another issue is maintaining high enough temperatures with a water-jacketed catalyst for the catalyst to react properly. The light-off temperature of these advanced catalysts is in the range of 250 to 270°C which was low enough for the catalysts to work effectively in our laboratory tests. However, it could be necessary for manufacturers to retard the spark timing at idle and low load for some engines to maintain this minimum temperature in the catalyst.
The matching of the catalyst to the engine may have to be compromised to fit it into the exhaust manifold. However, significant reductions are still achievable. One study on a 4.3 liter automotive engine looked at three different Pd -only catalyst displacements. The smallest of these catalysts had a displacement ratio of 0.12 to 1. The HC+NOx downstream of the catalyst was measured to be from 1.2 to 2.6 grams per mile, depending on the severity of the catalyst aging. 15 

### This is equivalent to about 1.5 to 3.2 g/kW-hr based on highway operation. 16 

### This work suggests that significant reductions are achievable with an “undersized” catalyst. As discussed later in this chapter, significant reductions in exhaust emissions have been demonstrated for catalysts packaged in SD/I exhaust systems.

4.2.6.3 Catalyst Durability
Two aspects of marine applications that could affect catalyst durability are thermal load and vibration. Because the catalyst would be coupled close to the exhaust ports, it would likely see temperatures as high as 750 to 850°C when the engine is operated at full power. The bed temperature of the catalyst would be higher due to the reactions in the catalyst. However, even at full power, the bed temperature of the catalyst most likely would not exceed the exhaust temperature by more than 50-100°C. In our laboratory testing, we minimized the temperature at full load by operating the engine with a rich air-fuel mixture. The temperatures seen were well within the operating range of new Pd-only catalysts which are capable of withstanding prolonged exposure to temperatures approaching 1100°C. 17



### In on-highway applications, catalysts are designed to operate in gasoline vehicles for more than 100,000 miles. This translates to about 4,000-5,000 hours of use on the engine/catalyst. We estimate that, due to low annual hours of operation, the average useful life of Small SI and Marine SI engines is only a fraction percent of this value. This suggests that catalysts designed for automotive use should be durable over the useful life of a Small SI and Marine SI engines. Use of catalysts in automotive, motorcycle, and hand-held equipment applications suggests that catalysts can be packaged to withstand the vibration in the exhaust manifold. As discussed later in this chapter, catalysts have recently been demonstrated, through in-use testing, to be durable over the useful lives of SD/I marine vessels.

4.2.6.4 Water Reversion
Another aspect of marine applications that could affect catalyst durability is the effect of water contact with the catalyst. There is concern that, in some designs, water could creep back up the exhaust passages, due to pressure pulses in the exhaust, and damage the catalyst and oxygen sensor. This damage could be due to thermal shock from cold water coming into contact with a hot catalyst or due to salt deposition on the catalyst. One study was performed, using a

4-19

### Final Regulatory Impact Analysis
two-stroke outboard equipped with a catalyst, to investigate the effect of water exposure on a catalyst. 18 

### The results of this study are summarized in Table 4.2-1.
Table 4.2-1: Summary of Marine Catalyst Durability Study

Issue Investigation Result
high catalyst temperatures - compared base catalyst to catalysts aged for 10 hrs at 900 and 1050°C - little change in conversion efficiency observed

saltwater effects - soaked catalysts in two seawater solutions and compared to base catalyst

- used intake air with a salt-water mist - large drop in conversion efficiency observed
- no effect on catalyst

fresh water effects - soaked catalyst in fresh water and compared to base catalyst
- flushed out catalyst with fresh water that was soaked in saltwater - little change in conversion efficiency observed
- washing catalyst removes salt and restores some performance

thermal shock of hot catalyst with cold water - as part of the catalyst soaking tests, 900°C catalysts were soaked in both salt and fresh water - no damage to the catalysts was reported

deterioration factor - operated engine with catalyst for 300 hours of E4 operation - 20% loss in conversion efficiency for a 2-stroke engine



### The above study on catalysts in marine applications was performed supplemental to an earlier study. 19 

### The earlier study also showed that immersing the catalysts in saltwater would hurt the conversion efficiency of the catalyst, but that operating in a marine environment would not. In addition, this earlier study showed that much of the efficiency loss due to salt on the catalyst could be reversed by flushing the catalyst with water. This paper also showed that with the catalyst activated, temperatures at full power were less than at mid power because the space velocity of the exhaust gases at rated speed was high enough to reduce the conversion efficiency of the catalyst.
A study of water reversion was performed on a vessel powered by a sterndrive engine. 20 

### However, it was found that the water found in the exhaust system upstream of where the exhaust and water mix was due to condensation. This condensation was a result of cool surfaces in the exhaust pipe due to the water-jacketing of the exhaust. This study found that the condensation could be largely resolved by controlling the exhaust cooling water temperature with a thermostat. Since that time, data has been collected on a number of catalyst-equipped SD/I vessels operated either in salt or fresh-water. This data, which showed no significant catalyst deterioration, is discussed later in this chapter. These engines were designed to prevent water reversion by placing the catalyst near the engine and away from the water/exhaust mixing point. In addition, some of the prototype designs used either a water dam or mist barrier to help limit any potential water reversion.

4-20

### Feasibility of Exhaust Emission Control

4.2.7 Advanced Emission Controls
On February 10, 2000, EPA published new "Tier 2" emissions standards for all passenger vehicles, including sport utility vehicles (SUVs), minivans, vans and pick-up trucks. The new standards will ensure that exhaust VOC emissions be reduced to less than 0.1 g/mi on average over the fleet, and that evaporative emissions be reduced by at least 50 percent. Onboard refueling vapor recovery requirements were al so extended to medium-duty passenger vehicles. By 2020, these standards will reduce VOC emissions from light-duty vehicles by more than 25 percent of the projected baseline inventory. To achieve these reductions, manufacturers will need to incorporate advanced emission controls, including: larger and improved close-coupled catalysts, optimized spark timing and fuel control, improved exhaust systems.
To reduce emissions, gasoline-fueled vehicle manufacturers have designed their engines to achieve virtually complete combustion and have installed catalytic converters in the exhaust system. In order for these controls to work well for gasoline-fueled vehicles, it is necessary to maintain the mixture of air and fuel at a nearly stoichiometric ratio (that is, just enough air to completely burn the fuel). Poor air-fuel mixture can result in significantly higher emissions of incompletely combusted fuel. Current generation highway vehicles are able to maintain stoichiometry by using closed-loop electronic feedback control of the fuel systems. As part of these systems, technologies have been developed to closely meter the amount of fuel entering the combustion chamber to promote complete combustion. Sequential multi-point fuel injection delivers a more precise amount of fuel to each cylinder independently and at the appropriate time increasing engine efficiency and fuel economy. Electronic throttle control offers a faster response to engine operational changes than mechanical throttle control can achieve, but it is currently considered expensive and only used on some higher-price vehicles. The greatest gains in fuel control can be made through engine calibrations -- the algorithms contained in the powertrain control module (PCM) software that control the operation of various engine and emission control components/systems. As microprocessor speed becomes faster, it is possible to perform quicker calculations and to increase response times for controlling engine parameters such as fuel rate and spark timing. Other advances in engine design have also been used to reduce engine-out emissions, including: the reduction of crevice volumes in the combustion chamber to prevent trapping of unburned fuel; "fast burn" combustion chamber designs that promote swirl and flame propagation; and multiple valves with variable-valve timing to reduce pumping losses and improve efficiency. These technologies are discussed in more detail in the RIA for the Tier 2 FRM. 21



### As noted above, manufacturers are also using aftertreatment control devices to control emissions. New three-way catalysts for highway vehicles are so effective that once a TWC reaches its operating temperature, emissions are virtually undetectable. 22 

### Manufacturers are now working to improve the durability of the TWC and to reduce light-off time (that is, the amount of time necessary after starting the engine before the catalyst reaches its operating temperature and is effectively controlling VOCs and other pollutants). EPA expects that manufacturers will be able to design their catalyst systems so that they light off within less than thirty seconds ofengine starting. Other potential exhaust aftertreatment systems that could further reduce coldstart emissions are thermally insulated catalysts, electrically heated catalysts, and HC adsorbers

4-21

### Final Regulatory Impact Analysis
(or traps). Each of these technologies, which are discussed below, offers the potential for VOC reductions in the future. There are technological, implementation, and cost issues that still need to be addressed, and at this time, it appears that these technologies would not be a cost-effective means of reducing nonroad emissions on a nationwide basis.
Thermally insulated catalysts maintain sufficiently high catalyst temperatures by surrounding the catalyst with an insulating vacuum. Prototypes of this technology have demonstrated the ability to store heat for more than 12 hours. 23 

### Since ordinary catalysts typically cool down below their light-off temperature in less than one hour, this technology could reduce in-use emissions for vehicles that have multiple cold-starts in a single day. However, thistechnology would have less impact on emissions from vehicles that have only one or two coldstarts per day.
Electrically-heated catalysts reduce cold-start emissions by applying an electric current to the catalyst before the engine is started to get the catalyst up to its operating temperature more quickly. 24 

### These systems require a modified catalyst, as well as an upgraded battery and charging system. These can greatly reduce cold-start emissions, but could require the driver to wait until the catalyst is heated before the engine would start to achieve optimum performance.
Hydrocarbon adsorbers are designed to trap VOCs while the catalyst is cold and unable to sufficiently convert them. They accomplish this by utilizing an adsorbing material which holds onto the VOC molecules. Once the catalyst is warmed up, the trapped VOCs are automatically released from the adsorption material and are converted by the fully functioning downstream three-way catalyst. There are three principal methods for incorporating an adsorber into the exhaust system. The first is to coat the adsorber directly on the catalyst substrate. The advantage is that there are no changes to the exhaust system required, but the desorption process cannot be easily controlled and usually occurs before the catalyst has reached light-off temperature. The second method locates the adsorber in another exhaust pipe parallel with the main exhaust pipe, but in front of the catalyst and includes a series of valves that route the exhaust through the adsorber in the first few seconds after cold start, switching exhaust flow through the catalyst thereafter. Under this system, mechanisms to purge the adsorber are also required. The third method places the trap at the end of the exhaust system, in another exhaust pipe parallel to the muffler, because of the low thermal tolerance of adsorber material. Again a purging mechanism is required to purge the adsorbed VOCs back into the catalyst, but adsorber overheating is avoided. One manufacturer who incorporates a zeolite hydrocarbon adsorber in its California SULEV vehicle found that an electri cally heated catalyst was necessary after the adsorber because the zeolite acts as a heat sink and nearly negates the cold start advantage of the adsorber. This approach has been demonstrated to effectively reduce cold start emissions.



## 4.3 Feasibility of Small SI Engine Standards

We are establishing new, more stringent HC+NOx standards for Small SI engines (<19kW) used in nonhandheld, terrestrial applications (we are also setting a CO std for Small SI engines used in marine applications that is discussed in Section 4.4). The standards differ by engine size. Class I engines have a total cylinder displacement of < 225cc. Class II engines

4-22

### Feasibility of Exhaust Emission Control
have a total displacement of 

### $ 225cc. We are also making changes to the emission certification protocols for durability testing and test fuel specifications for both classes. The new certification requirements will improve emissions performance of these engines over their regulatory lifetime and better align the test fuel with in-use fuel characteristics.
Table 4.3-1 shows the existing Phase 2 exhaust emission standards for Class I and II small spark ignition engines as well as the new Phase 3 standards. The Phase 3 standards represent a nominal 35-40 percent reduction from current standards.
Table 4.3-1: Comparison of Phase 2 and Phase 3 Standards for Small Spark-Ignition Engines Engine Class Phase 2 Standards (HC+NOx g/kW-hr) Phase 3 Standards (HC+NOx g/kW-hr) Percent Reduction (%) Class I (<225 cc) 16.1 10.0 38 Class II ( 

### $ 225cc) 12.1 8.0 34

The following sections present the technical analyses and information that support our view that the Phase 3 exhaust emission requirements are technically feasible. We begin with a review of the current state of compliance with the Phase 2 standards relative to the Phase 3 standards and conclude with a more in depth assessment of the technical feasibility of the requirements for Class I gasoline-fueled engines, Class II single-cylinder gasoline-fueled engines, Class II multi-cylinder gasoline-fueled e ngines, and both classes of gaseous-fueled (e.g., liquid propane gas) engines.

4.3.1 Current Technology and 2008 Certification Test Data
In the 2008 model year manufacturers certified engines to the Phase 2 standards using a variety of engine designs and emission control technology. Table 4.3-2 shows manufacturers’ projected engine sales by technology type. For Cla ss I engines, side-valve designs represent the majority of sales, although there are also a significant number of overhead-valve sales. An extremely small number of engines used catalyst-based emission control technology. Class II is dominated by overhead-valve engine designs. A limited number of these engines used catalyst technology, electronic fuel injection, or were water cooled.

4-23

### Final Regulatory Impact Analysis
Table 4.3-2: 2005 Engine Sales by Technology Market Mix

Engine Technology Class I Class II

Side Valve 66% 2%
Overhead Valve 34% 98% With Catalyst 0.003% 0.4% With Other (Electronic Fuel Injection and/or water cooled) 0 1%

Looking at the industry from an engine family rather than a sales perspective, shows that 68 and 212 engine families were emission certified in Class I and II, respectively for 2008. The range of technology types is shown in Table 4.3-3. The majority of engine families in Class I are overhead-valve, carbureted engines, with only 14 families using side-valve, carbureted designs (the side-valve engines still account for the bulk of Class I sales). Five families utilized catalytic exhaust aftertreatment.
Table 4.3-3: 2005 Small Spark-Ignition Engine Technology Types and Number of Engine Families

Engine Class Side-Valve Overhead Valve

SingleCylinder Carburetor SingleCylinder Carburetor w. Catalyst SingleCylinder Carburetor SingleCylinder Carburetor w. Catalyst MultiCylinder Carburetor MultiCylinder Carburetor w. Catalyst MultiCylinder

Fuel Injection MultiCylinder

Fuel Injection

w. Catalyst

I yes (14) no yes (48) yes (4) no no no no

II yes (2) yes (0) yes (43) no yes (105) yes (6) yes (6) yes (8)



### In Class II, the majority of the engine families use multi-cylinder (predominately v-twins) designs incorporating overhead-valve technology. Most of these multi-cylinder families utilized carburetors, with a few using catalytic exhaust af tertreatment, fuel injection, or electronic engine controls. There are relatively fewer single-cylinder engine families using the older, less sophisticated side-valve technology. None of these engines were certified with catalytic aftertreatment.
Figures 4.3-1 and 4.3-2 present the 2008 certification results at full life for Class I and II

4-24

### Feasibility of Exhaust Emission Control
engine families, respectively, by technology type. 1 

### One striking feature of these figures, especially Figure 4.3-2, is that there are a number of engine families displaying emission levels well above the existing, i.e., Phase 2, standards. Generally, these families represent somewhat older technology, low production engines that have been certified using preexisting emission credits. Under the conditions of the final Phase 3 rules, these engine families will be unable to be certified using existing credits. As a consequence, we expect these families will be eliminated in favor of newer designs when the Phase 3 standards become effective.
Looking at the remaining engine families, several families were certified at levels necessary to comply with the Phase 3 standards. Also, a number of families are very close to the requisite emission levels. This suggests that, even accounting for the relative increase in stringency associated with our certification protocols, a number of families will either not need to do anything or require only modest reductions in their emission performance to meet the new standards.

1 The data presented in Figure 4.3-1 and Figure 4.3-2 are c onsistent with the 2008 certifica tion data used for the cost analysis in Chapter 6. This data does not include certificati on data from the nearly 90 Chinese manufacturers that have starte d certifying nonhandheld engines with EPA in the last few years. (As noted in Chapter 6, EPA has chosen not include data from Chinese manufacturers because we have no information on actual sales of their engines in the United States. Based on discussions with nonhandheld engine manuf acturers that have been certifying with EPA for over ten years now, it is our understanding that sales of nonhandheld engine s from Chinese manufacturers are relatively small at this time. ) The certificati on levels of the engines certified by Chinese manufacturers generally fall within the same range as the engines presented in Figur e 4.3-1 and Figure 4.3-2.

4-25

### Final Regulatory Impact Analysis

Figure 4.3-1:Class I HC+NOx Full Life Certification Results for 2008

0 2 4 6 8 10 12 14 16 18 20 22 24 26

80 100 120 140 160 180 200 220 Displacement (cc)HC+NOx (g/kW-hr)

SV Carb OHV Carb OHV Catalyst Phase 2 S t an da rd

Phase 3 S t an da rd



### Fi g ure 4.3-2: Class II HC+NOx Full Life Certification Results for 2008

0 2 4 6 8 10 12 14 16

0 200 400 600 800 1000 1200 1400 Displacement (cc)HC+NOx (g/kW-hr)

SV Carb OHV Carb OHV Fuel Inj OHV Catalyst Phase 2 Standard

Phase 3 Standard

4-26

### Feasibility of Exhaust Emission Control

4.3.2 Technology Assessment and Demonstration
As described above, a number of engine families already are certified to emission levels that likely would comply with the Phase 3 standards. However, many engine families clearly will have to do more to improve emission performance. Generally, we believe the new requirements will require many engine manufacturers to adopt exhaust aftertreatment technology using catalyst-based systems. Other likely changes in clude improved engine designs and fuel delivery systems. Finally, adding electronic controls or fuel injection systems may obviate the need for catalytic aftertreatment for some engine families, with the most likely candidates being multi-cylinder engine designs.
Many of the technical design considerations for adapting advanced emission controls to Small SI engines were presented in Section 4.2. These included redirected air from the cooling fan, redirected exhaust flow through multiple chamber and baffles within the catalyst muffler, or other design considerations. (These are also the kinds of design elements that engine manufacturers will need to consider for safe and durable emission control systems.) In the remainder of this section we describe the specific results of our emission control assessment based on engine testing of exhaust catalyst systems, as well as a more specific discussion of other potential emission reduction technology for certain engine types such as electronic engine controls and fuel injection. The results of our safety assessment are described later in section 4.8 of this chapter.

4.3.2.1 Overview of Technology Assessment
Our feasibility assessment began by evaluating the emissions performance of current technology for Small SI engines and equipment. These initial efforts focused on developing a baseline for emissions and general engine performance so that we could assess the potential for new emission standards for engines and equipment in this category. This process involved laboratory and field evaluations of the current e ngines and equipment. We reviewed engineering information and data on existing engine designs and their emissions performance. We also reviewed patents of existing catalyst/muffler designs for Class I engines. We engaged engine manufacturers and suppliers of emission control-related engine components in discussions regarding recent and expected advances in emissions performance beyond that required to comply with the current Phase 2 standards. Finally, we purchased catalyst/muffler units that were already in mass production by an original equipment manufacturer for use on European walk-behind lawn mowers and conducted engineering and chemical analysis on the design and materials of those units.
We used the information and experience gathered in the above effort along with the previous catalyst design experience of our e ngineering staff to design and build prototype catalyst-based emission control systems that were capable of effectively and safely achieving the Phase 3 requirement based on dynamometer and field testing. We also used the information and the results of our engine testing to assess the potential need for improvements to engine and fuel system designs, and the selective use of electr onic engine controls and fuel injection on some engine types. A great deal of this effort wa s conducted in association with our more exhaustive

4-27

### Final Regulatory Impact Analysis
study regarding the efficacy and safety of implementing advanced exhaust emission controls on Small SI engines, as well as new evaporative requirements for these engines. 25 

### In other testing, we evaluated advanced emission controls on a multi-cylinder Class II engine with electronic fuel injection. 26



### In designing our engine testing program, we selected engines certified to the Phase 2 emission standards that were expected to remain compliant with those standards for the duration of their useful life based on our low-hour emission testing and the manufacturer's declared deterioration factor from the certification records fo r that engine family. We also selected engine families that represented: 1) a cross section of Class I and Class II side-valve and overhead-valve technologies; and 2) higher sales volume families. Each engine was maintained based on the manufacturer's specifications. 2 

### The results of our specific technical feasibility assessment are presented below.

4.3.2.2 Class I Gasoline-Fueled Engines
We tested six side-valve and six overhead-valve Class I engines that used gasoline fuel with prototype catalyst/muffler control systems. The primary design target for selecting the catalyst configuration, e.g., volume, substrate, platinum group metal (PGM), was to achieve emission levels below the limit of 10 g/kW-hr HC+NOx for this class at 125 hours of engine operation. That time period represents the useful life requirement for the most common application in this category, i.e., residential walk-behind lawn mowers. A maximum of about 7 g/kW-hr HC+NOx was set as the low-hour performance target with a catalyst system to allow for engine and emission control degradation over the engine's useful life. This level assumes a certification cushion at low hours of 1 g/kW-hr HC +NOx and a multiplicative deterioration factor of 1.3. Secondary design targets were primarily safety related and included minimizing CO oxidation at moderate to high load conditions to maintain exhaust system surface temperatures comparable to those of the original Phase 2 compliant systems. The test engine, size, and salient catalyst features are shown in Table 4.3-4.
Table 4.3-5 presents the results of our catalyst testing on Class I engines. 27,28 

### Three of the engines were tested at high hours. The high-hour results for the remaining engines were projected from their low-hour emission performance. We projected high-hour emission results for these engines by applying the multiplicative deterioration factor from the manufacturer's Phase 2 certification application to the low-hour emission test results. The certification deterioration factors ranged from 1.097 to 1.302 g/kW-hr HC+NOx. 3 

### As shown, each of the engines achieved the requisite emission limit of 10 g/kW-hr HC+NOx at the end of their useful lives.

2 The specific test engines were generally used in residential lawn mower and lawn tractor applications. These applications were chosen for field testing as pa rt of our safety study because they represented certain potentially unique and challenging safety concerns connect ed with operation and storage in environments with combustible debris.

3 These results were taken from the 2005 certification results.

4-28Table 4.3-4: Class I Test Engineand Control Technology DescriptionEngine IDDisplacement(L)ValveTrainFuelMeteringPassive(Venturi)SecondaryAir?Catalyst TypeCatalystVolumeCatalyst CellDensityPGM Loading(mass/catalyst volume,Pt:Pd:Rh ratio)2360.20SideCarburetorYesMetal monolith44 cc200 cpsi30 g/ft3, 4:0:12460.20SideCarburetorYesMetal monolith44 cc200 cpsi30 g/ft3, 4:0:12480.20SideCarburetorYesMetal monolith44 cc200 cpsi30 g/ft3, 0.33:3.66:12490.20SideCarburetorWire-mesh60 ccN/Aproprietary, 0:0:168200.19SideCarburetorYesCordieriteCeramicMonolith40 cc400 cpsi30 g/ft3, 5:0:12580.19SideCarburetorYesCordieriteCeramicMonolith40 cc400 cpsi30 g/ft3, 5:0:12410.19OverheadCarburetorYesCordieriteCeramicMonolith40 cc400 cpsi30 g/ft3, 5:0:12550.19OverheadCarburetorYesCoated tube precatalyst, Metalmonolith mainbody catalyst20 mm dia. X 73mm long exhausttubing, 22 ccmetal monolithTube: 2 channels(annular shape),Main body: 200cpsiTube: ProprietaryMain body: 30 g/ft3,3:1:129820.19OverheadCarburetorYesMetal monolith34 cc100 cpsi50 g/ft3, 5:0:12430.16OverheadCarburetorYesCordieriteCeramicMonolith30 cc400 cpsi30 g/ft3, 5:0:12440.16Over-headCarburetorYesMetal monolith44 cc200 cpsi30 g/ft3, 1:3:12450.16OverheadCarburetorYesMetal monolith44 cc200 cpsi30 g/ft3, 3:1:1

### Final Regulatory Impact Analysis

Table 4.3-5: Class I Emission Results wi th Advanced Catalytic Control Technology

Engine Age (hours) 1 

### HC+NOx (g/kW-hr) 236 10-20 4.9 ± 0.6 2 

### Projected High 6.1 246 10-20 5.6 Projected High 7.0 248 10-20 4.6 Projected High 5.7 249 10-20 6.3 Projected High 7.8 6820 Not Tested na >110 9.4 258 10-20 6.7 >110 8.2 241 10-20 3.9 ± 0.2 >110 6.6 ± 0.2 255 10-20 5.0 Projected High 6.5 2982 10-20 4.9 ± 0.3 >110 7.0 ± 0.4 243 10-20 7 ± 1 Projected High 7.7 244 10-20 7.2 Projected High 7.9 245 10-20 5.6 Projected High 6.1

1 

### Projected high hour results estimated by multiplying the low hour test results by the manufacturer’s certification deterioration rate.
2 

### “±” values represent the 95% confidence intervals of 3 tests using a 2-sided t-test.

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### Feasibility of Exhaust Emission Control
The above method for projecting high-hour emission results using a certification deterioration factor assumes that the catalyst system will control engine-out emissions to the same extent, i.e., proportional reduction, over the useful life of the engine. For some engines this may not always be the case depending on oil consumption, air-to-fuel ratio and other factors that may change the effectiveness of the catalyst over time. 4 

### Our approach also did not explicitly account for the fact that manufacturers will generally design the engine and catalyst to provide some certification cushion. It appears that most of the engines in Tables 4.3-5 would accommodate the above design considerations. However, the proj ected high-hour results are uncomfortably close to the 10 g/kW-hr HC+NOx standard for engine number 6820. In these cases, such factors can be accounted for by the engine manufacturer in the engine family’s research and design phase by either improving the durability of the engine (see the discussion below) or designing the catalyst to account for degradation in catalyst effectiveness over time, e.g, more precious metal loading, larger catalyst volume, dividing the catalyst into two separate pieces within the exhaust stream, etc.
The technical feasibility of the Phase 3 standard for Class I engines is supported by a number of Small SI engine manufacturers. 29,30,31,32 

### Also, a manufacturer of emission controls specifically indicated the types of hardware that may be needed to comply with new standards. 33 

### That manufacturer concluded that, depending on the application and engine family, either catalyst or electronic engine controls should be able to achieve emission standards as low as 9 g/kW-hr HC+NOx. As demonstrated above, we believe the standard of 10 g/kW-hr HC+NOx can be achieved using catalysts only. However, based on our engineering judgment, we agree that it may be possible to achieve the standard with the sole use of electronic engine controls because of the more precise management of air-fuel mixtures and ignition spark timing offered by that technology.
We conducted a design and process Failure Mode and Effects Analysis study to assess the safety of implementing advanced exhaust emission controls on Small SI engines. 34 

### That work, which was based in part on our engine test program, suggests that manufacturers of Class I may need to improve the durability of basic engine designs, ignition systems, or fuel metering systems for some engines in order to comply with the emission regulations at full useful life. Some of these emission-related improvements may include:

1. Adding a fuel filter or improving the needle and seat design in the carburetor to minimize fuel metering problems caused by debris from the fuel tank; 2. Improving intake manifold design or materials to reduce air leaks; 3. Upgrading the ignition system design for better ignition spark reliability and durability; 4. Improving design and manufacturing processes for carburetors to reduce the production variability in air-fuel mixtures; and

4 Catalyst performance degradation can occur from thermal sintering and catalyst poisoning due to oil consumption. Catalyst performance can also improve as engi ne air-to-fuel ratio slowly drifts towards stoichiometry over the useful life of the engine. Air-cooled engines are typically designed with air-to-fuel ratio calibrations that take into account lean-drift with extended operation, and are designed with a sufficiently rich air-to-fuel ratio to prevent net-lean operation at high hours that could result in engine damage or deteriorating engine performance.

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### Final Regulatory Impact Analysis

5. Enhancing exhaust manifold design for better reliability and durability.

4.3.2.3 Class II Single-Cylinder Gasoline-Fueled Engines
Class II single-cylinder engines that use gasoline fuel are currently certified and sold under the Phase 2 standard in both side-valve and ove rhead-valve configurations. In 2008, only 2 out of 107 Class II single-cylinder engine families used si de-value designs. Manufacturers certified these families under the averaging provisions of the applicable regulations with emission credits that were generated by (low emitting) overhead-valve engines. We believe that the Phase 3 standard will reduce the number of emission credits available for the certification of side-valve technology. As a result, we assume that a number of the remaining Class II side-valve engines may be phased out of applicable manufacturer's product line in the future.
Based on the above, we did not directly assess the technical feasibility of the standard for side-valve Class II engines in our test progr am. Instead we assessed only single-cylinder, overhead-valve Class II engines with prototype catalyst/muffler control systems. The primary design target for selecting the catalyst configur ation for these engines, e.g., volume, substrate, design and PGM loading, was to achieve emission levels well below the limit of 8 g/kW-hr HC+NOx for this class to accommodate the longer useful life of many of these engines. The emission regulations allow useful lives ranging from 250 to1000 hours. For two of the engines families, we selected emission control technology with a target of meeting a 3.5 g/kW-hr HC+NOx. This included the use of electronic engine and fuel controls to improve the management of air-fuel mixtures and ignition spark timing that allow, among other advantages, the use of larger catalyst volumes and higher precious metal loading. Secondary design targets were primarily safety related and included minimizing CO oxidation at moderate to high load conditions to maintain exhaust system surface temperatures comparable to those of the original Phase 2 compliant systems. The test engines, size, salient catalyst parameters, and use of electronic engine controls are shown in Table 4.3-6.

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### Feasibility of Exhaust Emission Control

Table 4.3-6: Class II Single-Cylinder Test Engine and Control Technology Description

Engine Displac ement

(L) Useful Life Fuel Metering Catalyst Type Catalyst Volume Catalyst Cell Density Catalyst Loading

142 0.40 500 hour Carburetor Cordierite Ceramic Monolith 250 cc 400 cpsi 40 g/ft 3 , 5:0:1 1

231 0.50 250 hour Electronic Fuel Injection Metal monolith 280 cc 200 cpsi 70 g/ft 3 , 0:5:1

251 0.50 250 hour Carburetor Cordierite Ceramic Monolith 250 cc 400 cpsi 40 g/ft 3 , 5:0:1

253 0.50 250 hour Carburetor Cordierite Ceramic Monolith 250 cc 400 cpsi 40 g/ft 3 , 5:0:1

254 0.59 250 hour Carburetor Cordierite Ceramic Monolith 250 cc 400 cpsi 40 g/ft 3 , 5:0:1

232 0.49 1,000 hour Electronic Fuel Injection Metal monolith 250 cc 200 cpsi 40 g/ft 3 , 5:0:1

1 

### Metal loading expressed as a ratio of platinum:palladium:rhodium.

Table 4.3-7 shows the results of our catalyst testing on single cylinder Class II engines. Only one of the engines was tested at high hours. As explained above for the Class I engines, the high-hour results for the remaining engines we re projected from their low-hour emission performance. We projected high-time emission results for these engines by applying the multiplicative deterioration factor from the manufacturer's Phase 2 certification application to the low-hour emission test results. The certificati on deterioration factors ranged from 1.033 to 1.240 g/kW-hr HC+NOx. 5 

### As shown, each of the engines achieved the requisite emission limit of 8 g/kW-hr HC+NOx.

5 These results were taken from the 2005 certification results.

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### Final Regulatory Impact Analysis
Table 4.3-7: Class II Single-Cylinder Emission Results with Advanced Catalytic Control Technology

Engine Age (hours) 1 

### HC+NOx (g/kW-hr) 231 (w/ EFI) 10-40 1.8 ± 0.4 2 

### Projected High 2.2 232 (w/ EFI) 10-40 2.2 ± 0.1 Projected High 2.3 251 10-40 3.1 ± .3 Projected High 3.8 253 10-40 4.5 ± 0.1 Projected High 5.6 254 10-40 4.0 ± 0.3 Projected High 4.5 142 50 2.5 ± 0.6 500 2.8

1 Projected high-hour results estimated by multiplying the low-hour test results by the manufacturer’s 2005 certification deterioration rate.
2 “±” values represent the 95% confidence intervals of 3 tests using a 2-sided t-test.



### Again, as with Class I engines, the technical feasibility of the Class II standard was supported by a number of Small SI engine manufacturers. 35363738 

### Also, a manufacturer of emission controls specifically indicated the types of hardware that may be needed to comply with new standards. 39 

### That manufacturer concluded that, depending on application and engine family, a catalyst and electronic engine controls should be capable of achieving emission standards as low as 7 g/kW-hr HC+NOx. Also, as described above , that same manufacturer concluded that, again depending on the application and engine family, either catalyst or electronic engine controls should be able to achieve emission standards as low as 9 g/kW-hr HC+NOx. Our standard of 8 g/kW-hr HC+NOx is in between these two regions. Therefore, based solely on that manufacturer’s conclusions, complying with the standard may require control technology ranging from either a catalyst or electronic engine controls, or a combination of both.
Based on the above information, especially our testing as discussed previously, we conclude that catalysts do not necessarily need to be used in conjunction with electronic engine controls to achieve our standard of 8 g/kW-hr HC +NOx. Either one of those technologies appear sufficient. In fact, market forces may cause some manufacturers to shift to electronic controls in the absence of more stringent emission standards. Nonetheless, we can not discount the possibility that both technologies may be used by some manuf acturers to meet the standard on single-cylinder Class II engines. (See section 4.2.3.4 for more on electronic engine control and fuel injection.)
The design and process Failure Mode and Effects Analysis study mentioned previously suggests that manufacturers of Class II may need to improve the durability of basic engine designs,

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### Feasibility of Exhaust Emission Control
ignition systems, or fuel metering systems for some engines in order to comply with the emission regulations at full useful life. 40 

### Some of these emission-related improvements may include:

1. Reducing the variability in air-fuel mixtures with tighter manufacturing tolerances for fuel metering components; and 2. Improving the ignition system design for better ignition spark reliability and durability.

4.3.2.4 Class II Multi-Cylinder Gasoline-Fueled Engines
Gasoline-fueled Class II multi-cylinder engines are very similar to their single-cylindercounterparts. Beyond the difference in the number of cylinders, several more Class II multicylinder engine families are currently certified with catalysts and electronic engine control technology (either with or without a catalyst). Because of the direct similarities and the use of more sophisticated emission control-related tec hnology on some engine families, we find that ourconclusions regarding the technical feasibility of the 8 g/kW-hr HC+NOx standard for singlecylinder Class II engines is directly transferable to multi-cylinder Class II engines.
Nonetheless, we also tested two twin-cylinder gasoline-fueled Class II engines from different engine families by the same manufacturer. 41 

### The engines were basically identical except for their fuel metering systems, i.e., carbureted or electronic fuel injection. We tested both without modification and tested the electronic fuel inj ected engine with a catalyst system that we developed. All the tests were conducted when the engines had accumulated 10-15 total hours of operating time.
The results of this testing are shown in Table 4.3-8. As was done for the Class I and II single-cylinder engines discussed earlier, we project ed emission levels at the end of each engine’s useful life using the multiplicative deterioration factors for each engine family as reported in the manufacturer’s Phase 2 certification application. As shown, the carbureted engine is projected tohave end of life emissions of approximately 9.1 g/kW-hr. Based on our experience with singlecylinder engines, compliance with the new standard may require the use of a catalyst for this engine family. The unmodified engine with electr onic fuel injection is projected to achieve about 7.3 g/kW-hr. This engine is very close to complying with the standard and will most likely require only additional fuel-air mixture and injection timing calibration changes for compliance.

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### Final Regulatory Impact Analysis
Table 4.3-8: Class II Multi-Cylinder Emission Results with Advanced Catalytic Control Technology (V-Twin, Approximately 0.7 Liter Displacement, 3-Way Catalyst)

Engine Configu r-ation Fuel Metering Age (hours) 1 

### HC+NO

x(g/kWhr) Catalyst Type Catalyst Volume Catalyst Cell Density Catalyst Loading OEM Carburet 10-40 7.2

-- -- -- -- Projected 9.1

-- -- -- -- OEM EFI 10-40 5.9

-- -- -- -- Projected 7.3

-- -- -- -- OEM w/ EFI 10-40 1.8 Cordierite 700cc 400 cpsi 60 g/ft 3



### , catalyst Projected 2.2 same same same same
1 Projected high-hour results estimated by multiplying the low-hour test results by the manufacturer’s 2004 certification deterioration rate.
2 Metal loading expressed as a ratio of platinum:palladium:rhodium.


### Finally, the combination of electronic fuel in jection and catalytic exhaust aftertreatment clearly has the potential to reduce emissions well below the Phase 3 standard as shown in the table.
We also evaluated emission control technology for twin-cylinder Class II engines, and by analogy all multi-cylinder engines, as part of our safety study. 42 

### Here again we did not find any unique challenges in designing catalyst-based control systems for these multi-cylinder engines relative to the feasibility of complying with the exhaust standards under normal engine operation. However, we did conclude that these engines may present unique concern with the application of catalytic control technology under atypical operati on conditions. More specifically, the concern relates to the potential consequences of combustion misfire or a complete lack of combustion in one of the two or more cylinders when a single catalyst/muffler design is used. (A single muffler is typically used in Class II applications.) In a single-catalyst system, the unburned fuel and air mixture from the malfunctioning cylinder would combine with hot exhaust gases from the other, properly operating cylinder. This condition would create high temperatures within the muffler system as the unburned fuel and air charge from the misfiring cylinder combusts within the exhaust system. This could potentially destroy the catalyst.
One solution is simply to have a separate catalyst/muffler for each cylinder. Another solution is to employ electronic engine controls to monitor ignition and either put the engine into “limp-mode” or shut the engine down until the condition clears on re-start or until necessary repairs are made, if appropriate. For engines usi ng carburetors, this would effectively require the addition of electronic controls. For engines empl oying electronic fuel injection that may need to also employ a small catalyst, it would require that the electronic controls incorporate ignition misfire detection if they do not already utilize the inherent capabilities within the engine management system.

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### Feasibility of Exhaust Emission Control
We expect some engine families will use electronic fuel injection to meet the Phase 3 standard without employing catalytic aftertreatme nt. As described earlier, engine families that already use these fuel metering systems and are reasonably close to complying with the requirement are likely to need only additional calibration changes to the engine management system for compliance. In addition, we expect that some engine families which currently use carbureted fuel systems will convert directly to electronic fuel injection. Manufacturers may adopt this strategy to couple achieving the standard without a catalyst and realizing other advantages of using fuel injection such as easier starting, more stable and reliable engine operation, and reduced fuel consumption. A few engine manufacturers ha ve confidentially confirmed their plans to use electronic fuel injection on some engine families in the future as part of an engine management strategy in lieu of using catalysts.
Our evaluation of electronic fuel injection systems that could be used to attain the new standard found that a rather simple, low cost system should be sufficient. We demonstrated this proof of concept as part of the engine test program we conducted for our safety study. In that program, we fitted two single-cylinder Class II engines with an electronic control unit and fuel system components developed for Asian motor-scooters and small-displacement motorcycles. The sensors for the system were minimized to include a throttle position sensor, air charge temperature sensor, oil temperature sensor, manifold absolute pressure sensor, and a crankshaft position sensor. This is in contrast to the original equipment manufacturer (OEM) fuel injection systems currently used in some two-cylinder Class II engine applications that employ more sophisticated and expensive automotive-based components.
Regarding the electronic control unit and fuel system components referenced above and in previous sections, at least two small engine manufacturers have developed simplified, compact, low-cost electronically controlled fuel injection systems for small motorcycles and scooters. 4344 

### One manufacturer has also developed a general purpose small engine with electronic engine speed control technology that eliminates the need for a battery. 45,46 

### These manufacturers have generally reported a number of benefits for these advanced systems, including lower emissions and better fuel economy.

4.3.2.5 Class II Gaseous-Fueled Engines
Engine manufacturers and equipment manuf acturers certify engines to run on liquid propane gas (LPG) or compressed natural gas (CNG) in a number of applications including indoor floor buffers which require low CO emissions. The technology to reduce emissions to the Phase 3 levels is catalyst due the fact that most engines run closer to stoichiometry than gasoline engines and further enleanment to reduce emissions may not be feasible. Due to the high amount of NOx compared with HC, as seen from engine data in the certification database, the catalysts may need to be designed to reduce NOx and oxidize a limited amount of CO. The EPA 2008 Certification Database lists 6 multi-cylinder engine families in the Class II 1000 useful life category as having catalysts. Due to this fact, it is assumed that gaseous engines do not have the same concerns with multi-cylinder engines and catalysts as gasoline engines.

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### Final Regulatory Impact Analysis



## 4.4 Feasibility of Outboard/Personal Watercraft Marine Engine Standards

Outboard and personal watercraft (OB/PWC) engines are subject to exhaust emission standards which require approximately a 75 percent reduction in hydrocarbon emissions compared to conventional carbureted, crankcase-scavenged two-stroke engines. Because of the emission credit program included in these requirements, manufacturers are able to sell a mix of old and new technology engines to meet the standards on average.
We are finalizing new exhaust emission standards for OB/PWC engines based on the emissions results achievable from the newer technology engines. These technologies have primarily been two-stroke direct injection and f our-stroke engine designs. For a few model years, one manufacturer certified PWC engines with catalytic aftertreatment. This section presents emission data for 2004 model year outboard and personal watercraft engines and includes a description of the various emission control technologies used. In addition, the possibility of using catalytic aftertreatment on OB/PWC engines is discussed.

4.4.1 OB/PWC Certification Test Data
When engine manufacturers apply for certification to exhaust emission standards, they submit exhaust emission test data. In the case of the OB/PWC engines, the emission standards are based on the sum of hydrocarbons and oxides of nitrogen (HC+NOx). Manufacturers submit emission test data on HC and NOx to demonstrate their emission levels. Although carbon monoxide (CO) emissions are not currently regulated, manufacturers submit data on CO emissions as well.
Three primary technologies are used on Mari ne SI engines: conventional two-stroke engines, direct injection two-stroke engines, and four-stroke engines. Conventional two-stroke engines are primarily carbureted, but larger engine s may have indirect fuel injection systems aswell (IDI). Four stroke engines come in carbureted, throttle-body fuel injected (TBI), and multiport fuel injection (MPI) versions. These technologies are discussed in more detail in Section 4.4.2.

4.4.1.1 HC+NOx Certification Data
Figure 4.4-1 presents HC+NOx certification levels for 2006 model year outboard engines and compares this data to the existing and new exhaust emission standards. These certification levels are based on test data over the ISO E4 duty cycle with an adjustment for emissions deterioration over the regulatory useful life. The certification data set includes engines well above and below the emission standard. Manufacturers are able to certify to the standard by meeting it on average. In other words, clean engines generate emission credits which offset the debits incurred by the engines emitting above the standard. Figure 4.4-2 presents only the data from engines that meet the 2006 standard. As shown in these figures, two-stroke direct injection engines and four-stroke engines easily meet the 2006 standard.

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### Feasibility of Exhaust Emission Control

0 50 100 150 200 250 300 350 400

0 50 100 150 200 Rated Power [kW]HC+NOx [g/kW-hr] 2s Carb 2s DI 4s Carb 4s EFI Baseline
2006
2010 

### Figure 4.4-1: 2006 MY Outboard HC+NOx Certification Levels

0 100 200 300 400 500 600 700 800

0 50 100 150 200 Rated Power [kW]CO [g/kW-hr] 2s Carb 2s DI 4s Carb 4s EFI proposed 

### Figure 4.4-2: 2006 MY New Technology Outboard HC+NOx Certification Levels

Figures 4.4-3 and 4.4-4 present similar data for personal watercraft engines. These engines

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### Final Regulatory Impact Analysis
use similar technology, but the HC+NOx emissions are a little higher on average, presumably due to higher average power densities for PWC engines. This difference in emissions is reflected in the new HC+NOx standards.

Figure 4.4-3: 2006 MY Personal Watercraft HC+NOx Certification Levels

0 50 100 150 200 250 300 350 400

0 50 100 150 200 Rated Power [kW]HC+NOx [g/kW-hr] 2s Carb 2s DI 2s Catalyst 4s EFI Baseline
2006
2010



### Figure 4.4-4: 2006 MY New Technology PWC HC+NOx Certification Levels

0 5 10 15 20 25 30 35 40 45 50

0 50 100 150 200 Rated Power [kW]HC+NOx [g/kW-hr] 2s Carb 2s DI 2s Catalyst 4s EFI Baseline
2006
2010

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### Feasibility of Exhaust Emission Control

4.4.1.2 CO Certification Data
Although no exhaust emission standards for CO are currently in place for Marine SI engines, the technological advances associated with the HC+NOx standards have resulted in lower CO emissions for many engines. Figures 4.4-5 and 4.4-6 present reported CO exhaust emission levels for certified outboard and personal watercraft engines. These engines use similar technology as outboard engines and show similar emission results.

Figure 4.4-5: Reported CO Emission Levels for 2006 MY Outboard Engines

0 100 200 300 400 500 600

0 50 100 150 200 Rated Power [kW]CO [g/kW-hr] 2s Carb 2s DI 2s Catalyst 4s EFI
2010



### Figure 4.4-6: Reported CO Emissi on Levels for 2006 MY PWC Engines

0 100 200 300 400 500 600 700 800

0 50 100 150 200 Rated Power [kW]CO [g/kW-hr] 2s Carb 2s DI 4s Carb 4s EFI
2010

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### Final Regulatory Impact Analysis

4.4.2 OB/PWC Emission Control Technologies
This section discusses the how general technologies discussed above apply to outboard and PWC applications and discusses specific OB/PWC technology.

4.4.2.1 Conventional Two-Stroke Engines
As discussed earlier in this chapter, hydrocarbon emissions from two-stroke engines are primarily the result of short-circuiting losses where unburned fuel passes through the engine and out the exhaust during cylinder charging. Even with an indirect injection system, the air and fuel are mixed prior to entering the cylinder. Therefore, even though there is better metering of fuel and air than with a carbureted engine, short-circuiting losses still occur. Because of the very rich and cool conditions, little NOx is formed. As s hown in Figures 4.4-1 and 4.4-2, HC emissions can range from 100 to 400 g/kW-hr. CO is formed as a product of incomplete combustion. As a result, CO emissions range from 200 to 500 g/kW-hr from these engines.

4.4.2.2 Direct Injection Two-Stroke Engines
The primary advantage of direct-injection (DI) for a two-stroke is that the exhaust gases can be scavenged with fresh air and fuel can be injected into the combustion chamber after the exhaust port closes. As a result, hydrocarbon emissions, fuel economy, and oil consumption are greatly improved. Some users prefer direct-injec tion two-stroke engines over four-stroke engines due to the higher power to weight ratio. Today, this technology is used on engines with power ratings ranging from 35 to 220 kW. One manufacturer has recently stated its plans to manufacture DI two-stroke engines as low as 7.4 kW.
Most of the DI two-stroke engines curren tly certified to the current OB/PWC emissions standards have HC+NOx emissions levels somewhat higher than certified four-stroke engines. These engines also typically have lower CO emissions due to the nature of a heterogeneous charge. By injecting the fuel directly into a charge of air in the combustion chamber, localized areas of lean air/fuel mixtures are created wher e CO is efficiently oxidized. PM emissions may be higher for DI two-stroke engines than for four-stroke engines because oil is burned in the combustion chamber and because of localized rich areas in the fuel injection stream.
Recently, one manufacturer has introduced a newer technology DI two-stroke engine that has comparable HC+NOx emission results as many of the certified four-stroke engines. 47 

### This engine makes use of a low-pressure fuel injection nozzle that relies on high swirl to produce uniform fuel flow rates and droplet sizes. Als o, significant improvements have been made in oil consumption. As with the older DI two-stroke designs, CO emissions are much lower than comparable four-stroke engines. What is unique about this design is that the manufacturer has reported lower PM emissions than for a comparable four-stroke engine.

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### Feasibility of Exhaust Emission Control

4.4.2.3 Four Stroke Engines
Manufacturers currently offer four-stroke Marine SI engines with power ratings ranging from 1.5 to 224 kW. These engines are available with carburetion, throttle-body fuel injection, or multi-point fuel injection. Carbureted engines ar e offered from 1.5 to 60 kW while fuel injected engines are offered from 22 to 224 kW. One manufacturer has stated that the fuel injection systems are too expensive to use on the smaller engine sizes. Most of the four-stroke outboard engines above 19 kW have HC+NOx emissions below 16 g/kW-hr and many have emissions below 13 g/kW-hr. CO emissions for these engines range from 150 to 250 g/kW-hr. Based on the certification data, whether the engine is carbureted or fuel injected does not have a significant effect on combined HC+NOx emissions. For PWC engines, the HC+NOx levels are somewhat higher. However, many of the four-stroke PWC e ngines are below 16 g/kW-hr. CO emissions for these engines are similar as those for four-stroke outboards.

4.4.2.4 Catalysts Figure 4.4-7: PWC Engine with Catalyst

One manufacturer has certified two PWC engine models with oxidation catalysts. One engine model uses the oxidation catalyst in conjunction with a carburetor while the other uses throttle-body fuel injection. The engine with throttle-body fuelinjection has an HC+NOx emission rate of 25 g/kWhr which is significantly below the EPA 2006 standard. In this application, the exhaust system is shaped in such a way to protect the catalyst from water and is nearly as large as the engine (see Figure 4.4-7). Manufacturers have recently begun efforts to develop a three-way catalyst system for PWC engines used in jet boats.
Catalysts have not yet been packaged into the exhaust system of production outboard marine engine s. In current designs, water and exhaust are mixed in the exhaust system to help cool the exhaust and tune the engine. Water often works its way up through the exhaust system because the lower end in under water and due to pressure pulses. As discussed above, salt-water can be detrimental to catalyst performance and durability. In addition, the lower unit of outboards are designed to be as thin as possible to improve the ability to turn the engine on the back of the boat and to reduce drag on the lowest part of the unit. Certainly, the success of packaging catalysts in sterndrive and inboard boats in recent development efforts (see below) suggests that catalysts may be feasible for outboards. However, this has not yet been demonstrated and significant development efforts would be necessary.



## 4.5 Feasibility of Sterndrive/Inboard Marine Engine Standards

We are establishing exhaust emission standards for spark-ignition sterndrive and inboard (SD/I) engines. These new emission standards are supported by data collected on SD/I engines

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### Final Regulatory Impact Analysis
equipped with catalysts. This section presents exhaust emission data from baseline SD/I engines as well as data from SD/I engines equipped with lean calibrations, exhaust gas recirculation, and catalytic control.

4.5.1 Baseline SD/I Emissions Data
The vast majority of SD/I engines are four-stroke reciprocating piston engines similar to those used in automotive applications. The exceptions are small sales of air boats using aircraft piston-type engines and at least one marinizer that us es rotary engines. More than half of the new engines sold are equipped with electronic fuel injection while the rest still use carburetors. The majority of the electronic fuel injection systems are multi-port injection; however, throttle-body injection is also widely used, especially on smaller engines.
Table 4.5-1 presents baseline emissions for four-stroke SD/I engines built up from automotive engine blocks. 48,49,50,51,52,53,54 

### All these data were collected during laboratory tests over the ISO E4 duty cycle. Five of these engines are carbureted, one uses throttle-body fuel injection, and four use multi-port fuel injection. One of the multi-port fuel injected engines was tested with three calibrations. Note that without emissions calibrations performed specifically for low emissions, the HC+NOx emissions are roughly equal for the carbureted and fuel injected engines. Using the straight average, HC+NOx from the carbureted engines is 15.6 g/kW-hr while it is 16.0 g/kW-hr from the fuel injected engines (15.1 g/kW-hr if the low HC calibration outlier is excluded).

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### Feasibility of Exhaust Emission Control

Table 4.5-1: Baseline SD/I Exhaust Emission Data Engine # Power [kW] Fuel Delivery System HC [g/kW-hr] NOx [g/kW-hr] CO [g/kW-hr]

1 79 carburetor 11.2 8.0 281

2 91 carburetor 4.4 13.9 98

3 121 carburetor 8.5 6.0 247

4 153 multi-port electronic fuel injection 4.9 11.7 111

5 158 carburetor 7.3 6.0 229

6 167 carburetor 8.0 5.7 174

7 196 carburetor 4.4 10.3 101

8 159 throttle-body fuel injection 2.9 8.7 42

9 185 multi-port electronic fuel injection 5.2 9.7 149

9 181 #9, low CO calibration 5.8 11.7 48

9 191 #9, low HC calibration 3.3 18.2 72

10 219 multi-port electronic fuel injection 4.7 9.4 160

11 229 multi-port electronic fuel injection 2.7 13.1 44



### A distinct class of SD/I engines are the high-performance engines. These engines are similar to SD/I engines except that they are designed for high power output at the expense of engine durability. This high power output is typi cally achieved through higher fuel and air rates, larger combustion chambers, and through higher peak engine speeds. In most cases, custom engine blocks are used. Even in the engines that use an automotive block, few stock automotive engine components are used. Table 4.5-2 presen ts emission data collected by EPA on five highperformance engines. 55,56,57 

### This data also includes data submitted by a high performance engine manufacturer in its public comments on the proposed rule. 58

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### Final Regulatory Impact Analysis

Table 4.5-2: Baseline High Performance SD/I Exhaust Emission Data [g/kW-hr]
Power [kW] Fuel Delivery System HC NOx CO BSFC

391 multi-port electronic fuel injection 14.7 3.8 243 354

550 carburetor 13.2 a 8.4 253 376

634 multi-port electronic fuel injection, supercharger 16.9 9.1 135 348

778 throttle-body fuel-injection, supercharger, intercooler 7.6 4.9 349 448

802 multi-port electronic fuel injection, supercharger 16.1 9.4 102 299

466 electronic fuel injection 15.4 a 3.2 257

-- 410 electronic fuel injection 14.8 a 3.9 325

-- 466 electronic fuel injection, low emission calibration b 4.3 10.8 104

--

a HC concentration at idle was out of measurement range
b 

### 15% load factor at idle

4.5.2 Exhaust Gas Recirculation Emission Data
We collected data on three engines over the ISO E4 marine test cycle with and without the use of exhaust gas recirculation (EGR). 59,60,61 

### The first engine was a 6.8 L Ford heavy-duty highway engine. Although this was not a marine engine, it uses the same basic technology as SD/I engines. The second and third engines were the 7.4 L and 4.3 L SD/I engines used in the catalyst development program described below. These engines are marinized versions of GM heavy-duty highway engines. The baseline emissions from the 7.4 L engine are a little different than presented below in the catalyst discussion because engine head was rebuilt prior to the catalyst development work.
This test data suggests that, through the use of EGR on a SD/I marine engine, a 40-50 percent reduction in NOx (30-40 percent reduction in HC+NOx) can be achieved. EGR was not applied at peak power in this testing because the throttle is wide open at this point and displacing fresh air with exhaust gas at this mode of operation would reduce power. We also did not apply EGR at idle because the idle mode does not contribute significantly to the cycle weighted NOx.

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### Feasibility of Exhaust Emission Control

Table 4.5-3: Exhaust Emission Data Usin g EGR on the E4 Marine Duty Cycle
EGR Scenario HC [g/kW-hr] NOx [g/kW-hr] CO [g/kW-hr] Power [kW] BSFC [g/kW-hr] 6.8 L Engine: baseline with EGR 2.7 2.7 13.4 7.1 26.5 24.3 145 145 326 360 7.4 L Engine: baseline with EGR 4.5 4.5 8.4 4.8 171 184 209 209 349 356 4.3 L Engine: baseline with EGR 4.9 4.2 11.7 5.3 111 92 153 148 329 350

4.5.3 Catalytic Control Emission Data

4.5.3.1 Engine Testing
In a joint effort with the California Air Resources Board (ARB), we contracted with Southwest Research Institute to perform catalyst development and emission testing on a SD/I marine engine. 62 

### This test program was performed on a 7.4 L electronically controlled Mercruiser engine with multi-port fuel injection. Figure 4.5-1 illustrates the three primary catalyst packaging configurations used in this test program. The upper right-hand picture shows a catalyst packaged in a riser extension which would be placed between the lower exhaust manifold and the exhaust elbow. This riser had the same outer dimensions as the stock riser extension produced by Mercury Marine. The upper left-hand picture shows a catalyst packaged in the elbow. The lower picture shows a larger catalyst that was packaged downstr eam of the exhaust elbow. All of these catalyst configurations were water jacketed to prevent high surface temperatures.

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### Final Regulatory Impact Analysis

Figure 4.5-1: Three Catalyst Configurations Used in SD/I Test Program

Table 4.5-4 presents the exhaust emission results for the baseline test and three catalyst packaging configurations. In each case a pair of catalysts were used, one for each exhaust manifold. For the riser catalyst configuration, we tested the engine with two cell densities, 60 and 300 cells per square inch (cpsi), to investigate the effects of back-pressure on power. The catalysts reduced in HC+NOx in the range of 42 to 77 percent and reduced CO in the range of 46 to 54 percent. There were no significant impacts on power, and fuel consumption actually improved due to the closed-loop engine calibrations necessary to optimize the catalyst effectiveness. At the full power mode, we left the engine controls in open- loop and allowed it to operate rich to protect the catalysts from over-heating.

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### Feasibility of Exhaust Emission Control

Table 4.5-4: Exhaust Emission Data on a 7.4 L SD/I Engine with Various Catalysts Catalyst Scenario* (cell density, volume, location) HC [g/kW-hr] NOx [g/kW-hr] CO [g/kW-hr] Power [kW] BSFC [g/kW-hr] baseline (no catalyst) 4.7 9.4 160 219 357

60 cpsi, 0.7 L, riser 2.5 5.7 81 214 345 300 cpsi, 0.7 L, riser 1.7 1.9 87 213 349 400 cpsi, 1.3 L, elbow 2.8 1.1 81 217 337 200 cpsi, 1.7 L, downstream 2.1 1.2 83 221 341 *Multiply volume by two for total catalyst volume per engine.



### Additional reductions in HC+NOx and CO can be achieved by using EGR in addition to a catalyst. However, the added benefit of EGR is small compared to the emission reductions achieved by the catalysts. Regardless, the use of EGR could give manufacturers some flexibility in the design of their catalyst. In the catalyst testing work described above on the 7.4 L SD/I marine engine, each of the catalyst configurations were tested with and without EGR. Table 4.5-5 presents these test results.

Table 4.5-5: Exhaust Emission Data on a 7.4 L SD/I Engine with Catalysts and EGR Catalyst Scenario* (cell density, volume, location) HC+NOx [g/kW-hr] CO [g/kW-hr] catalyst catalyst + EGR catalyst catalyst + EGR 60 cpsi, 0.7 L, riser 8.2 6.8 81 74 300 cpsi, 0.7 L, riser 3.6 2.8 87 77 400 cpsi, 1.3 L, elbow 3.9 3.3 81 76 200 cpsi, 1.7 L, downstream 3.3 2.5 83 73 *Multiply volume by two for total catalyst volume per engine.



### 4.5.3.2 Freshwater Boat Testing
The catalyst testing described above was a first step in developing and demonstrating catalysts that can reduce emissions from Marine SI engines. However, this program only looked at catalysts operating in a laboratory. Additional efforts have been made to address issues with using catalyst in marine applications by operating engines in boats with catalysts. When the California Air Resources Board finalized their catalyst-ba sed emission standards for SD/I engines, they agreed to further assessment of the durability of catalyst used in boats through technology review.
To that end, ARB, industry and the U.S. Coast Guard recently performed a cooperative in4-49

### Final Regulatory Impact Analysis
boat demonstration program designed to demonstrate the feasibility of using catalysts in SD/I applications. 63,64 

### This testing included four boats, two engine types, and four catalysts. Thecatalysts were packaged in the exhaust emission manifold in such a way that they were waterjacketed and capable of fitting within the existi ng boat design. Each of the boats were operated by the U.S. Coast Guard for 480 hours on a fresh water lake. This service accumulation period, which was intended to represent the useful life of typical SD/I engines, began in December of 2003 and was completed in September of 2004. Table 4.5-6 presents a description of the boats that were used in the test program.
Table 4.5-6: Vessel Configurations for Full Useful Life Catalyst Testing
Boat Engine Catalyst Type Catalyst Volume* Catalyst Cell Density Inboard Straight-Drive Ski Boat 5.7 L, V-8 metallic 1.4 L 300 cpsi

Inboard V-Drive Runabout 5.7 L, V-8 ceramic 1.7 L 400 cpsi 22 ft, Sterndrive Bowrider 5.7 L, V-8 metallic 1.4 L 200 cpsi

19 ft. Sterndrive Runabout 4.3 L, V-6 ceramic 0.7 L 400 cpsi *Multiply volume by two for total catalyst volume per engine.



### Exhaust emissions were measured for each catalyst before and after the durability testing. 65 

### No significant deterioration was observed on any of the catalysts. In fact, all of the 5.7 L engines were below the standard of 5 g/kW-hr HC+NOx even after the durability testing. Although the zero hour emissions for the 4.3 L engine were less than half of the HC+NOx standard, the final emissions for the 4.3 L engine were 15 percent a bove the HC+NOx standard. However, it should be noted that the 4.3L engine was determined to have excessive fuel delivered to one cylinder bank and low compression in one of the cylinders. These problems did not appear to be related to the catalyst installations and would account for the increase in emissions even without catalyst deterioration. Once the calibration on this engine was corrected, a level of 5 g/kW-hr HC+NOx was achieved. In addition, no deterioration was observed in the oxygen sensors which were installed upstream of the catalysts.
Significant carbon monoxide emission reductions were achieved, especially at lower power modes. At wide-open-throttle, the engines operated in open-loop to prevent the exhaust valves from overheating. Additional reductions in CO could be achieved through better fuel air ratio control. For instance, although the engines in this test program were fuel injected, batch injections were used. In other words, all of the fuel injectors for each bank were firing at the same time rather than timing the fuel injection with the valve timing for each individual cylinder. Because of this strategy, the engine would need to be calibrated somewhat rich. The next generation of electronics for these engines are expected to have more sophisticated control which would allow for optimized timing for each fuel injector.

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### Feasibility of Exhaust Emission Control

Table 4.5-7: Vessel Configurations for Full Useful Life Catalyst Testing

Boat Catalyst Aging HC [g/kW-hr] NOx [g/kW-hr] CO [g/kW-hr] 5.7 L engine 4.3 L engine baseline (no catalyst) baseline (no catalyst) 5.4 4.9 6.7 11.7 193 111Inboard StraightDrive Ski Boat 0 hours 480 hours 1.7 2.1 1.0 1.7 100 117
Inboard V-Drive Runabout 0 hours 480 hours 1.8 1.7 0.5 1.0 87 102 22 ft, Sterndrive Bowrider 0 hours 480 hours 1.8 1.5 0.5 0.9 74 93
19 ft. Sterndrive Runabout 0 hours 480 hours* 1.9 2.9 0.5 2.1 106 116 * after calibration corrected



### 4.5.3.3 Saltwater Boat Testing
Two test programs were initiated to investigate the feasibility of using catalysts on boats used in saltwater. In the first program, a small boat with a catalyst was operated over a set of operation conditions, developed by industry, to represent the worst case conditions for water reversion. In the second test program, three boats were equipped with catalysts and operated for an extended period similar to the fresh water testing.

4.5.3.3.1 Safety, Durability, and Performance Testing
We contracted with SwRI to test catalysts on a sterndrive engine before and after operation on a boat in saltwater. 66 

### The purpose of the testing was to determine if the catalyst would be damaged by water reversion in the exhaust manifold. This testing was performed on a 19 foot runabout with a 4.3 L sterndrive engine. On previous testing on this boat without a catalyst, SwRI found that the only water collected in the exhaust manifold was due to condensation. They were able to prevent this condensation by fitting the water jacket around the exhaust system with a thermostat to keep the manifold walls from becoming too cool.
The 4.3 L engine was fitted with a pair of riser catalysts similar to the one illustrated in Figure 4.5-1. These catalysts had a cell density of 300 cpsi and a combined volume of 1.4 L. The catalysts were water-jacketed to maintain low surface temperatures and, to prevent any possible water reversion, cones were inserted in the exhaust elbows. These cones were intended to increase the difficulty for water to creep up the inner walls of the exhaust manifold. The water jacketing system was fitted with a 82°C thermostat to keep the manifold wall temperatures above the dew

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### Final Regulatory Impact Analysis
point of the exhaust gas (~50°C) thereby preventing water condensation in the exhaust manifold.
Prior to testing, the catalysts were aged using a rapid aging cycle designed to represent 50,000 miles of vehicle operation. SwRI estimated that this would likely be more severe than would be seen over the useful life of an SD/I engi ne. The engine was then tested for emissions, in a test cell, with and without the aged catalysts installed in the exhaust manifold risers. In addition to adding the catalysts, the engine fueling wa s optimized using closed-loop electronic emission control.
After the baseline emission tests, the catalysts were installed on a 19 foot runabout equipped with a similar 4.3 L engine used in the emissions test cell. The boat was operated on saltwater over a number of safety, durability, and performance tests that were developed by industry for heat soak, water ingestion, and engine exhaust back-pressure. In addition, SwRI operated the boat over tests that they designed to represent operation and use that would most likely induce water reversion. After this boat testing, the catalyst was returned to the laboratory for a repetition of the baseline emission tests.
Table 4.5-8 presents the baseline, aged catalyst, and post boat operation catalyst emission test results. No significant deterioration of the catalysts were observed. Prior to boat testing, the aged catalysts achieved a 75 percent reduction in HC+NOx and a 36 percent reduction in CO. After the boat operation in saltwater, the catalysts achieved a 73 percent reduction in HC+NOx and a 34 percent reduction in CO. As described in Chapter 3, if saltwater had reached the catalyst, there would have been a large reduction in catalyst efficiency. No salt deposits were observed on the catalysts when they were removed from the boat.
Table 4.5-8: Exhaust Emission Data on a 4.3 L SD/I Engine with Catalysts

Catalyst Scenario HC [g/kW-hr] NOx [g/kW-hr] CO [g/kW-hr] Power [kW] BSFC [g/kW-hr] open-loop, no catalyst 4.9 11.7 111 153 329 closed-loop, no catalyst 4.5 10.4 101 153 327

aged catalyst pre boat 2.1 2.0 70 154 321 aged catalyst post boat 2.2 2.3 73 150 327

4.5.3.3.2 Extended Period In-Use Testing
We engaged in a test program with the California Resources Board, United States Coast Guard, National Marine Manufacturers Association, the Texas Department of Parks and Wildlife, and Southwest Research Institute to evaluate three additional engines with catalysts in vessels operating on salt-water. Early in the program, two of the three manifolds experienced corrosion in the salt-water environment resulting in water leaks and damage to the catalyst. These manifolds were rebuilt with guidance from experts in the marine industry and additional hours were

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### Feasibility of Exhaust Emission Control
accumulated on the boats. Although the accumulated hours are well below the 480 hours performed on fresh water, the completed operation showed no visible evidence of water reversion or damage to the catalysts. Table 4.5-9 presents initial exhaust emission results for the three engines, equipped with catalysts, included in this test program.

Table 4.5-9: Baseline Emission Data for En gines/Catalysts in Saltwater Test Program

Catalyst Scenario HC [g/kW-hr] NOx [g/kW-hr] CO [g/kW-hr] Power [kW] BSFC [g/kW-hr] Maxum, 4.3L V6, ceramic catalysts 2.1 0.7 136 150 345

Sea Ray, 5.7L V8, metal catalysts 1.3 0.3 114 191 351 Malibu, 5.7L V8, ceramic catalysts 0.5 0.4 107 194 348



### 4.5.3.4 Production Engines
At the time of proposal, only one manufacturer was selling inboard Marine SI engines equipped with catalysts. These engines are being sold nationwide. The engines are based on 5.7L automotive blocks and use electronically controlled fuel injection, twin catalysts, and onboard diagnostics. The manufacturer, Indmar, has also performed extended durability testing in a saltwater environment. Test data from this engine is presented in Table 4.5-10, with and without an applied deterioration factor. 67 

### One advantage that Indmar has promoted with this engine is very low CO at part throttle. Part throttle operation is associated with lower boat speeds where the risk of CO poisoning is highest. The measured CO over the marine duty cycle is primarily due to emissions at wide open throttle, where the engine goes to open loop rich operation to protect the exhaust valves from overheating.
Table 4.5-10: Exhaust Emission Data on a 5.7L Production SD/I Engine with Catalysts
HC [g/kW-hr] NOx [g/kW-hr] CO [g/kW-hr]

measured test results 1.8 2.0 46.6 with deterioration factor applied 2.0 2.3 51.8

At this time, three manufacturers have certified engines, equipped with catalysts, to the 5 g/kW-hr HC+NOx California standards for SD/I e ngines. Table 4.5-11 presents the certification data available from the California Air Resour ces Board’s Off-Road Certification Database. 68

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### Final Regulatory Impact Analysis
Table 4.5-11: Catalyst-Equipped SD/I Engines Certified in California

Manufacturer Engine Disp. [liters] Rated Power [kW] HC+NOx [g/kW-hr]

Indmar 5.7 5.7 230 230 3.7 4.6 Mercury Marine 1.6 3.0 5.0 5.7 8.1 8.1 75 101 194 246 280 317 4.2 2.7 1.8 3.4 2.8 4.6
Volvo Penta 5.0 8.1 239 298 3.3 2.6

4.5.3.5 CO Emissions Reductions at Low versus High Power
Under stoichiometric or lean conditions, catalysts are effective at oxidizing CO in the exhaust. However, under very rich conditions, catalysts are not effective for reducing CO emissions. SD/I engines often run at high power modes for extended periods of time. At these temperatures, engine marinizers must calibrate the engine to run rich as an engine protection strategy. If the engine were calibrated for a stoichometric air-fuel ratio at high power, high temperatures could lead to failures in exhaust valves and cylinder heads.
All of the data presented above on SD/I engines equipped with catalysts were based on engines that used open-loop engine control at high power. As a result, the catalysts achieved little reduction in HC and CO at full power (test mode 1). However, NOx reductions were achieved at mode 1 because NOx is effectively reduced under rich conditions.
The catalysts were effective in reducing CO in modes 2 through 5 of the test procedure. In these lower power modes, the engines described above saw CO reductions on the order of 80 percent. However, the weighted values over the test cycle only show about a 50 percent reduction in CO because of the high contribution of mode 1 to the total weighted CO value. Studies have shown that there is a higher risk of operator exposure to CO at lower boat speeds 69 

### which would correspond to lower engine power modes. This suggests that CO reductions at lower power modes may be more beneficial than CO reductions at full power.
To look at the effect of mode 1 on the cycle weighted CO levels, we performed an analysis in which we recalculated the CO level for ten cat alyst-equipped SD/I engines without mode 1. To determine the weighted value without mode 1, the weighting factor for mode 1 was set to zero percent and the weighting factors for modes 2 and 3 were each increased so that weighting factors would sum to 100 percent. Figure 4.5-2 compares the CO emissions with and without including

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### Feasibility of Exhaust Emission Control
mode 1 for these engines. Although mode 1 is only weighted as 6 percent of the test cycle, but makes up the majority of the cycle weighted CO value. Based on this analysis, the weighed CO level would be 70-90 percent lower if mode 1 were not included in the test procedure.

Figure 4.5-2: CO Emissions for SD/I Engines Equipped with Catalysts with and without Including Mode 1 in the Weighted Results

0 20 40 60 80 100 120 140

1 2 3 4 5 6 7 8 9 10 EngineCO [g/kW-hr] 

### E4 Weighting Without Mode 1



## 4.6 Feasibility of Standard for Marine Generator Sets

Currently, SI marine generator sets are regulated as Small SI or Large SI engines, depending on their size. Most SI marine generators are less than 25 hp and are therefore classifiedas Small SI engines. Generator sets in marine applications are unique in that they use liquidcooled engines. Liquid cooling allows manufactur ers to minimize the temperature of hot surfaces on marine generators, thereby reducing the risk of fires on a boat. For marine applications, liquid cooling is practical because of the nearly unlimited source of cooling water around the boat.
Another safety issue that has become apparent in recent years is carbon monoxide poisoning on boats. Studies have shown that exha ust emissions from engines on boats can lead to user exposure of high levels of carbon monoxide. 70 

### The marine industry, Coast Guard, American Boat and Yacht Council, and other stakeholders have been meeting regularly over the past several years in an attempt to mitigate the risk of CO poisoning in boating. 71,72 

### Mitigation strategies that have been discussed at these meetings include labeling, education, diverting the exhaust flow with smoke stacks, CO detectors, low CO em ission technologies, and emission standards.
The vast majority of gasoline marine generators are produced by two engine manufacturers. Recently, these two manufacturers have announced that they are converting their

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### Final Regulatory Impact Analysis
marine generator product lines over to low CO engines. 73,74 

### They have stated that this is to reduce the risk of CO poisoning and that this action is a result of boat builder demand. Both manufacturers are using a combination of clos ed-loop electronic fuel injection and catalytic control. To date, both of these manufacturers have certified some low CO engines and have stated their intent to convert their full product lines in the near future. These manufacturers also make use of the electronic controls to monitor catalyst function. Table 4.6-1 presents the 2005 model year certification levels for these engines.
Table 4.6-1: 2005 MY Certification Levels for Low CO Marine Generator Engines Engine Manufacturer Power [kW] Emission Control System HC+NOx [g/kW-hr] CO [g/kW-hr]

Kohler Power Systems 10.2 throttle-body injection, O 2 

### sensor, catalyst 7.2 5.2

Westerbeke 7.5 17.9 throttle-body injection, O 2 

### sensor, catalyst throttle-body injection, O 2 

### sensor, catalyst 2.0 4.4 0.01 0.0

In-use testing has been performed on two marine generator engine equipped with catalysts. These engines were installed on rental houseboats and operated for a boating season. Testing was first performed with low hours of operation; 108 hours for the 14 kW engine and 159 hours for the 20 kW. 75 

### The CO performance was reported to be “impressive with exhaust stack CO emissions of approximately 200 ppm for a fully warmed generator.” The emissions measured around the boat were much lower due to dilution. According to the manufacturer, no significant deterioration has been found in the emission performance of the cat alysts. Note that the manufacturer recommends changing the catalysts at 2000 hours and inspecting for CO at 1000 hours.



## 4.7 Test Procedures

We are making several technical amendments to the existing exhaust emission test procedures for Small SI and OB/PWC engines. These amendments are part of a larger effort to develop uniform test procedures across all of our programs. We including SD/I engines in these test procedures. In addition we are establishing not-to-exceed requirements for Marine SI engines. These new procedures are discussed in this section.

4.7.1 SD/I Certification Test Procedure
We are using the same certification duty cycle and test procedures for all Marine SI engines, including sterndrives and inboards. Tabl e 4.5-6 presents the certification test duty cycle. This duty cycle is commonly referred to as the E4 duty cycle and was developed using operational data on outboard and sterndrive marine gasoline engines. 76 

### In addition, the E4 duty cycle is recommended by the International Standards Organization for use with all spark-ignition pleasurecraft less than 24 meters in length. 77 

### Although some Marine SI engines may be used for commercial activities, these engines would not likely be made or used differently than those used

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### Feasibility of Exhaust Emission Control
for pleasure.
Table 4.7-1: SI Marine Certification Steady-State Test Duty Cycle

Mode % of Maximum Test Speed (MES) % of Maximum Torque at MES % of Maximum Power a at MES Weighting Factor

1 2 3 4 5 100 80 60 40 idle 100 71.6 46.5 25.0

0 b 100 57.2 27.9 10.1

-- 0.06 0.14 0.15 0.25 0.40

a % power = (% speed) × (% torque) b 15% of maximum torque at MES for high-performance engines


### For high-performance engines, the above test procedure is modified slightly. These engines typically have substantial auxiliary loads and parasitic losses even when the vessel does not need propulsion power. In addition, these engines are not designed to operate at a low load idle and survey data suggests that operators do not spend significant time at zero power idle. 78 

### To account for this, for high-performance engines, we revised the test torque at idle speed to be 15 percent of maximum torque at maximum test speed.

4.7.2 SI Marine Not-To-Exceed Requirements
EPA is concerned that if a marine engine is designed for low emissions on average over a low number of discrete test points, it may not necessarily operate with low emissions in-use. This is due to a range of speed and load combinations that can occur on a vessel which do not necessarily lie on the test duty cycle. For instance, the test modes on the E4 duty cycle lie on an average propeller curve. However, a propulsion engine may never be fitted with an “average propellor.” In addition, a light planing hull boat may operate at much lower torques than a heavily loaded boat.
It is our intent that an engine operate with low emissions under all in-use speed and load combinations that can occur on a boat, rather than just the discrete test modes in the five-mode duty cycle. To ensure this, we have requirements that extend to typical in-use operation. We are establishing not-to-exceed (NTE) requirements similar to those established for marine dieselengines. Under this approach, manufacturers would design their engines to comply with a not-toexceed limit, tied to the standard, for HC+NOx and CO, within the NTE zone. In the cases where the engine is included in averaging, banking, and trading of credits, the NTE limits would be tied to the family emission limits. We would reserve the right to test an engine in a lab or installed in a boat to confirm compliance to this requirement.
We believe there are significant advantages to taking this approach. The test procedure is very flexible so it can represent the majority of in-use engine operation and ambient conditions. Therefore, the NTE approach takes all of the bene fits of a numerical standard and test procedure and expands it to cover a broad range of conditions. Also, laboratory testing makes it harder to perform in-use testing because either the engines would have to be removed from the vessel or

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### Final Regulatory Impact Analysis
care would have to be taken that laboratory-type conditions can be achieved on the vessel. With the NTE approach, in-use testing and compliance become much easier because emissions may be sampled during normal vessel use. Because this approach is objective, it makes enforcement easier and provides more certainty to the industry of what is expected in use versus over a fixed laboratory test procedure.
Even with the NTE requirements, we believe it is still important to retain standards based on the steady-state duty cycle. This is the standard that we expect the certified marine engines to meet on average in use. The NTE testing is more focused on maximum emissions for segments of operation and should not require additional technology beyond what is used to meet the new standards. We believe basing the emission standards on a distinct cycle and using the NTE zone to ensure in-use control creates a comprehensive program. In addition, the steady-state duty cycles give a basis for calculating credits for averaging, banking, and trading.
We believe that the same technology that can be used to meet the standards over the fivemode certification duty cycle can be used to meet the NTE caps in the NTE zone. We therefore do not expect the NTE standards to cause marinizers to need additional technology. We do not believe the NTE concept results in a large amount of additional testing, because these engines should be designed to perform as well in use as they do over the steady-state five-mode certification test.

4.7.2.1 Shape of the NTE Zone
The NTE zone is intended to capture typical in-use operation for marine vessels. We used two data sources to define this operation. The first data source was the collection of data on marine engine operation that was used to develop the ISO E4 steady-state duty cycle. 79 

### Speed and torque data were collected on 33 outboards and three sterndrives. This data showed that the marine engines generally operated along a propeller curve with some variation due to differences in boat design and operation. A propeller curve defines the relationship between engine speed and torque for a marine engine and is generally presented in terms of torque as a function of engine speed in RPM raised to an exponent. The paper uses an exponent of 1.5 as a general fit, but states that the propeller curves for Marine SI applications range from exponents of 1.15 to 2.0.
The second source of data was a study of marine engine operation recently initiated by the marine industry. 80 

### In this study, sixteen boats were tested in the water at various engine speeds. These boats included seven sterndrives, three inboards, four outboards, and two personal watercraft. To identify the full range of loads at each engine speed, boats were operated both fully loaded and lightly loaded. Boats were operated at steady speeds to identify torque at each speed. In some cases, the operation was clearly unsafe or atypical. We did not include these operating points in our analysis. An example of atypical operation would be with a boat so highly loaded that it was operating in an unstable displacement mode with its bow sticking up into the air.
Figure 4.7-1 presents test data from the two studies as well as the NTE zone for Marine SI engines. This zone includes operation above and below the theoretical propeller curve used in the E4 duty cycle. Operation below 25 percent of rated speed is excluded because brake-specific

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### Feasibility of Exhaust Emission Control
emissions at low loads becomes very high due to low power in the denominator. This approach is consistent with the marine diesel NTE zone. The upper and lower borders of the NTE zone are designed to capture all of the typical operation that was observed in the two studies. The curve functions for these boarders are presented in Figure 4.7-1.

Figure 4.7-1: NTE Zone and Marine Engine Operation Data

0 0.2 0.4 0.6 0.8

1 1.2

0% 20% 40% 60% 80% 100% 120% Normalized SpeedNormalized Torque

Outboard PWC Inboard Sterndrive SAE 901596 E4 Setpoints Prop Curve Torque Curve NTE Zone Atypical Points 1.5 x Speed - 0.16

Speed^1.5 - 0.08 Torque MAP

100% Speed

40% Speed

25.3% Torque



### When testing the engine within the NTE zone, only steady-state operation would be considered. It is unlikely that transient operation is necessary under the NTE concept to ensure that emissions reductions are achieved. We designed the NTE zone to contain the operation near an assumed propeller curve that the steady-state duty cycle represents. We believe that the vast majority of the operation in the NTE zone would be steady-state. When bringing a boat to plane, marine engine operation would be transient and would likely be above the NTE zone. However we do not have enough information to quantify this. Also we do not believe that the NTE zone should be extended to include areas an engine may see under transient operation, but not under steady-state operation. For this reason, we do not believe that adding transient operation to the NTE requirements is necessary at this time. We would revise this opinion in the future if there were evidence that in-use emissions were increased due to insufficient emission control under transient operation

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### Final Regulatory Impact Analysis

4.7.2.2 Modal Emission Test Data within the NTE Zone
The NTE zone has emissions caps which represent a multiplier times the weighted test result used for certification. Although ideally the engine should meet the certification level throughout the NTE zone, we understand that a cap of 1.0 times the standard is not reasonable because there is inevitably some variation in emissions over the range of engine operation. This is consistent with the concept of a weighted modal emission test such as the E4 duty cycle.
In developing the emission caps in the NTE zone, we collected modal HC+NOx and CO emission data on a large number of OB, PWC, and SD/I engines. Because limited modal data is available in published literature, 81,82,83 

### most of the modal data on outboards and personal watercraft was provided confidentially by individual manufacturers. Data on SD/I engines with catalysts was collected as part of the catalyst development efforts discussed earlier in this chapter. 84,85,86,87 

### Our analysis focuses only on engines using technology that could be used to meet the new standards. The modal data is presented in Figures 4.7-2 through 4.7-9 in terms of the modal emission rate divided by the weighted E4 average for that engine. Each color bar represents a different engine. Because of the large volume of data and differences in engine operation and emissions performance, data is presented separately for carbureted 4-stroke, fuel-injected 4-stroke, and direct-injected 2-stroke OB/PWC, a nd for catalyst-equipped SD/I engines.
Figures 4.7-2 and 4.7-4 present normalized HC+NOx modal data for carbureted and EFI 4- stroke OB/PWC engines. Note that most of th e data points are near or below the E4 weighted average (represented by bars near or below 1.0). This is largely due to the exclusion of idle operation from the NTE zone compared to the E4 duty cycle that is 40 percent weighted at idle. As mentioned above, idle is excluded because brake-specific emissions become very large at low power due to a low power figure in the denominator (g/kW-hr). Especially for the carbureted engines, higher normalized HC+NOx emissions ar e observed at the low power end of the NTE zone (40 percent speed, 25 percent torque). As shown in Figures 4.7-3 and 4.7-5, a similar trend is observed with normalized CO emissions from these engines.

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### 1 2 3 4

1 2 3 4 

### Feasibility of Exhaust Emission Control

Figure 4.7-2: Normalized Modal HC+NOx for Carbureted 4-Stroke OB/PWC

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0

Normalized Speed, Torque [% of rated]Normalized HC+NOx [Modal/E4]

40%, 25% 60%, 47% 80%, 72% 100%, 100%



### 0.0 0.5 1.0 1.5 2.0 2.5

Normalized Speed, Torque [% of rated]Normalized CO [Modal/E4]

40%, 25% 60%, 47% 80%, 72% 100%, 100% 

### Figure 4.7-3: Normalized Modal CO for Carbureted 4-Stroke OB/PWC

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### 1 2 3 4

1 2 3 4 

### Final Regulatory Impact Analysis

Figure 4.7-4: Normalized Modal HC+NOx for EFI 4-Stroke OB/PWC

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0Normalized HC+NOx [Modal/E4]

40%, 25% 

### Normalized Speed, Torque [% of rated] 60%, 47% 80%, 72% 100%, 100%



### Figure 4.7-5: Normalized Modal CO for EFI 4-Stroke OB/PWC

2.5

2.0

1.5Normalized CO [Modal/E4]



### 1.0

0.5

0.0 40%, 25% Normalized Speed, Torque [% of rated] 60%, 47% 80%, 72% 100%, 100%

4-62

### 1 2 3 4 

### Feasibility of Exhaust Emission Control
Figures 4.7-6 through 4.7-9 present normalized HC+NOx and CO modal data for directinjected 2-stroke OB/PWC engines. Based on the data collected, there appear to be two distinct types of direct-injection 2-stroke engines. On e manufacturer uses a higher pressure fuel system with a unique combustion chamber design for low emissions. Because the modal variation in emission results are significantly different for the two engine designs, we designate them headings of Type 1 and Type 2 engines and look at them separately for the purposes of this analysis. As shown in Figure 4.7-6 and 4.7-7, Type 1 engines tend to have relatively high HC+NOx at low power, then fairly low emissions over the rest of the modes. For CO, these engines show muchless variability between modes. For Type 2 engines, HC+NOx is below the E4 average in the midspeed range as shown in Figure 4.7-8. However, there is a wide degree of variation in how these engines behave at low and high speed. Most of these engines seem to have high normalized HC+NOx emissions either at low or at high spee d. Figure 4.7-9 presents CO values for Type 1 engines. These engines tend to have high CO at full power with decreasing CO at lower power modes.
Figure 4.7-6: Normalized Modal HC+NOx for Type 1 DI 2-Stroke OB/PWC

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5

Normalized Speed, Torque [% of rated]Normalized HC+NOx [Modal/E4]

40%, 25% 60%, 47% 80%, 72% 100%, 100%

4-63

### 1 2 3 4



### 1 2 3 4 

### Final Regulatory Impact Analysis

0.0 0.5 1.0 1.5 2.0 2.5 3.0

Normalized Speed, Torque [% of rated]Normalized CO [Modal/E4]

40%, 25% 60%, 47% 80%, 72% 100%, 100% 

### Figure 4.7-7: Normalized Modal CO for Type 1 DI 2-Stroke OB/PWC

Figure 4.7-8: Normalized Modal HC+NOx for Type 2 DI 2-Stroke OB/PWC

0.0 0.5 1.0 1.5 2.0 2.5

Normalized Speed, Torque [% of rated]Normalized HC+NOx [Modal/E4]

40%, 25% 60%, 47% 80%, 72% 100%, 100%

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### 1 2 3 4 

### Feasibility of Exhaust Emission Control

0.0 0.5 1.0 1.5 2.0 2.5 3.0

Normalized Speed, Torque [% of rated]Normalized CO [Modal/E4]

40%, 25% 60%, 47% 80%, 72% 100%, 100% 

### Figure 4.7-9: Normalized Modal CO for Type 2 DI 2-Stroke OB/PWC

Figures 4.7-10 and 4.7-11 present normalized HC+NOx and CO modal data for SD/I engines equipped with catalysts. All of these e ngines demonstrated HC+NOx emissions below the E4 average in the mid-speed range. However, some of these engines show somewhat higher normalized HC+NOx emissions at either the low-pow er or full power mode. These differences are likely a function of catalyst design and location as well as air/fuel calibration. At wide open throttle, all of these engines were calibrated to run rich as an engine protection strategy, so emission reductions at this mode are due to NOx reductions in the catalyst. Because these engines are designed to run rich at full power, high CO emissions were observed at this mode. For the rest of the power range, CO emissions were generally below the E4 average for these engines. As part of the catalyst development work for SD/I engines, one engine was tested over 26 modes, most of which are contained in the NTE zone. 88 

### This engine was tested in its baseline configuration (openloop fuel injection) as well as with three catalyst configurations. The three catalyst configurations included one close-coupled to the engine (in the riser), one a little farther downstream (in the exhaust elbow), and a larger catalyst external to the existing exhaust manifold. This data provided insight into how exhaust emissions throughout the NTE zone for Marine SI engines compare to the modal test data on the theoretical propeller curve. This data is presented in Appendix 4A.

4-65

### 1 2 3 4 5 6 7

1 2 3 4 5 6 7 

### Final Regulatory Impact Analysis

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6

Normalized Speed, Torque [% of rated]Normalized HC+NOx [Modal/E4]

40%, 25% 50%, 35% 60%, 47% 70%, 59% 80%, 72% 90%, 85% 100%, 100% 

### Figure 4.7-10: Normalized Modal HC+NOx for SD/I with Catalysts

Figure 4.7-11: Normalized Modal CO for SD/I with Catalysts

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5

Normalized Speed, Torque [% of rated]Normalized CO [Modal/E4]

40%, 25% 50%, 35% 60%, 47% 70%, 59% 80%, 72% 90%, 85% 100%, 100%

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### Feasibility of Exhaust Emission Control

4.7.2.3 NTE Zones and Standards
As described above, the emissions characteristics of marine engines are largely dependent on technology type. Four-stroke engines tend to have relatively constant emission levels throughout the NTE zone. In contrast, two-stroke engine tend to have high variability in emissions, not only within the NTE zone but between different engine designs as well. Catalystequipped engines tend to have relatively flat emissions profiles, in the NTE zone, when operating in closed-loop engine control mode. However, at higher engine power, the engines are calibrated to operate with a rich fuel-air ratio, in open-loop control, to protect the exhaust valves and catalyst from high exhaust temperatures. This reduces th e catalyst efficiency at high power for oxidizing HC and CO.
Since the NPRM was published, we have worked with engine manufacturers to better understand the design constraints, operation, and em issions characteristics of marine engines. Based on this understanding, and the emission data presented above, we decided to develop different NTE standards for three distinct type s of engines; 4-stroke, 2-stroke, and catalystequipped. These standards are discussed below.
We used the modal data presented above and the data on additional operation points presented in Appendix 4A to develop NTE limits. These limits are presented as a multiplier times the Family Emission Limit (FEL) developed using the 5-mode test procedure. The limits represent the levels that can be met by the majority of the marine engines tested. In the case of engines that have modal emissions that are somewhat higher than the NTE limits, we believe that these engines can be calibrated to meet these limits. In addition, the limits are based on the FELs chosen by manufacturers at certification. Therefore, manufacturers would have the option of increasing their FELs, in some cases, to bring otherwise problem engines into compliance with the NTE limits.

4.7.2.3.1 4-Stroke Engines
The emissions data, presented above, for 4-stroke marine engines suggests that brakespecific emissions rates are relatively constant throughout the NTE zone. One exception is slightly higher HC+NOx emissions at low power. To account for this, we are subdividing the NTE zone to have a low power subzone below 50 percent of maximum test speed. In this low power subzone, the HC+NOx NTE limit is 1.6, while it is 1.4 for the remainder of the NTE zone. The CO NTE limit is 1.5 throughout the NTE zone. Figure 4.7-12 presents the NTE zone and subzones. These limits would apply to all non-catalyzed four-stroke marine engines.

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### Final Regulatory Impact Analysis

Figure 4.7-12: 4-Stroke Engine NTE Zone and Subzones

0% 20% 40% 60% 80% 100% 120%

0% 20% 40% 60% 80% 100% 120% Normalized SpeedNormalized Torque 1.5 x Speed - 0.16

Speed^1.5 - 0.08 Torque MAP

100% Speed

40% Speed

25.3% Torque 50% Speed

Speed^1.5 (theoretical propeller curve) E4 Modes Subzone 1

Subzone 2



### 4.7.2.3.2 2-Stroke Engines
The emissions data presented above, for 2-str oke direct-injection marine engines suggests that these engines have high variability in emissions, not only within the NTE zone but between different engine designs as well. Due to this variability, we do not believe that a flat (or stepped) limit in the NTE zone could be effectively used to establish meaningful standards for these engines. At the same time, we believe that NTE standards are valuable for facilitating in-use testing. Therefore, we developed a weighted NTE a pproach specifically for these engines. In the long term, we may consider further emission reduction based on catalytic control applied to OB/PWC engines. In this case, we would revisit the appropriateness of the weighted NTE approach in the context of those standards.
Under the weighted NTE approach, emissions data is collected at five test points. These test points are idle, full power, and the speeds specified in modes 2-4 of the 5-mode duty cycle. Similar to the 5-mode duty cycle, the five test points are weighted to achieve a composite value. This composite value must be no higher than 1.2 times the FEL for that engine.
The difference in this approach, from the 5-mode duty cycle, is that the test torque is not specified. During an in-use test, the engine would be set to the target speed and the torque value would be allowed to float. In addition, at wide open throttle, the engine speed would be based on

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### Feasibility of Exhaust Emission Control
actual performance on the boat. Because in-use engines installed in boats do not generally operate on the theoretical propeller curve used to define the 5-mode duty cycle, this NTE approach helps facilitate NTE testing.
At each test mode, limits are placed on allowable engine operation. These limits are generally based on the NTE zone presented above for 4-stroke engines, but there are two exceptions. First, the lower torque limit at 40 percent speed is lowered slightly to better ensure that an engine on an in-use boat is capable of operating within the NTE zone. Second, the speed range is extended at wide-open throttle for the same reason. Figure 4.7-13 presents this approach.

Figure 4.7-13: 2-Stroke Engine Weighted NTE Concept

0% 20% 40% 60% 80% 100% 120%

0% 20% 40% 60% 80% 100% 120% Normalized SpeedNormalized Torque 1.5 x Speed - 0.16

Speed^1.5 - 0.08 Torque MAP

40% Speed

Speed^1.5 (theoretical propeller curve) E4 Modes

Idle 2

4 3 80% Speed

60% Speed



### During laboratory testing, any point within each of the four non-idle subzones may be chosen as test points. These test points do not necessarily need to lie on a propeller curve. It should be noted that the actual power measured would be used in the calculation of the weighted brake-specific emissions.

4.7.2.3.3 Catalyst-Equipped Engines
SD/I engines are anticipated to make use of three-way catalysts to meet the new exhaust emission standards. These catalysts are most effective when the fuel-air ratio in the exhaust is near stoichiometry. Engine manufacturers use closed-loop control to monitor and maintain the proper fuel-air ratio in the exhaust for optimum catalyst efficiency. However, at high power, engine

4-695.7L NA

6.0L SC Base

6.0L SC Hi Perf 

### ? 

### Final Regulatory Impact Analysis
manufacturers must increase the fueling rate to reduce the temperature of the exhaust. Otherwise, if the exhaust temperature becomes too high, exhaust valves and catalysts may be damaged. During rich, open-loop operation at high power, the catalyst is oxygen-limited and less effective at oxidizing HC and CO. To address the issue of open-loop catalyst efficiency, we created a high power subzone in the NTE zone for catalyst-equipped engines.
The majority of SD/I engines are based on engine blocks produced by General Motors. To determine the appropriate threshold for the high power-subzone, we used temperature data supplied by General Motors. 89 

### This data was consistent with confidential data supplied by engine marinizers on engine control strategies for catal yst-equipped SD/I engines. Figure 4.7-14 presents the stoichiometric limits for engine protection, based on the General Motors study, for three different engine designs.

Figure 4.7-14: GM Study-Stoichiometri c Limits for Engine ProtectionNormalized Torque 100%

90%

80%

70% Engine Torque Curve

1

2 5.7L NA

6.0L SC Base

6.0L SC Hi Perf 

### ?

? ?

? ?

70% 80% 90% 100% 

### Normalized Speed

Figure 4.7-15 presents the NTE zone and high power subzone for catalyst-equipped marine engines. The shape of the high power subzone is based on the General Motors engine protection data. The emission limits are based on data discussed above on SD/I engines, with catalysts, operating in open-loop versus closed-loop engine control.
For catalyst-equipped engines, the largest contribution of emissions over the 5-mode duty cycle comes from open-loop operation at Mode 1. In addition, the idle point (Mode 5) is weighted

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### Feasibility of Exhaust Emission Control
40 percent in the 5-mode duty cycle, but not included in the NTE zone. For this reason, brake-specific emissions throughout most of the NTE zone are less than the weighted average from the steady-state testing. For most of the NTE zone, we are therefore requiring a limit equal to the duty-cycle standard (i.e., NTE multiplier = 1.0).
Emission data on catalyst-equipped engines al so show higher emissions near full-power operation. As discussed above, this is due to the need for richer fuel-air ratios under high-power operation to protect the engines from overheating. We are therefore establishing higher NTE limits for subzone 1 based on emissions performa nce during open-loop operation. Specifically, we are establishing an HC+NOx limit of 1.5 times the duty-cycle standard. Some HC+NOx control is expected in subzone 1 because a three-way catalyst will effectively reduce NOx emissions under rich conditions. However, for subzone 1, we are not setting a CO limit. Under rich conditions, a three-way catalyst is not at all effective for oxidi zing HC or CO emissions. In addition, the cycle weighted emission level for CO is primarily driven by Mode 1.

Figure 4.7-15: Catalyst-Equipped Engine NTE Zone and Subzones

0% 20% 40% 60% 80% 100% 120%

0% 20% 40% 60% 80% 100% 120% Normalized SpeedNormalized Torque

Subzone 2 1.5 x Speed - 0.16

Speed^1.5 - 0.08 Torque MAP

100% Speed

40% Speed

25.3% Torque 1.2 - 0.5 x Speed

Speed^1.5 (theoretical propeller curve) E4 Modes Subzone 1



### 4.7.2.4 Ambient Conditions
Ambient air conditions, including temperature and humidity, may have a significant effect on emissions from marine engines in-use. To ensure real world emissions control, the NTE zone testing should include a wide range of ambient air conditions representative of real world conditions. Because these engines are used in similar environments as marine diesel engines, we

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### Final Regulatory Impact Analysis
are applying the same ambient ranges to the Marine SI NTE requirements as already exist for marine diesel engine NTE requirements.
We believe that the appropriate ranges should be 13-30°C (55-86°F) for air temperature and 7.1-10.7 grams water per kilogram dry air ( 50-75 grains/pound of dry air) for air humidity. The air temperature ranges are based on temperatures seen during ozone exceedences, except that the upper end of the temperature range has been adjusted to account for the cooling effect of a body of water on the air above it. 90 

### We are also aware, however, that marine engines sometimes draw their intake air from an engine compartment or engine room such that intake air temperatures are substantially higher than ambient air temperatures. In this case, we would retain 35°C as the end of the NTE temperature range for engines that do not draw their intake air directly from the outdoor ambient.
For NTE testing in which the air temperature or humidity is outside the specified range, we require that the emissions must be corrected back to the specified air temperature or humidity range. These corrections would be consistent with the equations in 40 CFR Part 91, Subpart E except that these equations correct to 25°C and 10.7 grams per kilogram of dry air while the NTE corrections would be to the nearest outside edge of the specified ranges. For instance, if the outdoor air temperature were higher than 30°C for an engine that drew fresh outdoor air into the intake, a temperature correction factor could be applied to the emissions results to determine what emissions would be at 30°C.
Ambient water temperature also may affect emissions due to it’s impact on engine cooling. For this reason, we are requiring that the NTE testing include a range of ambient water temperatures from 5 to 27°C (41 to 80°F). The water temperature range is based on temperatures that marine engines experience in the U.S. in-use. At this time, we are not aware of an established correction for ambient water temperature, therefore the NTE zone testing would have to be withing the specified ambient water temperature range.



## 4.8 Impacts on Safety, Noise, and Energy

Section 213 of the Clean Air Act directs us to consider the potential impacts on safety, noise, and energy when establishing the feasibility of emission standards for nonroad engines. Furthermore, section 205 of Public Law 109-54 requires us to assess potential safety issues, including the risk of fire and burn to consumers in use, associated with the emission standards for nonroad spark-ignition engines under 50 horsepower. As further detailed in the following sections, we expect that the exhaust emission standards will either have no adverse affect on safety, noise, and energy or will improve certain aspects of these important characteristics.

4.8.1 Safety
We conducted a comprehensive, multi-year safety study of nonroad SI engines that focused on the following areas where we are finalizing new exhaust standards. 91 

### These areas are:
- New catalyst-based HC+NOx exhaust emission standards for Class I and II

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### Feasibility of Exhaust Emission Control
nonhandheld (NHH) engines; and
- New HC+NOx exhaust emission standards for outboard and personal watercraft (OB/PWC) engines and vessels, and a ne w CO exhaust emission standard for NHH engines used in marine auxiliary applications.
Each of these four areas is discussed in greater detail in the next sections.

4.8.1.1 Exhaust Emission Standards for Small Spark-Ignition Engines
The technology approaches that we assessed for achieving the Small SI engine standards included exhaust catalyst aftertreatment and improvements to engine and fuel system designs. In addition to our own testing and development effort, we also met with engine and equipment manufacturers to better understand their designs and technology and to determine the state of technological progress beyond EPA's Phase 2 standards.
The scope of our safety study included Class I and Class II engine systems that are used in residential walk-behind and ride-on lawn mower applications, respectively. Residential lawn mower equipment was chosen for the following reasons.
- Lawn mowers and the closely-related category of lawn tractors overwhelmingly represent the largest categories of equipment using Class I and Class II engines. We estimate that over 47 million walk-behind mowers and ride-on lawn and turf equipment are in-use in the US today. - These equipment types represent the majority of sales for Small SI engines. - Consumer Product Safety Commission (CPSC) data indicates that more thermal burn injuries associated with lawn mowers occur than with other NHH equipment; lawn mowers therefore represent the largest thermal burn risk for these classes of engines. - General findings regarding advanced emissi on control technologies for residential lawn and garden equipment carry over to commercial lawn and turf care equipment as well as to other NHH equipment using Class I and Class II engines. Lawn mower design and use characteristics pose unique safety implications not encountered by other NHH equipment using these engines (i.e. a mower deck collects debris during operation whereas a pressure washer collects no debris). Thus, other NHH equipment may employ similar advanced emission control technologies for meeting the standards without a corresponding concern regarding the safety issues analyzed in this study.
We conducted the technical study of the incremental risk on several fronts. First, working with the CPSC, we evaluated their reports and databases and other outside sources to identify those in-use situations which create fire and burn risk for consumers. The outside sources included meetings, workshops, and discussions with engine and equipment manufacturers. The following scenarios were identified for evaluation:
- Thermal burns due to inadvertent contact with hot surface on engine or equipment; - Fires from grass and leaf debris on the engine or equipment;

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### Final Regulatory Impact Analysis
- Fires due to fuel leaks on hot surfaces; - Fires related to spilled fuel or refueling vapor; - Equipment or structure fire when equipment is left unattended after being used; - Engine malfunction resulting in an ignitable mixture of unburned fuel and air in the muffler (engine misfire); and - Fire due to operation with richer than designed air-fuel ratio in the engine or catalyst.
These scenarios cover a comprehensive variety of in-use conditions or circumstances which potentially could lead to an increase in burns or fires. They may occur presently or not at all, but were included in our study because of the potential impact on safety if they were to occur. The focus of the analysis was, therefore, on the incremental impact on the likelihood and severity of the adverse condition in addition to the potential causes as it related to the use of more advanced emissions control technology.
Second, we conducted extensive laboratory and field testing of both current technology (Phase 2) and prototype catalyst-equipped advanced-technology engines and equipment (Phase 3) to assess the emission control performance and thermal characteristics of the engines and equipment. This testing included a comparison of exhaust system, engine, and equipment surface temperatures using thermal imaging equipment.
Third, we contracted with Southwest Research Institute (SwRI) to conduct design and process Failure Mode and Effects Analyses (FMEA). 92 

### The SwRI FMEA focused on comparing current Phase 2 and Phase 3 compliant engines and equipment to evaluate incremental changes in risk probability as a way of evaluating the incremental risk of upgrading Phase 2 engines to meet Phase 3 emission standards. This is an engineer ing analysis tool to help engineers and other professional staff on the FMEA team to identify and manage risk. In a FMEA, potential failure modes, causes of failure, and failure effects are identified and a resulting risk probability is calculated from these results. This risk probability is used by the FMEA team to rank problems for potential action to reduce or eliminate the cau sal factors. Identifying these causal factors is important because they are the elements that a manufacturer can consider reducing the adverse effects that might result from a particular failure mode.
Our technical work and subsequent analysis of all of the data and information strongly indicate that effective catalyst-based standards can be implemented without an incremental increase in the risk of fire or burn to the consumer either during or after using the equipment. Similarly, we did not find any increase in the risk of fire during storage near typical combustible materials. In many cases, the designs used for catalyst-based technology can lead to an incremental decrease in such risk.
More specifically, our work included taking temperature measurements and infrared thermal images of both OEM mufflers and protot ype catalyst/mufflers on six Class 1 engines and three Class 2 engines as part of the safety study. We integrated the emission reduction catalyst into the muffler. In doing so, we generally designed heat management features into the catalyst/muffler and cooling system. These heat management design elements, all of which were not used on every prototype, included: 1) positioning the catalyst within the cooling air flow of the

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### Feasibility of Exhaust Emission Control
engine fan or redirecting some cooling air over th e catalyst area with a steel shroud; 2) redirecting exhaust flow through multiple chambers or baffles within the catalyst/muffler; 3) larger catalyst/muffler volumes than the original equi pment muffler; and 4) minimizing CO oxidation at moderate to high load conditions to maintain exhaust system surface temperatures comparable to those of the OEM systems. The measurements and images were taken during various engine operating conditions and as the engines cooled down after being shut off.. This latter event, termed “hot soak,” is an important consideration since it is often when the operator is in close proximity to the engine either performing maintenance or refueling the equipment.
Figures 4.8-1 and 4.8-2 are an example of the measurements and images taken to compare Class 1 engine original equipment (OEM) mufflers to the same engines equipped with prototype catalyst/mufflers. The first figure depicts su rface temperatures from engine number 244 while operated on a laboratory dynamometer over three modes of EPA’s A-cycle steady-state test cycle. The second figure shows surface temperatures for the same engine at different times during hot soak. The prototype catalyst/muffler system shown in these figures uses one of the most effective heat management designs in the safety study. As shown, the catalyst system in this example has much lower surface temperatures during both engine operation and hot soak.
Similar information was collected in the laboratory for Class 2 engines used in lawn tractors. However, those tests were conducted on the “raw” engines without the chassis, which is an integral part of the overall engine cooling system for most residential Class 2 applications. Because of this, we believe it is more appropriate to compare the thermal measurements from field testing of the integrated unit.
The test results for engine 251 are fairly typical of the Class 2 lawn tractor test results. During engine operation, the OEM muffler confi guration had exposed surface temperatures of approximately 200 

### / C as viewed from both sides of the tractor when cutting moderate to heavy grass and peak temperatures as high as 300 to 365 

### / C. The lawn tractor equipped with engine 253, which is from the same engine family as number 251, was fitted with a prototype catalyst/muffler exhibited exposed surface temperatures of approximately 115 to 130 

### / C and peaks of 160 to 190



### / C. The lower temperatures for the prototype catalyst system is in part due to the more effective cooling of the catalyst/mufflers due to the re-routing of cooling air through the chassis and other heat management design elements.
The hot soak results for the above engines and two other related Class 2 lawn mowers are shown in Figure 4.8-3. The two-minute nominal re fueling point after engine shut-down following 30 minutes of grass-cutting operation is shown for reference. In these tests, both of the engines with prototype catalyst/mufflers had lower peak surface temperatures than the OEM muffler configurations.

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### Final Regulatory Impact Analysis

Figure 4.8-1: Surface Temperature Infrared Thermal Images of Exhaust System Components for Class 1 Engine 244 with a Catalyst/Muffler (left) and an OEM Muffler (right) at Various Operating Modes.

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### Feasibility of Exhaust Emission Control

Figure 4.8-2: Hot Soak Surface Temperature Infrared Thermal Images of Exhaust System Components for Class 1 Engine 244 After Sus tained Wide Open Throttle and 100 Percent Load.

4-77253 w/Catalyst 251 w/OEM Muffler 254 w/Catalyst 256 w/OEM Muffler 

### Final Regulatory Impact Analysis

Figure 4.8-3: Hot Soak Peak Surface Temperatures Infrared Thermal Images for Class 2 Lawn Tractors Following After Approximately 30-Minutes of Grass Cutting.

0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400Peak Surface Temperature (°C)2 - minutes

0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400Peak Surface Temperature (°C)

0

20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400Peak Surface Temperature (°C) 253 w/Catalyst 251 w/OEM Muffler 254 w/Catalyst 256 w/OEM Muffler2 - minutes

0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00

:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 Time (min.:sec.) Time (min.:sec.) e (min.:sec.)



### 4.8.1.2 Exhaust Emission Standards for Marine SI Engines
Our analysis of exhaust emission standards for Marine SI engines found that the U.S. Coast Guard has comprehensive safety standards that apply to engines and fuel systems used in these vessels. Additionally, organizations such as th e Society of Automotive Engineers, Underwriters Laboratories, and the American Boat and Yacht Council (ABYC) also have safety standards that apply in this area. We also found that the f our-stroke and two-stroke direct injection engine technologies likely to be used to meet the exhaust emission standards contemplated for Marine SI engines are in widespread use in the vessel fleet today. These more sophisticated engine technologies are replacing the traditional two-str oke carbureted engines. The four-stroke and two-stroke direct injection engines meet appli cable Coast Guard and ABYC safety standards and future products will do so as well. The emission standards must be complementary to existing safety standards and our analysis indicates that this will be the case. There are no known safety issues with the advanced technologies compared with two-stroke carbureted engines. Thenewer-technology engines arguably provide safety benefits due to improved engine reliability in4-78

### Feasibility of Exhaust Emission Control
use. Based on the applicability of Coast Guard and ABYC safety standards and the good in-use experience with advanced-technology engines in the current vessel fleet, we believe new emission standards would not create an incremental increase in the risk of fire or burn to the consumer.

4.8.2 Noise
As automotive technology demonstrates, achieving low emissions from spark-ignition engines can correspond with greatly reduced noise levels. Direct-injection two-stroke and fourstroke OB/PWC have been reported to be much quieter than traditional carbureted two-stroke engines. Catalysts in the exhaust act as mufflers which can reduce noise. Additionally, adding a properly designed catalyst to the existing muffler found on all Small SI engines can offer the opportunity to incrementally reduce noise.

4.8.3 Energy
Adopting new technologies for controlling fuel metering and air-fuel mixing, particularly the conversion of some carbureted engines to advanced fuel injection technologies, will lead to improvements in fuel consumption. This is especially true for OB/PWC engines where we expect the standards to result in the replacement of old-technology two stroke engines with more fuel efficient technologies such as two-stroke direct injection or four-stroke engines. Carbureted crankcase-scavenged two-stroke engines are inefficient in that 25 percent or more of the fuel entering the engine may leave the engine unburned. We estimate a fuel savings of about 61 million gallons of gasoline from marine engines in 2030, when most boats would be using engines complying with the standard.

The conversion of some carbureted Small SI e ngines to fuel injection technologies is also expected to improve fuel economy. We estimate approximately 7 percent of the Class II engines will be converted to fuel injection and that this will result in a fuel savings of about 10 percent for each converted engine. This translates to a fuel savings of about 22 million gallons of gasoline in 2030 when all of the Class II engines used in the U.S. will comply with the Phase 3 standards. By contrast, the use of catalyst-based control systems on Small SI engines is not expected to change their fuel consumption characteristics. These estimates are discussed in more detail in Chapter 6.

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### Final Regulatory Impact Analysis



## APPENDIX 4A: Normalized Modal Emissions for a 7.4 L MPI SD/I

Figure 4A-1: HC+NOx Ratios for 7.4L MPI Engine, Baseline

140%

0.4

0.5

0.6 0.4

0.6

0.7 0.4

0.8 0.9

1.0 1.0 0.9

1.0

1.0

1.0

1.1 0.8

0.8

0.9 0.7

0.7

0.6 0.6

0.5

0.8 NA

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% Normalized Speed 120%

100%

80%

60%

40%

20%

0%Normalized Torque



### Figure 4A-2: CO Ratios for 7.4L MPI Engine, Baseline

140%

1.1

1.1

1.3 0.9

0.8

0.7 0.9

0.4 0.5

0.5 0.5 0.3

0.3

0.3

0.4

0.4 0.4

0.5

0.4 0.4

0.5

0.6 0.6

0.8

1.5 NA

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% Normalized Speed 120%

100%

80%

60%

40%

20%

0%Normalized Torque

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### Feasibility of Exhaust Emission Control
Figure 4A-3: HC+NOx Ratios for 7.4L MPI Engine, Riser Catalysts

140%

120%

100%

80%

60%

40%

20%

0% 0.6

0.9

1.0 0.7

0.8

0.9 0.7

0.9 0.7
0.7 0.6 0.8

0.8

0.7

1.3

0.5 0.5

0.4

0.4 0.9

0.2

0.3 1.6

1.0

1.3
NA

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 

### Normalized SpeedNormalized Torque



### Figure 4A-4: CO Ratios for 7.4L MPI Engine, Riser Catalysts

140%Normalized Torque 120%

100%

80%

60%

40%

20%

0% 1.9

1.4

1.8 1.8

1.4

0.4 1.8

0.9 0.2
0.2 0.1 0.7

0.3

0.3

0.3

0.4 0.4

0.3

0.4 0.3

0.2

0.0 0.3

0.5

0.6
NA

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 

### Normalized Speed

4-81

### Final Regulatory Impact Analysis
Figure 4A-5: HC+NOx Ratios for 7.4L MPI Engine, Elbow CatalystsNormalized Torque 140%

120%

100%

80%

60%

40%

20%

0% 0.6 0.5

0.5 0.6

0.6 0.4

0.5

0.5 0.4 0.3
0.3
0.2 0.3

0.5

0.5

0.9 0.6

0.5

0.4 0.5

0.5

0.3 1.7

1.5

1.7 NA

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 

### Normalized Speed



### Figure 4A-6: CO Ratios for 7.4L MPI Engine, Elbow CatalystsNormalized Torque 140%

120%

100%

80%

60%

40%

20%

0% 1.8 1.7

1.2 1.6

0.7 0.5

0.6

0.5 0.4 0.2
0.1
0.1 0.3

0.3

0.4

0.5 0.4

0.4

0.4 0.3

0.3

0.1 0.4

0.4

0.8 NA

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 

### Normalized Speed

4-82

### Feasibility of Exhaust Emission Control
Figure 4A-7: HC+NOx Ratios for 7.4L MPI Engine, External CatalystsNormalized Torque 140%

120%

100%

80%

60%

40%

20%

0% 0.3

0.3

1.3 0.3

0.3

0.3 0.4

0.3 0.3

0.2
0.3 0.3

0.3

0.3

0.4

0.6 0.6

0.2

0.6 0.4

0.1

0.0 1.4

1.1

0.5 NA

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 

### Normalized Speed



### Figure 4A-8: CO Ratios for 7.4L MPI En gine, External Catalysts

140%

120%

100%

80%

60%

40%

20%

0% 0.5

0.5

0.6 0.3

0.4

0.4 0.3

0.2 0.1

0.1
0.2 0.4

0.3

0.3

0.5

0.7 0.8

0.4

0.7 0.4

0.2

0.0 0.9

1.5

0.1 NA

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 

### Normalized Speed

4-83Normalized Torque

### Final Regulatory Impact Analysis 

## Chapter 4 References 1. Internal Combustion Engine Fundamentals , Heywood, J., McGraw-Hill, Inc., New York, 1988, pp.829-836, Docket Identification EPA-HQ-OAR-2004-0008-0203.

2. Internal Combustion Engine Fundamentals , Heywood, J., McGraw-Hill, Inc., New York, 1988, pp.827-829, Docket Identification EPA-HQ-OAR-2004-0008-0203.

3. Conversation between Tim Fileman at Flagship Mari ne and Mike Samulski at U.S. EPA, February 10, 1999.

4. “Benefits and Cost of Potential Tier 2 Emission Reduction Technologies,” Energy and Environmental Analysis, Final Report, November 1997, Docket Identification EPA-HQ-OAR-2004-0008-0198.

5. “Study on Air Assist Fuel Injector Atomization and Effects on Exhaust Emission Reduction,” Saikalis, G., Byers, R., Nogi., T.,SAE Paper 930323, 1993, Dock et Identification EPA-HQ-OAR-2004-0008-0217.

6. “Three-Way Catalyst Technology for Off-Road Equipm ent Powered by Gasoline and LPG Engines,” Southwest Research Institute, prepared for CARB, CEPA, and SCAQMD, (SwRI 8778), April 1999, Docket Identification EPA-HQ-OAR-2004-0008-0224.

7. Internal Combustion Engine Fundamentals , Heywood, J., McGraw-Hill, Inc., New York, 1988, pp. 836-839, Docket Identification EPA-HQ-OAR-2004-0008-0203.

8. “Improving the NOx/Fuel Economy Trade-Off for Gasoline Engines with the CCVS Combustion System,” Stokes, J., Lake, T., Christie, M., Denbratt, I., SA E Paper 940482, 1994, Docket Identification EPA-HQ-OAR-2004- 0008-0498.

9. Wu, H., Yang, S., Wang, A., Kao, H., “Emission Control Technologies for 50 and 125 cc Motorcycles in Taiwan,” SAE Paper 980938, 1998, Docket Identification EPA-HQ-OAR-2004-0008-0502.

10. Borland, M., Zhao, F., “Application of Secondary Air Injection for Simultaneously Reducing Converter-In Emissions and Improving Catalyst Light-Off Performan ce,” SAE Paper 2002-01-2803, 2001, Docket Identification EPA-HQ-OAR-2004-0008-0497.

11. Koehlen, C., Holder, E., Guido, V., “Investigation of Post Oxidation and Its Dependency on Engine Combustion and Exhaust Manifold Design,” SAE Paper 2002-01-0744, 2002.

12. “Benefits and Cost of Potential Tier 2 Emission Reduction Technologies,” Energy and Environmental Analysis, Final Report, November 1997, Docket Identification EPA-HQ-OAR-2004-0008-0198.

13. “Reduction of Exhaust Gas Emissions by Using Pd-b ased Three-way Catalysts,” Lindner, D., Lox, E.S., Kreuzer, T., Ostgathe, K., van Yperen, R., SAE Pa per 960802, 1996, Docket Identification EPA-HQ-OAR-2004- 0008-0500.

14. “Overview of Recent Emission Control Technology Developments,” Manufacturers of Emission Controls Association, November 18, 1997, Dock et Identification EPA-HQ-OAR-2004-0008-0206.

15. “Application of Accelerated Rapid Aging Test (RAT ) Schedules with Poisons: The Effects of Oil Derived Poisons, Thermal Degradation and Catalyst Volume on FT P Emissions,” Ball, D., Mohammed, A., Schmidt, W., SAE Paper 972846, 1997, Docket Identification EPA-HQ-OAR-2004-0008-0501.

4-84

### Feasibility of Exhaust Emission Control

16. “Update Heavy-Duty Engine Emission Conversion Factors for MOBILE6; Analysis of Fuel Economy, NonEngine Fuel Economy Improvements, and Fuel Densities,” prepared by Arcadis for U.S. EPA, EPA420-R-006, January 2002, Docket Identification EPA-HQ-OAR-2004-0008-0251.

17. “Overview of Recent Emission Control Technology Developments,” Manufacturers of Emission Controls Association, November 18, 1997, Dock et Identification EPA-HQ-OAR-2004-0008-0206.

18. “Catalytic Converter Applications for Two Stroke, Spark-Ignited Marine Engines,” Fujimoto, H., Isogawa, A., Matsumoto, N., SAE Paper 951814, 1995, Docket Identification EPA-HQ-OAR-2004-0008-0220.

19. “Catalytic Converter Applications for Two Stroke, Spark-Ignited Marine Engines,” Fujimoto, H., Isogawa, A., Matsumoto, N., SAE Paper 941786, 1994, Docket Identification EPA-HQ-OAR-2004-0008-0218.

20. “Public Meeting to Consider a Status Report on Catalyst Testing of Spark-Ignition Inboard/Sterndrive Pleasurecraft: Staff Report,” State of California; Air Res ources Board, October 28, 2004, Docket Identification EPAHQ-OAR-2004-0008-0236.

21. “Regulatory Impact Analysis—Control of Air Po llution from New Motor Vehicles: Tier 2 Motor Vehicle Emissions Standards and Gasoline Sulfur Control Re quirements,” U.S. EPA, December 1999, EPA420-R-99-023, http://www.epa.gov/otaq/regs/ld-hwy/tier-2/frm/ria/r99023.pdf

22. “Demonstration of Tier 2 Emission Levels for Hea vy Light-Duty Trucks,” J. McDonald and L. Jones, SAE 2000-01-1957, Docket Identification EPA-HQ-OAR-2004-0008-0496.

23. “SULEV and ‘Off-Cycle’ Emissions Benefits of a Vac uum-Insulated Catalytic Converter,” Burch, S.D., and J.P. Biel, SAE 1999-01-0461, Docket Identification EPA-HQ-OAR-2004-0008-0495.

24. “Development of an Alternator-Powered Electri cally-Heated Catalyst System,” Laing, P.M., SAE 941042, Docket Identification EPA-HQ-OAR-2004-0008-0494.

25. “EPA Technical Study on the Safety of Emissi on Controls for Nonroad Spark-Ignition Engines < 50 Horsepower”, U.S. Environmental Protection Agency, EPA420-R-06-006, March 2006, Docket Identification EPAHQ-OAR-2004-0008-0329.

26. “Nonroad SI Manufacturer Discussion,” Slide 26-700cc Class II/Phase 2 Horizontal V-Twin. U.S. Environmental Protection Agency, November 22, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0087.

27. “EPA Technical Study on the Safety of Emissi on Controls for Nonroad Spark-Ignition Engines < 50 Horsepower”, U.S. Environmental Protection Agency, EPA420-R-06-006, March 2006, Docket Identification EPAHQ-OAR-2004-0008-0329.

28. “Test Results for Small Spark-Ignition Engine Nu mber 258,” Memorandum and Excel spreadsheet from Richard Wilcox, Office of Transportation and Air Quality, U.S. Environmental Protection Agency, January 23, 2007, Docket Identification EPA-HQ-OAR-2004-0008-0530.

29. Letter from David Raney, American Honda Motor Co., In c., to Margo T. Oge, U. S. Environmental Protection Agency, September 1, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0304.

30. Letter from Kent B. Herrick, Tecumseh Products Compa ny, to Margo T. Oge, U. S. Environmental Protection Agency, September 7, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0306.

31. Letter from Jeffrey Cl Shetler, Kawasaki Motors Corp , U.S.A., to Margo T. Oge, U. S. Environmental Protection Agency, September 7, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0305.

4-85

### Final Regulatory Impact Analysis

32. Letter from James P. Doyle, Kohler Co., to Margo T. Oge, U. S. Environmental Protection Agency, September 7, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0303.

33. “Reducing Emissions From Gasoline Platforms at Less Then 20 kW,” Slide 9, B. Walker and A. Gopalkrishna, Delphi Automotive, Asian Vehicle Emission Control C onference, Jaipur, Japan, September 22, 2006. EPA-HQOAR-2004-0008-0535.

34. “EPA Technical Study on the Safety of Emissi on Controls for Nonroad Spark-Ignition Engines < 50 Horsepower”, Appendix C - FMEA of Small SI Equipment and Engines, U.S. Environmental Protection Agency, EPA420-R-06-006, March 2006, Docket Identification EPA-HQ-OAR-2004-0008-0329.

35. Letter from David Raney, American Honda Motor Co., In c., to Margo T. Oge, U. S. Environmental Protection Agency, September 1, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0304.

36. Letter from Kent B. Herrick, Tecumseh Products Compa ny, to Margo T. Oge, U. S. Environmental Protection Agency, September 7, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0306.

37. Letter from Jeffrey Cl Shetler, Kawasaki Motors Corp , U.S.A., to Margo T. Oge, U. S. Environmental Protection Agency, September 7, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0305.

38. Letter from James P. Doyle, Kohler Co., to Margo T. Oge, U. S. Environmental Protection Agency, September 7, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0303.

39. “Reducing Emissions From Gasoline Platforms at Less Then 20 kW,” Slide 9, B. Walker and A. Gopalkrishna, Delphi Automotive, Asian Vehicle Emission Control C onference, Jaipur, Japan, September 22, 2006. EPA-HQOAR-2004-0008-0535.

40. “EPA Technical Study on the Safety of Emissi on Controls for Nonroad Spark-Ignition Engines < 50 Horsepower”, Appendix C - FMEA of Small SI Equipment and Engines, U.S. Environmental Protection Agency, EPA420-R-06-006, March 2006, Docket Identification EPA-HQ-OAR-2004-0008-0329.

41. “Nonroad SI Manufacturer Discussion,” Slide 26-700cc Class II/Phase 2 Horizontal V-Twin. U.S. Environmental Protection Agency, November 22, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0087.

42. “EPA Technical Study on the Safety of Emissi on Controls for Nonroad Spark-Ignition Engines < 50 Horsepower,” U.S. Environmental Protection Agency, EPA420-R-06-006, March 2006, Docket Identification EPAHQ-OAR-2004-0008-0329.

43. “Research on the New Control Method Using Cranksha ft Rotational Changes for Electronically Controlled FI System of Small Motorcycle Single Cylinder Engine,” To ichiro Hikichi, Tetsuya Kaneko, and Toshimitsu Nakajima, Honda R&D Co., Ldt., SAE Paper 2006-32-0108, Small Engine Technology Conference and Exhibition, San Antonio, Texas, November 13-16, 2006, Docket Identification EPA-HQ-OAR-2004-0008.

44. “Fuel Injection System for Small Motorcycles, ” Michihisa Nakamure, Yuuichirou Sawada, and Shigeki Hashimoto, Yamaha Motor Co., Ltd., SAE Paper 2003- 32-0084, September 2003,Docket Identification EPA-HQOAR-2004-0008.

45. “Honda Releases the iGX440 Next-Generation Gene ral Purpose Engine with Electronic Control Technology–a World’s First,” Honda Motor Co., Ldt., Press Release, April 20, 2005, Docket Identification EPA-HQ-OAR-2004- 0008.

46. “Honda’s iGX Intelligent Engine,” Honda Moto r Co., Ldt., Product Information, April 2007, Docket Identification EPA-HQ-OAR-2004-0008.

4-86

### Feasibility of Exhaust Emission Control

47. “Evinrude E-TEC Presentation; Ann Arbor Michigan,” presented to U.S. EPA by Fernando Garcia of BRP on September 30, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0246.

48. “Exhaust Emissions from Marine Engines Using Altern ate Fuels,” Michigan Automotive Research Corporation, Prepared for NMMA, October 8, 1992, Do cket Identification EPA-HQ-OAR-2004-0008-0205.

49. “Effects of Transience on Emissions from Inboard Marine Engines,” EPA memo by Mike Samulski, May 30, 1996, Docket Identification EPA-HQ-OAR-2004-0008-0209.

50. Letter from Jeff Carmody, Santa Barbara Air Quality ma nagement District, to Mike Samulski, U.S. EPA, July 21, 1997, Docket Identification EPA-HQ-OAR-2004-0008-0193.

51. “National Marine Manufacturers Association’s Small Business Boat Builder and Engine Manufacturers Comments in Response to EPA’s Initial Regulatory Flex ibility Analysis Regarding EPA’s Plans to Propose Emission Regulations for Recreational Marine Gas and Diesel Powered Sterndrive/Inboard Engines,” July 12, 1999, Docket Identification EPA-HQ-OAR-2004-0008-0213.

52. “Emissions from Marine Engines with Water Contact in the Exhaust System,” Mace, et. al., SAE Paper 980681, 1998, Docket Identification EPA-HQ-OAR-2004-0008-0219.

53. “Marine Gasoline Engine Testing,” Carroll, J., White, J., Southwest Research Institute, Prepared for U.S. EPA, September, 2001, Docket A-2000-01, Dock et Identification EPA-HQ-OAR-2004-0008-0253.

54. “Marine Gasoline Engine and Boat Testing,” Carroll, J., Southwest Research Institute, Prepared for U.S. EPA, September, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0254.

55. “Exhaust Emission Testing of Two High-Performance SD/I Marine Engines,” EPA Memo from Mike Samulski and Matt Spears, June 23, 2005, Dock et Identification EPA-HQ-OAR-2004-0008-0349.

56. Email from Mark Reichers, Mercury Marine, to Mike Samulski, US EPA, “1075 / 850 Test Data,” June 9, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0295.

57. Email from Mark Reichers, Mercury Marine, to Mike Samulski, US EPA, “525 EFI Baseline Emissions Data,” June 10, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0296.

58. Ray, P., Brown, R., “ Ilmor Comments on the Notice of Proposed Rulemaking for Control of Emissions from Nonroad Spark-Ignited Engines and Equipment 72 Fed. Reg. 28,908 (May 18,2007),” August 3, 2007.

59. “EGR Test Data from a Heavy-Duty Gasoline Engi ne on the E4 Duty Cycle,” EPA Memo from Joe McDonald and Mike Samulski, July 12, 1999, Do cket Identification EPA-HQ-OAR-2004-0008-0199.

60. “Marine Gasoline Engine Testing,” Carroll, J., White, J., Southwest Research Institute, Prepared for U.S. EPA, September, 2001, Docket Identification EPA-HQ-OAR-2004-0008-0253.

61. “Marine Gasoline Engine and Boat Testing,” Carroll, J., Southwest Research Institute, Prepared for U.S. EPA, September, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0254.

62. “Marine Gasoline Engine Testing,” Carroll, J., White, J., Southwest Research Institute, Prepared for U.S. EPA, September, 2001, Docket Identification EPA-HQ-OAR-2004-0008-0253.

63. “Summary of SwRI Project for CARB entitled, ‘D evelopment of Low Emissions SD/I Boats,” White, J., Southwest Research Institute, August 14, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0263.

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### Final Regulatory Impact Analysis

64. “Development of Low Emissions; SD/I Boats; Project Update,” Carrol, J., Southwest Research Institute, September 11, 2003, Docket Identification EPA-HQ-OAR-2004-0008-0264.

65. “Public Meeting to Consider a Status Report on Catalyst Testing of Spark-Ignition Inboard/Sterndrive Pleasurecraft: Staff Report,” State of California; Air Res ources Board, October 28, 2004, Docket Identification EPAHQ-OAR-2004-0008-0236.

66. “Marine Gasoline Engine and Boat Testing,” Carroll, J., Southwest Research Institute, Prepared for U.S. EPA, September, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0254.

67. E-mail from Rich Waggoner, Indmar, to Mike Samuls ki, U.S. EPA, “SBREFA notes from Indmar,” July 24, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0438.

68. http://www.arb.ca.gov/msprog/offroad/cert/cer t_results.php?order=0, February 14, 2008.

69. Garcia, A., Beamer, B., Earnest, G., “In Depth Su rvey Report of Carbon Monoxide Emissions and Exposures on Express Cruisers Under Various Operating Conditions,” National Institute for Occupa tional Safety and Health, Report No. EPHB 289-11a, January 2006, Do cket Identification EPA-HQ-OAR-2004-0008-0396.

70. Garcia, A., Beamer, B., Earnest, G., “In Depth Su rvey Report of Carbon Monoxide Emissions and Exposures on Express Cruisers Under Various Operating Conditions,” National Institute for Occupa tional Safety and Health, Report No. EPHB 289-11a, January 2006, Do cket Identification EPA-HQ-OAR-2004-0008-0396.

71. “Summary of Government/Industry Carbon Monoxide Workshop and Two Follow-Up Meetings,” Memo from Mike Samulski, U.S. EPA to Docket OAR-2004-0008, March 31, 2004, Docket Identification EPA-HQ-OAR-2004- 0008-0008.

72. “Carbon Monoxide Follow-up Meeting; Miami FL – IB EX Show; Minutes,” American Boat and Yacht Council, October 19, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0286.

73. “News Release: Floating Environmental Laborator y Demonstrates Westerbeke’s Safe-COTM Ultra-Low CO Emissions,” Westerbeke Engines & Generators, Sept ember 26, 2005, Docket Identification EPA-HQ-OAR-2004- 0008-0298.

74. “Create the Right Atmosphere; Kohler Marine Gene rators Helping Make Boating Safer,” Presented by Kohler Power Systems at the 2005 International Boatbuilders’ Exhibition and Conference, October 20, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0292.

75. Zimmer, A., Earnest, G., Kurimo, R., “An Evaluati on of Catalytic Emission Controls and Vertical Exhaust Stacks to Prevent Carbon Monoxide Poisonings from Hous eboat Generator Exhaust, ” National Institute for Occupational Safety and Health, EPHB 171-36a, Sept ember 2005, Docket Identification EPA-HQ-OAR-2004-0008- 0397.

76. “Duty Cycle for Recreational Marine Engines,” Morgan, E., Lincoln, R., SAE Paper 901596, 1990, Docket Identification EPA-HQ-OAR-2004-0008-0216.

77. “Reciprocating Internal Combustion Engines – Exha ust Emission Measurement – Part 4: Test Cycles for Different Engine Applications,” ISO/DIS 8178-4, Interna tional Standards Organization, Docket Identification EPAHQ-OAR-2004-0008-0503.

78. Ray, P., Brown, R., “ Ilmor Comments on the Notice of Proposed Rulemaking for Control of Emissions from Nonroad Spark-Ignited Engines and Equipment 72 Fed. Reg. 28,908 (May 18,2007),” August 3, 2007.

4-88

### Feasibility of Exhaust Emission Control

79. Morgan, E., Lincoln, R., “Duty Cycle for Recr eational Marine Engines,” SAE Paper 901596, 1990, Docket Identification EPA-HQ-OAR-2004-0008-0216.

80. Carroll, J., “Determination of Operating Ranges of Ma rine Engines,” prepared by Southwest Research Institute for the National Marine Manufacturers Association, August 2004, Docket Identification EPA-HQ-OAR-2004-0008- 0255.

81. Samulski, M., “Exhaust Emission Testing of a Two- Stroke and a Four-Stroke Marine Engine; Results and Procedures,” U.S. EPA, Memo to Docket #A -92-98, Docket Identification EPA-HQ-OAR-2004-0008-0097.

82. Wasil, J., Montgomery, D., Strauss, S., Bagley, S ., “Life Assessment of PM, Gaseous Emissions, and Oil Usage in Modern Marine Outboard Engines,” SAE-GRAZ 43, Society of Automotive Engineers International, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0262.

83. Klak, Joe, “Marine NTE Zones,” Bombardier Recr eational Products, October 26, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0508.

84. “Marine Gasoline Engine Testing,” Carroll, J., White, J., Southwest Research Institute, Prepared for U.S. EPA, September, 2001, Docket Identification EPA-HQ-OAR-2004-0008-0253.

85. “Marine Gasoline Engine and Boat Testing,” Carroll, J., Southwest Research Institute, Prepared for U.S. EPA, September, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0254.

86. “Summary of SwRI Project for CARB entitled, ‘D evelopment of Low Emissions SD/I Boats,” White, J., Southwest Research Institute, August 14, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0263.

87. “Development of Low Emissions; SD/I Boats; Project Update,” Carrol, J., Southwest Research Institute, September 11, 2003, Docket Identification EPA-HQ-OAR-2004-0008-0264.

88. “Marine Gasoline Engine Testing,” Carroll, J., White, J., Southwest Research Institute, Prepared for U.S. EPA, September, 2001, Docket Identification EPA-HQ-OAR-2004-0008-0253.

89. Mantey, C., “GMPT Study – Stoich Limits for Engi ne Protection,” Presented by General Motors to EPA on November 19, 2007.

90. Memorandum from Mark Wolcott to Charles Gray, “Ambient Temperatures Associated with High Ozone Concentrations,” U.S. EPA, September 6, 1984, Docket Identification EPA-HQ-OAR-2004-0008-0235.

91. “EPA Technical Study on the Safety of Emissi on Controls for Nonroad Spark-Ignition Engines < 50 Horsepower,” U.S. Environmental Protection Agency, EPA420-R-06-006, March 2006, Docket Identification EPAHQ-OAR-2004-0008-0329.

92. “EPA Technical Study on the Safety of Emissi on Controls for Nonroad Spark-Ignition Engines < 50 Horsepower,” U.S. Environmental Protection Agency, EPA420-R-06-006, March 2006, Docket Identification EPAHQ-OAR-2004-0008-0329.

4-89

### Feasibility of Evaporative Emission Control


# CHAPTER 5: Feasibility of Evaporative Emission Control

Section 213(a)(3) of the Clean Air Act presents statutory criteria that EPA must evaluate in determining standards for nonroad engines and vehicles including marine vessels. The standards must "achieve the greatest degree of emission reduction achievable through the application of technology which the Administrator determines will be available for the engines or vehicles to which such standards apply, giving appropriate consideration to the cost of applying such technology within the period of time available to manufacturers and to noise, energy, and safety factors associated with the application of such technology." This chapter presents the technical analyses and information that form the basis of EPA's belief that the new evaporative emission standards are technically achievable accounting for all the above factors.
The evaporative emission standards for Small SI equipment and Marine SI vessels are summarized in the Executive Summary. This chapter presents available emissions data on baseline emissions and on emission reductions achieved through the application of emission control technology. In addition, this chapter provides a description of the test procedures for evaporative emission determination.
Evaporative emissions from equipment and vessels using spark-ignition (SI) engines can be very high. This is largely because Small SI and Marine SI applications generally have fuel tanks that are vented to the atmosphere and because materials used in the construction of the plastic fuel tanks and hoses generally have high permeation rates. Evaporative emissions can be grouped into five categories:
DIURNAL: Gasoline evaporation increases as the temperature rises during the day, heating the fuel tank and venting gasoline vapors. We also include, under this heading, diffusion losses which are vapors that will escape from an open vent even without a change in temperature.
PERMEATION: Gasoline molecules can saturate plastic fuel tanks and rubber hoses, resulting in a relatively constant rate of emissions as the fuel continues to permeate through these components.
RUNNING LOSSES: The hot engine and exhaust system can vaporize gasoline when the engine is running.
HOT SOAK: The engine remains hot for a period of time after the engine is turned off and gasoline evaporation continues.
REFUELING: Gasoline vapors are always presen t in typical fuel tanks. These vapors are forced out when the tank is filled with liquid fuel.

5-1

### Final Regulatory Impact Analysis



## 5.1 Diurnal Emissions

In an open fuel tank, the vapor space is at atmospheric pressure (typically about 14.7 psi), and contains a mixture of fuel vapor and air. At all temperatures below the fuel's boiling point, the vapor pressure of the fuel is less than atmospheric pressure. This is also called the partial pressure of the fuel vapor. The partial pressure of the air is equal to the difference between atmospheric pressure and the fuel vapor pressure. For example, in an open-vented fuel tank at 60 

### / F, the vapor pressure of typical gasoline is about 4.5 psi. In this example, the partial pressure of the air is about 10.2 psi. Assuming that the vapor mixture behaves as an ideal gas, then the mole fractions (or volumetric fractions) of fuel vapor and air is equal to their respective partial pressures divided by the total pressure; thus, the fuel would be 31 percent of the mixture (4.5/14.7) and the air would be 69 percent of the mixture (10.2/14.7).
Diurnal emissions occur when the fuel temperature increases, which increases the equilibrium vapor pressure of the fuel. For example, assume that the fuel in the previous example was heated to 90 

### / F, where the vapor pressure that same typical fuel is about 8.0 psi. To maintain the vapor space at atmospheric pressure, the partial pressure of the air would need to decrease to 6.7 psi, which means that the vapor mixture must expand in volume. This forces some of the fuel-air mixture to be vented out of the tank. When the fuel later cools, the vapor pressure of the fuel decreases, contracting the mi xture, and drawing fresh air in through the vent. When the fuel is heated again, another cycle of diurnal emissions occurs. It is important to note that this is generally not a rate-limited process. Although the evaporation of the fuel can be slow, it is generally fast enough to maintain the fuel tank in an essentially equilibrium state.
As fuel is used by the engine, and the liquid fuel volume decreases, air is drawn into the tank to replace the volume of the fuel. (Note: the decrease in liquid fuel could be offset to some degree by increasing fuel vapor pressure caused by increasing fuel temperature.) This would continue while the engine was running. If th e engine was shut off and the tank was left overnight, the vapor pressure of the fuel would drop as the temperature of the fuel dropped. This would cause a small negative pressure within the tank that would cause it to fill with more air until the pressure equilibrated. The next day, the vapor pressure of the fuel would increase as the temperature of the fuel increased. This would cause a small positive pressure within the tank that would force a mixture of fuel vapor and ai r out. In poorly designed gasoline systems, where the engine or exhaust is very close to the fuel tank the engine/exhaust heating may cause large amounts of gasoline vapor to be vented directly to the atmosphere.
Several emission-control technologies can be used to reduce diurnal evaporative emissions. Many of these technologies also control running loss and hot soak emissions and some could be used to control refueling emissions. We believe manufacturers will have the opportunity use a wide variety of technology approaches to meet the evaporative emission standards. The advantages and disadvantages of the various possible emission-control strategies are discussed below. This section summarizes the data and rationale supporting the diurnal emission standard for Marine SI vessels and Small SI equipment presented in the Executive Summary.

5-2

### Feasibility of Evaporative Emission Control

5.1.1 Baseline Emissions

5.1.1.1 Marine Vessels
We tested two aluminum marine fuel tanks in their baseline configurations for diurnal emissions. Aluminum fuel tanks were used so that permeation emissions would not occur during the testing. The 17 gallon aluminum tank was constructed for this testing, but is representative of a typical marine fuel tank; the 30 gall on aluminum tank was removed from an 18 foot runabout. The fuel tanks were tested with the venting through a length of 5 

### / 8 

### inch hose to ensure that the emissions measured were a direct result of the fuel temperature heating and not diffusion through the vent (see Section 5.1.3). The advantage of using the aluminum fuel tanks for this testing was to exclude permeation emissions from the measured results. All of the testing was performed with fuel tanks filled to 40 percent of capacity with 9RVP 1 

### test fuel.
The diurnal test results are presented in units of grams per gallon capacity of the fuel tank per day. These units are used because gallons capacity is a defining characteristic of the fuel tank. Diurnal vapor formation itself is actually a function of the vapor space above the fuel in the fuel tank rather than the total capacity.
Table 5.1-1 presents the test results compared to anticipated results. The anticipated results are based on the Wade model which is a set of theoretical calculations for determining diurnal emissions based of fill level, fuel RVP, and temperature profile. These calculations are presented in Chapter 3. Although the Wade model over-predicts the vapor generation, it does show a similar trend with respect to temperature. To account for this over prediction, we use a correction factor of 0.78. This correction factor is based on empirical data 1 

### , has historically been used in our automotive emission models, and appears to be consistent with the data presented below.

1 Reid Vapor Pressure (psi). This is a measure of the volatility of the fuel. 9 RVP represents a typical summertime fuel in northern states.

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### Final Regulatory Impact Analysis
Table 5.1-1: Baseline Diurnal Evaporativ e Emission Results (varied temperature)

Temperatures Capacity [gallons] Measured [g/gallon/day] Wade Model [g/gallon/day] Corrected Wade [g/gallon/day] 22 - 36°C (72 - 96°F) 17 1.40 2.30 1.79 22 - 36°C (72 - 96°F) 30 1.50 2.30 1.79 24 - 33°C (74 - 91°F) 30 1.13 1.33 1.04 22 - 30°C (71 - 86°F) 30 0.88 1.02 0.80 25 - 31°C (77 - 88°F) 30 0.66 0.88 0.69 26 - 32°C (78 - 90°F) 30 0.85 1.04 0.81 28 - 31°C (82 - 87°F) 30 0.47 0.43 0.34

5.1.1.2 Small SI Equipment
We contracted with an outside lab for the testing of thirteen Small SI fuel tanks over various test temperature profiles. 2,3 

### This testing was performed with the tanks filled to 50 percent capacity with certification gasoline and is discussed in more detail below in the Section 5.2.1. This data is presented in Table 5.1-2. In addition, in cases where the fuel temperature profiles were within the input range of the Wade model for diurnal emissions, theoretical emissions were also calculated using the same correction factor discussed above for marine fuel tanks. As shown below, the measured values are fairly consistent with the theoretical values.

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### Feasibility of Evaporative Emission Control
Table 5.1-2: Fuel Temperature Measurements During Operation of Small SI Equipment Equipment Type Fuel Capacity [gallons] Temperature Profile °C Measured HC grams/gallon Theoretical HC grams/gallon Riding mower 1.1 1.4 x 2

1.7 2.5 3.0 6.5 6.5 x 2 15.7 - 28.4 21.9 - 29.7 19.5 - 30.3 27.0 - 35.0 26.6 - 28.4 24.3 - 33.2 20.5 - 23.9 0.92 0.88 0.82 1.29 0.25 1.20 0.26 0.91 0.71 0.94 1.16 0.17 1.08 0.23
Walk-behind

mower 0.34 0.25 0.22 23.3 - 33.0 28.7 - 46.7 28.7 - 59.7 0.76 4.92 36.9 1.18 NA* NA*

Generator set 8.5 7.0 20.6 - 25.8 25.8 - 50.0 0.45 9.90 0.38 NA*

Pressure washer 1.8 19.0 - 50.6 11.6 NA* * outside the temperature range of the model



### The California Air Resources Board performed diurnal testing on seven pieces of handheld equipment and 20 pieces of non-handheld equipment by placing the whole equipment in a SHED. 4 

### They filled the fuel tanks to 50 percent with 7 RVP fuel and tested over their 65- 105° F summer day test cycle. Because the entire piece of equipment was included in these tests, not only were diurnal venting emissions measured, but tank and hose permeation as well (plus any potential leaks). Average test results by equipment type are presented in Table 5.1-3.
Table 5.1-3: ARB Measurement of Evaporat ive Emissions from Small SI Equipment (7 RVP California Certification Fuel, 50% Fill, 65-105°F) Equipment Type Number of Data Points Average Measured HC [grams/day] Handheld equipment 7 1.04
Walk-behind lawnmowers 12 3.51

Generators 2 11.2 Riding Mowers 3 8.70 Edgers 2 1.53
Tiller 1 4.12

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### Final Regulatory Impact Analysis
ARB also performed tests on a subset of th e equipment using fuel containing MTBE and fuel containing ethanol to investigate fuel effect s. They observed nearly a 50 percent increase in emissions when an ethanol blend was used compared to an MTBE blend. The reason for this increase was not discussed, but may have due to increases in permeation caused by the ethanol or due to differences in fuel volatility. On fi ve pieces of equipment, a California wintertime cycle (51.6-69.5° F) was used as well. As would be expected, the emissions were reduced significantly. The theoretical models predict about an 85 percent reduction in diurnal venting emissions and about a 60 percent reduction in permeation. The observed results were about a 70 percent reduction which is in this range.

5.1.2 Insulation of the Fuel Tank
The diurnal vapor generated in a fuel tank is directly related to the diurnal temperature profile of the fuel in the tank. A reduction in temperature variation causes less vapor to be formed. To investigate this effect, we used insulation around the fuel tank to reduce the effect of the ambient air temperature variation on the fuel temperature variation. In our preliminary testing, we insulated a 23 gallon rotationally molded marine fuel tank using 3 inch thick construction foam with an R-value of 15 as defined by 16 CFR 460.5. This testing was performed with the fuel tank vent open to atmosphere. Table 5.1-4 presents the fuel temperatures and evaporative emissions over the three day test.
We tested this fuel tank over a three day diurnal test with an ambient temperature of 72- 96°F. This experiment resulted in a 50 percent reduction in emissions from baseline on the highest of these three test days. The baseline emissions were measured to be 2.5 g/gallon/day; however, it should be noted that for both the baseline test and the insulated tank tests we did not control for permeation or diffusion. Over this test, the emissions decreased for subsequent days. We believe this was due to the fuel temperature cycle stabilizing. Although we did not control for permeation or diffusion, the results from this preliminary experiment directionally show the effect of insulation on diurnal emissions.
Table 5.1-4: Evaporative Emission Re sults for Insulated Flat, Plastic Tank Test Day SHED Temperature Fuel Temperature Evaporative HC Day #1 22-36°C (72-96°F) 22-28°C (72-82°F) 1.2 g/gal/day Day #2 22-36°C (72-96°F) 26-30°C (78-86°F) 1.0 g/gal/day Day #3 22-36°C (72-96°F) 26-30°C (80-86°F) 0.8 g/gal/day

In boats with installed fuel tanks, the fuel tank is generally hidden beneath the deck. As a result, there is a certain amount of “inherent” insulation caused by the boat itself. This effect is increased for a boat that is stored in the water. The water acts as a cooling medium for the fuel tank, especially if it is installed in the bottom of the boat. In addition, the thermal inertia of the fuel in the tank can act to dampen temperature variation imposed from the diurnal heating of the

5-6

### Feasibility of Evaporative Emission Control
ambient air. To investigate this effect, we tested several boats by recording the ambient air temperature and fuel temperatures over a series of days. Two boats were tested on trailers outside in the summer, two boats were tested on trailers in a SHED, and two boats were tested in the water on summer days. Table 5.1-5 presents the average results of this testing. The temperature traces are presented in Appendix 5A.
Table 5.1-5: Ratio of Fuel to Ambient Temperature Swing for Boats Boat Type Test Conditions Capacity [gallons] Fuel Tank Fill Level Temperature Ratio* 9 ft. personal watercraft outside, on trailer 13 50% 66% 16 ft. jet boat outside, on trailer 40 50% 52%
18 ft. runabout in SHED, on trailer 30 40% 68% 16 ft. jet boat in SHED, on trailer 40 90% 33%
18 ft. runabout outside, in water 30 100% 19%
21 ft. deck boat outside, in water 20 90% 27% * Average ratio of change in fuel temper ature to change in ambient air temperature over test days.



### In their comments on the 2002 proposed rule, the National Marine Manufacturers Association presented temperature data on 18 f oot runabout, with a 32 gallon tank, tested in a SHED with an ambient temperature of 72-96°F. 5 

### The average fuel to ambient temperature ratio was 54 percent for this testing. This ratio is in the range of EPA test results for boats tested on a trailer. Brunswick also included temperature data in their comments. 6 

### The average days test on a boat on the water was 19 percent, which is consistent with our water tests. Brunswick’s average for boats tested while stored out of the water was 27 percent which is considerably lower than the EPA and NMMA testing. Combining all of the EPA and industry data, the average fuel to ambient temperature ratio (based on test days) is about 20 percent for boats in the water and 50 percent for boats stored out of the water.
During diurnal testing of lawnmowers, ARB found that the fuel and tank skin temperature follow the ambient temperature closely. 7 

### This same phenomenon would be expected for other Small SI equipment as well (and portable fuel tanks) because of the small fuel volumes and because these tanks are generally exposed to ambient air. One issue that we considered was that Small SI equipment is often stored in garages or sheds. In that case, we were interested in if the garage or shed acts to insulate the fuel tanks from ambient temperature swings. ARB collected data on four garages and one shed. This data included summer and winter California temperature measurements. For each test, the inside and outside temperature were measured for five days. This data is presented in Table 5.1-7. For the garages, the inside temperature was generally warmer than outside, but the variable temperature swings were smaller. For the shed, the inside temperature was warmer and showed higher heat builds than the outside temperature.

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### Final Regulatory Impact Analysis
Table 5.1-6 also presents an estimate of the effect on diurnal emissions using the theoretical equations presented in Chapter 3. No conclusive evidence of was observed to suggest that these fuel tanks are generally subject to inherent insulation.
Table 5.1-6: Comparison of Ambient to Inside Diurnal Temperature Swings
Season Enclosure Inside Temperature °C Avg T Avg Delta T Outside Temperature °C Avg T Avg Delta T Emission Effect
Winter garage D garage G garage J 13.8 12.1 13.5 6.4 9.2 2.4 10.1 5.8 8.0 9.3 14.3 7.3 -8% -9% -55%

Summer garage A garage D garage G garage J

shed 27.4 35.9 27.4 27.6 27.1 3.6 11.7 15.7 8.9 20.1 22.4 30.3 21.3 23.7 23.6 12.2 15.6 19.5 20.3 14.1 -63% 20% 23% -61% 119%

Some of the variance between the fuel temperature and ambient temperature, especially for larger fuel tanks, is likely due to the thermal inertia of the fuel in the tank. The fuel has mass and therefore takes time to heat up. ARB performed a study in which the fuel temperature and ambient temperature were recorded for aboveground storage fuel tanks. 8,9 

### Three fuel tanks sizes were included in the study: 350, 550, and 1000 gallons. Because of the large size of these tanks, the thermal inertia effects would be expected to be larger than for typical fuel tanks used in Marine SI and Small SI applications. For the 350 gallon fuel tank, ARB also measured the effect of insulating the fuel tank on temperature. Table 5.1-7 presents the results of this testing. Note that the test results are the average of five days. Ambient temperature on these test days typically had a minimum in the 60-70 

### / F range and a maximum temperature in the 95-105 

### / F range.
EPA performed testing on 17 gallon marine fuel tank in a SHED over a single 72-96 

### / F diurnal test and measured both ambient and fuel temperature. 10 

### This data is also included in Table 5.1-7. Note that for the smaller tank, there is little difference between the ambient and fuel temperature profiles. However, for larger tanks, the fuel temperature has about a 25-30 percent smaller temperature swing than the ambient temperature. Note that the insulated fuel tank had a temperature ratio similar to the fuel tank stored in a boat in the water.

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### Feasibility of Evaporative Emission Control
Table 5.1.7: Ratio of Fuel to Ambient Temperature for Uninsulated Fuel Tanks

Fuel Tank Type Tank Capacity [gallons] Temperature Ratio*
marine fuel tank 17 95% aboveground storage tank (with insulation) 350 75% (18%) aboveground storage tank 550 70% aboveground storage tank 1000 76%

* Average ratio of change in fuel temper ature to change in ambient air temperature over test days.



### 5.1.3 Diffusion Effect
For the purposes of this discussion, diffusion refers to the process in which gasoline vapor penetrates air in an attempt to equalize the concentration throughout the gas mixture. This transport phenomenon is driven by the concentration gradient and by effective area. In the case of a mobile source fuel system that has a vent to atmosphere, the fuel vapor concentration is near saturation in the fuel tank and near zero outside of the fuel system. Therefore, the diffusion rate is primarily a function of the path between the fuel tank and atmosphere. The following equation describes the relationship between the flux of gasoline vapor out of the tank, the concentration gradient, and the vent path:



## mass ∆ C Flux = = D × area × time ∆ x

where: D = diffusion coefficient (constant) 

### ) C = concentration gradient 

### ) x = path length area = cross sectional area of vent
Based on the above equation, diffusion from a tank through a vent hose would be a function of the cross-sectional area divided by the length of the hose. Therefore a longer hose would theoretically limit fuel vapor venting due to diffusion. Whenever a hydrocarbon (HC) molecule escapes from the fuel tank, a new molecule of air enters the fuel tank to replace the escaped HC. This brings the concentration of HC vapor in the fuel tank out of equilibrium. To balance the partial pressures in the fuel tank, more HC must evaporate as HC in the vapor space is depleted. In this way, the vapor concentration in the fuel tank remains saturated.

5.1.3.1 Marine Fuel Tank Data
In testing diurnal emissions from fuel tanks with open vents, the configuration of the vent can have a significant effect on the measured emi ssions due to the diffusion of vapor out of any

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### Final Regulatory Impact Analysis
opening in the fuel tank. Depending on the size and configuration of the vent, diffusion can actually occur when the fuel temperature is cooling. Most marine vessels with an installed fuel tank vent through a hose. As shown below this configuration can minimize diffusion.
To quantify the diffusion component for a typical fuel tank, we ran four 72-96°F diurnal tests on a 17 gallon aluminum marine fuel tank us ing various configurations for venting The first configuration was with the fuel cap cracked open and the vent sealed, the second configuration was with a 68 cm length of vent hose, and the third configuration was with a 1000 micron (1 mm) limiting flow orifice in the vent opening. This 1000 micron orifice was large enough to allow venting without any measurable pressure increase in the fuel tank during the diurnal test. The fourth configuration was a combination of the limited flow orifice and the vent hose. Table 5.1-8 presents the results of this testing.

Table 5.1-8: Diurnal Test Results with Varied Venting Configurations Vent Configuration Evaporative HC [g/gallon/day]

cracked fuel cap 2.05
68 cm of 5 

### / 8 

### " fuel hose 1.40

1000 micron orifice 1.47
1000 micron orifice + 68 cm of 5 

### / 8 

### " fuel hose 1.34

The above testing showed a 50 percent higher emission rate for the tank vented through a cracked fuel cap compared to one vented through a hose. In the test with the cracked fuel cap, an increase in HC concentration in the SHED was observed throughout the test, even when the fuel temperature was cooling. For the other three tests, the HC concentration leveled off when the temperature began to cool. This suggests that the difference in measured emissions of 0.6 - 0.7 g/gal/day was due to diffusion losses.
To further investigate this diffusion effect , we tested the 17 gallon aluminum tank with several venting configuration, at two constant temperature settings. Under these conditions, all of the measured evaporative emissions would be expected to be due to diffusion. As seen in Table 5.1-9, diffusion can be very high with too large of a vent opening unless a vent hose is used. The two lengths of vent hose tested di d not show a significant difference in diffusion emissions. We believe that the vent hose limits diffusion by creating a gradual gradient in fuel vapor concentration.

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### Feasibility of Evaporative Emission Control
Table 5.1-9: Constant Temperature Test Results with Varied Venting Configurations Vent Configuration 22°C (72°F) Evaporative HC [g/gal/day] 36°C (96°F) Evaporative HC [g/gal/day] 1⁄2" I.D. fitting 5.65 10.0
68 cm of 5 

### / 8 

### " fuel hose 0.11 0.18
137 cm of 5 

### / 8 

### " fuel hose 0.07 0.24

1000 micron orifice 0.28 0.41

The above data suggest that, at least for open vent fuel systems, the size and configuration of the venting system can have a significant effect on evaporative emissions. In marine applications, there is typically a vent hose attached to the fuel tank. Diffusion emissions appear to be minimal if the fuel tank is vented through a length of hose. This is probably because the long residence times in the hose cause more opportunities for molecular collisions which direct the HC molecules back towards the fuel tank.
One study looked at the evaporation of liquids from a tube filled to various fill heights. 11 

### As the fill height decreased (effectively increasing the length of the tube above the liquid surface) the evaporation quickly decreased. These results are consistent with the observed effects of venting through a hose in our testing. Installed marine fuel tanks typically vent through a hose to the outside of the boat; therefore, diffusion losses are likely relatively small for these applications. Another study was performed on automotive fuel caps which suggests that a crack in the gasket on the fuel cap of 1 percent of the gasket area can result in more than 2 grams of HC emissions per day. 12



### 5.1.3.2 Small SI Fuel Tank Data
For Small SI applications (and portable marine fuel tanks), the tanks are typically vented through an opening in the fuel cap. Therefore, unless the cap is sealed, we would expect diffusion emissions to occur. The above data suggest that diffusion can account for a significant portion of the evaporative HC emissions measured from a metal tank with a small vent in the cap over a 72-96°F diurnal test. Because diffusion would still occur at constant temperature, the contribution of diffusion to measured diurnal emissions would increase, on a percentage basis, as the diurnal temperature swing approached zero.
To investigate the effect of fuel cap design on diffusion for Small SI applications, we implemented a test program which included four fuel tank configurations (one metal and three plastic) and the corresponding fuel caps. These four fuel tanks were taken from lawnmowers using engines from the three lawnmower engine manufacturers with the highest U.S. sales and represent the majority of lawnmower fuel tanks on the market. Table 5.1-10 presents a description of these fuel tanks.

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### Final Regulatory Impact Analysis
Table 5.1-10: Lawnmower Fuel Tanks Used in Diurnal/Diffusion Testing
Tank Tank description Fuel Cap Vent Description

BM metal, 800 ml Three 1/16" dia. holes drilled in top of cap. Four similar holes drilled in fibrous gasket

BP plastic, 1175 ml Three torturous pathways through plastic gasket, with venting between tank/cap threads. (Also performed test using a modified cap similar to the cap used on the metal tank.)

HP plastic, 950 ml Pinhole in gasket center leading to two indentations in rubber gasket at mating surface, with venting between tank/cap threads

TP plastic, 920 ml Four indentations in rubber gasket at mating surface, with venting between tank/cap threads

We contracted with two outside laboratories to perform the diurnal/diffusion tests for the Small SI equipment fuel tanks shown above. 13,14,15,16 

### In this effort, the fuel tanks were sealed, except for the vents in the fuel cap, and filled to 40 percent of capacity with 9 RVP fuel. These tanks were then tested in a mini-SHED over the EPA 72-96°F 24-hour diurnal test procedure. To minimize the effect of permeation on the test results, new fuel caps and plastic fuel tanks were used for each test that had not been exposed to fuel or fuel vapor prior to the test.
Under this testing, emissions continued to climb even when temperature was cooling back from 96 

### / F to 72 

### / F. These emissions were clearly not driven by temperature, so they were determined to represent diffusion emissions. Total diffusion for the test was determined by recording the HC emissions that occurred during the last 12 hours of the test (during the cooling event) and then multiplying these emissions by two to represent 24 hours. Although the peak temperature occurs after nine hours, only the last 12 hours were used to ensure that the fuel in the tank was not still heating due to a thermal time lag. Diffusion was then subtracted off the total HC measurement to determine non-diffusion diurnal emissions. For the fuel cap with the three holes drilled straight through it, the emissions were so high that it went out of measurement range near the end of the tests performed by one of the contractors. However, all of the observed diffusion rates were linear, making it simple to extrapolate the data where necessary. Table 5.1- 11 presents the diurnal and diffusion data from these tests and compares it to the theoretical diurnal emissions using the corrected Wade equa tions discussed above. Charts in Appendix 5B present the time series of the measured HC compared to the mini-SHED temperature.

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### Feasibility of Evaporative Emission Control

Table 5.1-11: Diurnal and Diffusion Emission s from Lawnmower Fuel Tanks (g/gal/day) over a 72-96-72 °F (22.2-35.6-22.2 °C) Temperature Profile
Tank Total HC Diffusion Diurnal Wade Diurnal

BM 47.8 43.6 4.2 1.8

BP BP cap 2* 2.1 24.1 0.1 19.3 2.0 4.8 1.8 1.8

HP 1.6 0.1 1.5 1.8

TP 2.1 0.2 2.0 1.8 * modified to be similar to cap on metal tank (BM)



### The fuel caps in the above table for the lawnmower tanks labeled as BM and BP cap 2 resulted in very high diffusion emissions. Although this fuel cap type is a common design used in Small SI applications, it may represent one of the worst case configurations for diffusion. There are three small holes in the cap itself, and four small holes in the fibrous material imbedded in the inside of the cap. Presumably, this design was intended to minimize fuel from splashing out of the tank while still allowing the tank to breathe to prevent pressure or vacuum from occurring in the tank. Because the carburetor on this lawnmower is gravity fed, too much vacuum in the fuel tank could cause the engine to stall from lack of enough fuel. The reason that this may be a worst case configuration is that there is a direct (and relatively large) path for fuel vapor to escape from the fuel tank.
The other three fuel cap designs were also from stock lawnmower fuel systems. In all three of these designs, the venting occurred through small grooves in the gasket that seals the mating between the fuel cap and the fuel tank. The venting then occurs through the thread paths between the cap and tank. As a result, vapor and air must pass through a tortuous pathway to enter or leave the tank. This tortuous pathway appears to limit diffusion in much the same way as venting through a long hose does.
The above emission testing was repeated except that the vents in the fuel cap were sealed and the tank was vented through a 8 inch length of 1/4" I.D. hose. A lawnmower air intake filter was attached to the end of this hose in order to simulate the venting configuration on a lawnmower with running loss control. To minimize the effect of permeation, a low permeation barrier hose was used that had never before been exposed to fuel or fuel vapor. The test results in which the tanks were vented through hoses are presented in Table 5.1-12.

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### Final Regulatory Impact Analysis

Table 5.1-12: Diurnal and Diffusion Emission s from Lawnmower Fuel Tanks (g/gal/day) with Modified Venting Through Hose/Air Filter to Simulate Running Loss Control over a 72-96-72 °F (22.2-35.6-22.2 °C) Temperature Profile
Tank Total HC vent through stock cap Total HC vent through hose/filter Reduction in Total HC

BM 47.8 12.9 34.8

BP BP cap 2* 2.1 24.1 1.9 1.9 0.2 22.2

HP 1.6 2.0 (0.4)

TP 2.1 2.9 (0.7) * modified to be similar to cap on metal tank (BM)



### As shown in the table above, venting through the hose greatly reduced the measured emissions compared to the BM cap vent. When vented through the hose configuration, diffusion emissions were on roughly the same order as when the tortuous cap vents were used. This isconsistent with the data presented earlier on marine fuel tanks vented through a hose. In an inuse running loss system, a valve or limited flow orifice would likely also be in the vent line. These components would likely further reduce, or even eliminate, diffusion emissions.
There was some concern that diffusion may have been underestimated in the above tests because air flowing back into the fuel tank during the cooling period may have limited diffusion by pulling HC molecules back into the fuel tank. In addition, we believed that testing at constant temperature would allow us to more directly measure diffusion. Therefore, the above testing was repeated at a constant temperature of 29°C. 17,18,19 

### However, it should be noted that this testing may have overestimated diffusion somewhat because of small temperature fluctuations (less than 0.5 °C) around the average during the test. Therefore, any HC measurements from the “constant” temperature testing may have overstated diffusion due to vapor generated by the repeated mini-diurnal cycles during in the test. These test results are presented in Table 5.1-13.

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### Feasibility of Evaporative Emission Control

Table 5.1-13: Isothermal [29 °C] Diurnal and Diffusion Emissions from Lawnmower Fuel Tanks (g/gal/day) with Modified Venting Through Hose/Air Filter to Simulate Running Loss Control
Tank Total HC vent through stock cap Total HC vent through hose/filter Reduction in Total HC

BM 43.2 8.9 34.3

BP BP cap 2* 1.3 29.3 1.0 1.0 0.3 28.3

HP 1.0 0.8 0.2

TP 0.9 0.9 0.0 * modified to be similar to cap on metal tank (BM)



### At constant temperature, the relationship between measured diffusion emissions between the venting configurations was consistent with the variable temperature testing. However, the indicated diffusion results were somewhat higher. These higher results were influenced by two effects. In the variable temperature testing, the diffusion was measured during the cooling period when air was being drawn into the fuel tank. This would reduce diffusion into the SHED because escaping HC molecules would need to overcome the air flow into the tank. At the same time, the constant temperature test may have overstated diffusion due to the measured small fluctuations in temperature that may have caused mini-diurnal cycles. Likely, the actual diffusion rates are somewhere in-between the results presented in Tables 5.1-11 and 5.1-12. Appendix 5B contains data charts that present the results of the Small SI diffusion testing in more detail.
Although the results are presented above on a gram per gallon basis for comparison with diurnal emissions, diffusion appears to be more a function of orifice size that fuel tank size. Presumably, the diffusion rate on a grams per day basis would be the same through a given orifice regardless of size of the vapor space. This is reflected in the data above in that the permeation rates on a gram per gallon basis from the lawnmower fuel tanks with holes in the fuel cap were much larger than for the marine fuel tank in the testing discussed earlier. At the same time, larger fuel tanks may be designed with larger orifice sizes to account for higher amounts of vapor expansion in the tank.

5.1.4 Carbon Canister
The primary diurnal evaporative emission control device used in automotive applications is a carbon canister. With this technology, vapor generated in the tank is vented through a canister containing activated carbon (similar to charcoal). The fuel tank must be otherwise sealed; however, this only results in a minimal amount of pressure in the tank. The activated carbon collects and stores the hydrocarbons. Once the engine is running, purge air is drawn through the canister and the hydrocarbons are burned in the engine. These carbon canisters

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### Final Regulatory Impact Analysis
generally are about a liter in size for an automotive tank and have the capacity to store three days of vapor over the test procedure conditions. For automotive applications, this technology reduces diurnal emissions by more than 95 percent.
In a marine application, the vessel may sit for weeks without an engine purge; therefore, canisters were not originally considered to be a practical technology for controlling diurnal vapor from boats. Since that time, however, we have collected information showing that, during cooling periods, the canister is purged sufficiently enough so that it can be used effectively to reduce diurnal emissions. When the fuel in the tank cools, fresh air is drawn back through the canister into the fuel tank. This fresh air will partially purge the canister and return hydrocarbons back to the fuel tank. 20,21 

### Therefore, the canister will have open sites available to collect vapor during the next heating event. Test data presented below show that a canister that starts empty is more than 90 percent effective at capturing hydrocarbons until it reaches saturation. Once the canister reaches saturation, it is still capable of achieving more than a 60 percent reduction in diurnal emissions due to pa ssive purging. Passive purging occurs as a result of fresh air that is pulled through the canister during fuel tank cooling periods. With the addition of an engine (active) purge, greater reductions would be expected.
We tested a 30 gallon aluminum fuel tank over three, multiple-day diurnal cycles with and without a charcoal canister. The carbon canister was 2.1 liters in size with a butane working capacity (BWC) of 11 g/dL (based on EPA test) and was aged using multiple 24 hour diurnal cycles prior to testing. In our first test, the fuel temperature was cycled from 72-96°F using a heating blanket in a SHED for at total of 28 days. Because we were not able to test over weekends, we brought the fuel temperature down to 72°F and held it to prevent the generation or purging of vapors. On Mondays, we saw higher vapor rates than the rest of the week which was likely due to the vapor redistributing itself equally through the canister over the weekend when the temperature was held constant. Under normal conditions, the continued diurnal cycles would maintain a gradient through the canister and this effect would not occur. Appendix 5C contains graph showing the results of the 28 day test. This test is interesting because we began with a purged canister and were able to observe the loading of the canister over the first few days. It took about five test days to achieve canister breakthrough and another ten test days before the canister loading/purging cycle stabilized.

Once the canister was saturated, the emissions results stabilized. Therefore, for the subsequent canister tests, we began with a loaded canister and tested for four days. The results were collected beginning after the first night so that the canister would have a cooling cycle for back-purge. Table 5.1-14 presents our test results for the baseline and stabilized with canister diurnal emission rates.

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### Feasibility of Evaporative Emission Control

Table 5.1-14: EPA Diurnal Emission Test Results With and Without a Canister on a 30 Gallon Aluminum Marine Fuel Tank [g/gal/day] Temperature Range Baseline With a Canister Reduction 22.2-35.6°C (72-96°F) 1.50 0.52 65% 25.6-32.2°C (78-90°F) 0.85 0.28 67% 27.8-30.6°C (82-87°F) 0.47 0.14 71%

Marine manufacturers raised the concern that the high humidity in the areas where boats are used would be detrimental to this technology. They stated that the carbon could become saturated with water vapor, thereby reducing the available sites for hydrocarbon capture. These manufacturers also commented that carbon canisters may not be able to survive shocks and vibration that would be seen on a boat. Carbon canisters have been used in automotive applications for decades, which are subject to high humidity (rainy days) and shocks and vibration. In addition, one manufacturer, who is a primary supplier to the automotive industry, has developed a new grade of carbon that has low moisture adsorption characteristics and about 40 percent harder than typical automotive carbon. 22,23 

### This carbon has been designed specifically for marine applications. Based on this manufacturer’s testing, more than a 60 percent reduction in diurnal vapor emissions can be achieved with a passive purge system. This reduction is based on a canister capacity of 0.03 to 0.04 liters of carbon per gallon of fuel tank capacity.
The National Marine Manufacturers Association performed a test program has to demonstrate the durability of carbon canisters in marine applications. This test program included installing carbon canisters on a total of fourteen boats made by four boat builders. 24 

### These boat types included cruisers, runabouts, pontoon boats, and fishing boats. The carbon canister design used for these boats is a simple cylinder that can be cut to length with end caps and mounting brackets. The canisters were installed in the vent lines and a valve was added to prevent liquid fuel from reaching the canister during refueling. These canisters use marine grade carbon. At the end of this test program, each of the canisters were tested for working capacity and each canister showed proper performance. 25



### Another issue that has been raised has been the ability of carbon canisters to pass the Coast Guard flame test. The carbon canisters could be made out of a variety of materials, including metal. Even a thin-walled nylon fuel tank could be manufactured to pass the flame test if a flame-resistant coating or cover were used. One study attempted to ignite a carbon canister that was loaded with fuel vapor. 26 

### When an ignition source was applied to the canister vent, the gases exiting the canister were ignited and burned as a small, steady flame until the canister tube opening began to melt. No explosion occurred. In any case, as with the vent line, if the carbon canister is self-draining, then the canister would not likely hold the five ounces of fuel, specified in 33 CFR 183.558, to trigger the need for flame protection.
Manufacturers have raised the concern that it is common for liquid fuel to pass out the

5-17

### Final Regulatory Impact Analysis
vent line during refueling. If there were a canister in the vent line it would become saturated with fuel. While this would not likely cause permanent damage to the canister, we believe marine fuel systems should prevent liquid fuel from exiting the vent line for both environmental and safety reasons. A float valve or small orifice in the entrance to the vent line from the fuel tank would prevent liquid fuel from reaching the canister or escaping from the tank. Any pressure build-up from such a valve would cause fuel to back up the fill neck and shut off the fuel dispensing nozzle. In addition, a vapor space should be included to Figure 5.1-1: Canister Installation Example account for fuel expansion. These

Fill neck Vapor space (for fuel expansion) Valve or orifice

Canister Vent line 

### fuel system design considerations are straight-forward, long used in other applications, 27 

### are applicable to boats, 28 

### and would have the added benefit of minimizing fuel spillage, from boats, into the water. One possible design for preventing fuel from reaching the canister, due to refueling, sloshing, or expansion, is shown in Figure 5.1-1.
Recently, the California Air Resources Board (ARB) performed diurnal emission testing on a commercial mower and a generator with 6 gallon fuel tanks and 0.65 liter canisters. 29 

### Their testing showed better than 50 percent reductions, on average, in diurnal emissions through the use of canisters without an engine purge. The testing was performed over two diurnal temperature ranges, 53-71°F and 65-105°F which are intended to represent an average day and a high temperature episode.
Over a decade ago, testing performed on a car showed similar results. 30 

### A 1988 Regency 98 with an 18 gallon fuel tank was subjected to an 8 day diurnal without driving. This diurnal was performed using a 72-96°F temperature profile, a tank filled to 40 percent with 9RVP gasoline, and a purged canister at the beginning of testing. The test results showed, that the canister loading/purging cycle began to stabilize after 6 days. Due to the canister back-purge, the stabilized diurnal emission rate about 11.5 grams per day which was more than a 50 percent reduction compared to baseline.
A manufacturer of activated carbon performed studies of ethanol fuel blend and carbon bed temperature on carbon efficiency. 31 

### Testing was performed with carbon canisters using gasoline, E10, and E85 fuel for onboard vapor re fueling emissions efficiency. The emissions control was similar for each of the test fuels. Testing was also performed to measure gasoline working capacity for carbon soaked at temperatures ranging from 25 to 80 

### / C. Over this range only a 10 percent decrease in working capacity was observed with increasing temperature. Over the 25-40 

### / C range, which is more representative of boat or Small SI equipment use, the effect was only 1-2 percent. Based on the results from these studies, carbon canister efficiency would be expected to be effective at reducing diurnal emissions over the range of fuels and temperatures that may be seen in use.

5-18

### Feasibility of Evaporative Emission Control

5.1.5 Sealed System with Pressure Relief
Evaporative emissions are formed when the fuel heats up, evaporates, and passes through a vent into the atmosphere. By closing that vent, evaporative emissions are prevented from escaping. However, as vapor is generated, pressure builds up in fuel tank. Once the fuel cools back down, the pressure subsides. One way to control these emissions is to seal the fuel system. However, depending on the fuel tank design, a pressure relief valve may be necessary which would limit the control.

5.1.5.1 Pressure Relief Valve
For most marine applications, U.S. Coast Guard safety regulations require that fuel tanks be able to withstand at least 3 psi and must be able to pass a pressure impulse test which cycles the tank from 0 to 3 psi 25,000 times (33 CFR part 183). 2 

### The Coast Guard also requires that these fuel tanks must be vented such that the pressure in the tank in-use never exceeds 80 percent of the pressure that the tank is designed to withstand without leaking. The American Boat and Yacht Council makes the additional recommendation that the vent line should have a minimum inner diameter of 7/16 inch. 32 

### However, these recommended practices also note that “there may be EPA or state regulations that limit the discharge of hydrocarbon emissions into the atmosphere from gasoline fuel systems. The latest version of these regulations should be consulted.”
To prevent pressure from building too high in marine tanks, we first considered a 2 psi pressure relief valve. This is a typical automotive rating and is below the Coast Guard requirements. With this valve, vapors would be retained in the tank until 2 psi of pressure is built up in the tank due to heating of the fuel. Once the tank pressure reached 2 psi, just enough of the vapor would be vented to the atmosphere to maintain 2 psi of pressure. As the fuel cooled, the pressure would decrease. In our August 14, 2002 proposal (67 FR 53050) we considered standards based on a 1 psi valve which would only achieve a modest reduction over the diurnal test procedure. However this reduction would be significantly greater in use because the test procedure is designed to represent a hotter than average day. On a more mild day, there would be less pressure buildup in the tank and the valve may not even need to open. With the use of a sealed system, a low pressure vacuum relief valve would also be necessary so that air could be drawn into the tank to replace fuel drawn from the tank when the engine is running.
Manufacturers of larger plastic fuel tanks have expressed concern that their tanks are not designed to operate under pressure. For instance, although they will not leak at 3 psi, rotationally molded fuel tanks with large flat surfaces could begin deforming at pressures as low as 0.5 psi. At 2.0 psi, the deformation would be greater. This deformation would affect how the tank is mounted in the boat. Also, fuel tank manufacturers commented that some of the fittings

2 These regulations only apply to boats with inst alled fuel tanks and exclude outboard boats. However, ABYC recommended practice effectively extends many of these requirements to outboard boats as well.

5-19

### Final Regulatory Impact Analysis
or valves used today may not work properly under 2 psi of pressure. Finally, they commented that backup pressure-relief valves would be necessary for safety. For smaller fuel tanks, such as used in personal watercraft, portable fuel tanks, and Small SI equipment, pressure is less of an issue because of the smaller internal surface area of these fuel tanks. In addition, the construction of these fuel systems are generally vertically integrated which allows for more precise control of design parameters. For instance, personal watercraft manufacturers are already sealing their fuel systems to prevent fuel from spilling into the water. These systems generally have pressure relief valves ranging from 0.5 to 4.0 psi. In addition, portable fuel tanks are designed to be sealed without any pressure relief.
We looked at two types of pressure relief strategies: pressure relief valves and limited flow orifices. Because the Coast Guard requires that fuel systems not exceed 80 percent of their design capacity of 3 psi, we only looked at pressure relief strategies that would keep the pressure below 2.4 psi under worst case conditions.
For the pressure relief valve testing, we looked at several pressures ranging from 0.5 to 2.25 psi. The 2.25 psi valve was an off-the-shelf automotive fuel cap with a nominal 2 psi pressure relief valve and 0.5 psi vacuum relief valve. For the other pressure settings, we used another automotive cap modified to allow adjustments to the spring tension in the pressure relief valve. We performed these tests on the 17 gallon aluminum fuel tank to remove the variable of permeation. Emissions were vented through a hose to prevent diffusion losses from affecting the measurements. We operated over two temperature profiles. The first set of tests were performed in a variable temperature SHED with a 72-96°F ai r temperature profile. This temperature profile was based on the existing automotive cycle which is intended to represent a typical summer day on which a high ozone event may occur. The second set of tests were performed using a heating blanket to create a 78-90°F fuel temperature profile. This testing was intended to represent a fuel tank in a boat, where the tank may be inherently insulated, during the same ambient temperature profile. This inherent insulation creates a time lag on the heating and cooling of the fuel and reduces the amplitude of the temperature profile by half.
As shown in Figure 5.1-2, there was a fairly linear relationship between the pressure setting of the valve and the emissions measured over the variable-temperature test procedure. In addition, the slopes of the lines are similar for both test temperature scenarios. This suggests that over a smaller temperature profile, a greater percent reduction in HC can be achieved at a given pressure setting. This is reasonable because, in each case, a constant amount of vapor is captured. In other words, regardless of the temperature profile, the same amount of vapor must be generated to create a given pressure. For instance, with a 1 psi valve, about 0.4 grams/gallon of HC are captured over each temperature profile. However, this represents a 50 percent reduction over a 78-90°F temperature profile while only about a 25 percent reduction over the 72-96°F temperature profile.

5-20

### Feasibility of Evaporative Emission Control

Figure 5.1-2: Effect of Pressure Cap on Diurnal EmissionsHC [g/gal/day] 

### 1.6
1.4
1.2

1 0.8
0.6 0.4
0.2

0 y = -0.42x + 1.5 R 2 = 0.92

y = -0.47x + 0.81 R 2 = 0.96



### 0.0 0.5 1.0 1.5 2.0 2.5 pressure relief setting [psi] 

### 72-96F 78-90F

Portable marine fuel tanks are generally equipped with a valve that allows the tank to be sealed when not in use. The valve must be opened during engine operation or the draw of fuel from the fuel tank can create a vacuum in the fuel tank. If the vacuum becomes too great, the engine will not be able to draw sufficient fuel from the tank and therefore stall. During storage, the valve may be closed to prevent fuel vapors from escaping. These fuel tanks are designed to withstand pressurization much greater than would be experienced when a fuel tank is heated by ambient temperature changes. However, this vapor control strategy relies heavily on user behavior. According to one survey, the majority of boat owners store their portable marine fuel tanks with fuel in them, and many do not close the vent during storage. 33 

### Therefore, significant emission reductions may be achieved with a sealed fuel tank with an automatic vacuum relief valve. This is discussed further in section 5.1.5.3 below.

The California Air Resources Board tested a lawnmower in a SHED for diurnal emissions in a baseline configuration, a sealed system, and with various pressure relief settings. 34 

### Because the whole lawnmower was tested, permeation (and potentially leakages) were measured as well as diurnal venting emissions. The testing was performed over a 65-105°F temperature cycle with the fuel tank filled to 50 percent with 7 RVP fuel. For the system as a whole, they measured a 76 percent reduction in emissions when the tank was fully sealed compared to the open vent configuration. This suggests that diurnal venting made up about 76 percent of the evaporative emissions measured. Testing using 2, 3, and 4 psi pressure relief valves showed reductions of 43 percent, 43 percent, and 63 percent respectively. They also collected pressure data over various diurnal temperature cycles on a lawnmower fuel tank. Over the 65-105°F cycle, the measured a pressure increase of about 2.5 psi. Even under an extreme cycle of 68- 121°F, the measured increase in tank pressure was about 3.6 psi.

5-21

### Final Regulatory Impact Analysis

5.1.5.2 Limited Flow Orifice
Another strategy for maintaining a design pressure is to use a limited flow orifice on the vent. In our testing, we are looked at three orifice sizes: 25, 75, and 1,000 microns in diameter. Again, we performed tests over a 72-96°F diurnal using a 17 gallon aluminum tank. To get these exact orifice sizes, we ordered from a company that specializes in boring holes with a laser device. These orifices were relatively inexpensive. It should be noted that a smaller tank would need a smaller orifice and a larger tank could use a larger orifice to build up the same pressure in the tank. The test results are presented in Table 5.1-15. For all of the tests with the limited flow orifices, no vent hose was attached.
Table 5.1-15: Diurnal Evaporative Em issions with Limited Flow Orifices Orifice Diameter (microns) Peak Pressure [psi] Evaporative HC [g/gallon/day] baseline (open vent with hose) 0.0 1.40

1000 0.0 1.47

75 1.6 1.16

25 3.1 0.24

By limiting the flow of the vapor from the tank, emissions were reduced with some pressure build up in the tank. However, because the vapor is flowing from the tank even at low pressure, this strategy is less effective for reducing diurnal emissions than a pressure relief valve. Generally, a higher peak pressure is necessary with the LFO for a given emission reduction. In addition, the limited flow orifice would have to be sized for worst case conditions to prevent the tank from reaching too high of a pressure. A LFO sized for worst case conditions would be less effective under typical conditions because the vapor flow out of the tank could be too low for the LFO to create a restriction. In comparison, a pressure relief valve would achieve higher percent reductions under typical conditions than for worst case conditions because the valve would open less often.

5.1.5.3 Vacuum Relief Valve
For some fuel tanks, pressure relief is not necessary. An example of this is portable marine fuel tanks which are currently equipped with a manual sealing valve. This valve can be sealed by the operator during storage to prevent vapor from escaping. Although pressure will build up during diurnal heating, the fuel tanks are designed to withstand this pressure. However, the valve must be opened by the operator during engine operation so that a vacuum does not form in the fuel tank as fuel is drawn to the engine. If this vacuum were to become too high, it could cause the engine to stall by restricting fuel to the engine.
The existing design requires that the operator close the valve whenever the engine is not running for diurnal emissions to be controlled. If an automatic vacuum relief valve were used,

5-22

### Feasibility of Evaporative Emission Control
then the operator would not need to operate the sealing mechanism. It would always control diurnal emissions. At the same time, the vacuum relief valve would allow air to be drawn into the fuel tank when the engine is operating to prevent a significant vacuum from being formed.
One manufacturer’s approach to this automatic valve design is to use a diaphragm valve such as those used in automotive fuel systems. 35 

### This inexpensive design would be able to seal the tank under pressure, yet open at very low vacuums. This design (or other vacuum relief valve designs) could be used in any nonroad application where the fuel system is able to withstand pressure.

5.1.6 Selective Permeability Membrane
Another approach we investigated was fitting a molecular membrane in the vent line. The theory was that the membrane would allow oxygen and nitrogen to pass through, but block most longer-chain hydrocarbon molecules. We us ed a membrane fabricated using Teflon AF® which is an amorphous fluoropolymer. Because oxygen and nitrogen (and some smaller hydrocarbons) can pass through the membrane, hydrocarbons can be trapped in the fuel tank. However, the process for molecules passing through the membrane is slow, so it is important to size the membrane properly to prevent pressure build-up. This membrane could be placed in the vent line or directly in an opening in the top of the fuel tank.
Similar membranes are already used for several applications. One manufacturer provides membranes for a variety of uses such as oxygen or nitrogen enrichment of air or for separation of hydrocarbons from air. 36 

### One of these uses is to act as a vapor processor to prevent hydrocarbon vapor from escaping from retail gasoline stations in California. 37 

### Another membrane used for similar applications allows hydrocarbons to permeate but blocks smaller gases. This membrane is used in hydrocarbon recovery applications. 38 

### In the above noted applications, the membranes are typically used with a pump to provide a pressure drop across the membrane which causes permeation through the membrane. Typically, adequate mixing is needed to maintain an efficient diffusion rate.
We tested an amorphous fluoropolymer membrane with a surface area of about 40 cm 2 

### in the vent line of both a 30 and a 17 gallon aluminum fuel tank over three temperature cycles. The membrane was applied to a wire mesh in a cylindrical shape with the an outside diameter not much larger than the vent hose. Hydrocarbon emissions and fuel tank pressure were measured. Over these tests we consistently saw a pressure build up, even over a 24 hour test. To investigate the impacts of surface area, we increased the su rface area by using 3 filters in parallel (single vent line to assembly). Our test results suggest that the pressures associated with this technology are comparable with the pressure relief valves needed to achieve the same reductions. However, this technology may have the potential for meeting our standards if used in conjunction with a pump to provide a pressure differential across the filter without allowing pressure (and mixing) to build up in the fuel tank. Our test results are presented in Table 5.1-16.

5-23

### Final Regulatory Impact Analysis
Table 5.1-16: Diurnal Venting Emission s with Selective Permeable Membranes
Tank Size [gallons] Venting 72-96°F g/gal/day psi 78-90°F g/gal/day psi 81.6-86.4°F g/gal/day psi

30 open 1 filter 3 filters 1.50 0.24 0.39 0 2.9 2.2 0.85 0.14

– 0 1.5

– 0.47 0.19

– 0 0.6

– 17 open 3 filters 1.40 0.45 0 2.1 – 0.30 – 1.2 –

– –

–

5.1.7 Volume Compensating Air Bag
Another concept for minimizing pressure in a sealed fuel tank is through the use of a volume compensating air bag. 39 

### The purpose of the bag is to fill up the vapor space in the fuel tank above the fuel itself. By minimizing the vapor space, less air is available to mix with the heated fuel and less fuel evaporates. As vapor is generated in the small vapor space, air is forced out of the air bag, which is vented to atmosphere. Because the bag collapses as vapor is generated, the volume of the vapor space grows and no pressure is generated. 3 

### Once the fuel tank cools as ambient temperature goes down, the resulting vacuum in the fuel tank will open the bag back up.
We tested a 6 gallon portable plastic fuel tank with a 1.5 gallon volume compensating bag made out of Tedlar. Tedlar is a light, flexible, clear plastic which we use in our labs for collecting exhaust emissions samples. In our testing, the pressure relief valve never opened because the volume compensating bag was able to hold the vapor pressure below 0.8 psi for each of the three days. This testing supports the theory that a volume compensating bag can be used to minimize pressure in a fuel tank, which in turn, reduces emissions when used in conjunction with a pressure relief valve.
We did see an emission rate of about 0.4 g/gal/day over the 3 day test. The emission rate was fairly constant, even when the ambient temperature was cooling during the test. This suggests that the emissions measured were likely permeation through the tank. Other materials may be more appropriate than Tedlar for the construction of these bags. The bags would have to hold up in a fuel tank for years and resist permeation while at the same time be light and flexible. One such material that may be appropriate would be a fluorosilicon fiber.

3 The Ideal Gas Law states that pressure and volume ar e inversely related. By increasing the volume of the vapor space, the pressure can be held constant.

5-24

### Feasibility of Evaporative Emission Control

5.1.8 Bladder Fuel Tank
Probably the most effective technology for reducing evaporative emissions from fuel tanks is through the use of a collapsible fuel bladder. In this concept, a non-permeable bladder would be installed in the fuel tank to hold the fuel. As fuel is drawn from the bladder, the vacuum created collapses the bladder. Therefore, there is no vapor space and no pressure build up. Because the bladder would be sealed, there would be no vapors vented to the atmosphere. In addition, because there is no vapor space, vapor is not displaced during refueling events. We have received comments that bladder tanks would be cost prohibitive because its use would increase tank costs by 30 to 100 percent depending on tank size. However, bladder fuel tanks have positive safety implications as well and are already sold by at least one manufacturer to meet market demand in niche applications. Information on this system is available in the docket. 40



### We tested a marine bladder fuel tank in our lab for both diurnal and permeation emissions. Over the diurnal test procedure we saw an emission rate of 0.2 g/gal/day. Because the system was sealed, this measured emission rate was likely due to permeation through the bladder and not due to diurnal losses. We later tested the bladder fuel tank for permeation emissions at 29°C and measured a permeation rate of 0.46 g/gal/day. The bladder used in our testing was constructed out of polyurethane. The manufacturer of this bladder tank is now working with a lower permeability material known as THV. THV is a fluoropolymer that can be used to achieve more than a 95 percent reduction in permeation from current bladder fuel tanks made out of polyurethane. 41 

### In addition, THV is resistant to ethanol. Permeation rates for these materials are presented in Appendix 5D.

5.1.9 Floating Fuel and Vapor Separator
Another concept used in some stationary engine applications is a floating fuel and vapor separator. Generally small, impermeable plastic balls are floated in the fuel tank. The purpose of these balls is to provide a barrier between the surface of the fuel and the vapor space. However, this strategy does not appear to be viable for fuel tanks used in mobile sources. Because of the motion of Small SI equipment and Marine SI vessels, the fuel sloshes and the barrier would be continuously broken. Even small movements in the fuel could cause the balls to rotate and transfer fuel to the vapor space. In addition, the unique geometry of many fuel tanks could case the balls to collect in one area of the tank. However, we do not preclude the possibility that some form of this approach could be made to work effectively in some mobile source applications.

5.1.10 Liquid Vapor Trap
One company has developed a Figure 5.1-3: Liquid Vapor Trap liquid vapor trap that it refers to as a fuel vapor containment system (VCS). 42 

### A B The VCS behaves similar to a liquid 

### VCS trap used in sink drains in that trapped 

### fuel tank vent

5-25

### Final Regulatory Impact Analysis
liquid creates a barrier to gases. This trap would be placed in the vent line to limit fuel vapor emitted from the fuel tank. Figure 5.1-3 presents an illustration of the basic concept.
When the temperature in the fuel tank increases, the vapor would expand in the fuel tank. The fuel vapor would enter chamber A and force more of the liquid into chamber B. This would provide room for the vapor to expand without allowing vapor to escape through the vent. As the fuel tank cools, the vapor would condense. This would cause the level of the liquid in chamber A to rise while the level of the liquid in chamber B would drop. Some pressurization may occur in the fuel tank with this system, but it would be much less than for a sealed fuel tank due to the expansion chamber. Any pressure or vacuum in the fuel system would be a function of the VCS design and would be expected to be less than 0.5 psi. In addition, a pressure relief valve could be added to the system to protect against any high pressure excursions.
In the initial testing of the VCS, the manufacturer has used water as the liquid barrier. However, they stated that ethylene-glycol or ev en oil could be used which would be more stable liquids and would resist freezing. Diurnal te sting was performed on a 25 gallon fuel tank equipped with a roughly 3 gallon VCS unit. 43 

### Testing was performed in a mini-SHED over the EPA 72-96 

### / C diurnal cycle for two days. The tank was filled to 50 percent capacity with 9 RVP certification gasoline. The total weight loss was 1.1 grams on the first day and 2.6 grams on the second day. Using the higher of the two days, we get a diurnal emission rate of about 0.1 g/gal/day. The peak pressure during this testing was approximately 0.5 psi.



## 5.2 Running Loss Emissions

Running loss emissions are similar to diurnal emissions except that the fuel temperature rise is due to heat from the engine or other heat producing components, such as hydraulic systems, when the engine is running. This section summarizes the data and rationale supporting the running loss emission standard for Small SI equipment presented in the Executive Summary.

5.2.1 Baseline Emissions
To investigate running loss emissions, we instrumented seven riding lawnmowers, three walk-behind lawnmowers, two generators, and one pressure washer to measure the fuel temperature during typical operation. Many of th e temperature measurements were made by a contractor. 44 

### Of the riding mowers, two had fuel tanks in front near the engine, three had fuel tanks in rear away from engine (but near the hydraulic system), and two were “zero-turn” mowers that had pairs of side saddle tanks that were relatively close to the rear mounted engine. All of the riding mowers had plastic fuel tanks. One of the walk-behind mowers had a metal tank directly mounted to the block while the others had plastic tanks near the top/side of the engine. Both generators had plastic tanks mounted above the engine while the pressure washer had a metal tank mounted above the engine. All of the equipment vented through the fuel caps. The pressure washer had a metal fuel tank mounted above the engine. The equipment was operated in the field until the fuel temperature stabilized. For lawnmowers, the fuel temperature stabilized within 20 to 30 minutes while the larger equipment took up to an hour.

5-26

### Feasibility of Evaporative Emission Control
By measuring the increase in fuel temperature during operation, we were able to make a simple determination of the running loss emissions vented from the fuel tank. Other potential running loss emissions would be from the carburetor, due to permeation increases due to heating the fuel, or vibration-induced leaks in the fuel system. However, we believed that the majority of the running loss emissions would be due to br eathing losses associated with heating the fuel. Table 5.2-1 presents the results of the temperature testing.
We contracted with an independent testing labor atory to test fuel tanks from most of the above pieces of equipment over the measured fuel temperature profiles. 45 

### For three of the tests on larger fuel tanks, we found that the measured emissions were inconsistent with theoretical predictions. An investigation of the test data suggested that the test had been ended too soon to see the full effect of the heat build. Repeat tests were performed with a longer sample time. 46 

### From this data we get the running loss emissions due to the breathing losses associated with the heating of the fuel tank. New tanks were purchased for this testing that had not been previously exposed to fuel so permeation emissions would not be included in the emission measurements. Table 5.2-1 also presents the test results for the above equipment.
Table 5.2-1: Fuel Temperature Measurements During Operation of Small SI Equipment and Hydrocarbons Measured Over This Temperature Profile Equipment Type Fuel Capacity [gallons] Min. Temp °C Max. Temp °C HC [g/hr]

Riding mower front tank near engine 1.7 1.1 19.5 15.7 30.3 28.4 1.4 1.0 Riding mower rear tank away from engine 6.5 3.0 2.5 24.3 26.6 27.0 33.2 28.4 35.0 7.8 0.7 3.2 Zero-turn riding mower 2 saddle tanks near engine 6.5 x 2 1.4 x 2 20.5 21.9 23.9 29.7 3.4 2.5 Walk-behind mower (plastic) 0.34 0.25 23.3 28.7 33.0 46.7 0.3 1.2 Walk-behind mower (metal) 0.22 28.7 59.7 8.1

Generator set 8.5 7.0 20.6 25.8 25.8 50.0 1.8 69.3
Pressure washer 1.8 19.0 50.6 20.3

The California Air Resources Board performed running loss tests on several pieces of Small SI equipment. 47 

### This equipment included four lawnmowers (2 new and 2 old), one string trimmer, two generators, two ATVs, and two forklifts. To measure running loss emissions, the equipment were operated on California certificati on fuel in a SHED and the exhaust was routed

5-27

### Final Regulatory Impact Analysis
outside the SHED. Running loss emissions were determined by measuring the HC concentration in the SHED. Therefore the measurements included all evaporative emissions during operation including those from fuel heating, permeation, carburetor losses, and, for the two older lawnmowers, liquid fuel leaks. Although the ATVs and forklifts are not considered to be small offroad engines, these data can be used as surrogates for equipment that were not tested. Table 5.2-2 presents this data.
Table 5.2-2: Results from ARB Running Loss Tests Equipment Type Model Year* Running Loss [g/hr]

lawnmower 2000 2001 1994 1989 0.8 2.6 27.0 12.1 string trimmer 1999 0.6
generator 1995 2001 19.5 1.8

ATV 2001 2001 21.4 1.3
forklift 1995 1987 1.8 7.4 * the 2000 and 2001 equipment were new at the time of testing



### 5.2.2 Control Technology
Running loss emissions can be controlled by sealing the fuel cap and routing vapors from the fuel tank to the engine intake. In doing so, vapor generated heat from the engine will be burned by the engine. It may be necessary to use a valve or limited flow orifice in the purge line to prevent fuel from entering the line in the case of the equipment turning over and to limit the vapor to the engine during operation. Depending on the configuration of the fuel system and purge line, a one way valve in the fuel cap may be desired to prevent a vacuum in the fuel tank during engine operation. We anticipate that a system like this would eliminate running loss venting emissions. However, higher temperatures during operation would increase permeation somewhat. In addition, the additional length of vapor line would increase permeation. Considering these effects, we still believe that the system described here would result in more than a 90 percent reduction in running loss emissions from Small SI equipment.
A secondary benefit of running loss control for Small SI equipment has to do with diffusion emissions. As discussed above, venti ng a fuel tank through a hose (rather than through an open orifice) greatly reduces diffusion. In the system discussed above, all venting losses would occur through the vapor hose to the engine intake rather than through open vents in the

5-28

### Feasibility of Evaporative Emission Control
fuel cap. Therefore, the diffusion effect should be largely eliminated.
Another approach to reducing running loss emissions would be to insulate the fuel tank or move it further from heat sources such as the engine or hydraulic system. With this approach, the fuel cap vent would likely still be used, but diffusion could be controlled using a tortuous vent path in the cap as described above.
For marine fuel tanks we are not considering running loss emissions. For portable fuel tanks and installed fuel tanks on larger vessels , we would not expect there to be significant heating of the fuel tanks during engine operation due to the distance from the engine and the cooling effect of operating the vessel in water. For personal watercraft, the fuel tanks have a sealed system with pressure relief that should help contain running loss emissions. For other installed fuel tanks, we would expect the diurnal emission control system to capture about half of any running losses as well.



## 5.3 Fuel Tank Permeation

The polymeric material (plastic) of which many gasoline fuel tanks manufactured generally has a chemical composition much like that of gasoline. As a result, constant exposure of gasoline to these surfaces allows the material to continually absorb fuel. Permeation is driven by the difference in the chemical potentials of gasoline or gasoline vapor on either side of the material. The outer surfaces of these materials are exposed to ambient air, so the gasoline molecules permeate through these fuel-system components and are emitted directly into the air. Permeation emissions continue at a nearly constant rate, regardless of how much the vehicle or equipment is used. Because of these effects, permeation-related emissions can therefore add up to a large fraction of the total emissions from nonroad equipment.
This section summarizes the data and rationale supporting the permeation emission standard for Small SI and Marine SI fuel tanks presented in the Executive Summary.

5.3.1 Baseline Fuel Tank Technology and Emissions
Fuel tanks may be constructed in several ways. Portable marine fuel tanks and some small, higher production-volume, installed marine fuel tanks are generally blow-molded using high-density polyethylene (HDPE). Larger, inst alled marine fuel tanks are generally either rotationally-molded using cross-link polyethylen e (XLPE) or are constructed out of welded aluminum. Some boat builders even construct the fuel tanks out of fiberglass as part of the vessel construction. Fuel tanks on Small SI equipment may be injection molded, blow molded or rotationally molded. Blow-molded and injection-molded tanks are primarily made of HDPE, but nylon is used as well in some applications. Rotationally molded fuel tanks are generally made out of XLPE.
Blow molding is widely used for the manufacture of Small SI, portable marine, and PWC fuel tanks. Typically, blow molding is performed by creating a hollow tube, known as a parison, by pushing high-density polyethylene (HDPE) through an extruder with a screw. The parison is

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### Final Regulatory Impact Analysis
then pinched in a mold and inflated with an inert gas. In automotive applications, nonpermeable plastic fuel tanks are produced by blow molding a layer of ethylene vinyl alcohol (EVOH) or nylon between two layers of polyethylene. This process is called coextrusion and requires at least five layers: the barrier layer, adhesive layers on either side of the barrier layer, and HDPE as the outside layers which make up most of the thickness of the fuel tank walls. However, multi-layer construction requires additional extruder screws which significantly increases the cost of the blow molding machine.
Injection molding can be used with lower production volumes than blow molding due to lower tooling costs. In this method, a low viscosity polymer is forced into a thin mold to create each side of the fuel tank. The two sides are then welded together. In typical fuel tank construction, the sides are welded together by using a hot plate for localized melting and then pressing the sides together. The sides may also be connected using vibration or sonic welding.
Rotational molding has two advantages over blow molding, which is widely used forforming automotive parts. First, the tooling cost is an order of magnitude lower than for blowmolding. Therefore, for small production volumes such as seen for marine applications, rotational molding is more cost-effective. Manufacturers of rotationally molded plastic fuel tanks have commented that they could not produce their tanks with competitive pricing in any other way. The second advantage of rotational molding is that larger parts can generally be molded on rotational molding machines than on blow-molding machines. Plastic marine fuel tanks can exceed 120 gallons.
Installed plastic marine fuel tanks are often produced in many shapes and sizes to fit the needs of specific boat designs. These fuel tanks tanks are generally rotationally-molded out of cross-link polyethylene. Cross-link polyethylene, which has a permeation rate comparable to HDPE, is used in larger marine applications because of its ability to pass the U.S. Coast Guard flame resistance requirements (33 CFR 183.590). Rota tional-molding is also used in some Small SI applications where there are low production volum es of unique fuel tanks. XLPE is used in these fuel tanks as well because the fuel tank is often exposed and must be able to withstand impacts such as flying debris.

5.3.1.1 Baseline permeation test data

5.3.1.1.1 Marine fuel tanks
To determine the baseline permeation emissions from marine fuel tanks, we have collected permeation data on several plastic fuel tanks. Because gasoline does not permeate through aluminum, we did not perform perm eation testing on aluminum fuel tanks.
We tested ten plastic fuel tanks that were either intended for marine use or are of similar construction. This permeation testing was performed at 29°C with gasoline. Prior to testing, the fuel tanks were stored with gasoline in them for about 20 weeks to ensure stable permeation rates. Table 5.3-1 presents the measured permeation rates for these fuel tanks in grams per gallon of fuel tank capacity. Where the internal surface area was either easily determined or

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### Feasibility of Evaporative Emission Control
supplied by the manufacturer, we also calculated the permeation rate in terms of grams per square meter of inside surface area. The 31 gallon tank showed much lower permeation than the other fuel tanks. This was likely due to the thickness of the walls in this tank. Even after stabilization, permeation is a function of material thickness. According to Fick’s Law, if the wall thickness of a fuel tank were double, the permeation rate would be halved. 48



### Table 5.3-1: Permeation Rates for Plastic Marine Fuel Tanks Tested by EPA at 29°C Tank Capacity [gallons] Permeation [g/gal/day] [g/m 2 /day] Construction Application

3.3 6.0 6.0 6.0 6.6 6.6 6.0 23 31 0.96 0.61 1.18 0.75 0.83 0.77 0.60 0.64 0.44 12.7 6.8 13.1 8.4 9.1 8.4 8.3 8.1 5.5 HDPE HDPE HDPE HDPE HDPE HDPE cross-link cross-link cross-link portable marine portable marine portable marine portable marine portable marine portable marine marine test tank installed marine installed marine



### The Coast Guard tested three rotationally-molded, cross-link polyethylene marine fuel tanks at 40°C (104°F) for 30 days. 49 

### The results are presented in Table 5.3-2. Because permeation emissions are a function of surface area and wall thickness, there was some variation in the permeation rates from the three tanks on a g/gal/day basis. These results are not directly comparable to the EPA testing because of the difference in test temperature. However, we can adjust the permeation rates for temperature using Arrhenius’ relationship 50 

### combined with empirical data collected on permeation rates for materials used in fuel tank constructions (described below). These adjusted permeation rates are shown in Table 5.3-2 and are consistent with the EPA test data.

Table 5.3-2: Permeation Rates for Cr oss-Link Marine Fuel Tanks at 40°C Tank Capacity [gallons] Measured Permeation Loss [g/gal/day] Average Wall Thickness [mm] Adjusted to 29°C [g/gal/day]

12 1.48 5.3 0.71

18 1.39 5.6 0.67

18 1.12 6.9 0.54



### 5.3.1.1.2 Small SI equipment fuel tanks
The California Air Resources Board (ARB) investigated permeation rates lawn & garden equipment fuel tanks. The ARB data is compiled in several data reports on their web site and are

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### Final Regulatory Impact Analysis

included in our docket. 51,52,53,54,55 

### Table 5.3-3 presents a summary of this data which was collected using the ARB Test Method 513. 56 

### Where multiple tests were run on a given tank or tank type, the average results are presented. Although the temperature in the ARB testing is cycled from 18 - 41°C rather than held at a constant temperature, the average temperature is 29 

### / C which is similar to the EPA testing. Therefore, the permeation results would likely be similar if the data were collected at the average temperature of 29°C used in the EPA testing. Variation in permeation rates on a gram per square meter basis is likely due to differences in the wall thicknesses. Note that surface area measurements were not available for all of the fuel tanks. Smaller fuel tanks would be expected to have higher emissions on a gram per gallon basis due to the increased surface area to volume ratio. However, lower permeation rates were observed for the fuel tanks less than 1 quart, potentially due to relatively thicker walls or due to a difference in material used for these applications.

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-- Feasibility of Evaporative Emission Control

Table 5.3-3: Permeation Rates for Plastic Lawn and Garden Fuel Tanks Tested by ARB Over a 18-41°C Diurnal Tank Capacity Permeation Loss Permeation Loss [gallons] [g/gal/day] [g/m 2 /day]



### 0.06 0.20 5.39 0.08 0.26 6.67 0.09 0.12 0.09 0.19 5.88 0.10 0.28 0.12 0.53 9.01 0.15 0.42 7.32 0.16 0.29 4.79 0.25 1.32 11.56 0.25 0.73 10.65 0.25 0.67 9.75 0.25 0.74 10.75 0.25 0.86 12.54 0.25 0.68 9.91 0.25 1.06 9.24 0.25 1.24 10.84 0.25 0.99 8.68 0.25 0.67 9.80 0.25 0.66 9.65 0.25 0.62 9.07 0.25 1.39 12.17 0.25 1.26 11.03 0.29 1.27 15.00 0.38 0.27 0.38 1.30 10.66 0.38 0.92 9.18 0.38 0.08 0.50 1.39 12.69 0.50 1.04 8.53 0.55 1.24 0.74 1.82 1.4 1.72 7.81 1.7 1.14 1.8 1.47 6.19 3.9 3.28 4.84 5.0 3.20 5.0 2.75 5.0 3.82 8.80 7.5 2.07 2.86

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### Final Regulatory Impact Analysis
Some handheld equipment, primarily chainsaws, use structurally-integrated fuel tanks where the tank is molded as part of the body of the equipment. In these applications the frames (and tanks) are typically molded out of nylon for st rength. We tested structurally-integrated fuel tanks from four handheld equipment manufacturers at 29 

### / C on both gasoline and s 10 percent ethanol blend. The test results suggest that these fuel tanks are capable of meeting the standards using their current materials. In the cases where the permeation rates were higher than the standards, it was observed that the fuel cap seals had large exposed surface areas on the O-rings, which were not made of low permeation materials. Emissions could likely be reduced significantly from these tanks with improved seal designs. Table 5.3-4a presents the results of this testing. Note that permeation emissions are 20 to 70 percent higher on E10 than on gasoline for these fuel tanks.

Table 5.3-4a: Permeation Rates for Handhe ld Fuel Tanks Tested by EPA at 29°C
Tank ID Application Material Test Fuel Permeation Loss [g/m 2 

### /day]

R1 R2 R3 clearing saw (0.24 gallons) nylon 6 gasoline E10 E10 0.34 0.42 0.48

B1 B2 B3 B4 hedge clipper (0.05 gallons) nylon 6, 33% glass gasoline E10 E10 E10 0.62 1.01 1.12 0.93

W1 W2 W3 chainsaw (0.06 gallons) nylon 6, 30% glass gasoline E10 E10 1.45 2.18 2.46

G1 G2 G3 chainsaw (0.06 gallons) nylon 6, 30% glass gasoline E10 E10 1.30 1.41 2.14

The handheld industry also tested a number of fuel tanks for their products. 57 

### In this testing, they investigated the effect of fuel type and gasket material on the permeation results. These test results suggested that permeation can be reduced significantly by using a low permeation material, such as FKM, for the seal on the fuel cap. In addition, data on aged tanks suggested that NBR o-rings may deteriorate in-use such that the permeation rate (or vapor leak rate) through the seal increases greatly. This test data is presented in Table 5.3-4b.

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### Feasibility of Evaporative Emission Control
Table 5.3-4b: Permeation Rates for Handheld Fuel Tanks Tested by Industry
Tank Capacity Tank Material O-ring Material Test Temp. Test Fuel Permeation Loss [g/m 2 

### /day]

350cc nylon 6, 30% glass NBR NBR Aged NBR* New NBR* 28 

### / C CE10 1.00 0.64 45.2 0.92

260cc nylon 6, 30% glass NBR 28 

### / C CE10 1.31 0.64

773cc nylon 6, 30% glass NBR 40 

### / C CE10 CE10 gasoline 3.58 2.60 1.10

400cc nylon 6, 30% glass FKM 40 

### / C CE10 0.40

1538cc nylon 6, 33% glass NBR 40 

### / C CE10 1.11

1538cc nylon 6, 30% glass NBR FKM 40 

### / C CE10 1.42 0.37

530cc nylon 6, 30% glass NBR 40 

### / C gasoline 1.55

400cc HDPE NBR (gasket) 40 

### / C gasoline 17.5 * these units were used in the field prior to testing



### 5.3.1.1.3 Portable fuel tanks
The California Air Resources Board (ARB) i nvestigated permeation rates from portable fuel containers. Although this testing was not on Small SI or marine fuel tanks, the fuel tanks tested are of similar construction. 58,59 

### The ARB data is compiled in several data reports on their web site and is included in our docket. Table 5.3-5 presents a summary of this data which was collected using the ARB Test Method 513. 60 

### Due to the increasing surface to volume ratio with decreasing fuel tank sizes, data presented in terms of grams per gallon for smaller tanks would be expected to be higher for the same grams per surface area permeation rate. Although the temperature in the ARB testing is cycled from 18 - 41°C rather than held at a constant temperature, the results would likely be similar if the data were collected at the average temperature of 29°C which is used in the EPA testing.

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### Final Regulatory Impact Analysis

Table 5.3-5: Permeation Rates for HDPE Portable Fuel Containers Tested by ARB Over a 18-41°C Diurnal Tank Capacity [gallons] Permeation Loss [g/gal/day]


### 1.0 1.0 1.0 1.0 1.0 1.0 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 2.1 2.1 2.1 2.1 2.5 2.5 5.0 5.0 5.0 5.0 5.0 5.0 5.0 6.6 1.63 1.63 1.51 0.80 0.75 0.75 0.50 0.49 0.51 0.52 0.51 0.51 1.51 1.52 1.88 1.95 1.91 1.78 1.46 1.09 0.89 0.62 0.99 1.39 1.46 1.41 1.47 1.09

5.3.1.2 Effect of temperature on permeation rate
It is well known that the rate of permeation is a function of temperature. For most materials, permeability increases by about a factor of 2 for every 10°C increase in temperature. 61 

### To determine this relationship for nonroad fuel tanks, we performed permeation testing on nine HDPE Small SI fuel tanks at both 29°C and 36°C (85°F and 96°F). This sample set included both baseline and surface treated fuel tanks. On average (excluding the outlier), the temperature effect was equivalent to nearly a factor of 2 increase in permeation per 10°C increase in temperature. The one outlier likely resulted from measurement error due to the very low permeation levels (0.5 grams lost over 2 weeks). Table 5.3-6 presents the test results.

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### Data on HDPE samples

80% increase in permeation per 10 C increase in temperature Feasibility of Evaporative Emission Control
Table 5.3-6: Effect of Temperature on Perm eation from HDPE Small SI Fuel Tanks
Tank Treatment 29°C [g/m 2 

### /day] 36°C [g/m 2 

### /day] Increase per 10°C

A B C untreated 11.5 11.4 11.2 17.1 16.6 17.0 92% 86% 97%

D E F sulfonated 2.48 2.73 2.24 4.10 3.98 3.42 127% 85% 100%

H I J fluorinated 0.56 0.62 0.22 0.75 0.68 0.31 60% 17% 80%

Published data collected on HDPE samples at four temperatures 62,63 

### suggest that the permeation of gasoline through HDPE increases by about 80 percent for every 10°C increase in temperature. This relationship is presented in Figure 5.3-1, and the numeric data can be found in Appendix 5D.

Figure 5.3-1: Effect of Temperature on HDPE Permeation



### 0 50 100 150 200 250 300 350 400 450g mm/m2 day



### 0 10 20 30 40 50 60 70 

## degrees Celsius

Another study was performed on the permeation from complete automotive fuel systems. 64 

### These fuel systems, which included fuel tanks, hoses, and other components, were tested at both 29°C and 40°C on three fuel type s (gasoline, ethanol blend, and MTBE blend).

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### Final Regulatory Impact Analysis
The effect of temperature on permeation did not a ppear to be significantly affected by fuel type. Table 5.3-7 presents this data for ten automotive fuel systems tested on gasoline. This data showed more than a factor of 2 increase in permeation per 10°C increase in temperature.
Table 5.3-7: Effect of Temperature on Perm eation from Automotive Fuel Systems Fuel System Fuel Tank 29°C [mg/hr] 40°C [mg/hr] Increase per 10°C 2001 Toyota Tacoma 2000 Honda Odyssey 1999 Toyota Corolla 1997 Chrysler Town & Country 1995 Ford Ranger 1993 Chevrolet Caprice Classic 1991 Honda Accord LX

1989 Ford Taurus GL

1985 Nissan Sentra 1978 Olds Cutlass Supreme Metal Plastic (enhanced evap) Metal Plastic (enhanced evap) HDPE Fluorinated HDPE Metal Metal Metal Metal 9 21 10 23 309 95 40 24 53 57 20 55 24 52 677 255 110 52 148 122 101% 136% 124% 110% 102% 143% 148% 100% 152% 99%

5.3.1.3 Units for reporting the permeation rate (g/gal/day vs. g/m 2 

### /day)
Much of the permeation data presented in this chapter is in units of grams of hydrocarbons lost in a day divided by the capacity of the fuel tank (g/gal/day). For diurnal emissions, these units are used because the vapor generation is a function of fuel tank volume. For permeation emissions, we considered using these units because the capacity of the fuel tank is generally readily available; either identified on the fuel tank or readily measured. However, although volume is generally used to characterize fuel tank emission rates, permeation is actually a function of surface area. Because the surface to volume ratio of a fuel tank changes with capacity and geometry of the tank, two similar shaped tanks of different volumes or two different shaped tanks of the same volume could have different g/gal/day permeation rates even if they were made of the same material and used the same emission control technology. For this reason, the final standards are based on units of grams per square meter of inside surface area (g/m 2 

### /day).
This chapter presents permeation data for a large number of Small SI, marine, and other fuel tanks. For many of these fuel tanks, we had information on both the volume and inside surface area. Figure 5.3-2 presents the relationship between fuel tank volume in gallons and inside surface area in square meters. As a fuel tank becomes smaller, its surface to volume ratio increases. This relationship can be seen better in the chart to the right which presents only data for fuel tanks less than 1 gallon. A hyperbolic curve is fit through the data in Figure 5.3-2 to represent this relationship. This is seen better in the right-side chart which presents only smaller tank sizes. In addition to fuel tank volume, the surface to volume ratio is affected by geometry

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### Feasibility of Evaporative Emission Control
of the fuel tank. A long flat-fuel tank would have a higher surface to volume than a cube or spherical design. Larger plastic fuel tanks, used primarily in marine vessels, tend to have somewhat high surface to volume ratios for this reason.

Figure 5.3-2: Relationship Between Tank Volume and Inside Surface Area

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5

0 10 20 30 40 

### volume [gallons]inside surface area [m2]

0.00 0.05 0.10 0.15 0.20

0.0 0.5 1.0 

### volume [gallons]inside surface area [m2]



### 5.3.1.4 Effect of fuel tank fill level on permeation
Permeation is driven by the chemical potential of the fuel or vapor in contact with the plastic. In a fuel tank, the vapor is essentially at equilibrium with the fuel in a fuel tank. Therefore, the permeation rate is the same through the surfaces in contact with saturated vapor as it is through the surfaces in contact with the liquid fuel. Because the permeation rate of saturated vapor and liquid fuel are the same, the fill level of the fuel tank during a permeation test does not affect the measured results. Figure 5.3-3: Cup Method The fact that liquid fuel and saturated fuel vapor result in the same permeation rates is supported by published literature. 65,66,67,68 

### In two of these studies, permeation was measured for material samples using the cup method illustrated in Figure 5.3-3. In these tests, no significant difference was seen between the permeation rates for material samples exposed to liquid fuel or to fuel vapor. To test for permeation with fuel vapor, the cup was inverted so that the fuel was on the bottom and the sample was taken off the top. Table 5.3-8 presents the data from these two reports. In both cases, the material being tested was a fluoroelastomer. Purge Gas to Sampler Fuel Sample

Material Sample

Purge Gas to Sampler Fuel Sample

Material Sample

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### Final Regulatory Impact Analysis
Table 5.3-8: Permeation Measured in Cup Method with Fuel Versus Vapor Fuel Exposure Paper Fuel Temperature Liquid Fuel Exposure Fuel Vapor Exposure

SAE 2001-01-1999 CE10 40 / C 30.5 g/m 2 /day 29.5 g/m 2 /day

SAE 2000-01-1096 CE10

CM15 23 / C 40 / C 23 / C 40 / C 0.3 g/test 2.6 g/test 3.1 g/test 9.5 g/test 0.3 g/test 2.5 g/test 2.9 g/test 8.5 g/test



### One commenter presented test data suggesting that fill level may affect permeation emissions. 69 

### They tested four HDPE jugs, two filled to 40 percent and two filled to 100 percent with gasoline and saw a 15 percent difference in the average permeation results for the two fill levels (1.3 g/gal/day for 40 percent fill and 1.5 g/gal/day for 100 percent fill). Although this small measured difference was likely due to test variability, we performed our own testing to study the effect of fill level. For this testing, we used two 6-gallon HDPE portable marine fuel tanks. The fuel tanks were soaked with gasoline for 12 weeks to ensure a stabilized permeation rate. Each tank was tested at both 50 percent and 90 percent fill. No significant difference in permeation rate was observed for either tank. Table 5.3-9 presents the results in terms of g/gal/day at 29°C.

Table 5.3-9: Effect of Fuel Tank Fill Level on Permeation for Two Portable Marine Fuel Tanks [g/gal/day]
50% fill 90% fill

Tank 1 Tank 2 1.16 0.77 1.21 0.78



### Another study showed mixed results. Four automotive fuel systems (including fuel tank, hose, and other components) were tested for permeation with the fuel tanks filled with Fuel C to both 20 percent and 100 percent of capacity. 70 

### Prior to the testing, the fuel tanks were soaked with fuel at the specified fill levels until a stable permeation rate was achieved. It was not clear what fraction of the permeation came from the fuel tanks compared to other fuel system components or how the fuel level affected the exposure of the other components. In this study, two of the fuel systems saw no significant change in permeation as a result of a change in fill level. These two fuel system were on older vehicles, one with an untreated and one with a fluorinated HDPE fuel tank. Two other fuel syst ems, using fuel tanks that meet automotive enhanced evaporative emission requirements, showed significant reductions in fuel system permeation (32 percent and 49 percent) when tested with the fuel tank filled to only 20 percent capacity. The study presented no rationale for this effect; however, it should be noted that these were very low permeation systems and measurement error would presumably be larger. These data are presented in Table 5.3-10. In addition, it is possible that the change in fill level affected whether or not there was fuel in the hoses. As discussed later in this chapter, the vapor

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### Feasibility of Evaporative Emission Control
concentration in fuel hoses may be significantly lower than saturated when exposed only to vapor due to diffusion constraints.

Table 5.3-10: Effect of Fuel Tank Fill Level on Permeation for Four Automotive Fuel Systems at 29 

### / C [g/hour] Description of Fuel Tank 20% fill 80% fill Rig 2 Rig 4 Rig 5 Rig 6 enhanced evap system enhanced evap system HDPE fuel tank fluorinated HDPE fuel tank 0.013 0.021 0.350 0.095 0.019 0.041 0.349 0.094



### The California Air Resources Board also performed testing on three pairs of portable fuel tanks. 71 

### All of the fuel tanks were identical 1 gallon tanks made out of HDPE. Each pair was filled to a different level with California certification fuel (30 percent, 50 percent and 70 percent fill). The fuel tanks were then sealed and subjected to five days of the California diurnal test (65-105 

### / F) and weight loss was measured daily. Over the five days of testing, the tanks with lower fill levels actually saw significantly higher permeation than the other tanks. Looking at the last day of testing, which represents some conditioning of the fuel tanks by the fuel resulting in more stabilized permeation rates, the permeation rates are similar regardless of the fill level. This data, which is presented in Table 5.3-11, suggests that the fuel vapor in the tanks permeated at the same rate as (or higher than) the liquid fuel.

Table 5.3-11: Effect of Fuel Tank Fill Level on Permeation for Three Pairs of Portable Fuel Tanks [g/day]
Tank Fill Level 5-Day Permeation Last Day Permeation

30a 30b 30% 1.79 1.57 1.87 1.91

50a 50b 50% 1.53 1.03 1.91 1.43

70a 70b 70% 1.26 1.08 1.85 1.43



### 5.3.1.5 Effect of background concentration on permeation
As discussed above, permeation is driven by the difference in chemical potential between the inside and outside of the tank. If the concentration of vapor outside the fuel tank were large enough, it could reduce the permeation rate of fuel through the tank. One commenter presented test data suggesting that, at very low concentrations of vapor in the boat around the fuel tank, that the permeation rate would be significantly reduced. 72 

### This test data was based on two three hour tests on 5 gallon HDPE bottles at 35°C. They measured 0.57 g/hr with a background

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### Final Regulatory Impact Analysis
concentration of 26 ppm and 0.36 g/hr with a background of 212 ppm. No repeat tests were run. It is not clear why the above results were measured. Compared to the concentration of the fuel vapor in the tank, this difference between 212 and 26 ppm is minuscule (about three orders of magnitude difference from saturated vapor). It is more likely that this effect was due to test variation.
To investigate this potential effect on permeation emissions further, we performed our own testing. First, we measured the concentration of fuel vapor around the fuel tank on a summer day in a runabout with the tank installed in the hull. This concentration was 1400 ppm. We then tested two different fuel tanks for pe rmeation with different background concentrations. The background concentration was maintained by controlling the bleed of fresh air through the test container or SHED. Each test ran for about two weeks and the permeation rates were determined using the weight loss method. Prior to the testing, the tanks were soaked until a stable permeation rate was achieved, then new fuel was added to the tank just prior to beginning the test. The fuel tank was soaked until the fuel temperature stabilized at 29°C before the beginning weight was measured. The results, which are presented in Table 5.3-12, showed no significant difference in permeation as a func tion of background concentrations of hydrocarbon vapor.
Table 5.3-12: Effect of Background Concentration on Permeation
Fuel Tank Background [ppmC] Permeation [g/gal/day] 6 gallon HDPE 30 1500 0.77 0.78 23 gallon cross-link PE 30 150 1350 0.64 0.67 0.66

5.3.2 Fuel Tank Permeation Reduction Technologies
There are several strategies that can be used to reduce permeation from plastic fuel tanks. This section presents data collected on five permeation control strategies: sulfonation, fluorination, non-continuous barrier platelets, coextruded continuous barrier, and alternative materials.

5.3.2.1 Sulfonation
Sulfonation is a process where the surface of the fuel tank is treated to minimize permeation. The sulfonation process uses sulfur trioxide is used to create the barrier by reacting with the exposed polyethylene to form sulfonic acid groups on the surface. Current practices for sulfonation are to place fuel tanks on a small assembly line and expose the inner surfaces to sulfur trioxide, then rinse with a neutralizing ag ent. However, sulfonation can also be performed off-line. Either of these processes can be used to reduce gasoline permeation by more than 90

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### Feasibility of Evaporative Emission Control
percent from new tanks. 73



### We tested several sulfonated marine fuel tanks at 29°C for permeation. This testing included both HDPE blow-molded fuel tanks a nd cross-link polyethylene rotationally-molded tanks. Both gasoline and alcohol fuel blends were investigated. In some cases, the fuel tanks were exposed to durability testing as described in Section 5.6.2. The fuel tanks were stored with fuel in them (soaked) for preconditioning, then they were drained and then filled with fresh fuel prior to each permeation test. The purpose of the soak periods was to ensure that the fuel permeation rate had stabilized and the purpose of the pressure cycles and slosh testing was to evaluate the durability of the barrier treatment.

We also collected data from ARB and other sources on the effectiveness of sulfonation for reducing permeation emissions from plastic fuel tanks. Most of this research has been performed on blow-molded HDPE fuel tanks. As shown in these data, it is important that the resin formulation be matched to the sulfonation process. The following discussions look at sufonation results on HDPE and on cross-link polyethylene separately.

HDPE fuel tanks

We tested several HDPE fuel tanks that were sulfonated on the internal surfaces. These included three 6-gallon and one 3.3 gallon portable marine fuel tanks and three all-terrain vehicle (ATV) fuel tanks. These fuel tanks were sent to a sulfonater for barrier treatment. Multiple fuel tanks were used so that they could be tested on certification gasoline , E10 (10 percent ethanol), and M15 (15 percent methanol). The test results, presented in Table 5.3-13, showed more than a 90 percent reduction in permeation emissions from baseline. However, the two fuel tanks that were subjected to slosh testing saw emission levels above the standard. This may have been a material compatibility issue as discussed below. The test results are consistent with similar data collected by the California Air Resources Board.

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### Final Regulatory Impact Analysis

Table 5.3-13: EPA Permeation Data on Sulfonated HDPE Fuel Tanks at 29°C
Treatment Fuel Soak Period g/gal/day g/m 2 /day 6 gallon portable marine fuel tanks

baseline sulfonated sulfonated sulfonated sulfonated gasoline gasoline gasoline, sloshed E10 M15 15 weeks 16 weeks 12 weeks 24 weeks 24 weeks 0.77 0.04 0.39 0.14 0.08 8.53 0.45 4.30 1.58 0.84 4 gallon ATV fuel tanks

sulfonated sulfonated sulfonated gasoline E10 M15 20 weeks 24 weeks 24 weeks 0.13 0.06 0.08 1.05 0.45 0.64 3.3 gallon portable fuel tank

baseline sulfonated sulfonated E10 E10 E10, sloshed 14 weeks 14 weeks 38 weeks 0.96 0.06 0.16 12.7 0.83 2.09



### We performed slosh testing on the 6 and 3.3 gallon portable marine fuel tanks with E10 fuel. This slosh testing included 1 million cycles consistent with the durability test procedure. After the slosh testing, the permeation rates were measured to be 2.0 and 4.3 g/m 2 

### /day for the 3.3 and 6 gallon fuel tanks, respectively. As discussed below, we believe that the impact of the durability testing on the effectiveness of sulfonation can be minimized if the sulfonation process and material properties are matched properly. However, this data supports the need for the durability testing requirements.
The California Air Resources Board (ARB) co llected test data on permeation rates from sulfonated portable fuel containers using California certification fuel. 74 

### The results show that sulfonation can be used to achieve significant reductions in permeation from plastic fuel containers. This data was collected using a diurnal cycle from 18-41°C which is roughly equivalent to steady-state permeation testing at 29°C. The average emission rate for the 32 sulfonated fuel tanks is 0.35 g/gal/day; however, there was a wide range in variation in the effectiveness of the sulfonation process for these fuel tanks. Some of the data outliers were actually higher than baseline emissions. This was likely due to leaks in the fuel tank which would result in large emission increases due to pressure built up with temperature variation over the diurnal cycle. Removing these five outliers, the average permeation rate is 0.17 g/gal/day with a minimum of 0.01 g/gal/day and a maximum of 0.64 g/gal/day. This data suggests that more than a 90 percent reduction in permeation from HDPE fuel tanks is possible through sulfonation. This data is presented in Table 5.3-14.

5-44

### Feasibility of Evaporative Emission Control

Table 5.3-14: Permeation Rates for Sulfonated Plastic Fuel Containers Tested by ARB Over a 18-41°C Diurnal Tank Capacity [gallons] Permeation Loss [g/gal/day]



### 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5

5 5 5 5 5 5 5 0.05 0.05 0.05 0.06 0.06 0.06 0.08 0.12 0.14 1.23 1.47 1.87 0.02 0.02 0.48 0.54 1.21 0.03 0.08 0.32 0.38 0.42 0.52 0.64 0.80 0.01 0.04 0.05 0.06 0.11 0.13 0.15

Variation can occur in the effectiveness of this surface treatment if the sulfonation process is not properly matched to the plastic and additives used in the fuel tank material. For instance, if the sulfonater does not know what UV inhibitors or plasticizers are used, they cannot maximize the effectiveness of their process. Earlier data collected by ARB showed consistently high emissions from sulfonated fuel tanks; howev er, ARB and the treatment manufacturers agree that this was due to inexperience with treating fuel tanks and that these issues have since been

5-45

### Final Regulatory Impact Analysis
largely resolved. 75


### ARB also investigated the effect of fuel slosh on the durability of sulfonated surfaces. Three half-gallon fuel tanks used on Small SI equipment were sulfonated and tested for permeation before and after being sloshed with fuel in them 1.2 million times. 76,77 

### These fuel tanks were blow-molded HDPE tanks used in a number of Small SI applications including pressure washers, generators, snowblowers, and tillers. The results of this testing show that an 85 percent reduction in permeation was achieved on average even after the slosh testing was performed. Table 5.3-15 presents these results which were recorded in units of g/m 2 

### /day. The baseline level for Set #1 is an approximation based on testing of similar fuel tanks, while the baseline level for Set #2 is based on testing of those tanks.

The sulfonater was not aware of the materials used in the fuel tanks sulfonated for the slosh testing. After the tests were performed, the sulfonater was able to get some information on the chemical make up of the fuel tanks and how it might affect the sulfonation process. For example, the UV inhibitor used in some of the fuel tanks is known as HALS. HALS also has the effect of reducing the effectiveness of the sulfonation process. Two other UV inhibitors, known as carbon black and adsorber UV, are also used in similar fuel tank applications. These UV inhibitors cost about the same as HALS, but have the benefit of not interfering with the sulfonation process. The sulfonater claimed that if HALS were not used in the fuel tanks, a 97 percent reduction in permeation would have been seen. 78 

### To confirm this, one manufacturer tested a sulfonated tank similar to those in Set #2 except that carbon black, rather than HALS, was used as the UV inhibitor. This fuel tank showed a permeation rate of 0.88 g/m 2 

### /day at 40°C 79 

### which was less than half of what the CARB testing showed on their constant temperature test at 40°C. 80 

### A list of resins and additives that are compatible with the sulfonation process is included in the docket. 81,82

5-46

### Feasibility of Evaporative Emission Control

Table 5.3-15: Permeation Rates for Sulfonated Fuel Tanks with Slosh Testing by ARB Over a 18-41°C Diurnal Technology Configuration Units Tank 1 Tank 2 Tank 3 Average

Set #1 Approximate Baseline g/m 2 

### /day 10.4 10.4 10.4 10.4

Set #1 Sulfonated g/m 2 

### /day % reduction 0.73 93% 0.82 92% 1.78 83% 1.11 89%

Set #1 Sulfonated & Sloshed g/m 2 

### /day % reduction 1.04 90% 1.17 89% 2.49 76% 1.57 85%

Set #2 Average Baseline g/m 2 

### /day 12.1 12.1 12.1 12.1
Set #2 Sulfonated g/m 2 

### /day % reduction 1.57 87% 1.67 86% 1.29 89% 1.51 88%

Set #2 Sulfonated & Sloshed g/m 2 

### /day % reduction 2.09 83% 2.16 82% 1.70 86% 1.98 84%

About a year and a half after the California ARB tests on the Set #2 fuel tanks, we performed permeation tests on these fuel tanks. During the intervening period, the fuel tanks remained sealed with California certification fuel in them. We drained the fuel tanks and filled them with fresh California certification fuel. We then measured the permeation rate at 29°C. Because this is roughly the average temperature of the California variable temperature test, similar permeation rates would be expected. The untreated fuel tanks showed slightly lower permeation over the constant temperature test. This difference was likely due to the difference in the temperature used for the testing. However, the sulfonated fuel tanks showed an increase in permeation. This increase in permeation appears to be the result of the 1.5 year additional fuel soak. After this long soak, the average permeation reduction changed from 84 to 78 percent. Table 5.3-13 presents this comparison.

5-47

### Final Regulatory Impact Analysis
Table 5.3-16: Permeation Rates [g/m 2 

### /day] for Sulfonated Fuel Tanks Tested by ARB and EPA on CA Certification Gasoline with a 11⁄2 Year Fuel Soak Differential Technology Configuration Temperatu

re Tank 1 Tank 2 Tank 3 Average

Baseline, CARB testing 18-41°C 12.1 12.1 12.1 12.1 Baseline, EPA testing after 1.5 year additional fuel soak 29°C % change 11.5 -5% 11.4 -6% 11.2 -7% 11.4 -6%

Sulfonated, CARB testing 18-41°C 2.09 2.16 1.70 1.98

Sulfonated, EPA testing after 1.5 year additional fuel soak 29°C % reduction 2.48 78% 2.73 76% 2.24 80% 2.5 78%

After the above testing, we drained the fuel tanks and filled them with certification gasoline splash-blended with 10 percent ethanol (E10). We then soaked the fuel tanks for 20 weeks to precondition them on this fuel. Following the preconditioning, we tested these fuel tanks for permeation at 29 

### / C (85 

### / F). Table 5.3-17 presents these emission results compared to the emission results for three baseline tanks (untreated) that were subject to the same preconditioning. Percent reductions are presented based on the difference between the sulfonated fuel tanks and the average results of the three untreated fuel tanks.

Table 5.3-17: Permeation Rates for Sulfo nated Fuel Tanks on E10 Fuel at 29 

### / C

Technology Configuration Units Tank 1 Tank 2 Tank 3 Average

Baseline (untreated) g/m 2 

### /day 13.9 13.7 14.4 14.0
Sulfonated g/m 2 

### /day % reduction 3.91 72% 4.22 70% 2.92 79% 3.69 74%

An in-use durability testing program was also completed for sulfonated HDPE fuel tanks and bottles. 83 

### The fuel tank had a 25 gallon capacity and was removed from a station wagon that had been in use in southern California for five years (35,000 miles). The fuel tank was made of HDPE with carbon black used as an additive. After five years, the sulfonation level measured on the surface of the plastic fuel tank did not change. Tests before and after the aging both showed a 92 percent reduction in gasoline permeation due to the sulfonation barrier compared to the permeation rate of a new untreated tank. Testing was also done on 1 gallon bottles made of HDPE with 3 percent carbon black. These bottles were shown to retain over a 99 percent barrier

5-48

### Feasibility of Evaporative Emission Control
after five years. This study also looked at othe r properties such as yield strength and mechanical fatigue and saw no significant deterioration.
One study looked at the effect of alcohol in the fuel on permeation rates from sulfonated fuel tanks. 84 

### In this study, the fuel tanks were tested with both gasoline and various methanol blends. No significant increase in permeation due to methanol in the fuel was observed.

XLPE fuel tanks
We tested eight sulfonated cross-link polyethylene (XLPE) fuel tanks for permeation emissions. These tanks were produced by marine fuel tank manufacturers specifically for this testing. The fuel tanks were then treated by a sulfonater. For the first four tanks tested, the fuel tanks were molded using the resin formulation and processes currently used by the fuel tank manufacturers. When the sulfonation was applied, we observed that the barrier was soft and could be scraped off easily. When tested, the barrier on these fuel tanks was not as effective as had been seen on HDPE fuel tanks.

Because the barrier could be scratched off, the sulfonater ascertained that the sulfonation had poor surface penetration and the darkness of the barrier suggested heavy oxidation. For the next batch of four test tanks, the sulfonater wo rked with the material supplier and roto-molder and attempted to develop a formulation that may be more compatible with sulfonation. They decided to use the same material, but bake it in the oven longer to remove more oxygen from the surface of the fuel tank. Four bake times were used to produce the four 6-gallon test tanks: 11, 12, 14, and 16 minutes. It was observed that the sulfonation barrier could not easily be scratched off these fuel tanks. We tested the four sulfonated on E10 (10 percent ethanol) using the same procedures as for the HDPE tanks discussed above. The test results did not show a significant improvement.
Another approach may be to mold an inner liner of HDPE inside a XLPE shell. These materials readily bond with each other and sulfonation has been demonstrated for HDPE. This construction, which is currently used in chemical storage applications, is performed in the oven through the use of a “drop box” in the mold containing the HDPE. This drop-box is opened part way through the oven cycle allowing for a HDPE layer to be molded on the inside of the fuel tank.

5.3.2.2 Fluorination
Another barrier treatment process is known as fluorination. The fluorination process causes a chemical reaction where exposed hydrogen atoms are replaced by larger fluorine atoms which form a barrier on the surface of the fuel tank. In this process, fuel tanks are generally processed post production by stacking them in a steel container. The container is then voided of air and flooded with fluorine gas. By pulling a vacuum in the container, the fluorine gas is forced into every crevice in the fuel tanks. As a result of this process, both the inside and outsidesurfaces of the fuel tank would be treated. As an alternative, fuel tanks can be fluorinated online by exposing the inside surface of the fuel tank to fluorine during the blow molding process.

5-49

### Final Regulatory Impact Analysis
However, this method may not prove as effective as off-line fluorination which treats the inside and outside surfaces.
We tested several fluorinated marine fuel tanks at 29°C for permeation. This testing included both HDPE blow-molded fuel tanks a nd cross-link polyethylene rotationally-molded tanks. Both gasoline and alcohol fuel blends were investigated. In some cases, the fuel tanks were exposed to durability testing as described in Section 5.6.2. The fuel tanks were stored with fuel in them (soaked) for preconditioning, then they were drained and then filled with fresh fuel prior to each permeation test. The purpose of the soak periods was to ensure that the fuel permeation rate had stabilized and the purpose of the pressure cycles and slosh testing was to evaluate the durability of the barrier treatment.

We also collected data from ARB and other sources on the effectiveness of fluorination for reducing permeation emissions from plastic fuel tanks. Most of this research has been performed on blow-molded HDPE fuel tanks. Howeve r, we believe that fluorination can also be applied effectively for injection-molded HDPE tanks as well. The following discussion looks at each material separately as well as rotationally-molded cross-link polyethylene.

Blow-molded HDPE fuel tanks
We tested one fluorinated HDPE fuel tank which we bought off the shelf and sent to a fluorinater for barrier treatment. The fuel ta nk type used was a 6-gallon portable marine fuel tank. The fuel tank was soaked for 20 weeks with certification gasoline prior to testing. We measured a permeation rate of 0.05 g/gal/day (0.56 g/m 2 

### /day) which represents more than a 95 percent reduction from baseline. We then began soaking this fuel tank on E10, subjected it to the pressure and slosh testing, and retested the fuel tank. The post durability testing result showed a permeation rate of 0.6 g/gal/day (6.8 g/m 2 

### /day). As discussed below, we believe that the impact of the durability testing on the effectiveness of fluorination on can be minimized if the fluorination process and material properties are matched properly. In addition, this fuel tank was treated to a significantly lower level of fluorination than is now available. However, this data supports the need for the durability testing requirements.
The California Air Resources Board (ARB) co llected test data on permeation rates from fluorinated fuel containers using California certification fuel. 85,86 

### The results show that fluorination can be used to achieve significant reductions in permeation from plastic fuel containers. This data was collected using a diurnal cycle from 18-41°C which is roughly equivalent to steady-state permeation testing at 30°C. For the highest level of fluorination, the average permeation rate was 0.04 g/gal/day which represents a 95 percent reduction from baseline. Earlier data collected by ARB showed consistently high emissions from fluorinated fuel tanks; however, ARB and the treatment manufacturers agree that this was due to inexperience with treating fuel tanks and that these issues have since been largely resolved. 87 

### The ARB data is presented in Table 5.3-18.

5-50

### Feasibility of Evaporative Emission Control

Table 5.3-18: Permeation Rates for Fluorinated Plastic Fuel Containers Tested by ARB Over a 18-41°C Diurnal
Barrier Treatment* Tank Capacity [gallons] Permeation Loss [g/gal/day]

Level 4
(average =0.09 g/gal/day) 1 1 1 5 5 5 0.05 0.05 0.06 0.11 0.11 0.15

Level 5
(average =0.07 g/gal/day) 

### 1 1 1 1 1 1 1 1 1 2.5 2.5 2.5 2.5 2.5

5 5 5 

### 0.03 0.04 0.05 0.05 0.07 0.08 0.11 0.11 0.12 0.04 0.04 0.05 0.07 0.07 0.05 0.10 0.11

SPAL (average =0.04 g/gal/day) 5 5 5 0.04 0.04 0.04 *designations used in ARB report; shown in order of increasing treatment



### All of the data on fluorinated fuel tanks presented above were based on fuel tanks fluorinated by the same company. Available data from another company that fluorinates fuel tanks shows a 98 percent reduction in gasoline permeation through a HDPE fuel tank due to fluorination. 88



### ARB investigated the effect of fuel slosh on the durability of fluorinated surfaces. Two sets of three fluorinated fuel tanks were tested for permeation before and after being sloshed with fuel in them 1.2 million times. 89,90 

### These fuel tanks were 0.5 gallon, blow-molded HDPE tanks used in a number of Small SI applications including pressure washers, generators, snowblowers, and tillers. The results of this testing show that an 80 percent reduction in permeation was achieved on average even after the slosh testing was performed for Set #1. However, this data

5-51

### Final Regulatory Impact Analysis
also showed a 99 percent reduction for Set #2. This shows the value of matching the barrier treatment process to the fuel tank material. Table 5.3-19a presents these results which were recorded in units of g/m 2 

### /day. The baseline level for Set #1 is an approximation based on testing of similar fuel tanks, while the baseline for Set #2 is based on testing of those tanks.

Table 5.3-19a: Permeation Rates for Fluorinated Fuel Tanks with Slosh Testing by ARB Over a 18-41°C Diurnal Technology Configuration Units Tank 1 Tank 2 Tank 3 Average

Set #1 Approximate Baseline g/m 2 

### /day 10.4 10.4 10.4 10.4

Set #1 Fluorinated g/m 2 

### /day % reduction 1.17 89% 1.58 85% 0.47 96% 1.07 90%

Set #1 Fluorinated & Sloshed g/m 2 

### /day % reduction 2.38 77% 2.86 73% 1.13 89% 2.12 80%

Set #2 Approximate Baseline g/m 2 

### /day 12.1 12.1 12.1 12.1

Set #2 Fluorinated g/m 2 

### /day % reduction 0.03 >99% 0.00 >99% 0.00 >99% 0.01 >99%

Set #2 Fluorinated & Sloshed g/m 2 

### /day % reduction 0.07 99% 0.11 99% 0.05 >99% 0.08 99%

About a year and a half after the California ARB tests on the Set #2 fuel tanks, we performed permeation tests on these fuel tanks. During the intervening period, the fuel tanks remained sealed with California certification fuel in them. We drained the fuel tanks and filled them with fresh California certification fuel. We then measured the permeation rate at 29°C. Because this is roughly the average temperature of the California variable temperature test, similar permeation rates would be expected. The untreated fuel tanks showed slightly lower permeation over the constant temperature test. This difference was likely due to the difference in the temperature used for the testing. However, the fluorinated fuel tanks showed an increase in permeation. This increase in permeation appears to be the result of the 1.5 year additional fuel soak. Even after this long fuel soak, the fluorination achieves more than a 95 percent reduction in permeation. Table 5.3-19b presents this comparison.

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### Feasibility of Evaporative Emission Control
Table 5.3-19b: Permeation Rates [g/m 2 

### /day] for Fluorinated Fuel Tanks Tested by ARB and EPA on CA Certification Gasoline with a 11⁄2 Year Fuel Soak Differential Technology Configuration Temperature Tank 1 Tank 2 Tank 3 Average

Baseline, CARB testing 18-41°C 12.1 12.1 12.1 12.1 Baseline, EPA testing after 1.5 year additional fuel soak 29°C % change 11.5 -5% 11.4 -6% 11.2 -7% 11.4 -6%

Fluorinated, CARB testing 18-41°C 0.07 0.11 0.05 0.08

Fluorinated, EPA testing after 1.5 year additional fuel soak 29°C % reduction 0.56 95% 0.62 95% 0.22 98% 0.47 96%

After the above testing, we drained the fuel tanks and filled them with certification gasoline splash-blended with 10 percent ethanol (E10). We then soaked the fuel tanks for 20 weeks to precondition them on this fuel. Following the preconditioning, we tested these fuel tanks for permeation at 29 

### / C (85 

### / F). Table 5.3-21 presents these emission results compared to the emission results for three baseline tanks (untreated) that were subject to the same preconditioning. Percent reductions are presented based on the difference between the fluorinated fuel tanks and the average results of the three untreated fuel tanks. The slight increase in permeation on the E10 fuel was similar for the baseline and fluorinated fuel tanks and still resulted in permeation rates well below the standard.

Table 5.3-20: Permeation Rates for Fluo rinated Fuel Tanks on E10 Fuel at 29 

### / C

Technology Configuration Units Tank 1 Tank 2 Tank 3 Average

Baseline (untreated) g/m 2 

### /day 13.9 13.7 14.4 14.0
Fluorinated g/m 2 

### /day % reduction 0.43 97% 0.62 96% 0.62 96% 0.56 96%

The handheld industry also tested a number of fluorinated fuel tanks for their products. 91 

### This testing included three fuel types and two test temperatures. These test results suggest that fluorination may be used to significantly redu ce permeation from handheld fuel tanks. Higher permeation rates were observed in CE10 than gasoline; however, it is not clear whether these impacts were due to increased permeation through the gaskets or through the tank. As shown earlier in Table 5.3-4b, the use of low permeation gasket materials can significantly improve permeation rates, especially on fuel CE10. This test data is presented in Table 5.3-21.

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### Final Regulatory Impact Analysis

Table 5.3-21: Permeation Rates for Handheld Fuel Tanks Tested by Industry Tank Capacity Gasket Material Test Temp. Test Fuel Permeation Loss [g/m 2 

### /day]

695 NBR 28 

### / C CE10 2.01 2.88

420 NBR 28 

### / C CE10 1.46 1.32
400* NBR FKM 40 

### / C gasoline 0.56 0.64

252 NBR 40 

### / C CE10 gasoline

CE10 E10 2.94 0.84 1.95 1.40 * A similar, untreated, tank was measured to have a permeation rate of 17.5 g/m 2 /day.



### Another study also looked at the effect of alcohol in the fuel on permeation rates from fluorinated fuel tanks. 92 

### In this study, the fuel tanks were tested with both gasoline and various methanol blends. No significant increase in permeation due to methanol in the fuel was observed.
Under their rule for small offroad equipment, California may issue executive orders to manufacturers with low emission products. As of August, 2006, ARB has issued 5 executive orders for low permeation fuel tanks. 93 

### Under these executive orders, three fluorination approaches have been approved. The California fuel tank permeation standard is 1.5 g/m 2 

### /day tested at 40 

### / C on California certification fuel. Table 5.3-22 presents the test results for the fuel tanks with ARB executive orders. Note that the reported emissions are the average of five test samples.

Table 5.3-22: ARB Fuel Tank Executive Orders for Small Offroad Equipment
EO# Test Fuel g/m 2 

### /day

C-U-05-015 C-U-06-019 C-U-06-006 Phase II Phase II Phase II 1.10 0.30 0.38

One automobile manufacturer used fluorination to reduce permeation on HDPE fuel tanks to meet the LEV I vehicle standards. This manufacturer used similar or more stringent requirements for fuel soak, durability, and testing than finalized today. At 40°C, this

5-54

### Feasibility of Evaporative Emission Control
manufacturer stated that they measured 0.15-0.2 g/day for fluorinated tanks compared to over 10 g/day for untreated HDPE fuel tanks. 94


### Injection-molded HDPE fuel tanks
The issue has been raised by manufacturers that HDPE intended for injection-molding has a somewhat different composition than HDPE used for blow-molding. To address this concern, testing has been performed on fluorinated, injection-molded fuel tanks as well. 95 

### These fuel tanks were tested using California’s TP -901 test procedures which preconditioning steps including fuel soak, slosh testing, and pressure-vacuum cycling. California Phase II gasoline was used for this testing.
Three similar fuel tanks were tested also over the Federal test procedure. 96 

### Under this testing, E10 fuel was used. Weight loss tests were performed before and after the durability tests in 40 CFR 1501.515. 97 

### These durability tests included slosh testing, pressure vacuum cycling, and UV exposure. Results from this testing are presented in Table 5.3-23. The permeation was significantly higher when tested on E10 fuel, especially when accounting for differences in test temperature. In addition, permeation increased somewhat after the durability testing. However, the measured permeation rates were well below the fuel tank permeation standard on E10 after the durability testing.

Table 5.3-23: Permeation Rates for Fluori nated, Injection-Molded Fuel Tanks [g/m 2 

### /day]
Test Procedure Test Temperature Tank 1 Tank 2 Tank 3 Average

California TP-901 40 / C 0.28 0.26 0.27 0.27

Federal Baseline After Durability Testing 28 / C

28 / C 0.32

0.30 0.47

0.92 0.42

0.57 0.41

0.60



### XLPE fuel tanks
We tested several fluorinated cross-link polyethylene (XLPE) fuel tanks for permeation emissions. The first tank was a 6 gallon test tank produced by a marine fuel tank manufacturer specifically for this testing. The remaining fuel tanks were purchased on the open market. The fuel tanks were then treated by a fluorinater. We tested the first tank on certification gasoline. After a 20 week soak, we observed a permeation rate of 0.11 g/gal/day (1.52 g/m 2 

### /day), which represented more than an 80 percent reduction in permeation.
The remainder of the fluorinated tanks were tested on E10 (10 percent ethanol) using the same procedures as for the HDPE tanks discussed above. These fuel tanks were treated at a level equivalent to what the fluorinater uses for automotive applications. All of the fuel tanks were treated both on the inside and outside. The test results, presented in Table 5.3-24, showed emission reductions of about 40 percent on average. Emission results from the sloshed fuel

5-55

### Final Regulatory Impact Analysis
tanks were not significantly different than from the tanks that were not sloshed.

Table 5.3-24: EPA Permeation Data on Fluo rinated Cross-Link Fuel Tanks at 29°C on E10
Fuel Tank Capacity Soak Period g/gal/day g/m 2 /day slosh test?

1 12 gallons 29 weeks 0.27 0.39 4.1 5.9 no
no 0.32 4.9 no 0.36 5.4 no 0.38 5.8 no
2 12 gallons 29 weeks 0.39 0.34 5.7 5.0 yes
no 0.42 6.2 no 0.32 4.6 no
3 12 gallons 29 weeks 0.28 0.22 0.22 3.4 2.6 2.8 yes
no
no



### 5.3.2.3 Barrier Platelets
Another approach to creating a permeation barrier in a fuel tank is to blend a low permeable resin in with the HDPE and extrude it with a single screw. The trade name typically used for this permeation control strategy is Selar ® 

### . The low permeability resin, typically nylon or EVOH, creates non-continuous platelets in the HDPE fuel tank which reduce permeation by creating long, tortuous pathways that the hydrocarbon molecules must navigate to pass through the fuel tank walls. Although the barrier is not continuous, this strategy can still achieve greater than a 90 percent reduction in permeation of gasoline. EVOH has much higher permeation resistance to alcohol than nylon; therefore, it would be the preferred material to use for meeting our standard which is based on testing with a 10 percent ethanol fuel.
We tested several portable gas cans and marine tanks molded with low permeation noncontinuous barrier platelets 29°C. Six of fuel tanks tested were constructed using nylon as the barrier material. The remainder of the fuel ta nks were constructed using ethylene vinyl alcohol (EVOH) as the barrier material. The advantage of EVOH is that it has much better resistance to alcohol than nylon. Five of the nylon based fuel tanks were tested on certification gasoline. The sixth tank was tested on E10 (10 percent ethanol) to evaluate the effectiveness of this material with alcohol blended fuel. The fuel tanks with the EVOH barrier were all tested on E10.
Testing was performed after the fuel tanks had been filled with fuel and stored at room temperature. The purpose of the soak period was to ensure that the fuel permeation rate had stabilized. Although 20 weeks was generally accepted as an acceptable period, we soaked the tanks with gasoline for 22 weeks and the tanks with E10 for 37 weeks. The fuel tanks were

5-56

### Feasibility of Evaporative Emission Control
drained and then filled with fresh fuel prior to th e permeation tests. Because the barrier platelets are integrated in the tank wall material, it did not seem likely that pressure or slosh testing would significantly affect the performance of this technology.
Table 5.3-25 presents the results of the permeation testing on the fuel tanks with barrier platelets. These test results show more than an 80 percent reduction for the nylon barrier tested on gasoline. However, the nylon barrier does not perform as well when a fuel with a 10 percent ethanol blend is used. Testing on a pair of 2 gallon tanks with nylon barrier showed 80 percent percent higher emissions when tested on E10 than on gasoline. We also tested fuel tanks that used EVOH barrier platelets. EVOH has signi ficantly better resistance to permeation on E10 fuel than nylon (see Appendix 5D for material properties). For the fuel tanks blended with 6 percent EVOH, we observed an average permeation rate of about 1.4 g/m 2 

### /day on E10 fuel which meets our permeation standard.

Table 5.3-25: Permeation Rates for Plastic Fuel Containers with Barrier Platelets Tested by EPA at 29°C
Percent Selar®* Tank Capacity [gallons] Test Fuel Fuel Soak [weeks] g/gal/day g/m 2 /day

Nylon barrier platelets

unknown** unknown** 4% 4% 4% 4% 2 2 5 5.3 6.6 6.6 gasoline E10 gasoline gasoline gasoline gasoline 40 40 22 22 22 22 0.54 0.99 0.35 0.11 0.15 0.14 3.7 6.8 4.1 1.2 1.6 1.5 EVOH barrier platelets

2% 4% 4% 6% 6% 6.6 6.6 6.6 6.6 6.6 E10 E10 E10 E10 E10 37 37 37 37 37 0.23 0.14 0.15 0.08 0.09 3.0 1.9 2.0 1.4 1.4 *trade name for barrier platelet technology used in test program ** designed to meet California permeation requirement



### Manufacturers raised the concern about whet her or not a tank using barrier platelets would have a stabilized permeation rate after 20 weeks. In other words, manufacturers were concerned that this technology may pass the test, but have a much higher permeation rate in-use. We tested one of the 4 percent and 6 percent EVOH tanks on E10 again after soaking for a total of 104 weeks (2 years). The measured permeation rates were 2.0 and 1.4 g/m 2 

### /day for the 4 percent and 6 percent EVOH tanks, respectively, which represents no significant changes in permeation from the 37 week tests. In contrast we measured the 4 percent nylon tanks again after 61 weeks and measured a permeation rates of 2.8 and 2.7 g/m 2 

### /day which represented about

5-57

### Final Regulatory Impact Analysis
an 80-90 percent increase in permeation compared to the 22 week tests.
The California Air Resources Board (ARB) co llected test data on permeation rates from portable fuel containers molded with low pe rmeation non-continuous barrier platelets using California certification fuel. These fuel tanks all used nylon as the barrier resin. The results show that this technology can be used to achieve significant reductions in permeation from plastic fuel containers. This data was coll ected using a diurnal cycle from 18-41°C which is roughly equivalent to steady-state permeation testing at 30°C. Because the data is reported in g/gal/day, we only include the data on fuel tanks here that are compatible in size with marine fuel tanks. This test data showed that more than a 90 percent reduction in permeation is achievable through the use of nylon barrier platelets. However, all of this testing was performed on California certification fuel which does not include ethanol.

Table 5.3-26: Permeation Rates for Plastic Fuel Containers with Barrier Platelets Tested by ARB Over a 18-41°C Diurnal
Percent Selar®* Tank Capacity [gallons] Permeation Loss [g/gal/day]

4%
(average =0.12 g/gal/day) 5 5 5 5 5 6 6 0.08 0.09 0.13 0.16 0.17 0.08 0.10

6%
(average =0.09 g/gal/day) 5 5 5 5 5 5 6 6 0.07 0.07 0.07 0.08 0.12 0.17 0.06 0.07

8%
(average =0.07 g/gal/day) 5 5 6 6 0.08 0.10 0.05 0.06 *trade name for barrier platelet technology used in test program



### Dupont, who manufacturers Selar ® 

### , has performed testing on HDPE with higher blends of EVOH (known as Selar RB ® 

### ). Table 5.3-27 presents permeation rates for HDPE and three Selar RB ® 

### blends when tested at 60°C on xylene. 98 

### Xylene is a component of gasoline and gives a rough indication of the permeation rates on gasoline. This report also shows a reduction of 99 percent on naptha and 98 percent on toluene for 8 percent Selar RB ®



### .

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### Feasibility of Evaporative Emission Control
Table 5.3-27: Xylene Permeation Results for Selar RB® at 60°C Composition Permeation, g mm/m 2 /day % Reduction

100% HDPE 10% RB 215/HDPE 10% RB 300/HDPE 15% RB 421/HDPE 285 0.4 3.5 0.8 – 99.9% 98.8% 99.7%



### 5.3.2.4 Alternative Materials
Permeation can also be reduced from fuel tanks by constructing them out of a lower permeation material than HDPE. Examples of alternative materials are metal, various grades of plastic, and new fiberglass construction.

5.3.2.4.1 Metal
Gasoline does not permeation through metal. Therefore, the only permeation from a metal fuel tank would be through rubber gaskets or O-rings that may be used to seal connections on the fuel tank. Examples would be the gasket or O-ring in a fuel cap or a bolted-on component such as a sender unit for a marine tank. Presumably, the exposed surface area of the gaskets would be small enough that a metal fuel tank would be well below our permeation standard. One issue with metal fuel tanks, however, is fuel leakage due to corrosion. A study sponsored by the Coast Guard in 1994 showed that aluminum (and even stainless steel) fuel tanks are prone to failure, both in salt water and fresh water applications., due to corrosion. 99 

### Fuel leakages would not only be an environmental issue, but c ould be a safety issue as well. Aluminum fuel tank manufacturers have stated that corroding fuel tanks are typically due to improper installation.

5.3.2.4.2 Alternative Plastics
There are grades of plastics other than HDPE that could be molded into fuel tanks. One material that has been considered by manufacturers is nylon; however, although nylon has excellent permeation resistance on gasoline, it has poor chemical resistance to alcohol-blended fuels. As shown in Appendix 5D, nylon could be used to achieve more than a 95 percent percent reduction in permeation compared to HDPE for gasoline. However, for a 10 percent ethanol blend, this reduction would significantly less depending on the grade of nylon. For a 15 percent methanol blend, the permeation would actually be several times higher through nylon than HDPE.
Some handheld equipment, primarily chainsaws, use structurally-integrated fuel tanks where the tank is molded as part of the body of the equipment. In these applications, the frames (and tanks) are typically molded out of nylon for st rength. We tested structurally-integrated fuel tanks from four handheld equipment manufacturers at 29 

### / C on both gasoline and a 10 percent ethanol blend. The test results suggest that permeation emissions are 20 to 70 percent higher on

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### Final Regulatory Impact Analysis
E10 than on gasoline for these fuel tanks. Note these fuel tanks are capable of meeting the standards using their current materials. In the cases where the permeation rates were higher thanthese standards, it was observed that the fuel cap seals had large exposed surface areas on the Orings, which were not made of low permeation materials. Emissions could likely be reduced significantly from these tanks with improved seal designs. Table 5.3-28 presents the results of this testing.

Table 5.3-28: Permeation Rates for Nylon Ha ndheld Fuel Tanks Tested by EPA at 29°C
Tank ID Application Material Test Fuel Permeation Loss [g/m 2 

### /day]

R1 R2 R3 clearing saw nylon 6 gasoline E10 E10 0.34 0.42 0.48

B1 B2 B3 B4 hedge clipper nylon 6, 33% glass gasoline E10 E10 E10 0.62 1.01 1.12 0.93

W1 W2 W3 chainsaw nylon 6, 30% glass gasoline E10 E10 1.45 2.18 2.46

G1 G2 G3 chainsaw nylon 6, 30% glass gasoline E10 E10 1.30 1.41 2.14

Other materials which have excellent permeation resistance even with alcohol-blended fuels are acetal copolymers and thermoplastic polyesters. These polymers can be used to form fuel tanks in the blow-molding, rotational-mo lding, and injection-molding processes. An example of an acetal copolymer is known as Celcon ® 

### which has excellent chemical resistance to fuel and has been shown to be durable based on exposure to automotive fuels for 5000 hours at high temperatures. 100 

### As shown in Appendix 5D, Celcon would result in more than a 99 percent reduction in permeation compared to HDPE for gasoline. On a 10 percent ethanol blend, the use of Celcon would result in more than a 95 percent reduction in permeation. Two thermoplastic polyesters, known as Celanex ® 

### and Vandar ® 

### , are also being considered for fuel tank construction and are being evaluated for permeation resistance by the manufacturer. Celcon has a more crystalline structure than Vandar resulting in lower permeation but less impact resistance.
We tested a 1-liter blow-molded Vandar fuel tank and three rotationally-molded 3-liter fuel tanks made of impact toughened Celcon for permeation at 29°C on E10 fuel. Prior to the permeation testing, the fuel containers were soaked in E10 for more than 20 weeks. These test results are included in Table 5.3-29 below. For the Celcon tank tests, higher emissions were observed in the second week than the first week. This behavior was seen in repeat tests and was

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### Feasibility of Evaporative Emission Control
likely due to deterioration of the epoxy seal used in this testing. Therefore, the actual emission rates of the material are likely lower than presented below. More detailed data on this testing is available in the docket. 101



### Table 5.3-29: Permeation Results Acetal Copolymer Fuel Tanks at 29°C on E10
Material Name Material Type g/gal/day g/m 2 /day

Vandar V1 thermoplastic polyester 1.7 5.6 Impact C10 Resistant C11 Celcon C13 modified acetal copolymer 0.13 0.09 0.10 0.75 0.53 0.59



### Fuel tank manufacturers have expressed some concern that the acetal copolymer is not as tough as cross-link polyethylene. Thermoplastic polyesters have better impact resistance, but higher permeation. The impact toughened fuel tanks mentioned above were in response to these concerns. Also, the rotational molding process must be better controlled to use these materials in comparison to XLPE. The temperature profile must be tightly controlled to uses Celcon, or formaldehyde gases may form. The moisture level of Vandar must be kept low prior to molding.
Acetal copolymers are also used today to produce many fuel resistant automotive components such as low permeation fuel caps. This construction has been used for many years in automotive applications and now acetal copolymers are being used to manufacture low permeation fuel caps for nonroad equipment as well.
Another low permeation thermoplastic that can be used in the manufacture of fuel tanks is a polyester/polycarbonate alloy. One example is marketed under the trade name of Xenoy 6620. This engineered plastic is impact modified and is intended for the injection molding process. The polyester provides good chemical resistance and the polycarbonate provides the impact resistance. Permeation testing was performed on a fuel tank made of Xenoy 6620 following the California test procedures. At 40 

### / C on California Phase II CERT fuel, the measured permeation rate was 0.26 g/m 2 

### /day. 102 

### The manufacturer of this material also has a version that is modified slightly so that it can be used in the blow-molding process.

5.3.2.4.3 Low Permeation Fiberglass
One manufacturer has developed a low perm eation fiberglass fuel tank construction. 103 

### The composite tanks are fabricated using a glass fiber reinforced closed cell urethane composite sheet as substrate and assembled with structural urethane adhesive as a fastening medium. These fuel tanks may be hand constructed, or for larger volume production, they may be molded at lower cost. Once fully assembled with necessary fuel fittings the tank is coated with fiberglass reinforced resin, sufficient for H-24 ABYC (American Boat and Yacht Council) and 33 CFR 183.510 standards for fuel systems mechanical strength requirements. A final gel coat finish may

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### Final Regulatory Impact Analysis
was applied for aesthetics.
Permeation control is achieved by incorporating fillers into a resin system and coating the assembled tank interior and exterior. This filler is made up of nanocomposites (very small particles of treated volcanic ash) 4 

### which are dispersed into a carrier matrix. This construction creates a tortuous pathway for hydrocarbon migration through the walls of the fuel tank. We tested a 14 gallon fuel tank provided by this manufacturer and measured a permeation rate of 0.97 g/m 2 

### /day on E10 fuel at 29°C. Other advantages of this technology are improved strength and flame resistance compared to plastic fuel tanks.

5.3.2.5 Multi-Layer Construction
Fuel tanks may also be constructed out of multiple layers of materials. In this way the low cost and structural advantages of traditional materials can be utilized in conjunction with higher grade materials which can provide effective permeation resistance. Today, fuel tanks are made in many ways including higher volume blow-molding, lower volume injection molding,and very low volume rotational-molding. The discussion below presents data on several multilayer fuel constructions.

5.3.2.5.1 Blow-Molded Coextruded Barrier
Coextruded barrier technology has been long established for blow-molded automotive fuel tanks. Data from one automobile manuf acturer showed permeation rates of 0.01-0.03 g/day for coextruded fuel tanks at 40°C on EPA certifi cation fuel. They are using this technology to meet LEV II vehicle standards. For comparison, this manufacturer reported permeation rates of more than 10 g/day for standard HDPE fuel tanks. 104



### Another study looks at the permeation rates, using ARB test procedures, through multilayer fuel tanks. 105 

### The fuel tanks in this study were 6 layer coextruded plastic tanks with EVOH as the barrier layer (3 percent of wall thickness). The outer layers were HDPE and two adhesive layers were needed to bond the EVOH to the polyethylene. The sixth layer was made of recycled polyethylene. The two test fuels were a 10 percent ethanol blend (CE10) and a 15 percent methanol blend (CM15). See Table 5.3-30.

Table 5.3-30: Permeation Results for a Co extruded Fuel Tank Over a 18-41°C Diurnal Composition Permeation, g/day % Reduction 100% HDPE (approximate) 3% EVOH, 10% ethanol (CE10) 3% EVOH, 15% methanol (CM15) 6 - 8 0.2 0.3 – 97% 96%

4 Chemically modified montmorillonite for nanocomposite formulation

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### Feasibility of Evaporative Emission Control
The California Air Resources Board tested two sets of three 5-gallon portable fuel containers. 106 

### Each set was manufactured by a different company, but all of the fuel tanks were blow-molded with a coextruded barrier layer. Testing was performed over the California 18- 41 

### / C temperature cycle with California Phase II gasoline. Testing was performed with and without the spouts removed. The test data presented in Table 5.3-31 was after 174 days of fuel soak with the spouts removed and the openings welded shut. California reported the test results in grams per gallon. Table 5.3-31 also presents approximate g/m 2 

### /day values based on the relationship between tank capacity and inside surface area used in the NONROAD2005 emissions model.

Table 5.3-31: ARB Permeation Results fo r a Coextruded Portable Fuel Tanks
Fuel Tank Permeation, g/gal/day Approximate Rate in g/m 2 /day

B1 B2 B3 Average 0.01 0.01 0.01 0.01 0.09 0.11 0.11 0.10

M1 M2 M3 Average 0.01 0.02 0.02 0.02 0.14 0.21 0.18 0.17



### The handheld industry also tested a number of fuel tanks for their products that had been coextruded with an EVOH barier. 107 

### Even with NBR gaskets on the fuel caps, these tanks had permeation rates well below the new standards. This test data is presented in Table 5.3-32.
Table 5.3-32: Permeation Rates for Handheld Fuel Tanks Tested by Industry Tank Capacity Gasket Material Test Temp. Test Fuel Permeation Loss [g/m 2 

### /day]

1840 NBR 28 

### / C CE10 0.23 0.26

470 NBR 28 

### / C CE10 0.75 0.54

Another approach has recently been developed in which a multi-layer fuel tank can be blow-molded with only two layers. 108 

### In this construction, a barrier layer of a polyarylamide known as Ixef MXD6 is used on the inside of a HDPE fuel tank. Ixef has permeation properties similar to EVOH. Test results showed a permeation rate of 0.8 g-mm/m 2 

### /day at 60 

### / C on CE10 for a test film of Ixef. Unlike EVOH, Ixef can be exposed directly to the fuel which removes the need for an inner layer of HDPE. In addition, a tie material can be blended into the HDPE which will allow the polyarylamide to bond directly to the HDPE rather than using an adhesive layer.

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### Final Regulatory Impact Analysis

Permeation emissions were measured on five 2.5 liter fuel tanks at 28 

### / C using fuel CE10. 109 

### During the preconditioning of these fuel tanks, the pressure-vacuum, slosh, and UVexposure durability tests were performed. All of the testing was performed using stock fuel caps and gaskets. One of the fuel tanks showed considerably higher emissions than the others. This higher emitting tank was found to have an issue with the interface between the tank and the fuel cap. In general, the permeation rates were well below the tank permeation standard. These test results are presented in Table 5.3-33.
We also tested three test bottles and three fuel tanks made using this construction for permeation emissions. The test bottles were about 1.3 liters in volume and used a fluoropolymer gasket under the caps. The fuel tanks were similar to those described above. Each of the test bottles and tanks was filled with E10 and soaked for more than 20 weeks. Prior to the two week weight loss test, fresh fuel was added to each bottle/tank. As shown in Table 5.3-33, the measured permeation results were well below the new tank permeation standard.

Table 5.3-33: Permeation Results Ixef Barrier Test Bottles at 29°C on E10
Tank Conditions Preconditioning g/gal/day g/m 2 /day

tank 1 28 / C, fuel soak, slosh, 0.11 0.67 tank 2 Fuel CE10 pressure-vacuum, 0.14 0.87 tank 3 and UV exposure 0.19 1.17 tank 4 0.13 0.80 tank 5 a 0.34 2.07

tank 6 29 / C, fuel soak 0.04 0.36 tank 7 Fuel E10 0.19 1.80 tank 8 0.04 0.36

bottle 1 b bottle 2 b bottle 3 b 29 / C, Fuel E10 fuel soak 0.05/0.02 0.14/0.02 0.07/0.02 0.26/0.12 0.72/0.12 0.39/0.12

a interface issue reported with cap
b repeated test with epoxy seal on fuel cap



### Tanks 6-8 and bottles 1-3 were tested by EPA using screw on fuel caps with gaskets. For the test bottles, gaskets were cut at EPA from FKM rubber. It was thought that the permeation results were affected by the seal at the fuel cap. Therefore, the tests were rerun 6 months later using epoxy as a secondary seal at the fuel cap. As a result, much lower permeation rates were measured for all three test bottles. For the fuel tanks, the stock fuel caps and gaskets were used. One of the tanks had significantly higher permeation emissions than the other two tanks. This difference may have been a seal issue at the fuel cap.

5.3.2.5.2 Rotational Molded Dual-layer Construction
As discussed above, an inner layer can be molded into the inside of a rotationally molded

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### Feasibility of Evaporative Emission Control
fuel tank through the use of a drop-box that opens after the XLPE tank begins to form. Through this method, a XLPE fuel tank could be molded with a low permeation inner barrier. With this construction, it may be possible to reduce the amount of XLPE used depending on the structural characteristics of the inner liner material. For instance, acetal copolymer can be rotationally molded and could be used as the inner liner. This way, the permeation characteristics of an acetal copolymer could be achieved through an inner liner while still retaining the toughness of XLPE . One issue would be that acetal copolymers do not readily adhere to XLPE. Therefore fitting designs would need to account for this.
Another material that could be used in a multi-layer approach is nylon which comes in many grades. Typical nylon grades used in Sma ll SI fuel tank constructions may not perform well in marine applications because of the hygroscopic nature of these nylons. In other words, typical nylon adsorbs water which can make it brittle. In addition, E10 fuel permeates through nylon much more readily than gasoline.
One manufacturer is working with a nylon known as Rilsan ® 

### polyamide 11 (PA 11) in constructing low permeation multi-layer rotational-molded fuel tanks. 110 

### Rilsan ® 

### polyamide 11 has two advantages to traditional nylons in that it is not hygroscopic and it is more resistive to alcohol fuels. One manufacturer has manufactured fuel tanks using the PA11 as an inner liner in a polyethylene shell. The manufacturer using this approach reports a permeation rate of about 3 g-mm/m 2 

### /day on fuel CE10 at 28°C compared to about 30 g-mm/m 2 

### /day for XLPE. In addition, the nylon used in multi-layer constructions is formulated with a polyethylene graft that causes it to adhere well to XLPE. This prevents the layers from separating in use.
We tested two 10 gallon multi-layer rotational molded fuel tanks at 29°C with E10 fuel after a 35 week soak with two fuel changes during that period. 111 

### One of the tanks was molded with an outer shell of medium-density polyethylene while the other was molded with an outer shell of cross-link polyethylene. The long soak period was due to test equipment problems and the fuel was changed with each test attempt. However, it presents valuable data on the longer term effectiveness of this technology. This test data is presented in Table 5.3-34. The manufacturer reported that this tank design passed testing on the Coast Guard burn, pressure, shock, and impulse test requirements. 112,113,114,115 

### In addition, a tank of this construction was tested and passed the tank durability tests for snowmobiles specified in SAE J288. 116 

### These tests include cold (-40 

### / C) and hot temperature (60 

### / C) immersion and drop tests.
Typically, multi-layer rotational-molded fuel tanks are constructed with the use of a drop box which adds the inner-layer material into the mold after the first material sets. Other approaches are to use a meltable bag containing the inner-layer material or even to pull the mold from the oven to add the inner-layer material. However, one manufacturer, that participated in the SBREFA process, has stated that they have developed a method to mold the inner liner without the use of a drop box or other approach that lengthens molding cycle time. This fuel tank manufacturer is selling fuel tanks using this construction for use in Small SI equipment and is selling mono-layer XLPE rotational-molded tanks for use in boats.

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### Final Regulatory Impact Analysis

Table 5.3-34: Permeation Results PA 11/PE Fuel Tanks at 29°C on E10
Tank Outer Shell g/gal/day g/m 2 /day

1 2 MDPE XLPE 0.05 0.06 0.71 0.79



### Under their rule for small offroad equipment, California may issue executive orders to manufacturers with low emission products. As of August, 2006, ARB has issued 5 executive orders for low permeation fuel tanks. 117 

### Under these executive orders, two basic multi-layer rotomolded (XLPE and nylon) approaches have been approved. The California fuel tank permeation standard is 1.5 g/m 2 

### /day tested at 40 

### / C on California certification fuel. However, most of the testing was performed on fuel CE10 whic h is a significantly more aggressive fuel for permeation. Table 5.3-35 presents the test results for rotational-molded fuel tanks with ARB executive orders. Note that the reported emissions are the average of 3-5 test samples.

Table 5.3-35: ARB Fuel Tank Executive Orders for Small Offroad Equipment
EO# Test Fuel g/m 2 

### /day

C-U-05-005 CE10 Phase II 0.81 0.18

C-U-06-014 CE10 CE10 CE10 0.10 0.00 0.09

There is another approach to dual-layer rotomolded fuel tanks under development that uses a “single shot” approach to molding. 118 

### In this method a material known as polybutylene terephthalate cyclic oligimor (CBT) is combined with the XLPE in the mold. Because of the different melt rates and viscosities of the two materials, during the mold process, the CBT® polymerizes into a thermoplastic known as polybutylene terephthalate (PBT) to form a barrier layer on the inside of the fuel tank. Adhesion between the PBT and XLPE comes from mechanical bonding between the two layers. This material can be used without lengthening the cycle time for rotational molding, and it does not require forced cooling. 119 

### Initial testing shows a permeation rate of <1 g/m 2 

### /day when tested with fuel CE10 at 40 

### / C for a sample with a 3.9 mm total wall thickness. 120 

### This wall thickness for this testing was composed of 0.9mm CBT and 3.0mm XLPE. PBT itself has a permeation rate on CE10 at 40 

### / C of less than 0.05 g-mm/m 2 

### /day.

5.3.2.5.3 Injection-Molded Dual-Layer Construction
To add a barrier layer in the injection molding process, a thin sheet of the barrier material may be placed inside the mold prior to injection of the poleythylene. The polyethylene, which generally has a much lower melting point than the barrier material, bonds with the barrier material to create a shell with an inner liner.

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### Feasibility of Evaporative Emission Control

5.3.2.5.4 Thermoformed Multi-Layer Construction
As an alternative, multiple layers can be created through thermoforming. 121 

### In this process, sheet material is heated then drawn into two vacuum dies. The two halves are then fused while the plastic is still molten to form the fuel tank. Before the halves are fused together, it is possible to add components inside of the fuel tank. Low permeation fuel tanks can be constructed using this process by using multi-layer sheet material. This multi-layer sheet can be extruded using similar materials to multi-layer blow-molded fuel tank designs. A typical barrier construction would include a thin EVOH barrier, adhesion layers on both sides, a layer of HDPE regrind, and HDPE layers on the outside surfaces.
This process has low capital costs compared to blow-molding and should be cost competitive with injection molding and rotational-molding. Manufacturers have indicated that this construction could be coated with an intumescent material which would help it pass the Coast Guard fire test. This coating could be applied directly to the multi-layer plastic sheets while they are still hot after extrusion. Once the plastic cools, it could be applied using flame ionization or electric arcing to increase the surface are of the plastic for adhesion.
EPA tested two, 5.6 gallon, thermoformed fuel tanks for permeation. These fuel tanks were constructed as described above with a thin EVOH barrier and were soaked with E10 for 27 weeks prior to testing. Due to test variability, testing was repeated at 35 and 44 weeks (fresh fuel was added prior to each weight loss test). From day to day, a constant weight loss was not always observed, and weight gains were occasionally seen. This variability in measured weight loss was likely due to the very low permeation rates combined with the effect of atmospheric conditions on measured weight. The highest variations in weight loss were observed when storms passed through suggesting that the changes in barometric pressure and relative humidity were affecting the buoyancy of the fuel tanks (discussed in more detail in Section 5.6.2.3). In the third round of testing (after 44 weeks), barometric pressure and humidity were measured and deemed to be relatively stable. In addition, a smaller tank with sand in it (rather than fuel) was measured simultaneously as a control to give some indication of the buoyancy effect. A small weight loss was measured for the control tank, suggesting that the measured test results may slightly overstate the permeation for the thermoformed fuel tanks. Table 5.3-36 presents the test results for each of the three tests.

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### Final Regulatory Impact Analysis
Table 5.3-36: Permeation Results Multilay er Thermoformed Fuel Tanks at 29°C on E10 Soak (weeks) Tank g/gal/day g/m 2 /day

27 #16 #21 0.01 0.01 0.15 0.05

35 #16 #21 0.01 0.01 0.07 0.09

44 #16 #21 0.01 0.00 0.11 0.04 Average #16 #21 0.01 0.01 0.11 0.06



### 5.3.2.5.5 Epoxy Barrier Coating
Another approach that has shown promising results is to coat a plastic fuel tank with a low permeation epoxy barrier coating. Early attempts at coating a plastic fuel tank resulted in coatings that eventually wear off due to the difficulty of bonding some materials to HDPE and XLPE. However, because fluorination increases the surface energy of the plastic, a low level of fluorination can be used to make it possible to apply an epoxy coating, even to XLPE. Because this approach is applied to the fuel tank post-molding, it can be used for any plastic fuel tank, regardless of the production molding method.
We performed permeation testing on six 12 gallon rotationally-molded XLPE fuel tanks with a thin, low-permeation epoxy coating. This coating was a two-part epoxy that was sprayed onto the tank and thermally cured in 45 minutes. Prior to the permeation measurements, the fuel tanks were soaked with E10 fuel at about 25°C for 15 weeks. The tanks were then drained and fresh E10 was added prior to the 29°C constant temperature permeation test. Inspection of the externally coated fuel tanks showed that the epoxy was unevenly applied and that some bare spots existed. This was reflected in the unsatisfactory permeation results. A more careful coating would be expected to result in similar results as the internal coatings. One of the externally coated fuel tanks was over-coated with a 1-part epoxy that was cured with a 45 second UV exposure. This tank was soaked for an additional 6 weeks prior to retesting. These test results, which are presented in Table 5.3-37, show that this technology can be used to reduce permeation emissions by more than 90 percent.

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### Feasibility of Evaporative Emission Control

Table 5.3-37: EPA Permeation Data on Epoxy Coated XLPE Fuel Tanks at 29°C on E10
Fuel Tank Set Coating Soak Period g/gal/day g/m 2 /day slosh test?

1 I n s i d e Thermocured 15 weeks 0.04 0.001 0.07 0.6 0.02 1.0 no
no yes
2 Outside Thermocured* 15 weeks 0.13 0.23 0.23 1.9 3.3 3.3 no
no yes
3 Outside UV cured additional 6 weeks 0.03 0.4 no

* inspection showed uneven application of th e coating which affected permeation results



### Since the above testing was performed, the fluorinater and the epoxy manufacturer who developed this approach have performed more testing on their UV cured, 1-part epoxy. The testing was performed on epoxy coated HDPE bottles and 2 gallon fuel tanks using the California ARB test procedure of 40° C with California certification fuel. 122 

### At 29°C, we would expect the permeation rate to be about half of these levels due to the relationship between permeation and temperature discussed above in Section 5.3.1.2. The results for this testing were reported to be 0.3 g/m 2 

### /day on average for both the bottles and tanks on gasoline. The bottles had a permeation rate of 0.5 g/m 2 

### /day on gasohol (ethanol blend). This technology resulted in better than 95 percent reductions in permeation. Table 5.3-38 presents the test results after a 9 week fuel soak at 40°C.
Table 5.3-38: Permeation Data: Epoxy Coated HDPE Fuel Tanks at 40°C on CA Cert Fuel
Fuel Tank g/gal/day g/m 2 /day

1 2 3 4 0.04 0.02 0.02 0.08 0.25 0.09 0.11 0.49



### Roto-molders of marine fuel tanks generally use cross-link polyethylene. The advantage of XLPE is that its cross-link structure causes it to behave like thermoset which helps the fuel tanks pass the Coast Guard fire test (33 CFR 183.590) by holding their shape longer under exposure to fire. If a flame retardant were included in the epoxy coating, a less expensive material, such as HDPE could be used to make fuel tanks that are subject to the flame test requirement. The manufacturers who have developed the above approach for permeation have developed an additive that provides an intumescent coating to allow the fuel tanks to be produced at a lower cost. Testing on the Coast Guard burn test showed that an HDPE fuel tank would fail around after being exposed to a flame for about 1.5 minutes (the standard is 2.5

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### Final Regulatory Impact Analysis
minutes). With the intumescent coating, the fuel tank passed the flame test and survived more than 5 minutes. 123



## 5.4 Fuel/Vapor Hose Permeation

The polymeric materials (plastic or rubber) used in the construction of gasoline fuel and vapor hoses generally have chemical compositions much like that of gasoline. As a result, constant exposure of gasoline to these surfaces allows the material to continually absorb fuel. Permeation is driven by the difference in the chemical potentials of gasoline or gasoline vapor on either side of the material. The outer surfaces of these materials are exposed to ambient air, so the gasoline molecules permeate through these fuel-system components and are emitted directly into the air. Permeation emissions continue at a nearly constant rate, regardless of how much the vehicle or equipment is used. Because of these effects, permeation-related emissions can therefore add up to a large fraction of the total evaporative emissions.
This section summarizes the data and rationale supporting the permeation emission standard for fuel lines presented in the Executive Summary.

5.4.1 Baseline Hose Technology and Emissions

5.4.1.1 Marine Fuel Hose Subject to 33 CFR part 183
The majority of marine fuel hoses are constructed primarily of nitrile rubber with a chloroprene cover for abrasion and flame resistance. Hoses are designed to meet the Coast Guard requirements in 33 CFR part 183 which reference SAE J1527. 124 

### Fuel hose for boats with gasoline engines (excluding outboards) must m eet the Class 1, Type A requirements which specify a maximum permeation rate of 100 g/m 2 

### /day at 23°C on ASTM Reference Fuel C 125 

### (50 percent toluene, 50 percent iso-octane). Class 1 refers to hose that is used where liquid fuel is normally continuously in the hose. Type A refers to hose that will pass a 21⁄2 minute flame resistance test.
On a fuel containing an alcohol blend, permeation would likely be higher from these fuel hoses. In fact, the SAE J1527 standard also requires Class 1 hose to meet a permeation rate of 300 g/m 2 

### /day on fuel CM15 (15 percent methanol). Although ethanol is generally less aggressive than methanol, ethanol in the fuel would still be expected to increase the permeation rate significantly through most fuel hoses. Based on the data presented in Appendix 5D, permeation through nitrile rubber is about 50 percent higher when tested on Fuel CE10 (10 percent ethanol) compared to testing on Fuel C.
Fuel fill neck hoses are subject to a less stringent permeation standard under the Coast Guard specifications because they are not normally continuously in contact with fuel (Class 2). This relaxed standard is 300 g/m 2 

### /day on Fuel C and 600 g/m 2 

### /day on Fuel CM15 at 23°C. Where marine fuel hose is typically extruded, fill neck hose is generally constructed by wrapped layers on a mandrill. Fill neck hose is constructed with a larger inner diameter (1.5-2") to accommodate higher fuel rates and with thicker, more heavily reinforced walls, to prevent

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### Feasibility of Evaporative Emission Control
buckling and pinching.
Marine fuel hose is typically designed to be somewhat lower than the SAE J1527 requirements. Confidential data by one manufacturer supplying baseline marine fuel hose suggested that their fuel feed hose is about 25 percent lower than the Class 1, Type A requirement on Fuel C and about 35 percent lower on Fuel CM15. In their comments on the 2002 proposal for marine evaporative emission cont rol, Lawrence industries stated that the majority of their fill neck hose permeates in the range of 150 to 180 g/m 2 

### /day which is about half of the 300 g/m 2 

### /day requirement required by the Coast Guard. 126



### We collected test data on marine hose permeation through contracts with outside laboratories. 127,128,129,130,131 

### Data was also available on a fuel feed hose testing funded by the marine industry. 132 

### All of the hose were prepared by soaking with liquid fuel for long enough periods to stabilize the permeation rate. This data is presented in Table 5.4-1. Note that this data shows somewhat lower permeation than was reported by manufacturers based on their own testing. Especially in the case of the fuel feed hose, this may be a function of the hose construction. This hose was purchased by the contractor without any knowledge of the hose construction. Therefore, it is not known if this is a representative sample of a baseline hose construction or if it contains some sort of barrier material.

Table 5.4-1: Permeation Rates for Baseline SAE J1527 Marine Fuel Hose Hose Type I.D. Fuel Type* g/m 2 /day Test Temperature

fuel feed hose 3/8" E10 Fuel CE10 43 88 23 / C

vent hose 5/8" E10 37 28 / C

fill neck hose 1.5" Fuel C 95 98 109 22-36 / C temperature cycle

fill neck hose 1.5" Fuel C Fuel CE10 87 164 23 / C

fill neck hose 1.5" Fuel C E10 Fuel CE10 123 123 274 23 / C

* E10 refers to gasoline with 10 percent ethanol



### Although fuel hose used in personal watercraft is subject to 33 CFR part 183, personal watercraft manufacturers do not use hose specified in SAE J1527. Fuel hose specifications are contained in a separate recommended practice under SAE J2046. 133 

### Under this practice, the permeation requirement is 300 g/m 2 

### /day with testing performed in accordance with SAE J1527.

5-71

### Final Regulatory Impact Analysis

5.4.1.2 Other Marine Fuel Hose
Fuel hose used with outboard engines is not subject to 33 CFR part 183. This hose includes the fuel line from the portable fuel tank to the engine and fuel hose on the engine itself and is generally either constructed out of nitrile rubber with an abrasion resistant cover similar to hose used in recreational vehicle applications or is constructed out of polyvinyl chloride (PVC). One manufacturer of marine hose for use in outboard marine engines supplied permeation data on five hose constructions tested at 23°C. 134 

### This data is presented in Table 5.4-2 for Fuel C, Fuel CE10, and Fuel CM15 (15 percent methanol). As shown by this data, hose permeation rates can increase dramatically when tested on fuel blended with alcohol. Fuel lines connected to a portable fuel tank are also generally fitted with a primer bulb which is also typically constructed from nitrile rubber.
Table 5.4-2: Permeation Rates for Baseline Fuel Hose [g/m 2 

### /day at 23°C]
Fuel Hose Fuel C Fuel CE10 Fuel CM15 gasoline* E10

C-464-D11 C-530-D2-CE

ECO/CPE

J30R7 OMC ES1763 195 5 228 426 141 420 183 402 279 290 590 546 565 433 314 66 4 53 27 43 192 74 131 126 103 

### * cited as Marathon 92

5.4.1.3 Small SI Equipment Hose
Fuel hoses produced for use in Small SI equipment are generally extruded nitrile rubber with a cover for abrasion resistance. This hose is often equivalent to SAE J30 R7 hose which as a permeation requirement of 550 g/m 2 

### /day at 23°C 135 

### on ASTM Fuel C (50 percent toluene, 50 percent iso-octane). On a fuel containing an alcohol blend, permeation would likely be much higher for these fuel hoses. R7 hose is made primarily of nitrile rubber (NBR). Based on the data presented in Appendix 5D, permeation through NBR is 50 percent higher when tested on Fuel CE10 (10 percent ethanol) compared to testing on Fuel C.
One manufacturer performed a study of several hose samples and various fuel types. 136 

### Permeation testing was performed using the methodology in SAE J30. These hose samples included SAE J30 R7, R8, and R9 hose. The R7 hose samples were constructed with an acrylonitrile inner tube with a chlorosulfonated polyethylene cover layer. The R8 hose samples were constructed using a epichlorohydrin ethyl eneoxide copolymer. The R9 hose used a fluoroelastomer barrier for the inner tube w ith an outer tube made of chlorosulfonated polyethylene compound reinforced with a polyester braid. Over the two week tests, the study showed a peak permeation rate after 4-6 days for R7 and R8 hose and a peak permeation rate after 10-12 days for the lower permeating R9 hose. Table 5.4-3 below presents the two week averages for each of the hose samples and test fuels. In this study, the hose manufacturers were not identified, but the hose samples were each given a letter designation.

5-72

### Feasibility of Evaporative Emission Control
Table 5.4-3: Permeation Rates for SAE J 30 Fuel Hose [g/m 2 

### /day at 23°C]
Fuel Hose Fuel C Fuel CE10 Fuel CE15 Fuel CM15

SAE J30 R7 “mfr. D” SAE J30 R7 “mfr. E” 450 330 508 501 541 433 587 707

SAE J30 R8 “mfr. B” SAE J30 R8 “mfr. F” 152 130 385 355 337 308 620 545

SAE J30 R9 “mfr. A” SAE J30 R9 “mfr. C” 2 2 11 6 10 4 73 55



### Handheld equipment typically use smaller diameter hose made of a single material with no cover. This fuel hose may either be extruded straight run hose or may be more complex injection-molded designs. To determine baseline permeation emission rates from hose on handheld equipment, testing was performed by i ndustry using a modified SAE J30 weight loss procedure. 137 

### In this modified procedure, E10 fuel was used and the testing followed a 30 day fuel soak intended to stabilize the permeation rate. Further testing was later performed by industry on similar fuel lines exposed to E10 and to CE10. 138 

### This testing showed much higher permeation on CE10 than on E10 for these hose samples. Table 5.4-4 presents the test results.

Table 5.4-4: Handheld Product Fuel Line Permeation Test Data [23 

### / C]
Hose ID Construction Test Fuel Material g/m 2 

### /day

90014 90015 90016

S3 S4 H1 H2 B1* B2* extruded E10 NBR 198 192 168 165 171 360 455 205 224

S1 S2 C* molded E10 NBR NBR/PVC NBR/PVC 198 386 270

B1* B2* extruded CE10 NBR 742 662

E* F* A* molded CE10 NBR NBR/PVC NBR/PVC 1148 736 975 * average of 5 measurements

5-73

### Final Regulatory Impact Analysis

5.4.1.4 Fuel Effects on Hose Permeation
As shown in the data above, adding ethanol or methanol to the test fuel significantly affects the permeation rate through fuel hoses. Because the SAE guidelines typically specify Fuel C for testing, most of the hose data available in the literature is on Fuel C or some blend of Fuel C and ethanol or methanol.
One study looked at the effect of fuel composition on the permeation of several materials used in baseline hose constructions. 139 

### This data suggests that Fuel C is a more aggressive fuel with respect to permeation than gasoline. In addition, this data shows that permeation for these materials is very low with diesel fuel. Table 5.4-5 presents the data from this study. Appendix 5D includes a table spelling out the acronyms for the hose materials in this table.
Table 5.4-5: Permeation Rates by Fuel and Fuel and Hose Material [g/m 2 

### /day at 21°C]
Material Fuel C CE10 CM10 Indolene* IE10 IM10 Diesel

CFM CO ECO ETER 39% ACN NBR CSM

CR nil 150 190 230 300 490 640 35 270 390 400 420 575 690 nil 255 310 360 360 665 740 0.1 10 55 65 110 210 320 20 80 180 205 200 240 340 nil 125 150 165 200 300 385 3 2 5 10 15 nil 10 * “Indolene” refers to a fuel meeting the EPA specifications for certification gasoline



### This difference in permeation between Fuel C and gasoline is likely due to the higher aromatic content of Fuel C than of certification gasoline. A second study compared three common fuel system materials on Fuel C and certification gasoline. 140 

### Fuel C is made up of 50 percent toluene and 50 percent isooctane. As a result, it is half aromatics and half aliphatics. In this study, the certification gasoline was observed to be 29 percent aromatics, 67 percent aliphatics, and 4 percent olefins. The test resu lts were indicative of the effect of aromatics on permeation. Table 5.4-6 presents the permeation rate reported in g-mm/m 2 

### /day for three sample materials: a low permeation fluoroelastomer (FKM), two medium permeation epichlorohydrins (ECO) and two high permeation nitrile rubbers (NBR). This testing, which was performed at 24 

### / C, gives a good comparison of the effect of gasoline versus Fuel C on permeation.

5-74

### Feasibility of Evaporative Emission Control
Table 5.4-6: Fuel C Versus Gasoline Permeation by Hose Material [g-mm/m 2 

### /day]
Material Fuel C Indolene* % difference

FKM-1 3.3 1.2 -64%

ECO-1 ECO-3 180 282 33 45 -82% -84%

NBR-1 NBR-2 570 705 255 510 -55% -28% * “Indolene” refers to a fuel meeting the EPA specifications for certification gasoline



### 5.4.1.5 Vent Hose Permeation
Permeation occurs not only through hose walls that are in contact with liquid gasoline, but also through surfaces exposed to fuel vapor. In the event that the fuel vapor represents a saturated mix of air and fuel, we would expect permeation to be the same as that for exposure to liquid fuel. In a fuel tank, the walls of the tank are readily exposed to saturated vapor as discussed earlier in Section 5.3.1.4. In a fuel system hose not continuously exposed to liquid fuel, the vapor concentration may be significantly lower than saturation for several reasons. Clearly, if a hose is open to atmosphere, such as vent hose, there would be a gradient through the hose ranging from saturated vapor in the fuel tank to fresh air outside of the fuel system. In addition, if the tank is venting and drawing in air due to diurnal (or other) temperature changes, then the fuel hose will regularly be exposed to varying vapor concentrations.
To investigate permeation rates for vent hose exposed to gasoline vapor, we contracted with an outside laboratory to measure the permeation of fuel through marine hoses under various venting configurations. 141,142 

### The marine hose used in this testing met the USCG requirements for SD/I vessels in specified in 33 CFR part 183 and SAE Recommended Practice J1527. Each section of hose was connected to a metal fuel reservoir and exposed to liquid fuel for 8 weeks at 40°C to stabilize the permeation rate. The test fuel was EPA certification gasoline blended with 10 percent ethanol (E10) Each section of hose was then soaked for an additional 2 weeks at 40°C in the planned test configuration. After the soak, fresh fuel was added to the reservoirs and permeation was measured in a mini-SHED. Hose sections were tested at constant temperature in three configurations.
One section of hose was tested exposed to li quid fuel. Two sections of hose (1.5 and 5/8" I.D.) were tested with one end connected to the fuel reservoir and the other opened to atmosphere through a fitting in the SHED. This configuration was intended to simulate vent hose at constant temperature. A third configuration was also tested where three sections of hose were configured as vent hose and tested over a 22.2-35.6°C one day diurnal sequence. This test was intended to simulate vent hose in a fuel system exposed to fuel tank breathing caused by temperature variation. The data in this testing, shown in Table 5.4-7, suggest that permeation rates for vent lines are much lower than for hose that is regularly exposed to liquid fuel. This result is likely due to a fuel concentration gradient in the hose which is largely due to one end

5-75

### Final Regulatory Impact Analysis
being exposed to fresh air.
Table 5.4-7: Effect of Venting on Hose Permeation with E10 [g/m 2 

### /day]
I.D. inches Length feet Temperature Liquid Exposure Vented to Atmosphere

1.5 0.625 1 3 28°C (84°F) constant 123* 37 3.3 5.8

0.625 0.625 0.625 3 3 3 22-36°C (72-96°F) diurnal – 4.3 4.5 4.9 * taken from Table 5.4-1 on a similar hose for comparison



### The marine industry also funded permeation testing on vent hose exposed only to fuel vapor and air. 143 

### The vent line hose was preconditioned by attaching the hose to a 55 gallon steel drum containing commercial gasoline containing 10 percent ethanol and setting the drum outside during the summer. A carbon canister was attached to the end of the hose to simulate a vent line with diurnal emission control. Permeation was measured after 90, 120, 150, and 180 days of preconditioning. Because of the large size of the test rig, weight loss testing could not be performed. Instead, a sleeve was fitted over the hose and nitrogen was flowed through the sleeve to a carbon trap. The change in the weight of the carbon trap was then measured to determine the permeation rate. As with the fill neck testing, the hose was configured to run vertically from the top of the fuel reservoir (55 gallon drum). Repeat testing was performed on this hose and both values for each hose are presented in Table 5.4-8. The permeation rates for this testing were lower than for similar hose exposed to liquid fuel. Fuel vapor stratification may have been caused by a number of factors including breathing of fresh air into the tank during ambient cooling periods, gravity, and a limiting diffusion rate.
Table 5.4-8: Industry Test Data on Mari ne Vent Hose Exposed to Fuel Vapor
Hose manufacturer Permeation [g/m 2 /day]

#1 2.7, 2.2 2.7, 2.8 8.9, 8.5 5.7, 6.6

#2 2.2, 2.0 2.5, 2.2 2.5, 2.6

5-76

### Feasibility of Evaporative Emission Control

5.4.1.6 Vapor Hose Permeation
Even in a vapor hose that is sealed at one end, stratification may occur for a fuel system due to gravity. An example of vapor hose would be fuel fill neck hose with a sealed cap. Because fuel vapor is heavier than air, even a large diameter hose may see stratification of fuel vapor concentration if it reaches high enough above the surface of the liquid fuel. The stratification of vapor molecules happens slowly but would likely be observed under static conditions. Another cause of low vapor concentration in fuel system hose may occur due to the properties of diffusion discussed above in Section 5.1.3. If the hose diameter is small compared to its length, diffusion of vapor into the hose may be the rate limiting step rather than the permeation rate through the hose. In other words, the fuel vapor may enter the hose much slower than rate at which it could permeate through the hose. This effect could be combined with the other effects discussed above to cause lower permeation for fuel hose exposed to vapor rather than liquid fuel.
The marine industry funded permeation testing on fill neck exposed only to fuel vapor. 144 

### For the fill neck hose, a three foot section of hose was attached to the top of a five gallon metal fuel reservoir and configured vertically. The fuel reservoir was filled half-way with gasoline containing 10 percent ethanol. Approximately every 30 days, this hose/reservoir assembly was weighed for five days in a row. After the fifth day, the fuel in the reservoir was replaced with fresh fuel. Testing was performed at 23 

### / C. The only liquid fuel exposure was a weekly inversion of the assembly for about 1 minute. No attempt was made to simulate fuel slosh that would be likely be seen in a boat in the water. Also the hose was configured straight up and down rather than in a more representative configuration as seen on a boat that would include more horizontal orientation for most of the lengt h of the hose. Repeat testing was performed on the hose. 145 

### During this repeat testing, permeation was also measured for the same fill neck hose exposed to liquid fuel.
Four of the fill neck hose constructions were specified as meeting the A2 designation in SAE J1527. The other two fill neck hose samples were not identified except that they are made by a hose manufacturer that is known to offer fill neck hose with and without a fluoroelastomer barrier. Table 5.4-9 presents the test results which show much lower permeation rates for fill neck hose exposed vapor rather than liquid fuel. Because the end of the hose was not exposed to atmosphere, and because the hose was situated well above the surface of the liquid fuel in a vertical fashion, stratification may have occurred in the hose largely due to gravity. This stratification would be expected to lower the vapor concentration in the hose and therefore lower permeation.

5-77

### Final Regulatory Impact Analysis
Table 5.4-9: Industry Permeation Data on Marine Fill Neck Hose [g/m 2 

### /day]
Hose manufacturer Vapor Exposure Liquid Exposure

#1 4.8, 4.8 4.5, 4.4 4.7, 4.8 4.7, 4.7 129 114 113 121

#2 1.3, 1.1 0.6, 6.9 5.6 8.5



### The marine industry testing was all performed on static test rigs with vertically oriented hose. No consideration was given to how sloshing the test configuration, as would be seen in a boat in the water, would have affected the results. For in-use equipment, especially boats in the water, the fuel is sloshed regularly due to operation or waves. This sloshing may mix up the vapor in the tank and hose. The industry test pr ogram also did not consider how a different hose configuration (i.e. more horizontally oriented) would have affected the results. Fill neck hose in boats often runs nearly horizontal from the tank to the edge of the boat, then runs more vertically near the fill port.

We contracted with an outside test lab to Figure 5.4-1: Hose Test Configurations investigate the effects of fuel slosh and hose configuration on permeation through marine fill neck hose. 146 

### All of the testing was performed Liquid 

### on 3 foot sections of 1.5" I.D. marine fill neck hose. Testing was performed in each of the Vertical 

### three configurations shown in Figure 5.4-1. For each fuel vapor exposure test, the hose was first preconditioned by subjecting it to liquid fuel for 5 weeks followed by fuel vapor for an additional 5 weeks. For the liquid fuel exposure Horizontal 

### tests, the hose was soaked with liquid fuel for 10 weeks. Fuel soaking was performed at 40 

### / C.
A total of eleven tests were run. For each configuration, testing was performed on three fuels: Fuel C, CE10, and E10. The liquid fuel exposure tests were performed in the static position, while the fuel vapor exposure tests were performed with the fuel tanks on a slosh table. Sloshing was performed at 15 cycles per minute with a deviation of +7 

### / to -7 

### / from level to simulate movement that might be seen on a boat. An additional two tests were performed to measure permeation through vapor hose in the ver tical and horizontal positions without sloshing. Permeation was measured similar to the industry testing using weight loss measurements of the entire test rigs at 23 

### / C.
The test results from this testing are presented in Table 5.4-10. It was observed that permeation was much lower for vapor fuel exposure than for liquid fuel exposure. Fuel

5-78

### Feasibility of Evaporative Emission Control
permeation was significantly higher for the horizontal hose configuration than for the vertical hose configuration. This suggests that a large amount vapor stratification was occurring for the vertical hose, while some fuel vapor was collecting in the horizontal hose. The fuel sloshing applied in this testing doubled the permeation through the horizontal hose. Regardless of fuel slosh, no measurable permeation was observed through the vertically oriented hose. Permeation emissions were observed to be about twice as high on fuel CE10 than on Fuel C or E10.
Table 5.4-10: Effect of Hose Configuration, Vapor Exposure, and Test Fuel on Marine Fill Neck Hose Permeation at 23 

### / C Hose Configuration Vapor Exposure Test Fuel Permeation [g/m 2 /day]

horizontal stationary sloshed sloshed sloshed CE10 CE10 E10 Fuel C 4.6 9.1 4.6 9.1

vertical stationary sloshed sloshed sloshed CE10 CE10 E10 Fuel C 0.0 0.0 0.0 0.0

liquid soak CE10 E10 Fuel C 273.7 123.2 123.2



### In another study, the effects of liquid fuel versus vapor were studied in which the vapor hose was not open to atmosphere. 147 

### The fuel hose used for this testing was purchased over the counter and was labeled as SAE J30 R7. Further investigation of the hose revealed that this particular grade is made of lower permeation materials than typical Small SI hose constructions. It was constructed of NBR with a relatively hi gh ACN blend (39 percent) and an ECO cover wasused. This construction was originally intended to allow the hose to be painted with a lacquerbased paint, then dried in an oven. Although this is a somewhat atypical hose construction, the test results should still reflect the effects of liquid versus vapor on permeation.
In this testing, all of the fuel hose was preconditioned by soaking in liquid fuel for 5 weeks at about 40 

### / C. This soak was then repeated, except that half of the hose sections were then exposed only to fuel vapor resulting from attaching the hose to the top of a metal fuel reservoir. Three fuels were used; California certification gasoline (CARB II), EPA certification gasoline (gasoline), and EPA gasoline blended with 10 percent ethanol (E10). After the soak period, the fuel was refreshed and weight loss testing was performed at 23 

### / C. Table 5.4-11 presents the test results. Note that each data point in this table is the average of three hose samples. In this testing, the end of the hose was plugged and the hose was configured horizontally. The lower permeation rates for vapor exposure were likely the result a low vapor concentration in the hose. This low vapor concentration may have been caused because the diffusion into the long narrow hose may have been the rate limiting effect rather than the

5-79

### Final Regulatory Impact Analysis
permeation rate through the hose.
Table 5.4-11: Fuel Hose Permeation with Vapor vs. Liquid Exposure [g/m 2 

### /day]
Test Fuel Liquid Exposure Vapor Exposure

CARB II 35.8 0.3

Gasoline 44.5 0.1

E10 80.3 0.7



### 5.4.2 Hose Permeation Reduction Technologies
Materials used in current automotive fuel lines are two to three orders of magnitude less permeable than nitrile hoses. 148 

### In automotive applications, multilayer plastic tubing, made of fluoropolymers is generally used. An added benefit of these low permeability lines is that some fluoropolymers can be made to conduct electricity and therefore can prevent the buildup of static charges. 149 

### Although this technology can achieve more than an order of magnitude lower permeation than barrier hoses, it is relatively inflexible and may need to be molded in specific shapes for each Small SI application. For marine applications, this tubing would not likely meet the Coast Guard or ABYC durability specifications for fuel and vent hose.
Thermoplastic fuel lines for automotive applications are generally built to SAE J2260 specifications. 150 

### Category 1 fuel lines under this specification have permeation rates of less than 25 g/m 2 

### /day at 60°C on CM15 fuel (15 percent methanol). One thermoplastic used in automotive fuel line construction is polyvinylidene fluoride (PVDF). Based on the data presented in Appendix 5D, a PDVF fuel line with a typical wall thickness (1 mm) would have a permeation rate of 0.2 g/m 2 

### /day at 23°C on CM15 fuel. However, manufacturers involved in the boat building industry have commented that this fuel line would not be flexible enough to use in their applications because they require flexible rubber hose to fit tight radii and to resist vibration. They also commented that the hose they use must pass the Coast Guard flame resistance requirements. 151,152



### Recreational vehicle manufacturers are required to use hose that meets a permeation standard of 15 g/m 2 

### /day at 23°C on gasoline blended with 10 percent ethanol (E10). Low permeation hose constructions that have been identified for these applications could also be used in Small SI equipment. We believe that the same barrier materials that will be used for recreational vehicle hose can also be used for marine hose constructions. Marine hose constructions generally meet the Coast Guard flame resistance requirements either through the use of a flame-resistant cover, or by increasing the wall thickness. Therefore, the addition of an inner permeation barrier would not be expected to affect the flame resistance of the hose. Several low permeation hose constructions are discussed below. Even though most of this data is on hoses not designed for marine applications, the barrier technology can be used in marine hose.

5-80

### Feasibility of Evaporative Emission Control
We are requiring that fuel and vapor hose meet our standards on E10 fuel for two reasons. First, ethanol is commonly a component of in-use fuels. Second, for many materials used in hose constructions, permeation would likel y be much higher for fuel containing ethanol. For instance, a typical barrier material used in barrier hose constructions is FKM. Based on the data presented in Appendix 5D for FKM, the permeation rate is 3-5 times higher on Fuel CE10 than Fuel C. Therefore, a hose meeting 15 g/m 2 

### /day at 23°C on Fuel C may actually permeate at a level of 40-50 g/m 2 

### /day on fuel with a 10 percent ethanol blend.
There are lower permeation fuel hoses available today that are manufactured for automotive applications. These hoses are generally used either as vapor hoses or as short sections of fuel line to provide flexibility and absorb vibration. One example of such a hose 153 

### is labeled by General Motors as “construction 6" which is a multilayer hose with an inner layer of a fluoroplastic known as THV sandwiched in inner and outer layers of a rubber known as ECO. 5 

### A hose of this construction would have less than 8 g/m 2 

### /day at 40°C when tested on CE10.
Permeation data on several low permeation hose designs were provided to EPA by an automotive fuel hose manufacturer. 154 

### This hose, which is as flexible as non-barrier hose, was designed for automotive applications and is available today. Table 5.4-12 presents permeation data on three hose designs that use THV 800 as the barrier layer. The difference in the three designs is the material used on the inner layer of the hose. This material does not significantly affect permeation emissions through the hose but can affect leakage at the plug during testing (or connector in use) and fuel that passes out of the end of the hose which is known as wicking. The permeation testing was performed using the ARB 18-41°C diurnal cycle using a fuel with a 10 percent ethanol blend (E10).

Table 5.4-12: Hose Permeation Rates with THV 800 Barrier over ARB Cycle (g/m 2 

### /day)
Hose Name Inner Layer Permeation Wicking Leaking Total

CADBAR 9610 THV 0.16 0.00 0.02 0.18

CADBAR 9710 NBR 0.17 0.29 0.01 0.47

CADBAR 9510 FKM 0.16 0.01 0.00 0.18



### The data presented above shows that there is hose available that can easily meet the hose permeation standard on CE10 fuel. Although hose using THV 800 is available, it is produced for automobiles that must meet the tighter evaporative emission requirements in the Tier 2 standards. Hose produced in mass quantities today uses THV 500. This hose is less expensive and could be used to meet the hose permeation requirements. Table 5.4-13 presents information comparing hose using THV 500 with the hose described above using THV 800 as a barrier layer. 155 

### In addition, this data shows that permeation rates more than double when tested on CE10 versus Fuel C.

5 THV = tetrafluoroethylene hexafluoropropyle ne, ECO = epichlorohydrin/ethylene oxide

5-81

### Final Regulatory Impact Analysis
Table 5.4-13: Comparison of Hose Permeation Rates with THV 500 and 800 (g/m 2 

### /day) *

Hose Inner Diameter, mm THV 500 THV 800

Fuel C Fuel CE10 Fuel C Fuel CE10

6 0.5 1.4 0.2 0.5

8 0.5 1.4 0.3 0.5

10 0.5 1.5 0.2 0.5 * Calculated using data from Thwing Albert materials testing (may overstate permeation)



### We contracted with an independent testing la boratory to test several samples of SAE J30 R9 hose and a sample each of automotive vent line and fill neck hose for permeation. 156,157,158,159,160,161 

### The fuel and vapor hoses had a six mm inner diameter. The test lab used the SAE J30 test procedures for R9 hose with both Fuel C and Fuel CE10. Most of the R9 fuel hose was supplied by recreational vehicle manufacturers who also supplied information on the materials used in the construction of the hose as well. We purchased one sample of the R9 hose (which was labeled as such) from a local auto parts store without knowing its construction. Two additional R9 hoses were tested by a fuel hose manufacturer on fuel CE10 after a four week soak. 162 

### The SAE permeation specification for R9 hose is 15 g/m 2 

### /day at 23 

### / C on Fuel C. The R9 hose tested all met this limit, even on ethanol blend fuels which typically result in higher permeation. The automotive vent line showed similar results, but the automotive fill neck showed much lower permeation. Table 5.4-14 presents the test data on the above hose samples.

5-82

### Feasibility of Evaporative Emission Control
Table 5.4-14: Test Results on Commercially Available Hose Samples (g/m 2 

### /day) Hose Sample Construction Fuel C Fuel CE10

SAE J30 R9 FKM/ECO – 7.6

SAE J30 R9 FKM/ECO – 2.1

SAE J30 R9 FKM/NBR/CM – 4.2

SAE J30 R9 FKM/ECO – 10.9

SAE J30 R9 FKM/ECO – 5.2

SAE J30 R9 PVC/EEC – 11.6

SAE J30 R9 FKM barrier – 6.6

SAE J30 R9 fluorine/hydrin – 9.0

SAE J30 R9 unknown 10.1 12.1

SAE J30 R9 FKM barrier – 4.2

SAE J30 R9 FKM barrier – 6.7

Automotive vent line unknown 10.9 9.0

Automotive fill neck unknown 0.33 0.49



### Another hose construction that can be used to meet the marine hose permeation standards is known as F200 which uses Teflon® as a barrier layer. Teflon® has a permeation rate of 0.03- 0.05 g-mm/m 2 

### /day on 15 percent methanol fuel. F200 hose is used today to meet SAE J30 R11 and R12 requirements for automotive applications. Table 5.4-15 presents data on permeation rates for several F200 constructions. 163



### Table 5.4-15: F200 Typical Fuel Permeation Film Thickness [mils] Hose Diameter [in.] Fuel g/m 2 /day @23°C g/m 2 /day @40°C

2 0.375 TF-2

-- 0.7

2 0.275 TF-2

-- 1

2 0.275 M25 0.5 4

2 0.470 CE10

-- 3

2 0.625 CE10

-- 3

1 0.625 CE10

-- 4

1 1.5 CE10 1.5

-- 

### Low permeability hoses produced today are generally constructed with a barrier material

5-83

### Final Regulatory Impact Analysis
layer. There are hoses used in some marine applications with a thermoplastic layer (either nylon or EVOH) between two rubber layers to control permeation. Because the thermoplastic layer is very thin, on the order of 0.1 to 0.2 mm, the rubber hose retains its flexibility. Through contract with two independent labs, we tested three samples of marine barrier hose that were available prior to our 2002 proposal for marine permeation emissions. This hose included two 3/8" samples and one 5/8" sample which all used nylon as the permeation barrier. These hose constructions are used in some sterndrive and inboard applications. Table 5.4-16 presents the permeation test results at 23°C. 164,165,166,167,168,169



### Table 5.4-16: Test Results on Available Barrier Marine Hose Samples (g/m 2 

### /day)

Hose Description Lab 1 Lab 2*

Fuel C Fuel CE10 Fuel C

3/8" marine barrier fuel hose 0.80

-- 5.2 11.6 0.36

-- 5/8" marine barrier fuel hose

-- 3.4 0.76 * average of three tests


### Similar testing was performed by the marine industry on commercially available low permeation marine hose. 170 

### In this testing, the 3/8" I.D. fuel hose samples were connected to metal fuel reservoirs and soaked with gasoline containing 10 percent ethanol at 23 

### / C for 180 days. The weight of the container/hose assembly was measured for five days in a row approximately every 30 days. The fuel was replaced with fresh fuel after each series of weight measurements. The test report did not specify details on the hose constructions. However, based on the manufacturer part numbers, several of the hoses in this test program were determined to use a nylon barrier layer. One of the hoses included was a baseline rubber construction meeting Coast Guard requirements for SD/I fuel hose. Repeat testing was performed on the hose. 171 

### During this repeat testing, permeation was also measured for the same hose exposed to fuel CE10. Although the permeation rate was generally higher on fuel CE10, the barrier hose permeation rates were still well below the standard. Table 5.4-17 presents the results of this testing.
Table 5.4-17: Permeation Results for Commercially Available Marine Barrier Hose Tested at 23 

### / C with Gasoline Containing 10% Ethanol (g/m 2 

### /day)

Hose Construction Gasoline with 10% Ethanol CE10

SAE J1527 A1 constructions w ith nylon barrier 6.2, 5.2 5.6, 5.1 4.4, 3.8 4.4, 3.2 6.1 6.7 10.0 12.1 not reported 0.4, 0.1 0.0

5-84

### Feasibility of Evaporative Emission Control
After the 2002 proposal for marine permeation emissions, two marine hose manufacturers developed hose samples using the F200 hose construction. In addition, other hose manufacturers supplied samples of barrier hose using the F200 hose construction and using THV800 as a barrier layer. These manufacturers stated that they could make marine hose using the same barrier construction. We contracted to have these hose samples permeation tested on fuel CE10 at 23°C following a four week soak. 172 

### These test results are presented in Table 5.4-18.

Table 5.4-18: Permeation Test Results on New Marine Barrier Hose Constructions Application Barrier Material I.D. [inches] g/m 2 /day

marine fill neck Teflon (F200) 11⁄2 0.2

marine fuel hose Teflon (F200) 3/8 5.0

fuel hose Teflon (F200) 1/4 3.8

fuel hose THV 800 1/4 5.1



### Currently, the Coast Guard requires that fuel pumps on engines be located on or near the engine to minimize the length of high pressure fuel lines on the vessel. However, at least one manufacturer sells boats with the high pressure fuel pump in the fuel tank. They received a waiver from the Coast Guard by using fuel lines that use either a glass fiber or stainless steel braid cover and quick connect end fittings that are designed to withstand very high pressures (much higher than would be seen on a boat). 173 

### This particular fuel line construction also uses Teflon ® 

### as a barrier layer. Table 5.4-19 presents permeation test data on this hose. 174



### Table 5.4-19: Permeation Test Data on Reinforced Fuel Hose Application I.D. [inches] Temperature Fuel g/m 2 /day

Marine 0.31 0.25 0.19 23°C CE10 0.05 0.08 0.05

Outdoor Power Equipment 0.31 0.25 0.19 60°C CM15 0.52 0.93 1.08



### Primer bulbs are typically injection-molded out of nitrile rubber. Fuel lines for some handheld equipment are manufactured in a similar manner. Low permeation primer bulbs and fuel lines could be manufactured using a similar process by molding them from a fluoroelastomer such as FKM. Fluoroelastomers, such as FKM, have similar physical properties as nitrile rubber but are much more fuel-resistant. If the primer bulb or fuel line were molded out of a FKM with a sufficient flurorine concentration, the permeation rate would be less than fuel line permeation standard. Alternatively, primer bulbs could be manufactured to meet the standards by molding a fluoroelastomer inner liner with a nitrile shell to reduce costs. Other

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### Final Regulatory Impact Analysis
materials may be applicable as well (see tables of material properties in Appendix 5D).
One manufacturer has developed a low-permeation primer bulb replacement that meets the hose permeation standard. 175,176 

### This design uses a rigid, low permeation housing in the shape of a traditional primer bulb. However, it uses a simple piston displacement pump inside to take the place of soft elastomer squeeze type bulb. It is designed to have similar dimensions to existing primer bulbs and to be easily retrofitted into current applications.
Under their rule for small offroad equipment, California may issue executive orders to manufacturers with low emission products. As of August, 2006, ARB has issued 24 executive orders for low permeation fuel lines. 177 

### The California fuel line permeation standard is 15 g/m 2 

### /day tested at 40 

### / C on California certification fuel. However, many of the manufacturers tested their products on CE10 fuel which results in significantly higher permeation rates. Some manufacturers even tested at 60 

### / C. In all cases, the test results were below the 15 g/m 2 

### /day standard, even under the more challenging test conditions. Table 5.4-20 presents the test results for the fuel lines with ARB executive orders. Note that the reported emissions are the average of 5-6 test samples.

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### Feasibility of Evaporative Emission Control
Table 5.4-20: ARB Fuel Hose Executive Orders for Small Offroad Equipment
EO# I.D. [mm] Test Fuel Temperature g/m 2 

### /day

C-U-06-016 C-U-06-001

G-05-016 G-05-017 G-05-019 C-U-05-004 C-U-05-010 4.8 6.0 6.4 6.4 6.4 6.4 6.4 CE10 CE10 CE10 CE10 CE10 CE10 CE10 40 40 40 40 40 40 40 3.75 1.42 4.62 5.97 0.02 12.3 10.6
G-05-019* G-05-015a C-U-05-001 6.4 7.9 8.0 CE10 CE10 CE10 60 60 60 0.26 11.1 8.22
C-U-06-001* 6.0 CM15 40 3.77
C-U-06-001* 6.0 Fuel C 40 0.78

C-U-06-020 C-U-05-014 C-U-06-021 C-U-06-002 C-U-06-011 4.5 6.4 6.4 6.4 6.4 Indolene Indolene Indolene Indolene Indolene 40 40 40 40 40 3.20 8.20 7.40 5.00 12.7

C-U-05-011 C-U-06-017 C-U-05-013 C-U-05-006 C-U-05-012 C-U-05-003

G-05-018 C-U-05-009 C-U-06-010 C-U-05-002 2.0 3.5 4.0 4.0 4.0 4.5 4.8 4.8 4.8 6.4 Phase II Phase II Phase II Phase II Phase II Phase II Phase II Phase II Phase II Phase II 40 40 40 40 40 40 40 40 40 40 4.63 10.8 1.22 10.3 7.33 12.3 0.87 3.94 4.69 3.76 * fuel tube



### 5.4.3 Low Temperature Hose Materials
In some applications, molded fuel hoses are used rather than simple extruded fuel hose. These fuel hoses are typically molded out of n itrile rubber (NBR) or a fluoroelastomer such as FKM. FKM is essentially rubber impregnated with fluorine which results in good fuel permeation resistance. Manufacturers of handheld equipment that may be used in very cold weather have stated that they must use nitrile rubber because the FKM material may become brittle at very low temperatures. 178 

### Examples of such equipment are ice augers and chainsaws.

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### Final Regulatory Impact Analysis
Industry has not raised an issue with the capability of using extruded multi-layer hose in cold temperature applications. This type of hose construction has been demonstrated for low temperature use in automobiles and snowmobiles. Extruded fuel hose meeting SAE and ASTM standards is available today which meets a widespread set of safety and durability requirements. Industry has stated that for some applications, such as chainsaws, that extruded fuel hose will not work. In these applications, injection molding is used to manufacture complex fuel hose geometries designed to account for high vibration of the equipment. This vibration generally results in different motion patterns for the carburet or and fuel tank resulting in variable distances between the two.
Industry presented information on FKM fuel lines that became brittle and cracked at very low temperatures. 179,180 

### However, this information was was based on an FKM compound without a low temperature additive package. There are a wide range of FKM products available on the market. Many of these fluoroelastomers are designed for use at low temperatures. 181,182 

### For instance, low temperature o-rings are common in automotive applications. 183,184,185 

### Low temperature grade FKM products are available with a glass transition temperature as low as - 40 

### / C and a brittleness point as low as -60 

### / C. 186 

### However, low temperature grade FKM products typically cost several times as much as FKM products intended for less severe temperatures. In addition, these materials have not been demonstrated for use in molded fuel lines for handheld applications.
A lower cost option may be to blend a standard fluorosilicone such as FVMQ with a standard grade FKM. The fluorosilicone brings very low temperature characteristics to the blend. However, the permeation resistance is not nearly as good as for FKM products. The blended product would be intended to create a balance between cost, permeation, and low temperature properties. 187 

### This product is currently used in automotive o-rings. However, it is not clear if this material could be molded into fuel lines that would meet the appropriate design criteria for handheld applications.
A new material, called F-TPV, has been developed that is a dynamically vulcanized combination of fluorothermoplastic resin and fluoroelastomer compound. 188 

### The mix of the two materials can be varied to trade-off permeation resistance with material hardness. This material has been shown to have a permeation rate ranging from 3 to 30 g-mm/m 2 

### /day on fuel CE10 at 60 

### / C. Rubber hose molded out of even the softest version of this material would be expected to be capable of achieving a permeation rate well below the standard. In addition, the impact brittleness temperature is below -50 

### / C for the full range of material blends discussed above. Finally, the cost of this material is much lower than for low-temperature FKM products. Further development efforts would be necessary to determine the suitability of this material for fuel lines on handheld equipment.
Table 5.4-4, above, presents permeation data on several samples of NBR fuel lines used on handheld equipment today. The permeation rates from these fuel lines range from 165 to 455 g/m 2 

### /day with E10 fuel at 23 

### / C. Later discussions with industry revealed that the NBR hose with the lower permeation rates had higher acrylonitrile (ACN) contents. Although high ACN rubber cannot achieve the same low permeation rates as FKM or F-TPV, some permeation

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### Feasibility of Evaporative Emission Control

reductions could still be achieved with this material.



## 5.5 Other Evaporative Emissions

5.5.1 Other Venting Losses
Hot soak emissions occur after the engine is turned off, especially during the resulting temperature rise. The primary source of hot soak emissions is the evaporation of the fuel left in the carburetor bowl. Other sources can include increased permeation and evaporation of fuel from plastic or rubber fuel lines in the engine compartment.
Refueling emissions occur when the fuel vapors are forced out when the tank is filled with liquid fuel. At a given temperature, re fueling emissions are proportional to the volume of the fuel dispensed into the tank. Every gallon of fuel put into the tank forces out one-gallon of the mixture of air and fuel vapors. Thus, refueling emissions are highest when the tank is near empty. Refueling emissions are also affected by the temperature of the fuel vapors and dispensed fuel. At low dispensed fuel temperat ures, the fuel vapor content of the vapor space that is replaced is lower than it is at higher temperatures because of the cooling effect on the vapor in the fuel tank.
In automotive applications, the carbon canister is sized not only to capture diurnal emissions, but refueling, hot soak, and running loss emissions as well. With an engine purge, the canister would effectively capture running loss emissions and hot soak emissions because the canister would presumably be nearly empty after a short period of operation. For the canister to be effective at collecting refueling emissions, it would need to be purged before the refueling event. However, even without a purged canister, refueling emissions could be minimized by matching the geometry of the fuel fill opening to the fuel pump nozzle. By minimizing the open space in the fuel fill opening around the nozzle, less air will be entrained which will minimize vapor generation during the refueling event. This will not help control the expulsion of vapor that is displaced by liquid fuel.

5.5.2 Refueling Spitback/Spillage
Installed fuel systems on boats are typically open vented. The exception to this is PWC which have sealed fuel tanks with pressure relief valves, largely to prevent spillage of fuel during operation. For larger boats, fuel spillage during operation is less of an issue; however, it is common for fuel to be lost to the environment during refueling or shortly thereafter. 189,190 

### There are several mechanisms that lead to fuel loss due to a refueling event. These mechanisms include restrictions in the fill neck, fuel flowing out the vent line, and expansion of fuel in the tank.
The American Boat and Yacht Council (ABYC) has a voluntary refueling standard designed to help prevent fuel from backing up the fill neck during a refueling event. 191 

### This test requires that no fuel back up the fill neck when a fuel tank in a boat is filled from 25 to 75 percent full at a fill rate of 9 gallons per minute. This test is apparently designed to make sure

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### Final Regulatory Impact Analysis
that the fill neck does not have a restriction that may cause fuel to back up the fill neck during refueling. To prevent fill from backing up the f ill neck, fill necks are typically made of large diameter hose which is reinforced to prevent kinking. In addition, the fuel fill opening is typically positioned higher than the vent line. This test does not consider fuel overflow that may occur from filling a marine tank to 100 percent full. In addition, the full rate may be too low to require a design that would work in typical in-use situations. One survey on 19 marinas saw a range of 8 to 25 gallons per minute for gasoline fill nozzles with an average of 14 gallons per minute. 192



### The most common refueling spillage today is overflow out the vent line. Typically the vent line is the path of least resistance for fuel overflow. Boats typically do not have a mechanism that prevents fuel tanks from filling all the way to the top. In fact, the fill and vent hose are attached to the top of the fuel tank and are often filled with fuel in addition to the tank. Because the vent hose exits the boat lower than the fill neck opening, the tank can be filled until fuel begins to exit through the vent hose. In addition, fuel may expand in the fuel tank when cool fuel is pumped into the fuel tank on a warm day. This expansion can cause additional fuel overflow out the vent line.
A number of devices have been produced to help control fuel spillage during refueling. These devices include liquid/vapor separators, combination deck fills and vents, and fuel flow monitoring systems. A study was performed by Boat US Foundation to evaluate the effectiveness of several of these systems which are currently available on the market. 193 

### The results of this study are discussed below.
Liquid/vapor separators are valves that are installed in the fuel line. The typical design is for the valve to contain a ball that rises when liquid fuel reaches it which closes the vent to liquid fuel. As the tank fills, fuel backs up the fill neck, allowing the automatic shut-off on the nozzle to stop the fuel flow. The study found that these systems typically worked best at lower fuel fill rates and that the larger units were more effective. The effectiveness of the larger units was probably because they essentially included a reservoir, allowing extra room for fuel expansion. For the smaller units, the testing consistently showed fuel backing up the fill neck too quickly for the automatic shut-off valve to engage and fuel spit back out of the deck fill.
In a vented deck fill design, the vent line is r outed back to the top of the fill neck. The intent is that the fuel surging out of the vent line would return to the fill neck and back to the tank. The study found that the combination vented deck fills significantly reduced spitback/spillage, but still needed to be used with some caution. One issue was that even when the fuel came back up and shut off the nozzle, pressure in the fuel tank would cause fuel to continue to rise in the line and spill onto the deck. Another manufacturer has a similar device except that a clear section of tubing that redirect s the fuel overflow from the vent line to the fill neck. The operator only attaches this tubing during refueling. Because the tubing is clear, the operator can see when the fuel is coming out of the vent and can manually slow down or stop the fuel flow.
Fuel flow monitoring systems are designed to keep track of fuel usage by measuring fuel

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### Feasibility of Evaporative Emission Control
flowing to the engine. The study did not present definitive results for the use of flow meters to accurately refuel the tank without overfill.
Where a carbon canister is used in the vent line for diurnal vapor control, it is important to include a device to prevent liquid fuel from entering the canister. This device could take the form of a floating ball valve, limited flow orifice, or other liquid/vapor separation mechanism. In addition, this device could be positioned in such a way as to prevent the tank from filling all the way to the top. For instance, the vent fitting could reach down into the fuel tank. Leaving a vapor space in the fuel tank gives room for fuel in the tank to expand.
In automotive applications, carbon canisters have been used for many years in vehicles that also meet fuel spit-back standards set by EPA. In typical automotive fuel systems, the fuel shut-off on the nozzle is tripped before the fuel comes back out the fill neck. It is common to have a narrow tube parallel to the fill neck reach into the fuel tank at the desired peak fill level of the tank. The narrow tube connects to the fill neck near the top where the small hole on the nozzle would be. When fuel splashes on this small hole, the vacuum draw is broken and the shut-off device is triggered. Fuel travels up the narrow tube more quickly than up the fill neck and triggers the nozzle shut-off well before fuel spit-back can occur.
At least one company is developing a similar design for use in boats. Testing has been performed on one system by an independent labor atory that also performs ABYC and Coast Guard tests for the marine industry. During the testing, a fuel tank was filled 30,000 times, using this fuel system configuration, without any spillage. 194 

### Also, this fuel system configuration creates a vapor space in the top of the tank which allows fuel to expand during heating, thereby preventing fuel spillage due to expansion of the fuel in the tank. 195 

### This system has since been modified to be adaptable to any fuel tank with a fuel sending unit based on the standard SAE 5- hole pattern. The updated system was tested using a similar methodology as in the Boat US study discussed above and underwent 25,000 refueling events at 15 gallons per minute without experiencing any spills. 196 

### Pictures and video of this system are included in the docket.



## 5.6 Evaporative Emission Test Procedures

This section discusses test procedures for measuring fuel line permeation, fuel tank permeation, and diurnal emissions.

5.6.1 Fuel line Permeation Testing
Fuel line permeation must be measured at a temperature of 23 ± 2°C using the weight loss method specified in SAE J30 197 

### and SAE J1527. 198 

### In this method, one end of a specified length of hose is connected to a metal reservoir while the other end is plugged. Test fuel is then added to the reservoir at a volume high enough to ensure that the hose is filled with fuel. Once care has been taken to ensure that no air bubbles are trapped in the fuel line, the reservoir is sealed and the entire system is weighed. Permeation is determined by weighing the system every 24 hours and noting the weight loss. After each weighing, the fuel is mixed by inverting the assembly, then returning it to its original position.

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### Final Regulatory Impact Analysis
We are including two modifications to SAE J30 that are consistent with our current requirements for recreational vehicles and highway motorcycles. First, the test fuel must be ASTM Fuel C 199 

### (50 percent toluene, 50 percent iso-octane) blended with 10 percent ethanol. 6 

### This fuel is known as CE10 and is commonly used in industry standards and test procedures such as in SAE recommended practices (includi ng SAE J1527). Section 5.4, and Appendix 5D presents permeation data for several hose constructions and materials used in hose constructions on fuels with and without ethanol. As shown in this data, adding ethanol to the test fuel significantly increases permeation. Standard recommended practice for hose testing uses Fuel C, or some blend of Fuel C and either ethanol or methanol. This test fuel is generally more aggressive than standard gasoline. Although hoses are not generally exposed to Fuel C in use, the level of the standard was based on testing us ing Fuel C and Fuel C blends. In addition, most of the test data on low permeation hose presented in this Chapter is based on fuel CE10. For these reasons, we believe that it is appropriate to allow Fuel CE10 for hose testing.
The second modification is that the hose must be preconditioned by filling the hose with fuel and soaking long enough to ensure that the permeation rate has stabilized. We are using a soak period of 8 weeks at 23 ± 5°C. If a longer time period is necessary to achieve a stabilized permeation rate for a given hose design, we expect the manufacturer to use a longer soak period (and/or higher temperature) consistent with good engineering judgement. For instance, thickwalled marine fuel hose may take longer to reach a stable permeation rate than thinner-walled hose used in Small SI applications. In addition, we are clarifying that the weight loss measurement period should be two weeks.
Alternatively, for purposes of submission of data at certification, permeation could be measured using alternative equipment and procedures that provide equivalent results. One alternative approaches that we anticipate manufacturers may use are the recirculation technique described in SAE J1737. 200 

### To use other alternative methods, such as enclosure-type testing such as in 40 CFR part 86, manufacturers have to apply to us and demonstrate equivalence. In enclosure testing, manufacturers would need to show how they would account for the ethanol fraction of the permeate.
Recommended practice for automotive fuel tubing is defined in SAE J2260. 201 

### The permeation requirements in this standard are one to two orders of magnitude lower than those defined for marine hoses. These permeation requirements are based on the same fuels as the revised SAE J 1527, but at a much higher temperature (60°C). At 60°C, permeation rates for a given material may be 16 times as high or higher than at 23°C based on the rule of thumb that permeation doubles for every 10°C increase in temperature. SAE J2260 refers to the permeation test procedures in SAE J1737. 202



### The procedures in SAE J1737 were designed to measure the low permeation rates needed in automotive applications to meet EPA evaporative emission requirements. There was concern that the weight loss measurement, such as used in SAE J1527, was not sensitive enough to

6 An exception to this is that fuel IE10 may be used for cold-weather fuel lines.

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### Feasibility of Evaporative Emission Control
measure these low permeation rates. In addition, this procedure requires exposing the material to be tested for hundreds of hours, depending on the material and fuel, to reach a steady-state permeation rate. In this procedure, fuel is h eated to 60°C and circulated through a tube running through a glass test cell. Nitrogen around the tube in this test cell is used to carry the permeate to activated charcoal canisters. The canisters are weighed to determine their capture. Because the canister is much lighter than the reservoir/hose in the SAE J1527 configuration, a much more accurate measurement of the permeation loss can be made.
Some manufacturers of low permeability product are finding that as their emission rates decrease, they need more refined test procedures to accurately measure permeation. These manufacturers are finding that the weight of the charcoal canisters are much higher than the permeate being measured. As an alternative to the gravimetric approach used in the above two procedures, even very low permeation emissions can be measured by a flame ionization detector and a SHED. As discussed earlier, SHED testing is generally used to measure evaporative emissions from whole automobile systems as well.

5.6.2 Fuel Tank Permeation Testing
We are applying similar fuel tank permeation test procedures to Small SI equipment and Marine SI vessels as we currently use for recreational vehicles. This testing includes preconditioning, durability testing, and permeation measurement. The differences in the test procedure compared to recreational vehicles are minor and are intended to simplify the testing. For instance, the durability testing is performed during the preconditioning soak period prior to the weight loss testing rather than testing the tank twice; once before durability testing, and once after. Figure 5.6-2 provides flow charts for this testing (2) compared to the recreational vehicle test (1) which includes the calculation of a deterioration factor.

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### Final Regulatory Impact Analysis
Figure 5.6-2: Flow Chart of Fuel Tank Permeation Test with and without a Deterioration Factor (DF) Determination



### 1: Full Test Procedure 2: Short Test without with DF* Determination DF Determination

begin with new tank

preconditioning

fuel soak 28 ± 5 C E10 fuel 20 weeks

use final permeation test result for certification

baseline permeation test run E10 fuel 28 ± 2 C

fuel soak 28 ± 5 C E10 fuel 20 weeks**

final permeation test run E10 fuel 28 ± 2 C Pressure Cycling 10,000 x -0.5 to 2.0 psi

UV Exposure

24 W/m

Slosh Testing 1 million cycles E10 fuel Durability Testing

2 begin test

use final permeation test result for certification fuel soak 28 ± 5 C E10 fuel 20 weeks**

final permeation test run E10 fuel 28 ± 2 C Pressure Cycling 10,000 x -0.5 to 2.0 psi

UV Exposure

24 W/m

Slosh Testing 1 million cycles E10 fuel Durability Testing

* The deterioration factor (DF) is the difference between the baseline and final permeation test runs in the full test procedure. In future tests, the first 3 steps would be performed, then a DF could be applied to determine the final test result.

** The length of "soak" during durability testing may be included in the fuel soak period provided that fuel remains in the tank. Soak periods can be shortened to 10 weeks if performed at 43 ± 5 C

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### Feasibility of Evaporative Emission Control
For the purpose of this testing, “fuel tank” includes the fuel cap and other components directly mounted to the tank that become part of the barrier for the fuel and vapor. During testing, fittings and openings in the fuel tank intended for hose connections (or petcock) is sealed with an impermeable plug. An opening containing a fuel petcock could also be plugged with an impermeable fitting because this is an opening to the fuel hose which will be required to meet permeation standards. In many installed marine fuel tanks, the fuel cap is not directly mounted on the fuel tank. Instead, the fuel cap is usually linked to the fuel tank by a fill neck hose. In this case, the fill neck opening in the fuel tank may be sealed with an impermeable plug during permeation testing.

5.6.2.1 Durability Testing
Prior to the weight loss test, the fuel tank must be preconditioned to ensure that the hydrocarbon permeation rate has stabilized. Under this step, the fuel tank must be filled with a 10 percent ethanol blend (E10), sealed, and soaked for 20 weeks at a temperature of 28 °C ± 5 °C. Once the permeation rate has stabilized, the fuel tank is drained and refilled with E10, sealed, and tested for a baseline permeation rate. The permeation rate from the fuel tank is determined by measuring the weight difference the fuel tank before and after soaking at a temperature of 28 °C ± 2 °C over a period of at least 20 weeks. The soak periods could be shortened to 10 weeks if performed at 43 °C ± 5 °C. The durability testing described below may be performed during the soak period. During the slosh testing, a lower tank fill level, consistent with the slosh test, is acceptable.
To determine a permeation emission deterioration factor, we established three durability tests: slosh testing, pressure-vacuum cycling, a nd ultra-violet (UV) light exposure. The purpose of these deterioration tests is to help ensure that the technology is durable and the measured emissions are representative of in-use permeation rates. For slosh testing, the fuel tank is filled to 40 percent capacity with E10 fuel and rocked for 1 million cycles. The pressure-vacuum testing contains 10,000 cycles from -0.5 to 2.0 psi. The slosh testing is designed to assess treatment durability as discussed above. These tests are designed to assess surface microcracking concerns. These two durability tests are based on a draft recommended SAE practice. 203 

### The third durability test is intended to assess potential impacts of UV sunlight (0.2 μm - 0.4 μm) on the durability of the surface treatment. In this test, the tank must be exposed to a UV light of at least 0.40 W-hr/m 2 

### /min on the tank surface for 15 hours per day for 30 days. Alternatively, it can be exposed to direct natural sunlight for an equivalent period of time in exposure hours.
The order of the durability tests is optional. However, we require that the fuel tank be soaked to ensure that the permeation rate is stabilized just prior to the weight loss test. If the slosh test is run last, the length of the slosh test may be considered as part of this soak period. Where possible, the deterioration tests may be run concurrently. For example, the fuel tank could be exposed to UV light during the slosh test . In addition, if a durability test can clearly be shown to not be appropriate for a given product, manufacturers may petition to have this testwaived. Only fuel tanks using surface barrier treatments or barriers consisting of postprocessing coatings are subject to the slosh and pressure-vacuum tests. In addition, a fuel tank

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### Final Regulatory Impact Analysis
that is only used in vehicles where an outer shell prevents the tank from being exposed to sunlight may not be subject UV testing.
After the durability testing, once the permeation rate has stabilized, the fuel tank is drained and refilled with fresh fuel, sealed, and tested for a final permeation rate. The final permeation rate from the fuel tank is determined using the same measurement method as for the baseline permeation rate. The final permeation rate is used for the emission rate from this fuel tank. The difference between the baseline and final permeation rates could be used to determine a deterioration factor for use on subsequent testing of similar fuel tanks.

5.6.2.2 Test Fuel
As discussed in Chapter 3, about much of the fuel sold in the U.S. contains ethanol and this percentage is expected to increase dramatically in 2012 and later. The fuel tank permeation test fuel is E10, which is a blend of 90 percent certification gasoline (as specified in 40 CFR 1065.210) blended with 10 percent ethanol for permeation testing of fuel tanks. As an alternative, we would allow testing on ASTM Fuel C blended with 10 percent ethanol (Fuel CE10). Fuel CE10 is commonly used in industry standards and test procedures such as in SAE recommended practices.

5.6.2.2.1 Effect of ethanol on fuel tank permeation
Most plastic nonroad fuel tanks today are ma de out of high-density polyethylene (HDPE) or cross-link polyethylene (XLPE). For Small SI and Marine SI markets, plastic is much more widely used than metal for fuel tank constructions. For HDPE, E10 fuel has little effect on permeation emissions and may even result in slightly lower emissions according to one study. 204 

### We tested three 0.5 gallon Small SI fuel tanks for permeation using both certification gasoline and E10 and found a slight increase in permeation due to ethanol. ARB also tested several Small SI fuel tanks on both gasoline and ethanol blends 205,206,207,208 

### and saw a small increase in permeation. Permeation data was collected on two XLPE marine fuel tanks on E10. The measured permeation rates were within the range of data from other XLPE marine fuel tanks tested on gasoline presented earlier in Table 5.3-1. This data is presented in Table 5.6-1.

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### Feasibility of Evaporative Emission Control

Table 5.6-1: Effect of Ethanol on Permeation for HDPE Fuel Tanks
Material Test Equipment Tank gallons Test Temp(s) gasoline [g/m 2 /day] E10 [g/m 2 /day] Increase in Permeation

HDPE material sample NA 40 / C 90 a 69 a -23%

HDPE Small SI fuel 0.5 29 / C 11.5 13.9 21% tanks 0.5 11.4 13.7 21% (EPA Testing) 0.5 11.2 14.4 28%

HDPE Small SI fuel tanks 0.25 0.25 18-41 / C 11.6 10.7 13.6 11.6 18% 7% (ARB Testing) 0.25 0.25 12.5 9.9 11.4 10.3 -9% 4% 0.25 9.2 10.3 12% 0.5 12.7 14.8 17% 3.9 4.8 5.0 4%

XLPE marine tanks (EPA testing) 12 12 29 / C

-- b 7.5 8.5 minimal

a ASTM Fuel C was used as gasolin e (50% toluene, 50% isooctane). Units are per mm of thickness
b See Table 5.3-1 for data on similar tanks tested on gasoline.



### Although E10 does not have a large effect on permeation through polyethylene, it does have a large effect on most other materials used in fuel systems, especially those designed for low permeation. This is supported by the data presented in Appendix 5D of permeation rates for several fuel system materials on fuel C, CE10, and C15. In addition, ethanol is commonly blended into fuels in-use and alcohol fuels may be used more in the future in an effort to use alternative energy sources. Therefore, we are requiring E10 as a test fuel to ensure that the permeation standard will be met on in-use fuels.
One study found that permeation from automotive fuel systems increased significantly when gasoline containing ethanol was used compared to gasoline without ethanol. 209 

### In this case the ethanol fuel was specifically blended to achieve two weight percent oxygen. This test fuel represents California reformulated fuel and contains 5.7 percent by volume ethanol. Table 5.6-2 presents the test results at 29°C. The average increase in permeation due to using E5.7 was 60 percent. Presumably, this effect would have been higher on E10. Because most of the fuel tanks are metal, the effect is largely due to fuel hose/tubing permeation.

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### Final Regulatory Impact Analysis

Table 5.6-2: Effect of Ethanol on Perm eation from Automotive Fuel Systems Fuel System Fuel Tank Gasoline E5.7 Increase 2001 Toyota Tacoma 2000 Honda Odyssey 1999 Toyota Corolla 1997 Chrysler Town & Country 1995 Ford Ranger 1993 Chevrolet Caprice Classic 1991 Honda Accord LX

1989 Ford Taurus GL

1985 Nissan Sentra 1978 Olds Cutlass Supreme Metal Plastic (enhanced evap) Metal Plastic (enhanced evap) HDPE Fluorinated HDPE Metal Metal Metal Metal 10 19 11 40 348 94 39 28 73 73 32 53 57 66 342 137 100 73 177 139 220% 179% 418% 65% -2% 46% 156% 161% 142% 90%



### One significant finding with the above study was that switching from one fuel to another affects the permeation rate within a few weeks. Although operating on gasoline with ethanol changes the fuel tank material in such a way that permeation increases, this effect is reversible when gasoline is used in the fuel tank for a long enough period of time. This study found that the permeation rate at 40°C typically approached a stabilized level within 1 to 2 weeks of switching from one fuel to another.
To investigate the potential effects of fuel switching, we tested two pairs of 6.6 gallon portable marine fuel tanks. These fuel tanks used the barrier platelet technology discussed above. The first pair used nylon as a barrier material which is highly sensitive to ethanol while the second pair used EVOH which is much less sensitive to ethanol. All four tanks were soaked on E10 fuel, then the fuel was drained and replaced for testing. For each pair, one tank was tested on EPA certification gasoline and the other was tested on E10 fuel (10 percent ethanol, 90 percent gasoline). We continued the test for more than six weeks to observe the effects of fuel switching on the permeation rates. The results suggest that switching to gasoline significantly reduces the permeation rate for the nylon barrier tanks, but has no significant effect on the fuel tanks using EVOH as a barrier. Note that the nylon tanks had permeation rates near the standards when soaked and tested on gasoline, but have much higher permeation rates when tested on E10. This data is presented in Figure 5.6-1. The R-squared values for linear fits to the data are also presented. The fuel tank with a nylon barrier that experienced fuel switching had a lower R-squared value than the other fuel tanks.

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### Feasibility of Evaporative Emission Control

Figure 5.6-1: Effect of Fuel Switching on P ermeation from Barrier Platelet Fuel Tanks

R 2 = 0.943 R 2 = 0.995

R 2 = 0.997

0 20 40 60 80 100 120 140Weight Loss [grams] Nylon, Gasoline Nylon, E10 EVOH, Gasoline EVOH, E10

0 7 14 21 28 35 42 49 

### Test Days



### Fuel tank permeation data on both gasoline and E10 fuel are presented earlier in this chapter for nylon handheld tanks, fluorinated and sulfonated Small SI tanks, portable tanks with non-continuous nylon barrier platelets, and rotationally molded tanks with a nylon inner barrier. This data is repeated here in Table 5.6-3 to better focus on the effect of ethanol on fuel tank permeation. As shown by this data and the previous discussion, ethanol in the test fuel tends to increase permeation. However, the effect of ethanol on permeation appears to be highly variable depending on the materials or surface treatments used in constructing the fuel tank.

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Table 5.6-3: Permeation Rates on Gasoline and E10 for Barrier Fuel Tanks
Permeation Control Capacity [gallons] Gasoline [g/m 2 

### /day] E10 [g/m 2 

### /day] % Increase

nylon 6 0.24 0.34 0.42 0.48 32%

nylon 6, 33% glass 0.05 0.62 1.01 1.12 0.93 65%

nylon 6, 30% glass 0.06 1.45 2.2 2.5 60%

nylon 6, 30% glass 0.06 1.30 1.4 2.1 37%

fluorination 0.5 0.56 0.62 0.22 0.43 0.62 0.62 19%

sulfonation 0.5 2.5 2.7 2.2 3.9 4.2 2.9 49%

non-continuous nylon platelets 2.0 3.7 6.8 84%

Rotomolded with PA11 liner* 1mm barrier thickness 0.17 0.24 0.12 0.91 0.72 0.78 0.81 350%

* based on testing for California (California Phase II gasoline and fuel CE10)



### 5.6.2.2.2 Effect of CE10 versus E10 on fuel tank permeation
As discussed above, we will allow the use of fuel CE10 as an alternative to E10 for fuel tank permeation testing. The primary fuel, E10 is representative of in-use fuel and is consistent with the certification fuel used for recreational ve hicles. However, fuel CE10 is widely used by industry for materials testing. Data presented earlier in this chapter suggests that permeation is generally significantly higher on fuel CE10 for fuel hoses. We were therefore interested in the effect of fuel CE10 versus E10 on fuel tank perm eation. We tested several fuel tanks and found that permeation was only slightly higher on CE10 than E10 for most of the fuel tanks tested.
To study the effects of CE10 versus E10 on permeation, we used fuel tanks that had been previously tested on fuel E10. All of these tanks were drained and refueled with fresh test fuel. Most of the tanks were filled with fuel CE10; however, with some exceptions, one of each tank type was filled with fresh E10 for comparison. These fuel tanks were then preconditioned by soaking them for 12 weeks with the new test fuel. Note that all of the test tanks had been

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### Feasibility of Evaporative Emission Control
soaking with E10 fuel for more than a year (and in some cases multiple years) prior to beginning this preconditioning soak. Following the soak period, each tank was drained, refilled with fresh fuel, and sealed. Permeation was measured over two weeks at 29 

### / C. The fuel tanks were weighed on each weekday during this period.
Table 5.6-4 presents the results of this testing. In most cases, emissions were only slightly higher on CE10 than E10. The exceptions were the nylon 6 and the acetal copolymer fuel tanks which showed much higher permeation on CE10. However, the permeation rates for these fuel tanks were still below the standard when tested on fuel CE10. The fuel tank with a continuous EVOH barrier was well below the standard on fuel CE10. No comparison was made to E10 results for this technology.

Table 5.6-4: Permeation Rates on Gasoline and E10 for Barrier Fuel Tanks
Permeation Control Capacity [gallons] E10 [g/m 2 

### /day] CE10 [g/m 2 

### /day] % Increase

nylon 6 0.24 0.69 1.4 1.2 90%

HDPE 0.5 12.5 13.3 13.5 7%

fluorination 0.5 0.41 0.49 0.52 21%

sulfonation 0.5 3.1 4.2 2.9 16%

non-continuous platelets (4% nylon) 6.6 4.5 5.3 16% non-continuous platelets (2% EVOH) 6.6 3.0* 3.3 10% non-continuous platelets (4% EVOH) 6.6 2.2 2.3 6% non-continuous platelets (6% EVOH) 6.6 1.3 1.4 6%

continuous EVOH barrier 5.6

-- 0.05 0.01 NA

acetal copolymer 0.8 0.25 0.55 0.65 140%

* based on previous testing (presented earlier in this chapter)



### 5.6.2.3 Reference Tank
In cases where the permeation of a fuel tank is low, and the sample tank is properly sealed, the effect of air buoyancy can have a signi ficant effect the measured weight loss. Air buoyancy refers to the effect on air density on the perceived weight of an object. As air density

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increases, it will provide an upward thrust on the fuel tank and create the appearance of a lighter tank. Air density can be determined by measuring relative humidity, air temperature, and air pressure. 210



### One testing laboratory presented data to EPA on their experience with variability in weight loss measurements when performing permeation testing on portable fuel tanks. 211 

### They found that the variation was due to air buoyancy e ffects. By applying correction factors for air buoyancy, they were able to greatly remove the variation in the test data. A technical brief on the calculations they used is available in the docket. 212



### A more direct approach to accounting for the effects of air buoyancy is to use a reference fuel tank. In this approach, an identical fuel tank to that being tested for permeation is tested without fuel in it and used as a reference fuel tank. Dry sand can be added to this tank to make up the difference in mass associated with the test tank being full of fuel. The reference tank is then sealed so that the buoyancy effect on the reference tank is the same as the test tank. The measured weight loss of the test tank can then be corrected by any measured changes in weight in the reference tank. The California Air Resources Board uses this approach for measuring portable fuel tank emissions, and they refer to the reference tank as a “trip blank.” 213



### 5.6.2.4 Engineering Design-Based Certification
A metal fuel tank automatically meets the design criteria for a design-based certification as a low-permeation fuel tank, subject to the restrictions on fuel caps and seals described below. There is also a body of existing test data showing that co-extruded fuel tanks from automotive applications have permeation rates that are well below the new standard. We are allowing design-based certification for co-extruded high-de nsity polyethylene fuel tanks with a continuous ethylene vinyl alcohol (EVOH) barrier layer. The EVOH barrier layer is required to be at least 2 percent of the wall thickness of the fuel tank. In addition, the ethylene content of the EVOH can be no higher than 40 mole percent.
To address the permeability of the gaskets, and seals used on metal and co-extruded tanks, the design criteria include a specification that seals (e.g. gaskets and o-rings) not made of low-permeation materials must have a total exposed surface area less than 0.25 percent of the total inside surface area of the fuel tank. For ex ample, consider a four gallon fuel tank with an inside surface area of 0.40 square meters. The total exposed surface area of these seals on the fuel tank, in this example, must be smaller than 1000 mm 2 

### (= 0.25%/100 × 0.40m 2 

### × 1,000,000

mm 2 

### /m 2 

### ). This is consistent with the proposed rule and the current requirements for recreational vehicles, but allows for larger seals for larger tanks. In addition, if a non-metal fuel cap is directly mounted to the fuel tank, the surface area of the fuel cap (determined by the cross-sectional area of the fill opening) may not exceed 3.0 percent of the total inside surface area of the fuel tank.
A metal or co-extruded fuel tank with a fuel cap and seals that meet these design criteria would be expected to reliably pass the standard. However, we believe it is not appropriate to assign an emission level to fuel tanks using a design-based certification option that will allow

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them to generate emission credits. Given the uncertainty of emission rates from the seals and gaskets, we will not consider these tanks to be any more effective than other fuel tanks meeting emission standards.
In the case where the fuel cap is directly mounted on the fuel tank, we consider the cap and associated seals to be part of the fuel tank. As discussed above, we allow the fuel cap to be tested either mounted on the fuel tank, or individually. As an alternative to testing the fuel cap, the manufacturer may opt to use a default permeation rate of 30 g/m 2 

### /day. To be eligible for this default rate, the seal on the fuel cap must be made of a low-permeation material, such as a fluoroelastomer. The surface area associated with this default value is the cross sectional area of the opening that is sealed by the fuel cap. If this default value were used, the fuel fill would be sealed with a non-permeable plug during the tank permeation test, and the default permeation rate would be factored into the final result.

For the purposes of this provision, we consider low-permeation materials to be those that haves a permeation rate not more than 10 g-mm/m 2 

### /day at 23 

### / C on CE10 fuel as tested under the procedures specified in SAE J2659. 214



### 5.6.3 Diurnal Emission Testing
The test procedure for diurnal emissions is to place the fuel tank in a SHED 7 

### , vary the temperature over a prescribed profile, and measure the hydrocarbons escaping from the fuel tank. The final result is reported in grams per gallon where the grams are the mass of hydrocarbons escaping from the fuel tank over 24 hours and the gallons are the nominal fuel tank capacity. The test procedure is based on the automotive evaporative emission test described in 40 CFR part 86, subpart B, with modifications specific to marine applications.

5.6.3.1 Temperature Profile
For installed marine fuel tanks, we believe that the fuel temperature profile observed in the tank has a lower variation in temperature due to the inherent insulation provided by the boat hull. Data discussed earlier in this chapter, and presented in Appendix 5A, suggest that the fuel temperature in an installed marine tank sees a change in temperature less than that of ambient air. Based on this data, the fuel temperature change in boats stored on trailers would be expected to be about half of ambient. For boats stored in the water, the fuel temperature change would be expected to be about 20 percent of ambient. Based on discussions with industry, we use a boat length as a surrogate for determining if a boat is a trailer boat. We consider a boat that is at or below 8.5 feet in width and below 26 feet in length as a trailer boat and larger boats as being primarily stored in the water.
To account for the differences between ambient and fuel temperature, we established a

7 Sealed Housing for Emission Determination

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### Final Regulatory Impact Analysis
test temperature profile of 78-90°F (25.6-32.2°C) fo r marine fuel tanks installed in boats less than 26 feet in length and at or below 8.5 feet in width. For larger boats, we established a test temperature profile of 81.6-86.4 

### / F (27.6-30.2 

### / C). These test temperature profiles are based on fuel rather than ambient temperature. Figure 5.6-3 presents the three temperature profiles over 24 hours. Numerical values are presented in Appendix 5E.
Figure 5.6-3: Diurnal Temperature Profiles

70 75 80 85 90 95 100

0 4 8 12 16 20 24 

### Elapsed Time [hours]Temperature [°F] 

### portable (air temp) installed <26ft (fuel temp) installed >26ft (fuel temp)

The automotive diurnal test procedure includes a three day temperature cycle. The purpose of this test length is to ensure that the carbon canister can hold at least three days of diurnal emissions without vapor breaking-through the canister. For vessels using carbon canisters as an evaporative emission control strategy, we established a multiple day cycle here as well so that the passive purging can be observed. In the automotive test, the canister is loaded, then purged during an engine test prior to the first day of testing. Because we are anticipating canisters on marine applications to be passively purged we are using a different approach. Prior to the first day of testing, the canister is loaded to full working capacity, then run over the diurnal test temperature cycle to allow one day of passive purging. The test result is then based on the highest recorded value in the following three days.
For fuel systems using a sealed system (or sealed-system with pressure relief), we do not believe that a three day test is necessary. Prior to the first day of testing, the fuel is stabilized at the initial test temperature. Following this stabilization, the SHED is purged and a single diurnal temperature cycle run. Because this technology does not depend on purging or storage capacityof a canister, multiple days of testing should not be necessary. Therefore, we established a oneday test for the following technologies: sealed system without pressure relief, sealed system with

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a pressure relief valve, sealed bladder fuel tanks, sealed fuel tanks with a volume compensating air bag.

5.6.3.2 Test Fuel
Consistent with the automotive test procedures, the test must take place using certification gasoline with a vapor pressure of 9.0 RVP. We do not require ethanol to be blended into the test fuel. Although ethanol has a significant effect on permeation, it would not be expected to affect diurnal emissions except in that it may affect fuel vapor pressure.
Diurnal emissions are not only a function of temperature and fuel volatility, but of the size of the vapor space in the fuel tank as well. Consistent with the automotive procedures, the fill level at the start of the test must be 40 percent of the nominal capacity of the fuel tank. Nominal capacity of the fuel tank is defined as the volume of fuel, specified by the manufacturer, to which the fuel tank can be filled when sitting in its intended position. The vapor space that normally occurs in a fuel tank, even when “full,” is not considered in the nominal capacity of the fuel tank.

5.6.3.3 Tank Configuration
Installed marine fuel tanks are typically equipped with a vent line. As shown above, this vent line can impact the emissions determined over the test procedure because it largely restricts diffusion losses. Therefore, open vent marine fu el tanks that are designed with a connection for a vent line must be equipped with a one meter fuel line to more accurately reflect real world emissions. This should only be necessary for baseline configurations.
The majority of marine fuel tanks are made of plastic. Even plastic fuel tanks designed to meet our standards are expected to have some amount of permeation. However, over the length of the diurnal test, if it were performed on a new tank that had not been previously exposed to fuel, the effect of permeation on the test results should be insignificant. For fuel tanks that have reached their stabilized permeation rate (such as testing on in-use tanks), we believe that it is appropriate to correct for permeation. In such a case, the permeation rate could be measured from the fuel tank and subtracted from the final diurnal test result. The fuel tank permeation rate has to be stabilized on the 9 RVP test fuel used for the diurnal test and measured either over the diurnal temperature cycle or at a constant temperature (28 ± 2°C). This test measurement is made just prior (within 24 hours) to the diurnal emission test to ensure that the permeation rate does not change prior to the diurnal test. In addition, the test fuel needs to remain in the fuel tank between the permeation and diurnal tests to ensure a stable permeation rate. The fuel tank could be emptied to change test fuels and test set ups; however, this period will not be allowed to exceed one hour. As an alternative to stabilizing the permeation rate prior to testing, the permeation could be measured immediately before and after the diurnal test, and the lower permeation rate used to correct the diurnal test results. In this case, the test fuel is not removed after the diurnal test, and the second permeation test begins within 8 hours of the end of the diurnal test.

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### Final Regulatory Impact Analysis

5.6.3.4 Carbon Canister Engineering Design
Design-based certification may be used as an option to performing the above test. For vessels using a carbon canister to control diurnal emissions, it is important to ensure that the canister design is sufficient to achieve the standards. The following discussion outlines the requirements that are necessary to ensure adequate canister design. These design parameters and their associated test procedures are largely based on our understanding of current industry practices for marine grade carbon. 215



### 5.6.3.4.1 Carbon canister capacity
In a passive purge system, the storage capacity of the carbon canister must be properly matched to the fuel system. Ideally, the canister is large enough to take full advantage of the passive purge caused by cooling of the fuel tank. By creating more open sites in the canister, greater vapor collection is possible during the next heating event. If a canister is undersized, then the vessel would not likely meet the standards. On the other hand, after a certain point, increasing the size of the canister offers little additional emission control. Once the system reaches a stabilized purge/load condition, the emission reduction potential is based on the portion of the canister that purges and loads rather than the full volume of the canister.
The storage capacity of a carbon canister is based both on the volume of the canister and the working capacity of the carbon. Butane working capacity (BWC) is a measure of the vapor storage capacity of the carbon and is expressed in units of mass of butane per unit of volume. The BWC of the carbon must be at least 9 g/dL based on the test procedures specified in ASTM D5228-92. 216 

### Under this test procedure, butane vapor is fed through a carbon sample at a specified rate, until the mass of the carbon sample reaches equilibrium. The butane is then purged off with dry air. BWC of the carbon sample is calculated from the difference in the measured mass of the carbon sample before and after the purge.
Using the ASTM test procedure, the BWC represents the full saturated capacity of the canister and not the amount of vapor that the canister will hold before breakthrough occurs. Under the EPA automotive test procedure in 40 CFR 86.134-96, the canister capacity is based on the amount of butane loaded in the canister until 2 grams of breakthrough is measured. However, the ASTM procedure gives a repeatable measure that is currently used by industry. The design standard of 9 g/dL is based on this test procedure and therefore accounts for the differences in the ASTM and existing EPA automotive procedure.
Based on the data presented earlier in this chapter, we are requiring that the volume of the carbon canister must be a minimum of 0.04 liters of carbon per gallon of fuel tank capacity for fuel tanks installed in trailerable boats (<26 feet in length and 

### # 8.5 feet in width). For larger boats, the fuel temperature may be less affected by diurnal temperature swings for two reasons. First, these fuel tanks are in larger vessels which are more likely to be stored in the water and therefore, subject to smaller temperature fluctuations. Second, these fuel tanks are generally larger and have larger thermal inertia in the fuel which may lead to lower temperature fluctuation. Therefore, for fuel tanks installed on non-trailerable boats ( 

### $ 26 feet in length or

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### Feasibility of Evaporative Emission Control
>8.5 feet in width), the design minimum volume is 0.016 liters of carbon every gallon per gallon of fuel tank capacity.

5.6.3.4.2 Carbon humidity resistance
In a marine environment, the carbon may be exposed to more humid air, on average, than in land-based applications such as cars and trucks. Traditional carbons used in automotive applications can adsorb water, thereby closing sites off to hydrocarbons. With active purge and carbon heating during refueling vapor collection, th e water vapor is easily purged off the carbon. Under this rule, we are basing the design specification on a passive purge canister design and are not requiring onboard refueling vapor recovery. Therefore, we believe that the carbon should be resistant to moisture in the air. In the in-use program discussed above, marine grade carbon was used that was developed specifically for high humidity applications. 217



### Design-based certification requirements for humidity resistance are based on the specifications of the humidity-resistant carbon used in the in-use demonstration program. This carbon meets a moisture adsorption capacity maximum of 0.5 grams of water per gram of carbon at 90 percent relative humidity and a temperature of 25±5 

### / C. This limit is based on a test procedure where dried carbon is exposed to water vapor and the pressure in the sample chamber is controlled to achieve the correct partial pressure of the water to achieve the desired relative humidity. The adsorption of water in the carbon is calculated based on the reduction in pressure in the sample chamber. More detail on this test procedure is available in the docket. 218



### 5.6.3.4.3 Carbon durability
Another issue that has been raised with regard to canister use in marine applications is the durability of the canister under the shocks that can be observed on a marine vessel. Automotive applications see shocks and vibration as well and the carbon is protected by packing it under pressure in the canister. To address the concern of carbon durability, however, we are including a carbon strength requirement. This strength requirement is consistent with the specifications for the carbon used in the in-use test program described above, which was designed to have a higher hardness value and lower dust attrition rates than typical automotive carbons.
The industry procedure for carbon pellet strength is to determine the average pellet size in a sample of carbon before and after a pan hardness test. Pellet size is determined by separating the carbon by size using sieves. The pan hardness test involves shaking the carbon in a pan with steel balls over a fixed period of time. The pellet strength is determined by taking the ratio of the average pellet size of the carbon before and after the pan and ball attrition test. Pellet strength must be at least 85 percent. The test procedure is ASTM D3802-79 219 

### with two variations. First, as discussed above, hardness is defined as the ratio of mean particle diameter before and after the attrition test. Second, the attrition test uses twenty 1⁄2" steel balls and ten 3⁄4" steel balls rather than fifteen of each as speci fied in ASTM D3802-79. These variations on the ASTM procedure reflect common industry practice for pelletized carbons in contrast to the original test procedure which were intended for granular carbons. 220

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### Final Regulatory Impact Analysis

5.6.3.4.4 Canister design
The design of the canister itself is important in building an effective and durable carbon canister system. The canister should be made of a material that is compatible with the application. For instance, the material should be fuel resistant and durable. Where a flame test is required by the Coast Guard, the material should be able to pass this test on its own or with a protective cover. In addition, the canister material must have good structural integrity at temperatures that it would be exposed to in a boat. If the material changes in dimension at temperature, that flexing may loosen the carbon packing, allowing the carbon to move and eventually deteriorate. The canister should be installed in the boat in such a way that undue stress is not placed on the canister. It should also be properly constructed so that there are no leaks in the canister.
The canister must be packed in such a way that the carbon does not move inside the canister in-use. If the carbon were able to move, it would eventually break down under vibration. Over time the carbon could deteriorate into dust which could eventually escape from the canister. This is not an issue with a carbon canister that uses a properly designed and installed volume compensator. The basic design of a volume compensator is that compression is held on the carbon bed with a spring. A mesh or foam cover is used on the volume compensator that will allow air to pass through, but will hold the carbon pellets in place.
The carbon should be packed into the canister in such a way that there is a consistent size of carbon pellets throughout the canister. If the carbon settles in the storage hopper, it would be possible for some canisters to be filled largely with the smallest diameter carbon pellets (or dust) which would increase the pressure restriction of the canister. Also, if the carbon is not packed properly when placed into the canister, it could later settle leading to a volume reduction of the carbon that is too large for the volume compensator to address.
The carbon canister design must allow for a proper flow path of vapor and air through the carbon bed. In current carbon canister designs, an air gap is typically installed upstream of the carbon bed. Flow directors may be molded into this air gap. The purpose of the air gap is to allow the vapor or purge air to disperse and flow through the entire carbon bed. Even with a small air gap, the vapor will disperse because it will attempt to follow the path of least resistance through the canister. Without the air gap, the flow could be predominately in the center of the carbon (or wherever the intake hose connection is located). In addition, to prevent flow restriction, the carbon granules must have a minimum mean diameter of 3.1 mm based on the procedures in ASTM D2862. 221



### The geometry of a carbon canister can affect the effectiveness of the control system. For instance, a long, narrow canister will have higher efficiency than a short wide canister. This is because some breakthrough can occur if the pathway is too short for the flow of vapor. Based on one study, the effectiveness of the carbon canister increases notably until a length to diameter ratio of about 3.5 is achieved. 222 

### At higher ratios, less of an impact on efficiency was observed. At too high of a length to diameter ratio, significant back pressure may occur in the system.

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### Feasibility of Evaporative Emission Control

5.6.3.4.5 Integration with Fuel System
It is important that a carbon canister system be appropriately integrated into the fuel system. For instance, the canister must be positioned in the vent line, and potentially a liquid separation valve added, to ensure that liquid fuel does not reach the canister during refueling. We also expect the fuel system design to minimize spit-back out of the fill neck during refueling. A design that caused fuel to stream out the fill neck during refueling, even with a fuel nozzle shut-off mechanism, is not acceptable.



## 5.7 Impacts on Noise, Energy, and Safety

The Clean Air Act requires EPA to consider potential impacts on noise, energy, and safety when establishing the feasibility of new emission standards for marine vessels.

5.7.1 Noise
In this case, we do not expect evaporative emission controls to have any impact on noise from Small SI equipment or marine vessels because noise from the affected parts of the fuel system is insignificant.

5.7.2 Energy
We anticipate that the evaporative emission standards will have a positive impact on energy. By capturing or preventing the loss of fuel through evaporation, we estimate that the lifetime average fuel savings will be about 1.4 gallons for an average piece of Small SI equipment and 28 gallons for an average boat. This translates to a fuel savings of about 45 million gallons for Small SI equipment and 26 million gallons for Marine SI vessels in 2030 when most of the affected equipment used in the U.S. is expected to have evaporative emission control.

5.7.3 Safety
As part of the development of this rule, EPA performed a technical study on the safety of emission control technology for Small SI equipment and Marine SI vessels. 223 

### The conclusions of this study are presented below. Although the study focuses on equipment with engines less than 37 kilowatts, the conclusions drawn for marine apply to boats with larger engines as well as ABYC, USCG, UL, and SAE requirements do not distinguish between engine sizes.
EPA has reviewed the fuel hose and fuel tank characteristics for NHH and HH equipment and evaluated control technology which could be used to reduce evaporative emissions from these two subcategories. This technology is capable of achieving reductions in fuel tank and fuel hose permeation without an adverse incremental impact on safety. For fuel hoses and fuel tanks, the applicable consensus standards, manufacturer specific test procedures and EPA requirements are sufficient to ensure that there will be no increase in the types of fuel leaks that lead to fire and burn risk in use. Instead, these standards will reduce vapor emissions both during operation

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### Final Regulatory Impact Analysis
and in storage. That reduction, coupled with some expected equipment redesign, is expected to lead to reductions in the risk of fire or burn without affecting component durability.
We also conducted a design and process Failure Mode and Effects Analyses (FMEA) comparing current Phase 2 and Phase 3 compliant engines and equipment to evaluate incremental changes in risk probability as a way of evaluating the incremental risk of upgrading Phase 2 engines to meet Phase 3 emission standards. 224 

### This is an engineering analysis tool to help engineers and other professional staff on the FMEA team to identify and manage risk. In a FMEA, potential failure modes, causes of failure, and failure effects are identified and a resulting risk probability is calculated from these results. This risk probability is used by the FMEA team to rank problems for potential action to reduce or eliminate the causal factors. Identifying these causal factors is important because they are the elements that a manufacturer can consider reducing the adverse effects that might result from a particular failure mode.

Our FEMA evaluated permeation and running loss controls on nonhandheld engines. We found that these controls do not increase the probability of fire and burn risk from those expected with current fuel systems, but could in fact l ead to directionally improved systems from a safety perspective. Finally, the running loss control program for nonhandheld equipment will lead to changes that are expected to reduce risk of fire during in-use operation. Moving fuel tanks away from heat sources, improving cap designs to limit leakage on tip over, and requiring a tethered cap will all help to eliminate conditions which lead to in-use problems related to fuel leaks and spillage. Therefore, we believe that the application of emission control technology to reduce evaporative emissions from these fuel hoses and fuel tanks will not lead to an increase in incremental risk of fires or burns and in some cases is likely to at least directionally reduce such risks.

EPA has reviewed the fuel hose and fuel tank characteristics for marine vessels and evaluated control technology which could be used to reduce evaporative emissions from boats. With regard to fuel hoses, fuel tanks, and diur nal controls, there are rigorous USCG, ABYC, UL, and SAE standards which manufacturers will continue to meet for fuel system components. All of these standards are designed to address the in-u se performance of fuel systems, with the goal of eliminating fuel leaks. The low permeation fuel hoses and tanks needed to meet the Phase 3 requirements need to pass these standards and every indication is that they will pass.
Furthermore, the EPA permeation certification requirements related to emissions durability will add an additional layer of assurance. Low permeation fuel hoses are used safely today in many marine vessels. Low permeation fuel tanks and diurnal emission controls have been demonstrated in various applications for many years without an increase in safety risk. Furthermore, a properly designed fuel system with fuel tank and fuel hose permeation controls and diurnal emission controls will reduce the fuel vapor in the boat, thereby reducing the opportunities for fuel related fires. In addition, using improved low permeation materials coupled with designs meeting USCG and ABYC requirements should reduce the risk of fuel leaks into the vessel. EPA believes that the application of emission control technologies on marine engines and vessels for meeting the evaporative emissions standards will not lead to an

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increase in incremental risk of fires or burns, and in many cases may incrementally decrease safety risks in certain situations.

5-1119/9/02 9/11/02 9/13/02 9/15/02 9/17/02 9/19/02 9/21/02 9/23/02 9/25/02 9/27/ 02 7/10/01 7/12/01 7/14/01 7/16/01 7/18/01 7/20/01 7/22/01 7/24/01 

### Final Regulatory Impact Analysis 

## APPENDIX 5A: Diurnal Temperature Traces

Figure 5A-1: Temperature Trace for Personal Watercraft on Trailer

55 60 65 70 75 80 85 90 95 100 105

12:00 AM 12:00 AM 12:00 AM 12:00 AM 12:00 AM 12:00 AM 12:00 AM 12:00 AMTemperature [deg F]

Fuel Temp Ambient Temp



### Figure 5A-2: Temperature Trace for Jet Boat on Trailer

45.00 50.00 55.00 60.00 65.00 70.00 75.00 80.00 85.00 90.00 95.00

12:00 AM 12:00 AM 12:00 AM 12:00 AM 12:00 AM 12:00 AM 12:00 AM 12:00 AM 12:00 AM 12:00 AMTemperature [deg F] fuel temp
ambient

5-11210/12/01 10/12/01 10/13/01 10/13/01 10/14/01 10/14/01 10/15/01 10/15/01

1/9/03 12:00 AM 1/9/03 12:00 PM 1/10/03 12:00 AM 1/10/03 12:00 PM 1/11/03 12:00 AM 1/11/03 12:00 PM 1/12/03 12:00 AM 1/12/03 12:00 PM 

### Feasibility of Evaporative Emission Control

Figure 5A-3: Temperature Trace for Runabout on Trailer

55.00 60.00 65.00 70.00 75.00 80.00 85.00 90.00 95.00 100.00 105.00

12:00 AM 12:00 PM 12:00 AM 12:00 PM 12:00 AM 12:00 PM 12:00 AM 12:00 PMTemperature [deg F]

Fuel Temp Ambient Temp



### Figure 5A-4: Temperature Trace for Jet Boat on Trailer

55.0 60.0 65.0 70.0 75.0 80.0 85.0 90.0 95.0 100.0 105.0Temperature [deg F]

fuel temp
ambient

12:00 AM 12:00 PM 12:00 AM 12:00 PM 12:00 AM 12:00 PM 12:00 AM 12:00 PM

5-1139/12/01 9/15/01 9/18/01 9/21/01 9/24/01 9/27/01 9/30/01 10/3/01

9/5/01 9/6/01 9/7/01 9/8/01 9/9/01 9/10/01 9/11/01 9/12/01 9/13/01 

### Final Regulatory Impact Analysis

Figure 5A-5: Temperature Trace for Runabout in Water

35 40 45 50 55 60 65 70 75 80 85

12:00 AM 12:00 AM 12:00 AM 12:00 AM 12:00 AM 12:00 AM 12:00 AM 12:00 AMTemperature [deg F]

Fuel Temp Ambient Temp Water Temp



### Figure 5A-6: Temperature Trace of Deckboat in Water

45 50 55 60 65 70 75 80 85 90 95Temperature [deg F]

Fuel Temp Ambient Temp Water Temp

12:00 AM 12:00 AM 12:00 AM 12:00 AM 12:00 AM 12:00 AM 12:00 AM 12:00 AM 12:00 AM

5-114

### Feasibility of Evaporative Emission Control 

## APPENDIX 5B: Emission Results for Small SI Equipment Fuel Tanks Showing Effect of Venting on Diffusion

5B.1 Diffusion Effects from Variable Temperature Diurnal Testing
Figure 5B-1: Diurnal/Diffusion Test Results for BM Metal Fuel Tank (2 Labs)

12.0

6.0 

### Temperature Stock Cap Vent, Lab 1 Stock Cap Vent, Lab 2 Hose Vent, Lab 1 Hose Vent, Lab 2

30.0

4.0 20.0

2.0 10.0

0.0 0.0 60.0

10.0 50.0

40.0 8.0Temperature [deg C]HC [grams]

0 3 6 9 12 15 18 21 24 Te st Hours

5-115

### Final Regulatory Impact Analysis
Figure 5B.1-2: Diurnal/Diffusion Test Results for BP Plastic Fuel Tank

8.0 40.0

35.0 7.0

30.0 6.0

0 3 6 9 12 15 18 21 24 Te st Hours 

### Temperature Modified Cap Vent Stock Cap Vent Hose Vent 25.0 5.0

20.0 4.0HC [grams]

15.0 3.0

10.0 2.0

5.0 1.0

0.0 0.0Temperature [deg C]



### Figure 5B.1-3: Diurnal/Diffusion Test Results for HP Plastic Fuel Tank

0.0 0.2 0.4 0.6 0.8 1.0 1.2

0 3 6 9 12 15 18 21 24 Test HoursHC [grams] 

### Temperature Stock Cap Vent Hose Vent

8.0

0.0 24.0 32.0 40.0 48.0Temperature [deg C]

16.0

5-116

### Feasibility of Evaporative Emission Control
Figure 5B.1-4: Diurnal/Diffusion Test Results for TP Plastic Fuel Tank

1.6 40.0 

### Temperature Stock Cap Vent Hose Vent 1.4 35.0

30.0 1.2

1.0

0.8

0.6

0.4

0.2

0.0HC [grams]Temperature [deg C]

25.0

20.0

15.0

10.0

5.0

0.0 0 3 6 9 12 15 18 21 24 

### Test Hours

5-117

### Final Regulatory Impact Analysis
5B.2 Isothermal Results for Small SI Equipmen t Fuel Tanks Showing Effect of Venting on Diffusion Figure 5B.2-1: Isothermal Diffusion Test Results for BM Metal Fuel Tank

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00HC [grams]

5.0

0.0 10.0 20.0 25.0 35.0Temperature [deg C]

15.0 30.0



### Temp (cap) Temp (hose) Stock Cap Vent Hose Vent

0 3 6 9 12 15 18 21 24 

### Test Hours

Figure 5B.2-2: Isothermal Diffusion Test Results for BP Plastic Fuel Tank

7.00 35.0

6.00 30.0

5.00 25.0

1.00

0 3 6 9 12 15 18 21 24 

### Test Hours Temp (mod cap) Temp (cap) Temp (hose) Stock Cap Vent Stock Cap Vent Hose Vent 5.0

0.00 0.0Temperature [deg C]HC [grams] 4.00 20.0

3.00 15.0

2.00 10.0

5-118

### Feasibility of Evaporative Emission Control
Figure 5B.2-3: Isothermal Diffusion Te st Results for HP Plastic Fuel Tank

0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35HC [grams]

5.0

0.0 10.0 20.0 25.0 35.0Temperature [deg C]

15.0 30.0



### Temperature Stock Cap Vent Hose Vent

0 3 6 9 12 15 18 21 24 

### Test Hours

Figure 5B.2-4: Isothermal Diffusion Test Results for TP Plastic Fuel Tank

0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35HC [grams]

5.0

0.0 10.0 20.0 25.0 35.0Temperature [deg C]

15.0 30.0



### Temp (cap) Temp (hose) Stock Cap Vent Hose Vent

0 3 6 9 12 15 18 21 24 

### Test Hours

5-119

### Final Regulatory Impact Analysis



## APPENDIX 5C: Diurnal Emission Re sults: Canister and Passive-Purge

Diurnal Emissions for a 30 Gallon Marine Fuel Tank with 2.1 L Canister, 72-96FEvaporative HC [grams/day] 

### 50.00

45.00

40.00

35.00

30.00

25.00

20.00

15.00

10.00

5.00

0.00 Diurnal Emissions Monday Outliers Baseline Emission Level



### 0 5 10 15 20 25 Test Days

5-120 

### 30

### Feasibility of Evaporative Emission Control 

## APPENDIX 5D: Material Properties of Common Fuel System Materials

This appendix presents data on permeation rates for a wide range of materials that can be used in fuel tanks and hoses. The data also includes effects of temperature and fuel type on permeation. Because the data was collected from several sources, there is not complete data on each of the materials tested in terms of temperature and test fuel. Table D-1 gives an overview of the fuel systems materials included in the data set. Tables D-2 through D-3 present permeation rates using Fuel C, a 10 percent ethanol blend (CE10), and a 15 percent methanol blend (CE15) for the test temperatures of 23, 40, 50, and 60°C.
Table 5D-1: Fuel System Materials
Material Name Composition

ACN NBR acrylonitrile Carilon aliphatic poly-ketone thermoplastic Celcon acetal copolymer CFM fluoroelastomer CO epichlorohydrin homopolymer CR polychloroprene polymer CSM chlorosulfonated polyethylene E14659 fluoropolymer film E14944 fluoropolymer film ECO epichlorohydrin-ethylene oxide copolymer ETER epichlorohydrin-ethylene oxide terpolymer ETFE ethylenetetrafluoroethylene, fluoroplastic EVOH ethylene vinyl alcohol, thermoplastic FEB fluorothermoplastic FEP fluorothermoplastic FKM fluorocarbon elastomer FPA copolymer of tetrafluoroethylene and perfluoroalkoxy monomer FVMQ fluorovinyl methal silicone rubber (flourosilicone) GFLT fluoroelastomer HDPE high-density polyethylene HDPE high density polyethylene HNBR hydrogenated acrylonitr ile-butadiene rubber LDPE low density polyethylene NBR acrylonitrile-butadiene rubber Nylon 12 thermoplastic PBT polybutylene terephthalate, thermoplastic PFA fluorothermoplastic Polyacetal thermoplastic PTFE polytetrafluoroethylene, fluoroplastic PVDF polyvinylidene fluoride, fluorothermoplastic THV tetrafluoroethylene, hexafluor opropylene, vinyledene fluoride

5-121

### Final Regulatory Impact Analysis
Table 5D-2: Fuel System Material Permeation Rates at 23°C by Fuel Type 225,226,227,228,229,230

Material Name Fuel C g-mm/m 2 /day Fuel CE10 g-mm/m 2 /day CM15 g-mm/m 2 /day

HDPE Nylon 12, rigid EVOH Polyacetal PBT PVDF NBR (33% ACN) HNBR (44%ACN) FVMQ FKM Viton A200 (66%F) FKM Viton B70 (66%F) FKM Viton GLT (65%F) FKM Viton B200 (68%F) FKM Viton GF (70%F) FKM Viton GFLT (67%F) FKM - 2120 FKM - 5830 Teflon FEP 1000L Teflon PTFE Teflon PFA 1000LP Tefzel ETFE 1000LZ Nylon 12 (GM grade) Nitrile Silicone Rubber Fluorosilicone FKM FE 5620Q (65.9% fluorine) FE 5840Q (70.2% fluorine) PTFE ETFE PFA THV 500 35 0.2

–

–

–

– 669 230 455 0.80 0.80 2.60 0.70 0.70 1.80

8 1.1 0.03

– 0.18 0.03 6.0 130

–

–

–

–

– 0.05 0.02 0.01 0.03 –

–

–

–

–

– 1028 553 584 7.5 6.7 14 4.1 1.1 6.5

–

– 0.03

– 0.03 0.05 24 635

–

– 16 7 4

–

–

–

– 35 64 10 3.1 0.4 0.2 1188 828 635 36 32 60 12 3.0 14 44 8 0.03 0.05 0.13 0.20

83 1150 6500 635

–

–

– 0.08* 0.04* 0.05*

0.3 * tested on CM20.

5-122

### Feasibility of Evaporative Emission Control
Table 5D-3: Fuel System Material P ermeation Rates at 40°C by Fuel Type 231,232
Material Name Fuel C g-mm/m 2 /day Fuel CE10 g-mm/m 2 /day CM15 g-mm/m 2 /day

Carilon EVOH - F101 EVOH - XEP380 HDPE LDPE Nylon 12 (L2101F) Nylon 12 (L2140) Celcon Fortron PPS SKX-382 Celcon Acetal M90 Celanex PBT 3300 (30% GR) Nylon 6 Dyneon E14659 Dyneon E14944 ETFE Aflon COP m-ETFE ETFE Aflon LM730 AP FKM-70 16286 GFLT 19797 Nitrile FKM FE 5620Q (65.9% fluorine) FE 5840Q (70.2% fluorine) THV-310 X THV-500 THV-610 X 0.06 <0.0001 <0.0001 90 420 2.0 1.8 0.38

–

–

–

– 0.25 0.14 0.24 0.27 0.41

11 13

–

–

–

–

– 0.31

– 1.5 0.013

– 69 350 28 44 2.7 0.12 0.35

3 26

–

– 0.67

– 0.79

35 38 1540

86 40 12

–

–

– 13 3.5 5.3 71 330 250

–

–

–

–

–

– 2.1 1.7 1.8 1.6 2.6

–

– 3500 120 180 45 5.0 3.0 2.1



### Table 5D-4: Fuel System Material P ermeation Rates at 50°C by Fuel Type 233
Material Name Fuel C g-mm/m 2 /day Fuel CE10 g-mm/m 2 /day CM15 g-mm/m 2 /day

Carilon HDPE Nylon 12 (L2140) Celcon ETFE Afcon COP FKM-70 16286 GFLT 19797 0.2 190 4.9 0.76

– 25 28 3.6 150 83 5.8 1.7 79 77 –

–

–

–

–

–

–

5-123

### Final Regulatory Impact Analysis
Table 5D-5: Fuel System Material P ermeation Rates at 60°C by Fuel Type 234,235,236,237
Material Name Fuel C g-mm/m 2 /day Fuel CE10 g-mm/m 2 /day CM15 g-mm/m 2 /day

Carilon HDPE Nylon 12 (L2140) Celcon ETFE Afcon COP FKM-70 16286 GFLT 19797 polyeurethane (bladder) THV-200 THV-310 X THV-510 ESD THV-500 THV-500 G THV-610 X ETFE 6235 G THV-800 FEP 0.55 310 9.5 1.7

– 56 60 285

–

– 6.1

– 4.1 2.4 1.1 1.0 0.2 7.5 230 140 11 3.8 170 130 460 54

– 18 11 10 5.4 3.0 2.9 0.4 –

–

–

–

–

–

–

–

– 38 35 20 22 9.0 6.5 6.0 1.1

5-124

### Feasibility of Evaporative Emission Control 

## APPENDIX 5E: Diurnal Test Temperature Traces

Table 5E-1: Temperature vs. Time Sequence for Diurnal Testing
Test Time* [minutes] Portable Fuel Tanks SHED Air Temperature Installed Fuel Tanks Trailerable Boat Fuel Temperature Installed Fuel Tanks Nontrailerable boat

Fuel Temperature

Fahrenheit Celsius Fahrenheit Celsius Fahrenheit Celsius

0 60 120 180 240 300 360 420 480 540 600 660 720 780 840 900 960 1020 1080 1140 1200 1260 1320 1380 1440 72.0 72.5 75.5 80.3 85.2 89.4 93.1 95.1 95.8 96.0 95.5 94.1 91.7 88.6 85.5 82.8 80.9 79.0 77.2 75.8 74.7 73.9 73.3 72.6 72.0 22.2 22.5 24.2 26.8 29.6 31.9 33.9 35.1 35.4 35.6 35.3 34.5 33.2 31.4 29.7 28.2 27.2 26.1 25.1 24.3 23.7 23.3 22.9 22.6 22.2 78.0 78.3 79.8 82.2 84.6 86.7 88.6 89.6 89.9 90.0 89.8 89.1 87.9 86.3 84.8 83.4 82.5 81.5 80.6 79.9 79.4 79.0 78.7 78.3 78.0 25.6 25.7 26.5 27.9 29.2 30.4 31.4 32.0 32.2 32.2 32.1 31.7 31.0 30.2 29.3 28.6 28.0 27.5 27.0 26.6 26.3 26.1 25.9 25.7 25.6 81.6 81.7 82.3 83.3 84.2 85.1 85.8 86.2 86.4 86.4 86.3 86.0 85.5 84.9 84.3 83.8 83.4 83.0 82.6 82.4 82.1 82.0 81.9 81.7 81.6 27.6 27.6 27.9 28.5 29.0 29.5 29.9 30.1 30.2 30.2 30.2 30.0 29.7 29.4 29.1 28.8 28.5 28.3 28.1 28.0 27.9 27.8 27.7 27.6 27.6 * Repeat as necessary

5-125

### Final Regulatory Impact Analysis 

## Chapter 5 References

1. Reddy, S., “Prediction of Fuel Vapor Generation Fr om a Vehicle Fuel Tank as a Function of Fuel RVP and Temperature,” SAE Paper 892089, 1989, Docket Identification EPA-HQ-OAR-2004-0008-0169.

2. Cushing, T., “Fuel Tank Hydrocarbon Emission Testi ng,” prepared by Sterling Performance for the U.S. EPA, Report #040107, September 30, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0137.

3. Cushing, T., “Fuel Tank Hydrocarbon Emission Testi ng,” prepared by Sterling Performance for the U.S. EPA, Report #040137, November 3, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0138.

4. “Evaporative Emissions from Offroad Equipment,” California Air Resources Board, June 22, 2001, Docket Identification EPA-HQ-OAR-2004-0008-0051.

5. “Docket No. A-2000-02; Notice or Proposed Rulemaki ng for the Control of Emissions from Spark-Ignition Marine Vessels and Highway Motorcycles; 40 C.F.R. Parts 86, 90, 1045, 1051, and 1068,” Comments from the National Marine Manufacturers Association, Docket Identification EPA-HQ-OAR-2004-0008-0211.

6. “Before the United States Environmental Protecti on Agency, Comments by Brunswick Corporation, Notice of Proposed Rulemaking, Part 1045 Control of Emissions from Spark-Ignition Marine Vessels,” Comments from Brunswick Corporation, Docket Identification EPA-HQ-OAR-2004-0008-0192.

7. “Diurnal Emissions Testing of Walk-Behind Mowers Configured with Fuel Tank Pressure Relief Valves (September 2002),” California Air Re sources Board, September 17, 2002, Docket Identification EPA-HQ-OAR2004-0008-0052.

8. “Aboveground Storage Tanks (AST); Enhanced Vapor R ecovery Regulation,” California Air Resources Board, August 16, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0413.

9. Email from Pamela Gupta, California Air Resources Board, to Mike Samulski, U.S. EPA, “Aboveground Storage Tanks (ASTs) Field Study Presentation,” September 6, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0420.

10. Samulski, M., “Characterization and Control of Evaporative Emissions from Fuel Tanks in Nonroad Equipment,” SAE Paper 2006-32-0094, 2006, Do cket Identification EPA-HQ-OAR-2004-0008-0424.

11. Beverley, K., Clint, J., Fletcher, P., “Evaporati on Rates of Pure Liquids Measured Using a Gravimetric Technique,” Phys. Chem. Chem. Phys., 1999, 1, 149-153, Received July 9, 1998, Accepted October 13, 1998, Docket Identification EPA-HQ-OAR-2004-0008-0103.

12. Batterman, S., Yu, Y., Jia, C., Godwin, C., “Non- methane Hydrocarbon Emissions from Vehicle Fuel Caps,” Atmospheric Environment 39 (2005), Received May 27, 2004, Accepted December 1, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0102.

13. Sterling Performance, “USEPA Fuel Tank Hydrocarbon Emission Testing,” prepared for the U.S. EPA, Report Number 040195, January 26, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0139.

14. “24 hr EPA Diurnal MicroSHED of Lawn Mower Gas Tanks,” Testi ng Services Group, Reports L504835-1.1, Prepared for U.S. EPA, April 20, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0140.

15. “24 hr EPA Diurnal MicroSHED of Lawn Mower Gas Tanks,” Testi ng Services Group, Reports L504835-1.2, Prepared for U.S. EPA, April 20, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0141.

5-126

### Feasibility of Evaporative Emission Control

16. “24 hr EPA Diurnal MicroSHED of Lawn Mower Gas Tanks,” Testi ng Services Group, Reports L504835-1.3, Prepared for U.S. EPA, April 20, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0142.

17. “24 hr EPA Isothermal MicroS HED of Lawn Mower Gas Tanks,” Testing Services Group, Reports L504835- 2.1, Prepared for U.S. EPA, April 20, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0143.

18. “24 hr EPA Isothermal MicroS HED of Lawn Mower Gas Tanks,” Testing Services Group, Reports L504835- 2.2, Prepared for U.S. EPA, April 20, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0144.

19. “24 hr EPA Isothermal MicroS HED of Lawn Mower Gas Tanks,” Testing Services Group, Reports L504835- 2.3, Prepared for U.S. EPA, April 20, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0145.

20. Haskew, H., Cadman, W., “Evaporative Emissions Under Real Time Conditions,” SAE Paper 891121, 1989, Docket Identification EPA-HQ-OAR-2004-0008-0168.

21. Haskew, H., Cadman, W., Liberty, T., “The Devel opment of a Real-Time Evaporative Emissions Test,” SAE Paper 901110, 1990, Docket Identification EPA-HQ-OAR-2004-0008-0170.

22. Tschantz, M., “Activated Carbon for Use in Mari ne Evaporative Control Applications,” Presented by MeadWestvaco Corporation at the 2004 Internationa l Boatbuilders Exposition, October 25, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0040.

23. Internal MeadWestvaco memorandum from M. Ts chantz to C. Pierson, “Preliminary 3 mm SeaGuard TM Specifications,” August 31, 2005, Dock et Identification EPA-HQ-OAR-2004-0008-0136.

24. “A Picture Book Concerning the NMMA 2005 Summer Test Program: Carbon Canisters for Marine Diurnal Control,” Harold Haskew & Associates, Inc., July 12, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0127.

25. Dr. Michael Tschantz, “Summer Test Program Carbon Analysis,” presented by Meadwestvaco Corporation at the 2005 International Boatbuilders Exhibition and Confer ence, October 20, 2005, Docket Identification EPA-HQOAR-2004-0008-0290.

26. Andreatta, D., Heydinger, G., Bixel, R., Park, J., Jo rgensen, S., “Evaluation of the Ignition Hazard Posed by Onboard Refueling Vapor Recovery Canisters,” SA E Paper 2001-01-0731, 2001, Docket Identification EPA-HQOAR-2004-0008-0494.

27. Giacomazzi, R., “The Evolution of Automotive Fuel Tanks,” Presented at the International Boat Builders’ Exposition and Conference, October 11, 2007.

28. Engineered Composite Solutions, “Products; Carbon Canisters,” retrieved from www.engineeredcompositesolutions.com/Products.htm on April 24, 2008.

29. “Diurnal Testing of Off-Road Equipment Retrofitte d with Carbon Canister Evaporative Emission Control Systems (March 2003),” California Air Resources Boar d, March 25, 2003, Docket Identification EPA-HQ-OAR2004-0008-0053.

30. Haskew, H., Cadman, W., Liberty, T., “The Devel opment of a Real-Time Evaporative Emissions Test,” SAE Paper 901110, 1990, Docket Identification EPA-HQ-OAR-2004-0008-0170.

31. Email from Reid Clontz, MeadWestvaco, to Mike Sa mulski, U.S. EPA, “Temperature and Ethanol Questions,” July 7, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0423.

32. American Boat and Yacht Council, “H-24 Gasoline Fuel Systems,” 2005, Docket Identification EPA-HQ-OAR2004-0008-0429.

5-127

### Final Regulatory Impact Analysis

33. Sutherland, S., Hayes, J., “Analysis of the 2007 Calif ornia Survey of Outboard and Sailboat Owners Regarding Use of Portable Outboard Marine Fuel Tanks,” Prepared for the California Air Resources Board by the Institute for Social Research at California State University, Sacramento, March 2007.

34. “Diurnal Emissions Testing of Walk-Behind Mowe rs Configured with Fuel Tank Pressure Relief Valves (September 2002),” California Air Re sources Board, September 17, 2002, Docket Identification EPA-HQ-OAR2004-0008-0052.

35. Letter from Bill Scott, Country Industries Technologies, to Mike Samulski U.S. EPA, regarding a gas tank vent design, July 20, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0287.

36. Compact Membrane Systems, Inc., www.compact membrane.com, Docket Identification EPA-HQ-OAR-2004- 0008-0100.

37. Koch, W., “Developing Technology for Enhanced Vapor Recovery: Part 1 - Vent Processors,” Petroleum Equipment & Technology, February/March 2001, Docket Identification EPA-HQ-OAR-2004-0008-0099.

38. Membrane Technology & Research, Inc., www.mtri nc.com, Docket Identification EPA-HQ-OAR-2004-0008- 0101.

39. “New Evaporative Control System for Gasoline Tanks,” Memorandum from Chuck Moulis, EPA to Glenn Passavant, Nonroad Center Director, EPA, March 1, 2001, Docket Identification EPA-HQ-OAR-2004-0008-0261.

40. Letter from Kevin Madison, Top Dog Systems, to Mike Samulski, U.S. EPA, regarding the Top Dog vaporless fuel system, April 23, 2001, Docket Identification EPA-HQ-OAR-2004-0008-0258.

41. Facsimile from Bob Hazekamp, Top Dog Systems to Mi ke Samulski, U.S. EPA, “Permeation of Polyurethane versus THV Materials @ 60°C,” January 14, 2002, Do cket A-2000-01, Docket Identification EPA-HQ-OAR-2004- 0008-0435.

42. Emails from Steve Vaitses, Seacurefill to Mike Samu lski, U.S. EPA, “VCS diagrams 1-4 attachments,” and “VCS attachments 5-7,” April 27, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0395.

43. Testing Services Group, “Marine Fuel Tank Vapor Trap Diurnal Emissions Testing; 48 hr EPA (custom) Diurnal,” TSG Report No. L605816-1.2, July 14, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0445.

44. Fox, J., “Fuel Temperature Measurements on Small Equipment," Fox Automotive, August 2004, Docket Identification EPA-HQ-OAR-2004-0008-0181.

45. Cushing, T., “Fuel Tank Hydrocarbon Emission Testi ng,” prepared by Sterling Performance for the U.S. EPA, Report #040107, September 30, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0137.

46. Cushing, T., “Fuel Tank Hydrocarbon Emission Testi ng,” prepared by Sterling Performance for the U.S. EPA, Report #040137, November 3, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0138.

47. Wong, W., “Addition of Evaporative Emissions for Small Off-Road Engines,” California Air Resources Board OFFROAD Model Change Technical Memo, Revised Ap ril 21, 2003, Docket OAR-2004-0008, Document OAR2004-0008-0006.

48. Tuckner, P., Baker, J., “Fuel Permeation Tes ting using Gravimetric Methods,” SAE Paper 2000-01-1096, 2000, Docket Identification EPA-HQ-OAR-2004-0008-0160.

49. Allen, S.J., “Fuel Tank Permeability Test Procedure Development; Final Report,” U.S. Coast Guard, December 1986, Docket Identification EPA-HQ-OAR-2004-0008-0231.

5-128

### Feasibility of Evaporative Emission Control

50. Nulman, M., Olejnik, A., Samus, M., Fead, E., Rossi, G., “Fuel Permeation Performance of Polymeric Materials,” SAE Paper 2001-01-1999, 2001, Do cket Identification EPA-HQ-OAR-2004-0008-0162.

51. “Permeation Rates of Small Off Road Engine High-Density Polyethylene Fuel Tanks (April 2001 Testing), June 8, 2001, California Air Resources Board, Docket Identification EPA-HQ-OAR-2004-0008-0146.

52. “Permeation Rates of Small Off Road Engine High- Density Polyethylene Fuel Tanks (February 2001 Testing), June 8, 2001, Docket Identification EPA-HQ-OAR-2004-0008-0147.

53. “Permeation Rates of High-Density Polyethylene Fuel Tanks (June 2001), June 12, 2001, California Air Resources Board, Docket Id entification EPA-HQ-OAR-2004-0008-0148

54. “Permeation Rates of High-Density Polyethylene Fuel Tanks (May 2001), June 11, 2001, California Air Resources Board, Docket Id entification EPA-HQ-OAR-2004-0008-0149.

55. “Average Permeation Rates of High-Density Polyet hylene Off-Road Equipment Fuel Tanks Using a Surface Area Approach, (March 2002),” March 15, 2002, California Air Resources Board, Docket Identification EPA-HQOAR-2004-0008-0256.

56. “Test Method 513; Determination of Permeation fo r Spill-Proof Systems,” California Air Resources Board, Adopted July 6, 2000, Docket Identification EPA-HQ-OAR-2004-0008-0150.

57. “OPEI HHPC Comments on EPA Proposed Phase 3 Rule for HH Fuel Tank Permeation,” Outdoor Power Equipment Institute,” Presentation to EPA, February 5, 2008.

58. www.arb.ca.gov/msprog/spillcon/reg.htm, Updated March 26, 2001, Copy of linked data reports available in Docket, Docket Identification EPA-HQ-OAR-2004-0008-0186.

59. Email from Jim Watson, California Air Resources Board, to Phil Carlson, U.S. EPA, “Early Container Data,” August 29, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0200.

60. “Test Method 513; Determination of Permeation fo r Spill-Proof Systems,” California Air Resources Board, Adopted July 6, 2000, Docket Identification EPA-HQ-OAR-2004-0008-0150.

61. Lockhart, M., Nulman, M., Rossi, G., “Estimating R eal Time Diurnal Permeation from Constant Temperature Measurements,” SAE Paper 2001-01-0730, 2001, Docket Identification EPA-HQ-OAR-2004-0008-0161.

62. Hopf, G., Ries, H., Gray, E., “Development of Multilayer Thermoplastic Fuel Lines with Improved Barrier Properties,” SAE Paper 940165, 1994, Docket Identification EPA-HQ-OAR-2004-0008-0174.

63. Nulman, M., Olejnik, A., Samus, M., Fead, E ., Rossi, G., “Fuel Permeation Performance of Polymeric Materials,” SAE Paper 2001-01-1999, 2001, Do cket Identification EPA-HQ-OAR-2004-0008-0162.

64. Haskew, H., McClement, D., “Fuel Permeation from Automotive Systems; Final Report,” prepared for the California Air Resources Board and the Coordinating Research Council, CRC Project No. E-65, September 2004, Docket Identification EPA-HQ-OAR-2004-0008-0151.

65. Tuckner, P., Baker, J., “Fuel Permeation Tes ting using Gravimetric Methods,” SAE Paper 2000-01-1096, 2000, Docket Identification EPA-HQ-OAR-2004-0008-0160.

66. Nulman, M., Olejnik, A., Samus, M., Fead, E ., Rossi, G., “Fuel Permeation Performance of Polymeric Materials,” SAE Paper 2001-01-1999, 2001, Do cket Identification EPA-HQ-OAR-2004-0008-0162.

5-129

### Final Regulatory Impact Analysis

67. Stevens, M., Demorest, R., “Fuel Permeation Analysis Method Correction,” SAE Paper 1999-01-0376, 1999, Docket Identification EPA-HQ-OAR-2004-0008-0157.

68. Lockhart, M., Nulman, M., Rossi, G., “Estimating R eal Time Diurnal Permeation from Constant Temperature Measurements,” SAE Paper 2001-01-0730, Do cket Identification EPA-HQ-OAR-2004-0008-0161.

69. Testimony of and Presentation, H. Haskew, Presid ent, Harold Haskew & Associates, MI, October 7, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0202.

70. Haskew, H., McClement, D., “Fuel Permeation from Automotive Systems; Final Report,” prepared for the California Air Resources Board and the Coordinating Research Council, CRC Project No. E-65, September 2004, Docket Identification EPA-HQ-OAR-2004-0008-0151.

71. Email from Jim Watson, California Air Resources Bo ard, to Mike Samulski, U.S. EPA, “Vapor Loss for Variable Volume Containers.xls,” October 26, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0291.

72. Email from Harold Haskew, Harold Haskew & Associat es, to Mike Samulski, U.S. EPA, “High-low permeation data,” April 9, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0238.

73. Kathios, D., Ziff, R., Petrulis, A., Bonczyk, J., “Permeation of Gasoline and Gasoline-alcohol Fuel Blends Through High-Density Polyethylene Fuel Tanks with Different Barrier Technologies,” SAE Paper 920164, 1992, Docket Identification EPA-HQ-OAR-2004-0008-0172.

74. www.arb.ca.gov/msprog/spillcon/reg.htm, Updated March 26, 2001, Copy of linked data reports available in the Docket, Docket Identification EPA-HQ-OAR-2004-0008-0186.

75. Email from Jim Watson, California Air Resources Board, to Phil Carlson, U.S. EPA, “Early Container Data,” August 29, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0200.

76. “Durability Testing of Barrier Treated High-Dens ity Polyethylene Small Off-Road Engine Fuel Tanks,” California Air Resources Board, June 21, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0152.

77. “Durability Testing of Barrier Treated High-Dens ity Polyethylene Small Off-Road Engine Fuel Tanks,” California Air Resources Board, March 7, 2003, Docket Identification EPA-HQ-OAR-2004-0008-0153.

78. Conversation between Mike Samulski, U.S. EP A and Tom Schmoyer, Sulfo Technologies, June 17, 2002.

79. “Sulfo Data”, E-mail from Tom Schmoyer, Sulfotec hnologies to Mike Samulski, U.S. EPA, March 17, 2003, Docket Identification EPA-HQ-OAR-2004-0008-0223.

80. “ADDENDUM TO: Durability Testing of Barrier Treated High-Density Polyethylene Small Off-Road Engine Fuel Tanks,” California Air Resources Board, Ma rch 27, 2003, Docket Identification EPA-HQ-OAR-2004-0008- 0154.

81. “Resin and Additives - SO3 Compatible,” Email from Tom Schmoyer, Sulfo Technologies to Mike Samulski and Glenn Passavant, U.S. EPA, June 19, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0215.

82. Email from Jim Watson, California Air Resources Board, to Mike Samulski, U.S. EPA, “Attachment to Resin List,” August 30, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0234.

83. Walles, B., Nulford, L., “Five Y ear Durability Tests of Plastic Gas Tanks and Bottles with Sulfonation Barrier,” Coalition Technologies, LTD, for Society of Plastics Indus try, January 15, 1992, Docket Identification EPA-HQOAR-2004-0008-0233.

5-130

### Feasibility of Evaporative Emission Control

84. Kathios, D., Ziff, R., “Permeation of Gasolin e and Gasoline-Alcohol Fuel Blends Through High-Density Polyethylene Fuel Tanks with Different Barrier Technologies,” SAE Paper 920164, 1992, Docket Identification EPA-HQ-OAR-2004-0008-0172.

85. www.arb.ca.gov/msprog/spillcon/reg.htm, Updated March 26, 2001, Copy of linked data reports available in Docket, Docket Identification EPA-HQ-OAR-2004-0008-0186.

86. “Permeation Rates of Blitz Fluorinated High Density Polyethylene Portable Fuel Containers,” California Air Resources Board, April 5, 2002, Dock et Identification EPA-HQ-OAR-2004-0008-0155.

87. Email from Jim Watson, California Air Resources Board, to Phil Carlson, U.S. EPA, “Early Container Data,” August 29, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0200.

88. www.pensteel.co.uk/light/smp/fluorination.htm. A copy of this site, as downloaded on August 13, 2004, is available in Docket, Docket Identification EPA-HQ-OAR-2004-0008-0214.

89. “Durability Testing of Barrier Treated High-Dens ity Polyethylene Small Off-Road Engine Fuel Tanks,” California Air Resources Board, June 21, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0152.

90. “Durability Testing of Barrier Treated High-Dens ity Polyethylene Small Off-Road Engine Fuel Tanks,” California Air Resources Board, March 7, 2003, Docket Identification EPA-HQ-OAR-2004-0008-0153.

91. “OPEI HHPC Comments on EPA Proposed Phase 3 Rule for HH Fuel Tank Permeation,” Outdoor Power Equipment Institute,” Presentation to EPA, February 5, 2008.

92. Kathios, D., Ziff, R., “Permeation of Gasolin e and Gasoline-Alcohol Fuel Blends Through High-Density Polyethylene Fuel Tanks with Different Barrier Technologies,” SAE Paper 920164, 1992, Docket Identification EPA-HQ-OAR-2004-0008-0172.

93. “SORE Component EO Summary,” email from Jim Watson, California Air Resources Board, to Mike Samulski, U.S. EPA, August 18, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0405.

94. “Fluorination Information,” e-mail from Doug McGre gor, BMW, to Mike Samulski, US EPA, August 8, 2003, Docket Identification EPA-HQ-OAR-2004-0008-0259.

95. “Final Report: Permeation Testing of Injection Molded Walk Behind Mower (WBM) Fuel Tanks using California’s TP-901 Procedures,” Automotive Testing Labor atories, Inc., August 30, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0182.

96. “Baseline Test Results: Permeation Testing of Injection Molded Walk Behind Mower (WBM) Fuel Tanks using Federal Test Procedures,” Automotive Testing Laborator ies, Inc., August 30, 2005, Docket Identification EPA-HQOAR-2004-0008-0183.

97. “Final Results: Permeation Testing of Injection Mo lded Walk Behind Mower (WBM) Fuel Tanks using Federal Test Procedures,” Automotive Testing Laboratories, In c., July 28, 2006, Docket Identification EPA-HQ-OAR-2004- 0008-0419.

98. “Selar RB Technical Information,” Faxed from Davi d Zang, Dupont, to Mike Samulski, U.S. EPA on May 14, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0221.

99. Lyn, K., “A Study on Problems with Aluminum Fuel Tanks in Recreational Boats,” Underwriters Laboratories Inc., sponsored by USCG, 1994, Docket Identification EPA-HQ-OAR-2004-0008-0098.

5-131

### Final Regulatory Impact Analysis

100. E-mail from Alan Dubin, Ticona, to Mike Samulski, U.S. EPA, “Fuel Permeation Chart and Aggressive Fuels Brochure,” July 31, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0196.

101. Samulski, M., “Permeation Emission Testing on Thr ee Roto-Molded Acetal Copolymer Fuel Tanks,” Memo to Docket OAR-2004-0008, October 25, 2005, Do cket Identification EPA-HQ-OAR-2004-0008-0443.

102. E-mail from Jim Watson, California ARB to Mike Sa mulski, U.S. EPA, “fuel tank specs.xls,” March 6, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0357.

103. Chambers, J., “Marine Fuel Containment... A Pe rmanent Solution,” Presentation by Engineered Composite Structures Inc. at the 2004 International Boatbuilders Exposition, October 25, 2004, Docket Identification EPA-HQOAR-2004-0008-0037.

104. “Fluorination Information,” e-mail from Doug McGre gor, BMW, to Mike Samulski, US EPA, August 8, 2003, Docket Identification EPA-HQ-OAR-2004-0008-0259.

105. Fead, E., Vengadam, R., Rossi, G., Olejnik, A., Thorn, J., “Speciation of Evaporative Emissions from Plastic Fuel Tanks,” SAE Paper 981376, 1998, Docket Identification EPA-HQ-OAR-2004-0008-0175.

106. Email from Dennis Goodenow, California Air Resources Board, to Mike Samulski, U.S. EPA, “Coextruded PFC Data, September 11, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0436.

107. “OPEI HHPC Comments on EPA Proposed Phase 3 Rule for HH Fuel Tank Permeation,” Outdoor Power Equipment Institute,” Presentation to EPA, February 5, 2008.

108. Solvay Advanced Polymers, “Solvay Advanced Polymers Unveils Modified Ixef® Polyarylamide Barrier Material for Automotive Fuel Systems,” Press Releas e, March 2, 200, Docket Identification EPA-HQ-OAR-2004- 0008-0539.

109. “Test Report: EPA CCD-05-14 Fuel Tank Permeation Te sting,” Testing Services Group, TSG Report Numbers L706619-1.1, 2.1, 3.1, and 4.1A, October 19, 2007, Docket Identification EPA-HQ-OAR-2004-0008- XXXX

.
110. O’Brien, Partridge, Clay, “New Materials a nd Multi-Layer Rotomolding Technology for Higher Barrier Performance Rotomolded Tanks,” Atofina Chemicals, Inc ., Presented at the Topcon Rotational Molding by Design Conference, June 6-8, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0044.

111. Samulski, M., “Permeation Emission Testing of Tw o Multi-Layer Roto-Molded Fuel Tanks,” Memo to Docket OAR-2004-0008, August 31, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0132.

112. Partridge, R., “Petro-Seal TM for Ultra-Low Permeation,” Arkema Inc., Presentation at 2004 International Boatbuilders Exposition, October 25, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0038.

113. “Test Report 16514-1A: NMMA/USCG Tests of Protot ype Fuel Tank for Atofina Chemicals, Inc.,” IMANNA Laboratory, July 16, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0416.

114. “Test Report 16544-1A: NMMA/USCG Tests of Protot ype Fuel Tank for Atofina Chemicals, Inc.,” IMANNA Laboratory, July 16, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0417.

115. “Test Report 17474-1: NMMA/USCG Tests of 40 Ga llon Prototype Fuel Tank for Arkema, Inc.,” IMANNA Laboratory, October 12, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0418.

116. “Final Report, Fuel Tank Testing, Procedure Numb er: SAE J288 DEC 02, Sections 4.2, 4.3,” MGA Research Corporation, October 19, 2006, Dock et Identification EPA-HQ-OAR-2004-0008-0406.

5-132

### Feasibility of Evaporative Emission Control

117. “SORE Component EO Summary,” email from Jim Watson, California Air Resources Board, to Mike Samulski, U.S. EPA, August 18, 2006, Do cket Identification EPA-HQ-OAR-2004-0008-0405.

118. Faler, Gary, “Cyclics CBT ® Resin for Dual Layer Applications in Rotomolding,” Cyclics Corporation, August 2006, Docket Identification EPA-HQ-OAR-2004-0008-0415.

119. Faler, Gary, ““Cyclics CBT ® Resin for Rotomolding,” Cyclics Corporation, Presented at ARMO 2006 Convention & Exposition, September, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0414.

120.Graham, B., Cook, D., “Measurement of Fuel Barrier Pr operties of Rotational Molded Materials,” Article from ANTEC 2006 Rotational Molding Division, May 12, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0404.

121. Fish, D., “Advanced Polymer Concepts,” Presen tation at the 2004 International Boatbuilders Exposition, October 25, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0039.

122. Bauman, B., “Advances in Plastic Fuel Tanks,” Presentation by Fluoro-Seal International at the 2004 International Boatbuilders Exposition, October 25, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0036.

123. Bauman, B., “Advances in Plastic Fuel Tanks,” Presentation by Fluoro-Seal International at the 2004 International Boatbuilders Exposition, October 25, 2004, Docket Identification EPA-HQ-OAR-2000-0008, Document OAR-2004-0008-0036.

124. SAE Surface Vehicle Standard, “Marine Fuel Hose s,” Society of Automotive Engineers J 1527, Issued 1985- 12, Revised 1993-02, Docket Identification EPA-HQ-OAR-2004-0008-0177.

125. American Society for Testing and Materials, “Sta ndard Test Method for Rubber Property–Effects of Liquids,” ASTM D 471-06, November 2006, Docket Identification EPA-HQ-OAR-2004-0008-0511.

126. “Public Hearing on Proposed Evaporative Emission Sta ndards for New Marine Vessels that Use Spark-Ignition Engines,” Held on Monday, October 7, 2002 at the U.S. E nvironmental Protection Agency, Office of Transportation and Air Quality, in Ann Arbor, Michigan, De Scribe Reporting, Inc., Docket Identification EPA-HQ-OAR-2004- 0008-0265.

127. “Test Report: 24 hr MicroShed Test on 3 Standard Fuel Hoses,” Testing Services Group, TSG Report Number L201672-2.5, July 29, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0227.

128. Akron Rubber Development Laboratory, “Test Report PN# 50107” Prepared for the U.S. EPA, December 13, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0184.

129. Akron Rubber Development Laboratory, “Test Report PN# 50108” Prepared for the U.S. EPA, December 13, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0185.

130. “Test Report: Marine Fuel Hose Testing; 6-hour/28 / C Constant Temperature MicroSHED after a cumulative 13-week soak in IE-10 Test Fuel at 40 / C,” Testing Services Group, TSG Report Number L404396-1.1A, January 20, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0407.

131. “Test Report: Permeation by Weight Loss,” Testing Services Group, TSG Report Number L505371-6.1, May 15, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0409.

132. Harold Haskew, “NMMA/EPA Meeting,” Harold Haskew & Associates, Inc, presented at NMMA/EPA meeting on January 24, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0359.

133. SAE Vehicle Recommended Practice, “Personal Watercra ft Fuel Systems,” Society of Automotive Engineers J 2046, Issued January 19, 1993, Docket Identification EPA-HQ-OAR-2004-0008-0179.

5-133

### Final Regulatory Impact Analysis

134. Memorandum from Mike Samulski to Docket A-2000-02, “Hose Permeation Data from Saint-Gobain Performance Plastics,” October 17, 2002, Do cket Identification EPA-HQ-OAR-2004-0008-0210.

135. SAE Recommended Practice J30, “Fuel and Oil Hoses,”June 1998, Docket Identification EPA-HQ-OAR2004-0008-0176.

136. Baltz, G., “Effects of Alcohol Extended Fuels on the Rate of Fuel Hose Permeation,” SAE Paper 880709,Presented at the International Congress and Exposition February 29-March 4, 1988, Docket Identification EPA-HQOAR-2004-0008-0167.

137. “OPEI Fuel Line Permeation Results,” Walbro Engi ne Management, April 12, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0440.

138. “HHPC Evaluation of EPA Proposed Phase 3 Rule for Fuel Line Permeation,” Outdoor Power Equipment Institute, presentation to EPA, February 5, 2008.

139. Horvath, J., “Optimizing Permeation Resistance and Low Temperature Flexibility in Heat Resistant NBR Fuel Hose,” SAE Paper 790661, presented at the Passenger Car Meeting, June 11-15, 1979, Docket Identification EPAHQ-OAR-2004-0008-0166.

140. MacLachlan, J., “Automotive Fuel Permeation Resi stance - A Comparison of Elastomeric Materials,” SAE Paper 790657, presented at the Passenger Car Meeting, June 11-15, 1979, Docket Identification EPA-HQ-OAR2004-0008-0165.

141. Testing Services Group, “Marine Fuel Hose Mi croSHED Testing; 6-hour/28°C Constant Temperature MicroSHED after a cumulative 13-week soak in IE-10 Test Fuel at 40°,” TSG Report No. L404396-1.1A, January 24, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0407.

142. Testing Services Group, “Marine Fuel Hose Micr oSHED Testing; 24-hourEPA MicroSHED after a cumulative 2-week soak in IE-10 Test Fuel at 40°,” TSG Repor t No. L404396-2.1A, January 24, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0408.

143. Harold Haskew, “Marine Fuel System Hose Permeation Testing: 2 nd Progress Report,” Harold Haskew & Associates, Inc., testing performed at Sterling Pe rformance Testing Laboratory, October 3, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0358.

144. Harold Haskew, “Marine Fuel System Hose Permeation Testing: 2 nd Progress Report,” Harold Haskew & Associates, Inc., testing performed at Sterling Pe rformance Testing Laboratory, October 3, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0358.

145. Harold Haskew, “NMMA/EPA Meeting,” Harold Haskew & Associates, Inc, presented at NMMA/EPA meeting on January 24, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0359.

146. “Test Report: Permeation by Weight Loss,” Testing Services Group, TSG Report Number L505371-6.1, May 15, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0409.

147. Sterling Performance, “U.S.E.P.A. Fuel Line Permeation 050085; Version 1.0,” August 13, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0428.

148. Denbow, R., Browning, L., Coleman, D., “Report Submitted for WA 2-9, Evaluation of the Costs and Capabilities of Vehicle Evaporative Emission Control T echnologies,” ICF, ARCADIS Geraghty & Miller, March 22, 1999, Docket Identification EPA-HQ-OAR-2004-0008-0194.

5-134

### Feasibility of Evaporative Emission Control

149. Denbow, R., Browning, L., Coleman, D., “Report Submitted for WA 2-9, Evaluation of the Costs and Capabilities of Vehicle Evaporative Emission Control T echnologies,” ICF, ARCADIS Geraghty & Miller, March 22, 1999, Docket Identification EPA-HQ-OAR-2004-0008-0194.

150. SAE Recommended Practice J2260, “Nonmetallic Fuel System Tubing with One or More Layers,”1996, Docket Identification EPA-HQ-OAR-2004-0008-0180.

151. 33 CFR 183.558

152. SAE Surface Vehicle Standard, “Marine Fuel Hose s,” Society of Automotive Engineers J 1527, Issued 1985- 12, Revised 1993-02, Docket Identification EPA-HQ-OAR-2004-0008-0177.

153. “Visit to Dyneon on June 12, 2002,” Memorandum from Mike Samulski, U.S. EPA to Docket A-2000-01, June 17, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0208.

154. “Meeting with Avon on June 27, 2002,” Memorandum from Mike Samulski, U.S. EPA to Docket A-2000-01, August 6, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0207.

155. “Meeting with Avon on June 27, 2002,” Memorandum from Mike Samulski, U.S. EPA to Docket A-2000-01, August 6, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0207.

156. Akron Rubber Development Laboratory, “Test Report; PN# 49503,” Prepared for the U.S. EPA, September 3, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0187.

157. Akron Rubber Development Laboratory, “Test Report PN# 50107” Prepared for the U.S. EPA, December 13, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0184.

158. Akron Rubber Development Laboratory, “Test Report PN# 50108” Prepared for the U.S. EPA, December 13, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0185.

159. Akron Rubber Development Laboratory, “Test Report PN# 53609” Prepared for American Honda Motor Company, September 26, 2003, Docket Identification EPA-HQ-OAR-2004-0008-0189.

160. Akron Rubber Development Laboratory, “Test Report PN# 53630” Prepared for the U.S. EPA, September 26, 2003, Docket Identification EPA-HQ-OAR-2004-0008-0190.

161. Akron Rubber Development Laboratory, “Test Report PN# 53908” Prepared for the U.S. EPA, October 20, 2003, Docket Identification EPA-HQ-OAR-2004-0008-0191.

162. Email from Mike Fauble, Avon Automotive to Mike Frederick Jr., Avon Automotive, “SAE J30 Test Results,” April 26, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0394.

163. Fuller, R., “Unique Low Permeation Elastomeric Laminates for Fuel Hose; F200 Technology used in Automotive Fuel Hose,” Hearing Testimony for Dupont -Dow Elastomers on NPRM, October 7, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0197.

164. “Test Report: 24 hr MicroSHED Test of Fuel Line A ssemblies After 8 Week Soak in Fuel C,” Testing Services Group, TSG Report Number L201672-3.1, June 25, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0229.

165. “Test Report: EPA MicroSHED Test on Fuel Line Assemblies 24-Hour EPA MicroSHED Test with Multipoint @ 8-Weeks,” Testing Services Group, TSG Report Numb er L201672-2.3, June 17, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0228.

5-135

### Final Regulatory Impact Analysis

166. “Test Report: EPA MicroSHED Test on Fuel Line Assemblies 24-Hour EPA MicroSHED Re-Test of Part #01672-11,” Testing Services Group, TSG Report Number L 201672-3.1R , July 8, 2002, Docket Identification EPAHQ-OAR-2004-0008-0230.

167. Akron Rubber Development Laboratory, “Test Report PN# 50107” Prepared for the U.S. EPA, December 13, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0184.

168. Akron Rubber Development Laboratory, “Test Report PN# 50108” Prepared for the U.S. EPA, December 13, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0185

169. Akron Rubber Development Laboratory, “Test Repor t PN# 52318” Prepared for the U.S. EPA, July 24,2003, Docket Identification EPA-HQ-OAR-2004-0008-0188.

170. Harold Haskew, “Marine Fuel System Hose Permeation Testing: 2 nd Progress Report,” Harold Haskew & Associates, Inc., testing performed at Sterling Pe rformance Testing Laboratory, October 3, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0358.

171. Harold Haskew, “NMMA/EPA Meeting,” Harold Haskew & Associates, Inc, presented at NMMA/EPA meeting on January 24, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0359.

172. Akron Rubber Development Laboratory, “Test Repor t PN# 52318” Prepared for the U.S. EPA, July 24,2003, Docket Identification EPA-HQ-OAR-2004-0008-0188.

173. “Meeting with DuPont and Teleflex on December 10, 2002,” memorandum from Mike Samulski, U.S. EPA to Docket A-2000-02, December 10, 2002, Do cket Identification EPA-HQ-OAR-2004-0008-0260.

174. “Low perm marine fuel hose,” e-mail from Rob Ben tley, Teleflex to Alan Stout U.S. EPA, July 16, 2003, Docket Identification EPA-HQ-OAR-2004-0008-0225.

175. Engineered Composite Solutions, “Press Release: Feb 2008 ECS develops low permeation primer bulb,” retrieved from http://www.engineeredcompositesolu tions.com/press_releases.htm on April 24, 2008.

176. BluSkies Marine Products, “Primer Bulb; A White Paper,” retrieved from www.bluskies.us on June 25, 2008.

177. “SORE Component EO Summary,” email from Jim Watson, California Air Resources Board, to Mike Samulski, U.S. EPA, August 18, 2006, Do cket Identification EPA-HQ-OAR-2004-0008-0405.

178. Letter from William Guerry, Kelly Drye Collier Shannon, to Glenn Passavant, U.S. EPA, and Susan Bathalon, U.S. Consumer Product Safety Commission, “EPA Proposal, Phase III, Small Engine Regulations - Fuel Lines for Cold Weather Handheld Products,” January 25, 2007, Docket Identification EPA-HQ-OAR-2004-0008-0524.

179. Outdoor Power Equipment Institute, “Fuel Hose De sign in Relation to the Design and Operation of Handheld Power Equipment,” Presentation to EPA, June 21, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0399.

180. Outdoor Power Equipment Institute, “Compari son of NBR and FPM (Viton) Performance on Hand Held Equipment,” Presentation to EPA, Do cket Identification EPA-HQ-OAR-2004-0008-0441.

181. “Alpha List of OEM Approvals,” http://www. precixinc.com/oemlist.html, downloaded August 15, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0411.

182. “Viton: Volume Swell of Viton® Fluoroelastomer s in Fuel C / Ethanol Blends,” DuPont Performance Elastomers, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0510.

5-136

### Feasibility of Evaporative Emission Control

183. “FKM / Genuine Viton®,” http://www.o-ring.info /en/datasheets/fkm-genuine-viton/, downloaded August 15, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0410.

184. Hatano, M., Otsuka, M., Ogata, C., Suetsugu, N ., Amemiya, T., Kudo, M., “Development of New FKM ORings with Superior Fuel-Oil Resistance and Low-Te mperature Properties,” SAE Paper 2005-01-1743, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0433.

185. Yamaguchi, Y., Shojima, D., Ogata, C., Oya, K., Kawasaki, K., Kudo, M., “Development of the New FKM ORing for a Cooling Device,” 2005-01-1753, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0434.

186. “Technical Information; Dyneon Fluorelastome r LTFE 6400X,” 3M, Issued February, 2003, Docket Identification EPA-HQ-OAR-2004-0008-0521.

187. “Relative Permeation of Elastomers,” Precix, downloaded from www.precixinc.com on February 14, 2007, Docket Identification EPA-HQ-OAR-2004-0008-0525.

188. Balzer, J., “F-TPV: A New Horizon for TPE Tec hnology,” Presented by Daikin America to U.S. EPA on February 14, 2007, Docket Identification EPA-HQ-OAR-2004-0008-0522.

189. Letter from Trevor J. Richards, President Spring Cove Marina, “Fuel Spills While Filling Pleasure Craft Tanks,” April 23, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0383.

190. Letter from Van DePiero, City of Pittsburg, Californi a to Steve Burkholder, Enviro Fill, April 19, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0384.

191. American Boat and Yacht Council, “H-24 Gasolin e Fuel Systems,” 2005, Docket Identification EPA-HQOAR-2004-0008-0429.

192. Email from Steve Burkholder, Enviro-Fill, to Mike Samulski and Alan Stout, U.S. EPA, “Overfill Prevention System Developments,” July 25, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0447.

193. Boat U.S. Foundation, “Foundation Findings #40; Spill? What Spill?; Products to Keep Fuel Where it Belongs–In Your Tank,” www.boatus.com/foundation/Findi ngs/findings40, March 2005, Docket Identification EPA-HQ-OAR-2004-0008-0431.

194. Letter from Steve Burkholder, Enviro-Fill, to Mike Sa mulski, U.S. EPA, March 1, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0430.

195. Letter from Steve Burkholder, Enviro-Fill, to Mike Samulski, U.S. EPA, January 13, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0446.

196. Email from Steve Burkholder, Enviro-Fill, to Mike Samulski and Alan Stout, U.S. EPA, “Overfill Prevention System Developments,” July 25, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0447.

197. SAE Recommended Practice J30, “Fuel and Oil Ho ses,” June 1998, Docket Identification EPA-HQ-OAR2004-0008-0176.

198. SAE Surface Vehicle Standard, “Marine Fuel Hose s,” Society of Automotive Engineers J 1527, Issued 1985- 12, Revised 2007-01.

199. American Society for Testing and Materials, “Sta ndard Test Method for Rubber Property–Effects of Liquids,” ASTM D 471-06, November 2006, Docket Identification EPA-HQ-OAR-2004-0008-0511.

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### Final Regulatory Impact Analysis

200. SAE Recommended Practice J1737, “Test Procedure to Determine the Hydrocarbon Losses from Fuel Tubes, Hoses, Fittings, and Fuel Line Assemblies by Recirc ulation,”1997, Docket Identification EPA-HQ-OAR-2004-0008- 0178.

201. SAE Surface Vehicle Standard, “Nonmetallic Fuel Sy stem Tubing with One or More Layers,” Society of Automotive Engineers J 2260, Issued 1996-11, Docket Identification EPA-HQ-OAR-2004-0008-0180.

202. SAE Surface Vehicle Recommended Practice, “Test Procedure to Determine the Hydrocarbon Losses from Fuel Tubes, Hoses, Fittings, and Fuel Line Assemblies by Recirculation,” Society of Automotive Engineers J 1737, Issued 1997-08, Docket Iden tification EPA-HQ-OAR-2004-0008-0178.

203. Draft SAE Information Report J1769, “Test Protocol for Evaluation of Long Term Permeation Barrier Durability on Non-Metallic Fuel Tanks,” Docket Identification EPA-HQ-OAR-2004-0008-0195.

204. Nulman, M., Olejnik, A., Samus, M., Fead, E ., Rossi, G., “Fuel Permeation Performance of Polymeric Materials,” SAE Paper 2001-01-1999, 2001, Do cket Identification EPA-HQ-OAR-2004-0008-0162.

205. “Permeation Rates of Small Off Road Engine Hi gh-Density Polyethylene Fuel Tanks (April 2001 Testing), June 8, 2001, California Air Resources Boar d, Docket Identification EPA-HQ-OAR-2004-0008-0146.

206. “Permeation Rates of High-Density Polyethylene Fuel Tanks (June 2001), June 12, 2001, California Air Resources Board, Docket Id entification EPA-HQ-OAR-2004-0008-0148

207. “Permeation Rates of High-Density Polyethylene Fuel Tanks (May 2001), June 11, 2001, California Air Resources Board, Docket Id entification EPA-HQ-OAR-2004-0008-0149.

208. “Average Permeation Rates of High-Density Polyet hylene Off-Road Equipment Fuel Tanks Using a Surface Area Approach, (March 2002),” March 15, 2002, California Air Resources Board, Docket Identification EPA-HQOAR-2004-0008-0256.

209. Haskew, H., McClement, D., “Fuel Permeation from Automotive Systems; Final Report,” prepared for the California Air Resources Board and the Coordinating Research Council, CRC Project No. E-65, September 2004, Docket Identification EPA-HQ-OAR-2004-0008-0151.

210. Dickson, A., Goyet, C., “Handbook of Methods for th e Analysis of the Various Parameters of the Carbon Dioxide System in Sea Water; Version 2,” Prepared fo r the U.S. Department of Energy, SOP21 “Applying air buoyancy corrections,” September 29, 1997, Docket Identification EPA-HQ-OAR-2004-0008-0135.

211. Testing Services Group, “CARB TM-513: Portable Fuel Container Permeation Testing,” Presented to U.S. EPA on August 18, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0133.

212. Testing Services Group, “Technical Brief: Buoyanc y Correction for Mass Measurement of Fuel Containers,” TB 50819-1, August 19, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0134.

213. California Air Resources Board, “TP-502: Test Pr ocedure for Determining Diurnal Emissions from Portable Fuel Containers,” proposed July 22, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0300.

214. “Test Method to Measure Fluid Permeation of Polymeric Materials by Speciation,” SAE Surface Vehicle Standard J2659, Issued December 2003, Do cket Identification EPA-HQ-OAR-2004-0008-0512.

215. Internal MeadWestvaco memorandum from M. Ts chantz to C. Pierson, “Preliminary 3 mm SeaGuard TM Specifications,” August 31, 2005, Dock et Identification EPA-HQ-OAR-2004-0008-0136.

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### Feasibility of Evaporative Emission Control

216. “Standard Test Method for Determination of Bu tane Working Capacity of Activated Carbon,” ASTM International, Designation D5228-92 (Reapproved 2005), Docket Identification EPA-HQ-OAR-2004-0008-0347.

217. Tschantz, M., “Activated Carbon for Use in Mari ne Evaporative Control Applications,” Presented by MeadWestvaco Corporation at the 2004 Internationa l Boatbuilders Exposition, October 25, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0040.

218. "Carbon Specs," email from M. Tschantz , MeadWest vaco to M. Samulski, U.S. EPA, November 18, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0421.

219. “Standard Test Method for Ball-Pan Hardness of Ac tivated Carbon,” ASTM International, Designation D3802- 79 (Reapproved 2005), Docket Identification EPA-HQ-OAR-2004-0008-0348.

220. “SOP 0960-610 vs. ASTM 3802,” email from Mike Tsch antz, MeadWestvaco to Mike Samulski, U.S. EPA, January 13, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0412.

221. “ Standard Test Method for Particle Size Distribu tion of Granular Activated Carbon,” ASTM International, Designation D2862-97 (Reapproved 2004).

222. Williams, R., Clontz, R., “Impact and Control of Canister Bleed Emissions,” SAE Paper 2001-01-0733, 2001, Docket Identification EPA-HQ-OAR-2004-0008-0432.

223. “EPA Technical Study on the Safety of Emissi on Controls for Nonroad Spark-Ignition Engines < 50 Horsepower,” U.S. Environmental Protection Agency, EPA420-R-06-006, March 2006, Docket Identification EPAHQ-OAR-2004-0008-0329.

224. “EPA Technical Study on the Safety of Emissi on Controls for Nonroad Spark-Ignition Engines < 50 Horsepower,” U.S. Environmental Protection Agency, EPA420-R-06-006, March 2006, Docket Identification EPAHQ-OAR-2004-0008-0329.

225. Hopf, G., Ries, H., Gray, E., “Development of Multilayer Thermoplastic Fuel Lines with Improved Barrier Properties,” SAE Paper 940165, 1994, Docket Identification EPA-HQ-OAR-2004-0008-0174.

226. Stahl, W., Stevens, R., “Fuel-Alcohol Permeation Rates of Fluoroelastomers, Fluoroplastics, and Other Fuel Resistant Materials,” SAE Paper 920163, 1992, Docket Identification EPA-HQ-OAR-2004-0008-0171.

227. “Visit to Dyneon on June 12, 2002,” Memorandum from Mike Samulski, U.S. EPA to Docket A-2000-01, June 17, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0208.

228. Goldsberry, D., “Fuel Hose Permeation of Fluor opolymers,” SAE Paper 930992, 1993, Docket Identification EPA-HQ-OAR-2004-0008-0173.

229. Tuckner, P., Baker, J., “Fuel Permeation Tes ting Using Gravimetric Methods,” SAE Paper 20001-01-1096, 2000, Docket Identification EPA-HQ-OAR-2004-0008-0160.

230. Fuller, R., “Unique Low Permeation Elastomeric Laminates for Fuel Hose; F200 Technology used in Automotive Fuel Hose,” Hearing Testimony for Dupont -Dow Elastomers on NPRM, October 7, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0197.

231. Nulman, M., Olejnik, A., Samus, M., Fead, E ., Rossi, G., “Fuel Permeation Performance of Polymeric Materials,” SAE Paper 2001-01-1999, 2001, Do cket Identification EPA-HQ-OAR-2004-0008-0162.

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### Final Regulatory Impact Analysis

232. Duchesne, D., Hull, D., Molnar, A., “THV Fluorothe rmoplastics in Automotive Fuel Management Systems,” SAE Paper 1999-01-0379, 1999, Docket Identification EPA-HQ-OAR-2004-0008-0159.

233. Nulman, M., Olejnik, A., Samus, M., Fead, E ., Rossi, G., “Fuel Permeation Performance of Polymeric Materials,” SAE Paper 2001-01-1999, 2001, Do cket Identification EPA-HQ-OAR-2004-0008-0162.

234. Nulman, M., Olejnik, A., Samus, M., Fead, E ., Rossi, G., “Fuel Permeation Performance of Polymeric Materials,” SAE Paper 2001-01-1999, 2001, Do cket Identification EPA-HQ-OAR-2004-0008-0162.

235. “Visit to Dyneon on June 12, 2002,” Memorandum from Mike Samulski, U.S. EPA to Docket A-2000-01, June 17, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0208.

236. Facsimile from Bob Hazekamp, Top Dog Systems, to Mike Samulski, U.S. EPA, “Permeation of Polyurethane versus THV Materials @ 60°C,” January 14, 2002, Do cket A-2000-01, Docket Identification EPA-HQ-OAR-2004- 0008-0435.

237. Duchesne, D., Hull, D., Molnar, A., “THV Fluorothe rmoplastics in Automotive Fuel Management Systems,” SAE Paper 1999-01-0379, 1999, Docket Identification EPA-HQ-OAR-2004-0008-0159.

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### Costs of Control 

# CHAPTER 6: Costs of Control

This chapter describes our approach to estimating the cost of complying with the new emission standards. We start with a general description of the approach used to estimate costs, then describe the technology changes we expect and assign costs to them. We also present an analysis of the estimated aggregate cost to society.



## 6.1 Methodology

We developed the costs for individual technologies using estimates from ICF Incorporated 1 

### , conversations with manufacturers, and other information as cited below. The technology characterization reflects our curre nt best judgment based on EPA’s technology demonstrations, engineering analysis, information from manufacturers, and the published literature.
Costs of control include variable costs (for incremental hardware costs, assembly costs, and associated markups) and fixed costs (for too ling, R&D, and certification). Variable costs are marked up at a rate of 29 percent to account for the engine or equipment/vessel manufacturers' overhead and profit. 2 

### For technologies sold by a supplier to the engine manufacturers, an additional 29 percent markup is included for the supplier's overhead and profit. Labor estimates are marked up by 100 percent to reflect fringe and overhead charges including management, supervision, general and administrative expenses, etc. All costs are in 2005 dollars.
The analysis presents an estimate of per-unit costs that will occur in the first year(s) of new emission standards and the corresponding long-term costs. Long-term costs decrease due to two principal factors. First, fixed costs are assessed for five years, after which they are fully amortized and are then no longer part of the cost calculation. Second, manufacturers are expected to learn over time to produce the engines with the new technologies or aftertreatment at a lower cost. Consistent with analyses from other programs, we reduce estimated variable costs by 20 percent beginning with the sixth year of production. 3 

### The small spark ignited engine industry and the marine industry have different reasons for the learning.
Learning for the Small SI industry is expected to occur in the catalyst muffler designs. It will likely occur for two reasons: 1) over time the number of different muffler catalyst designs may be reduced thereby decreasing substrate costs due to larger ordering volumes. 2) heat shield manufacturing may become automated and/or designs more uniform. Learning will not occur for other technologies such as electronic fuel injection systems for they currently exist on some Small SI equipment and motorized vehicles such as scooters .
In the marine industry, manufacturers are less likely to put in the extra R&D effort for low-cost manufacturing of engine families of relatively low sales volumes. Learning will occur in two basic ways. As manufacturers produce more units, they will make improvements in production methods to improve efficiency. The s econd way learning occurs is materials learning where manufacturers reduce scrap. Scrap includes units that are produced but rejected due to

6-1

### Final Regulatory Impact Analysis
inadequate quality and material scrap left over from the manufacturing process. As production starts, assemblers and production engineers will then be expected to find significant improvements in fine-tuning the designs and production processes.
We believe it is appropriate to apply this learning factor here for the marine industries, given that they are facing new emission regulations, some for the first time, and it is reasonable to expect learning to occur with the experience of producing and improving emission-control technologies. Manufacturers do not have signifi cant experience with most of the emissions controls that are anticipated for meeting the standards.
Many of the engine technologies available to Marine SI and Small SI engine manufacturers to control emissions also have the potential to significantly improve engine performance. This is clear from the improvements in automotive technologies. As cars have continually improved emission controls, they have also greatly improved fuel economy, reliability, power, and a reduced reliance on regular maintenance. Similarly, the fuel economy improvements associated with converting from two-stroke to four-stroke engines is well understood. We attempt to quantify these expected improvements for each type of engine below.
Even though the analysis does not reflect all the possible technology variations and options that are available to engine manufacturers, we believe the projections presented here provide a cost estimate representative of the different approaches manufacturers may ultimately take. We expect manufacturers in many cases to find and develop approaches to achieve the emission standards at a lower cost than we describe in this analysis.



## 6.2 Exhaust Emission Control Costs for Small SI Engines

This section presents our cost estimates for meeting the new exhaust emission standards for Small land-based spark-ignition (Small SI) engines. EPA has relied upon model year 2008 certification data for this analysis to characterize the current Class I and Class II market and the technology mix needed to comply with the Phase 3 standards. EPA chose not include data from Chinese manufacturers in this analysis because we have no information on actual sales of their engines in the United States. Manufacturers do submit sales estimates to EPA at the time of certification. However, the sales estimates provided by Chinese manufacturers would suggest that sales of Small SI nonhandheld engines have doubled over the last few years. Based on discussions with nonhandheld engine manufacturers that have been certifying with EPA for over ten years now, we do not believe this is the case and it is our understanding that sales of nonhandheld engines from Chinese manufacturers are relatively small at this time. Therefore, we believe it is appropriate to not include certification data from Chinese manufacturers in our analysis.
In 1995, EPA finalized the first regulations for reducing emissions from small spark ignited (SI) engines <19kW. Small spark ignited engine designs include side valve and overhead valve engine configurations designated in two groups by engine displacement. Class I engines are <225cc and Class II engines are > 225cc and less than 19kW. The Phase 2 regulations for these engines were set with the expectation that Class I side valve engines would be converted to

6-2

### Costs of Control
overhead valve design. Certification data from 2008 shows that engine manufacturers have been able to achieve Phase 2 certification with the continued use of side valve engines in some cases. A summary of the 2008 technology market mix is presented in Table 6.2-1.

For the final Phase 3 standards, the EPA 2008 certification database was referenced. It was found that the majority of Class I engines were in need of some emission reduction and therefore it is estimated that these engines would use catalysts and the related engine design improvements required to use catalysts safely. For Class II engines, the 2008 certification database revealed some engine families meet the Phase 3 emission levels and therefore technologies are not required on all engine families. For those engine families needing emission reduction technology, different technologies were assigned depending on whether the engine was a one cylinder or a multiple cylinder engine. A number of one cylinder engine families were estimated to use catalysts. For two or more cylinders, the largest engine family per engine manufacturer needing emission reduction technology was assigned closed loop electronic fuel injection. The remainder were assigned catalysts with the appropriate muffler setup. The expected technology market mix is presented in Table 6.2-2.
Table 6.2-1: 2008 Technology Market Mix
Class I Class II

SV 66% 2%

OHV 34% 98% w/ Catalyst 0.003% 0.4% w/ Other (EFI and/or watercooled) 0 1%



### Table 6.2-2: Technology Market Mi x Expectations for Phase 3 Engines HC+NOx Emission Standards: 38% Reduc tion Class I, 34% Reduction Class II *

Exhaust Standard Implementation Date 2012 Class I 2011 Class II

SV 66% 2%

OHV 34% 98% w/ Catalyst 95% 50% w/ Other (EFI and/or watercooled) 0 6.6% 

### *EPA 2008 certification data
The following sections describe the t echnologies and related variable and fixed costs followed by an analysis of aggregate costs. The costs are based on a report from ICF International entitled “Small SI engine Technologies and Costs.” 4 

### Variable costs to the manufacturers vary with the engine size and the emission technologies considered.

6-3

### Final Regulatory Impact Analysis
Manufacturers prices of all components were estimated from various sources including information from engine and catalyst manufact urers and previous work performed by ICF International on spark ignited engine technology. All hardware costs to the engine manufacturers are subject to a 29 percent mark-up. This includes manufacturer overhead, profit, dealer overhead and profit. A separate supplier markup of 29 percent is also applied to items typically purchased from a suppliers such as fuel injection and catalysts. A 5 percent warranty mark-up is added to hardware cost of specific technologies including electronics, to represent an overhead charge covering warranty claims associated with new parts.

Fixed costs to the manufacturer include the co st of researching, developing and testing a new technology. The cost of retooling the assembly line for the production of new parts as well as engine certification including durability testing are also fixed costs. Design and development fixed costs per month are listed in Table 6.2-3. Tooling and specific R&D costs are listed in the following sections. Fixed costs for certification are listed in Section 6.2.3.
Table 6.2-3: Design and Development Costs for use in Fixed Cost Estimates per Month 5

Hours Rates Costs Design Costs Per Month Engineer 160 $64.41 $10,306 TOTAL Design Costs Per Month $10,306 Development Costs Per Month Engineer 160 $64.41 $10,306

Technicians 320 $41.87 $13,398
Dynamometer Test Time 20 tests $250 ea $5,000

TOTAL Development Costs Per Month $28,704



### 6.2.1 Class I
Class I engines currently emitting at or below the Phase 2 emission standard of 16.1 g/kWh will need to reduce their engine out HC+NOx emissions by 30-50 percent to comply with the Phase 3 emission standard of 10 g/kWh with an appropriate margin. A number of Class I side valve (SV) engines have been redesigned for the Phase 1 and Phase 2 rulemakings, however SV and overhead valve (OHV) engines will need a different approach to meet these emission standards. One technology to reduce emissions to the Phase 3 levels is a three way catalyst with appropriate precious metal loading for minimal CO conversion. EPA work has shown that catalysts can function effectively through a dynamometer aging of 125 hours with a catalyst conversion of about the same amount at high hours as low hours 6 

### . The amount of conversion is

6-4

### Costs of Control
only constrained by 1) the size of the catalyst to fit in the existing, or slightly larger, muffler, 2) residence time of the exhaust gas along with 3) muffler surface and exhaust gas temperature issues with respect to the amount of CO conve rted within a catalyst. EPA’s work has been shown to convert HC+NOx within a range of 3.8-6.7 g/kW-h (median approx 5.7g/kW-h) on OHV engines and 3.8-10.3 g/kW-h on SV engines (median of 6.8 g/kW-h).

EPA’s 2005 Phase 2 certification database lis ts OHV and SV engine HC+NOx emission levels at low hours, a deterioration factor (df) and resultant certification levels. Engine manufacturers with most regulated experience were considered for these df ranges for we are most familiar with the performance of these engines. Engine families using credits to certify to the emission standard with ABT were not included.
Table 6.2-4: 2005 EPA Certification Database with Catalyst Assumptions 7 Technology Type/UL Engine Out “zero hours” (Min-Max) DF (Min-Max) Certification Level (Min-Max) Catalyst conversion (median from EPA work) Engine with Catalyst

SV/125 10-11 1-1.24 13-14 6.8 6.2-7.2

OHV/125 6-15 1-1.356 9-16 5.7 3.3-10.3

OHV/250 7-15 1-1.136 8-12 5.7 2.3-6.3

OHV/500 8-14 1-1.161 8-15 5.7 2.3-9.3



### Table 6.2-4 is based on median HC+NOx catalyst conversion from EPA test work in the Safety Study. 8 

### The Safety Study also shows improvements in the cooling system design will provide cooling to the engine and/or catal yst muffler system for reduced muffler skin temperatures. Individual engine family applications will vary and engine improvements may be required for durable and effective catalyst operation.

6.2.1.1 Engine Improvements for Class I
Improvements in engine combustion efficiency and engine cooling will assure the engine systems support catalyst durability. Engine improvements for durable catalyst operation include changes that are fixed costs and variable costs. Improvements in engine systems resulting in fixed costs potentially include the following: 1) improved combustion chamber design for optimized combustion, 2) improved piston design for reduced crevice volumes and reduced HC emissions, 3) improved machining and casting tolerances for all combustion chamber components, 4) improved cylinder head fin design for improved cooling, and 5) improved carburetion for fuel delivery and system durability. Some engines would also benefit greatly from 6) improved flywheel design in order to provide additional cooling to the engine and muffler system. Clearly not all engines need these upgrades and many will implement few or

6-5

### Final Regulatory Impact Analysis

none.
Fixed costs per engine family for engine improvements are estimated at four months of design work (one engineer) and six months of development work (one engineer, one technician and dynamometer test time) along with tooling costs for the cylinder head, piston, connecting rod, camshaft, carburetor, flywheel and setup changes. Tooling costs are estimated to be the same across engine useful life categories with the exception of Class I 125 hour SV engines which contains some engine families that are sold in much larger volumes and therefore would have more tools to be modified. These fixed costs are presented in Table 6.2-5.
Table 6.2-5: Fixed Costs for Engine Improvements for Class I 9 Engine Class Class I Useful life (hrs) 125 125,250,500 Valving SV OHV

R&D Design (4 months) 41,225 41,225 Development (6 months) 172,225 172,225 TOTAL R&D per Engine Line 213,450 213,450

TOOLING COSTS Cylinder Head 50,000 25,000

Piston 50,000 25,000 Connecting Rod 30,000 15,000

Camshaft 16,000 8,000

Carburetor 120,000 60,000 Flywheel 70,000 35,000 Setup Changes 150,000 75,000 TOTAL TOOLING per Engine Line 486,000 243,000

TOTAL FIXED $699,450 $456,450



### Variable cost items were identified from EP A field aging of engines from several engine manufacturers. EPA performed several lawnmower in-use test programs in 2003 to 2005. Several of the SV and OHV engines were equipped with catalysts. The process revealed that potentially several engine design characteristics needed improvement in some cases in order for catalysts to be successfully applied in-use. Items included: 1) fuel filter to screen out impurities (assure do not encounter a stuck float and ther eby excessive fuel flowed through the engine

6-6

### Costs of Control
coating the catalyst and rendering it inactive.), 2) incorporation of an intake gasket to assure leaks do not develop in the intake system thereby resulting in hot engine operation and a number of engine operational issues, 3) engine shroud screen over fan (avoid debris collecting in the engine fan), and 4) improved engine cooling system for SV engines to assure the engine’s piston and combustion chamber walls stay in contact so oil does not seep past the rings and into the combustion chamber (see Chapter 4) thereby potentially poisoning the catalyst. Lastly, the incorporation of improved induction coils will reduce the opportunity for spark plug wire failures and misfire events. Table 6.2-6 lists the variable costs for engine improvements for Class I engines certified to various useful lives. Clearly not all engines need these upgrades to succeed and many will implement few or none.
Table 6.2-6: Variable Costs for Engine Improvements for Class I 10 Engine Improvement UL 125 SV UL 125 OHV UL 250 UL 500

Fuel Filter Screens (80% of engine sales) cost/engine: 0.02 0.02 0.02 0.02

--

Improved Intake Gaskets (75% of engine sales for Class I 125 hour useful life) cost/engine: 0.03 0.02

-- -- --

Screen over cooling fan (16% of 125 hr Class I) cost/engine: 0.45 0.07 0.07

-- --

Larger Induction Coils (all) 0.10 0.10 0.10 0.10 Engine Manufacturer Cost 0.21 0.19 0.12 0.10 TOTAL w/Markup 29% OEM 0.27 0.24 0.15 0.13

Learning Curve w/ 29% Markup (0.8*Total w/Markup)*1.29 0.22 0.19 0.12 0.10



### 6.2.1.2 Catalysts for Class I
The following paragraphs describe details on catalysts substrates, washcoat and precious metal, and muffler shielding for Class I engines. Although commonly in use today, spark arresters are discussed in the context of the overall design.
Based on catalyst/muffler development and emission testing by EPA (2004-2005), an engine which has an HC+NOx exhaust ratio of 60/40 is best suited for the use of a catalyst in Small SI engines for the catalyst can be designed for minimal CO oxidation and related heat generation. This ratio can be found on OHV engines for they have efficient combustion chambers. SV engines require slightly larger catalysts due to their less efficient combustion chambers and less than optimum HC/NOx ratios. In addition, SV engines are more likely to

6-7

### Final Regulatory Impact Analysis
have oil seep past the piston rings due into the exhaust to cylinder distortion. A longer catalyst, or the use of a pipe catalyst prior to the brick catalyst, allows it to survive for the full useful life for the catalyst is poisoned from the front of the catalyst to the back. According to the EPA Phase 2 certification database, Class I SV engine families are certified to the 125 hour useful life and therefore the cost analysis includes two different catalyst costs for the 125 hour useful life.
The engines certified to the 250 and 500 useful life categories are all of OHV engine design. As with the 125 hour category, catalyst substrate sizes are calculated as a percentage of the engine displacement. The certification database was queried for this engine displacement data and the displacements are sales weighted, as seen in Table 6.2-7. Catalyst volumes range from 18 percent of the engine displacement for the 125 OHV useful life to 50 percent of the engine displacement for the 500 hour useful life. Larger catalysts are needed for longer useful life periods in order to provide the emission conversion durability. Specific costs for engines within each useful life category will differ.
The substrate cost is based on an average cost of metallic and ceramic substrates as presented in the ICF report 11 

### due to the variety of Small SI equipment types and variety of catalysts offered in the marketplace. This cost analysis estimates equal weighting of the substrate types and therefore takes an average of the cost for both metallic and ceramic.
Due to the concern of oil sulfur poisoning in Class I engines, EPA envisions that a 5:1 ratio of Platinum/Rhodium precious metal would be used for these catalysts. The cost of precious metals was taken from a 3 year average in price from 2003-2005. Washcoat material is expected to be a 30/70 percent mixture of cerium and alumina oxide, respectively.
The design of the catalyst/muffler forms the basis for the degree of cooling needed at the muffler and exhaust port. EPA’s solution for muffler surface and exhaust gas cooling included three steps 1) forcing the cooling air from the e ngine fan/cylinder head region to the muffler can be achieved through a slight redesign of the engine’s shroud, 2) a muffler shroud that is designed to guide the cooling air around the entire muffler and exits at a specified location, and lastly 3) and if when needed an ejector is added to the muffler at the exhaust gas outlet so the exhaust gas can be combined with ambient air before being accessible to the user.
EPA’s observation of a number of lawnmower engine designs revealed that the majority of heat shields currently used on small engines need to be redesigned in order to allow the use of air flow from the engine’s fan to flow optim ally around the muffler for cooling. The portion of engines that do have such systems and will not incur this cost were removed from the cost analysis and ICF’s estimates for this technology were adjusted. EPA utilized the 2005 certification database to estimate sales and to calculate a percentage of engines that will be estimated to redesign their muffler heat shiel d. Table 6.2-7 contains the variable costs for catalysts, heat shields and spark arresters.

6-8

### Costs of Control
Table 6.2-7: Variable Catalyst Costs for Class I 12 

### to Achieve the Phase 3 Standards
Useful Life UL 125 SV UL 125 OHV UL 250 UL 500

Engine Power (hp) 3.3 5.1 5.0 5.2 Engine Displacement (cc) 178 180 167 166 Catalyst Volume (cc) 45 32 55 83 Substrate Diameter (cm) 3.50 3.50 4.00 4.50

Substrate $1.97 $1.53 $2.32 $3.22

Washcoat and Precious Metal $1.83 $1.31 $2.81 $4.24

Labor $1.40 $1.40 $1.40 $1.40

Labor Overhead 40% $0.56 $0.56 $0.56 $0.56 Supplier Markup 29% $1.67 $1.39 $2.06 $2.73 Catalyst Manufacturer Price $7.43 $6.19 $9.15 $12.15

Heat Shield* $0.50 $0.29 $0.18 $0.14 Spark Arrestors $0.05 $0.05 $0.05 $0.05 Engine Manufacturer Cost $7.98 $6.53 $9.38 $12.34
TOTAL w/Markup 29% OEM $10.29 $8.42 $12.10 $15.92

* Based on EPA’s work with small engine equipment from 2003-2005, it has been observed that some manufacturers have heat shielding that is sufficient or only needs slight modification. These sales volumes have been removed and the resultant price recalculated.



### The fixed costs related to catalyst development for Class I engine applications include design (one engineer), of two months, and de velopment (one engineer, one technician and dynamometer time), for five months, of the muffler and heat shield. The inside of the muffler is to be redesigned to house the catalyst, provide supplemental air when needed, and provide baffling for the exhaust flow in order to maximi ze heat dissipation from the exhaust flow. The muffler stamping will also need to be updated to account for the new design. A second critical component of the catalyst/muffler system is the heat shield. The heat shield must be designed to allow cooling air from the fan to flow around the muffler to maximize cooling of the muffler and then exit at an optimum point. The muffler/heat shield system must be located at a predetermined distance from the engine block in order to allow air to flow behind the muffler to cool the backside. Setup changes also are incurred with these modified stampings. The total tooling per engine line is estimated at $240,000 for Class I engines of 125 hour useful life and

6-9

### Final Regulatory Impact Analysis
$120,000 for Class I engines of other useful life periods. The difference is due to the additional tooling for high volume SV engine families. Tabl e 6.2-8 presents the fixed costs associated with using catalysts on Class I engines.
Table 6.2-8: Fixed Costs for Catalysts for Class I Engines 13 Engine Class Class I Useful life (hrs) 125 125, 250, 500 Valving SV OHV

R&D Design (2 months) 20,612 20,612

Development (5 months) 143,521 143,521 TOTAL R&D per Engine Line 164,133 164,133

TOOLING COSTS Modified Muffler Stamping 100,000 50,000 Heat Shield Stamping 60,000 30,000 Engine Shroud Modification 30,000 15,000 Setup Changes 50,000 25,000 TOTAL TOOLING per Engine Line 240,000 120,000

TOTAL FIXED COSTS $404,133 $284,133



### A learning curve of 20 percent is applied to costs for catalyst technology starting in the sixth year after the standard is implemented. This somewhat conservative since the learning normally occurs at 20 percent with a doubling of production which would thus be in the third or fourth year. Optimized catalyst/muffler designs and manufacturing processes will likely be developed as the industry becomes experienced in using mufflers with catalysts on Small SI engines. The muffler washcoat will still be unique per engine family per engine manufacturer for engine out emissions will differ. Table 6.2-9 presents the estimated learning curve impacts on variable costs. The precious metal prices are determined in the marketplace and therefore would not be affected by the learning curve.

6-10

### Costs of Control
Table 6.2-9: Learning Curve Variable Catalyst Costs for Class I to Achieve the Phase 3 Standards
Useful Life UL 125 - SV UL 125 - OHV UL 250 UL 500

Engine Power (hp) 3.3 5.1 5.0 5.2 Engine Displacement (cc) 178 180 167 166 Catalyst Volume (cc) 45 32 55 83 Substrate Diameter (cm) 3.50 3.50 4.00 4.50

Substrate $1.57 $1.22 $1.86 $2.58

Washcoat and Precious Metal $1.83 $1.31 $2.81 $4.24

Labor $1.40 $1.40 $1.40 $1.40

Labor Overhead $0.56 $0.56 $0.56 $0.56 Supplier Markup 29% $1.55 $1.30 $1.92 $2.55

Manufacture Price $6.92 $5.80 $8.55 $11.32

Heat Shield (adjusted % for eng w/ sufficient heat shield) $0.40 $0.23 $0.14 $0.11

Flame/Spark Arrester $0.05 $0.05 $0.05 $0.05

Hardware Cost to Manufacturer $7.37 $6.08 $8.74 $11.49

w/Markup 29% OEM $9.50 $7.84 $11.28 $14.82



### Table 6.2-10 contains the estimated total costs for Class I Phase 2 compliant engines to meet the Phase 3 emission standards. Near term costs are those costs for the first five years. Long term costs are those costs to which the learning curve has been applied.

6-11

### Final Regulatory Impact Analysis
Table 6.2-10: Class I Estimated Total Costs Per Engine (Variable) and Per Engine Family (Fixed) to Achieve the Phase 3 Standards
Useful Life UL 125 - SV UL 125 - OHV UL 250 UL 500

Engine Displacement (cc) 178 180 167 166 Catalyst Volume (cc) 45 32 55 83 Substrate Diameter (cm) 3.50 3.50 4.00 4.50

Variable Costs - Near Term Engine Improvements $0.27 $0.24 $0.15 $0.13 Catalyst $10.29 $8.36 $12.10 $15.92 Total Variable Cost (Near) $10.56 $8.60 $12.25 $16.05 Variable Costs - Long Term (with Learning) Engine Improvements $0.22 $0.19 $0.12 $0.10 Catalyst $9.50 $7.84 $11.28 $14.82 Total Variable Cost (Long) $9.72 $8.04 $11.39 $14.92

Fixed Costs Engine Improvements $699,450 $456,450 $456,450 $456,450 Catalyst $404,133 $284,133 $284,133 $284,133

Total Fixed Costs $1,103,583 $740,583 $740,583 $740,583



### 6.2.2 Class II
The Phase 3 HC+NOx emission standard for Class II is 8 g/k-Wh which is a 34 percent emission reduction from the Phase 2 standards of 12.1 g/k-Wh. This standard is to be met at the end of the regulatory useful life for each engine family. The EPA Phase 2 certification database shows that the majority of engines in this Class are of OHV design however, approximately 2 percent of the engines are still side valve engine technology.
Class II side valve engines are currently certified to the Phase 2 standards with credits from lower emitting OHV engines. The EPA 2005 certification database shows the majority of overhead valve engines currently certifying HC+NOx at a range of 7-11 g/kW-h and side valve engines certifying in the range of 13-14 g/kW-h. Lowering of the emission standard will reduce the number of emission credits available for side valves to certify and therefore, it is assumed that the remaining side valve engines will be phased out and replaced with currently produced overhead valve engines or continue to be certified using ABT credits from a limited number of

6-12

### Costs of Control
lower emitting engine families.
Assuming a 2 g/kW-h compliance margin to 6 g/kW-h, emission reduction technologies will need to be designed to reduce emissions 15-57 percent. Table 6.2-11 illustrates potential engine out emissions with emission reduction t echnologies applied to Phase 2 engines. OHV engines are expected to potentially include some engine improvements and/or catalysts or electronic fuel injection.
Table 6.2-11: 2005 EPA Certification Database Summary With Catalyst Assumptions 14

UL OHV Engine Out “zero hours” (Min-Max)* DF (Min-Max)** Certification Level (Min-Max)* Catalyst conversion (non-EFI engine) 15 Engine with Catalyst (Based on Median values)

250 4.8-10.0 Median: 7.9 1-1.7 Median: 1.137 6.7-12.0 Median: 8.9 4.0 2.7-8.0

500 4.4-10.8 Median: 8.3 1-1.6 Median: 1.039 5.9-10.9 Median: 9.5 4.0 1.9-6.9

1000 6.0-11.2 Median: 8.4 1-1.4 Median: 1.03 6.9-11.2 Median: 8.9 4.0 2.9-7.2

* Values of engines that meet the standard. 500 hr UL has a liquid cooled engine with catalyst that meets a 2.6 g/kW-h HC+NOx and 1000 hr UL has the same that meets 1.8 g/kW-h HC+NOx. **Some engines have catalysts and therefore claim a higher df



### Class II contains several liquid cooled engines. These engines likely have the ability to be enleaned to more of a degree due to the additional cooling assistance and therefore may not need a catalyst to meet the Phase 3 emission standards.

6.2.2.1 Engine Improvements for Class II
Engine improvements include improved engine design and larger induction coils as shown in Tables 6.2-12 and 6.2-13. Improvements in engine design will allow for more efficient combustion and a more favorable HC:NOx ratio for the use of a reducing catalyst. A larger induction coil will reduce the opportunity for spark plug wire failure and misfire events. It is estimated that 1000 hour engines currently have sufficient induction coils and will not need this improvement.

6-13

### Final Regulatory Impact Analysis

Table 6.2-12: Variable Costs for Engine Improvements for Class II per Engine 16

UL250 UL 500 UL 1000 Larger Induction Coils 0.09 0.09

-- TOTAL w/Markup 29% OEM 0.12 0.12

--

Learning w/29% OEM (0.8*Total)*1.29 0.10 0.10

--



### Improved engine design includes machining and casting tolerances, improved combustion chamber configuration, reduced crevice volumes, better cooling (improved fin design on cylinder head and oil control), impr oved flywheel design and improved carburetion. Better carburetor performance is needed to assure floats do not stick and better cooling so engines operate at cooler temperatures. Fixed costs include design (one engineer at 4 months), development and tooling costs (one engineer, one technician and dynamometer time for 6 months) per engine family to achieve improved engine design. Projected fixed costs are presented in Table 6.2-13. The fixed cost is estimated to be the same per engine family and is estimated at $456,450.

6-14

### Costs of Control

Table 6.2-13: Fixed Costs for Engine Improvements for Class II per Engine Family 17 Engine Class Class II Useful life (hrs) 250,500,1000 Valving OHV

R&D Design (4 months) 41,225 Development (6 months) 172,225 TOTAL R&D per Engine Line 213,450

TOOLING COSTS Cylinder Head 25,000

Piston 25,000 Connecting Rod 15,000

Camshaft 8,000

Carburetor 60,000 Flywheel 35,000 Setup Changes 75,000 TOTAL TOOLING per Engine Line $243,000

TOTAL FIXED $456,450



### 6.2.2.2 Catalysts for Class II
Further emission reduction can be achieved through the use of catalysts. The catalyst must be designed for durability throughout the engine’s regulatory useful life. A catalyst efficiency of 25-45 percent is estimated for these engines. The catalyst technology that would be utilized would be similar to that used for Class I engines. The exceptions include: 1) Class II engines would not use supplemental air because the HC and NOx ratios are more favorable in Class II OHV engines due to their more efficient combustion chamber and larger displacement and horsepower, and 2) the precious metals in the catalysts range from platinum/palladium/rhodium for 250 and 500 hour Class II engines to to palladium/rhodium (5:1) for 1000 hour regulatory useful life engines.
Class II engine designs include engines 1 to 4 cylinders. Engines with two or more cylinders have specific issues to be considered in terms of safety with regard to engine exhaust and catalyst use and this will be addressed towards the end of this section. The variable costs for

6-15

### Final Regulatory Impact Analysis
catalysts of single cylinder engines are listed in Table 6.2-14. The catalyst substrate size is calculated based on the engine displacement size. To utilize one value per regulatory useful life category for this analysis, the engine horsepower and displacements were sales weighted with values from the 2005 EPA certification database information. Catalyst volumes range from 33 percent of the engine displacement for the 250 useful life to 50 percent of the engine displacement for the 1000 hour useful life. Larger catalysts are needed for longer useful life periods in order to provide the emission conversion durability.
Catalyst substrate and heat shield variable costs will be decreased in the sixth year with a learning curve of 20 percent. This somewhat conservative since the learning normally occurs at 20 percent with a doubling of production which would be in the third or fourth year. Optimized catalyst/muffler designs and heat shield manufacturing processes will likely be developed as the industry becomes experienced in application of the catalyst technology across their product line. The muffler washcoat will likely still be unique per engine family per engine manufacturer and therefore it is estimated there will likely not be a one size fits all catalyst/muffler design. The precious metal prices are determined in the marketplace and therefore are not discounted over time.

6-16

### Costs of Control
Table 6.2-14: Variable Catalyst Costs for Class II OHV Single Cylinder Engine HC+NOx Emission Reduction to Phase 3 Standards
Near Term Estimates Learning Curve Estimates

Useful Life 250 500 1000 250 500 1000 Engine Power (hp) 11.3 11.1 9.5 11.3 11.1 9.5 Engine Displacement (cc) 406 338 329 406 338 329 Catalyst Volume (cc) 134 135 165 134 135 165 Substrate Diameter (cm) 5.25 6.00 7.00 5.25 6.00 7.00

Substrate* $4.78 $4.81 $5.67 $3.82 $3.84 $4.53

Washcoat and Precious Metal $4.03 $2.73 $4.10 $4.03 $2.73 $4.10

Labor $1.40 $1.40 $1.40 $1.40 $1.40 $1.40

Labor Overhead 40% $0.56 $0.56 $0.56 $0.56 $0.56 $0.56 Supplier Markup 29% $3.12 $2.75 $3.40 $2.84 $2.47 $3.07

Manufacture Price $13.89 $12.25 $15.13 $12.65 $11.00 $13.66

Heat Shield $4.23 $3.96 $4.05 $3.38 $3.17 $3.24 Spark Arrestor $0.10 $0.05 $0.05 $0.10 $0.05 $0.05

Hardware Cost to Manufacturer $18.22 $16.26 $19.23 $16.14 $14.23 $16.95 w/Markup 29% OEM $23.50 $20.97 $24.80 $20.82 $18.35 $21.87 

### * 50/50- split of metallic vs ceramic substrates



### Fixed costs involve modification to the existing heat shield and cooling system. If the muffler is in close proximity to the engine fan then cost for a heat shield can also be included because in some cases the heat shields will need to be improved in order to direct cooling air from the engine’s flywheel over the muffler for muffler cooling. These fixed costs are presented in Table 6.2-15.

6-17

### Final Regulatory Impact Analysis
Table 6.2-15: Fixed Costs for Class II OHV Single Cylinder Engine Engine Class II Useful life (hrs) 125, 250, 500 Valving OHV

R&D Design (2 months) 20,612

Development (5 months) 143,521 TOTAL R&D per Engine Line 164,133

TOOLING COSTS Modified Muffler Stamping 50,000 Heat Shield Stamping 30,000 Engine Shroud Modification 15,000 Setup Changes 25,000 TOTAL TOOLING per Engine Line 120,000

TOTAL FIXED COSTS $284,133



### Carbureted V-Twins
Carbureted engines with more than one cylinder, ex: V-twins or more, have special concerns when considering the use of catalyst application. Multi-cylinder engines may continue to run if one cylinder misfires or does not fire at all. If this occurs, the results is raw unburned fuel and air from one cylinder and hot exhaust gases from the other cylinder combining in the muffler. In a catalyst muffler, this condition will likely result in continuous backfire which would create high temperatures within the muffler and potentially destroy the catalyst. One solution is to have separate catalyst mufflers for each cylinder. The two cylinders in the V-twins currently share one muffler. If two mufflers ar e used, then the individual mufflers would likely need to be slightly larger. Each individual muffler would need to be 25-30 percent larger than one half the volume of the original. Since the two cylinders in the V-twins currently share one muffler one option for consideration would be to package the two catalysts in separate chambers within one larger muffler.
Costs for this new muffler design are listed in Tables 6.2-16 and 6.2-17. V-twin engines from EPA’s certification database were sales we ighted for power and engine displacement per regulatory useful life. ICF provided the estim ates for existing muffler costs and new muffler cost estimates. 18

6-18

### Costs of Control
Table 6.2-16: Variable Costs for Change to Two Mufflers for V-Twins 19

250 OHV 500 OHV 1000 OHV Engine Power (hp) 16.3 20.1 17.1 Engine Displacement - Total (cc) 605 632 627 Per Cylinder Displacement (cc) 393 411 408

Current Muffler Cost ($20.24) ($23.13) ($22.57)
New Muffler Cost (includes 2) $26.31 $30.07 $29.34

Hardware Cost to Manufacturer $6.07 $6.94 $6.77
OEM Markup @ 29% $1.76 $2.01 $1.96
Total Component Costs $7.83 $8.95 $8.73



### Fixed costs include modified muffler stamping, exhaust pipe changes and setup changes. These costs are estimated at $100,000 per engine family. Special considerations were not accounted for in the case where OEM’s obtain their own muffler and assemble the muffler onto the engine once the engine is received from the engine manufacturer. This analysis considers that in most cases equipment manufacturers w ould buy their catalyst mufflers from the engine manufacturer in order to avoid engine certification.
Table 6.2-17: Fixed Costs for Change to Two Mufflers for V-Twins 20

250 OHV 500 OHV 1000 OHV Engine Power 16.3hp 20.1hp 17.1hp Engine Displacement - Total (cc) 605 632 627 Per Cylinder Displacement 393 411 408 Modified Muffler Stamping $50,000 $50,000 $50,000 Exhaust Pipe Changes $25,000 $25,000 $25,000 Setup Changes $25,000 $25,000 $25,000 Total Tooling per Engine Line $100,000 $100,000 $100,000



### In this analysis, catalyst sizes are related to the engine cylinder size and therefore since cylinders of V-twin engines are smaller than one cylinder Class II engines, costs are recalculated from Table 6.2-14. Note that one catalyst is used in each muffler for a total of two catalysts. Tables 6.2-18 and 6.2-19 present the projected vari able and fixed catalyst costs for Class II OHV V-twin engines.

6-19

### Final Regulatory Impact Analysis
Table 6.2-18: Variable Catalyst Costs for Class II OHV V-Twin Engine, Near Term and Learning Curve Effect
Near Term Costs Learning Curve Effect

Useful Life 250 500 1000 250 500 1000 Engine Power (hp) 16.3 21.0 17.1 16.3 21.0 17.1 Engine Displacement per Cylinder 303 316 314 303 316 314 Catalyst Volume (cc) 100 126 157 100 126 157 Substrate Diameter (cm) 5.00 5.00 5.50 5.00 5.00 5.50

Substrate* $3.74 $4.55 $5.44 $2.99 $3.64 $4.35

Washcoat and Precious Metal $3.00 $2.55 $3.91 $3.00 $2.55 $3.91

Labor $1.40 $1.40 $1.40 $1.40 $1.40 $1.40

Labor Overhead 40% $0.56 $0.56 $0.56 $0.56 $0.56 $0.56 Supplier Markup 29% $2.52 $2.63 $3.28 $2.31 $2.36 $2.96 Manufacture Price per Catalyst $11.22 $11.68 $14.59 $10.26 $10.51 $13.19

Two Catalysts ($x2) $22.45 $23.36 $29.18 $20.52 $21.02 $26.37 Heat Shield (2) $8.53 $9.76 $10.50 $6.82 $7.81 $8.4 Spark Arrestor (2) $0.20 $0.10 $0.10 $0.20 $O.10 $0.1

Hardware Cost to Manufacturer $31.18 $33.22 $39.79 $27.54 $28.92 $34.87 Markup 29% OEM $9.04 $9.63 $11.54 $7.99 $8.39 $10.11

New Muffler Differential $7.83 $8.95 $8.73 $6.26 $7.16 $6.98

TOTAL COST $48.05 $51.80 $60.06 $41.97 $44.76 $51.97 

### * 50/50- split of metallic vs ceramic substrates

6-20

### Costs of Control
Table 6.2-19: Fixed Costs for Class II OHV V-Twin Engine
Useful Lives 250, 500, 1000

R&D COSTS Design (2 months) $20,612 Development (5 months) $143,521

TOTAL R&D $164,133

TOOLING COSTS Heat Shield Stamping $50,000 Engine Shroud Modification $25,000 Setup Changes $25,000 New Muffler Design $100,000 Total Tooling per Engine Line $200,000

TOTAL FIXED COSTS $364,133



### Electronic Fuel Injection
Electronic fuel injection (EFI) is another solution for engines with two or more cylinders. EFI will allow more equal fuel delivery between or among the engine cylinders. In addition, it enables better atomization and more efficient fuel delivery during load pickup. If an engine family is somewhat close to the Phase 3 standard currently then EFI may allow the engine to meet the emission standards without a catalyst. If a small catalyst is needed, EFI allows the engine to be setup for cylinder monitoring and can be shut down if all cylinders are not operating properly. Due to the anticipated higher cost for EFI compared to catalyst, EPA estimates that each engine manufacturer will initially apply EFI to the engine family, of two or more cylinders, with the highest sales volume. Table 6.2-20 lists the estimated costs to apply electronic fuel injection. The cost tables include subtracting the existing carburetor.

6-21

### Final Regulatory Impact Analysis

Table 6.2-20: Variable Costs for Electronic Fuel Injection - Open and Closed Loop For Class II Engines and Applications with a Battery 21 Open Loop EFI Closed Loop EFI Injectors 8.00 8.00 Pressure Regulator 3.75 3.75

ECM/MAP Sensor 27.00 27.00 Throttle Body 2.75 2.75 Air Temperature Sensor 1.50 1.50 Fuel Pump 10.50 10.50 Oxygen Sensor

-- 7.00 Wiring/Related Hardware 12.00 12.00

HARDWARE COST TO MANUFACTURE 66.75 73.75 OEM markup @ 29% 19.36 21.39 Warranty Markup @ 5% 2.85 3.69 Total Component Cost 88.96 98.83 Remove existing carburetor ($15) marked up 29% -19.35 -19.35 EFI Technology Difference $69.61 $79.48



### Fixed costs for electronic fuel injection are listed in Table 6.2-21. Open loop fuel injection requires more research and development time due to the fact that it does not use an oxygen sensor to keep the air/fuel ratio in check. This analysis estimatess all engines using electronic fuel injection will be develope d as closed loop fuel injection systems.

6-22

### Costs of Control

Table 6.2-21: Fixed Costs for Electronic Fu el Injection - Open and Closed Loop For Class II Engines and Applications with a Battery Open Loop Closed Loop Design $41,225 $20,612 Development $229,633 $57,408

Modified Exhaust Manifold for O 2 Sensor --- $25,000

Total Fixed Costs $270,858 $103,020



### 6.2.2.3 Equipment Costs
The majority of Class I engines are sold as a unit and therefore the engine, fuel tank and muffler are provided by the engine manufacturer to the equipment manufacturer. As shown in EPA’s Technical Study on the “Safety of Emission Controls for Nonroad Spark-Ignition Engines <50 Horsepower”, catalysts can be applied to Class I engines such that muffler temperatures are equal to or less than those of the current Phase 2 product with minimal changes to the engine package. Some engines may require larger mufflers to house a catalyst depending on current muffler design. However the majority of equipm ent housing Class I engines are close coupled to the engine with open access for air cooling and therefore it no equipment redesign costs are applied to equipment manufacturers.
The majority of Class II engines are not sold as a unit. The current industry practice includes equipment manufacturers purchasing the mu ffler separate from the engine. Based on conversations with industry it is believed that for several reasons this practice will change to the dominant practice being the equipment manufactur er purchasing the muffler from the engine manufacturer. The offerings by the engine manufacturer will likely be influenced by the largest customers and smaller equipment manufacturers will have a few set models from which to choose. A limited amount of equipment redesign will be required on products.
EPA’s work with catalysts in mufflers of two one-cylinder Class II lawn tractor engines has revealed that the current muffler on this equipment type has plenty of room to accommodate the catalyst and internal baffling to promote cooling of the exhaust gases. Smaller mufflers are used in other applications in which engine noise is not of concern. EPA did not work with these mufflers and therefore, it is uncertain if the catalyzed muffler will work in these mufflers. It is possible that a larger muffler can may be required to accommodate the catalyst.
Changes that will be required on Class II engines with catalysts includes a heat shield for the muffler (counted in catalyst costs), necessary sheet metal to direct cooling from the engine flywheel to the muffler and any equipment de sign changes to accommodate a different engine envelope.
Incorporating shrouding to direct the cooling air to and around the muffler is of most

6-23

### Final Regulatory Impact Analysis
importance. The shrouding added includes extending and rerouting some of the engine sheet metal that is used to direct the air-flow out of the engine cylinder and blocking off the usual air exit into the engine compartment. The air is routed out the bottom of the chassis instead. In EPA’s Class II one cylinder engine testing, th e “touch-guard” was boxed in by closing off it's slots, closing off one end, and reducing the size of the opening on the opposite end. The exhaust exit was re-routed to a different location, and an ejector was added over the top of the exhaust. The amount of additional metal is fairly minimal and relatively thin-gage. The best examples are the Kohler CV490 on one of the Craftsman tractors and the Kohler SV590 on the Cub Cadet. Detailed photos of the SV590 installation can be found in EPA’s Safety Study. 22



### For equipment that use engines with catalysts and require heat shield or equipment design changes, variable costs are estimated for the sheet metal and/or engine structure redesign at $1.30 per piece of equipment. Since a portion of engines are assigned to EFI, or will likely not require additional heat shield or equipment modifications due to current equipment design, it is estimated that 60 percent of equipment will utilize increased sheet metal and/or engine structure redesign. This yields a sales weight ed average of $0.78 per equipment. Fixed costs for R&D for the added sheet metal design and/or engine restructure are estimated at $30,000 per equipment model and tooling changes are also estimated at $45,000 per model. These estimates are based on the estimates for developing and applying heat shields in the catalyst cost estimates for Class II and can be seen in Table 6.2-22.
Table 6.2-22: Average Equipment Costs Per Equipment Model
Variable Costs Fixed Costs

Heat Shield -0- included in catalyst costs -0- included in catalyst costs

Additional material for equipment redesign or air entrainment pathway 1.30 per equipment
0.78 avg over all for 60% of equipment n/a

R&D n/a 30,000 Tooling Changes n/a 45,000



### 6.2.3 Compliance and Certification
The certification and compliance costs include engine dynamometer aging as well as emission testing pre- and post-aging. Certification and compliance costs are included in this analysis as fixed costs. After preliminary emission testing, engines are aged on the dynamometer to the regulatory useful life. The aged engines are then emission tested. The engine’s emission levels must be below the new standards. If not, then the engine family cannot be certified unless the excesses are offset with other engine families within a manufacturers product line and the manufacturer must be involved in the averaging, banking and trading program. Engine families will need to certify to the new emission standards using the updated

6-24

### Costs of Control
test procedure found in Chapter 4.
The Phase 2 certification database was used as the basis for the number of engine families to be certified to these standards. The 2005 Certification database contains a number of engine manufacturers that have certified to the Phase 1 emission standards (1997) as well as a large number of additional engine manufacturers that have certified to the Phase 2 standards (2002).

6.2.3.1 Measurement Protocol 1065 Compliance Costs
New to the small engine industry are the 1065 protocols for gaseous emission measurement. These protocols are found in 40 CFR Part 1065. Depending on the analyzing equipment used by the industry, the certification analyzers may have to be upgraded to the estimated cost of $250,000. It is possible that less costly upgrades on some analyzers will be available. A CVS system can be assemb led for $50,000 given manufacturer ingenuity.

6.2.3.2 Certification Costs
Certification costs include emission testing after a short engine break-in period and aging on a dynamometer to the full useful life and then repeat emission testing. Costs for dynamometer aging of each Class and corresponding useful life are found in ICF’s report “Small SI Engine Technologies and Costs.” 23 

### The costs per dynamometer aged engines are estimated in Table 6.2-3. are based on test setup, data analysis, engine aging operation, dyno costs, scheduled maintenance, prototype engine cost and fuel.
Table 6.2-23: Dynamometer Aging Certific ation Costs Per Class and Useful Life
CLASS I CLASS II

125 $9,532 250 $18,413

250 $17,462 500 $34,658

500 $33,353 1,000 $70,069



### The costs for the emission compliance tests are found in Tables 6.2-24 and 6.2-25 and they are the same for each engine regardless of useful life category. A total of two emission tests after break-in and two at end of useful lif e are accounted for in this cost analysis. The emission test costs are estimated at $2,012 each and are based on the costs for a private test laboratory in 2005. 24



### Table 6.2-24: Emission Testing Costs Per Class
CLASS I CLASS II

all useful lives $8,048 all useful lives $8,048

6-25

### Final Regulatory Impact Analysis
Table 6.2-25: Per Engine Family Emission Testing and Dynamometer Aging Costs Per Class and Useful Life
CLASS I CLASS II

125 $17,580 250 $26,461

250 $25,510 500 $42,706

500 $41,401 1,000 $78,117



### 6.2.4 LPG/CNG Engine Costs
Engine manufacturers and equipment manufactur ers certify engines to run on LPG. The number of engine families are obtained from EP A’s 2008 Certification Database. Certification costs found in Section 6.2.3.2 apply to these engines. Part 1065 compliance costs are not applied since the engine manufacturers are the same as listed in the gasoline section (costs already applied) and it is estimated that equipment manufacturers contract with a test lab due to the high cost of maintaining an individual test lab.
For engine certification, all engine families will be required to be tested for baseline emissions, see Table 6.2-26. Small volume e ngine manufacturers with a production of 10,000 engines or less can utilize an assigned deterioration factor and do not have to undergo dynamometer aging or end of life emission testing. Those listed under dynamometer aging in Table 6.2-26 will need to age the engines and perform end of life emission testing. The number of engine families listed under catalyst development will need emission reduction technology such as catalysts.
Table 6.2-26: Number of LPG Engine Families Per Class and Useful Life Designation for Fixed Cost Analysis
CLASS I CLASS II

UL BaselineE mission Testing Dynamo-meter Aging + End of Life Emission Testing Catalyst Dev UL Baseline Emission Testing Dynamo-meter Aging + End of Life Emission Testing Catalyst Dev
1cyl/2cyl

125

-- -- -- 250 9 9 1 2

250

-- -- -- 500 20 20 2 10

500 2 2 1 1000 13 13 1 8 For Phase 3, companies with small volume production (<10,000) can use an assigned df.

6-26

### Costs of Control

Table 6.2-27 lists the certification costs.

Table 6.2-27: Certification Costs - LPG

Class I Class II
Baseline Emission Testing $8,048 $169,008 Dynamometer Aging $66,706 $1,769,774 End of Life Emission Test $8,048 $169,008 Total $82,802 $2,107,790



### As mentioned above, the technology to reduce emissions to the Phase 3 levels is catalysts. Catalysts are currently being utilized on LPG engines as shown in EPA’s 2008 Certification Database. Basic engine improveme nt design changes, accounted for in the gasoline engine families, were not accounted for in these engines for they were already made in the base engine before they were converted to run on LPG/CNG. Costs that will be applied to these engines are R&D for catalyst formulation and variable parts costs which will need to be formulated for the exhaust makeup from these engines. The majority of these engines are two cylinder engines, however the concerns of the application of catalysts to these engine designs are relieved in that some of the V-twin LPG engine s are already certified with catalysts. Costs for catalyst system redesign for some of the existing engine families are included in order for these families to meet the Phase 3 standards. Table 6.2-28 lists the R&D and Tooling costs for catalysts for LPG. Table 6.2-29 contains the totals for fixed cost for each class given the total number of engine families listed in Table 6.2-26.

6-27

### Final Regulatory Impact Analysis
Table 6.2-28: Fixed Costs for Class II OHV Single Cylinder Engine - LPG Engine Class II Useful life (hrs) 125, 250, 500 Valving OHV

R&D Design $20,612 Development (5 months) $143,521 TOTAL R&D per Engine Line $164,133

TOOLING COSTS TOTAL TOOLING per Engine Line 0*

TOTAL FIXED COSTS $164,133



### * LPG engines are modified from gasoline version e ngines. Tooling costs are not included for it is estimated that catalyst volume for these engines will be determined based on a percentage of engine displacement, as the gasoline version, and therefore the catalysts will fit into the same muffler space.



### Table 6.2-29: Total Fixed Costs for LPG Engine Families 2005$
Class I Class II Catalyst R&D $492,399 $6,072,921

Certification Cost $47,114 $1,146,438

TOTAL $539,413 $7,219,359



### Certification data on gaseous fueled engines show that the HC:NOx ratio is higher in NOx than in HC which is opposite from gasoline engines. Platinum will be used in the precious metal mixture in order for the oxygen reduced from the NOx to be utilized to convert CO due to the lack of HC. For Class I engines, the cost estimate presented in Table 6.2-7 is applicable because it is calculated with a platinum/palladium/rhodium ratio of 5/0/1. For Class II engines, the 500 and 1000 hour catalyst cost estimates will be modified in order to include more platinum and all useful life periods will have resized catalysts based on the sales weighted engine displacement in the certification listing of LPG engines. Table 6.2-30 lists the variable catalyst costs for Class II OHV Engines, 250 and 500 hour useful life engines (no 1000 hour UL engines are listed in the LPG certification). Two to three cylinder engines have higher displacement and therefore costs are recalculated for those engine designs.

6-28

### Costs of Control
Table 6.2-30: Variable Catalyst Costs for Class II OHV Engines - LPG HC+NOx Emission Reduction to Phase 3 Standards 1 cylinder 2 cylinders

Useful Life 250 500 1000** 250 500 1000 Engine Power (hp) 13.8 17.8

- 18.2 19.2 23 Engine Displacement (cc) 415 389

- 597 743 751 Engine/Catalyst 33% 40%

- 33% 40% 50% Catalyst Volume (cc)*** (per cylinder) 137 156

- 197 297 376

Substrate Diameter 5.25 6.00

- 5.00 5.00 5.50 Substrate* (per cylinder) 5.55 8.91

- 3.70 5.20 6.34

Washcoat and Precious Metal 4.24 4.82

- 2.96 4.46 8.86

Labor $1.40 $1.40

- $1.40 $1.40 $1.40

Labor Overhead 40% $0.56 $0.56

- $0.56 $0.56 $0.56 Supplier Markup 29% $3.41 $4.55

- $2.50 $3.37 $4.97 Manufacture Price (per catalyst) $15.16 $20.24

- $11.12 $14.99 $22.14 Total Catalyst Cost $15.16 $20.24 $22.24 $30.00 $44.24 Heat Shield (2 for v-twin) $4.23 $4.26

- $5.90 $6.92 $7.32 Spark Arrestor (2 for v-twin) $0.10 $0.05

- $0.20 $0.10 $0.10

Hardware Cost to Manufacturer $19.49 $24.55

- $28.34 $37.00 $51.69 w/Markup 29% OEM $25.14 $31.67

- $8.22 $10.73 $14.99

Add’l Muffler for V-twin

- - - $7.83 $8.95 $8.73 Total Catalyst Cost for LPG engines $24.14 $31.67

- $44.40 $56.68 $75.41

Total Catalyst Cost for Gasoline Engines $23.50 $20.97

- $48.05 $51.80 $60.06

Cost Difference $1.64 $10.70

- -$3.66 $4.87 $15.37
* 50/50- split of metallic vs ceramic substrates ** No one cylinder LPG engines are certified to the 1000 hour useful life *** these catalyst volumes were calculated from the engine disp in EPA’s certification data for 2005

6-29

### Final Regulatory Impact Analysis

Calculations for the rulemaking have been completed using gasoline assumptions. To account for the increase in costs due to some of the gasoline engines being used as LPG engines, an increase in the total cost is added to the current gasoline engine variable cost total. Table 6.2.-31 is an example of costs for 2012 in 2005$.
Table 6.2-31: Change in Variable Cost in 2012, 2005$ - LPG Total Engine Sales Estimate per Useful Life 2012 % of LPG/CNG Engines in Useful Life

per Class # of Cyl Number of Engines

with change in Cost Estimate Variable Cost Change in 2012 Total Change in costs in 2012 2005$

Class I 125 OHV 2,953,419 0% 1 0 0 0 250 905,005 0% 1 0 0 0 500 623,431 0.63% 1 3574 0 0 Class II 250 3,334,488 0.58% 1 14,500 $1.38 $20,027

2 10,469 -$2.95 -$30,923 500 724,231 1.94% 1 12,918 $9.25 $119,523

2 90,630 $5.17 $ 468,553

1000 821,463 3.19% 2 18,700 $15.59 $ 291,517 2012 Total Increase $868,698



### * use the same technology as gasoline counterpart
Table 6.2-32 contains the catalyst cost estim ates for LPG engines including a learning curve discount. This cost estimate is used in year six of the cost estimates.

6-30

### Costs of Control
Table 6.2-32: Variable Catalyst Costs with Learning Curve for Class II OHV Engines

- LPG; HC+NOx Emission Reduction to Phase 3 Standards 1 cylinder 2 cylinders

Useful Life 250 500 1000** 250 500 1000 Engine Power (hp) 13.8 17.8

- 18.2 19.2 23 Engine Displacement (cc) 415 389

- 597 743 751 Engine/Catalyst 33% 40%

- 33% 40% 50% Catalyst Volume (cc)*** (per cylinder) 137 156

- 197 297 376

Substrate Diameter 5.25 6.00

- 5.00 5.00 5.50 Substrate* (per cylinder) 4.44 7.13

- 2.96 4.16 5.07

Washcoat and Precious Metal 4.24 4.82

- 2.96 4.46 8.86

Labor $1.40 $1.40

- $1.40 $1.40 $1.40

Labor Overhead 40% $0.56 $0.56

- $0.56 $0.56 $0.56 Supplier Markup 29% $3.09 $4.03

- $2.29 $3.07 $4.61 Manufacture Price (per catalyst) $13.73 $17.94

- $10.17 $13.65 $20.50 Total Catalyst Cost $15.90 $24.88 $20.33 $27.30 $41.00 Heat Shield (2 for v-twin) $3.38 $3.41

- $4.72 $5.54 $5.86 Spark Arrestor (2 for v-twin) $0.10 $0.05

- $0.20 $0.10 $0.10

Hardware Cost to Manufacturer $17.21 $21.40

- $25.25 $32.93 $46.96 w/Markup 29% OEM $22.20 $27.61

- $7.32 $9.55 $13.62

Add’l Muffler for V-twin

- - - $6.26 $7.16 $6.98 Total Catalyst Cost for LPG engines $22.20 $27.61

- $38.84 $49.64 $67.56

Total Catalyst Cost for Gasoline Engines $20.82 $18.35

- $41.79 $44.47 $51.97

Cost Difference $1.38 $9.25

- -$2.95 $5.17 $15.59
* 50/50- split of metallic vs ceramic substrates ** No one cylinder LPG engines are certified to the 1000 hour useful life *** these catalyst volumes were calculated from the engine disp in EPA’s certification data for 2005

6-31

### Final Regulatory Impact Analysis

6.2.5 Small SI Aggregate Costs
Costs presented in the previous sections are combined here to present streams of costs. The first, Section 6.2.5.1, presents variable costs (recurring costs) for meeting the Phase 3 exhaust standards. Section 6.2.5.2 presents a stream of fixed costs for meeting the Phase 3 exhaust standards. Costs are based on assuming all engines are gasoline engines. Additional costs for LPG engines are included at the end of this section.

6.2.5.1 Variable Costs for Meeting Exhaust Standards
Variable costs for Class I are summarized in Table 6.2-10 for engine improvements and catalysts in near term and long term (with learning) costs. Nearly all engines in Class I (96.9% 125 useful life (UL), 99.4% 250 UL and 72.65% 500 UL) are estimated to have both technologies applied and therefore the costs are added according to useful life period and then multiplied by the number of engines sold per useful life category, as will be discussed later. The resultant variable costs per engine is presented in Table 6.2-33. Long term costs are six years after the near term costs and include a 20 percent learning curve reduction for engine improvement components, catalyst substrate and heat shield costs.
Variable costs for Class II are a combination of engine improvements and catalyst or engine improvements and electronic fuel inj ection (EFI), see Section 6.2.2. Information on engine designs and related certification emissi on results in the 2008 EPA Certification Database were utilized to determine the percentage of technologies per useful life. A portion of the engines, the largest multi-cylinder engine family per engine manufacturer needing emission reduction, are assigned the use of electronic fuel injection. The remaining engine families are assigned catalysts and related engine improvement s. Some engines would not to require any costs. Long term costs (learning) are six years after the near term costs and include a 20 percent learning curve reduction for engine improvement components, catalyst substrate and heat shield costs.
Table 6.2-32: Percentage Technologies Per Useful Life per Class II Useful Life No changes EFI - Class II V-twin V-twin catalyst Catalyst-Single Cylinder 250 43.66% 5.88% 0.61% 49.85% 500 59.84% 5.62% 0.30% 34.24% 1000 28.50% 10.80% 18.24% 42.46%

6-32

### Costs of Control
Table 6.2-33: Variable Costs Per Engine for Meeting Exhaust Standards, Per Engine (2005$)

Useful Life (hrs) Class I Class II Near Term (2012) Long Term (2017)* Near Term (2011) Long Term (2016)*

125- SV 10.41 9.43

-- -- 125 - OHV 8.55 7.80

-- -- 250 12.17 11.33 16.8 14.24

500 11.71 10.87 11.93 9.87

1000

-- -- 30.07 25.21 

### *Long term includes learning reduction

The total Small SI engine costs for the first 30 years (2008-2037) were estimated using sales and growth estimates from the US EPA’s NONROAD model. The percentage sales per useful life category (Class I: 125, 250, 500, Class II: 250, 500, 1000) were calculated from the manufacturer prescribed useful life period and yearly estimated sales per engine family in the EPA 2008 Phase 2 certification database (confidential information). The percentages in Table 6.2-34 were applied to US EPA’s NONROAD model sales estimates and the results are presented in Table 6.2-35 Note that snowblowers are not included for they only have to comply with the evaporative standards since they are exempted from the exhaust emission standards

. Table 6.2-34: Small SI Engines Sale Percentages per Useful Life
Useful Life Class I Class II

125- SV 66%

--- 125 - OHV 23%

--- 250 6% 74%

500 5% 11%

1000

--- 15%

6-33

### Final Regulatory Impact Analysis
Table 6.2-35: Class I and Class II Projected Sales per Useful Life Category (snowblowers excluded)

YEAR CLASS I CLASS II 125 125 250 500 250 500 1,000 SV OHV OHV OHV OHV OHV OHV 2008
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 6,139,695 6,250,204 6,360,351 6,474,907 6,584,353 6,698,636 6,810,588 6,921,857 7,031,516 7,144,731 7,256,744 7,370,110 7,482,752 7,594,978 7,706,370 7,818,799 7,931,065 8,043,780 8,157,416 8,270,846 8,383,989 8,497,471 8,610,967 8,724,583 8,838,143 8,951,587 9,064,949 9,178,412 9,291,898 9,405,435 2,112,583 2,150,608 2,188,508 2,227,925 2,265,584 2,304,907 2,343,428 2,381,714 2,419,446 2,458,402 2,496,944 2,535,952 2,574,710 2,613,326 2,651,654 2,690,339 2,728,969 2,767,752 2,806,853 2,845,883 2,884,814 2,923,861 2,962,913 3,002,007 3,041,082 3,080,116 3,119,122 3,158,163 3,197,212 3,236,279 565,168 575,340 585,479 596,025 606,099 616,619 626,924 637,167 647,261 657,683 667,994 678,429 688,798 699,129 709,382 719,732 730,066 740,442 750,902 761,343 771,758 782,204 792,652 803,110 813,564 824,006 834,442 844,886 855,333 865,784 489,249 498,055 506,832 515,961 524,682 533,789 542,710 551,577 560,315 569,337 578,263 587,296 596,272 605,215 614,091 623,051 631,997 640,978 650,034 659,072 668,088 677,131 686,175 695,229 704,278 713,318 722,352 731,393 740,436 749,484 3,375,298 3,436,078 3,497,169 3,560,736 3,621,924 3,685,741 3,747,698 3,809,238 3,870,775 3,933,230 3,995,499 4,058,405 4,120,822 4,183,226 4,245,149 4,307,507 4,369,904 4,432,728 4,495,615 4,558,320 4,620,946 4,683,749 4,746,567 4,809,474 4,872,290 4,935,044 4,997,777 5,060,568 5,123,362 5,186,178 485,273 494,012 502,795 511,934 520,731 529,906 538,814 547,662 556,509 565,488 574,441 583,485 592,459 601,431 610,333 619,299 628,270 637,302 646,344 655,359 664,363 673,392 682,423 691,468 700,499 709,521 718,540 727,568 736,596 745,627 687,306 699,683 712,123 725,067 737,527 750,522 763,138 775,669 788,200 800,917 813,597 826,406 839,116 851,824 864,433 877,131 889,837 902,629 915,435 928,203 940,956 953,744 966,536 979,345 992,137 1,004,915 1,017,689 1,030,475 1,043,262 1,056,053



### The Total Variable Costs were calculated using the sales information found in Table 6.2-35 and applying the corresponding variable cost from Table 6.2-33. Results are presented in Table 6.2-36. Engines used in snowblowers and handheld equipment will require only evaporative control measures and these are presented in Section 6.5.

6-34

### Costs of Control
Table 6.2-36: Variable Costs for Meeting Phase 3 Exhaust Emission Standards, 2005$

Year Class I: Engine only Class II: Engine & Equipment

125 250 500 250 500 1,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
2030 2031 2032 2033 2034 2035 2036 2037 -

-

-

- 86,472,768 87,973,661 89,443,931 90,905,230 92,345,393 86,511,329 87,867,634 89,240,307 90,604,228 91,963,103 93,311,878 94,673,217 96,032,587 97,397,383 98,773,331 100,146,794 101,516,776 102,890,863 104,265,113 105,640,825 107,015,858 108,389,476 109,762,116 111,135,969 112,510,105 113,884,858 -

-

-

- 7,376,417 7,504,448 7,629,867 7,754,521 7,877,372 7,449,638 7,566,432 7,684,635 7,802,085 7,919,100 8,035,245 8,152,473 8,269,530 8,387,055 8,505,540 8,623,812 8,741,783 8,860,108 8,978,447 9,096,912 9,215,318 9,333,603 9,451,803 9,570,108 9,688,438 9,806,820 -

-

-

- 6,141,854 6,248,457 6,352,885 6,456,676 6,558,965 6,191,089 6,288,151 6,386,385 6,483,993 6,581,239 6,677,763 6,775,185 6,872,467 6,970,137 7,068,606 7,166,896 7,264,937 7,363,272 7,461,619 7,560,070 7,658,473 7,756,775 7,855,006 7,953,324 8,051,663 8,150,046 -

-

- 59,835,023 60,863,232 61,935,618 62,976,746 64,010,872 55,130,893 56,020,430 56,907,330 57,803,283 58,692,279 59,581,099 60,463,047 61,351,207 62,239,924 63,134,711 64,030,407 64,923,505 65,815,481 66,709,969 67,604,683 68,500,650 69,395,337 70,289,133 71,182,631 72,076,956 72,971,320 73,865,999 -

-

- 6,105,598 6,210,517 6,319,944 6,426,181 6,531,704 5,493,685 5,582,326 5,670,704 5,759,984 5,848,571 5,937,140 6,025,024 6,113,527 6,202,086 6,291,250 6,380,504 6,469,500 6,558,384 6,647,518 6,736,674 6,825,955 6,915,109 7,004,174 7,093,210 7,182,327 7,271,449 7,360,602 -

-

- 21,799,867 22,174,477 22,565,182 22,944,499 23,321,265 19,873,736 20,194,399 20,514,111 20,837,087 21,157,554 21,477,959 21,795,886 22,116,052 22,436,419 22,758,975 23,081,857 23,403,804 23,725,346 24,047,793 24,370,323 24,693,303 25,015,822 25,338,020 25,660,111 25,982,500 26,304,902 26,627,419



### 6.2.5.2 Fixed Costs
Fixed costs for the small spark ignition engines include test cell modifications for 1065 compliance, emission certification of engine families as well as R&D and tooling expenditures for engine design changes and equipment modifica tions. This section presents the aggregate fixed costs for small spark ignition engines.
The test procedure for small spark ignited engines for this rulemaking is governed by Part 1065 with regulation specific details in Part 1054. Evaluation of Part 1065 reveals that there are some differences in calibration procedures with existing Part 90 and programming must be changed to calculate via 1065. As industry begins to apply 1065 requirements in its test cells

6-35

### Final Regulatory Impact Analysis
there may be some other modifications that will be revealed. To cover these costs, EPA is allocating $600,000 per engine manufacturer for 1065 compliance. The number of engine manufacturers is taken from the the certification database which lists 16 different engine manufacturers of nonhandheld engines and 15 engine manufacturers of handheld engines. The certification database also lists a number of new offshore manufacturers. These companies typically certify through independent test laborat ories within the United States and therefore only encounter costs for these upgrades through increased service fees. For this cost analysis, one additional manufacturer for nonhandheld and handheld is added to the certification database totals to cover test labs. Therefore, for nonhandheld engine manufacturers, a total of 17 test facilities at 600,000 per test facility yields a total estimated cost of $10,200,000. For the purpose of this cost analysis, this cost is spread even ly across all useful lives per class for a total of 1,700,000 for each. Upgrades for test cells for handheld engines are calculated at $9,600,000. Engine manufacturers are to begin using compliant test cells for new engine family certifications beginning in 2013. This cost analysis estimates engine manufacturers will invest in their test cells from 2008-2011.
Table 6.2-37: Fixed Costs for Compliance with 1065, 2005$ (thousands) CLASS I CLASS II HANDHELD 125 250 500 250 500 1000 TOTAL 1,700 1,700 1,700 1,700 1,700 1,700 9,600 Investment Per Year 2008 425 425 425 425 425 425 2,400 2009 425 425 425 425 425 425 2,400 2010 425 425 425 425 425 425 2,400 2011 425 425 425 425 425 425 2,400



### Each engine family must certify each year to the emissions standards applicable in that year. This cost analysis assumes no carryover data, but that all engine families will undergo durability aging and emission testing. The number of engine families per Class and per useful life category were taken from EPA’s 2008 Certifi cation Database. For Class I, the 2008 database lists 66 engine families from traditionally regulated companies. For Class II, the 2008 database lists 121 engine families. The engine families are designated per useful life class by the claim in the certification application. The estimates in Table 6.2-38 represent the number of engine families per useful life designation used in this cost analysis to calculate fixed costs. Costs for certifiers of LPG engines are covered in Section 6.2.4.

6-36

### Costs of Control
Table 6.2-38: Number of Engine Families Per Class and Useful Life Designation for Certification
CLASS I CLASS II

125 31 250 39

250 15 500 18

500 20 1000 64



### It should be noted that the certification database does contain certifications from a large number of companies that have a short history of compliance and claim large sales numbers. These companies were not used in this analysis for we are not yet convinced they are actually selling in this country nor in the numbers they claim. Engine families still certified to Phase 1 (either through credits, small engine family flexibilities or averaging) were also not included. For Class II, there are a number of small volume engine families which have not yet been certified to Phase 2 due to flexibilities in that rulemaking. Due to the low volume sales, these engine families were estimated to be certified to the 250 hour useful life. For Class I-A, engine families are being moved to the <80cc category where they already meet the handheld emission standard. Class I-B engines are traditionally low volume sales engine families; we believe that they will likely be incorporated into the engine manufacturers ABT programs and certification of these low volume sales engine families will be covered without engine improvement.
The total engine exhaust emission certification costs are calculated by taking the number of engine families from Table 6.2-38 and multiplying them by the emission test and dynamometer aging costs from Table 6.2-23. This analysis estimates that engine certification costs are expended over two years prior to standard implementation as shown in Table 6.2-39. The combined 1065 compliance and engine certification costs are presented in Table 6.2-40.
Table 6.2-39: Engine Certification Costs to Exhaust Standards CLASS I CLASS II Handheld 125 250 500 250 500 1000 $0 2008 2009 635,064 811,414 3,007,505 2010 272,490 191325 455,411 635,064 811,414 3,007,505 2011 272,490 191325 455,411



### Table 6.2-40: Total Stream of Costs for Engine Certification by Year, (thousands) CLASS I CLASS II 125 250 500 250 500 1000 Handheld 2008 425 425 425 425 425 425 2,400 2009 425 425 425 1,060 1,236 3,432 2,400 2010 697 616 880 1,060 1,236 3,432 2,400 2,400 2011 697 616 880 425 425 425

6-37

### Final Regulatory Impact Analysis
Fixed costs for engine research and development and tooling changes to meet exhaust emission standards are presented throughout secti ons 6.2.1 Class I and 6.2.2. Class II. The fixed costs include engine improvements, engine improvements with catalyst development or EFI development and application. Class I engine families are assigned engine improvements and/or engine improvements and catalyst development costs. The number of engine families per Class are from the 2008 EPA Certification Database. Table 6.2-41 presents the number of engine families estimated per technology package for Class I and Table 6.2-42 presents the number of engine families estimated per technology for Class II.

Table 6.2-41: Estimated Number of Engine Families per Technology Package, Class I Technology/Useful Life 125 250 500 - Engine Improvements (all) 31 15 20 - Catalysts 26 13 14



### Table 6.2-42: Estimated Number of Engine Families per Technology Package, Class II Technology/Useful Life 250 500 1000 - Engine Improvements (all) 39 18 64 - One Cylinder Engine Catalyst 16 4 14 - Two or More Cylinders per Engine for Catalyst 7 3 27 - Electronic Fuel Injection on Two or More Cylinder Engines 4 3 5



### Table 6.2-43: Total Fixed Costs (thousands) for Engines to Meet Phase 3 Exhaust Emission Standards

CLASS I CLASS II 125 125 250 500 250 500 1000 SV OHV OHV OHV OHV OHV OHV R&D 5,286 5,598 5,335 6,567 12,412 5,225 20,780 Tooling 10,164 5,571 5,205 6,540 12,412 12,412 12,412 TOTAL 15,450 11,169 10,540 13,107 15,450 15,450 15,450



### Table 6.2-44: Total Fixed Costs Investment (thousands) for Engines to Meet Phase 3 Exhaust Emission Standards CLASS I CLASS II
125-sv 125-ohv 250 500 250 500 1000 2008 1,322 1,400 1,334 1,642 4,301 2,398 7,419 2009 1,322 1,400 1,334 1,642 11,150 5,263 18,498 2010 6,404 4,185 3,936 4,912 11,150 5,263 18,498 2011 6,404 4,185 3,936 4,912

6-38

### Costs of Control

Total fixed costs for Small SI exhaust emissions are shown in Table 6.2-45.
Table 6.2-45: Certification and Technology Fixed Costs for Engines to Meet Phase 3 Exhaust Standards Class I Class II Handheld 125 250 500 250 500 1,000 2008 3,146 1,759 2,067 4,562 2,167 7,352 2,400 2009 3,146 1,759 2,067 12,046 5,843 21,438 2,400 2010 11,286 4,553 5,792 12,046 5,843 21,438 2,400 2011 11,286 4,553 5,792 425 425 425 2,400



### Equipment companies using Class II engines are also estimated to incur fixed costs in redesigning equipment models to incorporate Phase 3 Class II engines. The PSR database shows there are 413 businesses using Class II engines. 25 

### Assuming each business on average produces two unique models requiring clearly different redesign yields a number of 826 redesigns. Table 6.2-22 contains equipment costs per equipment model and Table 6.2-46 contains the total equipment costs.
Table 6.2-46: Total Class II Equipment Cost

250 500 1000 2009 10325000 10325000 10325000 2010 10325000 10325000 10325000



### 6.2.5.3 Operating Cost Savings
The application of electronic fuel injection to an estimated 6.6% of the Class II engines is expected to result in fuel savings. Fuel savings from the use of fuel injection on Class II engines is estimated at 10 percent. Kohler has been offe ring a fuel injected Class II engine for nearly 10 years and two articles (1996 OEM Off-Highway and 1998 Diesel Progress) 26,27 

### claim 15-20 percent fuel savings over carbureted engines. We elected to conservatively use a figure of ten percent. In calculating the fuel savings, we use a gasoline price of $1.81 per gallon without taxes. 28 

### Table 6.2-47 presents estimated fuel savings for Class II engines with electronic fuel injection. The improvements and catalyst application to Class I engines are estimated to result in no operating or fuel savings. Fuel savings that are obtained from evaporative reduction technologies are presented later in the evaporative portion of this chapter.

6-39

### Final Regulatory Impact Analysis
Table 6.2-46: Fuel Savings from the Increased Use of Electronic Fuel Injection on Class II Engines

Year Gallons Fuel Savings $

2008 0 0 2009 0 0 2010 0 0 2011 3,916,719 $7,104,929 2012 7,074,990 $12,834,033 2013 10,071,145 $18,269,057 2014 11,966,500 $21,707,230 2015 13,835,431 $25,097,472 2016 15,252,178 $27,667,451 2017 16,221,164 $29,425,191 2018 16,966,562 $30,777,343 2019 17,576,831 $31,884,371 2020 18,104,416 $32,841,410 2021 18,532,855 $33,618,599 2022 18,916,185 $34,313,960 2023 19,267,974 $34,952,106 2024 19,607,579 $35,568,148 2025 19,935,933 $36,163,782 2026 20,259,628 $36,750,965 2027 20,579,305 $37,330,860 2028 20,896,206 $37,905,717 2029 21,210,286 $38,475,459 2030 21,521,549 $39,040,090 2031 21,830,758 $39,600,995 2032 22,138,949 $40,160,054 2033 22,446,266 $40,717,527 2034 22,752,947 $41,273,846 2035 23,059,059 $41,829,132 2036 23,363,883 $42,382,085 2037 23,667,468 $42,932,787

6-40

### Costs of Control

6.2.5.4 Total Aggregate Costs
The aggregate costs for meeting the exhaust emission standards are presented in Table 6.2-47. Aggregate costs include variable costs and fixed costs for engine manufacturers (technology, certification, 1065 compliance), equipm ent manufacturers and LPG engine families and converters. An average cost per engine is presented in Table 6.2-48 and the aggregate costs with fuel savings is presented in Table 6.2-49.
Table 6.2-47: Total Aggregate for 30 year Cost Analysis for Exhaust Emission Standard Compliance without Fuel Savings, 2005$

Year Exhaust Only 1065 Certification Upgrades Handheld CLASS I CLASS II

2008 7,012,721 15,393,779 2,400,000 2009 7,012,721 71,614,262 2,400,000 2010 21,671,947 71,614,262 2,400,000 2011 21,671,947 93,177,678 2,400,000 2012 99,991,039 93,481,939 0 2013 101,726,567 95,129,055 0 2014 103,426,684 96,728,158 0 2015 105,116,426 98,316,508 0 2016 106,781,731 85,010,277 0 2017 100,152,057 86,381,917 0 2018 101,722,217 87,749,492 0 2019 103,311,327 89,131,026 0 2020 104,890,306 90,501,833 0 2021 106,463,442 91,872,369 0 2022 108,024,886 93,232,307 0 2023 109,600,875 94,601,825 0 2024 111,174,585 95,972,201 0 2025 112,754,576 97,351,938 0 2026 114,347,477 98,733,075 0 2027 115,937,502 100,110,208 0 2028 117,523,496 101,485,609 0 2029 119,114,243 102,864,885 0 2030 120,705,179 104,244,509 0 2031 122,297,808 105,626,063 0 2032 123,889,649 107,005,647 0 2033 125,479,854 108,383,854 0 2034 127,068,925 109,761,603 0 2035 128,659,401 111,140,627 0 2036 130,250,205 112,519,710 0 2037 131,841,723 113,899,279 0



### Table 6.2-48 presents a sales weighted average per-equipment cost estimate for engines

6-41

### Final Regulatory Impact Analysis
meeting the Phase 3 exhaust standards. Note that the fixed costs are invested prior to the implementation date for Class I and Class II engines and therefore the variable costs are what remain in these years. Near term costs for Class I are from 2012-2016 and for Class II are from 2011-2015. Long term costs include a learning curve deduction in manufacturing/production for these engines in the 6 th 

### year and the Class I costs start in 2017 and Class II starts in 2016.
Table 6.2-48: Sales Weighted Average Per-Equipment Cost Estimates (Without Fuel Savings) for Exhaust Standards, 2005$ Short Term Costs (years 1-5) per Class per Useful Life Class I Class II Handheld (no Exhaust) 125 250 500 250 500 1000

Near Term 10.48 7.51 11.12 17.70 13.66 31.93 0.00 Long Term* 9.01 11.33 10.87 15.02 10.76 26.49 0.00 * Long term is with learning, if applicable


### The aggregate costs with fuel savings is presented in Table 6.2-49. Fuel savings are available from Class II engines using electronic fuel injection and start in 2011 which is the first year of standard implementation.

6-42

### Costs of Control

Table 6.2-49: Total Aggregate for 30 year Cost Analysis for Exhaust Emission Standard Compliance with Fuel Savings, 2005$ Class I Class II Handheld 2008 7,012,721 15,393,779 2,400,000 2009 7,012,721 71,614,262 2,400,000 2010 21,671,947 71,614,262 2,400,000 2011 21,671,947 89,260,959 2,400,000 2012 99,991,039 86,406,949 0 2013 101,726,567 85,057,910 0 2014 103,426,684 84,761,659 0 2015 105,116,426 84,481,077 0 2016 106,781,731 69,758,099 0 2017 100,152,057 70,160,753 0 2018 101,722,217 70,782,931 0 2019 103,311,327 71,554,195 0 2020 104,890,306 72,397,418 0 2021 106,463,442 73,339,514 0 2022 108,024,886 74,316,122 0 2023 109,600,875 75,333,851 0 2024 111,174,585 76,364,623 0 2025 112,754,576 77,416,005 0 2026 114,347,477 78,473,447 0 2027 115,937,502 79,530,903 0 2028 117,523,496 80,589,404 0 2029 119,114,243 81,654,598 0 2030 120,705,179 82,722,959 0 2031 122,297,808 83,795,305 0 2032 123,889,649 84,866,697 0 2033 125,479,854 85,937,588 0 2034 127,068,925 87,008,656 0 2035 128,659,401 88,081,568 0 2036 130,250,205 89,155,827 0 2037 131,841,723 90,231,811 0



### At a 7 percent discount rate, over 30 years, the estimated annualized cost to manufacturers for Small SI exhaust emission cont rol, without fuel savings, is $182 million. The corresponding estimated annualized fuel savings due to the use of electronic fuel injection on Class II engines is $24 million. At a 3 percent discount rate, the estimated annualized cost to manufacturers for Small SI exhaust emission cont rol, without fuel savings, is $189 million. The corresponding estimated annualized fuel savings due to the use of electronic fuel injection on Class II engines is $27 million.

6-43

### Final Regulatory Impact Analysis



## 6.3 Exhaust Emission Control Costs for Outboard and Personal Watercraft Marine Engines

This section presents our cost estimates for meeting the new exhaust emission standards for outboard and personal watercraft marine engines.
As of about a decade ago, outboard and personal watercraft (OB/PWC) engines were primarily two-stroke carbureted engines. Ther e were no emission control requirements. Since then, manufacturers have used two primary strategies to meet exhaust emission standards. The first is two-stroke direct injection. By injec ting the fuel directly into the combustion chamber after the exhaust port closes, the short-circuiting fuel losses with traditional two-strokes can be largely eliminated. The second approach is to convert to using four-stroke engines, either carbureted or fuel-injected. One other appro ach that has been used by one PWC manufacturer has been the use of a two-way catalyst in the exhaust of a two-stroke engine. Today, engine sales are a mix of old and new technology. We anticipate that the standards will largely be met by phasing out the old-technology engines and using technology already available in the marketplace.
Since California ARB has adopted standards similar to the new national standards, manufacturers have already started with design a nd testing efforts to meet our standards. To reflect this in the cost analysis, we include no estimated costs for R&D to introduce the various emission-control technologies. This reflects the expectation that manufacturers will not need to conduct additional R&D for EPA’s requirements, since they are introducing those technologies for sale in California. As noted below, we are including estimated R&D expenditures as part a compliance cost, because EPA’s NTE standards represent an incremental requirement beyond what California ARB has adopted.
For the purpose of this analysis, we divide outboards into five power categories and PWC into three power categories. We present cost estimates of various emission-control technologies for each of these power categories. Additional detail on the per-engine costs presented in this section is available in the docket. 29 

### Table 6.3-1 presents these power categories and the engine size we use to represent each category.
Table 6.3-1: Engine Sizes Used for Cost Analysis Power Range Engine Power Displacement Cylinders Outboard Engines 0-25 hp 25-50 hp 50-100 hp 100-175 hp

>175 hp 9.9 hp 40 hp 75 hp 125 hp 225 hp 0.25 L 0.76 L 1.60 L 1.80 L 3.00 L 2 3 3 4 6

Personal Watercraft

Engines 50-100 hp 100-175 hp

>175 hp 85 hp 130 hp 175 hp 1.65 L 1.85 L 2.50 L 2 3 4

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### Costs of Control

6.3.1 Two-Stroke Direct Injection

Traditional outboards use carbureted two-stroke engine designs where the fuel and air are mixed in the carburetor then pumped into the combustion chamber through the crankcase. The piston itself acts to open and close the intake and exhaust ports. As a result, fuel may be lost out the exhaust port. Better control of the fuel can be achieved using indirect injection in place of the carburetor; however, this does not prevent short-circuiting losses. Indirect injection is primarily used on the largest two-stroke engines. Direct-injection has been used by manufacturers to reduce emissions from two-stroke outboards. By injecting the fuel directly into the cylinder after the exhaust port is closed, short-circuiting losses can be minimized. Table 6.3-2 and 6.3-3 present incremental costs of applying direct injection to outboards and PWC, respectively. For the largest power category, costs are presented incremental to indirect injection. For the remaining categories, costs are presented incremental to carbureted engines. For 135 hp PWC engine, incremental costs are presented for both IDI and carbureted engines because baseline engines in this power category use both approaches.
Table 6.3-2: Outboard—Projected Incremental Costs for 2-Stroke Direct Injection 9.9 hp carb. 40 hp carb. 75 hp carb. 125 hp carb. 225 hp IDI

Hardware Cost to Manufacturer carburetor(s) fuel metering solenoids IDI injectors fuel distributer pressure regulator air compressor air regulator throttle body position sensor intake manifold fuel pump electronic control module air intake temperature sensor manifold air pressure sensor injection timing sensor/timing wheel wiring/related hardware Total Incremental Hardware Cost ($28) $36

$80 $15 $30 $5 $3 $85 $5 $10 $5 $20 $266

--

--

-- ($114) $60

$100 $15 $35 $5 $0 $90 $5 $10 $8 $30 $244

--

--

-- ($135) $66

$120 $17 $35 $9 ($5) $95 $5 $11 $9 $30 $257

--

--

-- ($165) $96

$140 $20 $40 $10 ($6) $100

$5 $11 $10 $50 $311

--

--

-- -- $156 ($102) ($25) ($35) $165 $22 $10 ($5) ($35)

$0 $0 $0 $0 $0 $151
Engine Manufacturer Markup labor at $28/hour labor overhead at 40% markup at 29% warranty markup at 5% Total Incremental Component Cost $13 $5 $82 $13 $380 $15 $6 $77 $12 $354 $19 $8 $82 $13 $379 $22 $9 $99 $16 $456 $14 $6 $49 $8 $228

6-45

### Final Regulatory Impact Analysis
Table 6.3-3: PWC—Projected Incremental Costs for 2-Stroke Direct Injection 85 hp carb. 130 hp carb. 130 hp IDI 175 hp IDI

Hardware Cost to Manufacturer carburetor(s) fuel metering solenoids IDI injectors fuel distributer pressure regulator air compressor air regulator throttle body position sensor intake manifold fuel pump electronic control module air intake temperature sensor manifold air pressure sensor injection timing sensor/timing wheel wiring/related hardware Total Incremental Hardware Cost ($114) $44

$120 $17 $35 $9 ($5) $95 $5 $11 $9 $20 $246

--

--

-- ($165) $72

$140 $20 $40 $10 ($6) $100

$5 $11 $10 $30 $267

--

--

-- -- $72 ($51) ($20) ($30) $140 $20 $0 ($10) ($30)

$0 $0 $0 $0 $0 $91 -- $104 ($68) ($25) ($35) $165 $22

$0 ($5) ($35)

$0 $0 $0 $0 $0 $123
Engine Manufacturer Markup labor at $28/hour labor overhead at 40% markup at 29% warranty markup at 5% Total Incremental Component Cost $19 $8 $79 $12 $364 $22 $9 $86 $13 $398 $12 $5 $31 $5 $144 $12 $5 $41 $6 $186

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### Costs of Control

6.3.2 Migration from Two-Stroke to Four-Stroke Engines
The primary technology that manufacturers are using to meet exhaust emissionsstandards has been to convert their product offering more to four-stroke engines. Because fourstroke engines are common in the market today, we do not include costs for research anddevelopment or warranty. Rather, we anticipate that manufacturers will sell more of the fourstroke engines and phase out the carbureted two-st roke designs as a result of the new standards. Tables 6.3-4 and 6.3-5 below present a comparison between costs for two-stroke and four-stroke outboard and PWC engines, respectively. These costs are based on prices for current product offerings.
Table 6.3-4: Outboard—Projected Incremental Costs for 4-Stroke 9.9 hp 40 hp 75 hp 125 hp 225 hp 2-stroke baseline technology 4-stroke control technology carb carb carb carb carb carb carb EFI DFI EFI

2-stroke cost 4-stroke cost Markup at 29% $900 $1,124

$65 $2,101 $2,633

$154 $3,076 $3,861

$228 $4,195 $5,504

$380 $6,339 $7,761

$412

Total Incremental Cost $289 $686 $1,013 $1,689 $1,834



### Table 6.3-5: PWC—Projected Incremental Costs for 4-Stroke 85 hp 130 hp 175 hp 2-stroke baseline technology 4-stroke control technology carb EFI DFI EFI DFI EFI

2-stroke cost 4-stroke cost Markup at 29% $3,319 $4,350

$299 $4,578 $5,587

$293 $5,862 $7,207

$390

Total Incremental Cost $1,330 $1,302 $1,735

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### Final Regulatory Impact Analysis

6.3.3 Four-Stroke Electronic Fuel Injection
Manufacturers can gain better control of their fuel and air management through the use of electronic fuel injection. This is often used in larger OB/PWC engines today. For this analysis, we consider the use of a port fuel-injection system , which refers to individual injectors located at each intake port in the engine. In addition to the injectors, this system includes a fuel rail, pressure regulator, electronic control module, mani fold air pressure and temperature sensors, a high pressure fuel pump, a throttle assembly, a throttle position sensor, and a magnetic crankshaft pickup for engine speed. Tables 6.3-6 and 6.3-7 present the incremental costs of a port fuel-injection system compared to a carburetor-based fuel system for outboards and personal watercraft, respectively.
Table 6.3-6: Outboard—Projected Incremental Costs for 4-Stroke EFI 9.9 hp 40 hp 75 hp 125 hp 225 hp

Hardware Costs carburetor(s) injectors fuel rail pressure regulator intake manifold throttle body position sensor fuel pump electronic control module air intake temperature sensor manifold air pressure sensor injection timing sensor wiring/related hardware Hardware Cost to Manufacturer ($28) $34 $40 $15 $5 $30 $13 $95 $5 $10 $5 $20 $244 ($114) $51 $55 $15 $5 $35 $10 $100

$5 $10 $8 $30 $210 ($135) $51 $65 $20 $6 $35 $10 $105

$5 $11 $9 $30 $212 ($165) $68 $70 $30 $10 $40 $14 $110

$5 $11 $10 $40 $243 ($240) $102 $80 $35 $15 $50 $17 $115

$5 $11 $10 $60 $260
Engine Manufacturer Markup labor at $28/hour labor overhead at 40% markup at 29% warranty markup at 5% Total Incremental Component Cost $3 $1 $72 $12 $332 $4 $2 $63 $11 $289 $4 $2 $63 $11 $291 $4 $2 $72 $12 $333 $4 $2 $77 $13 $356

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### Costs of Control
Table 6.3-7: PWC—Projected Incremental Costs for 4-Stroke EFI 85 hp 130 hp 175 hp

Hardware Costs carburetor(s) injectors fuel rail pressure regulator intake manifold throttle body position sensor fuel pump electronic control module air intake temperature sensor manifold air pressure sensor injection timing sensor wiring/related hardware Hardware Cost to Manufacturer ($135) $34 $65 $20 $6 $35 $10 $105

$5 $11 $9 $20 $185 ($165) $51 $70 $30 $10 $40 $14 $110

$5 $11 $10 $30 $216 ($240) $68 $80 $35 $15 $50 $17 $115

$5 $11 $10 $40 $206
Engine Manufacturer Markup labor at $28/hour labor overhead at 40% markup at 29% warranty markup at 5% Total Incremental Component Cost $4 $2 $55 $9 $255 $4 $2 $64 $11 $297 $4 $2 $61 $10 $283

6-49

### Final Regulatory Impact Analysis

6.3.4 Catalysts

We believe the OB/PWC exhaust emission standards can be achieved without the use of catalysts. At this time, three-way catalysts have not been demonstrated on OB/PWC engines. However, one manufacturer has been using a tw o-way catalyst on PWCs with 2-stroke engines for several years. We include research and development costs for this technology because it is not currently used in the marine industry, but is an alternative we assess in Chapter 11. Catalyst sizes and formulations are based on the analysis discussed below for SD/I engines. Tables 6.3-8 and 6.3-9 present the incremental cost of adding catalysts to four-stroke, electronic fuel-injection OB and PWC engines, respectively.
Table 6.3-8: Outboard—Projected Incremental Costs for Catalytic Control 9.9 hp 40 hp 75 hp 125 hp 225 hp Catalyst Unit Price catalyst volume (L) substrate diameter (cm) substrate ceria/alumina Pt/Pd/Rd can (18 gauge SS) Total Material Cost Labor labor overhead at 40% supplier markup at 29% Manufacturer Price per Unit 0.09 4.5 $2 $1 $2 $0.4

$6 $14 $6 $8 $33 0.27 6.0 $4 $3 $7 $0.8 $15 $14 $6 $10 $45 0.56 8.5 $5 $6 $16 $1 $29 $14 $6 $14 $62 0.63 9.0 $6 $7 $18 $1 $32 $14 $6 $15 $67 1.05 10.0 $8 $12 $29 $2 $52 $14 $6 $21 $92

Hardware Cost to Manufacturer catalyst exhaust manifold modifications oxygen sensor Total Incremental Hardware Cost $33 $15 $25 $73 $45 $17 $25 $87 $62 $20 $25 $107 $67 $25 $25 $117 $92 $30 $25 $147
Engine Manufacturer Markup labor at $28/hour labor overhead at 40% markup at 29% warranty markup at 5% Total Incremental Component Cost $1 $1 $22 $2 $99 $1 $1 $26 $2 $116 $1 $1 $32 $2 $143 $1 $1 $34 $3 $156 $1 $1 $43 $3 $195

Fixed Cost to Manufacturer research & development tooling units/year years to recover Fixed Cost/Unit $342,788 $75,000

5,000

5 $23 $352,938 $75,000

5,600

5 $21 $362,068 $75,000

6,400

5 $19 $372,980 $75,000

5,900

5 $21 $388,643 $75,000

4,700 5 $27

Total Incremental Cost $122 $137 $162 $177 $222

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### Costs of Control
Table 6.3-9: PWC—Projected Incremental Costs for Catalytic Control 85 hp 130 hp 175 hp Catalyst Unit Price catalyst volume (L) substrate diameter (cm) substrate ceria/alumina Pt/Pd/Rd can (18 gauge SS) Total Material Cost Labor labor overhead at 40% supplier markup at 29% Manufacturer Price per Unit 0.58 9.0 $5 $7 $16 $1 $30 $14 $6 $14 $63 0.65 9.0 $6 $7 $18 $1 $33 $14 $6 $15 $68 0.88 9.0 $7 $10 $25 $2 $44 $14 $6 $18 $82

Hardware Cost to Manufacturer catalyst exhaust manifold modifications oxygen sensor Total Incremental Hardware Cost $63 $35 $25 $123 $68 $40 $25 $133 $82 $45 $25 $152
Engine Manufacturer Markup labor at $28/hour labor overhead at 40% markup at 29% warranty markup at 5% Total Incremental Component Cost $1 $1 $36 $3 $165 $1 $1 $39 $3 $177 $1 $1 $45 $4 $202

Fixed Cost to Manufacturer research & development tooling units/year years to recover Fixed Cost/Unit $363,502 $75,000

1,700

5 $71 $371,332 $75,000

5,300

5 $23 $381,016 $75,000

1,000

5 $126

Total Incremental Cost $236 $200 $328



### 6.3.5 Certification and Compliance
Outboard and PWC engines must already be certified to meet the current EPA HC+NOx exhaust emission standards. We therefore do not anticipate any increase in clerical work associated with these standards. In addition, manufacturers are likely to meet the new standards by selling more of their lower-emission engines, which are certified today. However, manufacturers may need to adjust engine calibrations to meet the new standard and collect further data to demonstrate compliance with the not-to-exceed zone. We therefore allow on average two months of R&D for each engine family as part of the certification process.Considering two engineers and three technicians and the corresponding testing costs for the two6-51

### Final Regulatory Impact Analysis
month period, we estimate a total cost of $130,000 per engine family. Unless engine designs were significantly changed, manufacturers could recertify engine families each year using carryover of this original test data. If this cost is amortized over five years of engine sales with an average volume of 5,500 engines per family for outboards and 4,200 engines per family for PWC, the resulting cost is $5 per engine for outboards and $6 for PWC.

6.3.6 Operating Cost Savings
We anticipate that the standards will largely be met on average by phasing out old, highemitting technologies, such as carbureted two-stroke engines and replacing them with currently available clean technologies such as four-stroke engines and direct-injection two-stroke engines. In addition to having lower emissions, these newer-technology engines have significantly lower fuel consumption. Over the life of an engine, these fuel savings result in significant operating cost savings. In calculating the fuel savings, we use a gasoline price of $1.81 per gallon without taxes. 30



### The largest portion of the fuel savings would come from phasing out carbureted crankcase-scavenged two-stroke engines. As discussed in Chapter 4, scavenging losses from these engines can result in more than 25 percent of the fuel passing through the engine unburned. In addition, we model incremental fuel-consumption benefits between fuel-injected two-stroke engines, carbureted four-stroke engines, and fuel-injected four strokes. These fuel consumption rates and their derivation are described in more detail in the docket. 31



### Table 6.3-10: Projected Fuel Savings for OB/PWC Engines
Outboard PWC Annual Per-Engine Gallons Consumed 72 225 Average Life (years) 19 9.9 Anticipated Reduction in Fuel Consumption 5.2% 4.7%

Lifetime Gallons Saved 72 103 Lifetime Cost Savings $130 $187 Discounted Cost Savings (7%) $75 $142



### 6.3.7 Total OB/PWC Engine Costs
As discussed above, we anticipate that manufacturers would meet the standards largely by changing their technology mix from older to newer technologies. For this reason, our estimated per-engine costs for the average OB/PWC engine reflect a mix of technology changes. Table 6.3-11 presents the baseline technology mix by power class. This technology mix is based on an analysis of sales projections submitted to EPA by OB/PWC manufacturers at time of certification. These sales projections are confidential, but a general description of this analysis is

6-52

### Costs of Control

available in the docket. 32



### Table 6.3-11: Baseline Technology Mix for OB/PWC Engines
2-Stroke Carbureted 2-Stroke Indirect Injection 2-Stroke Direct Injection 4-Stroke Carbureted 4-Stroke Fuel Injection

Outboards 9.9 hp 40 hp 75 hp 125 hp 225 hp 24% 32% 20% 20% 0% 0% 0% 0% 0% 25% 0% 2% 10% 30% 60% 76% 35% 0% 0% 0% 0% 32% 70% 50% 15%

PWC 85 hp 130 hp 175 hp 30% 5% 0% 60% 0% 70% 10% 5% 30% 0% 0% 0% 0% 90% 0%



### To develop the control technology mix, we made three adjustments to the baseline technology mix. First, we considered that all the 2-stroke carbureted and indirect injection engines would be replaced by either 2-stroke dir ect injection or 4-stroke engines. Second, we included calibration costs for the for the 2-stroke direct injection and 4-stroke engines for better emission performance. These engines are well below the existing HC+NOx standards; however, there is currently wide variability in certified emission levels. We believe the standards willrequire engine manufacturers to pay closer attention to emissions calibrations for their higheremitting new technology engines. Third, we included the conversion of a small number of 2- stroke direct injection engines to 4-stroke based on product plans conveyed to us in private conversations with manufacturers. While there is no way of knowing exactly what the actual technology mix will be, we believe our analysis represents a reasonable scenario. Table 6.3-12 presents the projected technology mix for this control scenario.

6-53

### Final Regulatory Impact Analysis
Table 6.3-12: Projected Control Technology Mix for OB/PWC Engines
2-Stroke Carbureted 2-Stroke Indirect Injection 2-Stroke Direct Injection 4-Stroke Carbureted 4-Stroke Fuel Injection

Outboards 9.9 hp 40 hp 75 hp 125 hp 225 hp 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 2% 10% 30% 50% 100% 66% 20% 0% 0% 0% 32% 70% 70% 50%

PWC 85 hp 130 hp 175 hp 0% 0% 0% 0% 0% 0% 0% 5% 30% 100% 0% 0% 0% 95% 70%



### We developed the per-engine costs based on the technology mix and technology cost tables presented above. As discussed above, our cost estimates include both variable and fixed, and we distinguish between near-term and long-term costs. Because our analysis amortizes fixed costs over 5 years, the long-term costs are made up of variable costs only. Variable costs are lower in the long term due to the learning effect discussed above. Table 6.3-13 presents these average per-engine cost estimates.
Table 6.3-13: OB/PWC Per-Engine Cost Estimates (Without Fuel Savings) Short Term (years 1-5) Long Term (years 6-10) Fixed Variable Total OB aggregate 9.9 hp 40 hp 75 hp 125 hp 225 hp $11 $5 $5 $8 $15 $27 $280 $69 $216 $203 $338 $690 $291 $74 $222 $210 $353 $717 $224 $55 $173 $162 $270 $552

PWC aggregate 85 hp 130 hp 175 hp $19 $29 $14 $45 $340 $870 $85 $1,290 $359 $899 $98 $1,336 $272 $696 $68 $1,032



### 6.3.8 OB/PWC Aggregate Costs
Aggregate costs are calculated by multiplying the per-engine variable cost estimates described above by projected engine sales. These variable costs are then added to the fixed costs

6-54

### Costs of Control
as incurred. Engine sales are based on estimates supplied by the National Marine Manufacturers Association (www.nmma.org) and projections for future years are based on the growth rates in the NONROAD model. Fuel-consumption reductions are calculated using the NONROAD based on population estimates. These population estimates in the NONROAD model are similar to those estimated by NMMA. A description of the sales and population data and our analysis of the data are available in the docket. 33 

### Table 6.3-14 presents the projected costs of meeting the exhaust emission standards over a 30-year time period, with and without the fuel savings. Fuel savings from the evaporative emission standards are not included in this table, but they are presented separately below.
The population and sales data reported by NMMA, suggest that the NONROAD model may somewhat underestimate the useful life of outboard and personal watercraft marine engines. If useful life were back-calculated—dividi ng NMMA population by sales and adjusted for growth—we would get a longer average life estimate. As a result, the per-engine fuel savings described above may be understated. Because the current approach gives us a conservative benefits estimate, and because we do not have new data on average lives for marine engines to update the estimates in the NONROAD model, we are not updating the model at this time. For this reason, the 30-year stream may give a better view of the impact of the fuel savings than the per-engine analysis.
At a 7 percent discount rate, over 30 years, the estimated annualized cost to manufacturers for OB/PWC exhaust emission control is $95 million. The corresponding estimated annualized fuel savings due to more efficient engines is $48 million. At a 3 percent discount rate, the estimated annualized cost to manufacturers for OB/PWC exhaust emission control is $95 million. The corresponding estimated annualized fuel savings due to more efficient engines is $57 million.

6-55

### Final Regulatory Impact Analysis
Table 6.3-14: Projected 30-Year Aggregate Cost Stream for OB/PWC Engines

Year Without Fuel Savings With Fuel Savings

O B P W C O B P W C

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 $8,347,493 $8,347,493 $83,474,059 $84,087,276 $84,700,492 $85,313,708 $85,926,924 $69,232,112 $69,716,553 $70,200,994 $70,685,435 $71,169,876 $71,654,317 $72,138,757 $72,623,198 $73,107,639 $73,592,080 $74,076,521 $74,564,028 $75,051,534 $75,539,041 $76,026,548 $76,514,055 $77,001,562 $77,489,069 $77,976,576 $78,464,083 $78,951,590 $79,439,097 $79,926,603 $3,773,815 $3,773,815 $26,775,058 $26,971,752 $27,168,447 $27,365,142 $27,561,836 $22,206,825 $22,362,213 $22,517,602 $22,672,991 $22,828,380 $22,983,769 $23,139,157 $23,294,546 $23,449,935 $23,605,324 $23,760,712 $23,917,085 $24,073,457 $24,229,829 $24,386,201 $24,542,574 $24,698,946 $24,855,318 $25,011,690 $25,168,062 $25,324,435 $25,480,807 $25,637,179 $8,347,493 $8,347,493 $79,497,283 $76,139,850 $72,816,127 $69,526,261 $66,259,388 $45,684,931 $42,316,350 $38,991,304 $35,708,089 $32,473,153 $29,314,449 $26,232,921 $23,265,756 $20,500,653 $18,356,730 $16,648,131 $15,128,141 $13,767,757 $12,656,743 $11,676,039 $10,870,140 $10,196,651 $9,613,547 $9,148,071 $8,757,202 $8,450,580 $8,228,217 $8,059,025 $3,773,815 $3,773,815 $24,485,325 $22,376,416 $20,292,925 $18,241,565 $16,224,620 $8,714,463 $6,764,827 $4,885,794 $3,100,364 $1,454,031 $587,570 $(9,566) $(471,718) $(844,125) $(1,149,312) $(1,387,033) $(1,568,545) $(1,705,040) $(1,796,384) $(1,842,344) $(1,854,155) $(1,865,959) $(1,877,784) $(1,889,601) $(1,901,412) $(1,913,224) $(1,925,042) $(1,936,853)



## 6.4 Exhaust Emission Control Costs for Sterndrive/Inboard Marine Engines

This section presents our cost estimates for meeting the new exhaust emission standards for sterndrive and inboard marine engines.
Sterndrive and inboard (SD/I) marine engines are typically “marinized” using automotive engine blocks. There are a few exceptions wh ere unique engine blocks are used, but these applications represent a very small portion of the sales volume. Typical automotive blocks are 3.0 liter in-line 4-cylinder engines, 4.3 liter V-6 engines, and V-8 engines ranging from 5.0 to 8.2 liters total displacement. For purposes of this analysis, we present costs for an in-line 4 cylinder engine, a V-6 engine, and three V-8 engine confi gurations. In addition, this analysis considers costs to the original engine manufacturer and to the engine “marinizer.” Additional detail on the

6-56

### Costs of Control
projected costs may be found in the docket. 34



### Because California ARB has adopted standards similar to the new national standards, manufacturers have already started with design a nd testing efforts to meet our standards. To reflect this in the cost analysis, we include no estimated costs for R&D to introduce the various emission-control technologies. This reflects the expectation that manufacturers will not need to conduct additional R&D for EPA’s requirements, since they are introducing those technologies for sale in California. As noted below, we are including estimated R&D expenditures as part a compliance cost, because EPA’s NTE standards represent an incremental requirement beyond what California ARB has adopted.

6.4.1 Fuel Injection
Current SD/I engines are sold with carburetors or with fuel-injection systems. The smaller 3.0 L I4 engines are typically carbureted while the larger 8.1 and 8.2 L V8 engines are typically fuel injected. Our estimate is that about 25-30 percent of V6 engines and 70-80 percent of the 5.0 - 6.2L V8 engines are currently sold with fuel injection. For the purpose of this analysis we anticipate that all SD/I engines will need to be fuel injected to meet the new emission standards. Fuel injection allows better control of the air-to-fuel ratio in the engine and exhaust for better emission design control and catalyst efficiency.
We consider the use of a port fuel-injection system for this analysis, which refers to individual injectors located at each intake port in the engine. In addition to the injectors, this system includes a fuel rail, pressure regulator, electronic control module, manifold air pressure and temperature sensors, a high pressure fuel pump, a throttle assembly, a throttle position sensor, and a magnetic crankshaft pickup for engine speed. We also consider a cool fuel system to prevent the occurrence of vapor lock in the fuel lines. Table 6.4-1 presents the incremental costs of a port fuel-injection system compared to a carburetor-based fuel system. Because this technology is widely used today, we include fixed costs for final calibrations as part of the cost of certification and compliance in Section 6.4.4.

6-57

### Final Regulatory Impact Analysis
Table 6.4-1: Projected Incremental Hardware Costs for Controlled Port Fuel Injection
3.0L I4 4.3L V6 5.0L V8 5.7L V8 8.1L V8

Hardware Cost to Manufacturer carburetor injectors pressure regulator fuel filter intake manifold fuel rail throttle assembly (w/ position sensor) cool fuel system (w/ pump) electronic control module air intake temperature sensor manifold air pressure sensor crank position sensor wiring/related hardware Total Incremental Hardware Cost ($140) $68 $15 $1 $14 $80 $150 $115 $70 $5 $14 $16 $80 $488 ($145) $102 $15 $1 $25 $80 $150 $120 $65 $5 $14 $16 $80 $528 ($145) $136 $15 $1 $25 $80 $150 $120 $65 $5 $14 $16 $80 $562 ($145) $136 $15 $1 $30 $80 $150 $120 $65 $5 $14 $16 $80 $567 ($145) $160 $15 $1 $40 $80 $60 $120 $60 $5 $14 $16 $80 $506
Engine Manufacturer Markup labor at $28/hr labor overhead at 40% markup at 29% warranty markup at 5% Total Incremental Component Cost $3 $1 $143 $24 $659 $4 $2 $155 $26 $715 $4 $2 $165 $28 $760 $4 $2 $166 $28 $767 $4 $2 $148 $25 $685

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### Costs of Control

6.4.2 Exhaust Gas Recirculation
We do not anticipate that manufacturers will use exhaust gas recirculation (EGR) to meet the exhaust emission standards. However, in developing this rule, we considered the option of a standard based on emission reductions possible through the use of EGR. This analysis is reflected in our alternatives discussion in Chapter 11. For this analysis, we consider an EGR system with a valve, plumbing, and modification to the intake manifold. Table 6.4-2 presents incremental variable costs of a controlled engine with EGR compared to an uncontrolled engine with port fuel injection and no EGR.
Table 6.4-2: Projected Incremental Hardware Costs for Exhaust Gas Recirculation
3.0L I4 4.3L V6 5.0L V8 5.7L V8 8.1L V8

Hardware Cost to Manufacturer intake manifold exhaust gas recirculation exhaust manifold oxygen sensors Total Incremental Hardware Cost $5 $25 $2 $17 $49 $5 $25 $5 $34 $69 $10 $25 $5 $34 $74 $10 $25 $5 $34 $74 $10 $25 $5 $34 $74
Engine Manufacturer Markup labor at $28/hr labor overhead at 40% markup at 29% warranty markup at 5% Total Incremental Component Cost $1 $0 $15 $2 $67 $1 $0 $20 $3 $94 $1 $0 $22 $4 $101 $1 $0 $22 $4 $101 $1 $0 $22 $4 $101

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### Final Regulatory Impact Analysis

6.4.3 Catalysts
We anticipate that manufacturers will use small three-way catalysts to meet the SD/I exhaust emission standards. A catalyst will likely be placed in the riser of each exhaust manifold upstream of where the water and exhaust gases mix. Catalyst sizes and configurations are based on the developmental catalyst efforts on SD/I engines discussed in Chapter 4. Costs are included to modify the exhaust manifolds for packaging of the catalyst. We believe these catalysts will be used in conjunction with port fuel injection a nd closed-loop electronic control. Therefore, we include the cost of an oxygen sensor upstream of each catalyst. The costs in Table 6.4-3 are presented incremental to an open-loop port fuel injection.
Table 6.4-3: Projected Incremental Hardware Costs for Catalytic Control
3.0L I4 4.3L V6 5.0L V8 5.7L V8 8.1L V8 Catalyst Unit Price catalyst volume (L) (each) number of catalysts substrate diameter (cm) substrate ceria/alumina Pt/Pd/Rd can (18 gauge SS) Total Material Cost labor at $28/hr labor overhead at 40% supplier markup at 29% Manufacturer Price per Unit 1.00 1 9.5 $8 $11 $28 $3 $51 $5 $2 $17 $74 0.75 2 8.3 $7 $9 $21 $3 $39 $5 $2 $13 $59 0.88 2 9.0 $7 $10 $25 $3 $45 $5 $2 $15 $66 1.00 2 9.5 $8 $11 $28 $3 $51 $5 $2 $17 $74 1.40 2 11.0 $10 $16 $39 $4 $69 $5 $2 $22 $98

Hardware Cost to Manufacturer catalysts oxygen sensors exhaust manifold Total Incremental Hardware Cost $74 $17 $10 $101 $119 $34 $20 $173 $132 $34 $20 $186 $148 $34 $25 $207 $195 $34 $30 $259
Engine Manufacturer Markup labor at $28/hr labor overhead at 40% markup at 29% warranty markup at 5% Total Incremental Component Cost $2 $1 $30 $5 $139 $1 $0 $50 $9 $233 $1 $0 $54 $9 $251 $1 $0 $60 $10 $279 $1 $0 $76 $13 $349



### As discussed above, we do not include research and development costs in our fixed costs for SD/I engines. However, we do include tooli ng costs that would be associated with ramping up production of California engines for the entire United States. These tooling costs are presented in Table 6.4-4.

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### Costs of Control
Table 6.4-4: Projected Incremental Tooling Costs for Catalytic Control
3.0L I4 4.3L V6 5.0L V8 5.7L V8 8.1L V8 Fixed Costs to Engine Manufacturer tooling units/year years to recover fixed costs/unit $30,000 15,000 5 $1 $35,000 15,000 5 $1 $40,000 15,000 5 $1 $40,000 15,000 5 $1 $45,000 15,000 5 $1
Fixed Costs to Engine Marinizer tooling units/year years to recover fixed costs/unit $35,000 2,000

5 $5 $45,000 2,000

5 $6 $50,000 2,000

5 $7 $55,000 2,000

5 $7 $55,000 1,000

5 $14

Total Incremental Fixed Costs $5 $6 $7 $8 $15



### 6.4.4 Certification and Compliance
We estimate that certification costs for SD/I engines would come to about $130,000 per engine family. We expect that manufacturers would combine similar engines into the same family. The above certification cost estimate allows for two months of R&D for each engine family as part of the certification process. This would include two engineers and three technicians and the corresponding testing costs for the two-month period. Unless engine designs were significantly changed, engine families could be recertified each year using carryover of this original test data. If this cost is amortized over five years of engine sales with an average volume of 2,000 engines per family, the resulting cost is $13 per engine.

6.4.5 Operating Cost Savings
We anticipate that manufacturers will convert their remaining carbureted engines to fuel injection to meet the new standards. We believe this will result in fuel savings because of the better fuel control offered by fuel injection compared to carburetion. The fuel consumption rates we use for carbureted and fuel injected SD/I e ngines and their derivation are described in more detail in the docket. 35 

### We use the price of gasoline discussed earlier in this chapter.

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### Final Regulatory Impact Analysis
Table 6.4-5: Projected Fuel Savings for SD/I Engines Annual Per-Engine Gallons Consumed 228 Average Life (years) 19.7 Anticipated Reduction in Fuel Consumption 2.3%

Lifetime Gallons Saved 101 Lifetime Cost Savings $185 Discounted Cost Savings (7%) $105



### 6.4.6 Total SD/I Engine Costs
We expect that SD/I engine manufacturers would use catalytic convertors and electronic fuel injection to meet the standards. In 2003, about 60 percent of SD/I engines were sold with electronic fuel injection. This estimate is based on confidential sales information submitted to the California Air Resources Board by SD/I manufacturers certifying to the 2003 California exhaust emission standards. The manufacturers who certified in California represent more than 90 percent of U.S. sales of SD/I engines. Ma nufacturers have indicated to us that they are moving in the direction of selling more fuel-inj ected engines and using carburetors only on their low-cost “introductory” engines. For this cost analysis, we use the projected technology mix for 2009 from the NONROAD model which projects that a bout 85 percent of SD/I engines sold will be fuel-injected. Table 6.4-6 presents our estimates of the sales mix between carbureted and fuelinjected SD/I engines.
Table 6.4-6: Baseline Technology Mix for SD/I Engines
2003 MY California Certification Projected 2009 Baseline

Carbureted Fuel Injection Carbureted Fuel Injection

3.0L I-4 4.3L V-6 5.0L V-8 5.7L V-8 8.1L V-8 high performance 100% 75% 40% 10% 100%

-- 0% 25% 60% 90% 0%

-- 50% 20% 5% 0% 0% 50% 50% 80% 95% 100% 100% 50%



### We developed the per-engine costs by assigning costs for electronic fuel injection for engine models that are projected to be carbur eted in 2009. Except for high-performance engines, we also apply costs for catalysts. As discussed above, our cost estimates include both variable and fixed costs, and we distinguish between near-term and long-term costs. Because our analysis amortizes fixed costs over 5 years, the long-term costs are made up of variable costs only. These variable costs are lower in the long term due to the learning effect discussed above.

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### Costs of Control
Table 6.4-7 presents these average per-engine cost estimates. Fixed costs for high-performance engines were based on an engine family size of 50 engines, compared to 2,000 engines for traditional SD/I engines.
Table 6.4-7: SD/I Per-Engine Cost Estimates (Without Fuel Savings) Short Term (years 1-5) Long Term (years 6-10) Fixed Variable Total SD/I Aggregate 3.0L 4.3L 5.0L 5.7L 8.1L high performance $21 $18 $19 $20 $21 $28 $280 $334 $465 $377 $297 $279 $349 $257 $355 $483 $396 $317 $300 $377 $537 $266 $372 $301 $238 $223 $279 $216



### 6.4.7 SD/I Aggregate Costs
Aggregate costs are calculated by multiplying the per-engine variable cost estimates described above by projected engine sales. These variable costs are then added to the fixed costs as incurred. Engine sales are based on estimates supplied by the National Marine Manufacturers Association (www.nmma.org) and projections for future years are based on the growth rates in the NONROAD model. Fuel consumption reductions are calculated using the NONROAD based on population estimates. These population estimates in the NONROAD model are similar to those estimated by NMMA. A description of the sales and population data and our analysis of the data is available in the docket. 36 

### Table 6.4-8 presents the projected costs of the rule over a 30-year time period with and without the fuel savings that would be expected from meeting the exhaust emission standards. Fuel savings from the evaporative emission standards are not included in this table, but they are presented separately below.
At a 7 percent discount rate, over 30 years, the estimated annualized cost to manufacturers for SD/I exhaust emission control is $28 million. The corresponding estimated annualized fuel savings due to more efficient engine controls is $8 million. At a 3 percent discount rate, over 30 years, the estimated annualized cost to manufacturers for SD/I exhaust emission control is $28 million. The corresponding estimated annualized fuel savings due to more efficient engine controls is $10 million.

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### Final Regulatory Impact Analysis
Table 6.4-8: Projected 30-Year Aggre gate Cost Stream for SD/I Engines

Year Without Fuel Savings With Fuel Savings

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 $4,971,723 $4,971,723 $31,909,535 $32,143,949 $32,378,362 $32,612,775 $32,847,189 $26,361,975 $26,546,438 $26,730,902 $26,915,366 $27,099,830 $27,284,293 $27,468,757 $27,653,221 $27,837,685 $28,022,149 $28,206,612 $28,392,244 $28,577,875 $28,763,506 $28,949,137 $29,134,769 $29,320,400 $29,506,031 $29,691,662 $29,877,294 $30,062,925 $30,248,556 $30,434,187 $4,971,723 $4,971,723 $31,207,005 $30,512,049 $29,822,674 $29,128,682 $28,440,869 $21,040,258 $20,317,643 $19,601,606 $18,896,409 $18,205,484 $17,523,304 $16,828,978 $16,141,908 $15,467,722 $14,804,334 $14,154,769 $13,524,906 $12,917,862 $12,338,401 $11,804,572 $11,474,294 $11,259,905 $11,088,594 $10,948,483 $10,831,791 $10,732,954 $10,650,884 $10,582,255



## 6.5 Evaporative Emission Control Costs for Small SI Equipment

This section presents our cost estimates for meeting the new evaporative emission standards for land-based equipment using small spark-ignition engines.
In our analysis of the costs of the evaporative emission standards for Small SI equipment, we consider the approximately 250 equipment types used in the NONROAD model to determine emission inventories. These equipment types are then aggregated into the five engine classes, with each class divided by general equipment types and between residential and commercial applications. For each of these aggregate categories, we determine weighted average hose lengths and tank sizes which we use as inputs to our cost calculations. These inputs are presented in more detail in the evaporative emission inventory discussion in Chapter 3. This discussion presents our cost estimates as a function of hose length and tank size. In addition, we present examples of costs for four typical Small SI equipment configurations which include a handheld (HH) configuration, a walk-behind mower (WBM), and two other non-handheld

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### Costs of Control
(NHH) configurations. These configurations, which are presented in Table 6.5-1, are based on average tank sizes and hose lengths used in our inventory model (see Chapter 3). Although these typical configurations do not, by any means, repr esent all of the equipment types included in our cost calculations, they should give a good indi cation of how we performed our analysis.
Table 6.5-1: Typical Small SI Equipment Configurations

HH WBM NHH #1 NHH #2 Fuel Tank Capacity (gallons) Fuel Tank Material* Fuel Tank Molding Process Fuel Tank Weight (lbs.) 0.25 HDPE IM/BM 0.6 0.5 HDPE IM/BM 0.8 2 HDPE IM/BM 1.8 5 XLPE

RM 5.9 Fuel Hose Length (in.) Fuel Hose Inner Diameter (in.) 4 0.125 8 0.25 24 0.25 36 0.25 * HDPE = high-density polyethylene, XLPE = cross-link polyethylene * IM = injection-molded, BM = blow-molded, RM = rotational-molded


### The fuel tank weights are based on measurements made in our lab on many of the fuel tanks that were included in our evaporative emission test programs. The higher weight to capacity ratio of the smaller fuel tank is due to the smaller surface to volume ratio and due to extra structural components often molded as part of the fuel tanks. We use the fuel tank weight to determine costs of material changes. The method used to mold the fuel tank and material used affect the permeation control strategies that may be used. This effect is discussed below.
Note that some handheld equipment has structurally-integrated constructions where the fuel tank is part of the structure of the equipment. These fuel tanks are typically made out of nylon 6 with up to 30 percent fiberglass reinforcement. Data in Chapter 5 suggest that these fuel tanks would be able to meet the tank permeation standards without changing the fuel tank material.

6.5.1 Hose Permeation
Barrier fuel hose incremental costs estimates are based on costs shared confidentially by component manufacturers. These costs are supported by the costs of existing products used in other nonroad and automotive applications. 37,38,39 

### For baseline fuel lines, we consider nitrile rubber hose such as that used to meet SAE J30 R7 recommendations. For handheld equipment, we consider the baseline fuel lines to be injected-molded rubber hose for structurally-integrated constructions and clear elastomeric tubing for other equipment.
For this analysis, we considered three primary approaches to reducing permeation from fuel hoses. The first was the use of thermoplastic fuel lines such as those used in automotive applications. The incremental cost of these fuel lines is about $0-0.10/ft compared to typical hose used on Small SI equipment. However, there have been concerns expressed in the past by manufacturers that this fuel line is not flexible or durable enough for small nonroad applications.

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### Final Regulatory Impact Analysis
Two other approaches are using thermoplastic or thermoelastomer barrier materials in the fuel hose construction. Our estimate is that thermoplastic fuel lines, such as Teflon or THV800, would result in an incremental cost to the manufacturer of about $0.75-0.85 per foot. Manufacturers have expressed in the past that th ey would have to upgrade their fuel clamps for the use of thermoplastic barrier hose. Therefor e, we include an incremental cost for the two clamps totaling $0.10. Manufacturers have recently shared with us that they believe the standards can be met through the use of a lower cost approach. In this approach, the barrier layer is made of a thermoelastomer such as FKM. Our estimate of the incremental cost for this approach is $0.20-0.30 per foot. Although the high flexibility of thermoelastomers such as FKM may allow manufacturers to use existing hose clamps, we also include the hose clamp cost due to the uncertainty of how manufacturers will construct their equipment with the new hose.
In some handheld applications, the fuel lines are molded in intricate custom shapes rather than extruded like traditional hoses. In these designs, a section of the fuel line is inside the fuel tank while the remainder is external to the fuel tank. In addition, a vent line may be molded into the same part. Because the tanks are typically sealed with a one way valve on the vent, the vent lines are exposed to saturated vapor. The fuel lines may be formed from molded cured rubber such as NBR or injection-molded out of a rubbe rized plastic such as Alcryn. A low permeation approach would be to mold the fuel lines out of FKM which is a thermoelastomer used in other fuel line applications. Based on a sample of six fuel lines (two of which included vent lines) we got an average weight of 11 grams (0.025 lbs.). Based on cost estimates of $1.00/lb. for NBR and $10-15/lb. for FKM, we get a cost estimate of $0.25 to $0.35 per fuel line. Manufacturers have raised the concern that if a new material is used, that they may need to modify their hose connectors to make sure that the hose does not pull off the barbs. To account for this, we include a $0.10 cost for the addition of clamps or hose connector modifications.
Table 6.5-2 presents the estimated incremental costs of low permeation hose for four typical equipment configurations. These costs include the markup discussed above for overhead and profit. Because these hose constructions are established technology, we consider the short and long-term costs to be the same. We believe the standards can be achieved using a thermoelastic barrier and therefore use these costs in our analysis.

Table 6.5-2: Fuel Line Permeation Cost Estimates for Typical Small SI Equipment

HH 4", 1/8" ID WBM 8", 1/4" ID NHH #1 2 ft, 1/4" I.D. NHH #2 3 ft, 1/4" I.D. thermoplastic barrier hose $0.54 $0.86 $2.32 $3.42

thermoelastic barrier hose $0.28 $0.34 $0.77 $1.10

thermoelastic molded fuel line $0.48 NA NA NA



### 6.5.2 Tank Permeation
As discussed in earlier chapters, plastic fuel tanks for Small SI equipment are constructed in one of three primary molding processes: blow-molding, injection-molding, and rotational

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### Costs of Control
molding. Blow-molded tanks are primarily made of high-density polyethylene (HDPE), injection-molded tanks are primarily HDPE or nylon, and rotational molded tanks are primarily cross-link polyethylene (XLPE). Because the mold ing process can affect the permeation control approaches available, we discuss the technologies for each approach individually.

6.5.2.1 All HDPE fuel tanks
Surface treatments can be used to reduce permeation from HDPE fuel tanks, whether they are blow-molded, injection-molded, or rotational-molded. Our surface treatment cost estimates are based on price quotes from a companies that specialize in fluorination 40 

### and sulfonation. 41 

### In the fluorination process, costs are based on the number of fuel tanks that will fit into the fluorination treatment chamber. Therefore, costs are higher for larger fuel tanks, because less tanks will fit in the chamber. The price sheet referenced for our fluorination prices assumes rectangular shaped containers. These fuel tanks would stack easily in the fluorination treatment chamber with little wasted space. However, tor irregular shaped fuel tanks, less fuel tanks would fit in the treatment chamber due to dead space between the tanks when they are placed in the support baskets in the chamber. To account for this inefficiency with typical shaped fuel tanks, we consider a void space equal to about 25 percent of the volume of the fuel tank. For handheld equipment, we consider a void space of 100 percent because of the structurally-integrated nature of many tanks.
For sulfonation, the shape of the fuel tanks is less of an issue because the treatment process is limited only by the spacing on the production line which is roughly the same for the range of fuel tank sizes used in Small SI equipment. These prices do not include the cost of transporting the tanks; we estimated that shipping, handling and overhead costs would be an additional $0.03 to $0.76 per fuel tank depending on tank size (using the same void space estimates as above). 42



### Manufacturers, with high enough production volumes, could reduce the costs of sulfonating fuel tanks by constructing an in-house treatment facility. The cost of a sulfonation production line facility that could treat 150-500 thousand fuel tanks per year (depending on tank size) would be approximately $800,000. 43 

### This facility, which is designed to last at least 10 years, is made up of a SO 3 

### generator, a scrubber to clean up used gas, a conveyor belt, and injection systems for the SO 3 

### gas and for the neutralizing agent (ammonia solution). The manufacturer of this equipment estimates that the operating costs, which includes electricity and chemicals, would be about 3 cents per tank. We based our costs on a production capacity of 300,000 units per year for handheld tanks and 150,000 units per year for non-handheld tanks. In the long term, the costs would be based on the full life of the equipment which we estimate to be 10 years for this analysis. Finally, we use a labor rate of $28/hr with a 40 percent markup for overhead which is consistent with our engine costs above and apply one full time employee to operation of the sulfonation machine. A manufacturer that sulfonates its fuel tanks in-house would not need to pay shipping costs. In the long run, we calculate that this approach will be less expensive than shipping tanks to an outside facility.

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### Final Regulatory Impact Analysis

6.5.2.2 Blow-molded fuel tanks
Manufacturers may reduce permeation from blow-molded fuel tanks by blending in a low permeation material such as ethylene vinyl alc ohol (EVOH) with the HDPE. This is typically known by its trade name, Selar. The EVOH in the plastic forms non-continuous barrier platelets in the tank during blow-molding that make it harder for fuel to permeation through the walls of the tank. Using this approach, no changes should be necessary in the blow-molding equipment, so the costs are based on increased material costs. We used 10 percent EVOH which costs about $3-4 per pound and 90 percent HDPE which costs about $0.65-0.75 per pound. 44 

### This equates to a price increase of about $0.35 per pound. We then applied the material weights shown in Table 6.5-1 to estimate costs per tank for this technology.
For higher production volumes, manufacturers may consider blow molding multi-layer fuel tanks with continuous barriers. Practica lly, a new blow-molding machine would be required because four or five additional injection screws would be necessary for the barrier layer, two adhesion layers, an additional HDPE layer, and potentially a regrind layer. A machine that could blow-mold multi-layer tanks would approximately double the price of the blow-molding machine. For this analysis, we use a mono-layer machine cost of $1,000,000 and a multi-layer machine cost of $3,000,000 45 

### , resulting in an increase in machine cost of $2,000,000. In addition, tooling costs for each new tank design would be about $50,000. For this analysis we considered a fuel tank with a material composition of 3 percent EVOH at $3.50/lb, 4 percent adhesive layer at $1/lb, 45 percent regrind, and the remainder HDPE. Our analysis uses a total annual production of 80,000-160,000 blow-molded tanks per year, depending on tank size (smaller sizes would allow more tanks per mold), with 5 different molds. Capital costs are amortized over 5 years in the short term and 10 years in the long-term (reflecting a 10 year life of the machine).

6.5.2.3 Injection-molded fuel tanks
The technologies discussed above for blow-molded fuel tanks do not appear to be feasible for injection-molded fuel tanks. Th e non-continuous barrier platelet approach does not work well in this process because of the high shear stresses associated with injection molding. Multi-layer rotomolded tanks would have to be formed by making separate molds, then fusing the layers when the tank sides are welded together. While this may be possible, it would be cumbersome. Barrier treatments would work fo r fuel tanks injected out of HDPE, but many handheld tanks are injection molded out of nylon for better thermal resistance. At this time, it appears that fluorination and sulfonation would not work effectively on nylon tanks. However, nylon has low permeation on gasoline, and some nylon formulations are capable of meeting the standards which are based on test fuel with 10 percent ethanol.
The advantages of injection molding are that it has lower tooling costs than blowmolding and it is a faster molding process than rotational-molding. Although injection-molding does not lend itself well to multi-layer construction, there is another process with similar costs and production rates called thermoforming which does. Thermoforming entails using sheets of plastic that are heated and pulled into a mold using vacuum suction. As with injection molding,

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### Costs of Control
two halves are then joined together. In thermoforming, however, the sides are combined while the plastic is still molten rather than by welding as is used in injection-molding. By using sheetsof extruded multi-layer plastic, thermoforming can be used to produce low-permeation, multilayer fuel tanks.
Because the thermoforming process requires extruded sheets, this process requires the addition of an extruder. A small extruder, which would support several thermoforming machines considered in this analysis would cost $2-3 million. The thermoforming machine itself would cost about two-thirds that of an injection molding machine because it has less moving parts (such as the injection screw). However, we estimate that two thermoforming machines would be necessary to maintain the cycle time possible with an injection molding machine. At the same time, hot plate welding machines would not be necessary because the tanks halves are assembled in the thermoforming machine. We use an incremental cost savings of $100,000 for the molding machine. Mold costs are somewhat lower for thermoforming as well because they are made of aluminum rather than hardened steel. We estimate that a four-cavity injection mold would cost about $60-80,000 while a four-cavity thermoforming mold would cost $20-30,000. For this analysis we use a production of 300,000 tanks per year using 5 different molds. In the short term, we amortize the fixed costs over 5 years, while in the long term we use 10 years to represent the full life of the machines. Incremental material costs are based on 3 percent EVOH and 4 percent adhesion material to create the barrier layer.
Another option would be to mold the entire fuel tank of a low permeation material such as an acetal copolymer, or a thermoplastic polyester. These materials have list prices in the range of about $1- 2 per pound which is about doubl e the material cost of HDPE, but comparable to the cost of nylon. 46 

### In addition, these fuel tanks could be made out of metal, which does not permeate. For larger marine fuel tanks, metal tanks are available that cost about 25-30 percent more than plastic fuel tanks (made under low volume construction). Private conversations with Small SI equipment manufacturers suggest that making small fuel tanks out of metal could increase the cost of the tanks for Small SI equipment by 200-300 percent and would limit the possibility of constructing complex designs.

6.5.2.4 Rotational-molded fuel tanks
Many larger fuel tanks are rotationally molded. This process is more cost-effective for smaller production volumes than blow-molding or injection-molding because of the lower tooling costs for new tank designs. However, this process is slower which limits its usefulness for large production volumes. Typically, rotational-molded fuel tanks manufactured for Small SI equipment are made of cross-link polyethylene (XLPE). Although XLPE is more expensive than HDPE which may also be used in the rotational-molding process, it is considered to be more impact resistant than HDPE. This is important because the rotational molded fuel tanks are often larger fuel tanks mounted on the outside of the equipment where it could be exposed to impacts such as stepping, thrown rocks, branches, etc.
As discussed in Chapter 5, neither sulfonation or fluorination has been demonstrated to be successful in creating a barrier on XLPE that would meet the new standards. Therefore, we

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### Final Regulatory Impact Analysis
look to multi-layer approaches for our cost estimates. In the rotational-molding process, fuel tanks may be formed with two layers. The traditional method is to add the first material to the mold prior to entering the oven, and once that shell forms to add a second material through the use of a drop box in the mold. Depending on the complexity and size of a drop box, it can add from $1,000 to nearly $9,000 to the cost of the mold. 47,48,49 

### One manufacturer is currently making multi-layer rotational-molded fuel tanks for use Small SI equipment without the use of a drop box. Their approach is proprietary, but the material manufacturer is making efforts to develop an alternative to using a drop box as well. 50 

### For this analysis, we include a $5,000 cost for a drop box in the short term, but not in the long term. In addition, we do not project that this process will have an increase on the cycle processing time because the increased heating time is offset by decreased cooling time. The inner layer could be molded out of an acetal copolymer, nylon, or even HDPE which could then be surface treated. Typical acetal copolymers cost about the same as XLPE, although the rotational-molding grade may cost a little more. 51 

### We use a cost of $1.50/lb. for this acetal copolymer compared to XLPE which is approximately $1.20/lb. Nylon, which can range in cost from $2 to $6 depending on the grade may also be used in conjunction with XLPE to provide a permeation barrier. The advantage of nylon is that it bonds to XLPE better than acetal copolymers. For this analysis, we consider the use of nylon at $4.00/lb in a fuel tank with a 1 mm barrier and 4-5mm average total wall thickness. We amortize the fixed cost of the drop boxes over 5 years of production of 1000 tanks per year for each mold.
Another material is also available for molding an inner layer in rotomolded XLPE fuel tanks. This material is poly butylene terephthalate cyclic oligimor and is known by the trade name CBT®. With this material, no drop box is necessary. The CBT is added in the mold with the XLPE resin. During the molding process, the XLPE shell forms in the mold. Due to differences in viscosity and temperature properties, the CBT goes to the inside of the fuel tank. It then polymerizes to form an inner liner. We use a cost of $5/lb. for CBT in this analysis and use the same barrier thickness as discussed above.
Another technology that has been demonstrated for reducing permeation from XLPE fuel tanks is a low permeation epoxy barrier. To apply this barrier, an adhesion treatment must first be performed to increase the fuel tank surface energy so that the epoxy will adhere to the XLPE. This can be done through a low level fluorination treatment. For this analysis, we use the cost of level 1 fluorination. 52 

### We use the same void space and shipping costs discussed above for our fluorination cost analysis. The epoxy could be applied by dipping the fuel tank or spraying it on like paint and then must be cured using UV light. We include a fixed cost of $10,000 for a volume of 100,000 fuel tanks per year to account for coating and curing equipment. In addition, we apply the cost of one full time employee to apply the coating and use a labor rate of $28/hr with a 40 percent markup for overhead which is consistent with our engine costs above. For traditional epoxies, we estimate that the cost would be $6-7/lb. Manufacturers have commented that UV-curable epoxy, which could be pro cessed much faster, would cost $12-15/lb. 53,54 

### We use a cost of $12/lb. for this analysis. Because only a thin coating needed (we use 0.125 mm), the epoxy layer makes up only about 3 percent of the material of the fuel tank. Because there are benefits to the epoxy coating such as allowing the fuel tank to be painted, there may be an incentive to use this technology even on HDPE fuel tanks. For that reason, we estimated the cost

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### Costs of Control
for smaller HDPE tanks as well using the same general assumptions except for a larger production volume of 150,000 tanks per year due to their smaller size.

6.5.2.5 Summary of Fuel Tank Costs per Equipment
Table 6.5-3 summarizes the incremental costs of the fuel tank permeation emissioncontrol strategies discussed above. For technologies sold by a supplier to the engine manufacturers, an additional 29 percent markup is included for the supplier's overhead and profit. Both long-term and short-term costs are presented. The long-term costs account for the stabilization of the capital investments and the learning curve effect discussed above. We use the same material and shipping costs for our short-term and long-term estimates because these cost components are well established with a wide range of applications. As discussed above, for the multilayer fuel tank constructions, we consider an EVOH barrier for hand-held and Class I equipment and nylon barrier for Class II equipment.

Table 6.5-3: Tank Permeation Control Cost Estimates for Typical Small SI Equipment

HH 0.25 gallons IM/BM WBM 0.5 gallons

IM/BM NHH #1 2 gallons IM/BM NHH #2 5 gallons RM

fluorination a,b : short term long term $0.62 $0.50 $0.77 $0.63 $3.10 $2.52 NA

sulfonation a,b : short term long term $0.64 $0.52 $1.25 $1.01 $1.40 $1.16 NA

non-continuous platelets a $0.17 $0.22 $0.51 NA multi-layer a : short term EVOH long term $4.13 $2.01 $4.08 $1.98 $3.80 $1.75 NA

multi-layer c : short term PA11 long term NA NA NA $5.54 $3.40 multi-layer c : CBT NA NA NA $5.77 thermo-forming b : short term long term $0.36 $0.20 $0.53 $0.29 $1.50 $0.82 NA

acetal-copolymer a,b,c $0.62 $0.79 $1.82 $2.28

metal construction a,b,c $1.94 $3.87 $5.16 $9.68 epoxy coating a,b,c : short term long term $1.26 $1.01 $1.32 $1.06 $2.56 $2.08 $5.69 $4.64

a incremental to traditional blow-molding b incremental to traditional injection-molding

c incremental to traditional rotational-molding

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### Final Regulatory Impact Analysis

6.5.3 Venting Losses
Venting losses are made up of diurnal breathing losses and running losses which are similar to diurnal emissions except that the heating event is caused by the engine. We are requiring that equipment manufacturers install systems to capture their running losses by sealing the fuel tank and venting vapor to the engine intake. For the purpose of our cost analysis, we consider a system with a purge hose running from the fuel tank to the engine intake (with 2 hose clamps) that is the same length of the fuel hose. We use a cost of $0.25/ft for the hose and $0.10 each for the two hose clamps. This is consistent with the above cost analysis for low permeation hose. We also consider a fuel cap redesign to meet the sealing requirements with a one way valve to prevent a vacuum from occurring in the fuel tank as fuel is drawn out to the engine. We use a cost of $1 for the valve and cap redesign. Also, we include a cost of $0.10 to account for a limiting flow orifice in the purge line. Finally, using the labor costs discussed above, we calculate an incremental assembly labor cost of about $0.20 per engine.
Diurnal emissions could be captured through the use of a carbon canister. The carbon then could be purged by air drawn into the fuel tank as the fuel cools. This is known as passive purge. This system would be similar to the running loss control system except that venting would occur through a canister and the valving would be modified to provide liquid/vapor separation. This valve would prevent fuel from entering the canister if the equipment were tipped over. We estimate the cost of a canister to vary based on size ranging from about $2 for a 1 quart tank to about $4 for a five gallon tank. The majority of these canister costs for small fuel tanks are for the canister, connections, and mounting hardware. As the fuel tank size increases, the carbon becomes a more significant fraction of the cost. For this analysis, we add the cost of the canister to the cost of running loss control and include another $0.20 for assembly costs.
Diurnal emissions could be controlled further through an active purge canister system. In an active purge system, the canister would also be purged by the engine during operation. The added components of this system compared to the passive purge system would include a line to the air filter (or separate air filter for the canister breathing line) and a purge valve. This amounts to an additional cost of $0.15/ft for the air line, $0.20 for two clamps, $1 for the purge valve, and another $0.20 for assembly.

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### Costs of Control
Table 6.5-4: Venting Control Cost Estimates for Typical Small SI Equipment
WBM 0.5 gallons 8", 1/4" ID NHH #1 2 gallons 2 ft, 1/4" ID NHH #1 5 gallons 3 ft, 1/4" I.D. running loss: short term long term $2.06 $1.65 $2.32 $1.85 $2.51 $2.01 passive purge canister*: short term long term $3.07 $2.45 $3.82 $3.06 $4.38 $3.51 active purge canister**: short term long term $1.93 $1.54 $2.19 $1.75 $2.38 $1.91 * incremental to running loss control ** incremental to passive purge canister



### 6.5.4 Certification and Compliance
The running loss standards call for manufacturers to certify their running loss systems based on design rather than requiring emission testing. However, they will still need to integrate the emission-control technology into their designs and there will be some engineering and clerical effort need to submit the required information for certification. We expect that in the early years, plastic fuel tank manufacturers will perform durability and permeation testing on their fuel tanks for certification. They will be able to carry over this data in future years and will be able to carry across this data to other fuel tanks made of similar materials and using the same permeation control strategy regardless of tank size or shape. Typical certification costs may be spread between the tank manufacturer, hose manufacturer, and equipment manufacturer. For the sake of this analysis, we combine the tank, hose, and boat certification costs to calculate the total certification of an average fuel system. We estimate that 90 percent of fuel tank sales in Small SI equipment are plastic and the remainder are metal.
For the first year we estimate fuel tank durability and certification testing to cost about $15,000 per tank manufacturer on the assumption that the manufacturer will use the same materials and permeation control strategy for all of their fuel tanks to reduce costs. Low permeation fuel lines are largely an established technology. However, we include a cost of $1,000 to perform certification testing on fuel lines. In addition, we estimate about $10,000 for engineering and clerical work for the equipment manufacturers.
For handheld equipment manufacturers, we spread these costs over sales of 500,000 units per year. For handheld and Class I equipment manufacturers, which are integrated manufacturers, we base the costs on average annual sales per manufacturer. We estimate the average annual sales to be about 500,000 units for handheld equipment and 100,000 units for Class I equipment. Generally for Class II equipment, a large number equipment manufacturers purchase their engines from a smaller number of engine manufacturers. We estimate average annual sales per year to be 50,000 units for Class II.

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### Final Regulatory Impact Analysis
As with other fixed costs, we amortized the cost over 5 years of sales to calculate per unit certification costs. Combining these costs, we get average fuel system integration and compliance costs of about $0.01 for handheld equipment, $0.05 for Class I equipment, and $0.10 for Class II equipment.

6.5.5 Operating Cost Savings
Evaporative emissions are essentially fuel that is lost to the atmosphere. Over the lifetime of a piece of Small SI equipment, this can result in a significant loss of fuel. The reduction in evaporative emissions would therefore result in meaningful fuel savings which can be directly related to operating cost savings based on an average density of 6 lbs/gallon for gasoline (based on lighter hydrocarbons which evaporate first) and the price of gasoline described above. Table 6.5-5 presents the estimated fuel savings for Small SI equipment associated with the evaporative emission standards.
Table 6.5-5: Projected Evaporative Fu el Savings for Small SI Equipment
Handheld Class I Class II Evaporative HC Reduced [lbs/life] 1.4 4.8 28.6

Lifetime Gallons Saved 0.2 0.8 4.7 Lifetime Cost Savings $0.41 $1.45 $8.55 Average Equipment Life [years] 4.2 5.3 5.9 Discounted Cost Savings (7%) $0.40 $1.31 $5.96



### 6.5.6 Total Small SI Equipment Costs
We expect that Small SI manufacturers will use a variety of technologies to meet the fuel tank permeation standards. As discussed above, many options are available so the technologies chosen will depend on the baseline fuel tank construction, the equipment application, and the manufacturers’ particular design philosophies. Hose permeation standards will likely be met through the use of barrier hose constructions.
For the purpose of this analysis, we divided Small SI equipment into 23 categories to better quantify differences in costs that may be associated with different equipment applications. Earlier in this chapter, engine costs are presented as a function of design life. However, we believe evaporative emission costs are more a function of the application than the design life due to the differences in hose lengths and tank sizes and constructions. Manufacturers would not likely design a less robust fuel system for equipment used with lower hour engines. Table 6.5-6 presents our assessment of the mix of the fuel system constructions used today. This assessment is based on the NONROAD 2005 model and on confidential information supplied by Small SI equipment manufacturers.

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### Costs of Control

Table 6.5-6: Baseline Technology Mix for Small SI Equipment

Equipment Class Fuel Line Description Fuel Tank Construction Length ft* construction gallons material/process** Handheld Equipment

Class III commercial Class III residential Class IV commercial Class IV residential Class V 0.25 0.25 0.33 0.33 0.50 rubber hose rubber hose 6% molded line 24% molded line 52% molded line 0.9 0.3 0.4 0.3 0.5 HDPE HDPE 6% Nylon/94% HDPE 24% Nylon/76% HDPE 52% Nylon/48% HDPE Class I Equipment ag/const/gen ind/mat hand commercial mowers residential mowers

com. other L&G res. other L&G pumps/comp/press. wash snow equipment utility/rec. vehicles welders/generators 0.72 0.72 0.62 0.72 0.62 0.72 0.63 0.72 0.72 rubber hose rubber hose rubber hose rubber hose rubber hose rubber hose rubber hose rubber hose rubber hose 1.6 0.8 0.4 1.1 0.6 0.8 0.3 3.6 0.8 100% IM 90% IM/10% BM 100% IM 90% IM/10% BM 100% IM 100% IM 100% IM 100% IM 100% IM Class II Equipment
ag/const/gen ind/mat hand commercial mowers residential mowers

com. other L&G res. other L&G pumps/comp/press. wash snow equipment utility/rec. vehicles welders/generators 3.6 6.5 3.2 1.5 1.1 2.6 1.2 2.7 3.8 rubber hose rubber hose rubber hose rubber hose rubber hose rubber hose rubber hose rubber hose rubber hose 5.4 4.7 2.6 1.2 5.0 4.7 0.7 3.9 6.0 60% IM/40% RM 60% IM/40% RM 70/18/12% IM/BM/RM 60% IM/40% RM 70/18/12% IM/BM/RM 60% IM/40% RM 60% IM/40% RM 60% IM/40% RM 60% IM/40% RM * we use 1/8" I.D. for handheld and 1/4" I.D. for non-handheld hose ** IM = injection molded HDPE, BM = blow-molded HDPE, RM = rotational-molded XLPE


### We base our fuel tank costs on several technologies. In our cost analysis for handheld engines, we model costs based on fluorinati on for HDPE tanks, but we do not apply costs to tanks that are molded out of nylon as these tanks would likely meet the standards today. For non-handheld equipment, we split the costs of permeation control of injected molded HDPE fuel tanks 50/50 between fluorination and converting to multi-layer thermoformed constructions with an EVOH barrier. For blow-molded fuel tanks , we base our costs on using a multi-layer blowmolded construction with an EVOH barrier. For rotational-molded XLPE fuel tanks, we base our costs on rotational-molding a nylon layer in the tank.

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### Final Regulatory Impact Analysis
For fuel line permeation, we distinguish between the costs for traditional hose versus molded fuel lines. Fuel hose costs are based on using a fluoroelastomer barrier within the traditional construction. For molded fuel lines, we base the costs on molding the partscompletely out of a high-grade fluoroelastomer. We do not apply costs to fuel lines used in coldweather equipment.

As discussed above, our cost estimates incl ude both variable and fixed costs, and we distinguish between near-term and long-term costs. Because our analysis amortizes fixed costs over 5 years, the long-term costs are generally made up of variable costs only. The exception to this is fuel tank permeation control strategies where more expensive molding equipment is used. We assume an equipment life of 10 years, so in the long term, the amortized additional cost of the molding equipment is half, on average, of the short-term amortized cost over 5 years (5 years of amortized payments/10 years of equipment life = 1⁄2). In addition, variable costs are lower in the long term due to the learning effect discussed in Section 6.1. Table 6.5-7 presents these average per-engine cost estimates.
Table 6.5-7: Small SI per Equipment Co st Estimates (Without Fuel Savings) Short Term (years 1-5) Long Term (years 6-10)

Fixed Variable Total Fixed Variable Total Handheld aggregate tank permeation hose permeation $0.01 $0.01

$0 $0.81 $0.62 $0.19 $0.82 $0.63 $0.19 $0 $0 $0 $0.69 $0.50 $0.19 $0.69 $0.50 $0.19 Class I aggregate tank permeation hose permeation

running loss $0.47 $0.45 $0.02

$0 $2.58 $0.33 $0.33 $1.92 $3.05 $0.78 $0.35 $1.92 $0.19 $0.19

$0 $0 $2.01 $0.27 $0.20 $1.53 $2.20 $0.46 $0.20 $1.53 Class II aggregate tank permeation hose permeation

running loss $1.26 $1.21 $0.04

$0 $5.47 $2.15 $1.09 $2.23 $6.73 $3.37 $1.13 $2.23 $0.69 $0.69

$0 $0 $4.48 $1.73 $0.96 $1.78 $5.16 $2.42 $0.96 $1.78



### 6.5.7 Small SI Equipment Aggregate Costs
Aggregate costs are calculated by multiplying the per-equipment variable cost estimates described above by projected equipment sales. Fixed costs are added as incurred. Fuel savings are calculated directly from the projected HC reductions due to the evaporative emission standards. Table 6.5-8 presents the projected costs of the rule over a 30-year time period with and without the fuel savings associated with reducing evaporative emissions.
At a 7 percent discount rate, over 30 years, the estimated annualized cost to manufacturers for Small SI evaporative emission control is $65 million. The estimated corresponding annualized fuel savings due to control of evaporative emissions from Small SI

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### Costs of Control
equipment is $53 million. At a 3 percent discount rate, the estimated annualized cost to manufacturers for Small SI evaporative emission control is $68 million. The estimated corresponding annualized fuel savings due to control of evaporative emissions from Small SI equipment is $59 million.

Table 6.5-8: Projected 30-Year Aggre gate Cost Stream for Small SI Evap

Year Without Fuel Savings With Fuel Savings

Handheld Class I Class II Handheld Class I Class II

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 $224,312 $5,942,463 $5,816,345 $5,923,313 $7,752,522 $7,883,770 $6,810,314 $6,922,632 $7,034,855 $7,147,090 $7,259,067 $7,371,143 $7,483,470 $7,595,660 $7,707,763 $7,819,853 $7,931,999 $8,044,212 $8,156,448 $8,268,656 $8,380,840 $8,493,060 $8,605,303 $8,717,528 $8,829,741 $8,941,949 $9,054,168 $9,166,396 $9,278,617 $9,390,834 $4,648,719 $4,732,285 $9,215,094 $9,277,641 $30,008,965 $29,122,813 $29,609,400 $30,093,095 $30,569,878 $25,830,285 $26,235,145 $26,644,831 $27,051,954 $27,457,582 $27,860,231 $28,266,579 $28,672,351 $29,079,725 $29,490,381 $29,900,304 $30,309,200 $30,719,307 $31,129,464 $31,540,051 $31,950,436 $32,360,405 $32,770,086 $33,180,125 $33,590,247 $34,000,550 $7,105,928 $13,749,794 $12,455,089 $35,396,135 $36,003,944 $35,892,762 $36,495,479 $37,094,450 $32,298,515 $32,819,027 $33,338,022 $33,862,125 $34,382,368 $34,902,482 $35,418,720 $35,938,441 $36,458,489 $36,981,966 $37,505,944 $38,028,453 $38,550,330 $39,073,626 $39,597,054 $40,121,181 $40,644,586 $41,167,490 $41,690,229 $42,213,436 $42,736,659 $43,260,062 $224,312 $5,707,932 $5,135,637 $4,845,509 $6,079,623 $5,677,010 $4,191,701 $4,019,074 $3,902,020 $3,897,310 $3,924,431 $3,968,150 $4,021,523 $4,080,576 $4,139,728 $4,198,990 $4,258,379 $4,317,834 $4,377,298 $4,436,735 $4,496,146 $4,555,595 $4,615,066 $4,674,519 $4,733,961 $4,793,398 $4,852,844 $4,912,301 $4,971,750 $5,031,196 $3,697,028 $2,634,260 $6,081,748 $5,276,627 $21,187,318 $16,186,469 $13,744,050 $12,389,454 $11,344,204 $5,337,945 $4,963,819 $4,768,572 $4,660,933 $4,604,761 $4,586,374 $4,607,753 $4,648,613 $4,691,017 $4,733,531 $4,775,266 $4,815,980 $4,857,899 $4,899,855 $4,942,267 $4,984,464 $5,026,247 $5,067,730 $5,109,583 $5,151,512 $5,193,635 $4,886,033 $8,715,782 $4,833,539 $20,401,655 $14,937,731 $9,525,916 $6,260,075 $3,382,349 $(4,288,346) $(5,765,846) $(6,881,442) $(7,709,855) $(8,357,363) $(8,820,939) $(9,198,114) $(9,511,148) $(9,799,648) $(10,064,140) $(10,315,949) $(10,558,303) $(10,793,367) $(11,021,049) $(11,243,155) $(11,460,730) $(11,676,805) $(11,890,232) $(12,101,049) $(12,309,918) $(12,516,613) $(12,721,142)



## 6.6 Costs of Evaporative Emission Controls for Marine Vessels

This section presents our cost estimates for meeting the new evaporative emission standards for marine vessels.
To determine the cost impacts of the evaporative emission standards on marine fuel systems, we considered three primary marine applications. The first is a portable fuel tank with a detachable fuel line and a primer bulb. The second is a personal watercraft vessel. The third is

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### Final Regulatory Impact Analysis
a larger vessel with an installed fuel tank and fuel lines meeting SAE J1527 specifications. In our cost analysis, we consider a wide range of vessel sizes for each of these categories. However, to simplify this discussion we only present our cost estimates for the three typical applications shown in Table 6.6-1. For this illustration, costs are based on vessels with one fuel tank and one engine. Although these typical conf igurations do not, by any means, represent all of the vessel types included in our cost calculations, they should give a good indication of how we performed our analysis.
Table 6.6-1: Typical Marine Vessel Fuel System Configurations
Portable Tank PWC Installed Tank Fuel Tank Capacity (gallons) Fuel Tank Material* Fuel Tank Molding Process Fuel Tank Weight (lbs.) 6 HDPE blow-molded 4.4 17 HDPE blow-molded 12 57 XLPE rotational-molded 55 Fuel Hose: Length (ft.) Inner Diameter (in.) Vent Hose: Length (ft.) Inner Diameter (in.) Fill Neck: Length (ft.) Inner Diameter (in.) 6, primer bulb 1/4

–

–

–

– 5.7 1/4 2 1/4 1.9 1.5 9.9 3/8 8.0 5/8 10.1 1.5 

### * HDPE = high-density polyethylene, XLPE = cross-link polyethylene

Fuel tank weights are based on measurements of fuel tanks used in our permeation testing and are used to determine material costs. XLPE fuel tanks are typically thicker walled; thus they typically weigh more per gallon of capacity. Fuel hose lengths are based on conversations with (and confidential business information from) boat builders and fuel system suppliers. This data is within the range of hose lengths included in the written comments made by one boat builder on our earlier proposal. 55



### 6.6.1 Hose Permeation
There are several grades of fuel system hose used in marine applications. For sterndrive and inboard (SD/I) applications, Title 33 of the Code of Federal Regulations, Part 183 defines fuel system requirements. These requirements reference SAE J1527 for fuel hose specifications. For personal watercraft (PWC), fuel line specifications are defined in SAE J2046. For outboards, no fuel hose specifications exist. Typically, larger vessels, with installed fuel tanks use SAE J1527 Class I hose for lines filled with fuel and Class II hose for lines containing fuel vapor. Inner diameters (ID) of these fuel system lines are typically 3/8" for fuel lines, 5/8" for vent lines, and 1.5" for fill necks. PWC typically have fuel supply/return hose with a 1/4" ID. Portable marine fuel tanks for outboards typically have fuel lines with a 1/4" ID and a primer bulb. Fill neck hose is made by wrapping several layers of materials over a mandrill and vulcanizing the rubber in an oven. The remaining fuel lines are typically extruded. Fuel hose meeting the CFR requirements typically has several layers for durability and flame resistance.

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### Costs of Control
Barrier fuel hose incremental costs estimates are based on costs of existing products used in marine and automotive applications. 56,57,58,59,60 

### Because the manufacturing process is not fundamentally changed in adding a barrier layer, this cost is mostly the result of more expensive materials. For 1/4" hose such as used in some small outboards and personal watercraft, we estimate a cost increase of $0.25/ft for a thermoelastic barrier and $0.85/ft for a thermoplastic barrier. These costs are consistent with the costs described above for Small SI equipment.
SD/I vessels are required to use marine fuel hose meeting Coast Guard requirements specified in 33 CFR part 183. This hose is recommended by the American Boat and Yacht Council for outboard boats not using portable fuel tanks as well. Marine hose with a nylon barrier is available today that meets these requirements. The cost differential of traditional versus marine barrier hose for fuel and vent lines in the market today varies from no cost at all to more than $1 per foot. One hose distributer stat ed that they sell both non-barrier and barrier hose at the same price. They stated that the fuel resistance provided by the barrier layer allows the hose construction to use a thinner wall and therefore use less rubber. Another hose distributor, lists about a $1 cost markup for A1 barrier hose compared to their B1 marine hose. Note that B1 hose does not meet the Coast Guard fire requirements for fuel lines and this may be part of the reason for the cost differential. For this analysis, we use a cost increase of $0.50/ft for fuel hose and $1.00 for vent hose for vessels with installed fuel tanks. We use a higher incremental cost for vent hose because this hose typically has a larger diameter, requiring more material.
For 11⁄2" fill neck hose, we estimate a cost increase of $2.00/ft. This cost increase is based on our estimates of material and labor costs. The fill neck hose would be constructed in the same manner as today except that a thin barrier layer would be included in the multi-layer construction. One hose distributer advertises barrier fill-neck hose with a price markup of $9 per foot. However, this cost markup likely represents the high costs typical of special orders where setup costs must be spread over low hose production. Currently, little or none of this hose is purchased by boat builders. Our price estimate is more consistent with differences in cost for barrier versus non-barrier chemical hose manufactured in the same manner.
We do not expect the addition of a barrier layer to affect the flexibility of the hose because marine hose is already fairly stiff and because the barrier layer is very thin and flexible. In fact, the barrier hose samples we tested appeared a little more flexible than the baseline hose because less wall thickness was needed for permeation control. Therefore, we believe special hose clamps or fittings will not typically be required.
Primer bulbs are typically formed from molded cured rubber such as NBR or injectionmolded out of a rubberized plastic such as Alcryn. Primer bulbs could also be molded from FKM which is a fluoroelastomer used in fuel lin e applications. Primer bulbs typically weigh between 0.1 and 0.2 lbs, nitrile costs about $1.00/lb and FKM costs about $10-15/lb depending on the level of fluorine in the material. If th e whole primer bulb was molded out of FKM, it would increase the material cost by about $1.50-2.00 per primer bulb. Alternatively, manufacturers could save on material costs by injection molding an inner layer of Alcryn and curing a coating of FKM over this shell. Using a higher grade of FKM ($15/lb) could help minimize the amount of the fluoroelastomer needed. For the multi-layer design, we assume

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### Final Regulatory Impact Analysis
about 30-50 percent of the material would be FKM which results in a material cost increase of about $0.90 per primer bulb.
Table 6.6-2 presents our estimates of incremental costs for low permeation marine fuel system hose. Primer bulb costs are presented both for 100 percent FKM and multi-layer constructions. The incremental cost for the 1/4" fuel lines are presented for the thermoelastic barrier and the costs for the heavier fuel hose are based on costs of existing nylon barrier marine hose. These costs include a markup, and no long-term cost savings are applied to these costs because they are primarily material costs.
Table 6.6-2: Hose Permeation Control Cost Estimates for Typical Marine Vessels
Portable Tank 6', 1/4" ID fuel hose primer bulb PWC 5.7', 1/4" ID fuel hose 1.9', 1.5" ID fill neck 2.0', 1/4" ID vent hose Installed Tank 9.9', 3/8" ID fuel hose 10.1', 1.5" ID fill neck 8.0', 5/8" ID vent hose primer bulb 100% FKM multi-layer fuel supply/return fill neck vent hose $2.13 $1.16 $1.94

–

– –

– $1.84 $5.16 $0.65 –

– $6.58 $26.12 $10.29



### 6.6.2 Tank Permeation
Portable fuel tanks and fuel tanks used in personal watercraft are typically blow-molded out of HDPE and have a capacity ranging from 4 to18 gallons. Because of the manufacturing process and material used, some permeation control technologies are available that are different from what would be feasible for larger rotational-molded fuel tanks. Larger, low-production volume marine fuel tanks are typically rotationa l-molded out of XLPE. Rotational-molding is used for smaller production runs because of the much lower relative tooling costs compared to blow-molding. For fuel tanks in vessels that are subject to the 33 CFR 183 fuel system requirements, manufacturers have found that fuel tanks molded out of HDPE will not pass the fire test, while XLPE fuel tanks will. Therefore, XLPE is used in rotational-molded marine fuel tanks.

6.6.2.1 Blow-Molded Fuel Tanks
Our surface treatment cost estimates are based on price quotes from companies that specialize in this fluorination 61 

### and sulfonation. 62 

### The fluorination costs are a function of the geometry of the fuel tanks because they are based on how many fuel tanks can be fit in a treatment chamber. The price sheet referenced for fluorination assumes rectangular shaped containers. For irregular shaped fuel tanks, the costs would be higher because they could not efficiently utilize the chamber volume. There would be significant void space. We consider a

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### Costs of Control
void space equal to about 25 percent of the volume of the fuel tank. For sulfonation, the shape of the fuel tanks is less of an issue because the treatment process is limited only by the spacing on the production line which is roughly the same for the range of fuel tank sizes used for portable and personal watercraft fuel tanks. Thes e prices do not include the cost of transporting the tanks; we estimated that shipping, handling and overhead costs would be an additional $0.40- $1.40 per fuel tank, for tanks ranging from 4-18 gallons. 63



### As discussed above for Small SI fuel tanks, manufacturers, with high enough production volumes, could reduce the costs of sulfonating fuel tanks by constructing an in-house treatment facility. We base our costs for marine fuel tanks on 150,000 tanks per year and use this approach for our long-term cost determination for sulfonation.
Our estimate of the cost for non-continuous barrier platelets (generally known as Selar) is based on increased material costs. No changes should be necessary to the blow-molding equipment. We used 10 percent ethylene vi nyl alcohol (EVOH) which is about $3-4 per pound and 90 percent HDPE which is about $0.65-0.75 per pound. 64 

### This equates to a price increase of about $0.35 per pound. We then applied the material weights shown in Table 6.5-1 to estimate costs per tank for this technology.
For higher production volumes, manufacturers may consider blow molding multi-layer fuel tanks with continuous barriers. Practica lly, a new blow-molding machine would be required because four or five additional injection screws would be necessary for the barrier layer, two adhesion layers, an additional HDPE layer, and potentially a regrind layer. A machine that could blow-mold multi-layer tanks would approximately double the price of the blow-molding machine For this analysis, we use a mono-layer machine cost of $1,000,000 and a multi-layer machine cost of $3,000,000 for smaller tanks and $4,000,000 for larger tanks (>6 gallons) 65



### , resulting in an increase in machine cost of $2,000,000-$3,000,000. In addition, tooling costs for each new tank design would be about $50,000. For this analysis we considered a fuel tank with a material composition of 3 percent EVOH at $3.50/lb, 4 percent adhesive layer at $1/lb, 45 percent regrind, and the remainder HDPE. Our analysis uses a total annual production of 60,000-80,000 blow-molded tanks per year, depending on tank size, with 5 different molds. Capital costs are amortized over 5 years in the short term and 10 years in the long-term (reflecting a 10 year life of the machine).

6.6.2.2 Rotational-Molded Fuel Tanks

Most installed fuel tanks are rotational-molded out of XLPE for the reasons discussed above. As discussed above, barrier treatments have not been demonstrated to provide effective permeation control for XLPE. In addition, Selar and traditional multi-layer blow-molding approaches do not work for rotational-molded cross-link polyethylene fuel tanks.
Two approaches were discussed above in the Small SI section for rotational-molded XLPE fuel tanks: 1) dual-layer molding with a barrier layer and 2) epoxy coating of fuel tanks. These approaches could also be applied to marine fuel tanks. For the dual layer approach, marine fuel tank manufacturers have expressed c oncern that the acetal copolymer will not adhere

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### Final Regulatory Impact Analysis
well to the XLPE. For large fuel tanks, this could be an issue because the layers could pull apart and cause leaks at the fittings. As an alternative, one company has developed an approach using a high grade, non-hygroscopic nylon known a polyamide 11 as a barrier layer. This material costs about $5-7/lb compared to XLPE which costs about $1.20/lb. The barrier layer would likely be about 20 percent of the total material. Using a nylon cost of $6/lb. and a barrier fraction of 30 percent, we get an average material cost of $2.64/lb. For the short term, we add a $5,000 cost to the mold or a drop box which we amortize over 100 tanks per year for 5 years. Consistent with the analysis for Small SI equipment, we do not include the cost of a drop box in the long term because of the ongoing development of a process that does not require a drop box. 66 

### In fact, one manufacture is already using a proprietary process to mold multi-layer rotational-molded fuel tanks without a drop box.
Another material is also available for molding an inner layer in rotomolded XLPE fuel tanks. This material is poly butylene terephthalate cyclic oligimor and is known by the trade name CBT®. With this material, no drop box is necessary. The CBT is added in the mold with the XLPE resin. During the molding process, the XLPE shell forms in the mold. Due to differences in viscosity and temperature properties, the CBT goes to the inside of the fuel tank. It then polymerizes to form an inner liner. We use a cost of $5/lb. for CBT in this analysis and use the same barrier thickness as discussed above.
Another technology that has been demonstrated for reducing permeation from XLPE fuel tanks is a low permeation epoxy barrier. To apply this barrier, an adhesion treatment must first be performed to increase the fuel tank surface energy so that the epoxy will adhere to the XLPE. This can be done through a low level fluorination treatment. For this analysis we use the cost of level 1 fluorination. 67 

### We use the same void space and shipping costs discussed above for our fluorination cost analysis. Shipping costs are estimated to range from $4-$10 per tank for 20-130 gallon tanks. The epoxy could be applied by dipping the fuel tank or spraying it on like paint and then the epoxy must be allowed to cure. We include a fixed cost of $10,000 for a volume of 15,000 fuel tanks per year to account for coating and curing equipment. In addition, we apply the cost of part of one employee’s time (using a labor standard of 15,000 tanks annually per employee) time to apply the coating and use a labor rate of $28/hr with a 40 percent markup for overhead which is consistent with our engine costs above. We estimate that the epoxy cost would be $6-7/lb. Manufacturers have commented that UV-curable epoxy, which could be processed much faster, would cost $12-15/lb. 68,69 

### We use a cost of $12/lb. for this analysis. However with only a thin coating needed (we use 0.125 mm), the epoxy layer makes up only about 2.0-2.5 percent of the material of the fuel tank. Because there are benefits to the epoxy coating such as allowing the fuel tank to be painted, there may be an incentive to use this technology even on HDPE fuel tanks. For that reason, we estimated the cost for portable fuel tanks as well using the same general assumptions except for a larger production volume of 100,000 tanks per year with a increased labor standard due to the smaller tank sizes.

6.6.2.3 Other Marine Fuel Tank Constructions
We do not anticipate that the permeation standard would affect the cost of metal fuel tanks. Although some permeation can occur at rubber seals (such as for the sending unit), this

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### Costs of Control
would be small due to the small exposed surface area of the seals.
Another type of fuel tank construction that is used in some applications, such as offshore racing boats, is fiberglass fuel tanks. This fiberglass is commonly made of vinyl ester or epoxy which have high permeation rates. One manufacturer has developed a fiberglass composite that uses treated volcanic ash in a carrier matrix to create a non-continuous permeation barrier. This composite is known as an unsaturated polyester nanocomposite (UPE). In addition to being a low permeation technology for fiberglass tanks, this construction could also be used as an alternative for metal or plastic fuel tanks. These low permeation fiberglass constructions can be fabricated or molded. We estimate that fabricat ed fiberglass composite fuel tanks would cost at least as much as metal fuel tanks because of the labor involved in hand constructing the tanks. However, these fuel tanks may also be molded with an average mold cost of $2,500. 70 

### For the purposes of this analysis we use a cost increase of 20 percent when comparing this technology to rotational-molded fuel tanks which is a somewhat lower than the cost of a metal fuel tank.

6.6.2.4 Summary of Fuel Tank Costs per Vessel
Table 6.6-3 summarizes the incremental costs of the fuel tank permeation emissioncontrol strategies discussed above. For technologies sold by a supplier to the engine manufacturers, an additional 29 percent markup is included for the supplier's overhead and profit. Both long-term and short-term costs are presented. The long-term costs account for the stabilization of the capital investments and the learning curve effect discussed above. We use the same material, shipping, and fluorination costs for our short-term and long-term estimates because these cost components are well established with a wide range of applications. As discussed above, for the multilayer fuel tank constructions, we consider an EVOH barrier for portable and PWC fuel tanks and a polyamide 11 ba rrier for rotational-molded fuel tanks. UPE fiberglass nanocomposite costs presented here are incremental to rotational-molded XLPE tanks.

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### Final Regulatory Impact Analysis

Table 6.6-3: Tank Permeation Control Co st Estimates for Typical Marine Vessels

Portable Tank 6 gallons PWC 17 gallons Installed Tank 57 gallons

fluorination: short term long term $9.30 $7.44 $26 $21 NA

sulfonation: short term long term $1.67 $1.26 $3.27 $1.29 NA

non-continuous platelets $1.27 $3.37 NA multi-layer: short term EVOH long term $7.74 $4.22 $15 $8.58 $81 $68
multi-layer: short term PA11 long term NA NA $81 $68
multi-layer: CBT NA NA $54
UPE fiberglass short term nanocomposite long term NA NA $48 $39
epoxy coating: short term long term $5.47 $4.85 $12 $11 $43 $39



### 6.6.3 Venting Losses
For portable fuel tanks, the standards would require the fuel cap to be modified to remove the user-controlled screw and add a one-way valve. We estimate that the cost of a vacuum relief valve would be about $0.50 more than the manual valve used on portable fuel tanks today. We double this cost to account for upgrading the valve for marine applications. For personal watercraft, we are not claiming any costs or benefits because these vessels already seal their fuel tanks with a pressure relief valve. 71



### Larger fuel tanks are currently vented to atmosphere. One emission-control technology that could be used to meet our standards would be to seal the fuel tank and use a 1 psi pressure relief valve to prevent over-pressure. However, manufacturers have commented that their fuel tanks are not designed to withstand pressure and that the current molding process does not lend itself to making the fuel tanks more pressure resistant. Their fuel tanks currently deflect significantly at pressures as low as 1 psi. However, for some fuel tank constructions, a sealed system may be a viable option. For our cost analysis of this approach, we estimate the cost of a pressure relief valve to be about $1 based on products available in automotive applications. We double this cost to account for either upgrading the valve for marine applications or adding a redundant valve for safety reasons. For this case, we consider in the costs, changes in the fuel tank design to make it more able to withstand 1 psi of pressure. We estimate that if manufacturers were to make changes to the geometry of the fuel tank to help withstand 1 psi of pressure without significant deflection, it could increase the material needed by 10 to 30 percent. We include a cost estimate of $2,500 for the development of each new mold and amortize it over

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### Costs of Control
100 tanks per year for 5 years. If the pressure relief valve is placed in the fill-neck cap, no vent hose would be needed, which would reduce the cost of the fuel system. For the long-term cost estimate, we consider the cost savings of removing the vent line. For this analysis, based on conversations with boat builders, we divide the aftermarket hose price 72 

### by four to represent the cost of the hose to the boat builder.
Diurnal emissions may also be controlled through the use of a carbon canister in the vent line. The carbon would be purged by air drawn into the fuel tank as the fuel cools. This is known as passive purge. With a canister system, no significant pressure would build up in the fuel tank. The canister would be packaged in the existing vent line and a float valve or other liquid/vapor separation device would be added to the fuel system to ensure that liquid fuel would not enter the vent line during refueling. We include a cost of $2 for this valve and $0.40 for two additional hose clamps. In our cost estimates, we consider a canister using marine grade carbon which is harder and more moisture resistant than typical carbon used in automotive applications. Data shows that about 2 liters of carbon would be necessary for a 50 gallon fuel tank. 73 

### We estimate the cost of a canister to vary based on size ranging from about $12 for a 20 gallon tank to about $38 for a 100 gallon tank.
Pressure could be completely eliminated using a bladder fuel tank because there would be no vapor space. Based on conversations with a manufacturer of bladder fuel tanks, the incremental cost of adding a bladder to a fuel tank would increase the fuel tank cost by 30-100 percent, depending on the size and shape of the fuel tank. As with a control strategy using a pressure relief valve in the fill neck, no vent hose would be needed with a bladder fuel tank.
Pressure in the fuel tank can be minimized by reducing the vapor space in the fuel tank. A volume compensating air bag can be used to minimize pressure. This air bag would need to be about 1/4 to 1/3 the volume of the fuel tank. For this analysis we use 1/3 the cost of the bladder fuel tank to account for the smaller bag size. We also include the cost of a low pressure psi valve which could be used in conjunction with this technology as a safety backup.
Table 6.6-4: Venting Control Cost Estimates for Typical Marine Vessels
Portable Fuel Tank 6 gallons Installed Fuel Tank 57 gallons pressure relief valve: short term long term $1.29 $1.03 $26 $21 passive purge canister: short term long term NA NA $32 $25

bladder fuel tank: short term long term NA NA $259 $207 volume compensating short term air bag: long term NA NA $91 $73

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### Final Regulatory Impact Analysis

6.6.4 Certification and Compliance
We anticipate that manufacturers will use design based certification to as an alternative to emission testing to meet the diurnal emission requirements. However, they will still need to integrate the emission-control technology into their designs and there will be some engineering and clerical effort need to submit the required information for certification. We expect that in the early years, plastic fuel tank manufacturers will perform durability and permeation testing on their fuel tanks for certification. They will be able to carry over this data in future years and will be able to carry across this data to other fuel tanks made of similar materials and using the same permeation control strategy regardless of tank size or shape. Typical certification costs may be spread between the tank manufacturer, hose manufacturer, and boat builder. For the sake of this analysis we combine the tank, hose, and boat certification costs to calculate the total certification of an average fuel system. We estimate that 80 percent of fuel tank sales are plastic and about 25 percent of fuel tanks sold are portable fuel tanks.
For the first year we estimate fuel tank durability and certification testing to cost about $15,000 per tank manufacturer on the assumption that the manufacturer will use the same materials and permeation control strategy for all of their fuel tanks to reduce costs. Low permeation fuel lines are largely established technology. However, we include a cost of $1,000 to perform certification testing on marine hose. In addition, we estimate about $10,000 for engineering and clerical work for the tank and hose manufacturers. Boat builder certification should be a simple letter referencing the tank and hose certificates and design requirements. We consider a cost of $500 for this effort.
For portable fuel tank manufacturers we spread these costs over sales of 25,000 tanks per year. For PWC manufacturers, which are integrat ed manufacturers, we base the costs on average annual PWC sales which we estimate to be about 15,000 units per year. For vessels with installed fuel tanks, the same tank manufacturer will often sell to many boat builders. Therefore, we base the cost on average sales per tank manufacturer which we estimate to be about 40,000 per year. Although there is currently a limited offering of marine fuel hose products today, we conservatively use the same lower unit volumes as for fuel tanks when applying hose testing costs. This represents the scenario where portable fuel tank manufacturers and PWC manufacturers perform their own hose testing, while smaller boat builders rely on data from the hose manufacturers. For non-integrated boat builders using installed fuel tanks, we estimate that the average sales per year is approximately 250 vessels.
As with other fixed costs, we amortized the cost over 5 years of sales to calculate per unit certification costs. Combining these costs, we get average fuel system integration and compliance costs of about $0.22 for portable fuel tanks, $0.35 for PWC, and $0.53 for fuel systems on other vessels.

6.6.5 Operating Cost Savings
Evaporative emissions are essentially fuel that is lost to the atmosphere. Over the lifetime of a marine vessel, this can result in a significant loss of fuel. The reduction in

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### Costs of Control
evaporative emissions would therefore result in meaningful fuel savings which can be directly related to operating cost savings based on an average density of 6 lbs/gallon for gasoline (based on lighter hydrocarbons which evaporate first) and the price of gasoline described above. Table 6.6-5 presents the estimated fuel savings for marine vessels associated with the evaporative emission standards.
Table 6.6-5: Projected Evaporative Fuel Savings for Marine Vessels
Portable PWC Installed Evaporative HC Reduced [lbs/life] 80 53 228

Lifetime Gallons Saved 13 9 38 Lifetime Cost Savings $24 $16 $68 Average Equipment Life [years] 12.7 9.9 17 Discounted Cost Savings (7%) $17 $12 $42



### 6.6.6 Total Marine Vessel Costs
We expect that marine vessel manufactures will make use of a variety of technologies to meet the fuel tank permeation and diurnal emission standards. As discussed above, many options are available so the technologies chosen will depend on the baseline fuel tank construction, the vessel type, and the manufacturer’s particular preferences. The hose permeation standards will likely be met through the use of barrier hose constructions.
In calculating the costs of this rule, we consider the marine vessel categories in the NONROAD model. NONROAD divides marine vessels into outboard, personal watercraft, and SD/I applications and further subdivides these app lications into several engine power categories. This analysis uses the unique hose and tank sizes for each subcategory in the NONROAD model and described in Chapter 3. For this analysis, we treat all vessels with outboard engines up to 25 hp as having portable fuel tanks made of plastic. This analysis considers all PWC to have plastic fuel tanks as well. Based on our understanding of the market share of plastic versus aluminum tanks, we use a split of 30 percent metal and 70 percent plastic for installed fuel tanks.
We base our cost analysis on likely technologies that manufactures may use. For portable and PWC fuel tanks and, we base our tank permeation control costs on multi-layer coextrusion with an EVOH barrier. For larger installed fuel tanks, we split the costs 50/50 between dual-layer rotational-molded tanks with a nylon barrier and the use of a low-permeation epoxy coating over the tanks in a post molding process. Diurnal control costs are based on sealed systems for portable marine tanks, cu rrent technology for PWC, and passive canister systems for vessels with installed fuel tanks. Fuel supply line costs are based on thermoelastic barrier technology. No costs or benefits are claimed for vent hose or fill neck hose.

As discussed above, our cost estimates incl ude both variable and fixed costs, and we

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### Final Regulatory Impact Analysis
distinguish between near-term and long-term costs. Because our analysis amortizes fixed costs over 5 years, the long-term costs are generally made up of variable costs only. The exception to this is fuel tank permeation control strategies where more expensive molding equipment is used. We assume an equipment life of 10 years, so in the long term, the amortized additional cost of the molding equipment is half, on average, of the short-term amortized cost over 5 years (5 years of amortized payments/10 years of equipment life = 1⁄2). In addition, variable costs are lower in the long term due to the learning effect discussed in Section 6.1. Table 6.6-6 presents these average per-engine cost estimates.
Table 6.6-6: Per Vessel Evaporative Emission Cost Estimates (Without Fuel Savings) Short Term (years 1-5) Long Term (years 6-10)

Fixed Variable Total Fixed Variable Total Portable aggregate tank permeation hose permeation

diurnal venting $6.65 $6.64 $0.01

$0 $5.39 $1.00 $3.10 $1.29 $12.04 $7.65 $3.10 $1.29 $3.21 $3.21

$0 $0 $5.13 $1.00 $3.10 $1.03 $8.34 $4.22 $3.10 $1.03 PWC aggregate tank permeation hose permeation

diurnal venting $12.95 $12.93 $0.01

$0 $4.49 $2.64 $1.84

$0 $17.43 $15.58 $1.86

$0 $6.30 $6.30

$0 $0 $4.49 $2.64 $1.84

$0 $10.79 $8.94 $1.84

$0 Installed aggregate tank permeation hose permeation

diurnal venting $0.63 $0.23 $0.01 $0.40 $73.55 $35.31 $6.54 $31.69 $74.18 $35.54 $6.54 $32.09 $0 $0 $0 $0 $61.53 $29.63 $6.54 $25.35 $61.53 $29.63 $6.54 $25.35



### 6.6.7 Marine Vessel Aggregate Costs
Aggregate costs are calculated by multiplying the per-vessel variable cost estimates described above by projected vessel sales and adding in fixed costs as incurred. Vessel sales are based on estimates from the National Marine Manufacturers Association (www.nmma.org) and projections for future years are based on the growth rates in the NONROAD model. A description of the sales and population data and our analysis of the data are available in the docket. 74 

### Fuel savings are calculated directly from the projected HC reductions due to the evaporative emission standards. Table 6.6-7 presents the projected costs of the rule over a 30- year time period with and without the fuel savings associated with reducing evaporative emissions. For the purposes of combining these costs with the exhaust emission costs described above, we also present the projected costs by engine type in Table 6.6-8.
The population and sales data reported by NMMA, suggest that the NONROAD model may somewhat underestimate the useful life of outboard and personal watercraft marine vessels. If useful life were back-calculated—dividi ng NMMA population by sales and adjusted for growth—we would get a longer average life estimate. As a result, the per-vessel fuel savings

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### Costs of Control
described above may be understated. Because the current approach gives us a conservative benefits estimate, and because we do not have new data on average lives for marine vessels to update the estimates in the NONROAD model, we are not updating the model at this time. For this reason, the 30-year stream may give a better view of the impact of the fuel savings than the per-vessel analysis.
At a 7 percent discount rate, over 30 years, the estimated annualized cost to manufacturers for marine evaporative emission control is $21 million. The estimated corresponding annualized fuel savings due to control of evaporative emissions from boats is $22 million. At a 3 percent discount rate, the estimated annualized cost to manufacturers for marine evaporative emission control is $23 million. The estimated corresponding annualized fuel savings due to control of evaporative emissions from boats is $27 million.

Table 6.6-7: Projected 30-Year Aggre gate Cost Stream for Marine Vessels

Year Without Fuel Savings With Fuel Savings

Portable PWC Installed Portable PWC Installed

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 $36,474 $803,917 $857,095 $594,826 $599,164 $603,502 $607,839 $593,848 $598,004 $602,159 $606,314 $610,470 $614,625 $618,781 $622,936 $627,091 $631,247 $635,402 $639,584 $643,765 $647,947 $652,129 $656,310 $660,492 $664,674 $668,855 $673,037 $677,219 $681,400 $685,582 $67,297 $1,461,840 $1,395,094 $855,964 $862,207 $868,449 $874,691 $880,933 $887,097 $893,262 $899,426 $905,590 $911,754 $917,918 $924,083 $930,247 $936,411 $942,575 $948,778 $954,982 $961,185 $967,388 $973,591 $979,794 $985,998 $992,201 $998,404 $1,004,607 $1,010,810 $1,017,014 $425,096 $2,437,783 $2,118,774 $13,113,533 $25,655,601 $25,841,342 $26,027,084 $26,212,826 $24,120,397 $22,380,137 $22,534,578 $22,689,018 $22,843,458 $22,997,898 $23,152,338 $23,306,778 $23,461,218 $23,615,659 $23,771,076 $23,926,494 $24,081,911 $24,237,329 $24,392,747 $24,548,164 $24,703,582 $24,859,000 $25,014,417 $25,169,835 $25,325,252 $25,480,670 $36,474 $550,181 $299,968 $(352,563) $(787,374) $(1,194,787) $(1,593,995) $(2,011,013) $(2,403,445) $(2,791,322) $(3,170,164) $(3,541,264) $(3,893,751) $(4,217,582) $(4,502,321) $(4,715,380) $(4,892,031) $(5,047,877) $(5,189,699) $(5,318,214) $(5,440,156) $(5,551,536) $(5,655,549) $(5,745,992) $(5,828,655) $(5,903,314) $(5,963,979) $(6,018,898) $(6,068,556) $(6,116,187) $67,297 $1,401,963 $1,271,709 $516,639 $308,552 $103,461 $(97,802) $(295,433) $(487,095) $(673,068) $(850,586) $(1,000,808) $(1,134,586) $(1,212,981) $(1,270,967) $(1,318,185) $(1,357,627) $(1,391,089) $(1,418,920) $(1,441,800) $(1,460,469) $(1,475,218) $(1,486,959) $(1,496,432) $(1,505,907) $(1,515,381) $(1,524,855) $(1,534,329) $(1,543,803) $(1,553,278) $425,096 $1,913,103 $1,028,968 $10,845,446 $21,179,415 $19,143,903 $17,118,227 $15,098,006 $10,806,108 $6,882,907 $4,872,062 $2,878,316 $901,070 $(1,069,567) $(3,020,477) $(4,922,205) $(6,725,979) $(8,386,163) $(9,827,107) $(11,086,083) $(12,248,543) $(13,295,437) $(14,225,862) $(15,039,376) $(15,694,795) $(16,270,514) $(16,778,147) $(17,215,402) $(17,601,830) $(17,945,566)

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### Final Regulatory Impact Analysis

Table 6.6-8: Projected 30-Year Aggregate Cost Stream for Marine Vessels by Engine Type

Year Without Fuel Savings With Fuel Savings

OB PWC SD/I OB PWC SD/I

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 $319,871 $2,656,653 $2,502,577 $8,678,125 $15,269,926 $15,380,478 $15,491,029 $15,583,252 $14,360,302 $13,168,410 $13,259,282 $13,350,154 $13,441,026 $13,531,898 $13,622,771 $13,713,643 $13,804,515 $13,895,387 $13,986,834 $14,078,282 $14,169,729 $14,261,176 $14,352,623 $14,444,071 $14,535,518 $14,626,965 $14,718,413 $14,809,860 $14,901,307 $14,992,754 $67,297 $1,461,840 $1,395,094 $855,964 $862,207 $868,449 $874,691 $880,933 $887,097 $893,262 $899,426 $905,590 $911,754 $917,918 $924,083 $930,247 $936,411 $942,575 $948,778 $954,982 $961,185 $967,388 $973,591 $979,794 $985,998 $992,201 $998,404 $1,004,607 $1,010,810 $1,017,014 $141,699 $585,047 $473,292 $5,030,234 $10,984,838 $11,064,366 $11,143,894 $11,223,423 $10,358,098 $9,813,887 $9,881,610 $9,949,333 $10,017,057 $10,084,780 $10,152,503 $10,220,227 $10,287,950 $10,355,674 $10,423,826 $10,491,978 $10,560,130 $10,628,281 $10,696,433 $10,764,585 $10,832,737 $10,900,889 $10,969,041 $11,037,193 $11,105,345 $11,173,497 $319,871 $1,906,143 $912,594 $5,726,980 $10,170,561 $8,145,273 $6,134,930 $4,108,869 $776,555 $(2,506,681) $(4,483,567) $(6,438,915) $(8,363,328) $(10,247,532) $(12,075,309) $(13,785,575) $(15,367,391) $(16,791,879) $(17,990,346) $(19,002,879) $(19,924,799) $(20,741,603) $(21,455,586) $(22,105,569) $(22,684,596) $(23,205,543) $(23,661,696) $(24,055,883) $(24,404,310) $(24,716,953) $67,297 $1,401,963 $1,271,709 $516,639 $308,552 $103,461 $(97,802) $(295,433) $(487,095) $(673,068) $(850,586) $(1,000,808) $(1,134,586) $(1,212,981) $(1,270,967) $(1,318,185) $(1,357,627) $(1,391,089) $(1,418,920) $(1,441,800) $(1,460,469) $(1,475,218) $(1,486,959) $(1,496,432) $(1,505,907) $(1,515,381) $(1,524,855) $(1,534,329) $(1,543,803) $(1,553,278) $141,699 $557,141 $416,341 $4,765,903 $10,221,480 $9,803,842 $9,389,302 $8,978,125 $7,626,108 $6,598,266 $6,185,465 $5,775,967 $5,370,647 $4,960,383 $4,552,511 $4,147,990 $3,749,381 $3,357,839 $2,973,540 $2,598,583 $2,236,099 $1,894,631 $1,574,175 $1,320,201 $1,161,147 $1,031,715 $919,570 $821,583 $733,924 $655,200



## 6.7 Cost Sensitivity Analysis

In developing the cost estimates described a bove, EPA used data from a wide variety of sources. These sources included conversations with manufacturers and vendors, published material costs, government cost tracking, and sales literature. In addition, we discussed many of our cost estimates with industry experts. Through this process we have received information suggesting that there is the potential for variability in some of the cost estimates used as inputs to this analysis. For instance, fuel prices have been rising over the past few years which affects the dollar value of our fuel savings estimates.
In this section, we perform an analysis of the sensitivity of our cost estimates to the

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### Costs of Control
observed variation in costs for several input components of the cost analysis. The input components that we are focusing on for the sensitivity analysis are those that would be expected to have a significant effect on the final cost results. These are components that we either observed high variability when collecting the data, or industry has raised issues about the uncertainty of the technology which may lead to cost uncertainty.
We are focusing on five elements of the cost analysis for this sensitivity analysis. These five elements are:

1. gasoline prices 2. precious metal costs 3. fraction of Small SI equipment manuf acturers that design their own mufflers 4. electronic fuel injection on all Class II engines with multiple cylinders 5. costs of rotational-molded tank technologies

6.7.1 Gasoline Price Sensitivity
To estimate fuel savings in the above analysis, we used fuel price information obtained from the U.S. Department of Energy, Energy Information Administration (EIA) which posts gasoline price samples throughout the year on-line. 75 

### For 2004 and 2005, national fuel prices are based on an analysis of fuel prices by PADD as reported by EIA in 2006. 76 

### For years later than 2005, we use the estimates reported in the 2008 Annual Energy Outlook report also developed by EIA. 77 

### Based on this information, the national average fuel price, with taxes, grew from $2.20 in 2005 to $2.99 in 2008. This price estimate includes both a $0.184/gallon federal excise tax and approximately a $0.21/gallon average state excise tax. 78 

### Subtracting these taxes, we get a fuel cost of $2.60/gallon for 2008.
To investigate the sensitivity of the cost analysis in this chapter to gasoline fuel price, we looked at the U.S. average fuel prices for 2004 and 2007. These price estimates were calculated in the same manner as the 2005 estimate. Table 6.7-1 presents these estimates. Fuel savings are directly related to the gasoline price used in the cost analysis. Therefore, if the 2004 average gasoline price were used in the cost analysis, the estimated fuel savings would have been about 22 percent lower. If the 2008 projected price were used, the estimated fuel savings would have been about 33 percent higher. Because of the recent trend of increasing gasoline prices, we may be understating the fuel savings in our cost analysis. However, using the 2005 fuel price is consistent with our use of 2005 dollars for the costs in this chapter.
Table 6.7-1 U.S. Average Gasoline Prices [$/Gallon]

Year with taxes without taxes

2004 2005 2006 2007 2008 (projected) $1.80 $2.20 $2.63 $2.77 $2.99 $1.41 $1.81 $2.44 $2.37 $2.60

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### Final Regulatory Impact Analysis

As discussed above, our analysis of fuel savi ngs uses a constant fuel price for all future years. To the extent that fuel prices were to fluctuate in future years, this could have an impact on realized fuel savings. To investigate the sensitivity of our analysis to future fuel prices, we considered fuel price projections from the EIA’s 2008 Annual Energy Outlook. 79 

### EIA projections include primary estimates of fuel prices, known as the “reference case,” as well as “high price” estimates. These projections, which include taxes on motor gasoline, are shown in Figure 6.7-1. EIA projections from AEO 2007 and AEO 2006 are also presented for comparison. Note that the EIA reference cases show relatively flat fuel price projections beyond 2010, when the fuel savings associated with this rule would be realized.

Figure 6.7-1: EIA Motor Gasoline Projections [Include Taxes ]


### EIA Motor Gasoline Projections (Sales weighted-average price for all grades. Includes Federal, State, and local taxes)

2008 2013 2018 2023 2028 $- $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00$/gallon (with taxes)

FRM AEO 2006 AEO 2007 AEO 2008 AEO 2008 HIGH PRICE



### Table 6.7-2 presents our fuel savings estimates for this rule and presents a comparison with modified estimates using the EIA fuel price projections. Consistent with the above discussion, we adjusted the fuel price estimates to remove taxes on motor gasoline. Compared to the primary EPA estimate, using the reference case projections would result in about a 9 percent increase in estimated fuel savings. Using the high price estimate would result in about a 60 percent increase in estimated fuel savings.

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Table 6.7-2: Sensitivity of Fuel Savings Estimates to Gasoline Price Projections

Year Price without Taxes Per Gallon Fuel Savings [million dollars] Primary AEO 2008 Reference AEO 2008 High Price Primary AEO 2008 Reference AEO 2008 High Price

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $1.81 $2.60 $2.36 $2.16 $2.09 $2.02 $1.95 $1.94 $1.86 $1.80 $1.82 $1.84 $1.91 $1.97 $1.93 $1.95 $1.96 $1.95 $1.97 $1.98 $1.99 $2.02 $2.04 $2.06 $2.06 a $2.06 a $2.06 a $2.06 a $2.06 a $2.06 a $2.06 a $2.60 $2.39 $2.45 $2.48 $2.51 $2.55 $2.61 $2.62 $2.67 $2.73 $2.77 $2.82 $2.89 $2.97 $3.01 $3.01 $3.03 $3.00 $3.01 $3.04 $3.06 $3.09 $3.13 $3.13 a $3.13 a $3.13 a $3.13 a $3.13 a $3.13 a $3.13 a $3 $8 $20 $45 $72 $97 $118 $137 $154 $168 $181 $194 $204 $214 $224 $233 $241 $248 $255 $261 $267 $272 $277 $282 $286 $290 $294 $297 $301 $304 $5 $11 $24 $52 $80 $105 $126 $140 $153 $168 $184 $204 $221 $228 $241 $251 $259 $269 $278 $287 $297 $306 $314 $319 $324 $329 $333 $337 $341 $345 $5 $11 $27 $61 $100 $137 $169 $198 $226 $253 $277 $301 $325 $351 $371 $386 $402 $411 $423 $437 $450 $464 $479 $487 $494 $501 $507 $514 $520 $525
Annualized Savings

[million dollars] 3% 7% $180 $156 $197 $169 $293 $249

a Based on estimate for 2030. AEO 2008 does not project fuel prices beyond 2030



### .

6.7.2 Variation in Precious Metal Prices
Precious metal prices for Platinum and Rhodium have increased over the past 5 years. 80 

### Prices for palladium are currently at their 1998 levels. However, a large spike in palladium prices was seen in 2000 and 2001. Due to the high variability of this market, we get higher precious metal cost estimates if we based the price estimates on a recent single month average (September 2006). If we look at an average over a longer time period (10 years) we calculate lower platinum costs, but higher rhodium and palladium costs. These precious metal price estimates are presented in Table 6.7-3.

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Table 6.7-3: Precious Metal Prices [per troy oz] ICF 3 year Average September 2006 10 Year Average

Rhodium $1,121 $4,835 $1,356

Palladium $210 $316 $341

Platinum $811 $1,134 $623



### 6.7.2.1 Sensitivity of Small SI Catalyst Costs to Precious Metal Costs
To look at the sensitivity of our cost analysis for Small SI exhaust emission control, we considered the precious metal cost variability described above. Based on the amount of each ofthese precious metals in our projected catalyst designs, Table 6.7-4 presents the impact on perengine costs of using the spot price and 10 year average price in our analysis. These costs, which are broken down by class and useful life, are presented for the near term without fuel savings.
Table 6.7-4: Sensitivity of Small SI Total Per Engine Cost Estimates to Precious Metal Costs
CLASS I I I II II II

UL 125 250 500 250 500 1000

TECH OHV/SV OHV OHV OHV OHV OHV RULE Cost/Equip 14.12 19.82 26.07 46.21 50.83 92.17 (3 yr avg precious metal price)

SEPTEMBER 2006 PRICE Cost/Equip $15.69 $22.60 $30.25 $47.48 $52.67 $96.11 Increase $1.57 $2.78 $4.18 $1.27 $1.84 $3.94 % Increase 10% 12% 14% 3% 4% 4%

10 YEAR AVERAGE Cost/Equip $13.91 $19.45 $25.51 45.84 $51.39 $93.80 Increase -$0.21 -$0.37 -$0.56 $-0.37 $0.56 $1.63 %Increase -1.5% -1.9% -2.2% -1% 1% 2%



### 6.7.2.1 Sensitivity of SD/I Catalyst Costs to Precious Metal Costs
To look at the sensitivity of our cost analysis for SD/I exhaust emission control, we considered the precious metal cost variability described above. Based on the amount of each of

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these precious metals in our projected catalyst designs, Table 6.7-5 presents the impact on perengine costs of using the spot price and 10 year average price in our analysis. These costs, which are presented for each of the engine sizes used above for the primary cost analysis, are near term costs without fuel savings.

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Table 6.7-5: Sensitivity of SD/I Cost Estimates to Precious Metal Costs
3.0L I4 4.3L V6 5.0L V8 5.7L V8 8.1L V8 Primary Analysis $483 $396 $317 $300 $377 September 2006 Precious Metal Prices

Cost Increase % Increase $511 $28 5% $417 $21 5% $342 $24 7% $328 $28 8% $416 $39 9% 10 Year Average Precious Metal Prices

Cost Increase % Increase $479 -$4 -1% $393 -$3 -1% $314 -$4 -1% $296 -$4 -1% $371 -$6 -2%



### Catalyst manufacturers usually buy precious metals on contract, not at the market spot price. Our primary analysis values appear reasonable.

6.7.3 Portion of Equipment Manufacturers Designing Own Muffler System and Recertifying the Engine
This analysis considers that equipment manufacturers will purchase the muffler design provided by the engine manufacturer in the engine’s certified engine configuration. However, due to the fact that engine manufacturers will likely not be able to provide catalysts in all of the muffler designs used by equipment manufacturers, the smaller volume equipment manufacturer will need to pick their muffler from the limited offerings of the engine manufacturer.
The muffler designs may or may not fit into the equipment produced by the equipment manufacturer. If it does not, then the equipment manufacturer may choose to utilize the catalyst brick from their engine manufacturer and work with a muffler manufacturer to redesign their existing muffler. If they choose this option, then they must undergo expenses to redesign the muffler and heat shield to apply the catalyst safely. The equipment manufacturer must also pay for emission test of the new engine/muffler conf iguration as well as pay the certification fee to EPA for engine certification.
Applications which may find issues using a predetermined muffler design include those that have close coupled equipment shrouding or a closed equipment structure. EPA estimates that 10 percent of equipment companies will find themselves in this situation with at least one piece of equipment in their product line. Given there are an estimated 413 companies, 41 companies with three differently designed models each yields 123 models. Given that there are at times more than one engine used in an equipment design, we can assume two engine types per model - this yields a total of 246 redesigns and certifications. The fixed costs for this work are listed in Table 6.7-6.

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Table 6.7-6: Costs for Equipment Manufacturers

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### Final Regulatory Impact Analysis
to Perform Engine Certification, Class II OHV
Fixed Costs Muffler/Heat Shield Design $75,000

Emission Test per Certified Engine Configuration $2012

Estimated EPA Certification Fee $800 TOTAL Per Equipment Model Per Engine Type $77,812 10% of Equipment Manufacturers = 41 (x41) 41
Three equipment models per equipment mfr. 123 Two engine types per Equipment Model (x2) 246

TOTAL ESTIMATED COST $19,141,752



### If this occurred it would add about $19 million dollars to the total compliance cost or about 0.86 percent of the total 30 year cost net present value.

6.7.4 Electronic Fuel Injection on Class II Engines with Multiple Cylinders
The current analysis states that only a porti on of an engine manufacturers Class II engine families of two or more cylinders per engine will incorporate electronic fuel injection. In the event that success with the technology results in all Class II engines of two or more cylinders using the technology, then the cost stream of this rulemaking will change. Table 6.7-7 compares the estimated costs of catalysts and fuel injection.
Table 6.7-7: Cost Comparison Between Catalyst and EFI Technology Class II V-twin

250 500 1000

Variable Costs V-Twin Catalyst $49.59 $53.47 $62.32

Electronic Fuel Injection $78.99 $78.99 $78.99

Difference $28.40 $25.52 $16.67

Fixed Costs V-Twin Catalyst $364,133 $364,133 $364,133

Electronic Fuel $103,020 $103,020 $103,020

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Difference -$261,113 -$261,113 -$261,113



### The resultant change in cost/equipment for this is shown in Table 6.7-8. The costs presented here are for the near term and long term without fuel savings. The reason that costs do not change very much overall is due to the fact that there is still a significant portion of Class II engines that are single cylinder whose costs estimates are not changing.

Table 6.7-8 Sales Weighted Average Cost Per Class II Equipment
250 500 1000 Short Term (first year - includes fixed costs) Primary analysis $46.21 $50.83 $92.17

All Class II V-Twin to EFI $46.80 $49.71 $91.55

Difference $0.59 1.3% -$1.12 2.2% -$0.62 0.67% Long Term (6 th year and beyond) Primary analysis $32.56 $27.13 $49.80

All Class II V-Twin to EFI $33.16 $27.15 $50.62

Difference $0.60 1.8% $0.02 0.07% $0.82 1.6%



### The estimated fuel savings for a residential riding mower is $39.00 net present value over its lifetime. EFI is estimated to cost $79.00 after consideration of the savings from removal of the existing carburetor. Therefore, the increase in the overall hardware cost with fuel savings is $40.00.

6.7.5 Costs of Rotational-Molded Tank Technologies
Many of the fuel tank permeation control technologies discussed in Chapter 5 are used widely today. One exception is multi-layer rotationally-molded fuel tanks. One tank manufacturer is currently producing fuel tanks for Small SI equipment with a nylon inner layer. This manufacturer has stated that they are able to produce these fuel tanks using the normal molding process without additional equipment. However, other manufacturers who sell tanks into Small SI and marine applications have expressed concern that they do not know how to mold tanks with nylon inner liners without the use of a drop box. As described above, a drop box is an added component on a mold that opens during the molding process to add a second layer of material into the mold. These manufacturers have indicated that they are working with another material, CBT (discussed above and in Chapter 5), that would not require a drop box.

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However, they have not finished their evaluation of this technology. Marine fuel tank manufacturers have expressed the concern that if th e cost of plastic fuel tanks were too high, that more boat builders may begin using aluminum fuel tanks.
To examine the uncertainty in what technologies will be used to reduce permeation from rotationally molded fuel tanks, we considered three factors listed below. As with the analysis above, we present costs for typical fuel tank sizes rather than trying to present every fuel tank size considered in the cost model. The two fuel tank sizes used here are a 5 gallon tank for Small SI equipment and a 57 gallon fuel tank for boats.

1. Cost of using a drop box in the rotational-molding process 2. Sensitivity to variations in material costs 3. Consideration of replacing plastic with metal fuel tanks in marine industry
In the analysis described above, we include a $5,000 cost per mold in the near term to account for the cost using drop boxes. This cost was based on a range of cost estimates supplied by tank manufacturers ranging from $1,000 to nearly $9,000 per mold for adding drop boxes. In the long term we projected that tank manufacturers would all be able to mold fuel tanks without the use of a drop box. This projection was based on the current practices of one manufacturer and on alternative processes that other manufacturers are investigating today. To look at the sensitivity of tank permeation control costs for rotationally-molded fuel tanks, we consider costs without drop boxes and with $9,000 drop boxes.

Table 6.7-9: Sensitivity of Rotomolded Tank Cost Estimates to Drop Box Cost
5 Gallon Small SI Tank 57 Gallon Boat Tank Primary Analysis ($5,000 drop box) $5.54 $81 Without Drop Box

Cost Increase % Increase $4.25 ($1.29)

-23% $68 ($13) -16% With $9,000 Drop Box

Cost Increase % Increase $6.58 1.04 19% $92 $10 13%



### The analysis above considers three multi-layer approaches to rotationally-molded fuel tanks. These approaches are molding with a nylon inner layer using a drop box, molding with a slightly more expensive CBT layer without a drop box, and a post processing epoxy coating. All three of these approaches would be sensitive to changes in barrier material prices. Because these are new materials for fuel tank applications, it would be possible that material costs would decrease over time with increased production volumes. At the same time, increases in material

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### Costs of Control
costs could occur, especially for materials with prices tied closely to petroleum prices (such as polyethylene). To consider the sensitivity of fuel tank cost to material costs, we consider the fuel tank construction with a nylon barrier. Here we consider both a 20 percent decrease and a 20 percent increase in material costs, both for the nylon and the cross-link polyethylene. This translates a cross-link polyethylene cost ra nging from $0.96 to $1.44/lb. and nylon costs ranging from to a nylon cost ranging from $3.20 to $4.80/lb. for Small SI and $4.8 to $7.2/lb. for marine fuel tanks.
Table 6.7-10: Sensitivity of Rotomolded Tank Cost Estimates to Material Cost
5 Gallon Small SI Tank 57 Gallon Boat Tank Primary Analysis $5.54 $81

20% Decrease in Material Costs

Cost Increase % Increase $5.18 ($0.85)

-15% $68 ($14) -17%

20% Increase in Material Costs

Cost Increase % Increase $6.40 $0.86 15% $95 ($14) 17%



### Marine fuel tanks that are installed in marine vessels are primarily rotationally-molded out of cross-link polyethylene. However, many fuel tank are also made of aluminum. Very large fuel tanks (typically greater in size than rotationally-molded fuel tanks) are often made out of fiberglass. Marine fuel tank manufactur ers making rotationally-molded fuel tanks have expressed the concern that if the costs were to increase too high, that many boat builders would switch to using aluminum fuel tanks. Based on conversations with industry, plastic fuel tanks sell for about 2/3 to 3/4 the price of aluminum fuel tanks.
One manufacturer of multi-layer rotationally-molded fuel tanks with a nylon inner layerhas stated that they sell these fuel tanks at a price about 50 percent higher than traditional monolayer fuel tanks. Although this puts the plastic tanks into the price range of metal fuel tanks, there are other downstream costs that would also need to be considered. Boat builders have indicated that it is common for aluminum fuel tanks to corrode when exposed to water. For this reason, they typically include a large access panel to the fuel tank when metal fuel tanks are used. The use of an access panel greatly reduces the cost of replacing a fuel tank if necessary. This access panel adds cost and complexity to the boat and may affect where the fuel tank can be positioned in the boat. Boat manufacturers have indicated that, when plastic fuel tanks are used, the only access required is to the hose connections on one end of the fuel tank.
In addition to the cost of an access panel for removing corroded tanks, the cost of replacing the fuel tank must be considered. This would essentially double the price of the metal tank, even without considering labor costs. In addition, fuel spills could create other damage in

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the boat or even a safety hazard. Repeated problems with fuel tank corrosion could hurt the reputation of the boat builder and leave them open to litigation. For these reasons, many boat builders that have already chosen to use plastic fuel tanks would be expected to continue to use these fuel tanks, even if they were roughly the same cost as metal fuel tanks.
We analyzed at two effects that could have an impact on our estimate of the price of low permeation plastic fuel tanks. It seems unlikely that a high cost drop box would be necessary given that one manufacturer is already producing multi-layer tanks without using a drop box. In addition, the CBT technology is designed to not require the use of a drop box. While material costs may fluctuate, it is not likely that a 20 percent increase in nylon would be observed. The volume of this material sold is large and this rule would not be expected to limit availability of the material. In addition, manufacturers have indicated that nylon prices have not risen greatly with increased petroleum costs. Even with a 20 percent material price increase it seems unlikely that boat builders would switch to using metal tanks. Manufacturers using plastic tanks have indicated that they do so more for durability advantages with respect to corrosion than for a price savings. In addition, the life time cost savings of plastic fuel tanks would outweigh the material price increase. These lifetime cost savings include the installation of access ports to allow replacement of the tanks, actual replacement of corroded tanks, and customer perception of poor quality if tanks were to corrode.

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## Chapter 6 References

1. “Small SI Engine Technologies and Costs, Draft Report” ICF International, prepared for U.S. Environmental Protection Agency, August 2006, Docket Identification EPA-HQ-OAR-2004-008-0253.

2. “Update of EPA's Motor Vehicle Emission Control Equipment Retail Price Equivalent (RPE) Calculation Formula,” Jack Faucett Associates, Report No. JACKF AU-85-322-3, September 1985, Docket Identification EPAHQ-OAR-2004-0008-0204.

3. For further information on learning curves, see Chapter 5 of the Economic Impact, from “Regulatory Impact Analysis—Control if Air Pollution from New Motor Vehicles: Tier 2 Motor Vehicle Emissions Standards and Gasoline Sulfur Control Requirements,” U.S. EPA, D ecember 1999, EPA420-R-99-023. A copy of this document is included in Air Docket A-2000-01, at Document No. II-A-83. The interested reader should also refer to previous final rules for Tier 2 highway vehicles (65 FR 6698, February 10, 2000), marine diesel engines (64 FR 73300, December 29, 1999), nonroad diesel engines (63 FR 56968, October 23, 1998), and highway diesel engines (62 FR 54694, October 21, 1997).

4. “Small SI Engine Technologies and Costs, Draft Report” ICF International, prepared for U.S. Environmental Protection Agency, August 2006, Docket Identification EPA-HQ-OAR-2004-008-0253.
5.“Small SI Engine Technologies and Costs, Draft Report” ICF International, prepared for U.S. Environmental Protection Agency, August 2006, Docket Identification EPA-HQ-OAR-2004-008-0253.

6. “EPA Technical Study on the Safety of Emissi on Controls for Nonroad Spark-Ignition Engines < 50 Horsepower,” U.S. Environmental Protection Agency, EPA420-R-06-006, March 2006, Docket Identification EPAHQ-OAR-2004-0008-0329.

7. “EPA Technical Study on the Safety of Emissi on Controls for Nonroad Spark-Ignition Engines < 50 Horsepower,” U.S. Environmental Protection Agency, EPA420-R-06-006, March 2006, Docket Identification EPAHQ-OAR-2004-0008-0329.

8. “EPA Technical Study on the Safety of Emissi on Controls for Nonroad Spark-Ignition Engines < 50 Horsepower,” U.S. Environmental Protection Agency, EPA420-R-06-006, March 2006, Docket Identification EPAHQ-OAR-2004-0008-0329.
9.“Small SI Engine Technologies and Costs, Draft Report” ICF International, prepared for U.S. Environmental Protection Agency, August 2006, Docket Identification EPA-HQ-OAR-2004-008-0253.
10.“Small SI Engine Technologies and Costs, Draft Report” ICF International, prepared for U.S. Environmental Protection Agency, August 2006, Docket Identification EPA- HQ-OAR-2004-008-0253.

11. “Small SI Engine Technologies and Costs, Draft Report” ICF International, prepared for U.S. Environmental Protection Agency, August 2006, Dock et Identification EPA-HQ-OAR-2004-008-0253.

12. “Small SI Engine Technologies and Costs, Draft Report” ICF International, prepared for U.S. Environmental Protection Agency, August 2006, Docket Identification EPA-HQ-OAR-2004-008-0253.

13. “Small SI Engine Technologies and Costs, Draft Report” ICF International, prepared for U.S. Environmental Protection Agency, August 2006, Docket Identification EPA-HQ-OAR-2004-008-0253.

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### Final Regulatory Impact Analysis

14. “EPA Technical Study on the Safety of Emissi on Controls for Nonroad Spark-Ignition Engines < 50 Horsepower,” U.S. Environmental Protection Agency, EPA420-R-06-006, March 2006, Docket Identification EPAHQ-OAR-2004-0008-0329.

15. “EPA Technical Study on the Safety of Emissi on Controls for Nonroad Spark-Ignition Engines < 50 Horsepower,” U.S. Environmental Protection Agency, EPA420-R-06-006, March 2006, Docket Identification EPAHQ-OAR-2004-0008-0329.

16. “Small SI Engine Technologies and Costs, Draft Report” ICF International, prepared for U.S. Environmental Protection Agency, August 2006, Docket Identification EPA-HQ-OAR-2004-008-0253.
17.“Small SI Engine Technologies and Costs, Draft Report” ICF International, prepared for U.S. Environmental Protection Agency, August 2006, Docket Identification EPA-HQ-OAR-2004-008-0253.
18.“Small SI Engine Technologies and Costs, Draft Report” ICF International, prepared for U.S. Environmental Protection Agency, August 2006, Docket Identification EPA-HQ-OAR-2004-008-0253.
19.“Small SI Engine Technologies and Costs, Draft Report” ICF International, prepared for U.S. Environmental Protection Agency, August 2006, Docket Identification EPA-HQ-OAR-2004-008-0253.
20.“Small SI Engine Technologies and Costs, Draft Report” ICF International, prepared for U.S. Environmental Protection Agency, August 2006, Docket Identification EPA-HQ-OAR-2004-008-0253.

21. “Small SI Engine Technologies and Costs, Draft Report” ICF International, prepared for U.S. Environmental Protection Agency, August 2006, Docket Identification EPA-HQ-OAR-2004-008-0253.

22. “EPA Technical Study on the Safety of Emissi on Controls for Nonroad Spark-Ignition Engines < 50 Horsepower,” U.S. Environmental Protection Agency, EPA420-R-06-006, March 2006, Docket Identification EPAHQ-OAR-2004-0008-0329.

23. “Small SI Engine Technologies and Costs, Draft Report,” ICF International, August 2006, Docket Identification EPA-HQ-OAR-2004-008-0253.

24. “Small SI Engine Technologies and Costs, Draft Report,” ICF International, August 2006, Docket Identification EPA-HQ-OAR-2004-008-0253.

25. “Summary of 2002 Nonhandheld Equipment Market by Manufacturer Size”, EPA Memo by Phil Carlson to Docket EPA_HQ_OAR_2004_0008_0542.

26. “Build it, and they will come,” OEM Off-Highway, page 74-78, November 1996.

27. “EFI Hits the Small Engine Market ,” Diesel Progress, pages 52-54, July 1998.

28. Memorandum from Alex Rogozhin, RTI, to Chi Li, U.S. EPA, “Calculation of Motor Gasoline Prices in Small SI Rule EIA,” November 10, 2006, Dock et Identification EPA-HQ-OAR-2004-0008-0449.

29. “Marine Outboard and Personal Watercraft SI Engine Technologies and Costs,” ICF Consulting, prepared for the U.S. Environmental Protection Agency, July 2006, Docket Identification EPA-HQ-OAR-2004-0008-0452.

30. Memorandum from Alex Rogozhin, RTI, to Chi Li, U.S. EPA, “Calculation of Motor Gasoline Prices in Small SI Rule EIA,” November 10, 2006, Dock et Identification EPA-HQ-OAR-2004-0008-0449.

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### Costs of Control

31. “Updates to Technology Mix, Emissions Factors, Deterioration Rates, Power Distribution, and Fuel Consumption Estimates for SI Marine Engines in the NONROAD Emissions Inventory Model,” Memorandum from Mike Samulski, U.S. EPA to Docket, November 30, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0361.

32. “Updates to Technology Mix, Emissions Factors, Deterioration Rates, Power Distribution, and Fuel Consumption Estimates for SI Marine Engines in the NONROAD Emissions Inventory Model,” Memorandum from Mike Samulski, U.S. EPA to Docket, November 30, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0361.

33. Samulski, M., “Marine SI Sales and Price Estimates ,” U.S. EPA, August 30, 2004, Docket Identification EPAHQ-OAR-2004-0008-0448.

34. “Sterndrive and Inboard Marine SI Engine Technol ogies and Costs,” ICF Consulting, prepared for the U.S. Environmental Protection Agency, July 2006, Docket Identification EPA-HQ-OAR-2004-0008-0453.

35. “Updates to Technology Mix, Emissions Factors, Deterioration Rates, Power Distribution, and Fuel Consumption Estimates for SI Marine Engines in the NONROAD Emissions Inventory Model,” Memorandum from Mike Samulski, U.S. EPA to Docket, November 30, 2005, Docket Identification EPA-HQ-OAR-2004-0008-0361.

36. Samulski, M., “Marine SI Sales and Price Estimates ,” U.S. EPA, August 30, 2004, Docket Identification EPAHQ-OAR-2004-0008-0448.

37. Trident Marine Hose, “Retail Price List 2001,” Docket Identification EPA-HQ-OAR-2004-0008-0226.

38. Denbow, R., Browning, L., Coleman, D., “Report Submitted for WA 2-9, Evaluation of the Costs and Capabilities of Vehicle Evaporative Emission Control T echnologies,” ICF, ARCADIS Geraghty & Miller, March 22, 1999, Docket Identification EPA-HQ-OAR-2004-0008-0194.

39. “Meeting with Avon on June 27, 2002,” Memorandum from Mike Samulski, U.S. EPA to Docket A-2000-01, August 6, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0207.

40. “Information on Costs and Effectiveness of Fluorination Received from Fluoroseal,” Memorandum from Mike Samulski to Docket A-2000-1, March 27, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0201.

41. “Visit to Sulfo Technologies LLC on April 18, 2002, ” Memorandum from Mike Samulski, U.S. EPA to Docket A-2000-01, April 22, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0232.

42. “Shipping Costs,” Memorandum from Glenn Passava nt, U.S. EPA to Docket A-2000-01, March 27, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0222.

43. “Visit to Sulfo Technologies LLC on April 18, 2002, ” Memorandum from Mike Samulski, U.S. EPA to Docket A-2000-01, April 22, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0232.

44. “Plastic News,” Resin Pricing for November 8, 2004, www.plasticnews.com, Docket Identification EPA-HQOAR-2004-0008-0442.

45. Ward, Geoff, “Potential Small Entity Representative (SER) Response to Initial Outreach Document: Exhaust and Evaporative Emissions Control from Small SI Engine s and Equipment and Marine SI Engines and Vessels,” Agri-Industrial Plastics, July 25, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0427.

46. “Plastic News,” Resin Pricing for November 8, 2004, www.plasticnews.com, Docket Identification EPA-HQOAR-2004-0008-0442.

47. “Visit to Kracor, Inc.,” Memorandum from Mike Samulski, U.S. EPA to Docket A-2000-02, March 31, 2003, Docket Identification EPA-HQ-OAR-2004-0008-0249.

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### Final Regulatory Impact Analysis

48. Written comments from Robert Porter, Inca Molded Products to Phil Carlson, U.S.EPA regarding impacts of regulation on small business, July 24, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0426.

49. Written comments from Jim Harden, Grady-White Boat s to Phil Carlson, U.S.EPA regarding impacts of regulation on small business, July 25, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0437.

50. “Petro-Seal for Ultra-Low Fuel Permeation,” Ron Part ridge, Arkema Inc., Presentation at the International Boat Exposition, October 25, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0252.

51. “Plastic News,” Resin Pricing for November 8, 2004, www.plasticnews.com, Docket Identification EPA-HQOAR-2004-0008-0442.

52. “Information on Costs and Effectiveness of Fluorination Received from Fluoroseal,” Memorandum from Mike Samulski to Docket A-2000-1, March 27, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0201.

53. Written comments from Robert Porter, Inca Molded Products to Phil Carlson, U.S.EPA regarding impacts of regulation on small business, July 24, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0426.

54. Written comments from Jim Harden, Grady-White Boat s to Phil Carlson, U.S.EPA regarding impacts of regulation on small business, July 25, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0437.

55. “Comments by Brunswick Corporation; Notice of Pr oposed Rulemaking; Part 1045 Control of Emissions fromSpark-Ignition Marine Vessels,” Rolf Lichtner, Mercury Marine, January 7, 2003, Docket Identification EPA-HQOAR-2004-0008-0192.

56. Trident Rubber Inc., “Trident Marine Hose, Retail Price List 2001,” Docket Identification EPA-HQOAR-2004-0008-0226.

57. Denbow, R., Browning, L., Coleman, D., “Report Submitted for WA 2-9, Evaluation of the Costs and Capabilities of Vehicle Evaporative Emission Control T echnologies,” ICF, ARCADIS Geraghty & Miller, March 22, 1999, Docket Identification EPA-HQ-OAR-2004-0008-0194.

58. “Meeting with Avon on June 27, 2002,” Memorandum from Mike Samulski, U.S. EPA to Docket A-2000-01, August 6, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0207.

59. Lawrence Marine; NovaFlex Group, “Industrial Pr ice List: Marine Products,” October 15, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0439.

60. Trident Rubber Inc., “Trident Marine Hose, Reta il Price List, October 2005,” Docket Identification EPA-HQOAR-2004-0008-0444.

61. “Information on Costs and Effectiveness of Fluorination Received from Fluoroseal,” Memorandum from Mike Samulski to Docket A-2000-1, March 27, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0201.

62. “Visit to Sulfo Technologies LLC on April 18, 2002, ” Memorandum from Mike Samulski, U.S. EPA to Docket A-2000-01, April 22, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0232.

63. “Shipping Costs,” Memorandum from Glenn Passava nt, U.S. EPA to Docket A-2000-01, March 27, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0222.

64. “Plastic News,” Resin Pricing for November 8, 2004, www.plasticnews.com, Docket Identification EPA-HQOAR-2004-0008-0442.

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### Costs of Control

65. Ward, Geoff, “Potential Small Entity Representative (SER) Response to Initial Outreach Document: Exhaust and Evaporative Emissions Control from Small SI Engine s and Equipment and Marine SI Engines and Vessels,” Agri-Industrial Plastics, July 25, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0427.

66. “Petro-Seal for Ultra-Low Fuel Permeation,” Ron Part ridge, Arkema Inc., Presentation at the International Boat Exposition, October 25, 2004, Docket Identification EPA-HQ-OAR-2004-0008-0252.

67. “Information on Costs and Effectiveness of Fluorination Received from Fluoroseal,” Memorandum from Mike Samulski to Docket A-2000-1, March 27, 2002, Docket Identification EPA-HQ-OAR-2004-0008-0201.

68. Written comments from Robert Porter, Inca Molded Products to Phil Carlson, U.S.EPA regarding impacts of regulation on small business, July 24, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0426.

69. Written comments from Jim Harden, Grady-White Boat s to Phil Carlson, U.S.EPA regarding impacts of regulation on small business, July 25, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0437.

70. “Marine Fuel Containment; A Permanent Solution,” Ja son Chambers, Engineered Composite Structures Inc., Presentation at the 2004 International Boat Expositi on, October 25, 2004, Docket Identification EPA-HQOAR-2004-0008-0247.

71. Meetings with NMMA on Marine Emission Sta ndards,” Memorandum from Mike Samulski, U.S. EPA to Docket A-2000-02, March 4, 2002, Dock et Identification EPA-HQ-OAR-2004-0008-0250.

72. Trident Marine Hose, “Retail Price List 2001,” Docket Identification EPA-HQ-OAR-2004-0008-0226.

73. “Activated Carbon for Use in Marine Evaporativ e Control Applications,” MeadWestvaco Corporation, Presentation at the International Boat Exposition, October 25, 2004, Docket Identification EPA-HQOAR-2004-0008-0248.

74. Samulski, M., “Marine SI Sales and Price Estimates ,” U.S. EPA, August 30, 2004, Docket Identification EPAHQ-OAR-2004-0008-0448.

75. Energy Information Administration, “Reta il Gasoline Historical Prices,” downloaded from http://www.eia.doe.gov/oil_gas/petroleum/data_publicati ons/wrgp/mogas_history.html, on February 28, 2008.

76. Memorandum from Alex Rogozhin, RTI, to Chi Li, U.S. EPA, “Calculation of Motor Gasoline Prices in Small SI Rule EIA,” November 10, 2006, Dock et Identification EPA-HQ-OAR-2004-0008-0449.

77. Energy Information Administration, “Annual Energy Outlook 2008; with Projections to 2030,” DOE/EIA-0383(2008), June 2008.

78. Federal Highway Administration, “Tax Rates on Motor Fuel - 2003," downloaded from http://www.eia.doe.gov/oil_gas/petroleum/data_publications /wrgp/gasoline_taxes.html on October 25, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0451.

79. Energy Information Administration, “Annual Energy Outlook 2008; with Projections to 2030,” DOE/EIA-0383(2008), June 2008.

80. Johnson Matthey, “Platinum Today,” www.platinum .matthey.com, downloaded October 25, 2006, Docket Identification EPA-HQ-OAR-2004-0008-0422.

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### Cost Per Ton



# CHAPTER 7: Cost Per Ton

This Chapter will present the cost effectiveness analysis we completed for our proposed small spark ignition engine (<19 kW) and recreational marine (personal water craft, sterndrive/inboard and outboard) emission standard s. Under Clean Air Act section 213, we are required to promulgate standards which reflect the greatest degree of emission reduction achievable, giving appropriate consideration to co st, energy, and safety factors. The standards setting process is not necessarily premised on setting the most cost effective standards, even though this is a significant factor. Cost-effec tiveness is a useful tool in evaluating the appropriateness of our standards.
The cost-effectiveness analysis described in this chapter relies in part on cost information from Chapter 6 and emissions information from Chapter 3 to estimate the dollars per ton of emission reductions produced from our proposed standards. We have calculated the cost effectiveness using a 30-year net present value approach that accounts for all costs and emission reductions over a 30-year period. Finally, this chapter compares the cost effectiveness of the new provisions with the cost effectiveness of othe r control strategies from previous and potential future EPA programs.
Section 7.1 describes the calculation behind the 30 year net present value cost effectiveness and Section 7.2 lists the results of the calculations for our combined small spark ignition standards (exhaust and evaporative) and marine engines (exhaust and evaporative). Table 7.2-.5 lists the results for the 30-year net present value cost effectiveness analysis for Small SI and Marine. The results of the cost-effectiveness of comparative programs are listed in Table 7.2-6.



## 7.1 30-Year Net Present Value Cost Effectiveness (Cost per Ton)

We have calculated the cost effectiveness of our program using a “30-year net present value” approach that includes all nationwide emission reductions and costs for a 30 year period. This timeframe captures both the early period of the program when only the new equipment/engines meeting our standards will be in the fleet, and the later period when essentially all vehicles/engines in the fleet will meet our standards. The 30-year net present value approach does have one important drawback in that it includes the engine costs for engines sold 30 years after the program goes into effect, but includes almost none of the emission benefits from those engines. Thus the 30-year net present value approach does not necessarily match all costs with all the emission reductions that those costs are intended to produce. It is presented here, nevertheless, as a reasonable means by which to assess the cost effectiveness of these programs.
We have calculated this “30-year net present value” cost-effectiveness using the net present value of the annual emission reductions and costs described in Chapters 3 and 6, respectively. The calculation of 30-year net present value cost-effectiveness follows the pattern described above for the per-engine analysis:

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### Final Regulatory Impact Analysis

DNAE = 

# 3 (NE) i 

### /(1.07) i-2008



### Where:
DNAE = Reduction in nationwide 30-year net present value emissions in tons (NE) i 

### = Reduction in nationwide emissions in tons for year i of the program i = Year of the program, counting from year 1 to year 30

and
DNAC = 

# 3 (NC) i 

### /(1.07) i-2008



### Where: DNAC = Nationwide 30-year net present value costs in dollars (NC) i 

### = Nationwide costs in dollars for year i of the program i = Year of the program from year 1 to year 30
The 30-year net present value cost-effectiveness is produced by dividing DNAC by DNAE. The nationwide reductions in emissions for each year are given in Chapter 3. The results are given in Tables within the following section.



## 7.2 Results
We calculated the cost-effectiveness of our program on a 30-year net present value basis separately for our proposed Small SI standards <19kW and recreational marine standards. To do this, we summed net present value of total costs from Chapter 6, and divided by the sum of the net present value of tons reduced from Chapter 3. These costs and emission reductions are repeated in Appendices 7-A and 7-B. The results are given in Table 7.2-1 to 7.2-2 for Small SI engines and equipment and 7.2-3 and 7.2-4 for recreational marine engines and vessels.
Table 7.2-1: 30-year Net Present Value Cost-effectiveness of the Standards for Small SI Engines <19kW Without Fuel Savings (7 percent discount rate)
Pollutants HC+NOx NPV Costs (million $) NPV Reduction (tons) Cost per Ton

Exhaust $2,257 1,785,000 $1,264 Evaporative $809 1,098,000 $736 Exhaust + Evap $3067 2,883,000 $1,063

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### Cost Per Ton
Table 7.2-2: 30-year Net Present Value Cost-effectiveness of the Standards

for Small SI Engines <19kW With Fuel Savings (7 percent discount rate)
Pollutants HC+NOx NPV Costs (million $) NPV Reduction (tons) Cost per Ton

Exhaust $1,959 1,785,000 $1,097 Evaporative $151 1,098,000 $137 Exhaust + Evap $2,110 2,883,000 $856

Table 7.2-3: 30-year Net Present Value Cost-effectiveness of the Standards for Marine Engines Without Fuel Savings (7 percent discount rate)
Pollutants HC+NOx NPV Costs (million $) NPV Reduction (tons) Cost per Ton

Exhaust $1,521 1,826,000 $833 Evaporative $270 461,000 $585 Exhaust + Evap $1,790 2,287,000 $783

Table 7.2-4: 30-year Net Present Value Cost-effectiveness of the Standards for Marine Engines With Fuel Savings (7 percent discount rate)
Pollutants HC+NOx NPV Costs (million $) NPV Reduction (tons) Cost per Ton

Exhaust $823 1,826,000 $451 Evaporative ($6) 461,000

-- Exhaust + Evap $817 2,287,000 $357

Because many of the benefits and costs are manifest in future years, we apply discounting methods to adjust the dollar values of these effects to reflect the finding that society as a whole typically values the realization (or a voidance) of a given effect differently depending on when the effect occurs. In the discounting calculations used to produce the net present values that were used in our cost-effectiveness calculations, we used a discount rate of 7 percent, consistent with the 7 percent rate reflected in the cost-effectiveness analyses for other recent mobile source programs. OMB Circular A-94 requires us to generate benefit and cost estimates reflecting a 7 percent rate.
However, the cost and cost-effectiveness estimates for future proposed mobile source programs could also reflect a 3 percent discount rate. The 3 percent rate is in the 2 to 3 percent

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### Final Regulatory Impact Analysis
range recommended by the Science Advisory Board’s Environmental Economics Advisory Committee for use in EPA social benefit-cost analyses, a recommendation incorporated in EPA's

new Guidelines for Preparing Economic Analyses (November 2000) . Therefore, we have also calculated the overall cost-effectiveness of today's rule based on a 3 percent rate to facilitate comparison of the cost-effectiveness of this rule with future proposed rules which use the 3 percent rate. The results are shown in Tables 7.2-5 through 7.2-8.
Table 7.2-5: 30-year Net Present Value Cost-effectiveness of the Standards for Small SI Engines <19kW Without Fuel Savings (3 percent discount rate)
Pollutants HC+NOx NPV Costs (million $) NPV Reduction (tons) Cost per Ton

Exhaust $3,718 3,227,000 $1,152 Evaporative $1,327 1,932,000 $687 Exhaust + Evap $5,044 5,159,000 $978

Table 7.2-6: 30-year Net Present Value Cost-effectiveness of the Standards

for Small SI Engines <19kW With Fuel Savings (3 percent discount rate)
Pollutants HC+NOx NPV Costs (million $) NPV Reduction (tons) Cost per Ton

Exhaust $3,181 3,227,000 $986 Evaporative $170 1,932,000 $88 Exhaust + Evap $3,351 5,159,000 $650

Table 7.2-7: 30-year Net Present Value Cost-effectiveness of the Standards for Marine Engines Without Fuel Savings (3 percent discount rate)
Pollutants HC+NOx NPV Costs (million $) NPV Reduction (tons) Cost per Ton

Exhaust $2,407 3,425,000 $703 Evaporative $444 885,000 $502 Exhaust + Evap $2,852 4,310,000 $662

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### Cost Per Ton
Table 7.2-8: 30-year Net Present Value Cost-effectiveness of the Standards for Marine Engines With Fuel Savings (3 percent discount rate)
Pollutants HC+NOx NPV Costs (million $) NPV Reduction (tons) Cost per Ton

Exhaust $1,100 3,425,000 $321 Evaporative ($86) 885,000

-- Exhaust + Evap $1,014 4,310,000 $235

Because one primary purpose of cost-effectiveness is to compare our program to alternative programs, we listed the cost effectiveness of several previous EPA actions for controlled emissions from mobile sources for NOx and NMHC in Table 7.2-9. The programs shown in these tables are those for which cost-effectiveness was calculated in a similar manner allowing for a comparison. (Note: costs adjusted to 2005 dollars.)

Table 7.2-9: Cost-effectiveness of Recent Mobile Source Exhaust Emission Programs for HC+NOx, 2005$ (7 percent discount with fuel savings)
Program $/ton 2002 HH engines Phase 2 840 2001 NHH Engines Phase 2 neg* 1998 Marine SI engines 1900 2004 Comm Marine CI 200 2007 Large SI exhaust 80 2006 ATV exhaust 300 2006 off-highway motorcycle 290 2006 recreational marine CI 700 2010 snowmobile 1430 2006 <50cc highway motorcycle 1860 2010 Class 3 highway motorcycle 1650 * fuel savings outweigh engineering/hardware costs Costs adjusted to 2005$ using http://www1.jsc.nasa.gov/bu2/inflateGDP.html


### Permeation and other evaporative emission control measures we have implemented for highway and off-highway motorcycles, large SI engines, ATVs, and snowmobiles have all had cost effectiveness values of less than $0/ton due to the fuel savings.
The analyses supporting the values in Table 7.2-6 were conducted over the past ten years and thus not all were done on a purely identical basis in terms of their analytical approach (e.g., factors such as cost streams and cost recovery). By comparing values in Table 7.2-6 for NOx+HC to those presented above we can see that the cost-effectiveness of our proposed Small SI and recreational Marine SI standards fall within the range of these other programs. Some

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### Final Regulatory Impact Analysis
previous programs have been more cost effective (lower $/ton) than the program we are proposing today. However, it should be expected that the next generation of standards will be more expensive than the last, because earlier reductions are usually easier and less expensive to achieve and the least costly means for reducing emissions is generally pursued first.
This proposed rule also will bring environmental benefits related to reductions in carbon monoxide (CO) emissions and emissions of direct particulate matter (PM). We have elected to base our cost effectiveness analysis solely on HC+NOx for two reasons. First, with regard to PM and CO, no new or additional technology beyond that needed to achieve the proposed HC+NOx standards is expected to be required. These reductions will occur as part of the technology and related efforts to meet the HC+NOx standards. Second, in the case of PM, we are not setting standards but do expect reductions to occur as a result of engine changes and in some cases the use of aftertreatment. In neither case is significant additional effort needed.

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### Final Regulatory Impact Analysis



## CHAPTER 8: Cost-Benefit Analysis

8.1 Overview
This chapter presents our analysis of the health and environmental benefits that are estimated to occur as a result of the final Small SI and Marine SI engine standards throughout the period from initial implementation through 2030. Nationwide, the engines subject to the final emission standards in this rule are a significant source of nonroad mobile source air pollution. The final standards will reduce exposure to direct PM2.5, NOx, VOCs and air toxics emissions and help avoid a range of a dverse health effects associated with ambient ozone and PM 2.5 

### levels.
EPA is required by Executive Order (E.O.) 12866 to estimate the benefits and costs of regulations with estimated annual impacts of over 100 million dollars. Such regulations tend to include major new pollution control regulations. To estimate these benefits and costs, the analysis presented here attempts to answer th ree questions: (1) what are the physical health and welfare effects projected to result from particulate ma tter (PM) and oz one precursors (direct PM, VOCs and NOx)? (2) what is the m onetary value of the projected changes in health and welfare attributable to the fina l rule? and (3) how do the projected monetized benefits compare to the projected costs? This analysis constitutes one part of EPA’s thorough examination of the relative merits of this regulation.
The benefits analysis reli es on three major components to answer these questions:

• Calculation of the projected impact of the final rule on the national nonroad emissions inventory of precursors to ozone and PM 2.5 

### , specifically NOx, VOCs and direct PM, for two future years (2020 and 2030).

• Air quality modeling for 2020 and 2030 to de termine projected changes in ambient concentrations of ozone and PM 2.5 

### , reflecting baseline and post-control emissions inventories.

• A benefits analysis to determine the projecte d changes in human health and welfare, both in terms of physical effects and monetary valu e, that result from th e projected changes in ambient concentrations of ozone and PM 2.5 

### for the modeled standards.
A wide range of human health and welfar e effects are linked with exposure to PM, VOCs and NOx. Recent studies have linked sh ort-term ozone exposures with premature mortality. Exposure to ozone has also been linke d to a variety of respiratory effects including hospital admissions and illnesses resulting in school absences. Potential human health effects associated with PM 2.5 

### range from premature mortality to morbidity effects linked to long-term (chronic) and shorter-term (acu te) exposures (e.g., respirator y and cardiovascular symptoms resulting in hospital admissions, asthma exacer bations, and acute and chronic bronchitis). Welfare effects potentially linked to PM include materials damage and visibility impacts,

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### Cost-Benefit Analysis while ozone can adversely affect the agricultura l and forestry sectors by decreasing yields of crops and forests.
The benefits modeling is base d on peer-reviewed studies of air quality and health and welfare effects associated with improvements in air quality and peer-reviewed studies of the dollar values of those public hea lth and welfare effects. All of the benefit estimates for the control options in this analysis are based on an analytical structure and sequence consistent with benefits analyses performed for the recent analysis of the final Ozone NAAQS and the final PM NAAQS analysis. 1,2 

### For a more detailed discussion of the principles of benefits analysis used here, we refer the reader to thos e documents, as well as to the EPA Guidelines for Economic Analysis.

Table 8.1-1 summarizes the annual monetized h ealth and welfare benefits associated with the final standards for two years, 2020 and 2030. The estimates in Table 8.1-1, and all monetized benefits presented in this chapter, are in year 2005 dollars. There are a few items to note about these benefits:

• Using a conservative benefits estimate, the 2020 benefits outweigh the costs by a factor of 5. Using the upper end of the benefits range , the benefits could outweigh the costs by a factor of 19. Likewise, in 2030 benefits outweigh the costs by at least a factor of 8 and could be as much as a factor of 34. Thus , even taking the most conservative benefits assumptions, benefits of the final st andards clearly outweigh the costs.

• Emissions and air quality modeling decisions are made early in the analytical process. For this reason, the emission contro l scenarios used in the air quality and benefits modeling are slightly different than the final emissi on control program. The differences reflect further refinements of the re gulatory program since we perf ormed the air quality modeling for this rule. Chapter 3 of the RIA descri bes the changes in th e inputs and resulting emission inventories between the preliminar y assumptions used for the air quality modeling and the final regulatory scenario.

• The RIA for the proposal for this rulemaking only quantified benefits from PM; in the current RIA we quantify and monetize the ozone-related health impacts associated with the final rule. The science underlying the analysis is based on the current ozone criteria document. 3 

### The analytic approach to characteri zing uncertainty is c onsistent with the analysis used in the RIA for the final Ozone NAAQS.

• In a recent report on the estimation of ozone-re lated premature mortality published by the National Research Council (NRC), 4 

### a panel of experts and reviewers concluded that ozone-related mortality should be included in estimates of the health benefits of reducing ozone exposure. The report also recomme nded that the estimation of ozone-related premature mortality be accompanied by broad un certainty analyses while giving little or no weight to the assumption that there is no causal association between ozone exposure and premature mortality. Because EPA has ye t to develop a coordinated response to the NRC report’s findings and recommendations, howev er, we have retained the approach to

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### Final Regulatory Impact Analysis estimating ozone-related premature mortality used in RIA for the final Ozone NAAQS. EPA will specifically address the report's findings and recommendations in future rulemakings.

Table 8.1-1. Estimated Monetized PM- and Ozon e-Related Health Benefits of the Small SI and Marine SI Engine Standards 2030 Total Ozone and PM Benefits – PM Mortality Derived from American Cancer Society Analysis a Premature Ozone Mortality Function or Assumption Reference Mean Total Benefits (Billions, 2005$, 3% Discount Rate) c,d Mean Total Benefits (Billions, 2005$, 7% Discount Rate) c,d NMMAPS Bell et al., 2004 $2.4 $2.2 Meta-analysis Bell et al., 2005 $3.7 $3.5 Ito et al., 2005 $4.4 $4.2 Levy et al., 2005 $4.4 $4.3 Assumption that association is not causal e $1.8 $1.6 2030 Total Ozone and PM Benefits – PM Mortality Derived from Expert Elicitation b Premature Ozone Mortality Function or Assumption Reference Mean Total Benefits (Billions, 2005$, 3% Discount Rate) c,d Mean Total Benefits (Billions, 2005$, 7% Discount Rate) c,d NMMAPS Bell et al., 2004 $1.7 - $9.7 $1.6 - $8.8 Meta-analysis Bell et al., 2005 $3.0 - $11 $2.9 - $10 Ito et al., 2005 $3.7 - $12 $3.6 - $11 Levy et al., 2005 $3 .7 - $12 $3.7 - $11 Assumption that association is not causal e $1.1 to $9.1 $1.0 - $8.2

a Total includes ozone and PM 2.5 benefits. Range was developed by adding the estimate from the ozone premature mortality function to the estimate of PM 2.5 -related premature mortality derived from the American Cancer Society analysis (Pope et al., 2002). b Total includes ozone and PM 2.5 benefits. Range was developed by adding the estimate from the ozone premature mortality function to both the lower and upper ends of the range of the PM 2.5 premature mortality functions characterized in the expert elicitation. The effect estimates of five of the twelve experts included in the elicitation panel fall within the empirically-derived range provided by the ACS and Six-Cities studies. One of the experts fall below this range and six of the experts are above this range. Although the overall range across experts is summarized in this table, the full uncertainty in the estimates is reflected by the results for the full set of 12 experts. The twelve experts’ judgments as to th e likely mean effect estimate are not evenly distributed across the range illustrated by arraying the highest and lowest expert means.

c Note that total benefits presented here do not incl ude a number of unquantifie d benefits categories. A detailed listing of unquantified health and welf are effects is provided in Table 8.4-1. d Results reflect the use of both a 3 and 7 percent discount rate, as recommended by EPA’s Guidelines for Preparing Economic Analyses and OMB Circular A-4. Results are rounded to two significant digits for ease of presentation and computation.

e A recent report published by the National Resear ch Council (NRC, 2008) recommended that EPA “give little or no weight to the assumption that there is no causal association between estimated reductions in premature mortality and re duced ozone exposure.”



### Table 8.1-1 reflects those human health and we lfare effects we are able to quantify and monetize. However, the full complement of known or suspected human health and welfare effects associated with PM, ozone and air t oxics remain unquantified because of current limitations in methods or available data. We have not quantified poten tial health and welfare effects of ozone and PM because impact functio ns are not available or do not provide easily interpretable outcomes (e.g., changes in heart ra te variability, acid and particulate deposition

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### Cost-Benefit Analysis damage to cultural monuments and other material s, and reductions in acidification of lakes and streams and eutrophication in coastal areas). As a result, we may underestimate the total benefits attributable to the implementation of the final standards.
This chapter is organized as follows. In Section 8.2, we provide an overview of the air quality impacts modeled for the fina l standards that are used as i nputs to the benefits analysis. In Section 8.3, we discuss how uncertainty is characterized in this analysis. Section 8.4 discusses the literature on ozone - and PM-related health effects and describes the specific set of health impact functions we used in the benefits analysis. S ection 8.5 describes the economic values selected to estimate the dollar value of ozone- a nd PM-related health impacts. In Section 8.6, we report the results of the analysis for human health and welfare effects. Finally, Section 8.7 presents a comparis on of the costs and benefits associated with the final standards. There are also two appendice s associated with this chapter. The first, Appendix 8A, presents the results of the health-b ased cost effectiveness analysis. The second, Appendix 8A, presents the results of sensitivity analyses of key parameters in the benefits analysis.



## 8.2 Air Quality Impacts for Benefits Analysis
In Chapter 2, we summarize the methods fo r and results of estimating air quality for the 2020 and 2030 base case and final control scenar io. These air quality results are in turn associated with human populations and ecosystem s to estimate changes in health and welfare effects. For the purposes of the benefits anal ysis, we focus on the hea lth effects that have been linked to ambient changes in ozone and PM 2.5 

### related to emission reductions estimated to occur due to the final standards. We estimate ambient PM 2.5 

### and ozone concentrations using the Community Multiscale Air Quality model (CMAQ). The air quality modeling Technical Support Document (TSD), which can be found in the docket for this rule, contains detailed information about the modeling conducted fo r this rule. In this section, we describe how the modeled air quality results were used for the benefits analysis.
We remind the reader that the emission control scenarios used in the air quality and benefits modeling are slightly different th an the final emission control program. The differences reflect further refinements of the regulatory program since we performed the air quality modeling for this rule. Emissions and ai r quality modeling decisions are made early in the analytical process. Chapter 3 of the RIA describes the changes in the inputs and resulting emission inventories between the preliminary as sumptions used for the air quality modeling and the final regulatory scenario.



### 8.2.1 Converting CMAQ Outputs to Full-Seas on Profiles for Benefits Analysis
This analysis extracted hourly, surface-la yer PM and ozone concentrations for each grid cell from the standard CMAQ output files. For ozone, these model predictions are used

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### Final Regulatory Impact Analysis in conjunction with the observe d concentrations obtained from the Aerometric Information Retrieval System (AIRS) to generate ozone concentrations for the entire ozone season. A,B 

### The predicted changes in ozone concentrations from the future-year base case to future-year control scenario serve as inputs to the health and welfare imp act functions of the benefits analysis (i.e., the Environmental Benefits Mapping and Analysis Pr ogram [BenMAP]).

To estimate ozone-related health and welfar e effects for the contiguous United States, full-season ozone data are required for every BenMAP grid-cell. Given available ozone monitoring data, we generated full-season ozone profiles for each location in two steps: (1) we combined monitored observations and modele d ozone predictions to interpolate hourly ozone concentrations to a grid of 12-km by 12-km population grid cells for the contiguous 48 states, and (2) we converted th ese full-season hourly ozone prof iles to an ozone measure of interest, such as the daily 8-hour maximum. C,D



### For PM 2.5 

### , we also use the model predictions in conjunction with observed monitor data. CMAQ generates predictions of hourly PM species concentrations for every grid. The species include a primary coarse fraction (cor responding to PM in the 2.5 to 10 micron size range), a primary fine fraction (corresponding to PM less than 2.5 microns in diameter), and several secondary partic les (e.g., sulfates, nitrat es, and organics). PM 2.5 

### is calculated as the sum of the primary fine fraction and all of th e secondarily formed particles. Future-year estimates of PM 2.5 

### were calculated using relative re duction factors (RRFs) applied to 2002 ambient PM 2.5 

### and PM 2.5 

### species concentrations. A gridded field of PM 2.5 

### concentrations was created by interpolating Federal Reference Monitor ambient data and IMPROVE ambient data. Gridded fields of PM 2.5 

### species concentrations were created by interpolating EPA speciation network (ESPN) ambient data and IMPROVE data. The ambient data were interpolated to the CMAQ 12 km grid.
The procedures for determining the RRFs are similar to those in EPA’s draft guidance for modeling the PM 2.5 

### standard (EPA, 1999). The gui dance recommends that model predictions be used in a relative sense to estim ate changes expected to occur in each major PM 2.5 

### species. The procedure for calculating future-year PM 2.5 

### design values is called the “Speciated Modeled Attainment Test (SMAT).” EPA used this procedure to estimate the ambient impacts of the final emissions contro ls. Full documentation of the revised SMAT methodology is contained in the Air Quality Modeling TSD.

A The ozone season for this analysis is defined as the 5-month period from May to September.

B Based on AIRS, there were 961 ozone monitors with suffici ent data (i.e., 50 percent or more days reporting at least nine hourly observations per day [8 am to 8 pm] during the ozone season).

C The 12-km grid squares contain the population data used in the health benefits analysis model, BenMAP.

D This approach is a generalization of planar interpola tion that is technically refe rred to as enhanced Voronoi Neighbor Averaging (EVNA) spatial interpolation. See the BenMAP manual for technical details, available for download at http://www.epa.gov/air/benmap.



### 8- 5

### Cost-Benefit Analysis


### 8.2.2 Ozone and PM 2.5 

### Air Quality Results
This section provides a summar y of the predicted ambient PM 2.5 

### and ozone concentrations from the CMAQ model for the 2020 and 2030 base cases and changes associated with the final rule. Table 8.2-1 provides those ozone and PM 2.5 

### metrics for grid cells in the modeled domain that enter the he alth impact functions for health benefits endpoints. The population-wei ghted average reflects the ba seline levels and predicted changes for more populated areas of the nation. This measure better reflects the potential benefits through exposure ch anges to these populations.

Table 8.2-1. Summary of CMAQ-Derive d Population-Weighted Ozone and PM 2.5 

### Air Quality Metrics for Health Bene fits Endpoints Due to the Final Small SI and Marine SI Engine Standards 2020 2030 Statistic a Baseline Change b Baseline Change b Ozone Metrics: National Population-Weighted Average (ppb) c Daily 1-Hour Maximum Concentration 47.60 0.078 46.91 0.108 Daily 8-Hour Maximum Concentration 44.07 0.066 43.47 0.093 Daily 8-Hour Average Concentration 42.63 0.062 42.06 0.088 Daily 24-Hour Average Concentration 35.39 0.047 35.02 0.068 PM 2.5 Metrics: National Population-Weighted Average (ug/m 3 ) Annual Average Concentration 9.41 0.015 9.38 0.021

a Ozone and PM 2.5 metrics are calculated at the CMAQ grid-cell level for use in health effects estimates based on the results of spatial and temporal Voronoi Neighbor Averaging. Ozone metrics are calculated over relevant time periods during the daylight hours of the “ozone season” (i.e., May through September). For the 8- hour average, for example, the relevant time period is 9 am to 5 pm. b The change is defined as the base-case value minus the control-case value.

c Calculated by summing the product of the projected CMAQ grid-cell population and the estimated CMAQ grid cell seasonal ozone concentration and then dividing by the total population.



## 8.3 Characterizing Uncertainty: M oving Toward a Probabilistic Framework for Benefits Assessment
The National Research Council (NRC) 5 

### highlighted the need for EPA to conduct rigorous quantitative analysis of uncertainty in its benefits estimates and to present these estimates to decision makers in ways that foster an appropriate appreciation of their inherent uncertainty. In response to these comments, EPA’s Office of Air a nd Radiation (OAR) is developing a comprehensive strategy for characte rizing the aggregate impa ct of uncertainty in key modeling elements on both health incidence and benefits estimates. Components of that process include emissions modeling, air quality modeling, health effect s incidence estimation, and valuation.
In benefit analyses of air pollution regulations conducted to date, the estimated impact of reductions in premature mortality has acc ounted for 85% to 95% of total benefits.

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### Final Regulatory Impact Analysis Therefore, it is particularly important to characterize the uncertain ties associated with reductions in premature mortality. The healthimpact functions used to estimate avoided premature deaths associated with reductions in ozone have asso ciated standard errors that represent the statis tical errors around the effect estimat es in the underlying epidemiological studies. E 

### In our results, we report credible interv als based on these standard errors, reflecting the uncertainty in the estimated change in inci dence of avoided premat ure deaths. We also provide multiple estimates, to reflect model unc ertainty between alternative study designs. In addition, we characterize the uncertainty intr oduced by the inability of existing empirical studies to discern whether the relationship betw een ozone and pre-mature mortality is causal by providing an effect estimate preconditioned on an assumption that the effect estimate for pre-mature mortality fr om ozone is zero.
For premature mortality associated with e xposure to PM, we follow the same approach that has been used in several recent RIAs. F,G,H 

### First, we use Monte Carlo methods for estimating random sampling error associated with the concentration response functions from epidemiological studies and economic valua tion functions. Monte Carlo simulation uses random sampling from distributions of parameters to characterize the e ffects of uncertainty on output variables, such as incidence of premat ure mortality. Specifically, we used Monte Carlo methods to generate confidence interval s around the estimated heal th impact and dollar benefits. Distributions for individual effect estimates are based on the reported standard errors in the epidemiological st udies. Distributions for unit va lues are described in Table 8.5- 1.
Second, we use the results of our expert elicitation of the c oncentration response function describing the relationship betw een premature mortality and ambient PM 2.5 

### concentration. I, J 

### Incorporating only the uncertain ty from random sampling error omits important sources of uncertainty (e.g., in the functional form of the model; whether or not a

E Health impact functions measure the change in a health endpoint of interest, such as hospital admissions, for a given change in ambient ozone or PM concentration.

F U.S. Environmental Protection Agency, 2004a. Fina l Regulatory Analysis: Control of Emissions from Nonroad Diesel Engines. EPA420-R-04-007. Prepared by Office of Air and Radiation. Available at http://www.epa.gov/nonroad-di esel/2004fr/420r04007.pdf

G U.S. Environmental Protection Agency, 2005. Regulatory Impact Analysis for the Clean Air Interstate Rule. EPA 452/-03-001. Prepared by Office of Air and Radiation. Available at: http://www.epa.gov/inters tateairquality/tsd0175.pdf

H U.S. Environmental Protection Agency, 2006. Regulatory Impact Analysis for the PM NAAQS. EPA Prepared by Office of Air and Radiation. Available at: http://www.epa.gov /ttn/ecas/regdata/R IAs/Chapter%205-- Benefits.pdf

I Expert elicitation is a formal, highly structured an d well documented process whereby expert judgments, usually of multiple experts, are obtained (Ayyb, 2002).

J Industrial Economics, Inc. 2006. Expanded Expert Judgment Assessment of the Concentration-Response Relationship Between PM2.5 Exposure and Mortality. Pr epared for EPA Office of Air Quality Planning and Standards, September. Available at: http://www.epa.gov/ttn/ecas/regdata /Uncertainty/pm_ee_report.pdf


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### Cost-Benefit Analysis threshold may exist). This second approach a ttempts to incorporate these other sources of uncertainty.
Use of the expert elicitati on and incorporation of the st andard errors approaches provide insights into the like lihood of different outcomes and about the state of knowledge regarding the benefits estimates. Both appro aches have different strengths and weaknesses, which are fully described in Chapter 5 of the PM NAAQS RIA.
These multiple characterizations, including confidence intervals, omit the contribution to overall uncertainty of uncertainty in air quality changes, baseline incidence rates, populations exposed and transferability of th e effect estimate to diverse locations. Furthermore, the approach presented here does not yet include methods for addressing correlation between input parameters and the identification of reas onable upper and lower bounds for input distributions characterizing uncer tainty in additional model elements. As a result, the reported confidence in tervals and range of estimates give an incomplete picture about the overall uncertainty in the estimates. This information should be interpreted within the context of the larger uncertainty surrounding the entire analysis.



## 8.4 Health Impact Functions
Health impact functions measure the change in a health endpoint of interest, such as hospital admissions, for a given ch ange in ambient ozone or PM concentration. Health impact functions are derived from primary epidem iology studies, meta-analyses of multiple epidemiology studies, or expert elicitations. A standard health impact function has four components: 1) an effect estimate from a particul ar study; 2) a baseline incidence rate for the health effect (obtained from either the epidemiology study or a source of public health statistics such as the Centers for Disease Cont rol); 3) the size of the potentially affected population; and 4) the estimated change in the relevant ozone or PM summary measures.
A typical health impact f unction might look like:

β ⋅Δ x 

### Δ

y = y 0 

### ⋅ 

# ( e

− 1 

# )

, where y 0 

### is the baseline incidence (the product of the baseline incide nce rate times the potentially affected population), $ is the effect estimate, and ) x is the estimated change in the summary pollutant measure. There are other f unctional forms, but the basic elements remain the same. Section 6.2 described the ozone and PM air quality inputs to the health impact functions. The following subsections describe the sources for each of the other elements: size of potentially affected popul ations; effect estimates; and baseline incidence rates.



### 8.4.1 Potentially Affected Populations
The starting point for estimating the size of potentially affected populations is the 2000 U.S. Census block level dataset. 6 

### Benefits Modeling and An alysis Program (BenMAP) incorporates 250 age/gender/race ca tegories to match specific popul ations potentially affected

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### Final Regulatory Impact Analysis by ozone and other air pollutants. The softwa re constructs specific populations matching the populations in each epidemiological study by accessing the appropria te age-specific populations from the overall population databa se. BenMAP projects populations to 2020 using growth factors based on economic projections. 7



### 8.4.2 Effect Estimate Sources
The most significant monetized benefits of reducing ambient concentrations of ozone and PM are attributable to re ductions in human health risks. EPA’s Ozone and PM Criteria Documents 8,9 

### and the World Health Organization’s 2003 and 2004 10,11 

### reports outline numerous health effects known or suspected to be linked to exposure to ambient ozone and PM. EPA recently evaluated the PM literature fo r use in the benefits analysis for the 2006 PM NAAQS RIA. Because we used the same lite rature for the PM benef its analysis in this RIA, and also in the RIA for the proposed ru le, we do not provide a detailed discussion of individual effect estimates for PM in this sec tion. Instead, we refer th e reader to the 2006 PM NAAQS RIA and the proposed Small SI and Marine SI RIA for details. K


### The RIA for the proposal for this rulemaking only quantified benefits from PM; in the current RIA we quantify and monetize the ozone -related health and environmental impacts associated with the final rule using an approach consistent with the final ozone NAAQS RIA. More than one thousand new ozone health and we lfare studies have been published since EPA issued the 8-hour ozone standard in 1997. Many of these studies invest igated the impact of ozone exposure on health effects such as: chan ges in lung structure and biochemistry; lung inflammation; asthma exacerbation and causation ; respiratory illness-related school absence; hospital and emergency room visits for asthma and other respiratory causes; and premature death. We provide a discussion of those ozone-r elated impacts in this section. For a more detailed discussion of the health effects of ozone exposure, we point the reader to EPA’s ozone Criteria Document. 12


### It is important to note that we were not ab le to separately quantify all of the PM and ozone health effects that have been reported in the ozone and PM criteria documents in this analysis for four reasons: (1) the possibility of double countin g (such as hospital admissions for specific respiratory diseases); (2) uncertainti es in applying effect relationships that are based on clinical studies to the potentially affected population; (3 ) the lack of an established concentration-response relationship; or 4) the inability to appropr iately value th e effect (for example, changes in forced expiratory volum e) in economic terms. Table 8.4-1 lists the human health and welfare effects of pollutants affected by the final standards. Table 8.4-2 lists the health endpoints in cluded in this analysis.

K

U.S. Environmental Protection Agency, 2005. Regulatory Impact Analysis for the PM NAAQS. EPA Prepared by Office of Air and Radiation. Available at: http://www.epa.gov /ttn/ecas/regdata/R IAs/Chapter%205-- Benefits.pdf pp. 5-29.


### 8- 9CO Health Behavioral effects 

### Cost-Benefit Analysis
Table 8.4-1 Human Health and Welfare Effects of Pollutants Affected by the Final Standards

Quantified and Monetized in Base Pollutant/Effect Estimates a Unquantified Effects - Changes in: Premature mortality based on both cohort study estimates and on expert elicitation c,d Bronchitis: chronic and acute Hospital admissions: respiratory and cardiovascular Emergency room visits for asthma Nonfatal heart attacks (myocardial PM/Health b infarction) Lower and upper respiratory illness Minor restricted-activity days Work loss days Asthma exacerbations (asthmatic population) Respiratory symptoms (asthmatic population) Infant mortality Subchronic bronchitis cases Low birth weight Pulmonary function Chronic respiratory diseases other than chronic bronchitis Nonasthma respiratory emergency room visits UVb exposure (+/-) e

Visibility in Southeastern Class I areas Visibility in northeastern and Midwestern Class I areas Household soiling PM/Welfare Visibility in western U.S. Class I areas Visibility in residential and non-Class I areas UVb exposure (+/-) e Premature mortality: short-term exposures Hospital admissions: respiratory Emergency room visits for asthma Ozone/Health f Minor restricted-activity days School loss days Asthma attacks Acute respiratory symptoms Cardiovascular emergency room visits Chronic respiratory damage g Premature aging of the lungs g Nonasthma respiratory emergency room visits UVb exposure (+/-) e

Decreased outdoor worker Yields for commercial crops productivity Yields for commercial forests and noncommercial crops Damage to urban ornamental plants Ozone/Welfare Recreational demand from damaged forest aesthetics Ecosystem functions UVb exposure (+/-) e



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### Final Regulatory Impact Analysis
Quantified and Monetized in Base Pollutant/Effect Estimates a Unquantified Effects - Changes in:

Nitrogen Deposition/ Welfare Commercial forests due to acidic sulfate and nitrate deposition Commercial freshwater fishing due to acidic deposition Recreation in terrestrial ecosystems due to acidic deposition Commercial fishing, agriculture, and forests due to nitrogen deposition Recreation in estuarine ecosystems due to nitrogen deposition Ecosystem functions Passive fertilization Lung irritation NOx/Health Lowered resistance to respiratory infection Hospital admissions for respiratory and cardiac diseases Cancer, including lung (benzene, 1,3-butadiene, formaldehyde, acetalde hyde, naphthalene) Anemia (benzene) Disruption of production of blood components (benzene) Reduction in the number of blood platelets (benzene) Excessive bone marrow formation (benzene) Depression of lymphocyte counts (benzene) HC/Toxics Reproductive and developmental effects (1,3-butadiene) Health h Irritation of eyes and mucu s membranes (formaldehyde) Respiratory irritation (formaldehyde) Asthma attacks in asthmatics (formaldehyde) Asthma-like symptoms in non-asthmatics (formaldehyde) Irritation of the eyes, sk in, and respiratory tract (acetaldehyde) Upper respiratory tract irritation and congestion (acrolein) Neurotoxicity (n-hexane, toluene, xylenes) Direct toxic effects to animals HC/Toxics Bioaccumulation in the food chain Welfare h Damage to ecosystem function Odor

a Primary quantified and monetized effects are those included when determining the primary estimate of total monetized benefits of the final standards. b In addition to primary economic endpoints, there are a number of biological responses that have been associated with PM health effects including morphological changes and al tered host defense mechanisms. The public health impact of these biological responses may be partly represented by our quantified endpoints.

c Cohort estimates are designed to examine the effects of long term exposures to ambient pollution, but relative risk estimates may also incorporate some effects due to shorter term exposures (see Kunzli, 2001 for a discussion of this issue). d While some of the effects of short-term exposure ar e likely to be captured by the cohort estimates, there may be additional premature mort ality from short-term PM exposure no t captured in the cohort estimates included in the primary analysis.

e May result in benefits or disbenefits. f The public health impact of biological responses such as increased airway responsiveness to stimuli, inflammation in the lung, acute inflammation and resp iratory cell damage, and increased susceptibility to respiratory infection are likely partially represented by our quantified endpoints.



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### Cost-Benefit Analysis

g The public health impact of effects such as ch ronic respiratory damage and premature aging of the lungs may be partially represented by quantified endpoints such as hospital admissions or premature mortality, but a number of other related health impacts, such as do ctor visits and decreased athletic performance, remain unquantified. h The categorization of unquantified toxic health and welfare effects is not exhaustive.



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### Final Regulatory Impact Analysis Table 8.4-2. Ozone- and PM-Related Health Endpoints

Endpoint Pollutant Study Study Population Premature Mortality

Premature mortality –daily time series, nonaccidental ozone Bell et al (2004) (NMMAPS study) 13 Meta-analyses: Bell et al (2005) 14 Ito et al (2005) 15 Levy et al (2005) 16 All ages

Premature mortality—cohort study, allcause PM 2.5 Pope et al. (2002) 17 Laden et al. (2006) 18 >29 years >25 years

Premature mortality, total exposures PM 2.5 Expert Elicitation (IEc, 2006) 19 >24 years

Premature mortality — all-cause PM 2.5 Woodruff et al. (1997) 20 Infant (<1 year)

Chronic Illness

Chronic bronchitis PM 2.5 Abbey et al. (1995) 21 >26 years Nonfatal heart attacks PM 2.5 Peters et al. (2001) 22 Adults (>18 years) Hospital Admissions

Respiratory

ozone Pooled estimate: Schwartz (1995) - ICD 460-519 (all resp) 23 Schwartz (1994a; 1994b) - ICD 480-486 (pneumonia) 24,25 Moolgavkar et al. (1997) - ICD 480-487 (pneumonia) 26 Schwartz (1994b) - ICD 491-492, 494-496 (COPD) Moolgavkar et al. (1997) – ICD 490-496 (COPD) >64 years

Burnett et al. (2001) 27 <2 years PM 2.5 Pooled estimate: Moolgavkar (2003)—ICD 490-496 (COPD) 28 Ito (2003)—ICD 490-496 (COPD) 29 >64 years

PM 2.5 Moolgavkar (2000)—ICD 490-496 (COPD) 30 20–64 years PM 2.5 Ito (2003)—ICD 480-486 (pneumonia) >64 years PM 2.5 Sheppard (2003)—ICD 493 (asthma) 31 <65 years Cardiovascular PM 2.5 Pooled estimate: Moolgavkar (2003)—ICD 390-429 (all cardiovascular) Ito (2003)—ICD 410-414, 427-428 (ischemic heart disease, dysrhythmia, heart failure) >64 years

PM 2.5 Moolgavkar (2000)—ICD 390-429 (all cardiovascular) 20–64 years

Asthma-related ER visits ozone Pooled estimate: Jaffe et al (2003) 32 Peel et al (2005) 33 Wilson et al (2005) 34 5–34 years All ages All ages



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### Cost-Benefit Analysis

Endpoint Pollutant Study Study Population Asthma-related ER visits (con’t) PM 2.5 Norris et al. (1999) 35 0–18 years

Other Health Endpoints

Acute bronchitis PM 2.5 Dockery et al. (1996) 36 8–12 years Upper respiratory symptoms PM 2.5 Pope et al. (1991) 37 Asthmatics, 9–11 years Lower respiratory symptoms PM 2.5 Schwartz and Neas (2000) 38 7–14 years

Asthma exacerbations PM 2.5 Pooled estimate: Ostro et al. (2001) 39 (cough, wheeze and shortness of breath) Vedal et al. (1998) 40 (cough) 6–18 years a

Work loss days PM 2.5 Ostro (1987) 41 18–65 years School absence days

ozone Pooled estimate: Gilliland et al. (2001) 42 Chen et al. (2000) 43 5–17 years b

Minor Restricted Activity Days (MRADs) ozone Ostro and Rothschild (1989) 44 18–65 years PM 2.5 Ostro and Rothschild (1989) 18–65 years

a The original study populations were 8 to 13 for the Ostro et al. (2001) study and 6 to 13 for the Vedal et al. (1998) study. Based on advice from the Science Advisory Board Health Effects Subcommittee (SAB-HES), we extended the applied population to 6 to 18, reflecting the common biological basis for the effect in children in the broader age group. See: U.S. Science Advisory Board. 2004. Advisory Plans for Health Effects Analysis in the Analytical Plan for EPA’s Second Prospective An alysis –Benefits and Costs of the Clean Air Act, 1990—2020. EPA-SAB-COUNCIL-ADV-04-004. See also National Research Council (NRC). 2002. Estimating the Public Health Benefits of Proposed Air Pollution Regulations . Washington, DC: The National Academies Press. b Gilliland et al. (2001) studied children aged 9 and 10. Chen et al. (2000) studied children 6 to 11. Based on recent advice from the National Research Council and th e EPA SAB-HES, we have calculated reductions in school absences for all school-aged children based on the biological similarity between children aged 5 to 17. 

### In selecting epidemiological studies as sour ces of effect estimates, we applied several criteria to develop a set of studi es that is likely to provide the best estimates of impacts in the U.S. To account for the potential impacts of different health care systems or underlying health status of populations, we give preference to U.S. studi es over non-U.S. studies. In addition, due to the potential fo r confounding by co-pollutants, we give preference to effect estimates from models including both ozone and PM over effect estimates from singlepollutant models. 45,46


### A number of endpoints that are not health-re lated also may significantly contribute to monetized benefits. Potential welfare benefits associated with ozone exposure include: increased outdoor worker productivity; increas ed yields for commercial and non-commercial crops; increased commercial forest productivity; reduced damage to urban ornamental plants; increased recreational demand for undamaged fo rest aesthetics; and reduced damage to ecosystem functions. 47,48 

### While we include estimates of the value of increased outdoor worker productivity, estimation of other welfare impacts is beyond th e scope of this analysis.

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### Final Regulatory Impact Analysis
8.4.2.1 Ozone Exposure Metric
Both the NMMAPS analysis and the indi vidual time series studies upon which the meta-analyses were based use the 24-hour av erage or 1-hour maximum ozone levels as exposure metrics. L 

### The 24-hour average is not the most relevant ozone exposure metric to characterize population-level exposure. Given th at the majority of the people tend to be outdoors during the daylight hours and concentrat ions are highest during the daylight hours, the 24-hour average metric is not appropriate. The maximum 1-hour average metric uses an exposure window different than that that used for the current ozone NAAQS. Together, this means that the most biologically relevant metr ic is the maximum 8-hour average, which has also been the metric for ozone NAAQS since 1997. Thus, for the final rule analysis, we have converted ozone mortality health impact func tions that use a 24-hour average or 1-hour maximum ozone metric to maximum 8-hour av erage ozone concentration using standard conversion functions.
This practice is consistent both with the available e xposure modeling and with the form of the current ozone standard. This c onversion also does not affect the relative magnitude of the health impact function. An e quivalent change in the 24-hour average, maximum1-hour average, and maximum 8-hour av erage will provide the same overall change in incidence of a health effect. The convers ion ratios are based on observed relationships between the 24-hour average and maximum 8-hour average ozone values. For example, in the Bell et al., 2004 analysis of ozone-related premature mortalit y, the authors found that the relationship between the 24-hour average, the maximum 8-hour average, and the maximum 1- hour average was 2:1.5:1, so that the derived he alth impact effect estimate based on the maximum 1-hour average should be half that of the effect estimate based on the 24-hour values (and the maximum 8-hour average three- quarters of the 24-hour effect estimate).

8.4.2.2 Premature Mortality Effect Estimates
While particulate matter is the criteria pollutant most clearly associated with premature mortality, recent rese arch suggests that short-term repeated ozone exposure likely contributes to premature death. The 2006 Ozone Criteria Document states: “Consistent with observed ozone-related increases in respiratory- and cardiovascu lar-related morbidity, several newer multi-city studies, single-city studies, a nd several meta-analyses of these studies have provided relatively strong epidemiologic evidence for associations betw een short-term ozone exposure and all-cause mortality, even after adjustment for the influence of season and PM” (EPA, 2006: E-17). 49 

### The epidemiologic data are also supported by newly available experimental data from both animal and human studies which provide evidence suggestive of

L An exposure metric is a measure of air quality cal culated as the average or maximum of modeled ambient concentrations over a relevant time period, such as during the daylight hours of the “ozone season” (which is May through September for this analysis). The 24-hour average is therefore calcula ted as the average of all hourly ozone concentrations throughout the day (from 12am to 11:59pm). The 8-hour maximum is the maximum hourly value observed betw een 9am and 5pm each day. The 1-ho ur maximum is the maximum hourly value observed throughout an entire day.


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### Cost-Benefit Analysis plausible pathways by which risk of respiratory or cardiovascular morbidity and mortality could be increased by ambient ozon e. With respect to short-te rm exposure, the ozone Criteria Document concludes: “This overall body of evid ence is highly suggestive that ozone directly or indirectly contributes to non-accident al and cardiopulmonary-related mortality, but additional research is needed to more fully establish underlying mechanisms by which such effects occur” (pg. E-18).
With respect to the time-series studies, the conclusion regard ing the relationship between short-term exposure and premature mo rtality is based, in part, upon recent cityspecific time-series studies such as the Schwartz (2004) analysis in Houston and the Huang et al. (2004) analysis in Los Angeles. M 

### This conclusion is also based on recent meta-analyses by Bell et al. (2005), Ito et al. ( 2005), and Levy et al. (2005), and a new analysis of the National Morbidity, Mortality, and Air Pollution Study (NMMAPS) data set by Bell et al. (2004), which specifically sought to dise ntangle the roles of ozone, PM , weather-related variables, and seasonality. The 2006 Criteria Document st ates that “the results from these metaanalyses, as well as several single- and multip le-city studies, indicate that co-pollutants generally do not appear to substantiall y confound the association between ozone and mortality” (p. 7-103). However, CASAC raised questions about the implications of these time-series results in a policy context. Sp ecifically, CASAC emphasized that “...while the time-series study design is a power ful tool to detect very smal l effects that could not be detected using other designs, it is also a bl unt tool” (Henderson, 2006: 3). They point to findings (e.g., Stieb et al., 2002, 2003) that indicated associations between premature mortality and all of the criteria pollutants, in dicating that “findings of time-series studies do not seem to allow us to confidently attribute obs erved effects to individu al pollutants” (id.). They note that “not only is the interpretation of these associati ons complicated by the fact that the day-to-day variation in c oncentrations of th ese pollutants is, to a varying degree, determined by meteorology, the pollutants are ofte n part of a large and highly correlated mix of pollutants, only a very few of which are measur ed” (id.). Even with these uncertainties, the CASAC Ozone Panel, in its review of EP A’s Staff Paper, found “...premature total nonaccidental and cardiorespiratory mortality for incl usion in the quantitative risk assessment to be appropriate.”
Consistent with the methodology used in the ozone risk assessment found in the Characterization of Health Risks found in the Review of the National Ambient Air Quality Standards for Ozone: Policy Assessment of Scie ntific and Technical Information, we included ozone mortality in the primary health effects analysis, with the recognition that the exact magnitude of the effects estimate is subject to continuing uncertainty. We used effect estimates from the Bell et al. (2004) NMMAPS analysis, as well as effect estimates from the three meta-analyses.

M For an exhaustive review of the city-specific time-series studies considered in the ozone staff paper, see: U.S. Environmental Protection Agency, 2007. Review of th e National Ambient Air Quality Standards for Ozone: Policy Assessment of Scientific and Technical Information. Prepared by the Office of Air and Radiation. Available at http://www.epa.gov/ttn/naaqs/standards/ozone/data/2007_01_ozone_staff_paper.pdf. pp. 5-36.



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### Final Regulatory Impact Analysis In a recent report on the estimation of oz one-related premature mortality published by the National Research Council (NRC), 50 

### a panel of experts and reviewers concluded that ozone-related mortality should be included in estimates of the health benefits of reducing ozone exposure. The report also recommended th at the estimation of ozone-related premature mortality be accompanied by broad uncertainty anal yses while giving little or no weight to the assumption that there is no causal associa tion between ozone exposure and premature mortality. Because EPA has yet to develop a coordinated response to the NRC report’s findings and recommendations, however, we have retained the approach to estimating ozonerelated premature mortality used in RIA for the final Ozone NAAQS. EPA will specifically address the report's findings and recommenda tions in future rulemakings.
We estimate the change in mortality in cidence and estimated credible interval N 

### resulting from application of the effect estim ate from each study and present them separately to reflect differences in the study designs and assumptions about causality. However, it is important to note that this procedure only captures the uncertainty in the underlying epidemiological work, and does not capture other sources of uncertainty, such as uncertainty in the estimation of changes in air pollution exposure (Levy et al., 2000).

8.4.2.3 Respiratory Hospital Admissions Effect Estimates
Detailed hospital admission and discharge r ecords provide data for an extensive body of literature examining the relationship between hospital admissions and air pollution. This is especially true for the portion of the population aged 65 and older, because of th e availability of detailed Medicare records. In addition, there is one study (Burnett et al., 2001) providing an effect estimate for respiratory hos pital admissions in children under two.
Because the number of hospita l admission studies we considered is so large, we used results from a number of studies to pool some hospital admission endpoints. Pooling is the process by which multiple study results may be combined in order to produce better estimates of the effect estimate, or β . For a complete discussion of the pooling process, see Abt (2005). O 

### To estimate total respiratory hospital admissions associated with changes in ambient ozone concentrations for adults over 65, we first estimated the change in hospital admissions for each of the different effects categories that each study provided for each city. These cities included Minneapolis, Detroit, Tacoma and New Haven. To estimate total respiratory hospital admissions for Detroit, we added the pneumonia and COPD estimates, based on the effect estimates in the Schwartz study (1994) . Similarly, we summed the estimated hospital admissions based on the effect estimates th e Moolgavkar study repor ted for Minneapolis (Moolgavkar et al., 1997). To estimate total respiratory hospital admissions for Minneapolis using the Schwartz study (1994), we simply estimated pneumonia hospital admissions based on the effect estimate. Making this assumption that pneumonia admissions represent the total

N A credible interval is a posterior probability interval used in Bayesian statistics, which is similar to a confidence interval used in frequentist statistics.

O Abt Associates, Incorporated. Environmental Benefits Mapping and Analysis Program, Technical Appendices. May 2005. pp. I-3


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### Cost-Benefit Analysis impact of ozone on hospital admissions in this city will give some weight to the possibility that there is no relationship between ozone and COPD, reflecting the equivocal evidence represented by the different stud ies. We then used a fixe d-effects pooling procedure to combine the two total respiratory hospital admission estimates for Minneapolis. Finally, we used random effects pooling to combine the resu lts for Minneapolis and Detroit with results from studies in Tacoma and New Haven from Sc hwartz (1995). As noted above, this pooling approach incorporates both the precision of th e individual effect estimates and between-study variability characterizing diffe rences across study locations.

8.4.2.4 Asthma-Related Emergency Room Visits Effect Estimates

We used three studies as the source of the concentration-response functions we used to estimate the effects of ozone exposure on asthma-re lated emergency room (ER) visits: Peel et al. (2005); Wilson et al. (2005); and Jaffe et al. (2003). We estimated the change in ER visits using the effect estimate(s) from each study a nd then pooled the results using the random effects pooling technique (see Abt, 2005). Th e study by Jaffe et al. (2003) examined the relationship between ER visits and air pollution for populations aged five to 34 in the Ohio cities of Cleveland, Columbus and Cincinnati from 1991 through 1996. In single-pollutant Poisson regression models, ozone was linked to asthma visits. We use the pooled estimate across all three cities as reporte d in the study. The Peel et al . study (2005) estimated asthmarelated ER visits for all ages in Atlanta, using air quality data from 1993 to 2000. Using Poisson generalized estimating equations, the authors found a marginal association between the maximum daily 8-hour average ozone level and ER visits for asthma over a 3-day moving average (lags of 0, 1, and 2 days ) in a single pollutant model. Wilson et al. (2005) examined the relationship between ER visits for respiratory illnesses and as thma and air pollution for all people residing in Portland, Maine from 1998- 2000 and Manchester, New Hampshire from 1996-2000. For all models used in the analysis , the authors restricted the ozone data incorporated into the model to the months ozone levels are usually measured, the springsummer months (April through September). Usi ng the generalized additive model, Wilson et al. (2005) found a significant association between the maximum daily 8-hour average ozone level and ER visits for asthma in Port land, but found no significant association for Manchester. Similar to the approach used to generate effect estimates for hospital admissions, we used random effects pooling to combine the results acro ss the individual study estimates for ER visits for asthma. The Peel et al. (2005) and Wilson et al. (2005) Manchester estimates were not significant at the 95 percent le vel, and thus, the conf idence interval for the pooled incidence estimate based on these studies in cludes negative values. This is an artifact of the statistical power of the studies, and the negative values in the tails of the estimated effect distributions do not represent improvements in health as ozone concentrations are increased. Instead these should be viewed as a measure of uncertainty due to limitations in the statistical power of the study. Note that we included both hospital admissions and ER visits as separate endpoints associated with oz one exposure, because our estimates of hospital admission costs do not include the costs of ER vi sits, and because most asthma ER visits do not result in a hospital admission.

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### Final Regulatory Impact Analysis
8.4.2.5 Minor Restricted Activity Days Effects Estimate
Minor restricted activity da ys (MRADs) occur when individuals reduce most usual daily activities and replace them with less-strenu ous activities or rest, but do not miss work or school. We estimated the effect of ozone exposure on MRADs using a concentrationresponse function derived from Ostro and Rothsc hild (1989). These researchers estimated the impact of ozone and PM 2.5 

### on MRAD incidence in a national sample of the adult working population (ages 18 to 65) living in metropolitan areas. We developed separate coefficients for each year of the Ostro and Rothschild analysis (1976-1981), which we then combined for use in EPA’s analysis. The effect estimate used in the impact function is a weighted average of the coefficients in Ostro and Rothschild ( 1989, Table 4), using the inverse of the variance as the weight.

8.4.2.6 School Absences Effect Estimate
Children may be absent from school due to re spiratory or other acute diseases caused, or aggravated by, exposure to air pollution. Several studies have found a significant association between ozone levels and school abse nce rates. We use tw o studies (Gilliland et al., 2001; Chen et al., 2000) to estimate change s in school absences resulting from changes in ozone levels. The Gilliland et al. study estimated the incidence of new periods of absence, while the Chen et al. study examined daily abse nce rates. We convert ed the Gilliland et al. estimate to days of absence by multiplying the absence periods by the average duration of an absence. We estimated 1.6 days as the averag e duration of a school ab sence, the result of dividing the average daily school absence rate fr om Chen et al. (2000) and Ransom and Pope (1992) by the episodic absence duration from G illiland et al. (2001). Thus, each Gilliland et al. period of absence is conve rted into 1.6 absence days.
Following recent advice from the National Research Council (2002), we calculated reductions in school absences for the full populat ion of school age children, ages five to 17. This is consistent with recent peer-reviewe d literature on estimating the impact of ozone exposure on school absences (Hall et al. 2003). We estimated the change in school absences using both Chen et al. (2000) and Gilliland et al. (2001) and then, similar to hospital admissions and ER visits, pooled the results using the random effect s pooling procedure.

8.4.2.7 Worker Productivity

To monetize benefits associated with in creased worker productivity resulting from improved ozone air quality, we used informa tion reported in Crocker and Horst (1981). Crocker and Horst examined the impacts of ozone exposure on the productivity of outdoor citrus workers. The study measured productivity impacts. Worker productivity is measuring the value of the loss in productivity for a worker who is at work on a particular day, but due to ozone, cannot work as hard. It only applies to outdoor workers, like fruit and vegetable pickers, or construction worker s. Here, productivity impacts are measured as the change in income associated with a change in ozone expos ure, given as the elas ticity of income with respect to ozone concentration. The reported elas ticity translates a te n percent reduction in ozone to a 1.4 percent increas e in income. Given the national median daily income for

8- 19

### Cost-Benefit Analysis outdoor workers engaged in strenuous activity reported by the U.S. Census Bureau (2002), $68 per day (2000$), a ten percen t reduction in ozone yields about $0.97 in increased daily wages. We adjust the national median daily inco me estimate to reflect regional variations in income using a factor based on the ratio of county median household income to national median household income. No information wa s available for quantifying the uncertainty associated with the central valuation estimat e. Therefore, no uncertainty analysis was conducted for this endpoint.

8.4.2.8 Unquantified Effects

8.4.2.8.1 Direct Ozone Effects on Vegetation

The Ozone Criteria Document notes that “current ambient concentrations in many areas of the country are sufficient to impair growth of numerous common and economically valuable plant and tree species.” (U.S. EPA, 2006, page 9-1). Change s in ground-level ozone resulting from the implementation of alternativ e ozone standards are expected to affect crop and forest yields throughout the affected area. Recent scientific stud ies have also found the ozone negatively impacts the quality or nutriti ve value of crops (U.S. EPA, 2006, page 9-16).
Well-developed techniques exist to provide monetary estimates of these benefits to agricultural producers and to consumers. These techniques use models of planting decisions, yield response functions, and the supply of and demand for agricultural products. The resulting welfare measures are based on predic ted changes in market prices and production costs. Models also exist to measure benef its to silvicultural producers and consumers. However, these models have not been adapte d for use in analyzi ng ozone-related forest impacts. Because of resource limitations, we are unable to provide agricultural or benefits estimates for the final rule.
An additional welfare benefit expected to accrue as a result of reductions in ambient ozone concentrations in the United States is the economic value the public receives from reduced aesthetic injury to forests. There is sufficient scientific information available to reliably establish that ambient ozone levels cause visible injury to foliage and impair the growth of some sensitive plant species (U.S. EPA, 2006, page 9-19). However, present analytic tools and resources preclude EPA from quantifying the benefits of improved forest aesthetics.
Urban ornamentals (floriculture and nursery crops) represent an additional vegetation category likely to experience some degree of ne gative effects associated with exposure to ambient ozone levels and likely to affect large economic sectors. In the absence of adequate exposure-response functions and economic damage functions for the potential range of effects relevant to these types of vege tation, no direct quantitative economic benefits analysis has been conducted. The farm production value of ornamental crops was estimated at over $14 billion in 2003 (USDA, 2004). This is theref ore a potentially impor tant welfare effects category. However, information and valuati on methods are not available to allow for

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### Final Regulatory Impact Analysis plausible estimates of the percentage of these expenditures th at may be related to impacts associated with ozone exposure.

8.4.2.8.2 Nitrogen Deposition
Deposition to Estuarine and Coastal Waters
Excess nutrient loads, especia lly of nitrogen, cause a variety of adverse consequences to the health of estuarine and coastal waters. These effects in clude toxic and/or noxious algal blooms such as brown and red tides, low (hypoxi c) or zero (anoxic) concentrations of dissolved oxygen in bottom waters, the loss of submerged aquatic vegeta tion due to the lightfiltering effect of thick algal mats, and funda mental shifts in phytoplankton community structure (Bricker et al ., 1999). A recent study found that for the period 1990-2002, atmospheric deposition accounted for 17 percent of nitrate loadi ngs in the Gulf of Mexico, where severe hypoxic zones have been existe d over the last two decades (Booth and Campbell, 2007) P



### . Reductions in atmospheric deposition of NOx are expected to reduce the adverse impacts associated with nitrogen deposition to estuarine and coastal waters. However, direct functions relating changes in nitrogen loadings to changes in estuarine benefits are not available. The preferred WTP-based measure of benefits depends on the availability of these functions and on estimates of the value of environmental responses. Because neither appropriate functions nor suffici ent information to estimate the marginal value of changes in water quality exist at present, calculati on of a WTP measure is not possible.
Deposition to Agricultural and Forested Land
Implementation strategies for alternative standards which reduce NO X 

### emissions, will also reduce nitrogen deposition on agricultural land and forests. There is some evidence that nitrogen deposition may have positive eff ects on agricultural out put through passive fertilization. Holding all other factors consta nt, farmers’ use of pur chased fertilizers or manure may increase as deposited nitrogen is redu ced. Estimates of the potential value of this possible increase in the use of pur chased fertilizers are not availa ble, but it is likely that the overall value is very small relativ e to other health and welfare e ffects. The share of nitrogen requirements provided by this deposition is sma ll, and the marginal cost of providing this nitrogen from alternative sources is quite low. In some areas, agricultural lands suffer from nitrogen over-saturation due to an abundance of on-farm nitrogen production, primarily from animal manure. In these areas, reductions in atmospheric deposition of nitrogen from PM represent additional agricultural benefits.

P Booth, M.S., and C. Campbell. 2007. Spring Nitrate Flux in the Mississippi River Basin: A Landscape Model with Conservation Applications. Environ. Sci. Technol.; 2007; ASAP Web Release Date: 20-Jun-2007; (Article) DOI: 10.1021/es070179e


### 8-2 1

### Cost-Benefit Analysis Information on the effects of changes in passive nitrogen deposition on forests and other terrestrial ecosystems is very limited. Th e multiplicity of factors affecting forests, including other potential stressors such as ozone, and limiting factors such as moisture and other nutrients, confound assessmen ts of marginal changes in a ny one stressor or nutrient in forest ecosystems. However, reductions in deposition of nitrogen could have negative effects on forest and vegetation growth in ecosystems where nitrogen is a limiting factor (US EPA, 1993). Moreover, any positive effect that nitrog en deposition has on forest productivity would enhance the level of carbon dioxide sequestration as well. Q,R,S



### On the other hand, there is evidence that fore st ecosystems in some areas of the United States (such as the western U.S.) are nitrogen saturated (US EPA, 1993). Once saturation is reached, adverse effects of additional nitrogen be gin to occur such as soil acidification which can lead to leaching of nutrients needed fo r plant growth and mobilization of harmful elements such as aluminum. Increased soil aci dification is also linke d to higher amounts of acidic runoff to streams and lakes and leaching of harmful elements into aquatic ecosystems.

8.4.2.8.3 Ultraviolet Radiation
Atmospheric ozone absorbs a harmful band of ultraviolet radiation from the sun called UV-B, providing a protective shield to the Earth' s surface. The majority of this protection occurs in the stratosphere where 90% of atmos pheric ozone is located. The remaining 10% of the Earth's ozone is present at ground level (referred to as tropospheric ozone) (NAS, 1991; NASA). Only a portion of the tropospheric fraction of UV-B shie lding is from anthropogenic sources (e.g., power plants, bypr oducts of combustion). The portion of ground level ozone associated with anthropogenic sources varies by locality and over time. Even so, it is reasonable to assume that reductions in ground level ozone would lead to increases in the same health effects linked to in UV-B exposur es. These effects incl ude fatal and nonfatal melanoma and non-melanoma skin cancers and ca taracts. The values of $15,000 per case for non-fatal melanoma skin cancer, $5,000 per case for non-fatal non-melanoma skin cancer, and $15,000 per case of cataracts have been used in analyses of stratospheric ozone depletion (U.S. EPA, 1999). Fatal cancers ar e valued using the standard VSL estimate, which for 2020 is $6.6 million (1999$). UV-B has also been linke d to ecological effects including damage to crops and forest. For a more complete listi ng of quantified and unquantified UV-B radiation effects, see Table G-4 and G-7 in the Benef its and Costs of the Clean Air Act, 1990-2010 (U.S. EPA, 1999. UV-B related health effect s are also discussed in the context of stratospheric ozone in a 2006 report by ICF Consulting, prepared for the U.S. EPA.

Q Peter M. Vitousek et. al., “Human Alteration of the Global Nitrogen Cycle: Causes and Consequences” Issues in Ecology No. 1 (Spring) 1997.

R

Knute J. Nadelhoffer et. al., “Nitrogen deposition makes a minor contribution to carbon sequestration in temperate forests” Nature 398, 145-148 (11 March 1999) S Martin Köchy and Scott D. Wilson, “Nitrogen depositio n and forest expansion in the northern Great Plains Journal of Ecology Journal of Ecology 89 (5), 807–817



### 8-2 2

### Final Regulatory Impact Analysis There are many factors that influence UV- B radiation penetration to the earth’s surface, including latitude, altitude, cloud c over, surface albedo, PM concentration and composition, and gas phase pollution. Of these, onl y latitude and altitude can be defined with small uncertainty in any effort to assess the ch anges in UV-B flux that may be attributable to any changes in tropospheric ozone as a result of any revision to the ozone NAAQS. Such an assessment of UV-B related health effects would al so need to take into account human habits, such as outdoor activities (inc luding age- and occupation-relate d exposure patterns), dress and skin care to adequately estimate UV-B exposure levels. However, little is known about the impact of these factors on individual exposure to UV-B.
Moreover, detailed information does not exist regarding other factor s that are relevant to assessing changes in disease incidence, incl uding: type (e.g., peak or cumulative) and time period (e.g., childhood, lifetime, current) of expos ures related to vari ous adverse health outcomes (e.g., damage to the skin, including sk in cancer; damage to the eye, such as cataracts; and immune system suppression); wa velength dependency of biological responses; and interindividual variability in UV-B resistance to such health outcomes. Beyond these well recognized adverse health effects associated with various wavelengths of UV radiation, the Criteria Document (section 10.2.3.6) also discusse s protective effects of UV-B radiation. Recent reports indicate the necessity of UV-B in producing vitamin D, and that vitamin D deficiency can cause metabolic bone diseas e among children and adults, and may also increase the risk of many co mmon chronic diseases (e.g., type I diabetes and rheumatoid arthritis) as well as the risk of various t ypes of cancers. Thus, the Criteria Document concludes that any assessment that attempts to quantify the consequences of increased UV-B exposure on humans due to reduced ground-level ozone must include consideration of both negative and positive effects. However, as with other impacts of UVB on human health, this beneficial effect of UVB radiation has not pr eviously been studied in sufficient detail.
The Agency is currently evaluating the f easibility of estimating the effects of increased UVB exposures resulting from reductions in tropospheric ozone. Please refer to the final Ozone NAAQS RIA for a sens itivity analysis that explor es the quantification of UV-Brelated health effects. 51



### 8.4.2.8.4 Climate Implications of Tropospheric Ozone
Although climate and air quality are generally treated as separate issues, they are closely coupled through atmospheri c processes. Ozone, itself, is a major greenhouse gas and climate directly influences am bient concentrations of ozone.
The concentration of tropospheric ozone ha s increased substantially since the pre

industrial era and has contribu ted to warming. Tropospheric oz one is (after CO2 and CH4) the third most important cont ributor to greenhouse gas warmi ng. The National Academy of Sciences recently stated T 

### that regulations targeting ozone precursors would have combined

T National Academy of Sciences, “Radiative Forcing of Climate Change: Expanding the Concept and Addressing Uncertainties,” October 2005.


### 8-2 3

### Cost-Benefit Analysis benefits for public health and climate. As noted in the OAQPS Staff Paper, the overall body of scientific evidence suggests th at high concentrations of ozone on a regional scale could have a discernible influence on climate. Howeve r, the Staff Paper concludes that insufficient information is available at this time to qua ntitatively inform the secondary NAAQS process with regard to this aspect of the ozone-climate interaction.
Climate change can affect tropospheric ozon e by modifying emissions of precursors, chemistry, transport and removal. U 

### Climate change affects the sources of ozone precursors through physical response (light ning), biological response (s oils, vegetation, and biomass burning) and human response (ene rgy generation, land use, and ag riculture). Increases in regional ozone pollution are expect ed due to higher temperatures and weaker circulation. Simulations with global climate models for the 21st century indicate a decrease in the lifetime of tropospheric ozone due to increasing water vapor which could decrease global background ozone concentrations.
The Intergovernmental Panel on Climate Ch ange (IPCC) recently released a report V 

### which projects, with “virtual certainty,” decl ining air quality in cities due to warmer and fewer cold days and nights and/or warmer/mor e frequent hot days and nights over most land areas. The report states that projected climate ch ange-related exposures ar e likely to affect the health status of millions of people, in part, due to higher concentrations of ground level ozone related to climate change.
The IPCC also reports W 

### that the current generation of tropospheric ozone models is generally successful in describing the principal features of the present-day global ozone distribution. However, there is much less conf idence in the ability to reproduce the changes in ozone associated with perturbations of emi ssions or climate. There are major discrepancies with observed long-term trends in ozone concentr ations over the 20th century, including after 1970 when the reliability of observed ozone trends is high. Resolving these discrepancies is needed to establish c onfidence in the models.

U Denman, K.L., G. Brasseur, A. Chidthaisong, P. Ciais, P. M. Cox, R.E. Dickinson, D. Hauglustaine, C. Heinze, E. Holland, D. Jacob, U. Lohmann, S Ramachandran, P.L. da Silva Dias, S.C. Wofsy and X. Zhang, 2007: Couplings Between Changes in the Climate System and Biogeochemistry. In: Climate Change 2007: The Physical Science Basis. Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change [Solomon, S., D. Qin, M. Manning, Z. Chen, M. Marquis, K.B. Averyt, M.Tignor and H.L. Miller (eds .)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA.

V IPCC, Climate Change 2007: Climate Change Impacts, Adaptation and Vulnerability, Summary for Policymakers

W

Denman, et al, 2007: Couplings Between Changes in the Climate System and Biogeochemistry. In: Climate Change 2007: The Physic al Science Basis.



### 8-2 4

### Final Regulatory Impact Analysis The EPA is currently leading a research effo rt with the goal of identifying changes in regional US air quality that may occur in a future (2050) climat e, focusing on fine particles and ozone. The research builds first on an assessment of changes in US air quality due to climate change, which includes direct meteorol ogical impacts on atmospheric chemistry and transport and the effect of temperature change s on air pollution emissions. Further research will result in an assessment that adds the emission impacts from technology, land use, demographic changes, and air quality regulations to construct plausibl e scenarios of US air quality 50 years into the future. As noted in the Staff Paper, results from these efforts are expected to be available for consider ation in the next review of the ozone NAAQS.



### 8.4.3 Baseline Incidence Rates
Epidemiological studies of the association between pollution levels and adverse health effects generally provide a direct estimate of the relationship of air quality changes to the relative risk of a health effect, rather than estimati ng the absolute number of avoided cases. For example, a typical result might be that a 100 ppb decrease in daily ozone levels might, in turn, decrease hospital admissions by 3 percent. Th e baseline incidence of the health effect is necessary to convert this relative change into a number of cas es. A baseline incidence rate is the estimate of the number of cases of the health effect per year in the assessment location, as it corresponds to baselin e pollutant levels in that locati on. To derive the total baseline incidence per year, this rate must be multip lied by the corresponding population number. For example, if the baseline incidence rate is the number of cases per year per 100,000 people, that number must be multiplied by the number of 100,000s in the population.

Table 8.4-3 summarizes the sources of base line incidence rates and provides average incidence rates for the endpoints included in the analysis. Fo r both baseline incidence and prevalence data, we used age-specific rates where available. We applied concentrationresponse functions to individual age groups and then summed over the relevant age range to provide an estimate of total population benefits . In most cases, we used a single national incidence rate, due to a lack of more spatially disaggregated data. Whenever possible, the national rates used are national av erages, because these data are most applicable to a national assessment of benefits. For some studies, howev er, the only available incidence information comes from the studies themselves; in thes e cases, incidence in the study population is assumed to represent typical incidence at the national level. Regiona l incidence rates are available for hospital admissions, and county-level data are available for premature mortality. We have projected mortality rates such that future mortality rates are consistent with our projections of population grow th (Abt Associates, 2005).

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### Cost-Benefit Analysis Table 8.4-3. National Average Baseline Incidence Rates a

Endpoint Source Notes Rate per 100 people per year d by Age Group <18 18-24 25-34 35-44 45-54 55-64 65+ Mortality CDC Compressed Mortality File, accessed through CDC Wonder (1996-1998) nonaccidental 0.025 0.022 0.057 0.150 0.383 1.006 4.937

Respiratory Hospital Admissions. 1999 NHDS public use data files b incidence 0.043 0.084 0.206 0.678 1.926 4.389 11.62 9

Asthma ER visits 2000 NHAMCS public use data files c ; 1999 NHDS public use data files b incidence 1.011 1.087 0.751 0.438 0.352 0.425 0.232

Minor Restricted Activity Days (MRADs) Ostro and Rothschild (1989, p. 243) incidence – 780 780 780 780 780 –

School Loss Days National Center for Education Statistics (1996) and 1996 HIS (Adams et al., 1999, Table 47); estimate of 180 school days per year all-cause 990.0 – – – – – –

Endpoint Source Notes Rate per 100 people per year Asthma Exacerbations Ostro et al. (2001) Incidence (and prevalence) amongasthmatic AfricanAmerican children Daily wheeze

Daily cough

Daily dyspnea 0.076 (0.173)

0.067 (0.145)

0.037 (0.074) Vedal et al. (1998) Incidence among asthmatic children Daily wheeze

Daily cough

Daily dyspnea 0.038

0.086

0.045

a The following abbreviations are used to describe th e national surveys conducted by the National Center for Health Statistics: HIS refers to the National Health Inte rview Survey; NHDS - National Hospital Discharge Survey; NHAMCS - National Hospital Ambul atory Medical Care Survey. b See ftp://ftp.cdc.gov/pub/Health_Sta tistics/NCHS/Datasets/NHDS/

c See ftp://ftp.cdc.gov/pub/Health_Sta tistics/NCHS/Datasets/NHAMCS/ d All of the rates reported here are population-weighted incidence rates per 100 people pe r year. Additional details on the incidence and prevalence rate s, as well as the s ources for these rates ar e available upon request.


## 8.5 Economic Values for Health Outcomes

Reductions in ambient concentrations of air pollution generally lower the risk of future adverse health effects for a la rge population. Therefore, the appropriate economic measure is willingness-to-pay (WTP) for changes in risk of a health effect rather than WTP for a health effect that would occur with certainty (Freeman, 1993). Epid emiological studies generally provide estimates of the re lative risks of a pa rticular health effect that is avoided because of a reduction in air pollution. We conve rted those to units of avoided statistical incidence for ease of presentation. We calculated the value of avoided statis tical incidences by dividing

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### Final Regulatory Impact Analysis
individual WTP for a risk reduc tion by the related observed change in risk. For example, suppose a pollution-reduction regulation is able to reduce the risk of premature mortality from 2 in 10,000 to 1 in 10,000 (a reduction of 1 in 10,000). If individual WTP for this risk reduction is $100, then the WTP for an avoide d statistical premature death is $1 million ($100/0.0001 change in risk).
WTP estimates generally are not available fo r some health effects, such as hospital admissions. In these cases, we used the cost of treating or mitigating the effect as a primary estimate. These cost-of-illne ss (COI) estimates generally un derstate the true value of reducing the risk of a health e ffect, because they reflect the direct expenditures related to treatment, but not the value of avoided pain and suffering (Harring ton and Portney, 1987; Berger, 1987). We provide unit values for h ealth endpoints (along with information on the distribution of the unit value) in Table 8.5-1. All values are in constant year 2000 dollars, adjusted for growth in real income out to 2020 using projections provided by Standard and Poor’s. Economic theory argues that WTP for most goods (such as environmental protection) will increase if real income increases. Many of the valuation studies used in this analysis were conducted in the late 1980s and early 1990s. Because real income has grown since the studies were conducted, people’s willingness to pay for reductions in the risk of premature death and disease likely has grown as well. We did not adjust cost of illness-based values because they are based on current costs. Sim ilarly, we did not adjust the value of school absences, because that value is based on current wage rates. Table 8.5-1 presents the values for individual endpoints adjusted to year 2020 income levels. The di scussion below provides additional details on ozone related endpoints not previously included in the proposal for this rule. For details on valuation estimates fo r PM-related endpoints, see the 2006 PM NAAQS RIA and the proposed Small SI and Marine SI RIA.



### 8.5.1 Mortality Valuation
To estimate the monetary benefit of reducing the risk of premature death, we used the “value of statistical lives” saved (VSL) appr oach, which is a summary measure for the value of small changes in mortality risk for a larg e number of people. The VSL approach applies information from several published value-of-lif e studies to determine a reasonable monetary value of preventing premature mo rtality. The mean value of a voiding one statistical death is estimated to be roughly $6.2 million at 1990 in come levels (2005$), and $7.5 million at 2020 income levels. This represents an intermediate value from a variety of estimates in the economics literature (see the 2006 PM NAAQS RI A for more details on the calculation of VSL).



### 8.5.2 Hospital Admissi ons Valuation

In the absence of estimates of societal WTP to avoid hospital visits/admissions for specific illnesses, estimates of total cost of illn ess (total medical costs plus the value of lost productivity) typically are used as conservative, or lower bound, estimates. These estimates are biased downward, because they do not incl ude the willingness-to-pay value of avoiding pain and suffering.

8-2 7

### Cost-Benefit Analysis
The International Classificat ion of Diseases (ICD-9, 1979) code-specific COI estimates used in this analysis consist of estimated hospital charges and the estimated opportunity cost of time spent in the hospital (based on the average length of a hospital stay for the illness). We based all estimates of hospital charges and length of stays on statistics provided by the Agency for Healthcare Resear ch and Quality (AHRQ 2000). We estimated the opportunity cost of a day sp ent in the hospital as the va lue of the lost daily wage, regardless of whether the hospitali zed individual is in the workforce. To estimate the lost daily wage, we divided the 1990 median weekly wa ge by five and inflated the result to year 2005$ using the CPI-U “all items.” The resu lting estimate is $135.59. The total cost-ofillness estimate for an ICD code-specific hospital stay lasting n days, then, was the mean hospital charge plus $136 C n.


### 8.5.3 Asthma-Related Emergency Room Visits Valuation
To value asthma emergency room visits, we used a simple average of two estimates from the health economics literature. The firs t estimate comes from Sm ith et al. (1997), who reported approximately 1.2 million asthma-related emergency room visits in 1987, at a total cost of $186.5 million (1987$). The average cost pe r visit that year was $155; in 2005$, that cost was $386.32 (using the CPI-U for medical ca re to adjust to 2005$). The second estimate comes from Stanford et al. (1999), who repor ted the cost of an average asthma-related emergency room visit at $323.23 (in 2005$), base d on 1996-1997 data. A simple average of the two estimates yields a (rounded) unit value of $355.



### 8.5.4 Minor Restricted Activi ty Days Valuation
No studies are reported to have estimate d WTP to avoid a minor restricted activity day. However, one of EPA’s contractors, IEc (1993) has derived an estimate of willingness to pay to avoid a minor respiratory restricted activity day, using estimates from Tolley et al. (1986) of WTP for avoiding a combination of coughing, throat congestion and sinusitis. The IEc estimate of WTP to avoid a minor respir atory restricted activity day is $38.37 (1990$), or about $59 (2005$).
Although Ostro and Rothschild (1989) statis tically linked ozone and minor restricted activity days, it is likely that mo st MRADs associated with ozone exposure are, in fact, minor respiratory restricted activity days. For the purpose of valuing this health endpoint, we used the estimate of mean WTP to avoid a mi nor respiratory restricted activity day.



### 8.5.5 School Absences
To value a school absence, we: (1) estimated the probability that if a school child stays home from school, a parent will have to st ay home from work to care for the child; and (2) valued the lost productivity at the parent’s wage. To do this, we es timated the number of families with school-age children in which both parents work, and we valued a school-loss day as the probability that such a day also w ould result in a work-loss day. We calculated this value by multiplying the proportion of households with school-age children by a measure of

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### Final Regulatory Impact Analysis lost wages.

We used this method in the absence of a preferable WTP method. However, this approach suffers from several uncertainties. Fi rst, it omits willingness to pay to avoid the symptoms/illness that resulted in the school absen ce; second, it effectivel y gives zero value to school absences that do not result in work-l oss days; and third, it uses conservative assumptions about the wages of the parent stay ing home with the child. Finally, this method assumes that parents are unable to work from home. If this is not a valid assumption, then there would be no lost wages.
For this valuation approach, we assume d that in a household with two working parents, the female parent will stay home with a sick child. From the Statistical Abstract of the United States (U.S. Census Bureau, 2001), we obtained: (1) the numbers of single, married and “other” (widowed, divorced or sepa rated) working women wi th children; and (2) the rates of participation in the workforce of single, married and “other” women with children. From these two sets of statistics, we calculated a wei ghted average participation rate of 72.85 percent.
Our estimate of daily lost wage (wages lost if a mother must stay at home with a sick child) is based on the year 2000 median weekly wage among women ages 25 and older (U.S. Census Bureau, 2001). This median weekly wage is $551. Dividing by five gives an estimated median daily wage of $103. To estimate the e xpected lost wages on a day when a mother has to stay home with a school-age child, we first es timated the probability that the mother is in the workforce then multiplied that estimate by the daily wage she would lose by missing a work day: 72.85 percent times $103, for a total lo ss of $75. Using the CPI-U for all items to adjust to 2005$, the value equals approximately $85. This valuation approach is similar to that used by Hall et al. (2003).

8- 29Cost-Benefit AnalysisTable 8.5-1. Unit Values Used for Economic Valuation of Health Endpoints (2005$)aHealth EndpointCentral Estimate of Value Per StatisticalIncidenceDerivation of Estimates1990 IncomeLevel2020 IncomeLevelb2030 IncomeLevelbPremature Mortality (Value of aStatistical Life): PM2.5- andOzone-related$6,200,000$7,500,000$7,700,000Point estimate is the mean of a normal distribution with a 95 percentconfidence interval between $1 and $10 million (in 2000$). Confidenceinterval is based on two meta-analyses of the wage-risk VSL literature:$1 million represents the lower end ofthe interquartile range from theMrozek and Taylor (2002)52meta-analysis and $10 million representsthe upper end of the interquartile range from the Viscusi and Aldy(2003)53meta-analysis. Adjusted for 2005$, the mean equalsapproximately $6.2 million. The VSL represents the value of a smallchange in mortality risk aggregated over the affected population.Chronic Bronchitis (CB)$380,000$470,000$490,000Point estimate is the mean of a generated distribution of WTP to avoid acase of pollution-related CB. WTP to avoid a case of pollution-relatedCB is derived by adjusting WTP (as described in Viscusi et al., [1991]54)to avoid a severe case of CB for thedifference in severity and takinginto account the elasticity of WTP with respect to severity of CB.Nonfatal Myocardial Infarction(heart attack)3% discount rateAge 0–24Age 25–44Age 45–54Age 55–65Age 66 and over7% discount rateAge 0–24Age 25–44Age 45–54Age 55–65Age 66 and over$82,958$92,598$97,754$174,405$82,958$80,963$90,705$95,320$163,945$80,963$82,958$92,598$97,754$174,405$82,958$80,963$90,705$95,320$163,945$80,963$82,958$92,598$97,754$174,405$82,958$80,963$90,705$95,320$163,945$80,963Age-specific cost-of-illness values reflect lost earnings and directmedical costs over a 5-year periodfollowing a nonfatal MI.Lostearnings estimates are based on Cropper and Krupnick (1990).55Directmedical costs are based on simple average of estimates from Russell etal. (1998)56and Wittels et al. (1990).57Lost earnings:Cropper and Krupnick (1990). Present discounted value of 5 years oflost earnings:age of onset:at 3%at 7%25-44$10,880 $9,74045-54$16,036$14,35755-65$92,685$82,958Direct medical expenses: An average of:1. Wittels et al. (1990) ($127,296—no discounting)2. Russell et al. (1998), 5-year period ($27,690 at 3% discount rate;$26,180 at 7% discount rate)(continued)8-30Final Regulatory Impact AnalysisTable 8.5-1. Unit Values Used for Economic Valuation of Health Endpoints (2005$)a(continued)Health EndpointCentral Estimate of Value Per StatisticalIncidenceDerivation of Estimates1990 IncomeLevel2020 IncomeLevelb2030 IncomeLevelbHospital AdmissionsChronic Obstructive PulmonaryDisease (COPD)(ICD codes 490-492, 494-496)$15,345$15,345$15,345The COI estimates (lost earnings plus direct medical costs) are basedon ICD-9 code-level information (e.g., average hospital care costs,average length of hospital stay, and weighted share of total COPDcategory illnesses) reported in Agency for Healthcare Research andQuality (2000)58(www.ahrq.gov).Pneumonia(ICD codes 480-487)$18,219$18,219$18,219The COI estimates (lost earnings plus direct medical costs) are basedon ICD-9 code-level information (e.g., average hospital care costs,average length of hospital stay,and weighted share of totalpneumonia category illnesses) reported in Agency for HealthcareResearch and Quality (2000) (www.ahrq.gov).Asthma Admissions$8,226$8,226$8,226The COI estimates (lost earnings plus direct medical costs) are basedon ICD-9 code-level information (e.g., average hospital care costs,average length of hospital stay, andweighted share of total asthmacategory illnesses) reported in Agency for Healthcare Research andQuality (2000) (www.ahrq.gov).All Cardiovascular(ICD codes 390-429)$22,800$22,800$22,800The COI estimates (lost earnings plus direct medical costs) are basedon ICD-9 code-level information (e.g., average hospital care costs,average length of hospital stay,and weighted share of totalcardiovascular category illnesses) reported in Agency for HealthcareResearch and Quality (2000) (www.ahrq.gov).Emergency Room Visits forAsthma$355$355$355Simple average of two unit COI values:(1) $386.32, from Smith et al. (1997)59and(2) $323.23, from Stanford et al. (1999).60(continued)8-31Cost-Benefit AnalysisTable 8.5-1. Unit Values Used for Economic Valuation of Health Endpoints (2005$)a(continued)Health EndpointCentral Estimate of Value Per StatisticalIncidenceDerivation of Estimates1990 IncomeLevel2020 IncomeLevelb2030 IncomeLevelbRespiratory Ailments Not Requiring HospitalizationUpper Respiratory Symptoms(URS)$28$30$30Combinations of the three symptoms for which WTP estimates areavailable that closely match those listed by Pope et al. result in sevendifferent “symptom clusters,” eachdescribing a “type” of URS.Adollar value was derived for each type of URS, using mid-rangeestimates of WTP (IEc, 1994)61to avoid each symptom in the clusterand assuming additivity of WTPs. The dollar value for URS is theaverage of the dollar values for the seven different types of URS.Lower Respiratory Symptoms(LRS)$18$19$19Combinations of the four symptoms for which WTP estimates areavailable that closely match those listed by Schwartz et al. result in11 different “symptom clusters,” each describing a “type” of LRS. Adollar value was derived for each type of LRS, using mid-rangeestimates of WTP (IEc, 1994) to avoid each symptom in the clusterand assuming additivity of WTPs. The dollar value for LRS is theaverage of the dollar values for the 11 different types of LRS.Asthma Exacerbations$47$51$51Asthma exacerbations are valued at$47 per incidence (2005$), basedon the mean of average WTP estimates for the four severitydefinitions of a “bad asthma day,” described in Rowe and Chestnut(1986).62This study surveyed asthmatics to estimate WTP foravoidance of a “bad asthma day,” as defined by the subjects. Forpurposes of valuation, an asthma attack is assumed to be equivalentto a day in which asthma is moderate or worse as reported in theRowe and Chestnut (1986) study.Acute Bronchitis$407$434$438Assumes a 6-day episode, with daily value equal to the average oflow and high values for related respiratory symptoms recommendedin Neumann et al. (1994).63(continued)8-32Final Regulatory Impact AnalysisTable 8.5-1. Unit Values Used for Economic Valuation of Health Endpoints (2005$)a(continued)Health EndpointCentral Estimate of Value Per StatisticalIncidenceDerivation of Estimates1990 IncomeLevel2020 IncomeLevelb2030 IncomeLevelbRestricted Activity and Work/School Loss DaysWork Loss Days (WLDs)Variable(nationalmedian = )County-specific median annual wages divided by 50 (assuming 2 weeksof vacation) and then by 5—to get median daily wage. U.S. Year 2000Census, compiled by Geolytics, Inc.School Absence Days$85$85$85Based on expected lost wages from parent staying home with child.Estimated daily lost wage (if a mother must stay at home with a sickchild) is based on the median weekly wage among women age 25 andolder in 2000 (U.S. Census Bureau, Statistical Abstract of the UnitedStates: 2001, Section 12: Labor Force, Employment, and Earnings,Table No. 621). This median wage is $551. Dividing by 5 gives anestimated median daily wage of $103..The expected loss in wages due to aday of school absence in which themother would have to stay home with her child is estimated as theprobability that the mother is in the workforce times the daily wage shewould lose if she missed a day = 72.85% of $103, or $75 ($85 in 2005$)Worker Productivity$1.07 perworker per10% change inozone per day$1.07 perworker per10% changein ozone perday$1.07 perworker per10% change inozone per dayBased on $68 ($77 in 2005$) – median daily earnings of workers infarming, forestry and fishing – fromTable 621, Statistical Abstract ofthe United States (“Full-Time Wage and Salary Workers – Number andEarnings: 1985 to 2000") (Source of data in table: U.S. Bureau ofLabor Statistics, Bulletin 2307 and Employment and Earnings, monthly).Minor Restricted Activity Days(MRADs)$58$61$62Median WTP estimate to avoid one MRAD from Tolley et al. (1986).64aAll annual benefit estimates associated with the final standards have been inflated to reflect values inyear 2005 dollars. We use the Consumer PriceIndexes to adjust both WTP- and COI-based benefits estimates to 2005 dollars from 2000 dollars.65For WTP-based estimates, weuse an inflation factor of1.13based on the CPI-U for “all items.” For COI-based estimates, we use an inflation factor of 1.24 based on the CPI-U for medical care.bOur analysis accounts for expectedgrowth in real income over time. Economic theory argues that WTP for most goods (such as environmental protection)will increase if real incomes increase. Benefits are therefore adjusted by multiplying the unadjusted benefits by the appropriate adjustment factor to accountfor income growth over time. For a complete discussion of howthese adjustment factors were derived, we refer the reader to the PM NAAQS regulatoryimpact analysis. Note that similar adjustments do not existfor cost-of-illness-based unit values. For these, we apply the same unit value regardless of thefuture year of analysis.8-33

### Cost-Benefit Analysis 

## 8.6 Benefits Analysis Results for the Final Standards
Applying the impact and valuation functions described previously in this chapter to the estimated changes in PM 2.5 

### and ozone associated with th e final standards results in estimates of the changes in health damages (e.g., premature mortalities, cases, admissions) and the associated monetary values for those ch anges. Estimates of physical health impacts are presented in Table 8.6-1. Monetized values for those health endpoints are presented in Table 8.6-2. Total aggregate monetized benefits are presented in Table 8.6-3 and Table 8.6-4 using either a 3 percent or 7 pe rcent discount rate, respectively. All of the monetary benefits are in constant-year 2005 dollars. For each e ndpoint presented in Tables 8.6-1 and 8.6-2, we provide both the mean estimate and the 90% confidence interval.
In addition to omitted benefits categories such as air toxics and various welfare effects, not all known PM 2.5 

### - and ozone-related health and welf are effects could be quantified or monetized. The estimate of total monetized h ealth benefits of the final standards is thus equal to the subset of monetized PM 2.5 

### - and ozone-related health benefits we are able to quantify plus the sum of the nonm onetized health and welfare be nefits. We believe the total benefits are therefor e likely underestimated.
Total monetized benefits are dominated by be nefits of mortality risk reductions. We provide results for particulate matter based on PM 2.5 

### concentration response functions from the American Cancer Society Study (ACS), Six Cities, and Expert Elicitation to give an indication of the sensitivity of the benefits es timates to alternative assumptions. Following the recommendations of the NRC report (NRC, 200 2), we identify those estimates which are based on empirical data, and those which are ba sed on expert judgments. EPA recently asked its Science Advisory Board (SAB) to evaluate how EPA has incorporat ed expert elicitation results into the benefits analysis, and the extent to which they find the presentation in this RIA responsive to the NRC (2002) guidance to incorpor ate uncertainty into th e main analysis and further, whether the agency should move to ward presenting a central estimate with uncertainty bounds or continue to provide separate estimates fo r each of the 12 experts as well as from the ACS and Six Cities studies. EP A has not yet had a chance to incorporate the results of the SAB’s July 11, 2008 report (EPA-COUNCIL-08-002).
Using the ACS and Six-Cities results, we es timate that the final standards would result in between 150 and 340 cases of avoided PM 2.5 

### -related premature deat hs annually in 2020 and between 230 and 510 avoided premature deaths annually in 2030. When the range of expert opinion is used, we estimate between 80 and 840 fewer premature mortalities in 2020 and between 120 and 1,300 fewer premature mortalitie s in 2030. Note that in the case of the premature mortality estimates derived from the e xpert elicitation, we report the 90% credible interval, which encompasses a broader representati on of uncertainty relative to the statistical confidence intervals provided for the effect estimates derived from the epidemiology literature.
The range of ozone benefits associated w ith the final standards is based on risk reductions estimated using several sources of oz one-related mortality effect estimates. This

8-3 4

### Final Regulatory Impact Analysis analysis presents four alternative estimates fo r the association based upon different functions reported in the scientific liter ature, derived from both the National Morbidity, Mortality, and Air Pollution Study (NMMAPS) (Bell et al., 2004) and from a series of recent meta-analyses (Bell et al., 2005, Ito et al., 2005, an d Levy et al., 2005). This a pproach is not inconsistent with recommendations provided by the NRC in their recent report (NRC, 2008) on the estimation of ozone-related mortality risk reductions, “The committee recommends that the greatest emphasis be placed on estimates from new systematic multicity analyses that use national databases of air pollution and mortalit y, such as in the N MMAPS, without excluding consideration of meta-a nalyses of previously published studies.”
Prior to the publication of the NRC ozone mortality report, EPA considered the possibility that the observed associations betw een ozone and mortality may not be causal in nature. The report, however, recommended th at EPA give “little or no weight to the assumption that there is no causal associa tion between ozone exposure and premature mortality.” Because EPA has yet to devel op a coordinated response to the NRC report’s findings and recommendations, we have retained the approach to estimating ozone-related premature mortality used in RIA for the fina l Ozone NAAQS. EPA will specifically address the report's findings and recommen dations in future rulemakings.
For ozone-related premature mortality, we estimate a range of between 46 to 210 fewer premature mortalities as a result of th e final rule in 2020 and between 77 to 350 in 2030, assuming that there is a causal relationshi p between ozone exposure and mortality. The increase in annual benefits from 2020 to 2030 re flects additional emission reductions from the final standards, as well as increases in total population and the average age (and thus baseline mortality risk) of the population.

Our estimate of total monetized benefits in 2020 for the final standards, using the ACS and Six-Cities PM mortality studies and the rang e of ozone mortality assumptions, is between $1.2 billion and $4.0 billion, assuming a 3 percent discount rate, or between $1.1 billion and $3.8 billion, assuming a 7 percent discount rate. In 2030, we estimate the monetized benefits to be between $1.8 billion and $6.4 billion, assu ming a 3 percent discount rate, or between $1.6 billion and $6.1 billion, assuming a 7 percen t discount rate. The monetized benefit associated with reductions in the risk of both ozone- and PM 2.5 

### -related premature mortality ranges between 90 to 98 percent of total monetiz ed health benefits, in part because we are unable to quantify a number benefits categor ies (see Table 8.4-1). These unquantified benefits may be substantia l, although their magnitude is highly uncertain.
The next largest benefit is for reductions in chronic illness (chronic bronchitis and nonfatal heart attacks), a lthough this value is more than an order of magnitude lower than for premature mortality. Hospital admissions for respiratory and cardiov ascular causes, minor restricted activity days, and work loss days account for the majority of the remaining benefits. The remaining categories each account for a sma ll percentage of total benefit; however, they represent a large number of avoided incidences affecting many individuals. A comparison of the incidence table to the monetary benefits ta ble reveals that there is not always a close correspondence between the number of incidenc es avoided for a given endpoint and the monetary value associated with that endpoint . For example, there are over 100 times more

8-3 5

### Cost-Benefit Analysis work loss days than PM-related premature mo rtalities (based on the ACS study), yet work loss days account for only a very small fraction of total monetized benefits. This reflects the fact that many of the less severe health eff ects, while more common, are valued at a lower level than the more severe health effects. Al so, some effects, such as hospital admissions, are valued using a proxy measure of willingness-to-pay (e.g., cost-of-il lness). As such, the true value of these effects may be higher than that reported in Table 8.6-2.
Following these tables, we also provide a more comprehensive presentation of the distributions of incidence gene rated using the available inform ation from empirical studies and expert elicitation. Tables 8.6-5 and 8.6-6 present the dist ributions of the reduction in PM 2.5 

### -related premature mortality based on the C- R distributions provided by each expert, as well as that from the data-derived health im pact functions, based on the statistical error associated with the ACS study (Pope et al., 2002) and the Six-cities study (Laden et al., 2006). The 90% confidence interval for each separate estimate of PM-related mortality is also provided.

The effect estimates of five of the twelve experts included in th e elicitation panel fall within the empirically-derived range provided by the ACS and Si x-Cities studies. One of the experts fall below this range and six of the e xperts are above this ra nge. Although the overall range across experts is summarized in these tables, the full uncertainty in the estimates is reflected by the results for the fu ll set of 12 experts. The twelve experts’ judgments as to the likely mean effect estimate are not evenly distributed across the range illustrated by arraying the highest and lowest expert means.

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### Final Regulatory Impact Analysis
Table 8.6-1. Estimated Reduction in Incidence of Adverse Health Effects Related to the Final Standards a

2020 2030 Health Effect Mean Incidence Reduction (5 th – 95 th %ile)
PM-Related Endpoints
Premature Mortality – Derived from Epidemiology Literature Adult, age 30+ - ACS cohort study (Pope et al., 2002) 150 (60 - 240) 230 (88 – 360) Adult, age 25+ - Six-Cities study (Laden et al., 2006) 340 (190 – 500) 510 (280 – 740) Infant, age <1 year – Woodruff et al. 1997 0 (0 – 1) 1 (0 – 1) Premature Mortality – Derived from Expert Elicitation b Adult, age 25+ - Lower Bound (Expert K) 81 (0 – 380) 120 (0 – 580) Adult, age 25+ - Upper Bound (Expert E) 840 (420 – 1,300) 1,300 (650 – 1,900) Chronic bronchitis (adult, age 26 and over) 150 (28 – 270) 220 (40 – 400) Acute myocardial infarction (adults, age 18 and older) 330 (180 – 480) 530 (280 – 770) Hospital admissions—respiratory (all ages) c 40 (20 – 59) 61 (30 – 88) Hospital admissions—cardiovascular (adults, age >18) d 81 (50 – 110) 130 (82 – 180) Emergency room visits for asthma (age 18 years and younger) 150 (85 – 210) 210 (120 – 300) Acute bronchitis (children, age 8–12) 400 (-14 – 810) 580 (-20 – 1,200) Lower respiratory symptoms (children, age 7–14) 2,700 (1,300 – 4,000) 3,800 (1,800 – 5,800) Upper respiratory symptoms (asthmatic children, age 9–18) 1,900 (610 – 3,300) 2,800 (880 – 4,700) Asthma exacerbation (asthmatic children, age 6–18) 2,400 (270 – 7,000) 3,500 (380 – 10,000) Work loss days (adults, age 18–65) 17,000 (15,000 – 19,000) 23,000 (20,000 – 26,000) Minor restricted-activity days (adults, age 18–65) 100,000 (86,000 – 120,000) 140,000 (120,000 – 160,000) Ozone-Related Endpoints Premature Morta lity, All ages – Derived from NMMAPS Bell et al., 2004 46 (20 – 72) 77 (34 – 120) Premature Morta lity, All ages – Derived from Meta-analyses Bell et al., 2005 150 (84 – 210) 250 (140 – 360) Ito et al., 2005 200 (140 – 270) 340 (230 – 450) Levy et al., 2005 210 (160 – 260) 350 (260 - 440) Premature Mortality – Assumptio n that association between ozone and mortality is not causal e 0 0
Hospital admissions- respiratory causes (children, under 2; 540 1,000



### 8-3 7

### Cost-Benefit Analysis

adult, 65 and older) f (170 – 900) (290 – 1,700) Emergency room visit for asthma (all ages) 200 (0 – 510) 320 (0 - 810) Minor restricted activity days (adults, age 18-65) 310,000 (160,000 – 460,000) 450,000 (230,000 – 670,000) School absence days 110,000 (40,000 – 200,000) 180,000 (62,000 – 320,000)

a Incidence is rounded to two significant digits. PM and ozone estimates represent impacts from the final standards nationwide. b Based on effect estimates derived from the full-scal e expert elicitation assessing the uncertainty in the concentration-response function for PM-rel ated premature mortality (IEc, 2006). 66 The effect estimates of five of the twelve experts included in the elicitation panel fall within the empirically-derived range provided by the ACS and Six-Cities studies. One of the experts fall below this range and six of the experts are above this range. Although the overall range acro ss experts is summarized in this table, the full uncertainty in the estimates is reflected by the results for the full set of 12 experts. Th e twelve experts’ judgments as to the likely mean effect estimate are not evenly distributed across the range illustra ted by arraying the highest and lowest expert means.

c Respiratory hospital admissions for PM include admissions for chronic obstructive pulmonary disease (COPD), pneumonia, and asthma. d Cardiovascular hospital admissions for PM in clude total cardiovascula r and subcategories for ischemic heart disease, dysrhythmias, and heart failure.

e A recent report published by the National Resear ch Council (NRC, 2008) recommended that EPA “give little or no weight to the assumption that there is no causal association between estimated reductions in premature mortality and re duced ozone exposure.” f Respiratory hospital admissions for ozone incl ude admissions for all respiratory causes and subcategories for COPD and pneumonia.



### 8-3 8

### Final Regulatory Impact Analysis Table 8.6-2. Estimated Monetary Value in Reductions in Incidence of Health and Welfare Effects (in millions of 2005$) a,b
2020 2030 PM 2.5 -Related Health Effect Estima ted Mean Value of Reductions (5 th and 95 th %ile)

Premature Mortality – Derived from Epidemiology Studies c,d, Adult, age 30+ - ACS study (Pope et al., 2002) 3% discount rate

7% discount rate $1,000 ($240 - $2,100) $910 ($220 - $1,900) $1,600 ($370 - $3,200) $1,400 ($330 - $2,800) Adult, age 25+ - Six-cities study (Laden et al., 2006) 3% discount rate

7% discount rate $2,300 ($630 - $4,400) $2,100 ($570 - $3,900) $3,500 ($970 - $6,700) $3,200 ($870 - $6,000) Infant Mortality, <1 year – (Woodruff et al. 1997) 3% discount rate

7% discount rate $3.2 ($0.8 - $6.2) $2.9 ($0.8 - $5.6) $3.9 ($1.0 - $7.7) $3.5 ($0.9 - $6.9)

Premature mortality – Derived from Expert Elicitation c,d,e Adult, age 25+ - Lower bound (Expert K) 3% discount rate

7% discount rate $540 ($0 - $2,600) $490 ($0 - $2,400) $850 ($0 - $4,100) $760 ($0 - $3,700) Adult, age 25+ - Upper bound (Expert E) 3% discount rate

7% discount rate $5,600 ($1,500 - $11,000) $5,100 ($1,400 - $10,000) $8,800 ($2,400 - $17,000) $8,000 ($2,100 - $16,000) Chronic bronchitis (adults, 26 and over) $70 ($5.7 - $230) $110 ($8.6 - $350) Non-fatal acute myocardial infarctions 3% discount rate

7% discount rate $34 ($10 - $72) $33 ($10 - $70) $52 ($15 - $110) $51 ($14 - $110) Hospital admissions for respiratory causes $0.8 ($0.4 - $1.2) $1.3 ($0.6 - $1.8) Hospital admissions for cardiovascular causes $2.2 ($1.3 - $2.9) $3.5 ($2.2 - $4.7) Emergency room visits for asthma $0.05 ($0.03 - $0.08) $0.07 ($0.04 - $0.1) Acute bronchitis (children, age 8–12) $0.2 ($0 - $0.4) $0.2 ($0 - $0.6) Lower respiratory symptoms (children, 7–14) $0.05 ($0.02 - $0.09) $0.07 ($0.03 - $0.1) Upper respiratory symptoms (asthma, 9–11) $0.06 $0.08



### 8- 39

### Cost-Benefit Analysis
($0.02 - $0.1) ($0.02 - $0.2) Asthma exacerbations $0.1 ($0.01 - $0.4) $0.2 ($0.02 - $0.5) Work loss days $2.5 ($2.2 - $2.8) $3.4 ($3.0 - $3.8) Minor restricted-activity days (MRADs) $2.9 ($0.3 – $5.7) $4.0 ($0.4 - $7.7) Recreational Visibility, 86 Class I areas $17 (na) f $7 (na) Ozone-related Health Effect Premature Mortality, All ages – Derived from NMMAPS Bell et al., 2004 $340 ($86 - $680) $590 ($150 - $1,200)
Premature Mortality, Allages – Derived from Metaanalyses Bell et al., 2005 $1,100 ($310 - $2,100) $1,900 ($530 - $3,600) Ito et al., 2005 $1,500 ($450 - $2,800) $2,600 ($760 - $4,700) Levy et al., 2005 $1,600 ($470 - $2,700) $2,600 ($800 - $4,700) Premature Mortality – Assumptio n that association between ozone and mortality is not causal f $0 $0
Hospital admissions- respiratory causes (children, under 2; adult, 65 and older) $8.7 ($2.1 - $15) $17 ($3.8 - $31) Emergency room visit for asthma (all ages) $0.07 ($0 - $0.2) $0.1 ($0 - $0.3) Minor restricted activity days (adults, age 18-65) $19 ($8.5 - $31) $27 ($13 - $46) School absence days $9.7 ($3.4 - $17) $15 ($5.4 - $27) Worker Productivity $3.1 (na) g $5.1 (na) g

a Monetary benefits are rounded to two significant digits for ease of presentation and computation. PM and ozone benefits are nationwide. b Monetary benefits adjusted to account for growth in real GDP per capita between 1990 and the analysis year (2020 or 2030)

c Valuation assumes discounting over the SAB recommended 20 year segmented lag structure. Results reflect the use of 3 percent and 7 percent discount rates consistent with EPA and OMB guidelines for preparing economic analyses (EPA , 2000; OMB, 2003). d The valuation of adult premature mortality, derive d either from the epidemiology literature or the expert elicitation, is not additive. Rather, the valuat ions represent a range of possible mortality benefits.

e Based on effect estimates derived from the full-scal e expert elicitation assessing the uncertainty in the concentration-response function for PM-rel ated premature mortality (IEc, 2006). The effect estimates of five of the twelve experts included in the elicitation panel fall within the empirically-derived range provided by the ACS and Six-Cities studies. One of the experts fall below this range and six of the experts are above this range. Although the overall range acro ss experts is summarized in this table, the full uncertainty in the estimates is reflected by the results for the full set of 12 experts. Th e twelve experts’ judgments as to the likely mean effect estimate are not evenly distributed across the range illustra ted by arraying the highest and lowest expert means. f A recent report published by the National Resear ch Council (NRC, 2008) recommended that EPA “give little or no weight to the assumption that there is no causal association between estimated reductions in premature mortality and re duced ozone exposure.”



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### Final Regulatory Impact Analysis

g We are unable at this time to characterize the uncertainty in the estimate of benefits of worker productivity and improvements in visibility at Class I areas . As such, we treat these benefits as fixed and add them to all percentiles of the health benefits distribution.



### Table 8.6-3 Total Monetized Benefits of the Fi nal Small SI and Marine SI Engine Rule – 3% Discount Rate Total Ozone and PM Benefits (billions, 2005$) – PM Mortality Derived from the ACS and Six Cities Studies 2020 2030 Ozone Mortality Function Reference Mean Total Benefits Ozone Mortality Function Reference Mean Total Benefits

NMMAPS Bell et al., 2004 $1.5 - $2.8 NMMAPS Bell et al., 2004 $2.4 - $4.3

Bell et al., 2005 $2.3 - $3.6
Ito et al., 2005 $2.7 - $4.0 Meta-analysis Levy et al., 2005 $2.7 - $4.0 Bell et al., 2005 $3.7 - $5.6
Ito et al., 2005 $4.4 - $6.4 Meta-analysis Levy et al., 2005 $4.4 - $6.4
Assumption that association is not causal a $1.2 - $2.5 Assumption that association is not causal a $1.8 - $3.8
Total Ozone and PM Benefits (billions, 2005$) – PM Mortality Derived from Expert Elic itation (Lowest and Highest Estimate) 2020 2030 Ozone Mortality Function Reference Mean Total Benefits Ozone Mortality Function Reference Mean Total Benefits

NMMAPS Bell et al., 2004 $1.1 - $6.1 NMMAPS Bell et al., 2004 $1.7 - $9.7

Bell et al., 2005 $1.8 - $6.9
Ito et al., 2005 $2.2 - $7.3 Meta-analysis Levy et al., 2005 $2.3 - $7.4 Bell et al., 2005 $3.0 - $11
Ito et al., 2005 $3.7 - $12 Meta-analysis Levy et al., 2005 $3.7 - $12
Assumption that association is not causal a $0.7 - $5.8 Assumption that association is not causal a $1.1 - $9.1

a A recent report published by the National Research Coun cil (NRC, 2008) recommended that EPA “give little or no weight to the assumption that there is no causal association between estimated reductions in premature mortality and reduced ozone exposure.”



### 8-4 1

### Cost-Benefit Analysis

Table 8.6-4 Total Monetized Benefits of the Fi nal Small SI and Marine SI Engine Rule – 7% Discount Rate Total Ozone and PM Benefits (billions, 2005$) – PM Mortality Derived from the ACS and Six Cities Studies 2020 2030 Ozone Mortality Function Reference Mean Total Benefits Ozone Mortality Function Reference Mean Total Benefits

NMMAPS Bell et al., 2004 $1.4 - $2.6 NMMAPS Bell et al., 2004 $2.2 - $4.0

Bell et al., 2005 $2.2 - $3.4
Ito et al., 2005 $2.6 - $3.7 Meta-analysis Levy et al., 2005 $2.6 - $3.8 Bell et al., 2005 $3.5 - $5.3
Ito et al., 2005 $4.2 - $6.0 Meta-analysis Levy et al., 2005 $4.3 - $6.1
Assumption that association is not causal a $1.1 - $2.2 Assumption that association is not causal a $1.6 - $3.4
Total Ozone and PM Benefits (billions, 2005$) – PM Mortality Derived from Expert Elic itation (Lowest and Highest Estimate) 2020 2030 Ozone Mortality Function Reference Mean Total Benefits Ozone Mortality Function Reference Mean Total Benefits

NMMAPS Bell et al., 2004 $1.0 - $5.6 NMMAPS Bell et al., 2004 $1.6 - $8.8

Bell et al., 2005 $1.8 - $6.4
Ito et al., 2005 $2.2 - $6.8 Meta-analysis Levy et al., 2005 $2.2 - $6.8 Bell et al., 2005 $2.9 - $10
Ito et al., 2005 $3.6 - $11 Meta-analysis Levy et al., 2005 $3.7 - $11
Assumption that association is not causal a $0.7 - $5.2 Assumption that association is not causal a $1.0 - $8.2

a A recent report published by the National Research Coun cil (NRC, 2008) recommended that EPA “give little or no weight to the assumption that there is no causal association between estimated reductions in premature mortality and reduced ozone exposure.”



### 8-4 2

### Final Regulatory Impact Analysis
Tabl e 8.6-5. Results of Application of Exp ert Elicitation: Annual Reductions in Premature Mortality in 2020 Associ ated with the Final Standards Source of Mortality Estimate 2020 Primary Option

5th Percentile Mean 95th Percentile Pope et al. (2002) 59 150 240 Laden et al. (2006) 190 340 500 Expert A 120 670 1,200 Expert B 64 510 1,100 Expert C 92 510 1,100 Expert D 74 350 580 Expert E 420 840 1,300 Expert F 320 460 670 Expert G 0 300 550 Expert H 1 380 870 Expert I 80 500 900 Expert J 120 410 900 Expert K 0 81 380 Expert L 45 350 690



### Tabl e 8.6-6. Results of Application of Exp ert Elicitation: Annual Reductions in Premature Mortality in 2030 Associ ated with the Final Standards Source of Mortality Estimate 2030 Primary Option

5th Percentile Mean 95th Percentile Pope et al. (2002) 88 230 360 Laden et al. (2006) 280 510 740 Expert A 190 1,000 1,900 Expert B 97 780 1,700 Expert C 140 780 1,700 Expert D 110 540 890 Expert E 650 1,300 1,900 Expert F 490 700 1,000 Expert G 0 450 840 Expert H 2 580 1,300 Expert I 120 770 1,400 Expert J 190 620 1,400 Expert K 0 120 580 Expert L 67 530 1,100



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### Cost-Benefit Analysis 

## 8.7 Comparison of Costs and Benefits
In estimating the net benefits of the final standards, the appropriate cost measure is ‘social costs.’ Social costs represent the welfare costs of a rule to soci ety. These costs do not consider transfer payments (suc h as taxes) that are simply re distributions of wealth. Table 8.7-1 contains the estimates of monetized benefi ts and estimated social welfare costs for the final rule and each of the final control program s. The annual social welfare costs of all provisions of this final rule are described more fully in Chapter 9 of this RIA.

The results in Table 8.7-1 suggest that the 2020 monetized benefits of the final standards are greater than the e xpected social welfare costs. Specifically, the annual benefits of the total program will range between $1.2 to $4.0 billion annually in 2020 using a three percent discount rate, or be tween $1.1 to $3.8 billion assumi ng a 7 percent discount rate, compared to estimated social costs of approxi mately $210 million in that same year. These benefits are expected to increase to be tween $1.8 and $6.4 billion annually in 2030 using a three percent discount rate, or between $1.6 and $6.1 billion assuming a 7 percent discount rate, while the social costs are estimated to be approximately $190 million. Though there are a number of health and environmental effects asso ciated with the final standards that we are unable to quantify or monetize (see Table 8.4-1) , the benefits of the final standards far outweigh the projected costs. When we examin e the benefit-to-cost comparison for the rule standards separately, we also find that the bene fits of the specific e ngine standards outweigh their projected costs.
Using a conservative benefits estimate, the 2020 benefits outweigh the costs by a factor of 5. Using the upper end of the benef its range, the benefits could outweigh the costs by a factor of 19. Likewise, in 2030 benefits out weigh the costs by at le ast a factor of 8 and could be as much as a factor of 34. Thus , even taking the most conservative benefits assumptions, benefits of the final st andards clearly outweigh the costs.

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### Final Regulatory Impact Analysis Table 8.7-1. Summary of Annual Benefits and Costs of the Final Standards a 

### (Millions of 2005 dollars) Description 2020 2030 Estimated Social Costs b

Small SI Marine SI Total Social Costs $163 $44 $210 $185 $0.8 $190
Estimated Health Benefits of the Final Standards c,d,e,f

Small SI 3 percent discount rate 7 percent discount rate Marine SI 3 percent discount rate 7 percent discount rate Total Benefits

3 percent discount rate 7 percent discount rate $860 to $2,600 $790 to $2,500
$340 to $1,400 $310 to $1,300
$1,200 to $4,000 $1,100 to $3,800 $820 to $2,900 $710 to $2,800
$980 to $3,500 $890 to $3,300
$1,800 to $6,400 $1,600 to $6,100 Annual Net Benefits (Total Benefits – Total Costs)

3 percent discount rate 7 percent discount rate $990 to $3,800 $890 to $3,600 $1,600 to $6,200 $1,400 to $5,900

a All estimates represent annualized benefits and costs anticipated for the years 2020 and 2030. Totals may not sum due to rounding. b The calculation of annual costs does not require amortization of costs over time. Therefore, the estimates of annual cost do not include a discount rate or rate of return assumption (see Chapter 9 of the RIA). In Chapter 9, however, we use both a 3 percent and 7 percent social discount rate to calculate the net present value of total social costs consistent with EPA and OM B guidelines for preparing economic analyses (US EPA, 2000 and OMB, 2003).

c Total includes ozone and PM 2.5 benefits. Range was developed by adding the estimate from the ozone premature mortality function, including an assump tion that the association is not causal, to PM 2.5 -related premature mortality derived from the ACS (Pope et al., 2002) and Six Cities (Laden et al., 2006) studies. d Annual benefits analysis results reflect the use of a 3 percent and 7 percent discount rate in the valuation of premature mortality and nonfatal myocardial infarctions, consistent with EPA and OMB guidelines for preparing economic analyses (US EPA, 2000 and OMB, 2003).

e Valuation of premature mortality based on long-term PM exposure assumes discounting over the SAB recommended 20-year segmented lag structure described in the Regulatory Impact Analysis for the Final Clean Air Interstate Rule (March, 2005). f Not all possible benefits or disbenef its are quantified and monetized in this analysis. Potential benefit categories that have not been quantified and monetized are listed in Table 8.4-1.



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### Cost-Benefit Analysis
Chapter 8 References

1 U.S. Environmental Protection Agency. March 2008. Final Ozone NAAQS Regulatory Impact Analysis. Prepared by: Office of Air and Radiation, Offi ce of Air Quality Planning and Standards.

2 U.S. Environmental Protection Agency. October 2006. Final Regulatory Impact Analysis (RIA) for the Proposed National Ambient Air Quality Standards for Particulate Matter . Prepared by: Office of Air and Radiation. Available at HTTP ://www.epa.gov/ttn/ecas/ria.html.

3 U.S. Environmental Protection Agency (2006) Air quality criteria for ozone and related photochemical oxidants (second external review draft) Research Triangle Park, NC: National Center for Environmental Assessment; report no. EPA/600R-05/004aB-cB, 3v.Available: http://cfpub.epa.gov/ncea/ cfm/recordisplay.cfm?d eid=137307[March 2006]

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10 World Health Organization (WHO). 2003. Health As pects of Air Pollution with Particulate Matter, Ozone and Nitrogen Dioxide: Report on a WHO Working Group. World Health Organization. Bonn, Germany. EUR/03/5042688.

11 Anderson HR, Atkinson RW, Peacock JL, Marston L, Konstantinou K. 20 04. Meta-analysis of time-series studies and panel studies of Particulate Matter (PM) and Ozone (O3): Report of a WHO task group. Copenhagen, Denmark: World Health Organization.

12 U.S. Environmental Protection Agency (2006) Air quality criteria for ozone and related photochemical oxidants (second external review draft) Research Triangle Park, NC: National Center for Environmental Assessment; report no. EPA/600R-05/004aB-cB, 3v.Available: http://cfpub.epa.gov/ncea/ cfm/recordisplay.cfm?d eid=137307[March 2006]



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13 Bell, M.L., et al. 2004. Ozone and short-term mortal ity in 95 US urban communities, 1987-2000. Jama, 2004. 292(19): p. 2372-8.

14 Bell, M.L., F. Dominici, and J.M. Samet. A meta-analy sis of time-series studies of ozone and mortality with comparison to the national morbidity, mortality, and air pollution study. Epidemiology, 2005. 16(4): p. 436-45.

15 Ito, K., S.F. De Leon, and M. Lippmann. Associations between ozone and daily mortality: analysis and metaanalysis. Epidemiology, 2005. 16(4): p. 446-57.

16 Levy, J.I., S.M. Chemerynski, and J.A. Sarnat. 200 5. Ozone exposure and mortality: an empiric bayes metaregression analysis. Epidemiology, 2005. 16(4): p. 458-68.

17 Pope, C.A., III, R.T. Burnett, M.J. Thun, E.E. Calle, D. Krewski, K. It o, and G.D. Thurston. 2002. “Lung Cancer, Cardiopulmonary Mortality, and Long-term Exposure to Fine Particulate Air Pollution.” Journal of the American Medical Association 287:1132-1141.

18 Laden, F., J. Schwartz, F.E. Speizer, and D.W. Dockery. 2006. Reduction in Fine Particulate Air Pollution and Mortality. American Journal of Respirat ory and Critical Care Medicine . 173: 667-672.

19 Industrial Economics, Incorporated (IEc). 2006. Expanded Expert Judgment Assessment of the Concentration-Response Relationship Between PM2.5 Exposu re and Mortality. Peer Re view Draft. Prepared for: Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Research Triangle Park, NC. August.

20 Woodruff, T.J., J. Grillo, and K.C. Schoendorf. 1997. “The Relatio nship Between Selected Causes of Postneonatal Infant Mortality and Particulate Air Pollution in the United States.” Environmental Health Perspectives 105(6):608-612.

21 Abbey, D.E., B.L. Hwang, R.J. Bu rchette, T. Vancuren, and P.K. Mills . 1995. “Estimated Long-Term Ambient Concentrations of PM(10) and Development of Respiratory Symptoms in a Nonsmoking Population.” Archives of Environmental Health 50(2): 139-152.

22 Peters, A., D.W. Dockery, J.E. Mu ller, and M.A. Mittleman. 2001. “I ncreased Particulate Air Pollution and the Triggering of Myocardial Infarction.” Circulation 103:2810-2815.

23 Schwartz J. 1995. Short term fluctuations in air pollution and hospital admissions of the elderly for respiratory disease. Thorax 50(5):531-538.

24 Schwartz J. 1994a. PM(10) Ozone, and Hospital Admissions For the Elderly in Minneapolis St Paul, Minnesota. Arch Environ Health 49(5):366-374.

25 Schwartz J. 1994b. Air Pollution and Hospital Admissions For the Elderly in Detroit, Michigan. Am J Respir Crit Care Med 150(3):648-655.

26 Moolgavkar SH, Luebeck EG, Anderson EL. 1997. Air pollution and hospital admissions for respiratory causes in Minneapolis St. Paul and Birmingham. Epidemiology 8(4):364-370.

27 Burnett RT, Smith-Doiron M, Stieb D, Raizenne ME, Br ook JR, Dales RE, et al. 2001. Association between ozone and hospitalization for acute respiratory diseases in children less than 2 years of age. Am J Epidemiol 153(5):444-452.



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28 Moolgavkar, S.H. 2003. “Air Pollution and Daily Deaths and Hospital Admissions in Los Angeles and Cook Counties.” In Revised Analyses of Time-Series Studies of Air Pollution and Health . Special Report. Boston, MA: Health Effects Institute.

29 Ito, K. 2003. “Associations of Particulate Matter Co mponents with Daily Mortality and Morbidity in Detroit, Michigan.” In Revised Analyses of Time-Series Studies of Air Pollution and Health . Special Report. Health Effects Institute, Boston, MA.

30 Moolgavkar, S.H. 2000. “Air Pollution and Hospital Admissions for Diseases of the Circulatory System in Three U.S. Metropolitan Areas.” Journal of the Air and Waste Management Association 50:1199-1206.

31 Sheppard, L. 2003. “Ambient Air Pollution and Nonelderly Asthma Hospital Admissions in Seattle, Washington, 1987-1994.” In Revised Analyses of Time-Series Studies of Air Pollution and Health . Special Report. Boston, MA: Health Effects Institute.

32 Jaffe DH, Singer ME, Rimm AA. 2003. Air pollution and emergency department visits for asthma among Ohio Medicaid recipients, 1991-1996. Environ Res 91(1):21-28.

33 Peel, J. L., P. E. Tolbert, M. Klein, et al. 2005. Ambient air pollution and respiratory emergency department visits. Epidemiology. Vol. 16 (2): 164-74.

34 Wilson, A. M., C. P. Wake, T. Kelly, et al. 2005. Air pollution, weather, and respiratory emergency room visits in two northern New England cities: an ecological time-series study. Environ Res. Vol. 97 (3): 312-21.

35 Norris, G., S.N. YoungPong, J.Q. Koenig, T.V. Larson, L. Sheppard, and J.W. Stout. 1999. “An Association between Fine Particles and Asthma Emergency Department Visits for Children in Seattle.” Environmental Health Perspectives 107(6):489-493.

36 Dockery, D.W., J. Cunningham, A.I. Damokosh, L.M. Neas, J.D. Spengler, P. Koutrakis, J.H. Ware, M. Raizenne, and F.E. Speizer. 1996. “Health Effects of Acid Aerosols On North American Children-Respiratory Symptoms.” Environmental Health Perspectives 104(5):500-505.

37 Pope, C.A., III, D.W. Dockery, J.D. Spengler, and M.E. Raizenne. 1991. “Respiratory Health and PM 10 Pollution: A Daily Time Series Analysis.” American Review of Respiratory Diseases 144:668-674.

38 Schwartz, J., and L.M. Neas. 2000. “Fine Particles ar e More Strongly Associated than Coarse Particles with Acute Respiratory Health Effects in Schoolchildren.” Epidemiology 11:6-10.

39 Ostro, B., M. Lipsett, J. Mann, H. Braxton-Owens, and M. White. 2001 . “Air Pollution and Exacerbation of Asthma in African-American Children in Los Angeles.” Epidemiology 12(2):200-208.

40 Vedal, S., J. Petkau, R. White, and J. Blair. 1998. “Acute Effects of Ambient Inha lable Particles in Asthmatic and Nonasthmatic Children.” American Journal of Respirat ory and Critical Care Medicine 157(4):1034-1043.

41 Ostro, B.D. 1987. “Air Pollution and Morbidity Revisited: A Specification Test.” Journal of Environmental Economics Management 14:87-98.



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42 Gilliland FD, Berhane K, Rappaport EB, Thomas DC, Avol E, Gauderman WJ, et al. 2001. The effects of ambient air pollution on school absenteeism due to respiratory illnesses. Epidemiology 12(1):43-54.

43 Chen L, Jennison BL, Yang W, Omaye ST. 2000. Elementary school absenteeism and air pollution. Inhal Toxicol 12(11):997-1016.

44 Ostro, B.D. and S. Rothschild. 1989. “Air Pollu tion and Acute Respiratory Morbidity: An Observational Study of Multiple Pollutants.” Environmental Research 50:238-247.

45 U.S. Science Advisory Board. 2004. Advisory Plans fo r Health Effects Analysis in the Analytical Plan for EPA’s Second Prospective Analysis –Benefits and Costs of the Clean Air Act, 1990—2020. EPA-SABCOUNCIL-ADV-04-004.

46 National Research Council (NRC). 2002. Estimating the Public Health Benefits of Proposed Air Pollution Regulations. Washington, DC: The National Academies Press.

47 U.S. Environmental Protection Agency. 1999. The Benefits and Costs of the Clean Air Act, 1990-2010. Prepared for U.S. Congress by U.S. EPA, Office of Ai r and Radiation/Office of Policy Analysis and Review, Washington, DC, November; EPA report no. EPA-410-R-99-001.

48 U.S. Environmental Protection Agency, 2006. Air Quality Criteria for Ozone and Related Photochemical Oxidants. National Center for Environmental Assessm ent, Office of Research and Development, U.S. Environmental Protection Agency, Research Triangle Park, NC EPA 600/R-05/004aF

49 U.S. Environmental Protection Agency (2006) Air quality criteria for ozone and related photochemical oxidants (second external review draft) Research Triangle Park, NC: National Center for Environmental Assessment; report no. EPA/600R-05/004aB-cB, 3v.Available: http://cfpub.epa.gov/ncea/ cfm/recordisplay.cfm?d eid=137307[March 2006]

50 National Research Council (NRC), 2008. Estimating Mortality Risk Reduction and Economic Benefits from Controlling Ozone Air Pollution. The National Academies Press: Washington, D.C.

51 U.S. Environmental Protection Agency. March 2008. Final Ozone NAAQS Regulatory Impact Analysis. Prepared by: Office of Air and Radiation, Offi ce of Air Quality Planning and Standards.

52 Mrozek, J.R., and L.O. Taylor. 2002. “What Determines the Value of Life? A Meta-Analysis.” Journal of Policy Analysis and Management 21(2):253-270.

53 Viscusi, V.K., and J.E. Aldy. 2003. “The Value of a Statistical Life: A Critical Review of Market Estimates Throughout the World.” Journal of Risk and Uncertainty 27(1):5-76.

54 Viscusi, W.K., W.A. Magat, and J. Huber. 1991. “P ricing Environmental Health Risks: Survey Assessments of Risk-Risk and Risk-Dollar Trade-Offs for Chronic Bronchitis.” Journal of Environmental Economics and Management 21:32-51.

55 Cropper, M.L., and A.J. Krupnick. 1990. “The Social Costs of Chronic Heart and Lung Disease.” Resources for the Future. Washington, DC. Discussion Paper QE 89-16-REV.

56 Russell, M.W., D.M. Huse, S. Drowns, E.C. Hamel, and S.C. Hartz. 1998. “Direct Medical Costs of Coronary Artery Diseas e in the United States.” American Journal of Cardiology 81(9):1110-1115.



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57 Wittels, E.H., J.W. Hay, and A.M. Go tto, Jr. 1990. “Medical Costs of Coronary Artery Disease in the United States.” American Journal of Cardiol ogy 65(7):432-440.

58 Agency for Healthcare Research and Quality (AHRQ). 2000. HCUPnet, Healthcare Cost and Utilization Project. Rockville, MD. http://www.ahrq.gov/HCUPnet/

.

59 Smith, D.H., D.C. Malone, K.A. Lawson, L.J. Okamoto, C. Battista, and W.B. Saunders. 1997. “A National Estimate of the Economic Costs of Asthma.” American Journal of Respir atory and Critical Care Medicine 156(3 Pt 1):787-793.

60 Stanford, R., T. McLaughlin, and L.J. Okamoto. 1999. “The Cost of Asthma in the Emergency Department and Hospital.” American Journal of Respirat ory and Critical Care Medicine 160(1):211-215.

61 Industrial Economics, Incorporated (IEc). March 31, 1994. Memorandum to Jim DeMocker, Office of Air and Radiation, Office of Policy Analysis and Review, U.S. Environmen tal Protection Agency.

62 Rowe, R.D., and L.G. Chestnut. 1986. “Oxidants and Asthmatics in Los Angeles: A Benefits Analysis— Executive Summary.” Prepared by En ergy and Resource Consultants, Inc. Report to the U.S. Environmental Protection Agency, Office of Policy Analysis. EPA-230-09-86-018. Washington, DC.

63 Neumann, J.E., M.T. Dickie, and R.E. Unsworth. March 31, 1994. “Linkage Between Health Effects Estimation and Morbidity Valuation in the Section 81 2 Analysis—Draft Valuation Document.” Industrial Economics Incorporated (IEc) Memorandum to Jim DeMocker, U.S. Environmental Protection Agency, Office of Air and Radiation, Office of Policy Analysis and Review.

64 Tolley, G.S. et al. January 1986. Valuation of Reductions in Human Heal th Symptoms and Risks. University of Chicago . Final Report for the U.S. Environmental Protection Agency.

65 Council of Economic Advisors. 2005. The Annual Report of the Council of Economic Advisors. In: Economic Report of the President. Table B-60. U.S. Government Printing Office: Washington, DC.

66 Industrial Economics, Incorporated (IEc). 2006. Expanded Expert Judgment Assessment of the Concentration-Response Relationship Between PM2.5 Exposu re and Mortality. Peer Re view Draft. Prepared for: Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Research Triangle Park, NC. August.



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### Appendix 8A: Sensitivity Anal yses of Key Parameters in the Benefits Analysis

The primary analysis presented in Chapter 8 is based on our current interpretation of the scientific and economic literatur e. That interpretation require s judgments regarding the best available data, models, and modeling methodol ogies and the assumptions that are most appropriate to adopt in the face of important uncertainties and resource limitations. The majority of the analytical assumptions used to develop the primary estimates of benefits have been used to support similar rulemakings and approved by EPA = s Science Advisory Board (SAB). Both EPA and the SAB recognize that data and modeling limitations as well as simplifying assumptions can introduce significant uncertainty into the benefit results and that alternative choices exist for some inputs to the analysis, such as the mortality C-R functions. This appendix supplements our primary estimate s of benefits with a series of sensitivity calculations that use other sour ces of health effect estimates and valuation data for key benefits categories. The supplemental estimates examine sensitivity to both valuation issues and for physical effects issues. These s upplemental estimates are not meant to be comprehensive. Rather, they reflect some of the key issues identified by EPA or commenters as likely to have a significant impact on tota l benefits. The individual adjustments in the tables should not simply be added together because: 1) there may be overlap among the alternative assumptions; and 2) the joint probability among cer tain sets of alternative assumptions may be low.

8.A.1 Premature Mortality – Alternative Threshold Analysis To consider the impact of a threshold in th e response function for the chronic mortality endpoint, we have constructed a sensitivity anal ysis by assigning different cutpoints below which changes in PM 2.5 

### are assumed to have no impact on premature mortality. In applying the cutpoints, we have adjusted th e mortality function slopes accordingly. A 

### Five cutpoints (including the base case assumption) were incl uded in the sensitivity analysis: (a) 14 μg/m3 (assumes no impacts below the alternative annual NAAQS), (b) 12 μg/m3 (c) 10 μg/m3 (reflects comments from CASAC, 2005) 1 

### , (d) 7.5 μg/m3 (reflects recommendations from SAB-HES to consider estimating mortality be nefits down to the lowest exposure levels considered in the Pope 2002 study used as the basis for modeling chronic mortality) 2 

### and (e) background or 3 μg/m3 (reflects NRC recommenda tion to consider effe cts all the way to background). 3 

### We repeat this sensitivity analysis for the RIA of the final standards, the results of which can be found in Table 8A-1.

A Note that this analysis only adjusted the mortality slopes for the 10 μ g/m 3 , 12 μ g/m 3 and 14 μ g/m 3 cutpoints since the 7.5 μ g/m 3 and background cutpoints were at or below the lowest measured exposure levels reported in the Pope et al. (2002) study for the combined exposure dataset.


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### Cost-Benefit Analysis
Table 8A-1. PM-Related Mortal ity Benefits of the Final Sta ndards: Cutpoint Sensitivity Analysis Using the ACS Study (Pope et al., 2002) a
Certainty that Benefits are At Least Specified Value Level of Assumed Threshold PM Mortality Incidence

2020 2030 More Certain that Benefits Are at Least as Large

Less Certain that Benefits Are at Least as Large 14 μg/m3 b 6 7

12 μg/m3 29 40

10 μg/m3 c 150 230

7.5 μg/m3 d 220 340

3 μg/m3 e 250 380

a Note that this table only presents the effects of a cutpoint on PM-related mortality incidence. b Alternative annual PM NAAQS.

c Primary threshold assumption based on CASAC (2005). 85
d SAB-HES (2004) 86

e NAS (2002) 87



### 8.A.2 Premature Mortality - A lternative Lag Structures Over the last ten years, there has been a con tinuing discussion and e volving advice regarding the timing of changes in health effects following changes in ambient air pollution. It has been hypothesized that some reductions in premature mortality from exposure to ambient PM 2.5 

### will occur over short periods of time in individuals with compromised health status, but other effects are likely to occur among individuals w ho, at baseline, have reasonably good health that will deteriorate because of continued e xposure. No animal models have yet been developed to quantify these cumulative effects, nor are there epidemio logic studies bearing on this question. The SAB-HES has recognized this lack of direct evidence. However, in early advice, they also note that “although there is substantial eviden ce that a portion of the mortality effect of PM is manifest within a short period of time, i.e., less than on e year, it can be argued that, if no lag assumption is made, the entire mortality excess observed in the cohort studies will be analyzed as immediate effects, and this will resu lt in an overestimate of the health benefits of improved air quality. Thus some time lag is appropriate for distributing the cumulative mortality effect of PM in the population,” (EPA-SAB-COUNCIL-ADV-00-001, 1999, p. 9). 4 

### In recent advice, the SAB-HES suggests that appropriate lag structur es may be developed based on the distribution of cause -specific deaths within the ov erall all-cause estimate (EPASAB-COUNCIL-ADV-04-002, 2004). They suggest that diseases with longer progressions should be characterized by longe r-term lag structures, while air pollution impacts occurring in populations with existing dis ease may be characterized by shorter-term lags. A key question is the distribution of causes of death within the relatively broad categories analyzed in the long-term cohort studies. Although it may be reasonable to assume the

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### Final Regulatory Impact Analysis cessation lag for lung cancer deaths mirrors the long latency of the disease, it is not at all clear what the appropriate lag struct ure should be for cardiopulmon ary deaths, which include both respiratory and cardiovascular cau ses. Some respiratory diseas es may have a long period of progression, while others, such as pneumonia, ha ve a very short durati on. In the case of cardiovascular disease, there is an important question of whether air pollution is causing the disease, which would imply a relatively long ce ssation lag, or whether air pollution is causing premature death in individuals with preexisting heart disease, which would imply very short cessation lags. The SAB-HES provides several recommendations fo r future research that could support the development of defensible lag structures, in cluding using disease-specific lag models and constructing a segmented lag distribution to co mbine differential lags across causes of death (EPA-SAB-COUNCIL-ADV-04-002, 2004). The SA B-HES indicated support for using “a Weibull distribution or a simpler distributional fo rm made up of several segments to cover the response mechanisms outlined above, given our l ack of knowledge on the specific form of the distributions,” (EPA-SAB-COUNCIL-ADV-04-002, 2004, p. 24). However, they noted that “an important question to be resolved is wh at the relative magnitudes of these segments should be, and how many of the acute effects are assumed to be included in the cohort effect estimate,” (EPA-SAB-COUNCIL-ADV-04-002, 2004, p. 24-25). Since the publication of that report in March 2004, EPA has sought additiona l clarification from this committee. In its follow-up advice provided in December 2004, the SAB suggested that until additional research has been completed, EPA should assume a segmented lag structure characterized by 30 percent of mortality reductions occurring in th e first year, 50 percent occurring evenly over years 2 to 5 after the reduction in PM 2.5 

### , and 20 percent occurring evenly over the years 6 to 20 after the reduction in PM 2.5 

### (EPA-COUNCIL-LTR-05-001, 2004). 5 

### The distribution of deaths over the latency period is intended to re flect the contribution of short-term exposures in the first year, cardiopulmonary deaths in the 2- to 5-year period, and long-term lung disease and lung cancer in the 6- to 20- year period. Furthermore, in their advisory letter, the SABHES recommended that EPA include sensitivity an alyses on other possible lag structures. In this appendix, we investigate the sensitivity of premature mortality-reduction related benefits to alternative cessation lag structures, noting that ongoing an d future research may result in changes to the lag structure us ed for the primary analysis. In previous advice from the SAB-HES, they r ecommended an analysis of 0-, 8-, and 15-year lags, as well as variations on the proportions of mortality allocated to each segment in the segmented lag structure (EPA-SAB-COUNCIL-ADV-00-001, 1999, (EPA-COUNCIL-LTR-05-001, 2004). The 0-y ear lag is representative of EPA = s assumption in previous RIAs. The 8- and 15-year lags are based on the study periods from the Pope et al. (1995) 6 

### and Dockery et al. (1993) 7 

### studies, respectively. B 

### However, neither the Pope et al. nor Dockery et al. studies assumed any lag structur e when estimating the relative risks from PM exposure. In fact, the Pope et al. and Docker y et al. analyses do not support or refute the existence of a lag. Therefore, any lag structur e applied to the avoide d incidences estimated from either of these studies will be an assumed structure. The 8- and 15-year lags implicitly

FF Although these studies were conducted for 8 and 15 years, respectively, the choice of the duration of the study by the authors was not likely due to observations of a la g in effects but is more likely due to the expense of conducting long-term exposure studies or the amount of satisfactory data that could be collected during this time period.


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### Cost-Benefit Analysis assume that all premature mortalities occur at the end of the study periods (i.e., at 8 and 15 years). In addition to the simple 8- and 15-year la gs, we have added two additional sensitivity analyses examining the impact of assuming differe nt allocations of mort ality to the segmented lag of the type suggested by the SAB-HES. The fi rst sensitivity analysis assumes that more of the mortality impact is associated with chro nic lung diseases or l ung cancer and less with acute cardiopulmonary causes. This illustrative lag structure is characterized by 20 percent of mortality reductions occurring in the first year, 50 percent occu rring evenly over years 2 to 5 after the reduction in PM 2.5 

### , and 30 percent occurring evenly over the years 6 to 20 after the reduction in PM 2.5 

### . The second sensitivity analysis assumes the 5-year distributed lag structure used in previous analyses, which is eq uivalent to a three-segment lag structure with 50 percent in the first 2-year segment, 50 percen t in the second 3-year segment, and 0 percent in the 6- to 20-year segment. The estimated impacts of alterna tive lag structures on the monetary benefits associated with reductions in PM-related premature mortality (e stimated with the Pope et al. ACS impact function) are presented in Table 8A-2. These estimates are based on the value of statistical lives saved approach (i.e., $5.5 million per incide nce) and are presented using both a 3 percent and 7 percent discount ra te over the lag period.

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### Cost-Be nefit Analysis

Table 8A-2. Sensitivity of Benefits of Premature Mortality Reductions to Alternative Lag Assumptions (Relative to Primary Benefits Estimates of the Final Standards) Avoided Incidences Value (ACS; Pope et al., 2002) a (million 2006$) b Description of Sensitivity Analysis 2020 2030 2020 2030 Alternative Lag Structures for PM -Related Premature Mortality 30 percent of incidences occur in 1 st year, 50 percent in years 2 to 5, and Primary 20 percent in years 6 to 20 3% Discount Rate 150 230 $1,000 $1,600 7% Discount Rate 150 230 $900 $1,400 None Incidences all occur in the first year 150 230 $1,100 $1,700 8-year Incidences all occur in the 8th year 3% Discount Rate 150 230 $910 $1,400 7% Discount Rate 150 230 $690 $1,100 15-year Incidences all occur in the 15th year 3% Discount Rate 150 230 $740 $1,100 7% Discount Rate 150 230 $430 $660 20 percent of incidences occur in 1st Alternative year, 50 percent in years 2 to 5, and Segmented 30 percent in years 6 to 20 3% Discount Rate 150 230 $1,100 $1,500 7% Discount Rate 150 230 $1,000 $1,300 50 percent of incidences occur in 5-Year years 1 and 2 and 50 percent in years Distributed 2 to 5 3% Discount Rate 150 230 $980 $1,600 7% Discount Rate 150 230 $850 $1,500

a Incidences rounded to two significant digits. b Dollar values rounded to two significant digits. The alte rnative lag structure analysis presents benefits calculated using both a 3 percent and 7 percent discount rate. 

### The results of the scaled altern ative lag sensitivity analysis demonstrate that choice of lag structure can have a large impact on benefits. Because of discount ing of delayed benefits, the lag structure may have a large downward impact on monetized benefits if an extreme assumption that no effects occur until after 15 years is applied. However, fo r most reasonable distributed lag structures, differences in the specific shape of the lag function have relatively small impacts on overall benefits.

8.A.3 Visibility Benefits in Additional Class I Areas The Chestnut and Rowe (1990) viii 

### study from which the primary visi bility valuation estimates are derived only examined WTP for vi sibility changes in Class I areas (national parks and wilderness areas) in the southeast, southwes t, and California. To obtain es timates of WTP for visibility changes at national parks and wild erness areas in the northeast, nor thwest, and central regions of the U.S., we have to transfer WTP values from the studied regions. This introduces additional uncertainty into the estimates. However, we have taken steps to adjust the WTP values to account for the possibility that a visibility improve ment in parks in one region is not necessarily the same environmental quality good as the same visibility improvement at parks in a different region. This may be due to differences in the scen ic vistas at different parks, uniqueness of the

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### Final Regulatory Impact Analysis

parks, or other factors, such as public familiarity with the park resource. To take this potential difference into account, we adjusted the WTP being transferred by the ratio of visitor days in the two regions. Based on this benefits transfer methodology (i mplemented within th e preference calibration framework discussed in Chapter 5 and Appendi x I of the final PM NAAQS RIA), estimated additional visibility benefits in the northwest, central, and nort heastern U.S. are provided in Table 8.A-3.

Table 8.A-3: Monetary Benefits Associated with Im provements in Visibility in Additional Federal Class I Areas in 2020 and 2030 (in millions of 2006$) a

Year Northwest b Central c Northeast d Total 2020 $3.9 $1.7 $9.2 $15 2030 $15 $17 $12 $44

a All estimates are rounded to 2 significant digits. All rounding occurs after final summing of unrounded estimates. As such, totals will not sum across columns
b Northwest Class I areas include Crater Lake, Mount Rain ier, North Cascades, and Olympic national parks, and Alpine Lakes, Diamond Peak, Eagle Cap, Gearhart Mountain, Glacier Peak, Goat Rocks, Hells Canyon, Kalmiopsis, Mount Adams, Mount Hood, Mount Jefferson, Mount Washington, Mountain Lakes, Pasayten, Strawberry Mountain, and Thr ee Sisters wilderness areas. Central Class I areas include Craters of the Moon, Glacier, Grand Teton, Th eodore Roosevelt, Badlands, Wind Cave, and Yellowstone national parks, and Anaconda-Pintlar, Bob Marshall, Bridger, Cabinet Mountains, Fitzpatrick, Gates of the Mountain, Lostwood, Medici ne Lake, Mission Mountain, North Absaroka, Red Rock Lakes, Sawtooth, Scapegoat, Selway-Bitterroot, Teto n, U.L. Bend, and Washak ie wilderness areas. d 

### Northeast Class I areas include Acadia, Bi g Bend, Guadalupe Mountains, Isle Royale, Voyageurs, and Boundary Waters Canoe nationa l parks, and Brigantine, Caney Creek, Great Gulf, Hercules-Glades, Lye Brook, Mingo, Moos ehorn, Presidential Ra nge-Dry Roosevelt Campobello, Seney, Upper Buffalo, and Wi chita Mountains wilderness areas.

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### Cost-Be nefit Analysis

Appendix 8B: Health-Based Cost-Effectiveness of Reductions in Ambient O 3 

### and PM 2.5 

### Associated with the Final Small SI and Recreational Marine Engine Rule

8B.1 Introduction

Health-based cost-effectiveness an alysis (CEA) and cost -utility analysis (CUA) have been used to analyze numerous health interventions but have not been widely adopted as tools to analyze environmental policies. Analyses of environmenta l regulations have typica lly used benefit-cost analysis to characterize impacts on social welfare. Benefit-cost an alyses allow for aggregation of the benefits of reducing mortalit y risks with other monetized be nefits of reducing air pollution, including reduced risk of acute and chronic morb idity, and non-health benefits. One of the great advantages of the benefit-cost paradigm is that a wide range of quantif iable benefits can be compared to costs to evaluate the economic effici ency of particular acti ons. However, alternative paradigms such as CEA and CUA analyses may also provide useful insights. CEA involves estimation of the costs per unit of benefit (e.g., lives or life year s saved). CUA is a special type of CEA using preference-based measures of effectiveness, such as quality-adjusted life years (QALYs).
QALYs were developed to evalua te the effectiveness of indivi dual medical treatments, and EPA is still evaluating the appropr iate methods for CEA for environmental regulations. Agency concerns with the standard QALY methodology incl ude the treatment of people with fewer years to live (the elderly); fairness to people with pr eexisting conditions that may lead to reduced life expectancy and reduced quality of life; and how the analysis shoul d best account for non-health benefits.
The Office of Management and Budget (OMB) recently issued Circ ular A-4 guidance on regulatory analyses, requiring fede ral agencies to “prepare a CEA for all major rulemakings for which the primary benefits are improved public h ealth and safety to the extent that a valid effectiveness measure can be developed to represent expected health and safety outcomes.” Environmental quality improvement s may have multiple health and ecological benefits, however, making application of CEA more di fficult and less straightforward.
The Institute of Medicine (a member institution of the National Academies of Science) established the Committee to Evaluate Measures of Health Benefits for Environmental, Health, and Safety Regulation to assess the scientific va lidity, ethical implications, and practical utility of a wide range of effectiveness measures used or proposed in CEA. This committee prepared a report titled “Valuing Health for Regulatory Cost -Effectiveness Analysis” which concluded that CEA is a useful tool for assess ing regulatory interventions to pr omote human health and safety, although not sufficient for informed regulatory decisions (Miller, R obinson, and Lawrence, 2006). They emphasized the need for additional data and methodological improvements for CEA analyses, and urged greater consistency in the reporting of assumptions, data elements, and analytic methods. They also provided a number of recommendations for the conduct of regulatory CEA analyses. EPA is evaluating these recommendations and will determine a response for upcoming analyses.

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### Final Regulatory Impact Analysis

CEA and CUA are most useful fo r comparing programs that have similar goals, for example, alternative medical interventions or treatments that can save a life or cure a disease. They are less readily applicable to programs with multiple categories of benefits, such as those reducing ambient air pollution, because th e cost-effectiveness calculation is based on the quantity of a single benefit category. In other words, we cannot readily convert non-health benefits, such as visibility improvements associated with reductions in PM 2.5 

### or increases in worker productivity associated with reductions in O 3 

### , to a health metric such as life years saved. For these reasons, environmental economists prefer to present resu lts in terms of monetary benefits and net benefits.
However, QALY-based CUA has been widely adopted within the hea lth economics literature (Neumann, 2003; Gold et al., 1996) and in the analys is of public health interventions (US FDA, 2004). QALY-based analyses have not been as accepted in the environmental economics literature because of concerns about the theo retical consistency of QALYs with individual preferences (Hammitt, 2002), tr eatment of nonhuman health benefits, and a number of other factors (Freeman, Hammitt, and De Civita, 2002). For environmental regulations, benefit-cost analysis has been the preferred method of choos ing among regulatory alternatives in terms of economic efficiency. Recently several academic an alyses have proposed the use of life yearsbased benefit-cost or CEAs of air pollution regulations (Cohen, Hammitt, and Levy, 2003; Coyle et al., 2003; Rabl, 2003; Carrother s, Evans, and Graham, 2002). In addition, the World Health Organization has adopted the use of disability-a djusted life years, a va riant on QALYs, to assess the global burden of disease due to different cau ses, including environmental pollution (Murray et al., 2002; de Hollander et al., 1999).
One of the ongoing controversies in health impact assessment regards whether reductions in mortality risk should be reported and valued in terms of statistic al lives saved or in terms of statistical life years saved. Life years saved m easures differentiate am ong premature mortalities based on the remaining life expectancy of affect ed individuals. In gene ral, under the life years approach, older individuals will gain fewer lif e years than younger individuals for the same reduction in mortality risk duri ng a given time period, making inte rventions that benefit older individuals seem less beneficial relative to similar interventi ons benefiting younger individuals. A further complication in the deba te is whether to apply quality adjustments to life years lost. Under this approach, individuals with preexis ting health conditions would have fewer QALYs lost relative to healthy individuals for the same loss in life expectancy, making interventions that primarily benefit individuals with poor health seem less benefici al than similar interventions affecting primarily healthy individuals.
In this CEA, based largely on a report prep ared under contract with Abt Associates, 3 

### we calculated both life years saved and statistical lives saved. Fo llowing the methodology used in the CEAs for the PM and O 3 

### NAAQS RIAs, we did not assign QALY weights to the life years saved – i.e., we calculated life years saved, rather than QALYs gained from mortality avoided. Put another way, we assumed weights of 1.0 for a ll life years saved. Life years saved in the future, however, were discounted to reflect people’s time preferen ce (i.e., a benefit received now

3 The full report prepared by Abt Associ ates is included in the docket for th e Final Small SI and Recreational Marine Engine Rule (EPA-HQ-OAR-2004-0008).



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### Cost-Be nefit Analysis

is worth more than the same benefit received in th e future). We used discount rates of 3 percent and 7 percent.
Where possible, benefits that could not be quantif ied in the denominator of our cost-effectiveness ratios were monetized and subtracted from the cost of the regulation in the numerator. For example, developing QALYs for acute health ef fects is problematic (B ala and Zarkin, 2000). Therefore, rather than try to de rive QALYs for the acute morbidit y endpoints, we instead applied valuation estimates and subtracted the total monetized value of all avoided acute morbidity effects from the cost of the regulation, in the numerator of the cost-effectiveness ratios. The monetized benefits of non-health improvements, where they were estimated, were similarly subtracted from the cost of the regulation. Finally, although QALY estimates were derived for the (PM 2.5 

### -related) chronic morbidity endpoints, the medical a nd opportunity costs associated with these chronic illnesses were also subtracted from the cost of the regulation.

PM 2.5 

### -related benefits derive not only from avoi ded cases of premature mortality and acute morbidity, but from avoided cases of chroni c morbidity (chronic bronchitis and non-fatal myocardial infarction) as well. In the CEAs for the PM and O 3 

### NAAQS RIAs, EPA derived QALYs for these two chronic morbidity endpoints (see, for example, Appendix G of the PM NAAQS RIA, http://www.epa.gov/ttn/ecas/regdata/RIAs/Appendix%20G-- Health%20Based%20Cost%20Eff ectiveness%20Analysis.pdf ) and used an alternative aggregate effectiveness metric, Morbidity Inclusive Life Ye ars (MILYs), to address some of the concerns about aggregation of life extension and quality-o f-life impacts. MILYs re present the sum of life years gained due to reductions in premature mortality and the QALYs gained due to reductions in chronic morbidity. This measure may be pref erred to existing QALY aggregation approaches because it does not devalue life extensions in individuals with preexisting illnesses that reduce quality of life. However, the MILY measure is still based on life years and thus still inherently gives more weight to interventions that re duce mortality and morb idity impacts for younger populations with higher rema ining life expectancy.
For this analysis, we present several metrics: li ves saved, life years saved, cost of the regulation (net of the monetized benefits not included in the denominator) per life sa ved and per life year saved, and MILYs gained and the cost of the re gulation (net of the monetized benefits not included in the denominator) per MILY gained.
Note that, like future life years saved, future QALYs gained from avoided cases of chronic bronchitis and myocardial infarc tion are discounted. All costs a nd monetized benefits are in 2005 dollars.
Monte Carlo simulation methods as implemented in the Crystal BallTM software program were used to propagate uncertainty in several of the model parameters throughout the analysis. In particular, we incorporated uncertainty surr ounding the coefficients in the concentrationresponse (C-R) functions, the unit values for the various morbidity endpoints included in the analysis, and the quality of life weights for the two chroni c morbidity endpoints for which we developed QALYs.

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### Final Regulatory Impact Analysis

We characterized overall uncertainty in the re sults with 95 percent credible or confidence intervals based on the Monte Carl o simulations. In addition, we ex amined the impacts on the cost effectiveness metrics of changing key pa rameters and/or assumptions, including

• the discount rate (for the cost of the regulation in the numerat or and future lives or life years saved and QALYs gained in the denominator);

• the C-R functions for O 3 

### -related and PM 2.5 

### -related mortality ; and

• the life expectancies (and therefore years of potential life lost) of i ndividuals who die as a result of exposure to O 3 

### (as explained in S ection 8B.4 below).
The methodology presented in this appendix is not intended to stand as precedent either for future air pollution regulations or for other EPA re gulations where it may be inappropriate. It is intended solely to demonstrate one particular ap proach to estimating the cost-effectiveness of reductions in ambient PM 2.5 

### and O 3 

### in achieving improvements in public health. Reductions in ambient PM 2.5 

### and O 3 

### are estimated to have other health a nd environmental benefits that will not be reflected in this CEA. Other EPA regulations affecting other aspects of environmental quality and public health may require additional data a nd models that may precl ude the development of similar health-based CEAs. A number of additi onal methodological issues must be considered when conducting CEAs for environmental policies, including treatment of non-health effects, aggregation of acute and long-te rm health impacts, and aggreg ation of life extensions and quality-of-life improvements in different populati ons. The appropriateness of health-based CEA should be evaluated on a case-by-cas e basis subject to the availability of appropriate data and models, among other factors.
The remainder of this appendix provides an overv iew of the methods used to derive the cost effectiveness metrics developed for this CEA and presents the resulting metrics. Section 8B.2 provides an overview of effectiveness measures. Section 8B.3 discusse s general issues in constructing cost-effectiveness ratios. Section 8B.4 presents methods and results. Finally, Section 8B.5 presents concluding remarks.

8B.2 Effectiveness Measures
For the purposes of CEA, we focus the effectiven ess measures on the quantifiable health impacts of the reductions in PM 2.5 

### and O 3 

### estimated to occur as a result of this rule. If the main impact of interest is reductions in mortalit y risk from air pollution, the effec tiveness measures are relatively straightforward to develop. Mortality impacts can be characterized similar to the benefits analysis, by counting the number of premature deaths avoided, or can be characterized in terms of increases in life e xpectancy or life years. 4 

### Estimates of premature mortality have the benefit

4 

### Life expectancy is an ex ante concept, indicating the imp act on an entire population’s expectation of the number of lif e years they have remaining, be fore knowing which individuals will be affected. Life expectancy thus incorp orates both the probability of an effect and the impact of the effect if realized. Life years is an ex post concept, indicating the impact on individuals who actually die from exposure to air pollution. Changes in population life expectancy will always be substantially sma ller than changes in life years per premature mortality avoided, although the total life years gain ed in the population will be the same. This is

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### Cost-Be nefit Analysis

of being relatively simple to calculate, are cons istent with the benefit- cost analysis, and do not impose additional assumptions on the degree of life shortening. However, some have argued that counts of premature deaths avoided are problematic because a gain in life of only a few months would be considered equivalent to a gain of many life years, a nd the true effectiveness of an intervention is the gain in life expectancy or life years (Rabl, 2003; Miller and Hurley, 2003).
Calculations of changes in life years and life expectancy can be accomplished using standard life table methods (Miller and Hurley, 2003). Howeve r, the calculations require assumptions about the baseline mortality risks for each age cohort affected by air pollution. A general assumption may be that air pollution mortality risks affect the general mortality risk of the population in a proportional manner. However, some concerns have been raised that air pollution affects mainly those individuals with preexisting cardiovascular and respiratory disease, who may have reduced life expectancy relative to the ge neral population. This issue is ex plored in more detail below.
Air pollution is also associated with a numbe r of significant chronic and acute morbidity endpoints. Failure to consider these morbidity effects may understate th e cost-effectiveness of air pollution regulations or give too little weight to reductions in particular pollutants that have large morbidity impacts but no effect on life expectancy. The QALY approach explicitly incorporates morbidity impacts into measures of life years gained and is often used in health economics to assess the cost-eff ectiveness of medical spending programs (Gold et al., 1996). Using a QALY rating system, health quality rang es from 0 to 1, where 1 may represent full health, 0 death, and some number in between (e.g., 0.8) an impaired condition. QALYs thus measure morbidity as a reduction in quality of life over a period of life. QALYs assume that duration and quality of life are equi valent, so that 1 year spent in pe rfect health is equivalent to 2 years spent with quality of life half that of perfect health. QALYs can be used to evaluate environmental rules under certa in circumstances, although some very strong assumptions (detailed below) are associated with QALYs. Th e U.S. Public Health Service Panel on Cost Effectiveness in Health and Medicine recomm ended using QALYs when evaluating medical and public health programs that primarily reduce both mortality and morbidit y (Gold et al., 1996). Although there are significant non-h ealth benefits associated with air pollution regulations, over 90 percent of quantifiable monetized benefits ar e health-related. Thus, it can be argued that QALYs are more applicable for these types of regul ations than for other e nvironmental policies. However, the value of non-health benefits should not be ignored. As discussed below, we have chosen to subtract the value of non-health benefi ts from the costs in the numerator of the costeffectiveness ratio.
The use of QALYs is predicated on the a ssumptions embedded in the QALY analytical framework. As noted in the QALY literature, QALYs are consistent with the utility theory that underlies most of economics only if one imposes several restrictive assumptions, including independence between longevity and quality of life in the utility function, risk neutrality with respect to years of life (which implies that the utility function is linear), and constant proportionality in trade-offs between quality and quantity of life (Pliskin, Shepard, and Weinstein, 1980; Bleichrodt, Wakker, and Joha nnesson, 1996). To the extent that these assumptions do not represent actual preference s, the QALY approach wi ll not provide results

because life expectancy gains average expected life years gained over the entire population, while life years gained measures life years gained only for thos e experiencing the life extension.

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### Final Regulatory Impact Analysis

that are consistent with a benefit-cost an alysis based on the Kaldor-Hicks criterion. 5 

### Even if the assumptions are reasonably consistent with reality, because QALYs represent an average valuation of health states rather than the sum of societal WTP, there are no guarantees that the option with the highest QALY per dollar of cost will satisfy the Kaldor-Hicks criterion (i.e., generate a potential Pareto improvement [Garber and Phelps, 1997]).
Benefit-cost analysis based on WTP is not wit hout potentially troubling un derlying structures as well, incorporating ability to pay (and thus the potential for equity conc erns) and the notion of consumer sovereignty (which emphasizes wealth effects). Table 8B-1 compares the two approaches across a number of parameters. For the most part, WTP allows parameters to be determined empirically, while the QALY approach imposes some conditions a priori

. Table 8B-1. Comparison of QALY and WTP Approaches

Parameter QALY WTP
Risk aversion Risk neutral Empirically determined Relation of duration and quality Independent Empirically determined Proportionality of duration/ quality trade-off Constant Variable

Treatment of time/age in utility function Ut ility linear in time Empirically determined Preferences Community/Individual Individual Source of preference data Stated Revealed and stated Treatment of income and prices Not explicitly considered Constrains choices



### 8B.3 Construction of Cost-Effect iveness Ratios: General Issues
8B.3.1 Dealing with Morbidity Health Effects and Non-health Effects
Health effects from exposure to PM 2.5 

### and O 3 

### air pollution encompass a wide array of chronic and acute conditions in add ition to premature mortality. EPA’s Ozone and PM Criteria Documents outline numerous health effects known or suspected to be linked to exposure to ambient ozone and PM (US EPA, 2006; US EPA, 2005; Anderson et al., 2004). Although chronic conditions and premature mortality gene rally account for the majority of monetized benefits, acute symptoms can affect a broa d population or sensitive populations (e.g., asthmarelated emergency room visits among asthmatics) . In addition, reductions in air pollution may result in a broad set of non-health envir onmental benefits, including improved worker productivity, improved visibility in national park s, increased agricultural and forestry yields, reduced acid damage to buildings, and a host of other impacts. Lives saved, life years saved, and

5 

### The Kaldor-Hicks efficiency criterion requires that the “winners” in a particular case be potentially able to compensate the “losers” such that total societal welfare improves. In this case, it is sufficient that total be nefits exceed total costs of the regulation. This is also known as a potential Pareto improvement, because gains could be allocated such that at least one person in society would be better off wh ile no one would be worse off.

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### Cost-Be nefit Analysis

QALYs gained address only health impacts, and the OMB guidance notes that “where regulation may yield several different beneficial outcomes, a cost-effectiveness comparison becomes more difficult to interpret because there is more than on e measure of effectiveness to incorporate in the analysis.”
With regard to acute health impacts, Bala and Zarkin (2000) suggest that QALYs are not appropriate for valuing acute symptoms, because of problems with both measuring utility for acute health states and applying QALYs in a linear fashion to very short duration health states. Johnson and Lievense (2000) suggest using conj oint analysis to get healthy-utility time equivalences that can be compared across acute effects, but it is not clear how these can be combined with QALYs for chronic effects and loss of life expectancy. Ther e is also a class of effects that EPA has traditionally treated as acu te, such as hospital admissions, which may also result in a loss of quality of life for a period of time following the effect. For example, life after asthma hospitalization has been estimated with a utility weight of 0.93 (Bell et al., 2001; Kerridge, Glasziou, and Hillman, 1995).
How should these effects be combined with QAL Ys for chronic and mortality effects? One method would be to convert the acute effects to QALYs; however, as noted above, there are problems with the linearity assump tion (i.e., if a year with asthma symptoms is equivalent to 0.7 year without asthma symptoms, then 1 day w ithout asthma symptoms is equivalent to 0.0019 QALY gained). This is troubli ng from both a conceptual basis and a presentation basis. An alternative approach is simply to treat acute he alth effects like non-health benefits and subtract the dollar value (based on WTP or CO I) from compliance costs in the CEA.
To address the issues of incorporating acute morbidity and non-health benefits, OMB suggests that agencies “subtract the monetary estimate of the ancillary benefits from the gross cost estimate to yield an estimated net cost.” As w ith benefit-cost analysis , any unquantified benefits and/or costs should be noted and an indication of how they might affect the cost-effectiveness ratio should be described. We followed this recommended “net cost” ap proach, specifically in netting out the benefits of health improveme nts other than reduced mortality and improved quality of life from avoided chronic illness – in particular, the moneti zed benefits of acute morbidity avoided, the medical and opportunity costs (“cost of illness”) of avoided chronic illness, and the benefits of non-health improvement s, including increases in worker productivity associated with reductions in O 3 

### and visibility improvements at national parks associated with reductions in PM 2.5 

### (see Chapter 8 for more details on these benef it categories).
8B.3.2 Should Life Years Gained Be Adju sted for Initial Health Status?
The methods outlined below in Section 8B.4 provide estimates of the total number of life years gained in a population, regardless of the quality of those life years, or equivalently, assuming that all life years gained are in perfect health. In some CEAs (Cohen, Hammitt, and Levy, 2003; Coyle et al., 2003), analysts have ad justed the number of life years ga ined to reflect the fact that 1) the general public is not in perfect health a nd thus “healthy” life year s are less than total life years gained and 2) those affected by air pollution may be in a wors e health state than the general population and therefore will not gain as many “healthy” life years adjusted for quality, from an air pollution reduction. This adjustment, which converts life years gained into QALYs, raises a number of serious ethical issues. Proponents of QALYs have promoted the nondiscriminatory

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### Final Regulatory Impact Analysis

nature of QALYs in evaluating improvements in quality of life (e.g., an improvement from a score of 0.2 to 0.4 is equivalent to an improvement from 0.8 to 1.0), so the starting health status does not affect the evaluation of interventions th at improve quality of life. However, for lifeextending interventions, th e gains in QALYs will be directly proportional to the baseline health state (e.g., an individual with a 30-year life e xpectancy and a starting he alth status of 0.5 will gain exactly half the QALYs of an individual with the same life expectancy and a starting health status of 1.0 for a similar life-ex tending intervention). This is troubling because it imposes an additional penalty for those alr eady suffering from disabling condi tions. Brock (2002) notes that “the problem of disability disc rimination represents a deep and unresolved problem for resource prioritization.”
OMB (2003) has recognized this issue in thei r Circular A-4 guidance, which includes the following statement:
When CEA is performed in specific rulema king contexts, you should be prepared to make appropriate adjustments to ensure fa ir treatment of a ll segments of the population. Fairness is important in th e choice and execution of effectiveness measures. For example, if QALYs are used to evaluate a lifesavi ng rule aimed at a population that happens to experience a high rate of disability (i.e., where the rule is not designed to affect th e disability), the number of life years saved should not necessarily be diminished simply because th e rule saves the lives of people with lifeshortening disabilities. Bo th analytic simplicity and fairness suggest that the estimated number of life years saved for the disabled population should be based on average life expectancy information for the relevant age cohorts. More generally, when numeric adjustments are made for life expectancy or quality of life, analysts should prefer use of population averages rather than information derived from subgroups dominated by a particular demographic or income group. (p. 13) This suggests two adjustments to the standard QALY methodology: one adjusting the relevant life expectancy of the affected population, and the other affecting the baseline quali ty of life for the affected population.
In addition to the issue of fairness, potential m easurement issues are specific to the air pollution context that might argue for cauti on in applying quality-of-life ad justments to life years gained due to air pollution reductions. A number of epidemiological and toxicological studies link exposure to air pollution with chronic diseases, such as CB a nd atherosclerosis (Abbey et al., 1995; Schwartz, 1993; Suwa et al., 2 002). If these same individuals with chronic disease caused by exposure to air pollution are then at increased risk of prem ature death from air pollution, there is an important dimension of “double jeopardy” i nvolved in determining the correct baseline for assessing QALYs lost to air pollution (see Singer et al. [1995] for a br oader discussion of the double-jeopardy argument).
Analyses estimating mortality from acute exposures that ignore the effects of long-term exposure on morbidity may understate the hea lth impacts of reducing air pollu tion. Individuals exposed to chronically elevated levels of air pollution may realize an incr eased risk of death and chronic disease throughout life. If at some age they contract heart (or so me other chronic) disease as a result of the exposure to air po llution, they will from that poi nt forward have both reduced life

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### Cost-Be nefit Analysis

expectancy and reduced quality of life. The benefit to that individual from reducing lifetime exposure to air pollution would be the increase in lif e expectancy plus the increase in quality of life over the full period of increased life expect ancy. If the QALY loss is determined based on the underlying chronic condition and life expectancy without regard to the fact that the person would never have been in that state without long-term exposure to elevated air pollution, then the person is placed in double jeopardy. In other word s, air pollution has plac ed more people in the susceptible pool, but then we penalize those pe ople in evaluating pol icies by treating their subsequent deaths as less va luable, adding insult to injury, and potentially downplaying the importance of life expectancy losse s due to air pollution. If the risk of chr onic disease and risk of death are considered together , then there is no conceptual problem with measuring QALYs, but this has not been the case in recent applications of QALYs to air pol lution (Carrothers, Evans, and Graham, 2002; Coyle et al., 2003). Th e use of QALYs thus highlights the need for a better understanding of the relationship between chronic disease and long-term exposure and suggests that analyses need to c onsider morbidity and mortality jo intly, rather than treating each as a separate endpoint (this is an issue for current benef it-cost approaches as well).

Because of the fairness and measurement concer ns discussed above, for the purposes of this analysis, we do not reduce the number of life ye ars gained to reflect any differences in underlying health status that might reduce quality of life in remaining years. Thus, we maintain the assumption that all direct gains in life years resulting from mortality risk reductions will be assigned a weight of 1.0. The U.S. Public Health Service Panel on Cost Effectiveness in Health and Medicine recommends that “s ince lives saved or extended by an intervention will not be in perfect health, a saved life year will count as less than 1 full QALY” (Gold et al., 1996). However, for the purposes of this analysis, we pr opose an alternative to th e traditional aggregate QALY metric that keeps separate quality adju stments to life expectan cy and gains in life expectancy. As such, we do not make any adjustme nts to life years gained to reflect the less than perfect health of the general population. Gains in qua lity of life will be addressed as they accrue because of reductions in the incidence of chronic diseases. This is an explicit equity choice in the treatment of issues associated with quality-o f-life adjustments for incr eases in life expectancy that still capitalizes on the ability of QALYs to ca pture both morbidity and mortality impacts in a single effectiveness measure.
8B.3.3 Constructing Cost-Effectiveness Ratios
Construction of cost-effectiveness ratios requi res estimates of effectiveness (in this case measured by lives saved, life years gained, or MILYs gained) in the denominator and estimates of costs in the numerator. The estimate of cost s in the numerator should include both the direct costs of the controls necessary to achieve the reduction in ambient conc entrations of the air pollutant and the avoided costs (c ost savings) associated with the reductions in morbidity (Gold et al., 1996). In general, because reductions in air pollution do not require direct actions by the affected populations, there are no specific costs to affected individuals (aside from the overall increases in prices that might be expected to occur as contro l costs are passed on by affected industries). Likewise, because in dividuals do not engage in any specific actions to realize the health benefit of the pollution reduction, there are no decreases in utility (as might occur from a medical intervention) that need to be adjusted fo r in the denominator. Thus, the elements of the numerator are direct costs of controls minus th e avoided costs of illness (COI) associated with chronic illnesses. In addition, as noted above, to account for the value of reductions in acute

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### Final Regulatory Impact Analysis

health impacts and non-health benefits, we netted out the monetized value of these benefits from the numerator to yield a “net cost” estimate.

The denominators of the cost-effectiveness ratios we calculated are either lives saved, life years saved, or MILYs gained. For the MILY aggregat e effectiveness measure, the denominator is simply the sum of life years gained from increas ed life expectancy and QALYs gained from the reductions in incidence of chr onic illnesses associated with PM 2.5 

### – chronic bronchitis (CB) and nonfatal acute myocardi al infarction (AMI).

8B.4 Cost Effectiveness Metrics

In this section we describe the development of cost effectiveness metrics. To generate health outcomes, we used the same framework as for the benefit-cost analysis de scribed in Chapter 8. For convenience, we summarize the basic methodologi es here. For more details, see Chapter 8 and the Environmental Benefits Mapping and Analysis Program (BenMAP) user’s manual ( http://www.epa.gov/ttn/ecas/benmodels.html ).
BenMAP uses health impact functions to generate changes in the incidenc e of health effects. Health impact functions are derived from th e C-R functions reported in the epidemiology literature. A standard health impact function ha s four components: an effect estimate from a particular epidemiological study, a baseline incidence rate for the health effect (obtained from either the epidemiology study or a source of public health statistics, such as CDC), the affected population, and the estimated change in th e relevant pollutant summary measure.
A typical health impact f unction might look like this:

Δ y y = 0 

### ⋅ ( e β ⋅Δ x



### − 1 )
, where y 0 

### is the baseline incidence, equal to the baseline incidence rate times the potentially affected population; $ is the effect estimate; ) x is the estimated change in the pollutant (e.g., PM 2.5 

### or O 3 

### ) and ) y is the estimated change in incidence of the health effect (e.g., the number of deaths avoided) associated with the change in the pollutant, ) x. There are other functional forms, but the basic elements remain the same.

8B.4.1 Reductions in O 3 

### -Related Premature Deaths

To calculate O 3 

### -related life years saved under the Final Sm all SI and Recreational Marine Engine Rule (hereafter, Final SSI & RME Rule), we first calculated the numbers of O 3 

### -related statistical lives saved within 5-year age groups, using BenM AP. (For more details on the calculation of statistical lives saved using BenMAP, see Chapter 8 or the BenMAP user’s manual ( http://www.epa.gov/ttn/ecas/benmodels.html ). We used two studies used in the benefit analysis for the Final SSI & RME Rule RIA – Bell et al . (2004) and Levy et al. (2005). Both studies report estimated C-R functions of the associatio n between premature mortality and short-term exposures to ambient O 3 

### . Bell et al. (2004) is a multi-city study of 95 cities, and as such may avoid the potential for publicati on bias that may be inherent in single-city studies or meta8- 66

### Cost-Be nefit Analysis

analyses of single-city studies. This study provides the lowest estimate of O 3 

### -related premature deaths among the mortality studies included in th e Final SSI & RME Rule RIA benefit analysis. An upper bound estimate of O 3 

### -related premature deaths in the Final SSI & RME Rule RIA benefit analysis was provided by Levy et al. (2005) . More extensive discussions of these studies are given in Chapter 8.

We checked to confirm that the total number of O 3 

### -related statistical lives saved, summed across all age groups, equals the co rresponding number calculated in the Final SSI & RME Rule RIA benefit analysis. Age group-specific O 3 

### -related premature deaths avoided under the Final SSI & RME Rule in 2020 and in 2030 are given in Table 8B-2.

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### Final Regulatory Impact Analysis

Table 8B-2. Estimated Reduction in Incidence of O 3 -Related Premature Mortality Under the Final SSI & RME Rule in 2020 and 2030

Reduction in O 3 -Related Premature Mortality (95% CI)* Age 2020 2030 Interval Bell et al. (2004) Levy et al. (2005) Bell et al. (2004) Levy et al. (2005)

0 - 4 0 (0 - 0) 1 (1 - 1) 0 (0 - 0) 1 (1 - 2)
5 - 9 0 (0 - 0) 0 (0 - 1) 0 (0 - 0) 1 (0 - 1)
10 - 14 0 (0 - 0) 0 (0 - 1) 0 (0 - 0) 1 (0 - 1)
15 - 19 0 (0 - 0) 1 (0 - 1) 0 (0 - 0) 1 (1 - 1)
20 - 24 0 (0 - 0) 1 (1 - 2) 0 (0 - 0) 2 (1 - 2)
25 - 29 0 (0 - 0) 2 (1 - 2) 0 (0 - 0) 2 (2 - 3)
30 - 34 0 (0 - 0) 2 (1 - 2) 0 (0 - 0) 2 (1 - 3)
35 - 39 0 (0 - 1) 3 (2 - 3) 1 (0 - 1) 4 (3 - 5)
40 - 44 0 (0 - 1) 2 (2 - 3) 1 (0 - 1) 3 (2 - 4)
45 - 49 1 (0 - 2) 5 (3 - 6) 1 (0 - 2) 7 (5 - 9)
50 - 54 1 (0 - 2) 5 (4 - 7) 1 (0 - 2) 5 (4 - 7)
55 - 59 3 (1 - 5) 1 3 (9 - 18) 3 (1 - 6) 1 6 (11 - 20)
60 - 64 3 (1 - 5) 1 3 (9 - 17) 4 (1 - 6) 1 6 (11 - 21)
65 - 69 6 (2 - 9) 2 5 (17 - 33) 9 (3 - 16) 4 2 (29 - 54)
70 - 74 4 (1 - 7) 2 0 (14 - 26) 8 (3 - 13) 3 5 (24 - 46)
75 - 79 7 (2 - 12) 3 1 (22 - 41) 1 5 (5 - 26) 6 7 (46 - 88)
80 - 84 5 (2 - 8) 2 0 (14 - 26) 9 (3 - 15) 3 9 (27 - 51)
85+ 15 (5 - 25) 65 (45 - 85) 24 (8 - 40) 100 (72 - 140)
Total: 46 (15 - 77) 210 (140 - 270) 77 (25 - 130) 350 (240 - 460) *95 percent confidence or credible intervals (CIs) are based on the uncertainty about the coefficient in the mortality C-R functions. All estimates rounded to two significant figures.



### 8- 68

### Cost-Be nefit Analysis

8B.4.2 Life Years Saved as a Result of Reductions in O 3 

### -Related Mortality Risk

The number of life years saved depends not only on the number of statistical lives saved, but also on the life expectancies associated with those st atistical lives. As was pointed out in the CEAs for the PM and O 3 

### NAAQS RIAs, age-specific life exp ectancies for the general population are calculated from mortality rates fo r the general populat ion, and these reflect the prevalence of chronic disease, which shortens life expectanci es. The only reason one might use lower life expectancies than those for the general popula tion in the CEA for the Final SSI & RME Rule RIA is if the population at risk from exposure to O 3 

### was limited solely or disproportionately to individuals with preexisting chronic illness, whos e life expectancies were, on average, shorter than those of the general population (unless a ll of those individuals had preexisting chronic illness because of long-term exposure to O 3 

### ).

It is reasonable to assume that someone who dies from exposure to an air pollutant is already in a compromised state. However, there are both ac ute and chronic compromised states. If an individual has an acute illness (e.g., pneumonia) that puts him at risk of mortality when exposed to a high concentration of an air pollutant, then in the absence of that high concentration he could be expected to recover from the illness and go on to live the expected number of years for someone his age – i.e., he would have the age-speci fic life expectancy of the general population.
If an individual has a chronic i llness that makes him vulnerable to a high concentration of an air pollutant, then an important question is whether or not he would have had that chronic illness if he had not been exposed over the long term to high levels of the air pollutant. We can categorize individuals who are at risk of dying because of exposure to an air pollutant into three groups:

• those who are vulnerable because of a preexisting acute condition;

• those who are vulnerable because of a preex isting chronic condition that they would not have had, had they not been e xposed over the long term to hi gh levels of the air pollutant; and

• those who are vulnerable because of a preexisti ng chronic condition that they would have had even in the absence of long term expos ure to high levels of the air pollutant. The age-specific life expectancies of the gene ral population should apply to the first two groups, and the age-specific life expectan cies of the subpopulation with th e relevant chronic condition(s) should apply to the third group. If we knew the proportions of people who die from exposure to O 3 

### who are in each group, and the life expectan cies of people in the third group, we could calculate the number of life years saved as follows:

Total life years saved = 

# ∑ M i 

### * ( p 1 i 

### * LE i 

### + p 2 i 

### * LE i 

### + p 3 i 

### * LE i * 

### )

i 

### where
M i 

### denotes the number of O 3 

### -related deaths of individuals age i,
LE i 

### denotes the general population life expectancy for age i,

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### Final Regulatory Impact Analysis

LE i * 

### denotes the life expectancy for age i of the subpopulation with the relevant chronic condition(s) – i.e ., the third group;

p 1i 

### denotes the proportion of the M i 

### O 3 

### -related deaths that ar e in the first group;

p 2i 

### denotes the proportion of the M i 

### O 3 

### -related deaths that are in the second group; and

p 3i 

### denotes the proportion of the M i 

### O 3 

### -related deaths that are in the third group.

Unlike for PM 2.5 

### (discussed below), we currently lack information that would allow us to estimate the relevant proportions ne cessary to estimate the set of life expectancies that would be appropriate to apply to O 3 

### -related deaths. Although there is substantial evidence linking premature mortality to short-term exposures to O 3 

### , there is currently not similar evidence for long-term exposures. We therefore do not know if the second group above is relevant in the case of O 3 

### -related mortality. Nor do we know what proportion of O 3 

### -related deaths can be attributed to preexisting acute conditions (t he first group) versus preexisti ng chronic conditions that these individuals would have had even in th e absence of long term exposure to O 3 

### (the third group).
Because we currently lack the necessary inform ation to determine the appropriate set of life expectancies to use in calculating li fe years saved associated with O 3 

### -related premature mortality avoided, we calculated life years saved based on four di fferent underlying assumptions:

• A lower bound assumption of zero life years saved, based on the hypothesis that the observed statistical association between premat ure mortality and short-term exposures to O 3 

### is not actually a causal relationship;

• An upper bound assumption that an O 3 

### -related premature death of an individual of a given age will result in a loss of life years eq ual to the life expectancy in the general population of that age;

• Two intermediate assumptions: That the proportions of O 3 

### -related premature deaths in the three groups delineated above ( p 1i 

### , p 2i 

### , and p 3i 

### ) are such that, on average, the agespecific life expectancies among people who die O 3 

### -related premature deaths are those of

o people with severe preexisting chronic conditions, whose life expectancies are substantially shorter than those of the general population; and

o people with preexisting chronic conditions of a range of severities, whose life expectancies are somewhat shorter th an those of the general population.
Life years saved based on the upper bound assu mption were calculated from age-specific mortality probabilities for the general populatio n taken from the Centers for Disease Control (CDC) National Vital Statistics Reports, Vol. 56, No. 9, December 28, 2007, Table 1. Life table for the total population: United States, 2004. 6 

### We used a simplified method of calculating life expectancies from these age-specific mortality pr obabilities that yielded life expectancies that were close to the life expectancies derived using the more complicated method employed by the

http://www.cdc.gov/nchs/data/nvsr/nvsr56/nvsr56_09.pdf

8-7 0 6

### Cost-Be nefit Analysis

CDC. 7 

### In particular, starting with a cohort of si ze 1,000,000 at birth, we calc ulated the life-years lived between ages x and ( x +1), for x = 0, 1, 2, ..., 99, using the age-specific mortality probabilities taken from the CDC Vital Statistics Report (see above ) and assuming that all deaths that occurred between ages x and ( x +1) occurred midway through the year (i.e., we assigned 0.5 life-year to each year of death). The life expectancy at age n was then calculated as the sum of the life-years lived from age n through age 100 divided by the cohort size at age n . The life expectancy at age n is the number of life y ears lost due to an O 3 

### -related premature mortality of an individual age n

. To estimate life years saved under th e two intermediate assumptions about the life years lost as a result of O 3 

### -related premature mortality, we turned to the epidemiological evidence of a statistically significant association between short-term exposures to O 3 

### and respiratory hospital admissions. This evidence suggests that these short-term exposures may exacerbate respiratory conditions that were preexisting. It is reasonable to suppose thatsome of these hospitalizations for respiratory illnesses on da ys of relatively high O 3 

### concentrations might result in death. It may also be the case that some individuals who did not go to the hospital might also die. We therefore looked for information on life expectan cies of people with chronic respiratory conditions.
While there is information readily available in vital statistics sources on rates of death from chronic respiratory diseases, th ere is not similarly available information on rates of death among that subpopulation who su ffer from those diseases . It is the latter rate – the rate of death among that subpopulation who suffers from those diseases – that is of interest.
A recent study of people with and without ch ronic obstructive pulmonary disease (COPD) provided data from which we were able to construc t estimates of the mortality rates of interest. Mannino et al. (2006) followed a cohort of 15,440 subj ects ages 43 to 66 for up to 11 years. The cohort subjects were selected from the larger cohort of the Atherosclerosis Risk in Communities (ARIC) study, which selected its subjects fr om the population of four U.S. communities by probability sampling. 8 

### The subjects in the Mannino study we re limited to the ARIC participants who provided baseline information on respir atory symptoms and diagnoses, who underwent pulmonary function testing, and for wh om follow-up data were available.
Using a modification of the criteria devel oped by the Global Initia tive on Obstructive Lung Disease (GOLD), Mannino et al. (2006) classified the study subjects into COPD severity groups (or stages), with GOLD stage 0 (presence of re spiratory symptoms in the absence of any lung function abnormality) being the least severe COPD group, and GOLD stages 3 and 4 being the most severe. The unadjusted death rates of the study participants (taken from Table 1 of Mannino et al., 2006), ratios of (unadjusted) de ath rates, and hazard ratios, based on Cox

7 

### We calculated life expectancies from the mortality probabilities rather than using the life expectancies given in the CDC table because we were going to also calculate life expectancies for the subpopulations with se vere COPD and with “average” COPD by adjusting the agespecific mortality probabilities and then calcula ting life expectancies using these adjusted probabilities. 8 

### In one of the four communities probability sampling was used to select African-Americans only.

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### Final Regulatory Impact Analysis

proportional hazard regressions, which took into account several covariates (including, among others, age, sex, race, smoking status, and educati on level) are shown in the table below. In addition, the right-most column of the table belo w shows the proportion of COPD subjects in the study in each GOLD category.

Table 8B-3. Death Rates and Hazard Ratios fo r Subjects with Varying Degrees of Severity of COPD (from Mannino et al., 2006)

GOLD* Category N Deaths (%) PersonYears Death Rate per 1,000 Person-Years Ratio of Death Rate to Death Rate for Normal Population Hazard Ratio** Proportion of COPD Subjects in GOLD Category

GOLD 3 or 4 271 92 33.9% 2,143 42.9 7.97 5.7 4.77% GOLD 2 1,484 232 15.6% 12,852 18.1 3.35 2.4 26.14% GOLD 1 1,679 137 8.2% 15,031 9.1 1.69 1.4 29.57% GOLD 0 2,244 204 9.1% 20,191 10.1 1.88 1.5 39.52% Restricted 1,101 150 13.6% 9,644 15.6 2.89 2.3 Normal 8,661 427 4.9% 79,317 5.4 1.00 1.0

Total 15,440 1,242 8.0% 139,178 8.9 *Global Inititative on Obstructive Lung Disease (GOL D) guidelines for the staging of COPD severity. **See Mannino et al. (2006), p. 117.



### The ratios of unadjusted death rates are somewhat larger than the corresponding hazard ratios because these ratios were not adjusted for age. COPD is a progressive disease, so it would be expected that the proportion of older individuals would increase as the stages (and severity) increased, and this was indeed the case in the Mannino study. The hazard ratios, being based on regressions that took age into acc ount, avoid this problem. We th erefore used the hazard ratios to derive age-specific mortality rates for indi viduals with (1) severe COPD and (2) COPD of “average” severity. In particular, to derive age-specific mortality probabilities for the subpopulation with severe COPD, we multiplied each age-specific mortality probability for the general population by 5.7 (the hazard ratio for GOLD 3 or 4); to derive age-specific mortality probabilities for the subpopulation with “averag e” COPD, we multiplied each age-specific mortality probability for the general population by a weighted average of the GOLD categoryspecific hazard ratios, where the weight fo r a GOLD category was the proportion of COPD subjects in that GOLD category (given in the right-most column of Table 1 above). The weighted average hazard ratio was 1.906. Age-specifi c life expectancies were then derived for the severe COPD and “average” COPD subpopul ations using these adjusted mortality probabilities and the method for calculati ng life expectancies described above.
Once an appropriate set of life expectancies has been determined (e.g., life expectancies for the general population or life expectancies for a subpopulation with severe COPD), these then provide the number of life years lo st for an individual who dies at a given age. This information can then be combined with the estimated number of O 3 

### -related premature deaths at each age calculated with BenMAP (see previous subsectio n). Because BenMAP calculates numbers of premature deaths avoided within age intervals, we can either allocate the premature deaths avoided within an age interval uniformly to the ag es within the interval or, alternatively, we can calculate average life expectancies for the age in tervals. We illustrate the first approach in

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### Cost-Be nefit Analysis

calculating O 3 

### -related life years saved and the second approach in calculating PM 2.5 

### -related life years saved (see Section 8B.4.4).

Total O 3 

### -related life years gained was calculated as the sum of life years gained at each age:

N 

### Total life years gained = = 

# ∑ LE i 

### × M i i = 0


### where 

### LE i 

### is the remaining life expectancy for age 

### i , 

### M i 

### is the number of premature deaths avoided among individuals age 

### i , and 

### N is the oldest age considered.
For the purposes of determining cost effectivenes s, it is also necessary to consider the timedependent nature of the gains in life years. Standard economic theory suggests that benefits occurring in future years should be discounted rela tive to benefits occurrin g in the present. OMB and EPA guidance suggest discount rates of three and seven percent. Se lection of a 3 percent discount rate is also consistent with recommendations from the U. S. Public Health Service Panel on Cost Effectiveness in Health and Medicine (Gold et al., 1996).
Discounted total life years gained is calculated as follows:

LE 

### Discounted LY = 

# ∫

0 

### e − rt 

### dt ,

where 

### r is the discount rate, 

### t indicates time, and 

### LE is the life expectancy at the time when the premature death would have occurred. Because O 3 

### -related premature mortality is associated only with short-term exposures, all O 3 

### -related premature deaths are assumed to occur in the year of exposure. We ther efore did not discount O 3 

### -related premature deaths avoided.
Undiscounted age-specific life expectancies, a nd age-specific life expe ctancies using discount rates of 3 percent and 7 per cent are given for the general population, the subpopulation of individuals with severe COPD , and the subpopulation of indivi duals with COPD of average severity in Tables 8B-4, 8B-5, and 8B-6, respectively. The O 3 

### -related (discounted) life years saved, based on each of the two O 3 

### -mortality studies and each of th e assumptions about relevant life expectancies, are given, using 3 percent and 7 percent discount rates, in Tables 8B-7 and 8B8, respectively. The O 3 

### -related (discounted) lif e years saved, under the first assumption – that the observed statistical associa tion between premature mortality and short-term exposures to O 3 

### is not actually a causal relationship – is zero in all cases (i.e., regardless of the mortality study used and the scenario considered), and is therefore not shown in these Tables.

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### Final Regulatory Impact Analysis

Table 8B-4. Undiscounted and Discounted Age- Specific Life Expectancies for the General Population

Age at Age-Specific 3% Discounted 7% Discounted Beginning Mortality Deaths in Life-Years Life Remaining Life Remaining Life

of Year Probability* Cohort Size Year in Year Expectancy Expectancy Expectancy 0 0.006799 1,000,000 6,799 996,600 77.8 30.9 15.2 1 0.000483 993,201 480 992,961 77.3 30.8 15.2 2 0.000297 992,721 295 992,574 76.4 30.7 15.2 3 0.000224 992,427 222 992,315 75.4 30.6 15.2 4 0.000188 992,204 187 992,111 74.4 30.5 15.2 5 0.000171 992,017 170 991,932 73.4 30.4 15.2 6 0.000161 991,847 159 991,768 72.4 30.3 15.2 7 0.000151 991,688 149 991,613 71.4 30.2 15.2 8 0.000136 991,538 135 991,471 70.4 30.1 15.2 9 0.000119 991,403 118 991,345 69.5 29.9 15.1 10 0.000106 991,286 105 991,233 68.5 29.8 15.1 11 0.000112 991,180 111 991,125 67.5 29.7 15.1 12 0.000149 991,070 148 990,996 66.5 29.5 15.1 13 0.000227 990,922 225 990,809 65.5 29.4 15.1 14 0.000337 990,697 333 990,530 64.5 29.2 15.1 15 0.000460 990,363 456 990,135 63.5 29.1 15.1 16 0.000579 989,907 573 989,621 62.5 28.9 15.1 17 0.000684 989,334 677 988,996 61.6 28.8 15.0 18 0.000763 988,657 755 988,280 60.6 28.6 15.0 19 0.000819 987,902 809 987,498 59.7 28.4 15.0 20 0.000873 987,093 862 986,662 58.7 28.3 15.0 21 0.000926 986,231 913 985,775 57.8 28.1 15.0 22 0.000960 985,318 946 984,845 56.8 27.9 15.0 23 0.000972 984,372 957 983,893 55.9 27.8 14.9 24 0.000969 983,415 953 982,939 54.9 27.6 14.9 25 0.000960 982,462 943 981,991 54.0 27.4 14.9 26 0.000954 981,519 936 981,051 53.0 27.2 14.9 27 0.000952 980,583 933 980,117 52.1 27.0 14.8 28 0.000958 979,650 939 979,181 51.1 26.8 14.8 29 0.000973 978,712 952 978,235 50.2 26.5 14.8 30 0.000994 977,759 972 977,273 49.2 26.3 14.7 31 0.001023 976,787 999 976,287 48.3 26.1 14.7 32 0.001063 975,788 1,038 975,269 47.3 25.9 14.7 33 0.001119 974,750 1,091 974,205 46.4 25.6 14.6 34 0.001192 973,659 1,160 973,079 45.4 25.4 14.6 35 0.001275 972,499 1,240 971,879 44.5 25.1 14.5 36 0.001373 971,259 1,334 970,592 43.5 24.9 14.5 37 0.001493 969,925 1,448 969,201 42.6 24.6 14.4 38 0.001634 968,477 1,582 967,686 41.7 24.3 14.4 39 0.001788 966,895 1,729 966,031 40.7 24.0 14.3 40 0.001945 965,166 1,877 964,228 39.8 23.7 14.3 41 0.002107 963,290 2,029 962,275 38.9 23.5 14.2 42 0.002287 961,260 2,198 960,161 38.0 23.2 14.1 43 0.002494 959,062 2,392 957,866 37.0 22.8 14.0 44 0.002727 956,670 2,609 955,366 36.1 22.5 14.0 45 0.002982 954,061 2,845 952,639 35.2 22.2 13.9 46 0.003246 951,216 3,088 949,672 34.3 21.9 13.8



### 8-7 4

### Cost-Be nefit Analysis

Table 8B-4. Undiscounted and Discounted Age- Specific Life Expectancies for the General Population (cont’d)

Age at Age-Specific 3% Discounted 7% Discounted Beginning Mortality Deaths in Life-Years Life Remaining Life Remaining Life

of Year Probability* Cohort Size Year in Year Expectancy Expectancy Expectancy 47 0.003520 948,129 3,337 946,460 33.5 21.6 13.7 48 0.003799 944,792 3,589 942,997 32.6 21.2 13.6 49 0.004088 941,203 3,848 939,279 31.7 20.9 13.5 50 0.004404 937,355 4,128 935,291 30.8 20.5 13.4 51 0.004750 933,227 4,433 931,010 30.0 20.2 13.3 52 0.005113 928,794 4,749 926,419 29.1 19.8 13.2 53 0.005488 924,045 5,071 921,510 28.2 19.4 13.0 54 0.005879 918,974 5,403 916,273 27.4 19.1 12.9 55 0.006295 913,571 5,751 910,696 26.6 18.7 12.7 56 0.006754 907,820 6,131 904,755 25.7 18.3 12.6 57 0.007280 901,689 6,564 898,407 24.9 17.9 12.4 58 0.007903 895,125 7,074 891,588 24.1 17.5 12.3 59 0.008633 888,051 7,667 884,217 23.3 17.1 12.1 60 0.009493 880,384 8,357 876,205 22.5 16.7 11.9 61 0.010449 872,027 9,112 867,471 21.7 16.2 11.8 62 0.011447 862,915 9,878 857,976 20.9 15.8 11.6 63 0.012428 853,037 10,601 847,736 20.1 15.4 11.4 64 0.013408 842,435 11,295 836,788 19.4 15.0 11.2 65 0.014473 831,140 12,029 825,126 18.6 14.5 11.0 66 0.015703 819,111 12,863 812,680 17.9 14.1 10.7 67 0.017081 806,249 13,771 799,363 17.2 13.7 10.5 68 0.018623 792,477 14,758 785,098 16.5 13.2 10.3 69 0.020322 777,719 15,805 769,817 15.8 12.8 10.0 70 0.022104 761,915 16,841 753,494 15.1 12.3 9.8 71 0.024023 745,073 17,899 736,124 14.4 11.9 9.5 72 0.026216 727,174 19,064 717,642 13.7 11.5 9.3 73 0.028745 708,110 20,355 697,933 13.1 11.0 9.0 74 0.031561 687,756 21,706 676,903 12.5 10.6 8.7 75 0.034427 666,050 22,930 654,585 11.9 10.2 8.4 76 0.037379 643,120 24,039 631,100 11.3 9.7 8.2 77 0.040756 619,080 25,231 606,465 10.7 9.3 7.9 78 0.044764 593,849 26,583 580,558 10.1 8.9 7.6 79 0.049395 567,266 28,020 553,256 9.6 8.5 7.3 80 0.054471 539,246 29,373 524,560 9.0 8.1 7.0 81 0.059772 509,873 30,476 494,635 8.5 7.7 6.7 82 0.065438 479,397 31,371 463,712 8.1 7.3 6.4 83 0.071598 448,026 32,078 431,987 7.6 6.9 6.1 84 0.078516 415,949 32,659 399,619 7.1 6.5 5.8 85 0.085898 383,290 32,924 366,828 6.7 6.2 5.6 86 0.093895 350,366 32,897 333,917 6.3 5.8 5.3 87 0.102542 317,468 32,554 301,192 5.9 5.5 5.0 88 0.111875 284,915 31,875 268,977 5.5 5.1 4.7 89 0.121928 253,040 30,853 237,613 5.1 4.8 4.5 90 0.132733 222,187 29,492 207,441 4.8 4.5 4.2 91 0.144318 192,695 27,809 178,791 4.4 4.2 3.9 92 0.156707 164,886 25,839 151,967 4.1 3.9 3.7 93 0.169922 139,047 23,627 127,234 3.7 3.6 3.4 94 0.183975 115,420 21,234 104,803 3.4 3.3 3.1 95 0.198875 94,186 18,731 84,820 3.0 3.0 2.8 96 0.214620 75,454 16,194 67,357 2.7 2.6 2.5 97 0.231201 59,260 13,701 52,410 2.3 2.2 2.2 98 0.248600 45,559 11,326 39,896 1.8 1.8 1.8 99 0.266786 34,233 9,133 29,667 1.2 1.2 1.2 100 1.000000 25,100 25,100 12,550 0.5 0.5 0.5 *Mortality probabilities for the general population taken from Table 1. Life table for the total population: United States, 2004. CDC National Vital Statistics Reports, Vol. 56, No. 9, December 28, 2007 http://www.cd c.gov/nchs/data/nvsr/nvsr56/nvsr56_09.pdf



### 8-7 5

### Final Regulatory Impact Analysis

Table 8B-5. Undiscounted and Discounted Age-Specific Life Expectancies for the Subpopulation with Severe COPD

Age at Age-Specific 3% Discounted 7% Discounted Beginning Mortality Deaths in Life-Years Life Remaining Life Remaining Life

of Year Probability* Cohort Size Year in Year Expectancy Expectancy Expectancy 0 0.038755 1,000,000 38,755 980,622 54.5 27.5 14.9 1 0.002752 961,245 2,646 959,922 55.7 27.7 14.9 2 0.001692 958,599 1,622 957,788 54.9 27.5 14.9 3 0.001277 956,977 1,222 956,366 53.9 27.4 14.9 4 0.001074 955,755 1,026 955,242 53.0 27.2 14.9 5 0.000978 954,729 933 954,263 52.1 27.0 14.8 6 0.000916 953,796 873 953,359 51.1 26.8 14.8 7 0.000859 952,923 819 952,513 50.2 26.5 14.8 8 0.000777 952,104 739 951,734 49.2 26.3 14.7 9 0.000677 951,365 644 951,043 48.2 26.1 14.7 10 0.000606 950,721 576 950,433 47.3 25.8 14.7 11 0.000636 950,145 605 949,842 46.3 25.6 14.6 12 0.000850 949,540 807 949,137 45.3 25.3 14.6 13 0.001295 948,733 1,229 948,119 44.4 25.1 14.5 14 0.001918 947,505 1,818 946,596 43.4 24.8 14.5 15 0.002625 945,687 2,482 944,446 42.5 24.6 14.4 16 0.003301 943,205 3,113 941,648 41.6 24.3 14.4 17 0.003901 940,092 3,667 938,258 40.8 24.0 14.3 18 0.004351 936,424 4,075 934,387 39.9 23.8 14.3 19 0.004671 932,350 4,355 930,172 39.1 23.5 14.2 20 0.004976 927,995 4,618 925,686 38.3 23.3 14.1 21 0.005278 923,377 4,873 920,941 37.5 23.0 14.1 22 0.005472 918,504 5,026 915,991 36.7 22.7 14.0 23 0.005542 913,478 5,063 910,947 35.9 22.4 13.9 24 0.005522 908,415 5,016 905,907 35.1 22.2 13.9 25 0.005470 903,399 4,942 900,928 34.2 21.9 13.8 26 0.005436 898,458 4,884 896,016 33.4 21.6 13.7 27 0.005425 893,573 4,847 891,150 32.6 21.2 13.6 28 0.005461 888,726 4,853 886,300 31.8 20.9 13.5 29 0.005547 883,873 4,903 881,422 31.0 20.6 13.4 30 0.005668 878,970 4,982 876,479 30.1 20.2 13.3 31 0.005830 873,988 5,095 871,440 29.3 19.9 13.2 32 0.006061 868,893 5,266 866,260 28.5 19.5 13.1 33 0.006380 863,626 5,510 860,872 27.6 19.2 12.9 34 0.006792 858,117 5,828 855,203 26.8 18.8 12.8 35 0.007269 852,289 6,195 849,191 26.0 18.4 12.7 36 0.007827 846,094 6,622 842,783 25.2 18.0 12.5 37 0.008510 839,472 7,144 835,900 24.4 17.6 12.3 38 0.009312 832,328 7,750 828,452 23.6 17.2 12.2 39 0.010191 824,577 8,403 820,376 22.8 16.8 12.0 40 0.011084 816,174 9,047 811,651 22.0 16.4 11.8 41 0.012008 807,128 9,692 802,282 21.3 16.0 11.7 42 0.013035 797,436 10,395 792,238 20.5 15.6 11.5 43 0.014215 787,041 11,187 781,447 19.8 15.2 11.3 44 0.015546 775,854 12,061 769,823 19.1 14.8 11.1 45 0.016996 763,792 12,981 757,301 18.4 14.4 10.9 46 0.018503 750,811 13,892 743,865 17.7 14.0 10.7



### 8- 76

### Cost-Be nefit Analysis

Table 8B-5. Undiscounted and Discounted Age-Specific Life Expectancies for the Subpopulation with Severe COPD (cont’d)

Age at Age-Specific 3% Discounted 7% Discounted Beginning Mortality Deaths in Life-Years Life Remaining Life Remaining Life

of Year Probability* Cohort Size Year in Year Expectancy Expectancy Expectancy 47 0.020061 736,919 14,784 729,527 17.0 13.6 10.4 48 0.021652 722,135 15,636 714,317 16.3 13.1 10.2 49 0.023303 706,500 16,464 698,268 15.7 12.7 10.0 50 0.025103 690,036 17,322 681,375 15.0 12.3 9.8 51 0.027075 672,714 18,214 663,607 14.4 11.9 9.5 52 0.029144 654,500 19,075 644,963 13.8 11.5 9.3 53 0.031280 635,425 19,876 625,487 13.2 11.1 9.0 54 0.033512 615,549 20,628 605,235 12.6 10.7 8.8 55 0.035880 594,921 21,346 584,248 12.0 10.3 8.5 56 0.038497 573,575 22,081 562,535 11.5 9.9 8.2 57 0.041497 551,494 22,885 540,052 10.9 9.5 8.0 58 0.045046 528,609 23,812 516,703 10.3 9.0 7.7 59 0.049211 504,797 24,842 492,376 9.8 8.6 7.4 60 0.054108 479,956 25,969 466,971 9.3 8.2 7.1 61 0.059560 453,986 27,040 440,467 8.8 7.9 6.9 62 0.065249 426,947 27,858 413,018 8.3 7.5 6.6 63 0.070839 399,089 28,271 384,953 7.9 7.1 6.3 64 0.076425 370,818 28,340 356,648 7.4 6.8 6.0 65 0.082495 342,478 28,253 328,352 7.0 6.4 5.8 66 0.089507 314,225 28,125 300,163 6.6 6.1 5.5 67 0.097361 286,100 27,855 272,173 6.2 5.7 5.2 68 0.106149 258,245 27,413 244,539 5.8 5.4 5.0 69 0.115833 230,833 26,738 217,463 5.4 5.1 4.7 70 0.125993 204,094 25,714 191,237 5.1 4.8 4.4 71 0.136933 178,380 24,426 166,167 4.7 4.5 4.2 72 0.149433 153,954 23,006 142,451 4.4 4.2 3.9 73 0.163847 130,948 21,455 120,220 4.1 3.9 3.7 74 0.179896 109,493 19,697 99,644 3.8 3.6 3.5 75 0.196231 89,795 17,621 80,985 3.5 3.4 3.2 76 0.213062 72,175 15,378 64,486 3.2 3.1 3.0 77 0.232309 56,797 13,194 50,200 3.0 2.9 2.8 78 0.255152 43,603 11,125 38,040 2.7 2.7 2.6 79 0.281552 32,477 9,144 27,905 2.5 2.4 2.4 80 0.310486 23,333 7,245 19,711 2.3 2.2 2.2 81 0.340699 16,089 5,481 13,348 2.1 2.0 2.0 82 0.372994 10,607 3,956 8,629 1.9 1.9 1.8 83 0.408108 6,651 2,714 5,294 1.7 1.7 1.7 84 0.447543 3,937 1,762 3,056 1.5 1.5 1.5 85 0.489619 2,175 1,065 1,642 1.4 1.4 1.4 86 0.535199 1,110 594 813 1.3 1.3 1.2 87 0.584489 516 302 365 1.1 1.1 1.1 88 0.637689 214 137 146 1.0 1.0 1.0 89 0.694992 78 54 51 0.9 0.9 0.9 90 0.756579 24 18 15 0.8 0.8 0.8 91 0.822612 6 5 3 0.6 0.6 0.6 92 0.893232 1 0 0 0.0 0.0 0.0 *Mortality probabilities derived from mortality proba bilities for the general po pulation by multiplying by the hazard ratio (5.7) for GOLD 3 or 4, from Mannino et al. (2006).



### 8- 77

### Final Regulatory Impact Analysis

Table 8B-6. Undiscounted and Discounted Age-Specific Life Expectancies for the Subpopulation with COPD of Average Severity

Age at Age-Specific 3% Discounted 7% Discounted Beginning Mortality Deaths in Life-Years Life Remaining Life Remaining Life

of Year Probability* Cohort Size Year in Year Expectancy Expectancy Expectancy 0 0.012960 1,000,000 12,960 993,520 69.6 29.9 15.1 1 0.000920 987,040 908 986,586 69.5 29.9 15.1 2 0.000566 986,132 558 985,853 68.6 29.8 15.1 3 0.000427 985,574 421 985,363 67.6 29.7 15.1 4 0.000359 985,153 354 984,976 66.7 29.5 15.1 5 0.000327 984,799 322 984,638 65.7 29.4 15.1 6 0.000306 984,477 301 984,326 64.7 29.3 15.1 7 0.000287 984,176 283 984,034 63.7 29.1 15.1 8 0.000260 983,893 256 983,765 62.7 29.0 15.1 9 0.000226 983,638 223 983,526 61.8 28.8 15.1 10 0.000203 983,415 199 983,315 60.8 28.6 15.0 11 0.000213 983,216 209 983,111 59.8 28.5 15.0 12 0.000284 983,006 279 982,867 58.8 28.3 15.0 13 0.000433 982,727 426 982,514 57.8 28.1 15.0 14 0.000642 982,302 630 981,986 56.8 27.9 15.0 15 0.000878 981,671 862 981,241 55.9 27.8 14.9 16 0.001104 980,810 1,083 980,268 54.9 27.6 14.9 17 0.001304 979,727 1,278 979,088 54.0 27.4 14.9 18 0.001455 978,449 1,424 977,737 53.1 27.2 14.9 19 0.001562 977,025 1,526 976,262 52.1 27.0 14.8 20 0.001664 975,499 1,623 974,688 51.2 26.8 14.8 21 0.001765 973,876 1,719 973,017 50.3 26.6 14.8 22 0.001830 972,157 1,779 971,268 49.4 26.4 14.7 23 0.001853 970,378 1,798 969,479 48.5 26.1 14.7 24 0.001846 968,580 1,788 967,686 47.6 25.9 14.7 25 0.001829 966,792 1,769 965,907 46.7 25.7 14.6 26 0.001818 965,023 1,754 964,146 45.7 25.5 14.6 27 0.001814 963,269 1,747 962,395 44.8 25.2 14.5 28 0.001826 961,521 1,756 960,643 43.9 25.0 14.5 29 0.001855 959,766 1,780 958,875 43.0 24.7 14.5 30 0.001896 957,985 1,816 957,077 42.1 24.4 14.4 31 0.001949 956,169 1,864 955,237 41.1 24.2 14.3 32 0.002027 954,305 1,934 953,338 40.2 23.9 14.3 33 0.002133 952,371 2,032 951,355 39.3 23.6 14.2 34 0.002271 950,339 2,158 949,260 38.4 23.3 14.1 35 0.002431 948,181 2,305 947,028 37.5 23.0 14.1 36 0.002617 945,876 2,476 944,638 36.6 22.7 14.0 37 0.002846 943,400 2,685 942,058 35.7 22.4 13.9 38 0.003114 940,716 2,929 939,251 34.8 22.0 13.8 39 0.003408 937,786 3,196 936,189 33.9 21.7 13.7 40 0.003707 934,591 3,464 932,859 33.0 21.4 13.6 41 0.004016 931,127 3,739 929,257 32.1 21.0 13.5 42 0.004359 927,388 4,042 925,366 31.2 20.7 13.4 43 0.004753 923,345 4,389 921,151 30.4 20.3 13.3 44 0.005199 918,956 4,777 916,567 29.5 20.0 13.2 45 0.005683 914,179 5,196 911,581 28.7 19.6 13.1 46 0.006187 908,983 5,624 906,171 27.8 19.2 13.0



### 8- 78

### Cost-Be nefit Analysis

Table 8B-6. Undiscounted and Discounted Age-Specific Life Expectancies for the Subpopulation with COPD of Average Severity (cont’d)

Age at Age-Specific 3% Discounted 7% Discounted Beginning Mortality Deaths in Life-Years Life Remaining Life Remaining Life

of Year Probability* Cohort Size Year in Year Expectancy Expectancy Expectancy 47 0.006709 903,359 6,060 900,329 27.0 18.9 12.8 48 0.007241 897,298 6,497 894,050 26.2 18.5 12.7 49 0.007793 890,801 6,942 887,331 25.3 18.1 12.5 50 0.008395 883,860 7,420 880,150 24.5 17.7 12.4 51 0.009054 876,440 7,935 872,472 23.7 17.3 12.2 52 0.009746 868,505 8,464 864,273 23.0 16.9 12.1 53 0.010460 860,040 8,996 855,542 22.2 16.5 11.9 54 0.011207 851,044 9,537 846,276 21.4 16.1 11.7 55 0.011999 841,507 10,097 836,458 20.6 15.7 11.5 56 0.012874 831,410 10,703 826,058 19.9 15.3 11.3 57 0.013877 820,707 11,389 815,012 19.1 14.8 11.1 58 0.015064 809,318 12,191 803,222 18.4 14.4 10.9 59 0.016456 797,127 13,118 790,568 17.7 14.0 10.7 60 0.018094 784,009 14,186 776,916 17.0 13.5 10.4 61 0.019917 769,823 15,333 762,157 16.3 13.1 10.2 62 0.021820 754,490 16,463 746,259 15.6 12.7 10.0 63 0.023689 738,028 17,483 729,286 14.9 12.3 9.7 64 0.025557 720,545 18,415 711,337 14.3 11.8 9.5 65 0.027587 702,130 19,370 692,445 13.6 11.4 9.2 66 0.029932 682,760 20,436 672,542 13.0 11.0 8.9 67 0.032558 662,324 21,564 651,542 12.4 10.5 8.7 68 0.035497 640,760 22,745 629,388 11.8 10.1 8.4 69 0.038735 618,015 23,939 606,046 11.2 9.7 8.1 70 0.042133 594,076 25,030 581,561 10.6 9.3 7.8 71 0.045791 569,046 26,057 556,017 10.1 8.9 7.6 72 0.049971 542,989 27,134 529,422 9.6 8.4 7.3 73 0.054791 515,855 28,264 501,723 9.0 8.0 7.0 74 0.060158 487,591 29,333 472,924 8.5 7.6 6.7 75 0.065621 458,258 30,071 443,223 8.0 7.3 6.4 76 0.071249 428,187 30,508 412,933 7.6 6.9 6.1 77 0.077685 397,679 30,894 382,232 7.1 6.5 5.8 78 0.085324 366,785 31,296 351,137 6.7 6.1 5.6 79 0.094152 335,489 31,587 319,696 6.2 5.8 5.3 80 0.103828 303,902 31,554 288,125 5.8 5.4 5.0 81 0.113932 272,349 31,029 256,834 5.5 5.1 4.7 82 0.124731 241,319 30,100 226,269 5.1 4.8 4.5 83 0.136473 211,219 28,826 196,806 4.8 4.5 4.2 84 0.149661 182,394 27,297 168,745 4.4 4.2 4.0 85 0.163731 155,096 25,394 142,399 4.1 3.9 3.7 86 0.178974 129,702 23,213 118,096 3.8 3.7 3.5 87 0.195456 106,489 20,814 96,082 3.5 3.4 3.3 88 0.213247 85,675 18,270 76,540 3.3 3.2 3.1 89 0.232409 67,405 15,666 59,572 3.0 3.0 2.8 90 0.253004 51,740 13,090 45,194 2.8 2.7 2.7 91 0.275086 38,649 10,632 33,333 2.6 2.5 2.5 92 0.298702 28,017 8,369 23,833 2.4 2.4 2.3 93 0.323890 19,649 6,364 16,467 2.2 2.2 2.1 94 0.350677 13,285 4,659 10,955 2.0 2.0 2.0 95 0.379078 8,626 3,270 6,991 1.9 1.8 1.8 96 0.409089 5,356 2,191 4,261 1.7 1.7 1.6 97 0.440695 3,165 1,395 2,468 1.5 1.5 1.5 98 0.473858 1,770 839 1,351 1.3 1.3 1.3 99 0.508523 931 474 695 1.0 1.0 1.0 100 1.000000 458 458 229 0.5 0.5 0.5 *Mortality probabilities derived from mortality probabilities for the general population (see Table 2) by multiplying by the weighted average of hazard ratios for the GOLD severity categories (1.906) from Mannino et al. (2006).



### 8- 79

### Final Regulatory Impact Analysis

Table 8B-7. Estimated O 3 -Related Life Years Saved in 2020 and in 2030 Under the Final SSI & RME Rule, Using a 3 Percent Discount Rate

Estimated O 3 -Related Life Years Saved (95% CI)*
2020 2030 Mortality Study: Bell et al (2004) Levy et al. (2005) Bell et al (2004) Levy et al. (2005) Assuming Life Expectancies of the General Population 500 (150 - 800) 2,200 (1,500 - 2,900) 700 (250 - 1,200) 3,500 (2,400 - 4,600)Assuming Life Expectancies of the SubPopulation with COPD of Average Severity 360 (120 - 600) 1,700 (1,200 - 2,200) 560 (180 - 900) 2,700 (1,800 - 3,500)Assuming Life Expectancies of the SubPopulation with Severe COPD 190 (60 - 320) 1,000 (700 - 1,300) 290 (100 - 490) 1,500 (1,000 - 1,900) *95 percent confidence or credible intervals are based on the uncertainty about the coefficient in the mortality C-R functions. All estimates rounded to two significant figures.

Table 8B-8. Estimated O 3 -Related Life Years Saved in 2020 and in 2030 Under the Final SSI & RME Rule, Using a 7 Percent Discount Rate

Estimated O 3 -Related Life Years Saved (95% CI)*
2020 2030 Mortality Study: Bell et al (2004) Levy et al. (2005) Bell et al (2004) Levy et al. (2005) Assuming Life Expectancies of the General Population 360 (120 - 600) 1,700 (1,200 - 2,200) 590 (190 - 1,000) 2,700 (1,900 - 3,500)Assuming Life Expectancies of the SubPopulation with COPD of Average Severity 290 (90 - 500) 1,400 (900 - 1,800) 460 (150 - 800) 2,100 (1,500 - 2,800)Assuming Life Expectancies of the SubPopulation with Severe COPD 170 (50 - 280) 800 (600 - 1,100) 250 (80 - 430) 1,200 (800 - 1,600) *95 percent confidence or credible intervals are based on the uncertainty about the coefficient in the mortality C-R functions. All estimates rounded to two significant figures.



### 8B.4.3 Reductions in PM 2.5 

### -Related Premature Deaths
To generate PM 2.5 

### -related health outcomes, we used the sa me framework as for the benefit-cost analysis described in Chapter 8 and briefly su mmarized above in the introductory portion of Section 8B.4.
As in several recent air pollution health imp act assessments (e.g., Kunz li et al., 2000; EPA, 2004), we focused on the prospective cohort long-te rm exposure studies in deriving the health impact function for the estimate of premature mort ality. Cohort analyses are better able to capture the full public health impact of exposur e to air pollution over time (Kunzli et al., 2001; NRC, 2002). We selected an effect estimate from the extended analysis of the ACS cohort (Pope et al., 2002) as well as from the Harvard Six City Study (Laden et al., 2006). Given the focus in

8-8 0

### Cost-Be nefit Analysis

this analysis on developing a broa der expression of uncertainties in the benefits estimates, and the weight that was placed on bot h the ACS and Harvard Six-city studies by experts participating in the PM 2.5 

### mortality expert elicitati on, we elected to provide estimates derived from both Pope et al. (2002) and La den et al. (2006).
This latest re-analysis of the ACS cohort data (Pope et al, 2002) provide s additional refinements to the analysis of PM-related mortality by (a ) extending the follow-up period for the ACS study subjects to 16 years, which trip les the size of the mortality data set; (b) substant ially increasing exposure data, including consider ation for cohort exposure to PM 2.5 

### following implementation of PM 2.5 

### standard in 1999; (c) controlling for a va riety of personal risk factors including occupational exposure and diet; and (d) using adva nced statistical methods to evaluate specific issues that can adversely affect risk estimates, including the possibility of spatial autocorrelation of survival times in communities located near each other. The effect estimate from Pope et al. (2002) quantifies the relations hip between annual mean PM 2.5 

### levels and all-cause mortality in adults 30 and older. We selected the effect estimate estimated using the measure of PM representing average exposure over the follo w-up period, calculated as the average of 1979–1984 and 1999–2000 PM 2.5 

### levels. The effect estimate from this study is 0.0058, which is equivalent to a relative risk of 1.06 for a 10 : g change in PM 2.5 

### . A recent follow up to the Harvard 6-city study (Lad en et al., 2006) both confirmed the effect size from the first study and provided additio nal confirmation that reductions in PM 2.5 

### directly result in reductions in the risk of pr emature death. This additional evidence stems from the observed reductions in PM 2.5 

### in each city during the extended fo llow-up period. Laden et al. (2006) found that mortality rates consistently went down at a rate proportionate to the observed reductions in PM 2.5 

### . The effect estimate obtained from Laden et al. (2006) is 0.0148, which is equivalent to a relative risk of 1.16 for a 10 μ g/m 3 

### change in PM 2.5 

### . Age, cause, and county-specific mortality rate s were obtained from CDC for the years 1996 through 1998. CDC maintains an online data repo sitory of health statistics, CDC Wonder, accessible at http://wonder.cdc.gov/ . The mortality rates provided are derived from U.S. death records and U.S. Census Bureau postcensal popula tion estimates. Mortality rates were averaged across 3 years (1996 through 1998) to provide more stable estimates. When estimating rates for age groups that differed from the CDC Wonder gr oupings, we assumed that rates were uniform across all ages in th e reported age group. For example, to es timate mortality rates for individuals ages 30 and up, we scaled the 25- to 34-year old death count a nd population by one-half and then generated a population-weighted mortality rate using data for the older age groups.

The reductions in incidence of PM 2.5 

### -related premature mortality within each age group associated with the Final SSI & RME Rule in 2020 and 2030 are summarized in Table 8B-9.

8-8 1

### Final Regulatory Impact Analysis

Table 8B-9: Estimated Reduction in Incidence of PM 2.5 -Related All-Cause Premature Mortality Under the Final SSI & RME Rule in 2020 and 2030

Reduction in PM 2.5 -Related Premature Mortality (90% CI)* Age Interval 2020 2030 Pope et al. (2002) Laden et al. (2006) Pope et al. (2002) Laden et al. (2006)
25 - 29

--- 3 (2 - 5) --- 4 (2 - 5)
30 - 34 1 (0 - 2) 3 (2 - 4) 2 (1 - 3) 4 (2 - 5)
35 - 44 3 (1 - 5) 7 (4 - 10) 5 (2 - 8) 1 1 (6 - 17)
45 - 54 5 (2 - 9) 1 2 (7 - 18) 9 (3 - 14) 2 0 (11 - 29)
55 - 64 13 (5 - 21) 29 (16 - 43) 22 (9 - 35) 50 (27 - 72)
65 - 74 19 (7 - 30) 42 (23 - 61) 51 (20 - 81) 110 (62 - 170)
75 - 84 31 (12 - 49) 69 (38 - 100) 69 (27 - 110) 160 (85 - 230)
85+ 47 (18 - 75) 110 (57 - 150) 68 (27 - 110) 150 (84 - 220)
Total: 120 (47 - 190) 270 (150 - 390) 230 (88 - 360) 510 (280 - 750) *90 percent confidence or credible intervals (CIs) are based on the uncertainty about the coefficient in the mortality C-R functions. All estimates rounded to two significant figures.



### 8B.4.4 Life Years Saved as a Result of Reductions in PM 2.5 

### -Related Mortality Risk
To calculate life years saved asso ciated with a given change in air pollution, we used a life table approach coupled with age-specific estimates of reductions in premature mortality. We began with the complete unabridged lif e table for the United States in 2000, obtained from CDC (CDC, 2002). For each 1-year age inte rval (e.g., zero to one, one to two) the life table provides estimates of the baseline probability of dying dur ing the interval, person years lived in the interval, and remaining life expectancy. From this unabridged life table, we constructed an abridged life table to match the age intervals fo r which we have predictions of changes in incidence of premature mortality. We used th e abridgement method described in CDC (2002). Table 8B-10 presents the abridged life table for 10- year age intervals for adults over 30 (to match the Pope et al. [2002] study populati on). Note that the abridgemen t actually includes one 5-year interval, covering adults 30 to 34, with the remain ing age intervals covering 10 years each. This is to provide conformity with the age intervals available for mortality rates.
From the abridged life table (Table 8B-10), we obtained the remaining life expectancy for each age cohort, conditional on surviving to that age. Th is is then the number of life years lost for an individual in the genera l population dying during that age interval. This information can then be combined with the estimated number of premature deaths in each age interval calculated with

8-8 2

### Cost-Be nefit Analysis

BenMAP (see previous subsection). Total life y ears gained will then be the sum of life years gained in each age interval:

N 

### Total Life Years = 

# ∑ LE i 

### × M i 

### , i = 1


### where 

### LE i 

### is the remaining life expectancy for age interval 

### i , 

### M i 

### is the change in incidence of mortality in age interval 

### i , and 

### N is the number of age intervals.
As noted above, for the purposes of determining cost-effectiveness, it is also necessary to consider the time-dependent nature of the gains in life years. Standard economic theory suggests that benefits occurring in future years should be discounted relative to benefits occurring in the present. OMB and EPA guidance suggest discount ra tes of three and seven pe rcent. Selection of a 3 percent discount rate is also consistent with recommendations from the U.S. Public Health Service Panel on Cost Effectiveness in Health and Medicine (Gold et al., 1996).

Table 8B-10. Abridged Life Table for th e Total Population, United States, 2000

Total Person Number of Probability Number Years Person

of Dying Dying Lived Years Between Number Between Between Lived Expectation Ages x to Surviving to Ages x to Ages x to Above Age of Life at Age Interval x+1 Age x x+1 x+1 x Age x

Start Age End Age q x I x d x L x T x e x 30 35 0.00577 97,696 564 487,130 4,723,539 48.3
35 45 0.01979 97,132 1,922 962,882 4,236,409 43.6
45 55 0.04303 95,210 4,097 934,026 3,273,527 34.4
55 65 0.09858 91,113 8,982 872,003 2,339,501 25.7
65 75 0.21779 82,131 17,887 740,927 1,467,498 17.9
75 85 0.45584 64,244 29,285 505,278 726,571 11.3
85 95 0.79256 34,959 27,707 196,269 221,293 6.3
95 100 0.75441 7,252 5,471 20,388 25,024 3.5
100+ 1.00000 1,781 1,781 4,636 4,636 2.6



### Unlike O 3 

### -related premature deaths, PM 2.5 

### -related premature deaths are associated with longterm exposures. We therefore did not assume that these deaths all occur in 2020 or 2030. The PM 2.5 

### -related premature deaths avoided and asso ciated life years saved are thus further discounted to account for the lag be tween the reduction in ambient PM 2.5 

### and the corresponding reduction in mortality risk. We used the same 20-y ear segmented lag structure that is used in the benefit-cost analysis (see Chapter 8).

8-8 3

### Final Regulatory Impact Analysis

The most complete estimate of the impacts of PM 2.5 

### on life years is calculat ed using the Pope et al. (2002) C-R function relating all-cause mort ality in adults 30 and over with ambient PM 2.5 

### concentrations averaged over the periods 1979–1983 and 1999–2000. Use of all-cause mortality is appropriate if there are no differences in th e life expectancy of i ndividuals dying from air pollution-related causes and those dying from other causes. The argument that long-term exposure to PM 2.5 

### may affect mainly individuals with serious preexisting illnesses is not supported by current empirical studies. For exam ple, the Krewski et al. (2000) ACS reanalysis suggests that the mortality risk is no greater for those with preexisting illness at time of enrollment in the study. Life expectancy for th e general population in fa ct includes individuals with serious chronic illness. Mortality rates fo r the general popul ation then reflect prevalence of chronic disease, and as populations age th e prevalence of chronic disease increases.
The only reason one might use a lower life expect ancy is if the population at risk from air pollution was limited solely to those with preexisti ng disease. Also, note that the OMB Circular A-4 notes that “if QALYs are used to evaluate a lifesaving rule aimed at a population that happens to experience a high rate of disability (i.e., where the rule is not designed to affect the disability), the number of life years saved should not necessarily be diminished simply because the rule saves lives of people w ith life-shortening disabilities. Both analytic simplicity and fairness suggest that the estimat e number of life years saved fo r the disabled population should be based on average life expectancy information for the relevant age cohorts.” As such, use of a general population life expectancy is preferred over disability-specific life expectancies. Our primary life years calculations are thus consistent with the concept of not penalizing individuals with disabling chronic health conditions by assess ing them reduced benefits of mortality risk reductions. PM 2.5 

### -Related life years saved under the Final SSI & RME Rule in 2020 and 2030 are given in Table 8B-11.

Table 8B-11. Estimated PM 2.5 -Related Life Years Saved Under the Final SSI & RME Rule in 2020 and 2030

Estimated PM 2.5 -Related Life Years Saved (95% CI)* 2020 2030 Pope et al (2002) Laden et al. (2006) Pope et al (2002) Laden et al. (2006) Discounted back to 2020 or 2030, using a 3 percent discount rate: 1,100 (400 - 1,800) 2,600 (1,400 - 4,000) 2,200 (900 - 3,500) 5,000 (2,700 - 7,000) Discounted back to 2020 or 2030, using a 7 percent discount rate: 800 (300 - 1,200) 1,800 (1,000 - 2,500) 1,500 (600 - 2,400) 3,500 (1,900 - 5,100) *95 percent confidence or credible intervals (CIs) are based on the uncertainty about the coefficient in the mortality C-R functions. All estimates rounded to two significant figures.



### For this analysis, direct impacts on life exp ectancy are measured only through the estimated change in mortality risk based on the Pope et al. (2002) C-R func tion. The SAB-HES has advised against including additiona l gains in life expectancy due to reductions in incidence of chronic disease or nonfatal heart attacks (E PA-SAB-COUNCIL-ADV-04-002). Although reductions in these endpoints are likely to re sult in increased life expectancy, the HES has suggested that the cohort desi gn and relatively long follow-up pe riod in the Pope et al. study

8-8 4

### Cost-Be nefit Analysis

should capture any life-prolonging impacts associated with those endpoints. Impacts of CB and nonfatal heart attacks on quality of life will be captured separa tely in the QALY calculation as years lived with improved quality of life. The me thods for calculating this benefit are discussed below.


### 8B.4.5 Calculating Changes in th e Quality of Life Years (PM 2.5 

### -Related Chronic Morbidity)
In addition to directly measuri ng the quantity of life gained, meas ured by life years, it may also be informative to measure gains in the quality of life. The indirect reductions in levels of PM 2.5 

### also lead to reductions in serious illnesses that affect quality of life. These include chronic bronchitis (CB) and cardiovascular disease, for which we are ab le to quantify changes in the incidence of nonfatal hear t attacks. To capture these impor tant benefits in the measure of effectiveness, they must first be converted into a life-year equivalent so that they can be combined with the direct gains in life expectancy.
For the cost effectiveness analyses for the PM and O 3 

### NAAQS RIAs, we developed estimates of the QALYs gained from reductions in the incide nce of CB and nonfatal h eart attacks associated with reductions in ambient PM 2.5 

### . In general, QALY calculati ons require four elements:

1. the estimated change in inci dence of the health condition,
2. the duration of the health condition,
3. the quality-of-life weight w ith the health condition, and
4. the quality-of-life wei ght without the health condition (i .e., the baseline health state). The first element is derived using the health im pact function approach. The second element is based on the medical literature for each health condition. The third and fourth elements are derived from the medical cost-effectiveness and cost-utility literature. In the following two subsections, we discuss the choices of el ements for CB and nonfatal heart attacks.
The preferred source of quality-of-life weights ar e those based on community preferences, rather than patient or clinician ratings (Gold et al., 1996 ). Several methods are used to estimate qualityof-life weights. These include rating scale, stan dard gamble, time trade-off, and person trade-off approaches (Gold, Stevenson, and Fryback, 2002). Only the standard gamble approach is completely consistent with utility theory. Ho wever, the time trade-off method has also been widely applied in eliciting community pref erences (Gold, Stevenson, and Fryback, 2002).
Quality-of-life weights can be directly elicited for individual specific health states or for a more general set of activity restrictions and health st ates that can then be used to construct QALY weights for specific conditions (Horsman et al ., 2003; Kind, 1996). For this analysis, we used weights based on community-based preferences, using time trade-off or standard gamble when available. In some cases, we used patient or clinician ratings when no community preferencebased weights were available. Sources for weights are discussed in more detail below. Table 8B12 summarizes the key inputs for calculating QALYs associated with chronic health endpoints.

8-8 5

### Final Regulatory Impact Analysis

Table 8B-12. Summary of Key Parameters Used in QALY Calculations for Chronic Disease Endpoints

Parameter Value(s) Source(s)
Discount rate 0.03 (0.07 sensitivity analysis) Gold et al. (1996), U.S. EPA (2000), U.S. OMB (2003)

Quality of life preference score for chronic bronchitis 0.5 – 0.7 Triangular distribution c entered at 0.7 with upper bound at 0.9 (Vos, 1999a) (slightly better than a mild/moderate case) and a lower bound at 0.5 (average weight for a severe case based on Vos [1999a] and Smith and Peske [1994]) Duration of acute phase

of acute myocardial

infarction (AMI) 5.5 days – 22 days Uniform distribution with lower bound based on average length of stay for an AMI (AHRQ, 2000) and upper bound based on Vos (1999b). Probability of CHF post AMI 0.2 Vos, 1999a (WHO Burden of Disease Study, based on Cowie et al., 1997) Probability of angina post AMI 0.51 American Heart Association, 2003 (Calculated as the population with angina divided by the total population with heart disease) Quality-of-life preference score for post-AMI with CHF (no angina) 0.80 – 0.89 Uniform distribution with lower bound at 0.80 (Stinnett et al., 1996) and upper bound at 0.89 (Kuntz et al., 1996). Both studies used the time trade-off elicitation method. Quality-of-life preference score for post-AMI with CHF and angina 0.76 – 0.85 Uniform distribution with lower bound at 0.76 (Stinnett et al., 1996, adjusted for severity) and upper bound at 0.85 (Kuntz et al., 1996). Both studies used the time trade-off elicitation method. Quality-of-life preference score for post-AMI with angina (no CHF) 0.7 – 0.89 Uniform distribution with lower bound at 0.7, based on the standard gamble elicitation method (Pliskin, Stason, and Weinstein, 1981) and upper bound at 0.89, based on the time trade-off method (Kuntz et al., 1996). Quality-of-life preference

score for post-AMI (no angina, no CHF) 0.93 Only one value available from the literature. Thus, no distribution is specified. Source of value is Kuntz et al. (1996).



### 8B.4.5.1 Calculating QALYs Associated with Redu ctions in the Inciden ce of Chronic Bronchitis
CB is characterized by mucus in the lungs and a pe rsistent wet cough for at least 3 months a year for several years in a row. CB affects an estimated 5 percent of the U.S. population (American Lung Association, 1999). For gains in quality of life resulting from redu ced incidences of PMinduced CB, discounted QAL Ys are calculated as

* CB 

### DISCOUNTED QALY GAINED = 

# ∑ Δ CB i 

### × D i 

### × 

# ( w i 

### − w i 

# )

i



### 8- 86

### Cost-Be nefit Analysis

where ) CB i 

### is the number of incidences of CB avoided in age interval i, 

### w i 

### is the average QALY weight for the 

### i th age interval, 

### w i CB 

### is the QALY weight associated with CB in the 

### i th age interval, and 

### D i * 

### is the discounted duration of life with CB for individuals with onset of disease in D i 

### the 

### i th age interval, equal to 

# ∫ e − rt 

### dt 

### , where 

### D i 

### is the duration of life with CB for individuals

0 

### with onset of disease the 

### i th age interval.
A limited number of studies have estimated the imp act of air pollution on ne w incidences of CB. Schwartz (1993) and Abbey et al. (1995) provide evidence that long-term PM exposure gives rise to the development of CB in the United States . Only the Abbey et al. (1995) study was used, because it is the only study focusing on the relationship between PM 2.5 

### and new incidences of CB. The number of cases of CB in each ag e interval was derived by applying the impact function from Abbey et al. (1995) to the population in each age in terval with the appropriate baseline incidence rate. 9 

### The effect estimate from the Abbey et al. (1995) study is 0.0137, which, based on the logistic specifi cation of the model, is equivale nt to a relative risk of 1.15 for a 10 : g change in PM 2.5 

### . Table 8B-13 presents the estimate d reduction in new incidences of CB associated with the Final SSI & RME Rule in 2020 and 2030.
CB is assumed to persist for the remainder of an affected individual’s li fespan. Duration of CB will thus equal life expectancy conditioned on having CB. CDC has estimated that COPD (of which CB is one element) results in an average loss of life years equal to 4.26 per COPD death, relative to a reference life exp ectancy of 75 years (CDC, 2003). Thus, we subtracted 4.26 from the remaining life expectancy for each age group, up to age 75. For age groups over 75, we applied the ratio of 4.26 to the life expectancy for the 65 to 74 year group (0.237) to the life expectancy for the 75 to 84 and 85 and up age groups to estimate potential life years lost and then subtracted that value from the base life expectancy.

9 

### Prevalence rates for CB were obtained from the 1999 National Health Interview Survey (American Lung Association, 2002). Prevalence rates were available for three age groups: 18– 44, 45–64, and 65 and older. Prevalence rates per person for these groups were 0.0367 for 18– 44, 0.0505 for 45–64, and 0.0587 for 65 and older. The incidence rate for new cases of CB (0.00378 per person) was taken direct ly from Abbey et al. (1995).

8- 87

### Final Regulatory Impact Analysis

Table 8B-13. Estimated Reduction in Incidence of Chronic Bronchitis Under the Final SSI & RME Rule in 2020 and 2030

Reduction in PM 2.5 -Related Chronic Bronchitis (90% CI)* Age Interval 2020 2030

27 - 34 18 (3 - 33) 22 (4 - 40)
35 - 44 15 (3 - 28) 26 (5 - 48)
45 - 54 14 (3 - 26) 22 (4 - 40)
55 - 64 16 (3 - 28) 22 (4 - 40)
65 - 74 11 (2 - 19) 21 (4 - 38)
75 - 84 6 (1 - 11) 1 2 (2 - 22)
85+ 3 (1 - 5) 4 (1 - 8)
Total: 84 (16 - 150) 130 (24 - 240) *90 percent confidence or credible intervals (CIs) are based on the uncertainty about the coefficient in the mortality C-R functions. All estimates rounded to two significant figures.



### Quality of life with chronic lung diseases has been examined in several studies. In an analysis of the impacts of environmental exposures to cont aminants, de Hollander et al. (1999) assigned a weight of 0.69 to years lived with CB. This weight was based on physicians’ evaluations of health states similar to CB. Salomon and Murray (2003) estimated a pooled weight of 0.77 based on visual analogue scale, time trade-off, st andard gamble, and person trade-off techniques applied to a convenience sample of health professionals. The Harv ard Center for Risk Analysis catalog of preference scores repo rts a weight of 0.40 for severe COPD, with a range from 0.2 to 0.8, based on the judgments of the study’s authors (Bell et al., 2001). The Victoria Burden of Disease (BoD) study used a weight of 0.47 for severe COPD and 0.83 for mild to moderate COPD, based on an analysis by Stouthard et al. ( 1997) of chronic diseases in Dutch populations (Vos, 1999a). Based on the recommendations of Go ld et al. (1996), quality-of-life weights based on community preferences are preferred for CEA of interventions affectin g broad populations. Use of weights based on health professionals is not recommended. It is not clear from the Victoria BoD study whether the weights used fo r COPD are based on community preferences or judgments of health professionals. The Harvar d catalog score is clearly identified as based on author judgment. Given the lack of a clear preferred weight, we selected a triangular distribution centered at 0.7 with an upper bound at 0.9 (slightly better than a mild/moderate case defined by the Victoria BoD study) and a lower bound at 0.5 based on the Victoria BoD study. We will need additional empirical data on quality of life with chronic respiratory diseases based on community preferences to improve our estimates.

8- 88

### Cost-Be nefit Analysis

Selection of a reference weight for the general population without CB is so mewhat uncertain. It is clear that the general population is not in perfect health; however, there is some uncertainty as to whether individuals’ ratings of health states are in reference to a perfect health state or to a generally achievable “normal” health state given age and general health status. The U.S. Public Health Service Panel on Cost Effectiveness in Health and Medicine recommends that “since lives saved or extended by an in tervention will not be in perfect health, a saved life year will count as less than 1 full QALY” (Gold et al., 1996). Following Carrothers, Evans, and Graham (2002), we assumed that the reference weight for the general population without CB is 0.95. To allow for uncertainty in this parameter, we a ssigned a triangular distri bution around this weight, bounded by 0.9 and 1.0. Note that the reference weight for the general populat ion is used solely to determine the incremental quality-of-life impr ovement applied to the duration of life that would have been lived with the chronic disease. For example, if CB has a quality-of-life weight of 0.7 relative to a reference quality-of-life weight of 0.9, then the incremental quality-of-life improvement in 0.2. If the reference quality-of- life weight is 0.95, then the incremental qualityof-life improvement is 0.25. As noted above, th e population is assumed to have a reference weight of 1.0 for all life years gained due to mortality risk reductions.
We present discounted QALYs ove r the duration of th e lifespan with CB using a 3 percent discount rate. Based on the assumptions defi ned above, we used Monte Carlo simulation methods as implemented in the Crystal BallTM so ftware program to deve lop the distribution of QALYs gained per incidence of CB for each age interval. 10 

### Based on the assumptions defined above, the mean 3 percent discounted QALY gained per incidence of CB for each age interval along with the 95 percent confid ence interval resulting from the Monte Carlo simulation is presented in Table 8B-14. Table 8B-14 pres ents both the undiscounted and discounted QALYs gained per incidence, using a 3 percent discount rate.

10 

### Monte Carlo simulation uses random sampling from distributions of parameters to characterize the effects of uncertainty on output variables. For more details, see Gentile (1998).

8- 89

### Final Regulatory Impact Analysis

Table 8B-14. QALYs Gained per Avoided Incidence of CB

Age Interval Start Age End Age Undiscounted Discounted (3%)
25 34 12.15 (4.40-19.95) 6.52 (2.36-10.71)
35 44 9.91 (3.54-16.10) 5.94 (2.12-9.66)
45 54 7.49 (2.71-12.34) 5.03 (1.82-8.29)
55 64 5.36 (1.95-8.80) 4.03 (1.47-6.61)
65 74 3.40 (1.22-5.64) 2.84 (1.02-4.71)
75 84 2.15 (0.77-3.49) 1.92 (0.69-3.13)
85+ 0.79 (0.27-1.29) 0.77 (0.26-1.25) QALYs Gained per Incidence a

a Mean of Monte Carlo generated distribution; 95% confidence interval presented in parentheses.


### 8B.4.5.2 Calculating QALYs Associated with Reductions in the In cidence of Nonfatal Myocardial Infarctions
Nonfatal heart attacks, or acute myocardial infarctions, require mo re complicated calculations to derive estimates of QALY impacts. The actual heart attack, whic h results when an area of the heart muscle dies or is permanently damage d because of oxygen deprivation, and subsequent emergency care are of relatively short duration. Many heart attacks resu lt in sudden death. However, for survivors, the long-term impacts of advanced coronary heart disease (CHD) are potentially of long duration and can result in si gnificant losses in qua lity of life and life expectancy. In this phase of the analysis, we did not inde pendently estimate the gains in life expectancy associated with reductions in nonfatal heart at tacks. Based on recommendations from the SABHES, we assumed that all gains in life expect ancy are captured in the estimates of reduced mortality risk provided by the P ope et al. (2002) analysis. We estimated only the change in quality of life over the period of life affected by the occurrence of a heart attack. This may understate the QALY impacts of nonfatal heart a ttacks but ensures that the overall QALY impact estimates across endpoints do not double- count potential lif e-year gains.
Our approach adapts a CHD model developed for the Victoria Burden of Disease study (Vos, 1999b). This model accounts for the lost quality of life during the heart attack and the possible health states following the heart attack. Figur e 8B-1 shows the heart attack QALY model in diagrammatic form.
The total gain in QALYs is calculated as:

8-9 0

### Cost-Be nefit Analysis

D ISCOUNTED AMI QALY GAINED =

* AMI AMI * PostAMI postAMI 

# ∑ Δ AMI × D × 

# ( w

− w 

# ) + 

# ∑ ∑ 4 

### Δ AMI × p D × 

# ( w

− w 

# )

i i i i i j ij i ij i i j = 1



### where ) AMI i 

### is the number of nonfatal acute myocardi al infarctions avoided in age interval 

### i ,

w i

AMI 

### is the QALY weight associated with the acute phase of the AMI, p j 

### is the probability of being in the 

### j th post-AMI status, w ij postAMI 

### is the QALY weight associat ed with post-AMI health



### = e status 

### j , w i 

### is the average QALY weight for age interval i, 

### D i * AMI 

# ∫

t D

= 1

i AMI

− rt 

### dt , the discounted



### = e value of D i AMI 

### , the duration of the acute phase of the AMI, and 

### D i * postAMI 

# ∫

t D

= 1

i postAMI

− rt 

### d t , is the
discounted value of D ij PostAMI 

### , the duration of post-AMI health status 

### j

.

8-9 1

### Final Regulatory Impact Analysis

Acute Treatment Stage Chronic Post-AMI Follow up Stage

Post AMI QALY with Angina and CHF

Nonfatal AMI Congestive Heart Failure Y

e s

N o Angina

Angina Y

e s

N o

N o Y e s Post AMI QALY with CHF without Angina

Post AMI QALY with Angina without CHF

Post AMI QALY without Angina or CHF

Figure 8B-1. Decision Tree Used in Modeling Gains in QALYs from Reduced Incidence of Nonfatal Acute Myocardial Infarctions



### Nonfatal heart attacks have been link ed with short-term exposures to PM 2.5 

### in the United States (Peters et al., 2001) and other countries (Polon iecki et al., 1997). We used a recent study by Peters et al. (2001) as the ba sis for the impact function estim ating the relationship between PM 2.5 

### and nonfatal heart attacks. Pete rs et al. is the only available U.S. study to provide a specific estimate for heart attacks. Other studies, su ch as Samet et al. ( 2000) and Moolgavkar (2000), show a consistent relationship between all cardiovascular hospital ad missions, including for nonfatal heart attacks, and PM. Given the lasting impact of a h eart attack on longer-term health costs and earnings, we chose to provide a separa te estimate for nonfatal heart attacks based on the single available U.S. effect estimate. The finding of a specific impact on heart attacks is consistent with hospital admission and other studie s showing relationships between fine particles and cardiovascular effects both within and outside the United States. These studies provide a weight of evidence for this type of effect. Seve ral epidemiologic studies (Liao et al., 1999; Gold et al., 2000; Magari et al ., 2001) have shown that heart rate va riability (an indica tor of how much

8-9 2

### Cost-Be nefit Analysis

the heart is able to speed up or slow down in response to momentary stresses) is negatively related to PM levels. Heart rate variability is a risk factor for heart attacks and other CHDs (Carthenon et al., 2002; Dekker et al., 2000; Liao et al., 1997, Ts uji et al., 1996). As such, significant impacts of PM on heart ra te variability are consistent w ith an increased risk of heart attacks.
The number of avoided nonfatal AMI in each ag e interval was derived by applying the impact function from Peters et al. ( 2001) to the population in each age interval with the appropriate baseline incidence rate. 11 

### The effect estimate from the Peters et al. (2001) study is 0.0241, which, based on the logistic specifi cation of the model, is equivale nt to a relative risk of 1.27 for a 10 : g change in PM 2.5 

### . Table 8B-15 presents the estimated reduction in nonfatal AMI associated with the Final SSI & RME Rule in 2020 and 2030.
Table 8B-15. Estimated Reduction in Nonfatal Acute Myocardial Infarctions Under the Final SSI & RME Rule in 2020 and 2030

Reduction in PM 2.5 -Related Acute Myocardial Infarction (90% CI)* Age Interval 2020 2030

18 - 24 0 (0 - 0) 0 (0 - 0)
25 - 29 1 (1 - 2) 2 (1 - 3)
35 - 44 10 (5 - 14) 16 (9 - 23)
45 - 54 29 (16 - 42) 43 (23 - 63)
55 - 64 68 (37 - 98) 99 (53 - 140)
65 - 74 94 (51 - 140) 160 (84 - 230)
75 - 84 48 (26 - 69) 140 (76 - 210)
85+ 42 (23 - 62) 67 (36 - 98)
Total: 290 (160 - 420) 530 (280 - 770) *90 percent confidence or credible intervals (CIs) are based on the uncertainty about the coefficient in the mortality C-R functions. All estimates rounded to two significant figures.

11 

### Daily nonfatal myocardial infarction inciden ce rates per person were obtained from the 1999 National Hospital Discharge Survey (assuming all diagnosed nonfatal AMI visit the hospital). Age-specific rates for four regions are used in the analysis. Regional averages for populations 18 and older are 0.0000159 for the Northeast, 0.000 0135 for the Midwest, 0.0000111 for the South, and 0.0000100 for the West.

8-9 3

### Final Regulatory Impact Analysis

Acute myocardial infarction result s in significant loss of quality of life for a relatively short duration. The WHO Global Burden of Disease st udy, as reported in Vos (1999b), assumes that the acute phase of an acute myo cardial infarction lasts for 0. 06 years, or around 22 days. An alternative assumption is the acute phase is char acterized by the average length of hospital stay for an AMI in the United States, which is 5.5 days, based on data from the Agency for Healthcare Research and Quality’s Healthca re Cost and Utilization Project (HCUP). 12 

### We assumed a distribution of acute phase duration characterized by a uniform distribution between 5.5 and 22 days, noting that due to earlier discharges and in-home therapy available in the United States, duration of reduced quality of life may continue after disc harge from the hospital. In the period during and directly following an AMI (the acute phase), we assign ed a quality of life weight equal to 0.605, consistent with the weight for the period in treatment during and immediately after an attack (Vos, 1999b).
During the post-AMI period, a number of different health states can determine the loss in quality of life. We chose to classify post-AMI health status into four states defined by the presence or absence of angina and congestive heart failure (CHF). This makes a very explicit assumption that without the occurren ce of an AMI, individuals would not experience either angina or CHF. If in fact individuals already have CHF or a ngina, then the quality of life gained will be overstated. We do not have information about the percentage of th e population have been diagnosed with angina or CHF with no occurrence of an AMI. Nor do we have information on what proportion of the hear t attacks occurring due to PM exposure are first heart attacks versus repeat attacks. Probabilities for the four post-AMI health states sum to one.

Given the occurrence of a nonfatal AMI, the probability of conges tive heart failure is set at 0.2, following the heart disease model developed by Vos (1999b). The probability is based on a study by Cowie et al. (1997), which estimated that 20 percent of those surviving AMI develop heart failure, based on an analysis of the results of the Framingham Heart Study.
The probability of angina is based on the prevalen ce rate of angina in the U.S. population. Using data from the American Heart Association, we calculated the prevalence rate for angina by dividing the estimated number of people with angina (6.6 million) by the estimated number of people with CHD of all types (12.9 million). We then assumed that the prevalence of angina in the population surviving an AMI is similar to th e prevalence of angina in the total population with CHD. The estimated prevalence rate is 51 percent, so the probabi lity of angina is 0.51.
Combining these factors leads to the probabilities for each of the f our health states as follows:

I. Post AMI with CHF and angina = 0.102
II. Post AMI with CHF without angina = 0.098
III. Post AMI with angina without CHF = 0.408
IV. Post AMI without angina or CHF = 0.392

12 

### Average length of stay estimated from the HCUP data includes all discharges, including those due to death. As such, the 5.5-day average lengt h of stay is likely an underestimate of the average length of stay for AMI admissions where the patient is discharged alive.

8-9 4

### Cost-Be nefit Analysis

Duration of post-AMI health states varies, based in part on assumptions regarding life expectancy with post-AMI complicating health conditions. Based on the model used for established market economies (EME) in the WH O Global Burden of Disease study, as reported in Vos (1999b), we assumed that individuals wi th CHF have a relativel y short remaining life expectancy and thus a relatively short period with reduced quality of life (recall that gains in life expectancy are assumed to be captured by the co hort estimates of reduced mortality risk). Table 8B-16 provides the durati on (both discounted and undiscount ed) of CHF assumed for postAMI cases by age interval.
Table 8B-16. Assumed Duration of Congestive Heart Failure

Age Interval Duration of Heart Failure (years) Start Age End Age Undiscounted Discounted (3%)
18 24 7.11 6.51
25 34 6.98 6.40
35 44 6.49 6.00
45 54 5.31 4.99
55 64 1.96 1.93
65 74 1.71 1.69
75 84 1.52 1.50
85+ 1.52 1.50



### Duration of health states without CHF is assu med to be equal to th e life expectancy of individuals conditional on surviving an AMI. Ganz et al. (2000) note that “Because patients with a history of myocardial infarc tion have a higher chance of dying of CHD that is unrelated to recurrent myocardial infarction (for example, arr hythmia), this cohort has a higher risk for death from causes other than myocardial infarction or stroke than does an unselected population.” They go on to specify a mortality risk ratio of 1.52 for mortality from other causes for the cohort of individuals with a previous (nonfatal) AMI. The risk ratio is relative to all-cause mortality for an age-matched unselected population (i.e., general population). We adopted the same ratios and applied them to each age-specific all-cause mortality rate to derive life expectancies (both discounted and undiscounted) for e ach age group after an AMI, pres ented in Table 8B-17. These life expectancies were then used to represent th e duration of non-CHF post-A MI health states (III and IV).

8-9 5

### Final Regulatory Impact Analysis

Table 8B-17. Assumed Duration of Non-CHF Post-AMI Health States

Age Interval Post-AMI Years of Life Expectancy (non-CHF) Start Age End Age Undiscounted Discounted (3%)
18 24 55.5 27.68
25 34 46.1 25.54
35 44 36.8 22.76
45 54 27.9 19.28
55 64 19.8 15.21
65 74 12.8 10.82
75 84 7.4 6.75
85+ 3.6 3.47



### For the four post-AMI health states, we used QALY weights based on preferences for the combined conditions characterizing each health st ate. A number of esti mates of QALY weights are available for post-AMI health conditions.
The first two health states are characterized by the presence of CHF, with or without angina. The Harvard Center for Risk Analysis catalog of preference scores provides several specific weights for CHF with and without mild or severe angina and one set specific to post-AMI CHF. Following the Victoria Burden of Disease model, we assumed that most cases of angina will be treated and thus kept at a mild to moderate state. We thus focused our selection on QALY weights for mild to moderate angina. The Ha rvard database includes two sets of community preference-based scores for CHF (Stinnett et al ., 1996; Kuntz et al., 1996). The scores for CHF with angina range from 0.736 to 0.85. The lower of the two scores is based on angina in general with no delineation by severity. Based on the range of the scores for mild to severe cases of angina in the second study, one can infer that an average case of angina has a score around 0.96 of the score for a mild case. Applying this adjustment raises the lowe r end of the range of preference scores for a mild case of angina to 0.76. We selected a unif orm distribution over the range 0.76 to 0.85 for CHF with mild angina, with a midpoint of 0.81. The same two studies in the Harvard catalog also provide weights for CHF without angina . These scores range from 0.801 to 0.89. We selected a uniform distribu tion over this range, with a midpoint of 0.85.
The third health state is characterized by angina , without the presence of CHF. The Harvard catalog includes five sets of community preferen ce-based scores for angina, one that specifies scores for both mild and severe angina (Kuntz et al., 1996), one that specifies mild angina only (Pliskin, Stason, and Weinstein, 1981) , one that specifies severe an gina only (Cohen, Breall, and Ho, 1994), and two that specify angina with no se verity classification (Salkeld, Phongsavan, and Oldenburg, 1997; Stinnett et al., 1996). With the exception of the Pliskin, Stason, and Weinstein score, all of the angina scores are based on the time trade-off method of elicitation. The Pliskin, Stason, and Weinstein score is based on the standa rd gamble elicitation method. The scores for the nonspecific severity angina fall within th e range of the two scores for mild angina specifically. Thus, we used the range of mild angina scores as the endpoints of a uniform distribution. The range of mild angina scor es is from 0.7 to 0.89, with a midpoint of 0.80.

8- 96

### Cost-Be nefit Analysis

For the fourth health state, ch aracterized by the absence of CHF and/or angina, there is only one relevant community preference score available from the Harvard catalog. This score is 0.93, derived from a time trade-off elicitation (Kuntz et al., 1996). Insufficient information is available to provide a distributi on for this weight; therefore, it is treated as a fixed value.
Similar to CB, we assumed that the reference weight for the general population without AMI is 0.95. To allow for uncertainty in this parameter, we assigned a triangular distribution around this weight, bounded by 0.9 and 1.0.
Based on the assumptions defined above, we used Monte Carlo simulation methods as implemented in the Crystal BallTM software pr ogram to develop the distribution of QALYs gained per incidence of nonfatal AMI for each age interval. Fo r the Monte Carlo simulation, all distributions were assumed to be independent . The mean QALYs gained per incidence of nonfatal AMI for each age interval is presen ted in Table 8B-18, al ong with the 95 percent confidence interval resulting from the Monte Ca rlo simulation. Table 8B-18 presents both the undiscounted and discounted QAL Ys gained per incidence.

Table 8B-18. QALYs Gained per Avoi ded Nonfatal Myocardial Infarction

Age Interval QALYs Gained per Incidence a Start Age End Age Undiscounted Discounted (3%)
18 24 4.18 (1.24-7.09) 2.17 (0.70-3.62)
25 34 3.48 (1.09-5.87) 2.00 (0.68-3.33)
35 44 2.81 (0.88-4.74) 1.79 (0.60-2.99)
45 54 2.14 (0.67-3.61) 1.52 (0.51-2.53)
55 64 1.49 (0.42-2.52) 1.16 (0.34-1.95)
65 74 0.97 (0.30-1.64) 0.83 (0.26-1.39)
75 84 0.59 (0.20-0.97) 0.54 (0.19-0.89)
85+ 0.32 (0.13-0.50) 0.31 (0.13-0.49)

a Mean of Monte Carlo generated distribution; 95% confidence interval presented in parentheses.



### 8B.4.6 Aggregating Life Expe ctancy and Quality-of-Life Gains
Given the estimates of changes in life expectancy a nd quality of life, the next step is to aggregate life expectancy and quality-of-life gains to form an effectiveness measure that can be compared to costs to develop cost-effectiveness ratios. Th is section discusses the proper characterization of the combined effectiveness measure for the denominator of the cost-effectiveness ratio.

8- 97

### Final Regulatory Impact Analysis

To develop an integrated measure of changes in health, we simply sum together the gains in life years from reduced mortality risk in each age in terval with the gains in QALYs from reductions in incidence of chronic morbidity endpoints (CB and acute myocardial infarctions). The resulting measure of effectiveness then forms the denominator in the cost-effectiveness ratio. This combined measure of effectiveness is not a QALY measure in a strict sense, because we have not adjusted life-expectancy gains for preexis ting health status (quali ty of life). It is however, an effectiveness measure that adds a scaled morbidity equivalent to the standard life years calculation. Thus, we term the aggregat e measure morbidity inclusive life years, or MILYs. Alternatively, the combined measur e could be considered as QALYs with an assumption that the community pr eference weight for a ll life-expectancy gains is 1.0. If one considers that this weight might be considered to be a “fair” treatment of those with preexisting disabilities, the effectiveness measure might be termed “fair QALY” gained. However, this implies that all aspects of fairness have been a ddressed, and there are clearly other issues with the fairness of QALYs (or other e ffectiveness measures) that are not addressed in this simple adjustment. The MILY measure violates some of the properties used in deriving QALY weights, such as linear substitution between quality of lif e and quantity of life. However, in aggregating life expectancy and quality-of-life gains, it merely represents an alternative social weighting that is consistent with the spirit of the recent OMB guidance on CEA. The guidance notes that “fairness is important in the choice and execution of effectiv eness measures” (OMB, 2003). The resulting aggregate measure of effectiveness wi ll not be consistent wi th a strict utility interpretation of QALYs; however, it may s till be a useful index of effectiveness.
Applying the life expectancies and distributions of QALYs pe r incidence for CB and AMI to estimated distributions of incide nces yields distributions of li fe expectancy and QALYs gained under the Final SSI & RME Rule. These distributi ons reflect both the quantified uncertainty in estimates of avoided incidence and the quantified uncertainty in QALYs gained per incidence avoided.
Tables 8B-19 and 8B-20 present the discounted life years, QALY s, and MILYs gained, based on each combination of O 3 

### -mortality study, PM 2.5 

### -mortality study, and life expectancy assumption for O 3 

### -related life years saved used for the analysis, using a 3 pe rcent discount rate, for 2020 and 2030, respectively. Tables 8B-21 and 8B-22 pres ent the corresponding results using a 7 percent discount rate.

8- 98Cost-Benefit AnalysisTable 8B-19. Estimated Gains in Discounted MILYs Under theFinal SSI & RME Rule in 2020, Using a 3 Percent Discount RateO3Mortality StudyPM2.5MortalityStudyLife Expectancy Assumption for O3-Related Mortality(95% CI)O3-Related Life YearsGained from MortalityRiskReductions(95% CI)PM2.5-Related LifeYears Gained fromMortality RiskReductions(95% CI)QALYs Gained fromReductions in PM2.5-Related ChronicBronchitis(95% CI)QALYs Gained fromReductions in PM2.5-Related Non-FatalMyocardial Infarction(95% CI)Total MILYsGainedBell et al. (2004)Pope et al. (2002)General Population500(200 - 800)5,500(2,600 - 8,000)Bell et al. (2004)Pope et al. (2002)Subpopulation with Average COPD400(100 - 600)5,400(2,500 - 8,000)Bell et al. (2004)Pope et al. (2002)Subpopulation with Severe COPD200(100 - 300)1,1005,200(2,400 - 8,000)Levy et al. (2005)Pope et al. (2002)General Population2,200(1,500 - 2,900)(400 - 1,800)7,000(4,300 - 10,000)Levy et al. (2005)Pope et al. (2002)Subpopulation with Average COPD1,700(1,200 - 2,200)7,000(3,800 - 10,000)Levy et al. (2005)Pope et al. (2002)Subpopulation with Severe COPD1,000(700 - 1,300)3902506,000(3,100 - 9,000)Bell et al. (2004)Laden et al. (2006)General Population500(200 - 800)(50 - 900)(70 - 510)11,000(6,300 - 16,000)Bell et al. (2004)Laden et al. (2006)Subpopulation with Average COPD400(100 - 600)11,000(6,100 - 16,000)Bell et al. (2004)Laden et al. (2006)Subpopulation with Severe COPD200(100 - 300)2,60011,000(6,000 - 15,000)Levy et al. (2005)Laden et al. (2006)General Population2,200(1,500 - 2,900)(1,400 - 4,000)13,000(7,900 - 17,000)Levy et al. (2005)Laden et al. (2006)Subpopulation with Average COPD1,700(1,200 - 2,200)12,000(7,000 - 17,000)Levy et al. (2005)Laden et al. (2006)Subpopulation with Severe COPD1,000(700 - 1,300)11,000(6,800 - 16,000)*Life years, QALYs, and MILYs are discounted back to 2020. 95%confidence or credible intervals (CIs) around the point estimates are based on the uncertainty surrounding the effectestimates (coefficients) in the C-R functions and, for QALYs and MILYs, the uncertainty surrounding the quality of life weights. All estimates rounded to two significant figures.8-99Final Regulatory Impact AnalysisTable 8B-20. Estimated Gains in Discounted MILYs Under theFinal SSI & RME Rule in 2030, Using a 3 Percent Discount RateO3Mortality StudyPM2.5MortalityStudyLife Expectancy Assumption for O3-Related Mortality(95% CI)O3-Related Life YearsGained from MortalityRiskReductions(95% CI)PM2.5-Related LifeYears Gained fromMortality RiskReductions(95% CI)QALYs Gained fromReductions in PM2.5-Related ChronicBronchitis(95% CI)QALYs Gained fromReductions in PM2.5-Related Non-FatalMyocardial Infarction(95% CI)Total MILYsGainedBell et al. (2004)Pope et al. (2002)General Population700(200 - 1,200)6,100(3,100 - 9,000)Bell et al. (2004)Pope et al. (2002)Subpopulation with Average COPD600(200 - 900)6,000(3,000 - 9,000)Bell et al. (2004)Pope et al. (2002)Subpopulation with Severe COPD300(100 - 500)2,2005,700(2,700 - 9,000)Levy et al. (2005)Pope et al. (2002)General Population3,500(2,400 - 4,600)(900 - 3,500)9,000(5,800 - 12,000)Levy et al. (2005)Pope et al. (2002)Subpopulation with Average COPD2,700(1,800 - 3,500)8,000(5,000 - 11,000)Levy et al. (2005)Pope et al. (2002)Subpopulation with Severe COPD1,500(1,000 - 1,900)5904306,800(3,900 - 10,000)Bell et al. (2004)Laden et al. (2006)General Population700(200 - 1,200)(80 - 1,400)(110 - 880)11,600(6,800 - 16,000)Bell et al. (2004)Laden et al. (2006)Subpopulation with Average COPD600(200 - 900)11,000(6,600 - 16,000)Bell et al. (2004)Laden et al. (2006)Subpopulation with Severe COPD300(100 - 500)5,00011,000(6,400 - 16,000)Levy et al. (2005)Laden et al. (2006)General Population3,500(2,400 - 4,600)(2,700 - 7,000)14,000(9,400 - 19,000)Levy et al. (2005)Laden et al. (2006)Subpopulation with Average COPD2,700(1,800 - 3,500)14,000(9,000 - 18,000)Levy et al. (2005)Laden et al. (2006)Subpopulation with Severe COPD1,500(1,000 - 1,900)12,000(7,500 - 17,000)*Life years, QALYs, and MILYs are discounted back to 2030. 95%confidence or credible intervals (CIs) around the point estimates are based on the uncertainty surrounding the effectestimates (coefficients) in the C-R functions and, for QALYs and MILYs, the uncertainty surrounding the quality of life weights. All estimates rounded to two significant figures.8-100Cost-Benefit AnalysisTable 8B-21. Estimated Gains in Discounted MILYs Under theFinal SSI & RME Rule in 2020, Using a 7 Percent Discount RateO3Mortality StudyPM2.5MortalityStudyLife Expectancy Assumption for O3-Related Mortality(95% CI)O3-Related Life YearsGained from MortalityRiskReductions(95% CI)PM2.5-Related LifeYears Gained fromMortality RiskReductions(95% CI)QALYs Gained fromReductions in PM2.5-Related ChronicBronchitis(95% CI)QALYs Gained fromReductions in PM2.5-Related Non-FatalMyocardial Infarction(95% CI)Total MILYsGainedBell et al. (2004)Pope et al. (2002)General Population3603,800(1,800 - 5,700)(120 - 600)Bell et al. (2004)Pope et al. (2002)Subpopulation with Average COPD2903,700(1,800 - 5,700)(90 - 500)Bell et al. (2004)Pope et al. (2002)Subpopulation with Severe COPD1708003,600(1,600 - 5,500)(50 - 280)Levy et al. (2005)Pope et al. (2002)General Population1,700(300 - 1,200)5,100(3,100 - 7,000)(1,200 - 2,200)Levy et al. (2005)Pope et al. (2002)Subpopulation with Average COPD1,4004,800(2,700 - 7,000)(900 - 1,800)Levy et al. (2005)Pope et al. (2002)Subpopulation with Severe COPD8003002004,200(2,300 - 6,200)(600 - 1,100)Bell et al. (2004)Laden et al. (2006)General Population360(30 - 600)(50 - 400)7,500(4,300 - 11,000)(120 - 600)Bell et al. (2004)Laden et al. (2006)Subpopulation with Average COPD2907,500(4,200 - 11,000)(90 - 500)Bell et al. (2004)Laden et al. (2006)Subpopulation with Severe COPD1701,8007,300(4,100 - 11,000)(50 - 280)Levy et al. (2005)Laden et al. (2006)General Population1,700(1,000 - 2,500)9,000(5,600 - 12,000)(1,200 - 2,200)Levy et al. (2005)Laden et al. (2006)Subpopulation with Average COPD1,4009,000(5,300 - 12,000)(900 - 1,800)Levy et al. (2005)Laden et al. (2006)Subpopulation with Severe COPD8008,000(4,800 - 11,000)(600 - 1,100)*Life years, QALYs, and MILYs are discounted back to 2020. 95%confidence or credible intervals (CIs) around the point estimates are based on the uncertainty surrounding the effectestimates (coefficients) in the C-R functions and, for QALYs and MILYs, the uncertainty surrounding the quality of life weights. All estimates rounded to two significant figures.8-101Final Regulatory Impact AnalysisTable 8B-22. Estimated Gains in Discounted MILYs Under theFinal SSI & RME Rule in 2030, Using a 7 Percent Discount RateO3Mortality StudyPM2.5MortalityStudyLife Expectancy Assumption for O3-Related Mortality(95% CI)O3-Related Life YearsGained from MortalityRiskReductions(95% CI)PM2.5-Related LifeYears Gained fromMortality RiskReductions(95% CI)QALYs Gained fromReductions in PM2.5-Related ChronicBronchitis(95% CI)QALYs Gained fromReductions in PM2.5-Related Non-FatalMyocardial Infarction(95% CI)Total MILYsGainedBell et al. (2004)Pope et al. (2002)General Population5904,300(2,200 - 6,300)(190 - 1,000)Bell et al. (2004)Pope et al. (2002)Subpopulation with Average COPD4604,100(2,100 - 6,200)(150 - 800)Bell et al. (2004)Pope et al. (2002)Subpopulation with Severe COPD2508003,900(1,900 - 5,900)(80 - 430)Levy et al. (2005)Pope et al. (2002)General Population2,700(300 - 1,200)6,400(4,200 - 9,000)(1,900 - 3,500)Levy et al. (2005)Pope et al. (2002)Subpopulation with Average COPD2,1005,800(3,700 - 8,000)(1,500 - 2,800)Levy et al. (2005)Pope et al. (2002)Subpopulation with Severe COPD1,2004003404,900(2,900 - 7,000)(800 - 1,600)Bell et al. (2004)Laden et al. (2006)General Population590(50 - 900)(90 - 700)8,100(4,800 - 11,000)(190 - 1,000)Bell et al. (2004)Laden et al. (2006)Subpopulation with Average COPD4608,000(4,600 - 11,000)(150 - 800)Bell et al. (2004)Laden et al. (2006)Subpopulation with Severe COPD2501,8007,800(4,500 - 11,000)(80 - 430)Levy et al. (2005)Laden et al. (2006)General Population2,700(1,000 - 2,500)10,000(6,800 - 14,000)(1,900 - 3,500)Levy et al. (2005)Laden et al. (2006)Subpopulation with Average COPD2,10010,000(6,300 - 13,000)(1,500 - 2,800)Levy et al. (2005)Laden et al. (2006)Subpopulation with Severe COPD1,2009,000(5,400 - 12,000)(800 - 1,600)*Life years, QALYs, and MILYs are discounted back to 2030. 95%confidence or credible intervals (CIs) around the point estimates are based on the uncertainty surrounding the effectestimates (coefficients) in the C-R functions and, for QALYs and MILYs, the uncertainty surrounding the quality of life weights. All estimates rounded to two significant figures.8-102

### Cost-Be nefit Analysis



### 8B.4.7 Estimating the Avoided Costs of Chronic Illness
Construction of cost-effectiveness ratios requi res estimates of effectiveness (in this case measured by lives saved, life years gained, or MILYs gained) in the denominator and estimates of costs in the numerator. As noted above (see Section 8B.3.1), our es timate of costs in the numerator is net of the avoided costs (cost saving s) associated with the reductions in morbidity (Gold et al., 1996). Among the morbidity costs subtra cted from the direct co sts of controls in the numerator are the avoided costs of illness (COI) associated with PM 2.5 

### -related CB and nonfatal AMI.

Avoided costs for CB and nonfatal AMI are based on estimates of lost earnings and medical costs. 13 

### Using age-specific annual lost earnings and medical costs estimated by Cropper and Krupnick (1990) and a 3 percent discount rate, we estimated a lifetime present discounted value (in 2005$) due to CB of $179,305 for someone between the ages of 27 and 44; $116,892 for someone between the ages of 45 and 64; a nd $13,741 for someone over 65. The corresponding age-specific estimates of life time present discounted value (in 2005$) using a 7 percent discount rate are $102,300, $86,359, and $11,190, respectively. Th ese estimates assumed that 1) lost earnings continue only until age 65, 2) medical e xpenditures are incurred until death, and 3) life expectancy is unchanged by CB.

Because the costs associated w ith a myocardial infarction exte nd beyond the initial event itself, we consider costs incurred over several years. Using age-specific annual lost earnings estimated by Cropper and Krupnick (1990) and a 3 percen t discount rate, we estimated a present discounted value in lost earni ngs (in 2005$) over 5 years due to a myocardial infarction of $10,389 for someone between the ages of 25 and 44, $15,313 for someone between the ages of 45 and 54, and $88,508 for someone between the ag es of 55 and 65. The corresponding agespecific estimates of lost earnings (in 2005$) using a 7 percent disc ount rate are $9,301, $13,709, and $79,241, respectively. Cropper and Krupnick (1990) do not provide lost earnings estimates for populations under 25 or over 65. Thus, we do not include lost earnings in the cost estimates for these age groups.
Two estimates of the direct medical costs of myocardial infarction are used. The first estimate is from Wittels, Hay, and Gotto (1990), which estima ted expected total medical costs of MI over 5 years to be $51,211 (in 1986$) for people who were admitted to the hospital and survived hospitalization (there does not appear to be a ny discounting used). Using the CPI-U for medical care, the Wittels estimate is $135,66 7 in year 2005$. This estimated cost is based on a medical cost model, which incorporated therapeutic options, projected outcomes, and prices (using “knowledgeable cardiologi sts” as consultants). The mode l used medical data and medical

13 

### Gold et al. (1996) recommend not including lo st earnings in the cost-of-illness estimates, suggesting that in some cases, they may be alr eady be counted in the effectiveness measures. However, this requires that individuals fully in corporate the value of lo st earnings and reduced labor force participation opportuni ties into their responses to ti me-tradeoff or standard-gamble questions. For the purposes of this analysis and for consistency with the way costs-of-illness are calculated for the benefit-cost analysis, we have assumed that individuals do not incorporate lost earnings in responses to these questions. This as sumption can be relaxed in future analyses with improved understanding of how lost earnings are treated in pr eference elicitations.

8-10 3

### Final Regulatory Impact Analysis

decision algorithms to estimate the probabilities of certain events and/ or medical procedures being used. The second estimate is from Russell et al. (1998), which estima ted first-year direct medical costs of treating nonfatal myocar dial infarction of $15,540 (in 1995$), and $1,051 annually thereafter. Converting to year 2005$, that would be $27,674 for a 5-year period (using a 3 percent discount rate).

The two estimates from these studies are substa ntially different, and we have not adequately resolved the sources of differen ces in the estimates. Because the wage-related opportunity cost estimates from Cropper and Krupnick (1990) cover a 5-year period, we used estimates for medical costs that similarly cover a 5-year period. We used a simple average of the two 5-year estimates, or $81,671, and add it to the 5-year opport unity cost estimate. The resulting estimates are given in Table 8B-23.

Table 8B-23. Estimated Costs Over a 5-Year Period (in 2005$) of a Nonfatal Myocardial Infarction

Age of Onset Opportunity Cost 1 Medical Cost 2 Total Cost*

0 - 24 25 - 44 45 - 54 55 - 65 > 65 $0 $10,389 $15,313 $88,508 $0 $81,671 $81,671 $81,671 $81,671 $81,671 $81,671 $92,060 $96,984 $170,179

$81,671

1 Positive opportunity costs are based on Cropper and Krupnick (1990), using a 3 percent discount rate.

2 An average of the 5-year costs estimated by Wittels, Hay, and Gotto (1990) and Russell et al. (1998).



### The total avoided COI by age group associated with the reductions in CB and nonfatal acute myocardial infarctions (using a 3 percent discount rate) is provi ded in Table 8B-24. The total avoided COI associated with the Final SSI & RME Rule (using a 3 percent discount rate) is about $42 million in 2020 and about $71 million in 2030. Note that these estimates do not include any direct avoided medi cal costs associated with prem ature mortality. Nor do they include any medical costs that occur more than 5 years from the onset of a nonfatal AMI. Therefore, they are likely underestimates of the true avoided COI associated with the Final SSI & RME Rule in 2020 and 2030.

8-10 4

### Cost-Be nefit Analysis

Table 8B-24. Avoided Costs of Illness Associated with Reductions in Chronic Bronchitis and Nonfatal Acute Myocardial Infarctions Under the Final SSI & RME Rule in 2020 and 2030

Avoided Cost of Illness (in millions of 2005$)* Age Interval 2020 2030

Chronic Bronchitis Nonfatal Acute Myocardial Infarction Chronic Bronchitis Nonfatal Acute Myocardial Infarction 18 - 24 25 - 29 35 - 44 45 - 54 55 - 64 65 - 74 75 - 84

85+ --- $4.1 $3.4 $2.1 $2.2 $0.2 $0.1 $0.1 $0.0 $0.1 $0.9 $2.8 $11.5 $7.7 $3.9 $3.5 --- $4.9 $6.0 $3.2 $3.3 $0.4 $0.2 $0.1 $0.0 $0.2 $1.5 $4.2 $16.8 $12.8 $11.6 $5.5 Total: $12.1 $30.4 $18.1 $52.5 *Discounted using a 3 percent discount rate.



### 8B.4.8 Cost-Effectiveness Ratios
Construction of cost-effectiveness ratios requi res estimates of effectiveness (in this case measured by lives saved, life years gained, or MILYs gained) in the denominator and estimates of costs in the numerator. As noted above (see Section 8B.3.1), the es timate of costs in the numerator should include both the direct costs of the controls necessary to achieve the reduction in ambient PM 2.5 

### and O 3 

### and the avoided costs (cost savings) associated with the reductions in morbidity (Gold et al., 1996). In general, because reductions in air polluti on do not require direct actions by the affected populations, there are no speci fic costs to affected individuals (aside from the overall increases in prices th at might be expected to occur as control costs are passed on by affected industries). Likewise, because indivi duals do not engage in any specific actions to realize the health benefit of th e pollution reduction, there are no decreases in utility (as might occur from a medical intervention) that need to be adjusted for in the denominator. Thus, the elements of the numerator are direct costs of c ontrols minus the avoided COI associated with CB and nonfatal AMI. In addition, to account for the value of reductions in O 3 

### - and PM 2.5 

### -related acute health impacts and non-health benefits, we netted out the monetized va lue of these benefits from the numerator to yield a “net cost” estim ate. For the MILY aggregate effectiveness measure, the denominator is simply the sum of (O 3 

### - and PM 2.5 

### -related) life years gained from increased life expectancy and QALYs gained from the (PM 2.5 

### -related) reductions in CB and nonfatal AMI. The separate O 3 

### - and PM 2.5 

### -related inputs to the de nominators of the costeffectiveness ratios are summarized above in Tables 8B-19 through 8B-22. The costeffectiveness ratios and 95 percent confidence (c redible) intervals resu lting from all of the sources of uncertainty considere d, using Monte Carlo procedures as implemented in the Crystal BallTM software program and incorporating both the O 3 

### - and PM 2.5 

### -related benefits are shown in the tables below. Tables 8B-25 and 8B-26 show cost per life saved, us ing a 3 percent and 7 percent discount rate, resp ectively. Tables 8B-27 and 8B-28 show cost per life year saved at the two discount rates; and Ta bles 8B-29 and 8B-30 show cost per MILY gained.

8-10 5

### Final Regulatory Impact Analysis

Table 8B-25. Estimated Net Cost (2005$) per O 3 - and PM 2.5 -Related Life Saved Under the Final SSI & RME Rule in 2020 and 2030, Using a 3 Percent Discount Rate

O 3 Mortality Study PM 2.5 Mortality Study Cost Effectiveness Ratio: Net Cost (in Thousand $) per Life Saved* (95% CI)** 2020 2030 Bell et al. (2004) Pope et al. (2002) $260 ($110 - $580) $74 ($-99 - $280) Bell et al. (2004) Laden et al. (2006) $110 ($54 - $220) $34 ($-44 - $120) Levy et al. (2005) Pope et al. (2002) $180 ($85 - $320) $44 ($-58 - $140) Levy et al. (2005) Laden et al. (2006) $96 ($48 - $170) $26 ($-34 - $83) *The cost of the regulation is estimated to be $207.4 million in 2020 and $185.5 million in 2030. PM 2.5 -related avoided deaths are discounted back to 2020 or 2030. O 3 -related deaths are assumed to occur in 2020 or 2030. **95 percent confidence or credible intervals incorporate uncertainty surrounding the O 3 and PM 2.5 coefficients in the mortality and morbidity C-R functions as well as the uncertainty surrounding unit values of morbidity endpoints. All estimates rounded to two significant figures.
Table 8B-26. Estimated Net Cost (2005$) per O 3 - and PM 2.5 -Related Life Saved Under the Final SSI & RME Rule in 2020 and 2030, Using a 7 Percent Discount Rate

O 3 Mortality Study PM 2.5 Mortality Study Cost Effectiveness Ratio: Net Cost (in Thousand $) per Life Saved* (95% CI)** 2020 2030 Bell et al. (2004) Pope et al. (2002) $300 ($130 - $660) $99 ($-87 - $330) Bell et al. (2004) Laden et al. (2006) $130 ($67 - $250) $47 ($-39 - $140) Levy et al. (2005) Pope et al. (2002) $200 ($100 - $350) $57 ($-49 - $160) Levy et al. (2005) Laden et al. (2006) $110 ($58 - $190) $35 ($-30 - $95) *The cost of the regulation is estimated to be $207.4 million in 2020 and $185.5 million in 2030. PM 2.5 -related avoided deaths are discounted back to 2020 or 2030. O 3 -related deaths are assumed to occur in 2020 or 2030. **95 percent confidence or credible intervals incorporate uncertainty surrounding the O3 and PM2.5 coefficients in the mortality and morbidity C-R functions as well as the uncertainty surrounding unit values of morbidity endpoints. All estimates rounded to two significant figures.



### 8-1 06Cost-Benefit AnalysisTable 8B-27. Estimated Net Cost (2005$) per O3- and PM2.5-Related Life Year Saved Under the Final SSI & RME Rule in 2020 and 2030,Using a 3 Percent Discount RateO3Mortality StudyPM2.5Mortality StudyLife Expectancy Assumption for O3-RelatedMortalityCost Effectiveness Ratio: Net Cost (in Thousand $) perLife Year Saved*(95% CI)**20202030Bell et al. (2004)Pope et al. (2002)General Population$23($9.9 - $54)$6.8($-9 - $26)Bell et al. (2004)Pope et al. (2002)Subpopulation with Average COPD$24($10 - $56)$7.1($-9.5 - $27)Bell et al. (2004)Pope et al. (2002)Subpopulation with Severe COPD$25($10 - $61)$7.6($-10 - $30)Levy et al. (2005)Pope et al. (2002)General Population$16($7.8 - $30)$4.1($-5.5 - $13)Levy et al. (2005)Pope et al. (2002)Subpopulation with Average COPD$18($8.3 - $34)$4.7($-6.2 - $15)Levy et al. (2005)Pope et al. (2002)Subpopulation with Severe COPD$21($9.2 - $44)$5.8($-7.6 - $20)Bell et al. (2004)Laden et al. (2006)General Population$10($5 - $20)$3.1($-4.2 - $11)Bell et al. (2004)Laden et al. (2006)Subpopulation with Average COPD$11($5 - $21)$3.2($-4.2 - $11)Bell et al. (2004)Laden et al. (2006)Subpopulation with Severe COPD$11($5.1 - $21)$3.3($-4.4 - $11)Levy et al. (2005)Laden et al. (2006)General Population$8.8($4.4 - $16)$2.4($-3.2 - $7.7)Levy et al. (2005)Laden et al. (2006)Subpopulation with Average COPD$9.2($4.5 - $17)$2.6($-3.4 - $8.3)Levy et al. (2005)Laden et al. (2006)Subpopulation with Severe COPD$9.9($4.8 - $19)$2.9($-3.9 - $9.5)*The cost of the regulation is estimated to be $207.4 million in 2020 and $185.5 million in 2030. All life years are discounted back to the year of death. PM2.5-relatedavoided deaths are discounted back to 2020 or 2030.O3-related deaths are assumed to occur in 2020 or 2030.**95 percent confidence or credible intervals (CIs) incorporate uncertainty surrounding the O3and PM2.5coefficients in the mortality and morbidity C-R functions as well asthe uncertainty surrounding unit values of morbidity endpoints. All estimates rounded to two significant figures.8-107Final Regulatory Impact AnalysisTable 8B-28. Estimated Net Cost (2005$) per O3- and PM2.5-Related Life Year Saved Under the Final SSI & RME Rule in 2020 and 2030,Using a 7 Percent Discount RateO3Mortality StudyPM2.5Mortality StudyLife Expectancy Assumption for O3-RelatedMortalityCost Effectiveness Ratio: Net Cost (in Thousand $) perLife Year Saved*(95% CI)**20202030Bell et al. (2004)Pope et al. (2002)General Population$36($16 - $81)$12($-11 - $42)Bell et al. (2004)Pope et al. (2002)Subpopulation with Average COPD$37($16 - $85)$13($-11 - $44)Bell et al. (2004)Pope et al. (2002)Subpopulation with Severe COPD$39($17 - $93)$14($-12 - $50)Levy et al. (2005)Pope et al. (2002)General Population$24($12 - $44)$7($-6 - $20)Levy et al. (2005)Pope et al. (2002)Subpopulation with Average COPD$26($13 - $49)$8.0($-6.7 - $23)Levy et al. (2005)Pope et al. (2002)Subpopulation with Severe COPD$31($15 - $62)$10($-8.3 - $31)Bell et al. (2004)Laden et al. (2006)General Population$16($7.8 - $30)$5.6($-4.7 - $17)Bell et al. (2004)Laden et al. (2006)Subpopulation with Average COPD$16($7.9 - $31)$5.7($-4.8 - $17)Bell et al. (2004)Laden et al. (2006)Subpopulation with Severe COPD$17($8 - $32)$5.9($-5 - $18)Levy et al. (2005)Laden et al. (2006)General Population$13($6.8 - $23)$4.3($-3.5 - $12)Levy et al. (2005)Laden et al. (2006)Subpopulation with Average COPD$14($7.1 - $24)$4.6($-3.9 - $13)Levy et al. (2005)Laden et al. (2006)Subpopulation with Severe COPD$15($7.5 - $28)$5.1($-4.4 - $15)*The cost of the regulation is estimated to be $207.4 million in 2020 and $185.5 million in 2030. All life years are discounted back to the year of death. PM2.5-relatedavoided deaths are discounted back to 2020 or 2030.O3-related deaths are assumed to occur in 2020 or 2030.**95 percent confidence or credible intervals (CIs) incorporate uncertainty surrounding the O3and PM2.5coefficients in the mortality and morbidity C-R functions as well asthe uncertainty surrounding unit values of morbidity endpoints. All estimates rounded to two significant figures.8-108Cost-Benefit AnalysisTable 8B-29. Estimated Net Cost (2005$) per O3- and PM2.5-Related MILY Gained Under the Final SSI & RME Rule in 2020 and 2030,Using a 3 Percent Discount RateO3Mortality StudyPM2.5Mortality StudyLife Expectancy Assumption for O3-RelatedMortalityCost Effectiveness Ratio: Net Cost (in Thousand $) perMILY Gained*(95% CI)**20202030Bell et al. (2004)Pope et al. (2002)General Population$20($9 - $42)$5.5($-7.4 - $19)Bell et al. (2004)Pope et al. (2002)Subpopulation with Average COPD$21($9.3 - $44)$5.6($-7.6 - $20)Bell et al. (2004)Pope et al. (2002)Subpopulation with Severe COPD$21($9.4 - $46)$6.0($-8.1 - $21)Levy et al. (2005)Pope et al. (2002)General Population$15($7.2 - $26)$3.6($-4.9 - $11)Levy et al. (2005)Pope et al. (2002)Subpopulation with Average COPD$16($7.6 - $29)$4.0($-5.4 - $13)Levy et al. (2005)Pope et al. (2002)Subpopulation with Severe COPD$18($8.4 - $36)$4.8($-6.4 - $16)Bell et al. (2004)Laden et al. (2006)General Population$9.8($4.7 - $18)$2.8($-3.8 - $9.4)Bell et al. (2004)Laden et al. (2006)Subpopulation with Average COPD$9.9($4.8 - $19)$2.9($-3.8 - $9.6)Bell et al. (2004)Laden et al. (2006)Subpopulation with Severe COPD$10($4.8 - $19)$3.0($-3.9 - $10)Levy et al. (2005)Laden et al. (2006)General Population$8.3($4.2 - $14)$2.2($-2.9 - $7)Levy et al. (2005)Laden et al. (2006)Subpopulation with Average COPD$8.7($4.3 - $16)$2.4($-3.2 - $7.5)Levy et al. (2005)Laden et al. (2006)Subpopulation with Severe COPD$9.3($4.5 - $17)$2.7($-3.5 - $8.6)*The cost of the regulation is estimated to be $207.4 million in 2020 and $185.5 million in 2030. PM2.5-related avoided deaths are discounted back to 2020 or2030. O3-related deaths are assumed to occur in 2020 or 2030.**95 percent confidence or credible intervals (CIs) incorporate uncertainty surrounding the O3and PM2.5coefficients in the mortality and morbidity C-Rfunctions as well as the uncertainty surrounding unit values of morbidity endpoints. All estimates rounded to two significantfigures.8-109Final Regulatory Impact AnalysisTable 8B-30. Estimated Net Cost (2005$) per O3- and PM2.5-Related MILY Gained Under the Final SSI & RME Rule in 2020 and 2030,Using a 7 Percent Discount RateO3Mortality StudyPM2.5Mortality StudyLife Expectancy Assumption for O3-RelatedMortalityCost Effectiveness Ratio: Net Cost (in Thousand $) perMILY Gained*(95% CI)**20202030Bell et al. (2004)Pope et al. (2002)General Population$110($58 - $190)$31($15 - $64)Bell et al. (2004)Pope et al. (2002)Subpopulation with Average COPD$33($15 - $70)$31($15 - $66)Bell et al. (2004)Pope et al. (2002)Subpopulation with Severe COPD$31($15 - $64)$33($15 - $70)Levy et al. (2005)Pope et al. (2002)General Population$31($15 - $66)$22($12 - $38)Levy et al. (2005)Pope et al. (2002)Subpopulation with Average COPD$27($13 - $51)$24($12 - $42)Levy et al. (2005)Pope et al. (2002)Subpopulation with Severe COPD$22($12 - $38)$27($13 - $51)Bell et al. (2004)Laden et al. (2006)General Population$23($12 - $42)$15($7.4 - $27)Bell et al. (2004)Laden et al. (2006)Subpopulation with Average COPD$15($7.6 - $29)$15($7.5 - $28)Bell et al. (2004)Laden et al. (2006)Subpopulation with Severe COPD$15($7.4 - $27)$15($7.6 - $29)Levy et al. (2005)Laden et al. (2006)General Population$15($7.5 - $28)$13($6.5 - $21)Levy et al. (2005)Laden et al. (2006)Subpopulation with Average COPD$14($7.1 - $25)$13($6.8 - $22)Levy et al. (2005)Laden et al. (2006)Subpopulation with Severe COPD$13($6.5 - $21)$14($7.1 - $25)*The cost of the regulation is estimated to be $207.4 million in 2020 and $185.5 million in 2030. PM2.5-related avoided deaths are discounted back to 2020 or2030. O3-related deaths are assumed to occur in 2020 or 2030.**95 percent confidence or credible intervals (CIs) incorporate uncertainty surrounding the O3and PM2.5coefficients in the mortality and morbidity C-Rfunctions as well as the uncertainty surrounding unit values of morbidity endpoints. All estimates rounded to two significantfigures.8-110

### Final Regulatory Impact Analysis

8B.5 Conclusions

We estimated the cost effectiveness of attain ing the Final Small SI and Recreational Marine Engine Rule in 2020 and in 2030, based on reducti ons in premature deaths and incidence of chronic disease. We measured effectiveness us ing several different metrics, including lives saved, life years saved, and QALYs gained (for improvements in qua lity of life due to reductions in incidence of chronic disease). We suggested a new metric for aggregating life years saved and improvements in quality of life, morbidity inclusive life years (MILY) which assumes that society assigns a weight of one to years of life extended regardless of pree xisting disabilities or chronic health conditions.
CEA of environmental regulations that have substantial public h ealth impacts may be informative in identifying programs that have achieved cost-effective reductions in health impacts and can suggest areas where additional c ontrols may be justified. However, the overall efficiency of a regulatory action can only be judge d through a complete benefit-cost analysis that takes into account all benefits and costs, including both health and non-health effects. The benefit-cost analysis for the Final Small SI a nd Recreational Marine Engine Rule, provided in Chapter 8, shows that the rule ha s potentially large net benefits , indicating that implementation of the Final Small SI and Recreational Marine E ngine Rule will likely result in improvements in overall public welfare.

8- 111

### Cost-Be nefit Analysis

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Samet, J.M., S.L. Zeger, F. Dominici, F. Curriero, I. Coursac, D.W. Dockery, J. Schwartz, and A. Zanobetti. June 2000. The National Morbidity, Mortality and Air Polluti on Study: Part II: Morbidity, Mortality and Air Pollu tion in the United States. Res earch Report No. 94, Part II. Cambridge, MA: Health Effects Institute.
Schwartz, J. 1993. “Particulate Air Pollu tion and Chronic Respiratory Disease.” 

### Environmental Research 62:7-13.
Singer, P., J. McKie, H. Kuhse, J. Richards on, and J. Harris. 1995. “Double Jeopardy and the Use of QALYs in Health Care Allocation.” 

### Journal of Medical Ethics 21:144-157.
Smith, K.J., and R.R. Pesce. 1994. “Pulmonary Artery Catheterizati on in Exacerbations of COPD Requiring Mechanical Ventilation: A Cost-Effectiveness Analysis.” 

### Respiratory Care 39:961-7.
Stinnett, A.A., M.A. Mittleman, M.C. Weinstein, K.M. Kuntz, D.J. Cohen, L.W. Williams, P.A. Goldman, D.O. Staiger, M.G.M. Hunink, J. Ts evat, A.N.A. Tosteson, and L. Goldman. 1996. “The Cost-effectiveness of Di etary and Pharmacologic Thera py for Cholesterol Reduction in Adults.” In 

### Cost-effectiveness in Health and Medicine , Gold, M.E., J. E. Siegel, L.B. Russell, and M.C. Weinstein (eds.). New York: Oxford University Press.
Stouthard, M.E.A., J.L. Essink-Bot, G.J. Bonsel, J. J. Barendregt, P.G.N. Kramers, H.P.A. Van de Water, and L.J. Gunning-Schepers. 1997. “Disability Weights for Diseases in the Netherlands.” Rotterdam: Department of Public Health, Erasmus University Rotterdam.
Suwa, T. J.C. Hogg, K.B. Quinlan, A. Ohgami , R. Vincent, and S.F. van Eeden. 2002. “Particulate Air Pollution Induces Progression of Atherosclerosis.” 

### Journal of the American College of Cardiology 39:935-942.
Tsuji, H., M.G. Larson, F.J. Venditti, Jr., E.S. Manders, J.C. Evans, C.L. Feldman, and D. Levy. 1996. “Impact of Reduced Heart Rate Variability on Risk for Cardiac Events. The Framingham Heart Study.” 

### Circulation 94(11):2850-2855.

U.S. Environmental Protection Agency (EPA). 2000. 

### Guidelines for Preparing Economic Analyses . EPA 240-R-00-003.

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U.S. Environmental Protection Agency (EPA). 2004. Final Regulatory Analysis: Control of Emissions from Nonroad Diesel Engines.

U.S. Environmental Protection Agency, 2006. Final Regulatory Impact Analysis: PM 2.5 

### NAAQS. Prepared by Office of Air and Radiation. Available: http://www.epa.gov /ttn/ecas/ria.html [accessed 10 March 2008].

U.S. Environmental Protection Agency (EPA) Science Advisory Board (SAB). EPA-SABCOUNCIL-ADV-04-002. March 2004. Advisory on Pl ans for Health Effects Analysis in the Analytical Plan for EPA’s Second Prospective Analysis—Benefits and Costs of the Clean Air Act, 1990-2020: Advisory by the Health Effects Subcommittee of the Advisory Council on Clean Air Compliance Analysis.

U.S. Environmental Protection Agency (EPA) Science Advisory Board (SAB). 2005. EPA’s Review of the National Ambient Air Quality Sta ndards for Particulate Matter (Second Draft PM Staff Paper, January 2005). EPA-SAB-CASAC-05-007. June.

U.S. Food and Drug Administration (FDA). 2004. Bar Code Label Requirements for Human Drug Products and Biological Products; Final Rule. Federal Register: February 26, 2004 Volume 69 (38): 9119-9171.

U.S. Office of Management and Budget (OMB). 2003. Circular A-4: Regulatory Analysis, September 17, 2003. Available at: http:// www.whitehouse.gov/omb/ circulars/a004/a-4.pdf.
Vos, T. 1999a. Final worksheet VM1 COPD.xls , prepared for Victoria Burden of Disease Study. Available at: http:// www.dhs.vic.gov.au/phd/bod/daly.htm.
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### American Journal of Cardiology 65(7):432-40.

1 Clean Air Science Advisory Committee. June 2005. EPA’s Review of the National Ambient Air Quality Standards for Particulate Matter (Second Draft PM Staff Paper, January 2005). A R eview by the PM Review Panel of the EPA Clean Air Science Advisory Committee. EPASAB-CASAC-05-007.

2 EPA-SAB-COUNCIL_ADV_04-002. March 2004. Advisory on Plans for Health Effects Analysis in the Analytical Plan for EPA’s Second Prospective Analysis – Benefits and Costs of the Clean Air Act, 1990-2020: Advisory by the Health Effects Subcommittee of th e Advisory Council on Clean Air Compliance Analysis.



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3 National Research Council (NRC). 2002. Estimating the Public Health Benefits of Proposed Air Pollution Regulations . Washington, DC: The National Academies Press.

4 EPA-SAB-COUNCIL-ADV-00-001. October 1999. The Clean Air Act Amendments (CAAA) Section 812 Prospective Study of Costs and Benefits (1999): Advisory by the Health and Ecological Effects Subcommittee on Initial Assessments of Health and Ecological Effects. Part 2.

5 EPA-COUNCIL-LTR-05- 001. December 2004. Advisory Council on Clean Air Compliance Analysis Response to Agency Request on Cessation Lag.

6 Pope, C.A., III, M.J. Thun, M.M. Namboodiri, D.W. Dockery, J.S. Evans, F.E. Speizer, an d C.W. Heath, Jr. 1995. “Particulate Air Pollution as a Predictor of Morta lity in a Prospective Study of U.S. Adults.” American Journal of Respiratory Critical Care Medicine 151:669-674.

7 Dockery, D.W., C.A. Pope, X.P. Xu, J.D. Spengler, J.H. Ware, M.E. Fay, B.G. Ferris, and F.E. Speizer. 1993. “An Association between Air Pollution and Mortality in Six U.S. Cities.” New England Journal of Medicine 329(24):1753-1759.

viii Chestnut, L.G., and R.D. Rowe. 1990. Preservation Valu es for Visibility Protection at the National Parks: Draft Final Report. Prepared for Office of Air Quality Planni ng and Standards, U.S. Environmental Protection Agency, Research Triangle Park, NC and Air Quality Manage ment Division, National Park Service, Denver, CO.



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# CHAPTER 9: Economic Impact Analysis

We prepared an Economic Impact Analysis (EIA) to estimate the economic impacts of the final emission control program on the Small SI and Marine SI engine and equipment markets. In this chapter we describe the Economic Impact Model (EIM) developed to estimate the market-level changes in price and outputs for affected markets and the social costs of the program as well as the expected distribution of those costs across affected economic sectors. We also present the results of our analysis.
We estimate the net social costs of the final program to be about $186 million in 2030. 1 

### This estimate reflects the estimated compliance costs associated with the Small SI and Marine SI engine standards and the expected fuel savings from improved evaporative controls. When the fuel savings are not taken into account, the results of the economic impact modeling suggest that the social costs of these programs are expected to be about $459 million in 2030. Consumers of Small SI and Marine products are expected to bear about 86 percent of these costs. Engine and equipment manufacturers are expected to bear 3.3 percent and 10.3 percent, respectively. We estimate fuel savings of about $273 million in 2030, which will accrue to consumers.
With regard to market-level impacts in 2030, the average price increase for Small SI engines is expected to be about 7.4 percent ($12 per unit). The average price increase for Marine SI engines is expected to be about 1.9 percent ($213 per unit). The largest average price increase for Small SI equipment is expected to be about 5.6 percent ($15 per unit) for Class I equipment. The largest average price increase for Marine SI vessels is expected to be about 2.4 percent ($204 per unit) for Personal Watercraft.



## 9.1 Overview and Results

9.1.1 What is an Economic Impact Analysis?
An Economic Impact Analysis (EIA) is prepared to inform decision makers about the potential economic consequences of a regulatory action. The analysis consists of estimating the social costs of a regulatory program and the distribution of these costs across stakeholders. These estimated social costs can then be compared with estimated social benefits (as presented in Chapter 8). As defined in EPA’s Guidelines for Preparing Economic Analyses (EPA 2000, p 113), social costs are the value of the goods and services lost by society resulting from a) the use of resources to comply with and implement a regulation and b) reductions in output. In this analysis, social costs are explored in two steps. In the market analysis , we estimate how prices and quantities of goods affected by the final emission control program can be expected to

1 All estimates presented in this section are in 2005$. The fuel savings in this net social cost is calculated by 2005 gasoline price. 2005 Petroleum Marketing Annual (Table 31). U.S. Department of Energy, Energy Information Administration (DoE 2005).

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### Final Regulatory Impact Analysis

change once the program goes into effect. In the economic welfare analysis , we look at the total social costs associated with the program and their distribution across stakeholders.

9.1.2 What Methodology Did EPA Use in this Economic Impact Assessment?
The Economic Impact Model (EIM) is a behavioral model developed for this proposal to estimate price and quantity changes and total social costs associated with the emission controls under consideration. The model relies on basic microeconomic theory to simulate how producers and consumers of affected products can be expected to respond to an increase in production costs as a result of the final emission control program. The economic theory that underlies the model is described in detail in Section 9.2.
The EIM is designed to estimate the economic impacts of the final program by simulating economic behavior. This is done by creating a model of the initial, pre-control market for a product, shocking it by the estimated compliance costs, and observing the impacts on the market. At the initial, pre-control market equilibrium, a market is characterized by a price and quantity combination at which consumers are willing to purchase the same amount of a product that producers are willing to produce at that price (demand is equal to supply). The control program under consideration would increase the production costs of affected goods by the amount of the compliance costs. This generates a “shock” to the initial equilibrium market conditions. Producers of affected products will try to pass so me or all of the increased costs on to the consumers of these goods through price increases. In response to the price increases, consumers will decrease their demand for the affected goods. Producers will react to the decrease in quantity demanded by decreasing the quantity they produce; the market will react by setting a higher price for those fewer units. These interactions continue until a new market equilibrium price and quantity combination is achieved. The amount of the compliance costs that can be passed on to consumers is ultimately limited by the price sensitivity of purchasers and producers in the relevant market (price elasticity of demand and supply). The EIM explicitly models these behavioral responses and estimates new equilibrium prices and output and the resulting distribution of social costs across these stakeholders (producers and consumers).

The EIM is a behavioral model. The estimated social costs of this emission control program are a function of the ways in which producers and consumers of the engines and equipment affected by the standards change their behavior in response to the costs incurred in complying with the standards. These behavioral responses are incorporated in the EIM through the price elasticity of supply and demand (reflected in the slope of the supply and demand curves), which measure the price sensitivity of consumers and producers. An “inelastic” price elasticity (less than one) means that supply or demand is not very responsive to price changes (a one percent change in price leads to less than one percent change in supply or demand ). An “elastic” price elasticity (more than one) means that supply or demand is sensitive to price changes (a one percent change in price leads to more than one percent change in supply or demand). A price elasticity of one is unit elastic, meaning there is a one-to-one correspondence between a change in price and change in demand. The price elasticities used in this analysis are described in Section 9.3 and were estimated using well-established econometric methods. It

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### Economic Impact Analysis
should be noted that demand in the engine markets is internally derived from the Small SI equipment and Marine SI vessel markets as part of the process of running the model. This is an important feature of the EIM, which allows it to link the engine and equipment components of each model and simulate how compliance costs can be expected to ripple through the affected market.

9.1.3 What Economic Sectors are Included in the Economic Impact Model?
There are two broad economic sectors affected by the emission control program described in this proposal: (1) Small SI engines and equipment, and (2) Marine SI engines and equipment. For Small SI engines and equipment we model one integrated handheld engine and equipment category. On the nonhandheld side, the model distinguishes between 9 engine categories, depending on engine class and useful life (Class I: UL125, UL250, and UL500; Class I -snowblower: UL 125, UL250, and UL 500; Class II: UL250, UL500, UL1000), and 8 nonhandheld equipment categories (agriculture/construction/ general industrial; utility and recreational vehicles; lawn mowers; tractors; other lawn and garden; gensets/welders; pumps/compressors/pressure washers; and snowblowers). For Marine SI engines and equipment, the model distinguishes between sterndrives and inboards (SD/I), outboards (OB), and personal watercraft (PWC); SD/I and OB are further classified by whether they are luxury or not. These markets are described in Section 9.3 and in more detail in the industry characterizations prepared for this proposal.
This analysis assumes that the all of these products are purchased and used by residential households. This means that to model the behavior change associated with final standards we model all uses as residential lawn and garden care, power generation (Small SI) or personal recreation (Marine SI). We do not explicitly model commercial uses (how the costs of complying with the final programs may affect the production of goods and services that use Small SI or Marine SI engines or equipment as production inputs); we treat all commercial uses as if they were residential uses. We believe this approach is reasonable because the commercial share of the end use markets for both Small SI and Marine SI equipment is very small (see Section 9.3.1.1). In addition, for any commercial uses of these products the share of the cost of these products to total production costs is also small (e.g., the cost of a Small SI generator is only a very small part of the total production costs for a construction firm). Therefore, a price increase of the magnitude anticipated for this control program is not expected to have a noticeable impact on prices or quantities of goods or services produced using Small SI or Marine SI equipment as inputs (e.g., commercial turf care, construction, or fishing).
In the EIM the Small SI and Marine SI markets are not linked (there is no feedback mechanism between the Small SI and Marine SI market segments). This is appropriate because the affected equipment is not interchangeable and because there is very little overlap between the engine producers in each market. These two sectors represent different aspects of economic activity (lawn and garden care and power generation as opposed to recreational marine) and production and consumption of one product is not affected by the other. In other words, an increase in the price of lawnmowers is not expected to have an impact on the production and supply of personal watercraft, and vice versa. Production and consumption of each of these

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### Final Regulatory Impact Analysis

products are the results of other factors that have little crossover impacts (the need for residential garden upkeep or power generation; the desire for personal recreation).
Consistent with the final emission controls, this Economic Impact Analysis covers engines sold in 49 states. California engines are not included because California has its own state-level controls for Small SI and Marine SI engines. The sole exceptions are Small SI engines used in agriculture and construction applications in California: these engines are included in the control program of this analysis because the Clean Air Act preempts California from setting standards for those engines.
Table 9.1-1 summarizes the markets included in this Economic Impact Analysis. More detailed information on the markets and model data inputs is provided in Section 9.3.3, and in the industry profiles prepared for this proposal (See Chapter 1, & RTI, 2006 ).

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### Economic Impact Analysis
Table 9.1-1: Summary of Markets in Economic Impact Model

Model Dimension Small SI Marine SI Description of Markets HANDHELD No distinction between engine and equipment types for this analysis

NONHANDHELD Engine types

Class I (125, 250, 500 hours) Class II (250, 500, 1000 hours) Equipment types Lawn mowers

Lawn and garden tractors Pumps/compressors/pressure washers

Agriculture/construction/industrial Other lawn and garden Gensets/welders Snowblowers Utility and recreational vehicles Engine and equipment types SD/I recreational (runabouts,

airboats, jetboats) SD/I luxury (yachts, cruisers, offshore) OB recreational (runabouts, pontoons,

fishing) OB luxury (yacht, cruiser, express fish) Personal watercraft (PWC)
Engine sizes

Less than 25 hp 26 to 50 hp 51 to 100 hp 101 to 175 hp 176 to 300 hp Greater than 300 hp

Geographic scope 49 state, plus agriculture and construction for California 49 state (no California engines or equipment)

Market structure Competitive Competitive
Baseline population EPA certification database PSR OE Link sales database EPA and CARB certification database NMMA published statistical data Growth projections EPA’s 2005 Nonroad model EPA’s 2005 Nonroad model Supply elasticity Econometric estimate (ela stic) Econometric estimate (elastic) Demand elasticity Econometric estimate Gensets, all handheld: elastic Lawn mowers & other LG: inelastic

All others: unit elastic Econometric estimate (elastic)

Regulatory shock Handheld (integrated market): direct compliance costs (fixed + variable) cause shift in supply function

Nonhandheld: Engine: direct compliance costs cause shift in supply function
Equipment (Class I): no direct compliance costs but higher engine prices cause shift in supply function
Equipment (Class II): direct compliance costs plus higher engine prices cause shift in supply function PWC (integrated): direct compliance costs (fixed + variable) cause shift in supply function
SD/I and Outboard luxury: Engine: direct compliance costs cause shift in supply function
Vessel: direct compliance costs plus higher engine prices cause shift in supply function

Outboard recreational: Engine: direct compliance costs cause shift in supply function
Vessel: direct compliance costs cause shift in supply function

### Final Regulatory Impact Analysis

9.1.4 Summary of Results
The EIA consists of two parts: a market analysis and welfare analysis. The market analysis looks at expected changes in prices and quantities for affected products. The welfare analysis looks at economic impacts in terms of annual and present value changes in social costs.
We performed a market analysis for all years and all engines and equipment markets. In this section we present summarized results for selected markets and years. More detail can be found in the appendices to this chapter and in the docket for this rule (Li, 2007). Also, included in Appendix 9H are sensitivity analyses for several key inputs.
In this analysis, initial market equilibrium conditions are shocked by either the fixed cost or the variable cost. For the market analysis, this leads to a small increase in estimated price impacts for the years 2008 through 2014, the period during which the costs change over time reflecting the phase-in of either the different costs (variable and fixed costs) or the different standards. The increase is small because, for many elements of the program, annual per unit compliance costs are relatively smaller than engine or equipment per unit price . For the welfare analysis, applying both fixed and variable costs means that the burden of the social costs attributable to producers and consumers remains fixed throughout the period of analysis. This is because producers pass the fixed costs to consumers at the same rate as the variable costs instead of having to absorb them internally.

9.1.4.1 Market Analysis Results
In the market analysis, we estimate how prices and quantities of goods affected by the final emission control program can be expected to change once the program goes into effect. The analysis relies on the initial market equilibrium prices and quantities for each type of equipment and the price elasticity of supply and demand. It predicts market reactions to the increase in production costs due to the new compliance costs (variable and fixed). It should be noted that this analysis does not allow any other factors of production to vary. In other words, it does not consider that manufacturers may adjust their production processes or marketing strategies in response to the control program. Also, as explained above, while the markets are shocked by both fixed and variable costs, the market shock is not offset by fuel savings.
A summary of the estimated market impacts is presented in Table 9.1-2 for 2014, 2018, and 2030. These years were chosen because 2014 is the year of highest compliance cost; the market impacts reflect the compliance costs for all the programs as well as growth in equipment population; 2018 is the year in which the learning curve is expected to be applied to the variable cost; and 2030 illustrates the long-term impacts of the program.
Market level impacts are reported for the engine and equipment markets separately. This is because the EIM is a two-level model that treats these markets separately. However, changes in equipment prices and quantities are due to impacts of both direct equipment compliance costs

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### Economic Impact Analysis
and indirect engine compliance costs that are passed through to the equipment market from the engine market through higher engine prices.
The average market-level impacts presented in this section are designed to provide a broad overview of the expected market impacts that is useful when considering the impacts of the rule on the economy as a whole. The average price impacts are product-weighted averages of the results for the individual engine and equi pment categories included in that sub-sector (e.g., the estimated Marine SI engine price and quantity changes are weighted averages of the estimated results for all of the Marine SI engine markets). The average quantity impacts are the sum of the decrease in units produced units across sub-markets. Price increases and quantity decreases for specific types of engines and equipment are likely to be different.
Although each of the affected equipment in this analysis generally require one engine (the exception being Marine SI sterndrive/inboards), the estimated decrease in the number of engines produced in Table 9.1-2 is less than the estimated decrease in the number of equipment produced. At first glance, this result seems counterintuitive because it does not reflect the approximate one-to-one correspondence between engines and equipment. This discrepancy occurs because the engine market-level analysis examines only output changes for engines that are produced by independent engine manufacturers and subsequently sold to independent equipment manufacturers. Engines produced and consumed by vertically integrated equipment/engine manufactures are not explicitly modeled. Therefore, the market-level analysis only reflects engines sold on the "open market," and estimates of output changes for engines consumed internally are not reflected in this number. 2 

### Despite the fact that changes in consumption of internally consumed engines in not directly reported in the market-level analysis results, the costs associated with these engines are included in the market-level analysis (as supply shift for the equipment markets). In addition, the cost and welfare analyses include the compliance costs associated with internally consumed engines.

9.1.4.1.1 Marine SI Market Analysis
The average price increase for Marine SI engines in 2014, the high cost year, is estimated to be about 2.4 percent, or $266. By 2018, this average price increase is expected to decline to about 1.9 percent, or $213, and remain at that level for later years. The market impact analysis predicts that with these increases in engine prices the expected average decrease in total sales in 2014 is about 2.7 percent, or 10,883 engines. This decreases to about 2.2 percent in 2018, or about 9,055 engines.
On the vessel side, the average price change reflects the direct equipment compliance costs plus the portion of the engine costs that are passed on to the equipment purchaser (via higher engine prices). The average price increase in 2014 is expected to be about 1.6 percent, or

2 For example, PWC and handheld equipment producers generally integrate equipment and engine manufacturing processes and are included in the EIM as one-level equipment markets. Since there is no engine market for these engines, the EIM does not include PW C and handheld engine consumption changes in engine market-level results.

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### Final Regulatory Impact Analysis

$285. By 2018, this average price increase is expected to decline to about 1.3 percent, or $231. These price increases are expected to vary across vessel categories. The category with the largest price increase in 2014 is expected to be personal watercraft , with an estimated price increase of about 3.0 percent in 2014; this is expected to decrease to 2.4 percent in 2018. The smallest expected change in 2014 is expected to be for sterndrive/inboards vessels, which are expected to see price increases of about 0.9 percent. The market impact analysis predicts that with these increases in vessel prices the expected average decrease in quantity produced in 2014 is about 3.2 percent, or 12,230 vessels. This is expected to decrease to about 2.6 percent in 2018, or about 10,145 vessels. The personal watercraft category is expected to experience the largest decline in 2014, about 6.0 percent (4,800 vessels). The smallest percentage decrease in production is expected for sterndrive/inboards at 1.7 percent (1,580 vessels); the smallest absolute decrease in quantity is expected for outboard recreational vessels, at 144 vessels (2.0 percent).

9.1.4.1.2 Small SI Market Analysis
The average price increase for Small SI engines in 2014, the high cost year, is estimated to be about 8.3 percent, or $14. By 2018, this average price increase is expected to decline to about 7.4 percent, or $12, and remain at that level for later years. The market impact analysis predicts that with these increases in engine prices the expected average decrease in total sales in 2014 is expected to be about 1.9 percent, or 304,000 engines. This is expected to decrease to about 1.7 percent in 2018, or about 285,000 engines.
On the equipment side, the average price change reflects the direct equipment compliance costs plus the portion of the engine costs that are passed on to the equipment purchaser (via higher engine prices). The average price increase for all Small SI equipment in 2014 is expected to be about 2.6 percent, or $10. By 2018, this average price increase is expected to decline to about 2.3 percent, or $8. The average price increase and quantity decrease differs by category of equipment. As shown in Table 9.1-2, the price increase for Class I equipment is estimated to be about 6.2 percent ($17) in 2014, decreasing to 5.6 percent ($15) in 2018. The market impact analysis predicts that with these increases in equipment prices the expected average decrease in the quantity of Class I equipment produced in 2014 is about 2.1 percent, or 209,000 units. This is expected to decrease to about 1.9 percent in 2018, or about 200,000 units. For Class II equipment, a higher price increase is expected, about 2.6 percent ($24) in 2014, decreasing to 2.2 percent ($20) in 2018. The expected average decrease in the quantity of Class II equipment produced in 2014 is about 2.8 percent, or 101,000 units, decreasing to 2.4 percent, or about 92,000 units, in 2018.
For the handheld equipment market, prices are expected to increase about 0.2 percent for all years, and quantities are expected to decrease about 0.3 percent.

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### Economic Impact Analysis
Table 9.1-2: Summary of Estimated Market Impacts for 2014, 2018, 2030 (2005$)

Market Change in Price Change in Quantity

Absolute Percent Absolute Percent 2014
Marine

Engines $266 2.4% -10,883 -2.7% Equipment $285 1.6% -12,229 -3.2% SD/I $299 0.9% -1,578 -1.7% OB Recreational $870 1.0% -144 -2.0% OB Luxury $271 1.4% -5,666 -2.8% PWC $253 3.0% -4,841 -6.0% Small SI

Engines $14 8.3% -303,992 -1.9% Equipment $10 2.6% -360,310 -1.4% Class I $17 6.2% -209,284 -2.1% Class II $24 2.6% -101,104 -2.8% HH $0.3 0.2% -49,922 -0.3% 2018

Marine

Engines $213 1.9% -9,055 -2.2% Equipment $231 1.3% -10,145 -2.6% SD/I $244 0.7% -1,318 -1.4% OB Recreational $702 0.8% -119 -1.6% OB Luxury $218 1.1% -4,697 -2.3% PWC $204 2.4% -4,010 -4.8% Small SI

Engines $12 7.4% -284,995 -1.7% Equipment $8 2.3% -347,189 -1.2% Class I $15 5.6% -200,155 -1.9% Class II $20 2.2% -91,871 -2.4% HH $0.3 0.2% -55,164 -0.3% 2030 Marine

Engines $213 1.9% -9,802 -2.2% Equipment $231 1.3% -10,981 -2.6% SD/I $244 0.7% -1,426 -1.4% OB Recreational $702 0.8% -129 -1.6% OB Luxury $218 1.1% -5,085 -2.3% PWC $204 2.4% -4,341 -4.8% Small SI

Engines $12 7.4% -338,346 -1.7% Equipment $8 2.3% -412,103 -1.2% Class I $15 5.6% -237,485 -1.9% Class II $20 2.2% -109,120 -2.4% HH $0.3 0.2% -65,498 -0.3%

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### Final Regulatory Impact Analysis

9.1.4.2 Economic Welfare Results
In the economic welfare analysis we look at the costs to society of the final program in terms of losses to consumer and producer surplus. These surplus losses are combined with estimated fuel savings to estimate the net economic welfare impacts of the program. Estimated annual net social costs for selected years are presented in Table 9.1-3. This table shows that total social costs for each year are slightly less than the total engineering costs. This is because the total engineering costs do not reflect the decreased sales of engines and equipment that are incorporated in the total social costs.

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### Economic Impact Analysis Table 9.1-3: Estimated Annual Engin eering and Social Costs Through 2037 (2005$, $million)

Year Total Engineering Costs Total Social Costs Fuel Savings Net Engineering Costs (including fuel savings) Net Social Costs (including fuel savings) 2008 $53.8 $53.8 $3.2 $50.7 $50.6
2009 $126.8 $126.2 $8.1 $118.7 $118.1
2010 $271.0 $267.4 $19.6 $251.5 $247.8
2011 $328.7 $324.1 $43.9 $284.8 $280.2
2012 $441.6 $435.5 $70.8 $370.8 $364.7
2013 $445.4 $439.3 $95.7 $349.7 $343.6
2014 $450.0 $443.8 $115.9 $334.1 $327.9
2015 $411.6 $406.8 $134.3 $277.3 $272.5
2016 $408.8 $404.2 $150.9 $258.0 $253.3
2017 $398.3 $393.8 $165.3 $233.0 $228.6
2018 $403.3 $398.8 $178.3 $225.0 $220.5
2019 $408.3 $403.8 $190.4 $217.9 $213.4
2020 $413.4 $408.8 $201.4 $212.0 $207.4
2021 $418.4 $413.7 $211.1 $207.2 $202.6
2022 $423.4 $418.6 $220.5 $202.9 $198.2
2023 $428.4 $423.6 $229.3 $199.0 $194.3
2024 $433.4 $428.6 $237.1 $196.3 $191.5
2025 $438.4 $433.6 $244.2 $194.2 $189.3
2026 $443.5 $438.6 $250.8 $192.7 $187.8
2027 $448.5 $443.6 $256.9 $191.6 $186.6
2028 $453.6 $448.6 $262.7 $190.8 $185.8
2029 $458.6 $453.5 $268.1 $190.5 $185.4
2030 $463.7 $458.6 $273.0 $190.6 $185.5
2031 $468.7 $463.6 $277.6 $191.1 $185.9
2032 $473.8 $468.6 $281.9 $191.9 $186.7
2033 $478.8 $473.6 $285.8 $193.0 $187.7
2034 $483.9 $478.5 $289.6 $194.2 $188.9
2035 $488.9 $483.6 $293.3 $195.6 $190.3
2036 $494.0 $488.6 $296.8 $197.2 $191.8
2037 $499.0 $493.6 $300.1 $198.9 $193.5 NPV at 3% a $7,705.3 $7,616.6 $3,374. 6 $4,330.7 $4,242.0 NPV at 7% a $4,559.3 $4,506.2 $1,774. 7 $2,784.6 $2,731.4

a EPA presents the present value of cost and benefits estimates using both a three percent and a seven percent social discount rate. According to OMB Circular A-4, "the 3 percent discount rate represents the 'social rate of time preference'... [which] means the rate at which 'society' discounts future consumption flows to their present value"; "the seven percent rate is an estimate of the average before-tax rate of return to private capital in the U.S. economy ... [that] approximates the opportunity cost of capital."

9-11

### Final Regulatory Impact Analysis

Figure 9.1-1: Estimated Engineering, Total Social, Net Social Costs and Fuel Savings

Table 9.1-4 shows how total social costs are expected to be shared across stakeholders, for selected years. According to these results, consumers in the Marine SI market are expected to bear approximately 76 percent of the cost of the Marine SI program. This is expected to be offset by the fuel savings. Vessel manufacturers are expected to bear about 17 percent of that program, and engine manufacturers the remaining 6 percent. In the Small SI market, consumers are expected to bear 91 percent of the cost of the Small SI program. This will also be offset by the fuel savings. Equipment manufacturers are expected to bear about 7 percent of that program, and engine manufacturers the remaining 2 percent. The estimated percentage changes in surplus are the same for all years because the initial equilibrium conditions are shocked by both fixed and variable costs; producers would pass the fixed costs to consumers at the same rate as the variable costs.

9-12

### Economic Impact Analysis Table 9.1-4: Summary of Estimated Social Costs for 2014, 2018, 2030 (2005$, $million)

Market Absolute Change in Surplus Percent Change in Surplus Fuel Savings Total Change in Surplus 2014 Marine SI

Engine Manufacturers -$10.5 6% -$10.5 Equipment Manufacturers -$29.7 17% -$29.7

End User (Households) -$130.0 76% $45.4 -$84.6 Subtotal -$170.2 -$124.8 Small SI

Engine Manufacturers -$5.4 2% -$5.4 Equipment Manufacturers -$18.1 7% -$18.1

End User (Households) -$250.2 91% $70.4 -$179.7 Subtotal -$273.6 -$203.2 TOTAL -$443.8 $115.9 -$327.9 2018 Marine SI

Engine Manufacturers -$8.7 6%

- -$8.7 Equipment Manufacturers -$25.0 18% -$25.0

End User (Households) -$108.2 76% $82.7 -$25.6 Subtotal -$142.0 -$59.3 Small SI

Engine Manufacturers -$5.0 2% -$5.0 Equipment Manufacturers -$16.9 7% -$16.9

End User (Households) -$235.0 91% $95.6 -$139.4 Subtotal -$256.8 -$161.2 TOTAL -$398.8 $178.3 -$220.5 2030 Marine SI

Engine Manufacturers -$9.4 6% -$9.4 Equipment Manufacturers -$27.1 18% -$27.1

End User (Households) -$117.2 76% $152.9 $35.8 Subtotal -$153.7 -$0.8 Small SI

Engine Manufacturers -$5.9 2% -$5.9 Equipment Manufacturers -$20.0 7% -$20.0

End User (Households) -$278.9 91% $120.1 -$158.8 Subtotal -$304.9 -$184.8 TOTAL -$458.6 $273.0 -$185.5



### Table 9.1-5 contains more detailed information on the sources of the social costs for 2014. This table shows that engines and equipment manufacturers are expected to bear more of the burden of the program than end users. The loss of producer surplus for the small SI equipment and vessel manufacturers has two sources. First, they would bear part of the burden of the equipment costs. Second, they would also bear part of the engine costs, which are passed on to vessel manufacturers in the form of higher engine prices. In comparing with small SI equipment manufactures, marine SI vessel manufacturers would be able to pass along a relatively smaller share of compliance costs to end consumers due to the elastic price elasticity of demand for consumers of these vessels. As indicated in Table 9.3-22, the price elasticity of small SI equipment demand is inelastic while the price elasticity of vessel demand is very elastic.

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### Final Regulatory Impact Analysis Table 9.1-5: Estimated Surplus Change s by Market and Stakeholder for 2014 (2005$, $million)

Scenario Engineering Compliance

Costs Producer Surplus Consumer Surplus Total Surplus Fuel Savings Net Surplus

Engine Manufacturers Equipment Manufacturers Engine Price

Changes Equipment Cost

Changes End User

(Households) Engine Price

Changes Equipment Price

Changes Subtotal $118.7 $55.1

$173.8 Marine SI

-$10.5 -$29.7

-$13.2

-$16.5

-$130.0

-$93.6

-$36.4

-$40.2 -$130.0 -$10.5 -$29.7

-$130.0

-$170.2 $45.4

$45.4 -$10.5 -$29.7

-$84.6

-$124.8 Small SI

Engine $227.2 -$5.4 -$5.4 -$5.4 Manufacturers Equipment $49.0 -$18.1 -$18.1 -$18.1 Manufacturers Engine Price -$13.0 Changes Equipment Cost -$5.1

Changes End User -$250.1 -$250.1 $70.4 -$179.6 (Households) Engine Price -$206.6 Changes Equipment Cost -$43.5 Changes

Subtotal $276.2 -$23.6 -$250.1 -$273.6 $70.4 -$203.2 TOTAL $450.0 -$63.7 -$380.1 -$443.8 $115.9 -$327.9



### The present value of net social costs of the final standards through 2037 at a 3 percent discount rate, shown in Table 9.1-6, is estimated to be $4.2 billion, taking the fuel savings into account. We also performed an analysis using a 7 percent social discount rate. Using that discount rate, the present value of the net social costs through 2037 is estimated to be $2.7 billion, including the fuel savings.

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### Economic Impact Analysis Table 9.1-6. Estimated Net Social Costs Through 2037 by Stakeholder (2005$, $million)

Market Total Change in Surplus Percentage Change in Total Surplus Fuel Savings Net Change in Surplus

Net Present Value 3% Marine SI

Engine Manufacturers Equipment Manufacturers

End User (Households) Subtotal Small SI

Engine Manufacturers Equipment Manufacturers

End User (Households) Subtotal TOTAL -$167.0 6% -$474.5 17% -$2,079.0 76% -$2,720.5

-$94.1 2% -$329.9 7% -$4,472.1 91% -$4,896.1 -$7,616.6 $1,730.8 $1,730.8

$1,643.8 $1,643.8 $3,374.6 -$167.0 -$474.5 -$348.1 -$989.6

-$94.1 -$329.9 -$2,828.3 -$3,252.3 -$4,242.0

Marine SI

Engine Manufacturers Equipment Manufacturers

End User (Households) Subtotal Small SI

Engine Manufacturers Equipment Manufacturers

End User (Households) Subtotal TOTAL Net Present Value 7%

-$100.8 6% -$285.2 17% -$1,257.1 77% -$1,643.2

-$54.8 2% -$195.4 7% -$2,612.8 91% -$2,863.0 -$4,506.2 $881.0 $881.0

$893.8 $893.8 $1,774.7 -$100.8 -$285.2 -$376.1 -$762.2

-$54.8 -$195.4 -$1,719.1 -$1,969.2 -$2,731.4

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### Final Regulatory Impact Analysis
9.2 Economic Methodology


### Economic impact analysis uses a combination of theory and econometric modeling to evaluate potential behavior changes associated with a new regulatory program. As noted above, the goal is to estimate the impact of the regulatory program on producers and consumers. This is done by creating a mathematical model based on economic theory and populating the model using publically available price and quantity data. A key factor in this type of analysis is the responsiveness of the quantity of engines and equipment demanded by consumers or supplied by producers to a change in the price of that product. This relationship is called the elasticity of demand or supply.
The EIM’s methodology is rooted in applied microeconomic theory and was developed following the OAQPS Economic Analysis Resource Document (EPA 1999). This section discusses the economic theory underlying the modeling for this EIA and several key issues that affect the way the model was developed.

9.2.1 Behavioral Economic Models
Models incorporating different levels of economic decision making can generally be categorized as with -behavior responses or without -behavior responses. The EIM is a behavioral model.
Engineering cost analysis is an example of the latter and provides detailed estimates of the cost of a regulation based on the projected number of affected units and engineering estimates of the annualized costs. The result is an estimate of the total compliance costs for a program. However, these models do not attempt to estimate how a regulatory program will change the prices or output of an affected industry. Therefore, the results may over-estimate the total costs of a program because they do not take decreases in quantity produced into account.

The with- behavior response approach builds on the engineering cost analysis and incorporates economic theory related to producer and consumer behavior to estimate changes in market conditions. As Bingham and Fox (1999) note, this framework provides “a richer story” of the expected distribution of economic welfare changes across producers and consumers. In behavioral models, manufacturers of goods affected by a regulation are economic agents that can make adjustments, such as changing production rates or altering input mixes, that will generally affect the market environment in which they operate. As producers change their production levels in response to a new regulation, consumers of the affected goods are typically faced with changes in prices that cause them to alter the quantity that they are willing to purchase. These changes in price and output resulting from the market adjustments are used to estimate the distribution of social costs between consumers and producers.
If markets are competitive and per-unit regulatory costs are small, the behavioral approach will yield approximately the same total cost impact as the engineering cost approach. However, the advantage of the with- behavior response approach is that it illustrates how the costs flow

9-16

### Economic Impact Analysis through the economic system and it identifies which stakeholders, producers, and consumers are most likely to be affected.

9.2.2 What Is the Economic Theory Underlying the EIM?
The EIM is a multi-market partial-equilibrium numerical simulation model that estimates price and quantity changes in the intermediate run under competitive market conditions. Each of these model features is described in this section.

9.2.2.1 Partial Equilibrium Multi-Market Model
In the broadest sense, all markets are directly or indirectly linked in the economy, and a new regulatory program will theoretically affect all commodities and markets to some extent. However, not all regulatory programs have noticeable impacts on all markets. For example, a regulation that imposes significant per unit compliance costs on an important manufacturing input, such as steel, will have a larger impact on the national economy. A regulation that imposes a small direct compliance cost on an important input , or any direct compliance costs on an input that is only a small share of production costs, would be expected to have less of an impact on all markets in the economy.
The appropriate level of market interactions to be included in an economic impact analysis is determined by the number of industries directly affected by the requirements and the ability of affected firms to pass along the regulatory costs in the form of higher prices. There are at least three alternative approaches for modeling interactions between economic sectors, that reflect three different levels of analysis.

In a partial equilibrium model, individual markets are modeled in isolation. The only factor affecting the market is the cost of the regulation on facilities in the industry being modeled; there are no interaction effects with other markets. Conditions in other markets are assumed either to be unaffected by a policy or unimportant for cost estimation.

In a multi-market model, a subset of related markets is modeled together, with sector linkages, and hence selected interaction effects, explicitly specified. This approach represents an intermediate step between a simple, single-market partial equilibrium approach and a full general equilibrium approach. This technique has most recently been referred to in the literature as "partial equilibrium analysis of multiple markets" (Berck and Hoffmann, 2002).

In a general equilibrium model, all sectors of the economy are modeled together, incorporating interaction effects between all sectors included in the model. General equilibrium models operationalize neoclassical microeconomic theory by modeling not only the direct effects of control costs but also potential input substitution effects, changes in production levels associated with changes in market prices across all sectors, and the associated changes in welfare economy-wide. A disadvantage of general equilibrium modeling is that substantial time and resources are required to develop a new model or tailor an existing model for analyzing regulatory alternatives.

9-17

### Final Regulatory Impact Analysis This analysis uses a partial equilibrium approach in that it models only those markets that are directly affected by the final emission control program: the Small SI and Marine SI markets. In addition, these markets are modeled separately. This approach is appropriate because the Small SI and Marine SI sector represent different activities (residential garden care and personal recreation), and production and consumption of one is not affected by the other. In other words, an increase in the price of lawnmowers is not expected to have an impact on the production and supply of recreational marine vessels, and vice versa. Production and consumption of these products are the result of other factors that have little cross-over impacts.
The EIM uses a single-market approach for some sectors (Small SI handheld, Class I nonhandheld, personal watercraft, outboards recreational) and a two-market approach for the others (Small SI Class II nonhandheld; sterndrive/inboards; and outboards luxury) reflecting whether the markets are integrated and whether th e controls affect only engines or both engines and equipment. The advantage of a two-market approach is that it allows us to describe the expected distribution of the program’s effects across equipment and engine markets as well as the effects on purchasers of these engines and equipment. To simulate these relationships, the EIM consists of a series of standard partial equilibrium models that are linked through interactions between the equipment and engine markets. As a result, the model estimates changes in prices and quantities across all markets simultaneously for each of the linked engine and equipment markets.
The EIM does not specifically estimate potential price and quantity impacts on final goods and services that may be produced by equipment that would be subject to the final controls in the agricultural and construction sectors. This is appropriate because the vast majority of engines and equipment that would be subject to the final standards are purchased for residential use (recreational marine; home lawn and garden and residential utility uses; see Section 9.3 and the industry characterization prepared for this rule). Not only is the share of commercial users of this equipment small, but such equipment represents only a small portion of the total production costs for application markets such as agriculture, construction or manufacturing. The final standards would affect only a very small part of total inputs for those markets and would not be expected to result in an adverse impact on output and prices of goods produced in these commercial application sectors.
It should also be noted that the economic impact model employed for this analysis estimates the market-level economic impacts of the rule. It is not a firm-level analysis and therefore the impact for any particular manufacturer may be greater or less than the average impact for the market as a whole. This difference can be important, particularly where the rule affects different firms’ costs over different volumes of production. However, to the extent there are differential effects, EPA believes that the wide array of flexibilities provided in this rule are adequate to address any cost inequities that are likely to arise.

9.2.2.2 Competitive Market Structure Model
In a market oriented economic analysis, the analyst must determine the market structure according to most appropriate characteristics of the market under study. This market structure will form the basis of the economic impact model and determine the economic relationship to be

9-18

### Economic Impact Analysis reflected in the model. There are several types of market structures in economics: perfect competition, oligopoly, monopolistic competition, and monopoly. The typical economic impact analysis assumes a competitive market structure, although circumstance may require relaxing this assumption. 3



### The assumption of a competitive market is not about the number of firms in a market. It is about wether producers in the market are price takers or wether they have sufficient market power to influence the market price. In a competitive market, producers are price takers. Indicators of a competitive market include absence of barriers to entry, absence of strategic behavior among firms in the market, and product differentiation. 4 

### In addition, according to contestable market theory, oligopolies and even monopolies will behave very much like firms in a competitive market if it is possible to enter particular markets costlessly (i.e., there are no sunk costs associated with market entry or exit). This would be the case, for example, when products are substantially similar.
In imperfectly competitive markets, producers have some ability to influence the market price of output they produce. One of the classic reasons firms may be able to do this is their ability to produce commodities with unique attributes that differentiate them from competitors’ products. This allows them to limit supply, which in turn increases the market price, given the traditional downward-sloping demand curve. Decreasing the quantity produced increases the monopolist’s profits but decreases total social surplus because a less than optimal amount of the product is being consumed. In the monopolistic equilibrium, the value society (consumers) places on the marginal product exceeds the marginal cost to society (producers) of producing the last unit. Thus, social welfare would be increased by inducing the monopolist to increase production. Social cost estimates associated with a final regulation are larger with monopolistic market structures and other forms of imperfect competition because the regulation exacerbates the existing social inefficiency of too little output from a social pe rspective. The Office of Management and Budget (OMB) explicitly mentions the need to consid er these market power-related welfare costs in evaluating regulations under Executive Order 12866 (OMB, 1996).
This EIA is based on a competitive market structure. This is appropriate because the markets under analysis do not exhibit evidence of noncompetitive behavior: there are no indications of barriers to entry, the firms in these markets are not price setters, and there is no evidence of high levels of strategic behavior in the price and quantity decisions of the firms.
As described in the industry profiles for this final regulation (RTI, 2004), several of the recreational marine and Small SI sectors are highly concentrated and thus have the potential for the emergence of imperfect competition and price-setting behavior. Nonetheless, our analysis suggests that mitigating factors will limit this potential for raising price above marginal cost and thus that the assumption of a competitive market structure is justified. Among the mitigating factors are the presence of substantial import competition, relative ease of entry, existing excess

3 U.S. EPA. 2000. Guidelines for Preparing Ec onomics Analyses, EPA-240-R-00-003, page 126; 1999. OAQPS Economic Analysis Resource Document, page 5-8.

4 The number of firms in a market is not a necessary condition for a perfectly competitive market. See Robert H. Frank, Microeconomics and Behavior, 1991, McGraw-Hill, Incl., p. 33.

9-19

### Final Regulatory Impact Analysis production capacity, and a historical tendency of mark et participants to compete on price. These markets are also mature markets, as evidenced by unit sales growing at the rate of population increases. Pricing power in such markets is typically limited, and empirical data indicates that price pressure has existed in these markets for years and firms in these markets are price takers. 5 

### In addition, the products produced within each market are somewhat homogeneous in that engines and equipment from one firm can be purchased instead of engines and equipment from another firm, enhancing competition.
According to contestable market theory, oligopolies and even monopolies will behave very much like firms in a competitive market if it is possible to enter particular markets costlessly (i.e., there are no sunk costs associated with market entry or exit). This is the case with these markets as there is significant excess production capacity in both the Small SI and Marine SI industries, in part due to improved productivity and efficiency in current plants. Data on domestic plant capacity utilization rates are published by the U.S. Census (U.S. Census, 2005). The full production capability is defined as "the maximum level of production that an establishment could reasonably expect to attain under normal and realistic operating conditions fully utilizing the machinery and equipment in place." Recent domestic data for 2000 to 2004 indicate the internal combustion engine industry (NAICS 333618 Other Equipment Manufacturing) operated at 53 to 73 percent of full production capability. Similar data for vessels (NAICS 336612 Boat Building) indicate this industry operated between 59 and 62 percent of full production capability. The small SI equipment industry (NAICS 333112, lawn & garden tractor and home & lawn garden equipment manufacturing) operated at 50 to 65 percent of full production capability. Idle production capacity also limits the ability of firms to raise prices, since competitors can easily capture market share by increasing their production at the expense of a producer that increases its prices.
Finally, domestic producers face substantial competition from foreign manufacturers (RTI, 2006). These overseas firms may have strong incentives to compete vigorously on price with the well-established U.S. firms. For all of these reasons it is appropriate to use a competitive market structure model to estimate the economic impacts of this proposal.

9.2.2.3 Intermediate-Run Model
In developing the multi-market partial equilibrium model, the choices available to producers must be considered. For example, are producers able to increase their factors of production (e.g., increase production capacity) or alter their production mix (e.g., substitution between materials, labor, and capital)? These modeling issues are largely dependent on the time horizon for which the analysis is performed. Three benchmark time horizons are discussed below: the very short run, the long run, and the intermediate run. This discussion relies in large part on the material contained in the OAQPS Economic Analysis Resource Guide (U.S. EPA, 1999).

5 RTI (2006). Historical Market Data and Trends, Industry Profile for Small SI Engines and Equipment, Section 2.5. Draft Report

9-20

### Economic Impact Analysis The EIM models market impacts in the intermediate run. The use of the intermediate run means that some factors of production are fixed and some are variable. This modeling period allows analysis of the economic effects of the rule's compliance costs on current producers. As described below, a short-run analysis imposes all compliance costs on producers, while a long-run analysis imposes all costs on consumers. The use of the intermediate time frame is consistent with economic practices for this type of analysis.
In the very short run, all factors of production are assumed to be fixed, leaving the directly affected entity with no means to respond to increased costs associated with the regulation (e.g., they cannot adjust labor or capital inputs). Within a very short time horizon, regulated producers are constrained in their ability to adjust inputs or outputs due to contractual, institutional, or other factors and can be represented by a vertical supply curve, as shown in Figure 9.2-1. In essence, this is equivalent to the nonbehavioral model described earlier. Neither the price nor quantity changes and the manufacturer’s compliance costs become fixed or sunk costs. Under this time horizon, the impacts of the regulation fall entirely on the regulated entity. Producers incur the entire regulatory burden as a one-to-one reduction in their profit. This is referred to as the “full-cost absorption” scenario and is equivalent to the engineering cost estimates. Although there is no hard and fast rule for determining what length of time constitutes the very short run, it is inappropriate to use this time horizon for this analysis because it assumes economic entities have no flexibility to adjust factors of production.

Figure 9.2-1: Short Run: All Costs Born by Producers

Price

P

Q S

D

Output



### In the long run, all factors of production are variable, and producers can be expected to adjust production plans in response to cost changes imposed by a regulation (e.g., using a different labor/capital mix). Figure 9.2-2 illustrates a typi cal, if somewhat simplified, long-run industry supply function. The function is horizontal, indi cating that the marginal and average costs of

9-21

### Final Regulatory Impact Analysis production are constant with respect to output. 6 

### This horizontal slope reflects the fact that, under long-run constant returns to scale, technology and input prices ultimately determine the market price, not the level of output in the market.
Market demand is represented by the standard downward-sloping curve. The market is assumed here to be competitive; equilibrium is determined by the intersection of the supply and demand curves. In this case, the upward shift in the market supply curve represents the regulation’s effect on production costs. The shift causes the market price to increase by the full amount of the per-unit control cost (i.e., from P to P 

### N ). With the quantity demanded sensitive to price, the increase in market price leads to a reduction in output in the new with-regulation equilibrium (i.e., Q to Q 

### N ). As a result, consumers incur the entire regulatory burden as represented by the loss in consumer surplus (i.e., the area P ac P 

### N ). In the nomenclature of EIAs, this long-run scenario is typically referred to as “full-cost pass-through” and is illustrated in Figure 9.2-2.
Figure 9.2-2: Long Run: Full-Cost Pass-Through

$ d

Increase

Q 1 Q 0 Unit Cost Increase 

# } c

a b S 1 : With Regulation P 1 } Price

P 0 S 0 : Without Regulation

D

Output



### Taken together, impacts modeled under the long-run/full-cost-pass-through scenario reveal an important point: under fairly general economic conditions, a regulation's impact on producers is transitory. Ultimately, the costs are passed on to consumers in the form of higher prices.

6 The constancy of marginal costs reflects an unde rlying assumption of constant returns to scale of production, which may or may not apply in all cases.

9-22

### Economic Impact Analysis However, this does not mean that the impacts of a regulation will have no impact on producers of goods and services affected by a regulation. For example, the long run may cover the time taken to retire all of today's capital vintage, which could take decades. Therefore, transitory impacts could be protracted and could dominate long-run impacts in terms of present value. In addition, to evaluate impacts on current producers, the long-run approach is not appropriate. Consequently a time horizon that falls between the very short-run/full-cost-absorption case and the long-run/full-cost-pass-through case is most appropriate for this EIA.
The intermediate run time frame allows examination of impacts of a regulatory program during the transition between the short run and the long run. In the intermediate run, some factors are fixed; some are variable. In other words, producers can adjust some, but not all, factors of production, meaning they will bear some portion of the costs of the regulatory program. The existence of fixed production factors generally leads to diminishing returns to those fixed factors. This typically manifests itself in the form of a marginal cost (supply) function that rises with the output rate, as shown in Figure 9.2-3.
Figure 9.2-3: Intermediate Run: Partial-Cost Pass-Through

P 1

P 0 c

b

a $ g

e d f S 1 : With Regulation

S 0 : Without Regulation Price Increase } Unit Cost Increase 

# }

Q 1 Q 0 Output



### Again, the regulation causes an upward shift in the supply function. The lack of resource mobility may cause producers to suffer profit (produ cer surplus) losses in the face of regulation; however, producers are able to pass through some of the associated costs to consumers, to the extent the market will allow. As shown, in this case, the market-clearing process generates an increase in price (from P to P 

### N ) that is less than the per-unit increase in costs, so that the regulatory

9-23

### Final Regulatory Impact Analysis burden is shared by producers (net reduction in profits) and consumers (rise in price). In other words, there is a loss of both producer and consumer surplus.
Consistent with other economic impact analyses performed by EPA, this EIM uses an intermediate run approach. This approach allows us to examine the market and social welfare impacts of the program as producers adjust their output and consumers adjust their consumption of affected products in response to the increased production costs. During this period, the distribution of the welfare losses between producer and consumer depends in large part on the relative supply and demand elasticity parameters used in the model. For example, if demand for Small SI equipment is relatively inelastic (i.e., demand does not decrease much as price increases), then most of the direct compliance cost on refiners will be passed along to Small SI equipment consumers in the form of higher prices.

9.2.3 How is the EIM Used to Estimate Economic Impacts?

9.2.3.1 Estimation of Market Impacts (Single Market)
A graphical representation of a general economic competitive model of price formation, as shown in Figure 9.2-4(a), posits that market prices and quantities are determined by the intersection of the market supply and market demand curves. Under the baseline scenario, a market price and quantity (p,Q) are determined by the intersection of the downward-sloping market demand curve (D M 

### ) and the upward-sloping market supply curve (S M 

### ). The market supply curve reflects the sum of the domestic (S d 

### ) and import (S i 

### ) supply curves.

9-24

### Economic Impact Analysis

Figure 9.2-4: Market Equilibrium without and with Regulation

p S d S f S M

D M p p 

### + =

q d q f Q

Domestic Supply Foreign Supply Market

a) Baseline Equilibrium

p S f S M ′

D M p p 

### + = p ′ S d S M

p ′ p ′ S ′ d S ′ f

q ′ d q d q ′ f q f Q ′ Q

Domestic Supply Foreign Supply Market

b) With-Regulation Equilibrium



### With the regulation, the costs of production increase for suppliers. The imposition of these regulatory control costs is represented as an upward shift in the supply curve for domestic and import supply by the estimated compliance costs. As a result of the upward shift in the supply curve, the market supply curve will also shift upw ard as shown in Figure 9.2-3(b) to reflect the increased costs of production.
At baseline without the final rule, the industry produces total output, Q, at price, p, with domestic producers supplying the amount q d 

### and imports accounting for Q minus q d 

### , or q f 

### . With the regulation, the market price increases from p to p 

### N , and market output (as determined from the market demand curve) decreases from Q to Q 

### N . This reduction in market output is the net result of reductions in domestic and import supply.

9-25

### Final Regulatory Impact Analysis As indicated in Figure 9.2-4, when the final standards are applied the supply curve will shift upward by the amount of the estimated compliance costs. The demand curve, however, does not shift in this analysis. This is explained by the dynamics underlying the demand curve. The demand curve represents the relationship between prices and quantity demanded. Changes in prices lead to changes in the quantity demanded and are illustrated by movements along a fixed demand curve. In contrast, changes in any of the other variables would lead to change in demand and are illustrated as shifts in the position of the demand curve. 7 

### For example, an increase in the number of consumers in a market would cause the demand curve to shift outward because there are more individuals willing to buy the good at every price. Similarly, an exogenous increase in nominal income would also lead the demand curve to shift outward as people choose to buy more of a good at a given price. Changes in the prices of related good and tastes or preferences can also lead to demand curve shifts.
The final standards are expected to increase the costs of production in the Small SI engine and equipment and Marine SI engine vessel markets and ultimately lead to higher equilibrium prices in the affected markets. As these prices increase, the quantity demanded falls (i.e., the price change leads to a movement along the demand curve). 8 

### However, the final program is not expected to lead to shifts in the demand curve for several reasons. First, the assume the program will not directly influence prices of related goods (i.e., prices of any potential substitutes remain constant in the analysis). In addition, the program will not change nominal incomes through public finance mechanisms (e.g., lump sum subsidies/taxes) or change labor supply decisions. Finally, we assume tastes and preference will not change during the period of analysis. For all of these reasons, it would be inappropriate to shift the demand curve for this analysis.

9.2.3.2 Incorporating Multi-Market Interactions
The above description is typical of the expected market effects for a single product markets (e.g., Small SI handheld and Class I nonhandheld; personal watercraft) considered in isolation. However, several of the markets considered in this EIA are more complicated because the engine and equipment manufacturers are not integrated.
When both engine and equipment markets are considered separately, the regulatory program will affect equipment producers in two ways. First, equipment producers are affected by higher input costs (increases in the price of gasoline engines) associated with the rule. Second, the standards will also impose additional production costs on equipment producers associated with

7 An accessible detailed discussion of these concepts can be found in Chapter 5-7 of Nicholson’s (1998) intermediate microeconomics textbook.

8 Nicholson (1998) provides an example of the effects of a price increase on the quantity consumed (p: 134- 135). Throughout this discussion, we use uncompensated Marshallian demand functions. As a result, a price increase will also change an individual’s “real” income and reinforce substitution quantity responses to a good’s price change through an “income” effect. Both substituti on and (real) income effects are therefore built in the Marshallian demand function used for this analysis. It is important to note, however, that this type of “income” effect is conceptually different from an exogenous change in nominal income that leads to a shift in a demand function.

9-26

### Economic Impact Analysis equipment changes necessary to accommodate changes in engine design. In the sections that follow, we describe the demand relationships between these markets and how they are incorporated in the economic model.
In markets such as Class II nonhandheld or SD/I marine, the demand for engines is directly linked to the production of equipment or vessels that uses those engines. 9 

### This means that it is reasonable to assume that the input-output relationship between the gasoline engines and the equipment is strictly fixed and that the demand for engines varies directly with the demand for equipment. 10 

### A demand curve specified in terms of its downstream consumption is referred to as a derived demand curve. Figure 9.2-5 illustrates how a derived demand curve is identified.

9 In marine applications, one or two engines are us ed per boat, depending on its intrinsic design, and this configuration is insensitive to small changes in engine used. In the case of Small SI equipment, the one-to-one correspondence is exact. Furthermore, there is no poten tial for technical substitution, i.e., to make gasoline equipment one needs a gasoline engine.

10 This one-to-one relationship holds for engines sold on the market and for engines consumed internally by integrated engine/equipment manufacturers.

9-27S

S

∆ P eng Price Engines

($/Q)

Q – Engines ∆ Q 

### Final Regulatory Impact Analysis

Figure 9.2-5: Derived Demand for Engines

Price Equipment ($/Q)

∆ P E

Q – Equipment ∆ Q E D E 

### N

S E S E

S 

### N

eng

S eng 

# } Unit Cost Increase

Derived Demand

eng
∆ Q E = ∆ Q eng



### Consider an event in the marine equipment market that causes the price of equipment to increase by 

### ) P (such as an increase in the price of engines). This increase in the price of equipment will cause the supply curve in the equipment market to shift up, leading to a decreased quantity ( 

### ) Q E 

### ). The change in equipment production leads to a decrease in the demand for engines ( 

### ) Q Eng 

### ). The new point (Q E 

### – 

### ) Q E 

### , P – 

### ) P) traces out the derived demand curve. Note that the supply and demand curves in the marine equipment markets are needed to identify the derived demand in the engine market. All of the market supply and demand curves and the elasticity parameters used in the EIM are described in Appendix 9E

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### Economic Impact Analysis 9.2.3.3 Estimation of Social Costs
The economic welfare implications of the market price and output changes with the regulation can be examined by calculating consumer and producer net “surplus” changes associated with these adjustments. This is a m easure of the negative impact of an environmental policy change and is commonly referred to as the “social cost” of a regulation. It is important to emphasize that this measure does not include the benefits that occur outside of the market, that is, the value of the reduced levels of air pollution with the regulation. Including this benefit will reduce the net cost of the regulation and even make it positive.
The demand and supply curves that are used to project market price and quantity impacts can be used to estimate the change in consumer, producer, and total surplus or social cost of the regulation (see Figure 9.2-6).
The difference between the maximum price consumers are willing to pay for a good and the price they actually pay is referred to as “consumer surplus.” Consumer surplus is measured as the area under the demand curve and above the price of the product. Similarly, the difference between the minimum price producers are willing to accept for a good and the price they actually receive is referred to as “producer surplus.” Producer surplus is measured as the area above the supply curve below the price of the product. These areas can be thought of as consumers’ net benefits of consumption and producers’ net benefits of production, respectively.
In Figure 9.2-6, baseline equilibrium occurs at the intersection of the demand curve, D, and supply curve, S. Price is P l 

### with quantity Q l 

### . The increased cost of production with the regulation will cause the market supply curve to shift upward to S 

### N . The new equilibrium price of the product is P 2 

### . With a higher price for the product there is less consumer welfare, all else being unchanged. In Figure 9.2-6(a), area A represents the dollar value of the annual net loss in consumers’ welfare associated with the increased price. The rectangular portion represents the loss in consumer surplus on the quantity still consumed due to the price increase, Q 2 

### , while the triangular area represents the foregone surplus resulting from the reduced quantity consumed, Q l 

### – Q 2 

### . In addition to the changes in consumers’ welfare, there are also changes in producers’ welfare with the regulatory action. With the increase in market price, producers receive higher revenues on the quantity still purchased, Q 2 

### . In Figure 9.2-6(b), area B represents the increase in revenues due to this increase in price. The difference in the area under the supply curve up to the original market price, area C, measures the loss in producer surplus, which includes the loss associated with the quantity no longer produced. The net change in producers’ welfare is represented by area B – C.

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### Final Regulatory Impact Analysis

Figure 9.2-6: Market Surplus Changes with Regulations Consumer and Producer Surplus

P 1 P 2 S S ′

D $/Q

A

Q 2 Q 1 Q/t (a) Change in Consumer Surplus with Regulation

$/Q

P 2 P 1 S S ′

D B

C

Q 2 Q 1 Q/t (b) Change in Producer Surplus with Regulation

P 1 P 2 S S ′

D $/Q

D

Q 2 Q 1 Q/t (c) Net Change in Economic Welfare with Regulation

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### Economic Impact Analysis
The change in economic welfare attributable to the compliance costs of the regulations is the sum of consumer and producer surplus changes, that is, –(A) + (B–C). Figure 9.2-6(c) shows the net (negative) change in economic welfare associated with the regulation as area D.

9.2.4 How Are Special Market Characteristics Addressed?
In addition to the general model features described in Section 9.2.2, there are several specific characteristics of the Small SI and Marine SI markets that need to be addressed in the EIM. These are the treatment of fixed and variable costs, fuel savings, programmatic flexibilities, and substitution, and distribution systems effects.

9.2.4.1 Fixed and Variable Costs in a Competitive Market
The estimated engineering compliance costs, consisting of fixed costs (R&D, capital/tooling, certification costs), variable costs, and operating costs provide an initial measure of total annual compliance costs without accounting for behavioral responses. The starting point for assessing the market impacts of a regulatory action is to incorporate the regulatory compliance costs into the production decision of the firm.
In general, shifting the supply curve by the total cost per unit implies that both capital and operating costs vary with output levels. At least in the case of capital, this raises some questions. In the long run, all inputs (and their costs) can be expected to vary with output. But a short(er)-run analysis typically holds some capital factors fixed. For instance, to the extent that a market supply function is tied to existing facilities, there is an element of fixed capital (or one-time R&D). As indicated above, the current market supply function might reflect these fixed factors with an upward slope. As shown in Figure 9.2-7, the marginal cost (MC) curve will only be affected, or shift upwards, by the per-unit variable compliance costs (c 1 

### = TVCC/q), while the average total cost (ATAC) curve will shift up by the per-unit total compliance costs (c 2 

### = TCC/q). Thus, the variable costs will directly affect the production decision (optimal output rate), and the fixed costs will affect the closure decision by establishing a new higher reservation price for the firm (i.e., P m' 

### ). In other words, the fixed costs are important in determining whether the firm will stay in this line of business (i.e., produce anything at all), and the variable costs determine the level (quantity) of production.

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### Final Regulatory Impact Analysis

Figure 9.2-7: Modeling Fixed Costs
$/q MC N

MC

TVCC =C

1 q

ATAC N TCC C 2 = q P m N ATAC

P m

q m q m N q M q/t (a) Upward-sloping supply function



### Depending on the industry type, fixed costs associated with complying with a new regulation can generally be treated differently in an analysis of market impacts. In a competitive market, the industry supply curve is generally based on the market’s marginal cost curve; fixed costs do not influence production decisions at the margin. Therefore, the market anlaysis for a competitive market is based on variable costs only.
The nature of the Small SI and Marine SI markets suggests the market supply curve shifts in the model should include fixed compliance cost and variable compliance cost. This is because Small SI and Marine SI engine and equipment manufacturers produce a product that changes very little over time. These manufacturers may not engage in research and development to improve their products on a continuous basis (as opposed to highway vehicles or nonroad engines and equipment). In this case, the product changes that would be required to comply with the final standards would require these manufacturers to devote new funds and resources to product redesign and facilities changes. In this situation, Small SI and Marine SI engine and equipment manufacturers would be expected to increase their prices in attempting to recover both fixed and variable costs. This is in contrast to the nonroad diesel engine and equipment markets: manufacturers in those markets generally allocate redesign resources each year to accommodate a changing market. As stated in the section 9.3.3, this analysis applied fixed costs in the year in which they occur prior to the rule taking effect, and variable costs during the years that the rule is implemented. To reflect these conditions, the supply shift in this EIM is based on either fixed costs prior to the rule or variable costs after the rule starts, even though the model assumes a competitive market structure.

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### Economic Impact Analysis 9.2.4.2 Fuel Savings and Fuel Taxes
If all the costs of the regulation are not reflect ed in the supply shift, then the producer and consumer surplus changes reflected in Figure 9.2-6(c) will not capture the total social costs of the regulation. This will be the case, for example, if there are cost savings attributable to a program that are not readily apparent to consumers.
In this case, the final evaporative and exhaust controls are expected to result in fuel savings for users. Small SI engine and equipment manufacturers are expected to use fuel injection techniques to comply with the final standards for some of their two-cylinder Class II engines. These fuel injected engines are expected to have better fuel efficiency than carbureted engines. Marine SI manufacturers are expected to use 4-st roke and direction-injection 2-stroke technology for outboards and PWC. In addition, all sterndrive and inboard engines are expected to use fuel injection. These technologies are expected to result in reductions in fuel consumption.
These fuel savings are not included in the market analysis for this economic impact analysis. This is because all available evidence suggests that fuel savings do not affect consumer decisions with respect to the purchase of this equipment. Unlike motor vehicles or other consumer goods, neither Small SI nor Marine SI equipment is labeled with expected fuel consumption or expected annual operating costs. Therefore, there is no information available for the consumer to use or make this decision. Instead consumers base their purchase decision on other attributes of the product for which the manufacturer provides information. For lawn mowers this may be the horsepower of the engine, whether the machine has a bag or has a mulching feature, its blade size, etc. For PWC it may be how many people it can carry, its maximum speed, its horsepower, etc. In many cases, especially for Small SI equipment, the consumer may not even be aware of the fuel savings when operating the equipment, especially if he or she uses the same portable fuel storage container to fuel several different pieces of equipment.
These fuel savings are included in the social cost analysis. This is because they are savings that accrue to society. These savings are attribut ed to consumers of the relevant equipment. As explained in more detail in 9.3.5, the social cost analysis is based on the equivalent of the pre-tax price of gasoline in that analysis. Although the consumer will realize a savings equal to the pump price of gasoline (post-tax), part of that savings is offset by a tax loss to governmental agencies and is thus a loss to consumers of the services supported by those taxes. This tax revenue loss, considered a transfer payment in this analysis, doe s not affect the benefit-cost analysis results.

9.2.4.3 Flexibility Provisions
Consistent with the engineering cost estimates, the EIM does not include cost savings associated with compliance flexibility provisions or averaging, banking, and trading provisions. As a result, the results of this EIA can be viewed as somewhat conservative.

9.2.4.4 Substitution
Gasoline-powered SI engines convert the potential energy contained in the fuel into mechanical energy, which can then be used to do useful work, to provide locomotion, and/or to

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### Final Regulatory Impact Analysis generate electricity. These machines are technologically similar compression-ignition engines powered by diesel fuel, and often compete in the same equipment and applications markets. Similarly, electric motors are capable of performing many of the same tasks as gasoline engines in small and inexpensive equipment.
The relationships modeled in the EIM do not include substitution away from Small SI and Marine SI engines and equipment to diesel or electric alternatives. This is appropriate because consumers are not likely to make these substitutions. Diesel engines’ superior efficiency in energy conversion makes them more attractive for large engines, and for those with long required service lives, whether measured in operating hours or years of service. Gasoline-powered engines, on the other hand, have lower initial cost, and utilization in garden or recreational activities is not high enough for diesel fuel efficiency to overcome this gasoline advantage. On the SI marine side, the current population of recreational boats is overwhelmingly powered by gasoline engines, even in the large horsepower classes where diesel’s superi or efficiency would seem to provide significant cost advantages, and gasoline engines are the prevalent choice for garden equipment and residential generators. On the Small SI side, substitution to diesel is not a viable option for most residential consumers, either because diesel equipment does not exist (e.g., diesel string trimmers) or because there would be a large price premium that would discourage the use of diesel equipment (e.g., diesel lawnmowers and diesel recreational marine vessels). In addition, most households are not equipped to handle the additional fuel type and misfueling would carry a high cost. Finally, the lack of a large infrastructure system already in place like the one supporting the use of gasoline equipment for residential and recreational purposes, including refueling and maintenance, represents a large barrier to substitution from gasoline to diesel equipment. With regard to electric alternatives, the impact of substitution to electric for Small SI equipment (there are no comparable options for Marine SI) is also expected to be negligible. Gasoline is the power source of choice for small and inexpensive equipment due to its low initial cost. Gasoline equipment is also inherently portable, which make them more attractive to competing electric equipment that must be connected with a power grid or use batteries that require frequent recharging. Data that would allow investigation of the details of this clear consumer preference are not available, but it is reasonable to assume that increases in the cost of gasoline engines of the magnitude associated with this program would not cause widespread substitution to diesel or electric alternatives.

9.2.4.5 Distribution System Effects
The market interactions modeled in the EIM are those between producers and consumers of the specified engines and equipment that use those engines. The EIM does not consider sales distribution networks or how the regulated goods are sold to final consumers through wholesalers and/or retailers. This is appropriate because the final regulatory program does not impose additional costs on the distribution networks and those relationships are not expected to change as a result of the standards.
In the case of Small SI equipment, however, concerns have been raised about the potential for dominant retailers (big box stores such as Wal-Mart, Sears and K-Mart) to affect market equilibria and the ability of manufacturers to pass along cost increases associated with new

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### Economic Impact Analysis emission control requirements. Specifically, some Small SI equipment manufacturers assert that Big Box stores impose a price structure that would force them to absorb the compliance costs associated with the final standards. They contend that this is a relatively new phenomenon for their market and that EPA should consider these effects in the economic impact analysis for this proposal.
Dominant retailers are a fairly well-understood sector of the consumer good distribution network, especially with regard to clothing and household goods. These stores reduce product prices by exerting important influences on rele vant producers. Specifically, they discipline markets by encouraging manufacturers to compete on pr ice, and force inefficient firms to cut costs or leave the market.
Dominant retailers may also prevent efficient producers from passing on extra increases in fixed costs to consumers, including R&D costs asso ciated with engine or equipment redesign. So, for example, it may be the case that if a particular firm redesigns a lawnmower to produce more power a dominant retailer may not choose to change its pricing structure to account for that redesign. Nevertheless, the firm may still choose to incorporate the design change in the hope of capturing a greater share of the market and/or improve its name recognition.
It is unlikely, however, that a dominant retailer could prevent firms from passing on market-wide increases in average costs or marginal costs in response to a regulatory program. Profit maximizing manufacturers will continue to follow a marginal cost equals price pricing rule regardless of the distribution arrangements. A dominant retailer could not force the manufacturer to produce units where the marginal cost exceeds the price. If large retail distributors attempted to prevent efficient manufacturers from raising prices in response to the standards, manufacturers would likely respond to a retailer’s price pressure by reducing output. This would result in large excess demand in the equipment market which would ultimately have to be satisfied through some sort of arbitrage mechanism to a new higher equilibrium price.
An individual manufacturing company has little, if any, ability to pass on a cost increase if it is the only entity affected by that cost increase. In such a case, retailers would clearly have an incentive to purchase comparable engines or equipment that were not affected by the cost increase, placing the affected firm at a competitive disadvantage and reducing its market share. However, in this case all engine manufacturers will face increased average costs or marginal costs of production associated with the regulatory program . Therefore, the program does not necessarily put one engine manufacturer at a competitive disadvantage, although manufacturers that can more easily accommodate the new requirements will likely see lower costs than those who cannot.



## 9.3 EIM Data Inputs and Model Solution

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### Final Regulatory Impact Analysis The EIM is a computer model comprised of a series of spreadsheet modules that simulate the supply and demand characteristics of the markets under consideration. The model equations, presented in Appendix D to this chapter, are based on the economic relationships described in Section 9.2. The EIM analysis consists of four basic steps:

• Define the initial equilibrium conditions of the markets under consideration (equilibrium prices and quantities and behavioral parameters; these yield equilibrium supply and demand curves).

• Introduce a policy "shock" into the model based on estimated compliance costs that shift the supply functions.

• Use a solution algorithm to estimate a new, with-regulation equilibrium price and quantity for all markets.

• Estimate the change in producer and consumer surplus in all markets included in the model.
Supply responses and market adjustments can be conceptualized as an interactive process. Producers facing increased production costs due to compliance are willing to supply smaller quantities at the baseline price. This reduction in market supply leads to an increase in the market price that all producers and consumers face, which leads to further responses by producers and consumers and thus new market prices, and so on. The new with-regulation equilibrium reflects the new market prices where total market supply equals market demand.

The remainder of this section describes the data used to construct the EIM: initial equilibrium market conditions (equilibrium prices and quantities), compliance cost inputs, and model elasticity parameters. Also included is a brief discussion of the analytical expression used to estimate with-regulation market conditions.

9.3.1 Description of Product Markets
This EIM estimates the behavioral responses of the Small SI and Marine SI markets to the cost of complying with the final emission control program. Each of these markets is very briefly described below. More information can be found in the industry characterizations prepared for this proposal (Chapter 1 and RTI 2006).

9.3.1.1 Small SI Market
The Small SI market is the market for a variety of nonroad equipment powered by twostroke or four-stroke spark-ignition engines rated up to 19 kW (25 hp). This economic impact assessment distinguishes between two Small SI market sectors: handheld and nonhandheld. The handheld (HH) sector consists generally of equipment that is carried by the operator and is operated multipositionally, although some equipment in this category may have two wheels. HH equipment includes string trimmers, edgers, leaf blowers, and chain saws. The nonhandheld (NHH) sector consists mostly of wheeled equipment such as lawn mowers, garden tractors, and wheeled trimmers, blowers, and edgers. Also included in the Small SI market are generators,

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### Economic Impact Analysis compressors, and construction, agricultural, and small industrial equipment, as well as some recreational and utility vehicles and snowblowers.
The HH market can be characterized as an integrated market in which producers manufacture both the engine and the associated equipment. In the NHH market, in contrast, the engine and equipment manufacturers are typically separate entities. Engines produced by a manufacturer for use in its own equipment are called “captive” engines. Engines produced by manufacturers for sale on the open market to anyone who wants to buy them are called “merchant” engines. This distinction is important because compliance costs affect captive and merchant engines differently. Engine-related compliance costs for captive engines are absorbed into the equipment costs of integrated suppliers in their entirety. In contrast, nonintegrated suppliers who buy merchant engines absorb only part of the engine compliance costs into their equipment costs; the rest is borne by the engine manufacturer. Depending on the price sensitivity of demand in the engine market, the pass-through of engine compliance costs to the equipment manufacturer may be larger (more inelastic demand) or smaller (more elastic demand).
This analysis makes the simplifying assumption that virtually all Small SI equipment is sold to residential end-users for their personal use and a negligible number are sold to commercial entities for use as an input to the production of goods or services. This simplifying assumption allows us to disregard the impact of the compliance costs on the production of goods and services that would have Small SI equipment as an input. Any such impacts would be expected to be negligible given the relative share of Small SI equipment to any such production processes. This assumption is supported by data from the Outdoor Power Equipment and Engine Service Association (OPEESA), contained in Table 9.3-1, wh ich indicates that only about 3 percent of the NHH products sold in 2003 and 2004 were sold to commercial users. The rest, 97 percent, were sold to residential users. While this data reflects only NHH equipment, a similar situation likely exists for HH equipment given the nature of that equipment (light-duty lawn and garden equipment or gensets). Recent EPA certification data also supports this simplifying assumption. According to model year 2005 data, about 5 percent of Class I and 7 percent of Class II engines were high hour useful life (commercial) categories, or a total of about 9 percent of Classes I and II combined. About 19 percent of HH engines were high useful life categories.

Table 9.3-1: Share of Residential and Comm ercial Small SI Shipments (Various years)

2003 2004

Total Commercial Turf Products 297,085 234,475

Total Consumer NHH Products 8,598,901 8.188,614

Commercial Unit Volume NHH Share 3.3% 2.8% HH products (assumed consumer) 12,600,440 11,949,557

Commercial share - all Small SI 1.4% 1.2% Source: Outdoor Power Equipment & Engine Service Association, 2004.


### The analysis also assumes that there is a one-to-one correspondence between engines and equipment (there is only one engine per equipment unit) and that there is no market for loose

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### Final Regulatory Impact Analysis engines. These assumptions are reasonable given the nature of this equipment and because owners generally do not repower this equipment when the engine fails; instead, they repair the engine or replace the equipment. This assumption makes it possible to estimate the number of engines produced directly from the number of equipment.

9.3.1.1.1 Handheld Market
The HH engine market consists of Class III (< 20 cc), IV (20-50 cc) and V (>50 cc) engines. These engines are used in similar types of equipment, all of which are small and relatively lightweight. According to the industry profile prepared for this rule, the HH market is an integrated market in that about 90 percent of HH engines are “captive” engines, with the engine and equipment manufacturer being the same company (RTI, 2006). An integrated market means the EIM can use a one-market approach.
For the purpose of this analysis, all HH engines and equipment are grouped into one engine/equipment market. This is reasonable both because it is an integrated market and because the estimated compliance costs for the HH standards are expected to be similar for all types of HH engines and equipment regardless of size or application. The final standards for HH consist only of evaporative emission controls and the cost to comply with the standards are primarily related to fuel tank volume and fuel hose length, which do not vary significantly for most equipment.

9.3.1.1.2 Nonhandheld Market
The NHH engine market consists of Class I (<225 cc) and Class II (>225 cc) engines. There are three useful life categories for each and the costs for complying with the exhaust standards will vary by useful life category for each engine class. According to the industry profile prepared for this rule, the NHH market is not integrated in that about 95 percent of Class I and Class II NHH engines are merchant engines (RTI, 2006). The model thus explores the impacts onengine producers and equipment producers separately. This means it is necessary to use a twomarket approach, with the engine and equipment markets sharing some of the compliance costs and consumers bearing the rest.
Snowblowers engines are treated differently under EPA’s final program. The final program would impose only evaporative controls on these engines. Because Class I manufacturers of snowblower engines make the whole engine as a set (i.e., including fuel tank and fuel lines), it was decided to place all of the compliance costs on the engine manufacturer. These manufacturers are expected to produce a separate snowblower engine to be used in this equipment. Class II engines are commonly sold without fuel tanks, and so the evaporative controls for Class II snowblowers are attributed to the equipment manufacturer.
The nine Small SI nonhandheld engine markets are summarized in Table 9.3-2.

Table 9.3-2: Small SI Nonhandheld Engine Categories

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### Economic Impact Analysis

Class Useful Life

Class I 125 hours

250 hours

500 hours

Class I - Snowblower 125 hours

250 hours

500 hours

Class II 250 hours

500 hours

1000 hours


### The EIM includes eight types of NHH equipmen t, as described in Table 9.3-3. However, because not all engine/equipment combinations are applicable, there are a total of 40 engine/equipment markets. Specifically, there are no Class II lawnmowers, there are no Class I tractors, and all equipment in the “other lawn and garden” category using Class I engines are in the UL125 grouping.
Table 9.3-3: Nonhandheld Equipment Categories Equipment Class I Class II Agriculture/construction/general industrial Yes Yes Utility and recreational vehicles Yes Yes

Lawn mowers Yes No

Tractors No Yes Lawn and garden, other UL125 only Yes

Gensets/welders Yes Yes Pumps/compressors/pressure washers Yes Yes

Snowblowers Yes Yes



### 9.3.1.2 Marine SI market
The Marine SI market is the market for a variety of marine vessels powered by gasoline engines. These final Marine SI standards discussed here are for propulsion engines only. Auxiliary Marine SI engines <37 kW are included as Small SI engines for this rule. Larger auxiliary Marine SI engines were covered in the new standards for Large SI engines. Many of the auxiliary Marine SI engines are being designed with catalysts independent of the final standards, so the final standards will codify what is alr eady happening in the industry and force new entrants

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### Final Regulatory Impact Analysis in the market to employ the same types of emission controls. Given that the industry is already using catalysts, the estimated costs of complying are with the final standards are negligible. These engines typically use the same fuel tank as the propulsion engines so evaporative emission controls for these engines impose a nominal cost that is already covered in the vessel costs since the vessel costs include costs for hoses and tanks. The impact of treating marine Auxiliary Marine SI engines in this way are expected to be minimal because the number of vessels with installed auxiliary units is small and limited to sterndrive/inboard and outboard luxury vessels: about 21,700 out of a total of 356,300 vessels.

9.3.1.2.1 Marine SI Engine Markets
Unlike Small SI engines that can be used in a variety of different types of equipment, Marine SI engines are designed and manufactured for specific applications. Engines used in sterndrive or inboard vessels are different from those used in outboard applications, and are made by different manufacturers. Outboards and SD/I engines produced for luxury vessels are different from those produced for the general market. Personal watercraft, on the other hand, are generally an integrated system. Taking this into consideration, there are 13 engine markets included in this EIA, based on design and horsepower. These are described in Table 9.3-4.
Table 9.3-4: Marine SI Engine Markets Engine Design <25 hp 25-50 hp 51-100 hp 101-175 hp 176-300 hp >301 hp

SD/I Recreation XXX XXX XXX SD/I Luxury XXX XXX

OB Recreational XXX XXX XXX XXX XXX
OB Luxury XXX XXX

OB Loose XXX


### Similar to the Small SI market, most marine SI engines are used for recreational purposes. According to a 2000 study of the boat building industry, about 79 percent of Marine SI vessels are used for recreational purposes and only 7 percent for commercial purposes, with the remaining 14 percent for other purposes (CCA, 2000). 11 

### The propulsion system of choice for commercial marine vessels is diesel due to its greater reliability and lower fuel costs. The combustion characteristics of diesel engines also make them a better choice for vessels that are likely to spend large amounts of time at sea. While gasoline marine engines are used in applications such as lifeboats, patrol boats and small fishing vessels, their numbers are not large enough to warrant separate consideration in this Economic Impact Analysis.

11 This study looked at NAICS 336612 – establishments primarily engaged in building boats, defined as watercraft not built in shipyards and typically of the type suitable or intended for personal use; it is not clear what is meant by "other" in this study.

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### Economic Impact Analysis For the purposes of this analysis, all personal watercraft manufacturers are considered to be integrated manufacturers, and thus the engines are “captive.” This is reasonable because personal watercraft are similar to land-based recreational vehicles in that the engines are produced by the equipment manufacturer specifically for certain models.
The other two primary types of SI marine engines are outboards and sterndrives/inboards (SD/I). For these engines, we model a merchant relationship between the engine manufacturers and boat builders. This is reasonable because these engines are typically sold on the open market (outboards) or sold internally but through a market-type relationship between the engine and the equipment businesses (SD/I).
Outboard engines are typically produced by the engine manufacturer with little or no knowledge of what vessels the engines will be used on. Outboards are a self-contained assembly, with a power unit and drive unit, that can be fit to a wide range of boats. They may be used either with a portable fuel tank or connected to a fuel system installed on a vessel. In most cases, the engine manufacturer and boat builder are separate companies. However, it is becoming more common for engine manufacturing companies to purchase boat builders. Based on conversations with engine manufacturers and boat builders, we ha ve received indications that this trend has not significantly changed the relationship between the engine business units and the boat building business units. The boat builders typically pay market price for the engines and there is little integration of design beyond a typical manufacturer /supplier relationship. It seems that engine manufacturers generally buy outboard vessel building companies to gain access to target markets rather than to develop an integrated design. Generally, the vessel is sold without the engine and the consumer chooses the engine at the point of sale. This means that the vessel builder may not be involved in the transaction and that the distribution of the compliance costs is between the engine builder and the end consumer rather than between the engine builder and the vessel builder.

The relationship between engine manufacturers and boat builders is similar for SD/I engines as for outboard engines. One difference is that there are only two large businesses and many small businesses producing SD/I engines. These small businesses typically do not produce boats or own companies that do. SD/I engines are often sold to buyer groups created by boat builders to gain volume discounts on engines. B ecause of this, SD/I engine manufacturers often do not know what boats their engines are being used in. In the case where a large SD/I manufacturer has purchased boat building companies, the relationship is similar to that for outboards. Nevertheless, the distribution of compliance costs would be between the engine manufacturer and the vessel builder, since the engine is integrated in the final vessel design.

9.3.1.2.2 Marine SI Equipment Markets
There are five types of marine vessel markets:

• SD/I recreational (runabouts, airboats, jetboats)

• SD/I luxury (yachts, cruisers offshore)

• OB recreational (runabouts, pontoons, fishing)

• OB luxury (yacht, cruiser, express fish)

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### Final Regulatory Impact Analysis

• Personal watercraft
Of the 30 possible engine/vessel combinations, there are 15 combinations that are not applicable. For example, SD/I vessels use engines above 100 hp only. Personal watercraft use engines above 50 hp but do not use engines above 300 hp. This yields a total of 15 engine/vessel markets.
Table 9.3-5: Marine SI Vessel Types

Vessel <25 hp 25-50 hp 51-100 hp 101-175 hp 176-300 hp >301 hp

PWC XXX XXX XXX

SD/I Recreational XXX XXX XXX SD/I Luxury XXX XXX

OB Recreational XXX XXX XXX XXX XXX
OB Luxury XXX XXX


### Unlike Small SI equipment, there is not a one-to-one relationship between engines and equipment. Some vessels may have more than one propulsion engine. Table 9.3-6 shows the average number of engines per vessel assumed for the purposes of this analysis. In this table, OB engines per boat sale represents the average number of engines per outboard vessel in general. This average consists of three components: 1) some outboard vessels have more than one engine; 2) engines that are made as replacement engines; and 3) loose engines that are not sold with the boat, such as “kicker” engines which are used for low speed trolling.
Table 9.3-6: Average Number of Marine SI Engines per Vessel (2005)

Vessel <25 hp 25-50 hp 51-100 hp 101-175 hp 176-300 hp >301 hp Average

PWC 1.00 1.00 1.00 1.00

SD/I Recreational 1.00 1.02 1.01 1.01 SD/I Luxury 1.25 1.52 1.39

OB Recreational 1.25 1.25 1.29 1.29 1.29 1.28
OB Luxury 2.50 2.50 2.50 OB Engine/boat sale 1.47



### 9.3.1.3 Market Linkages
In the EIM, the Small SI and Marine SI markets are not linked (there is no feedback mechanism between the Small SI and Marine SI market segments). This is appropriate because the affected equipment is not interchangeable and because there is very little overlap between the engine producers in each market. These two sectors represent different aspects of economic activity (lawn and garden care and power generation as opposed to recreational marine) and

9-42

### Economic Impact Analysis production and consumption of one product is not affected by the other. In other words, an increase in the price of lawnmowers is not expected to have an impact on the production and supply of personal watercraft, and vice versa. Production and consumption of each of these productions are the results of other factors that have little cross-over impacts (the need for residential garden upkeep or power generation; the desire for personal recreation).

9.3.2 Market Equilibrium Conditions
The starting point for the economic impact analysis is initial market equilibrium conditions (prices and quantities) that exist prior to the implementation of new standards. At pre-control market equilibrium conditions, consumers are willing to purchase the same amount of a product that producers are willing to produce at the market price.

9.3.2.1 Small SI Initial Equilibrium Quantities and Prices

9.3.2.1.1 Small SI Engine and Equipment Initial Equilibrium Quantities
The EIM uses the same engine sales quantities that are used in the Small SI cost analysis presented in Chapter 6. The sales numbers for 2005 are reproduced in Tables 9.3-7 and 9.3-8. They are based on engine and equipment sales are for 49 states (all states except California) for 2005. However, the sales numbers include construction and agriculture equipment sold in California, since that equipment is not covered by California’s small engine program.
These engine sales numbers are taken from EPA’s NONROAD 2005 emission inventory model. To breakout the sales data by equipment, industry information from Power Systems Research database-OELink was used to characterize the distribution of equipment by the eight different equipment categories noted earlier. In addition, the sales within each equipment category were apportioned to the different useful life categories based on the fraction of engines certified in each class determined from EPA certification data for model year 2005.
Because of the one-to-one correspondence between Small SI engines and equipment, the number of equipment is equal to the number of engines sold in a given year.

Table 9.3-7: Small SI Handheld Engine and Equipment Sales (2005)

Sales - All Handheld Engines, Equipment 8,153,106

9-43

### Final Regulatory Impact Analysis Table 9.3-8: Small SI Nonhandheld Engine and Equipment Sales (2005)

Application Class I Class II Total

UL 125 UL 250 UL 500 UL 250 UL 500 UL 1000 Agricultural/Construction/ General Industrial/ Material Handling Equip Utility and Rec Vehicles
Lawn Mowers
Tractors
Lawn and Garden Other
Gensets/ Welders Pumps/ Compressors/ Pressure Washers 71,682

81,703 5,895,706
NA 647,256 271,391 579,775 7,675

8,748 631,254

NA
NA 29, 058 62,077 5,287

6,026 434,846

NA
NA 20,017 42,762 71,380

173,846

NA 1,701,351 127,915 605,169 253,971 15,503

37,757

NA 369,516 27,782 131,437 55,160 17,585

42,828

NA 419,141 31,513 149,088 62,568 189,112

350,908 6,961,805 2,490,008

834,465 1,206,160 1,056,313

Snowblowers 551,509 59,050 40, 677 475,353 103,242 117,107 1,346,938
Total 8,099,022 797,861 549,615 3,408,985 740,396 839,829 14,435,709



### 9.3.2.1.2 Small SI Engine and Equipment Initial Equilibrium Prices
The initial equilibrium prices for Small SI engines and equipment are contained in Tables 9.3-9 and 9.3-10. The engine prices were prices estimated by EPA using prices compiled from various websites and obtained from manufacturers. The engine prices were averaged for each useful life category for each class. The equipment prices were gathered through a survey of retailers, government dealers, and equipment websites (Caffrey, 2006).
For the handheld market, although all costs are placed on the engine manufacturer, the engine and equipment manufacturers are integrated so only the equipment price is necessary for the analysis.
Table 9.3-9: Small SI Handheld Engine and Equipment Prices (2005$) Equipment Price
$210



### Table 9.3-10a: Small SI Nonhandheld Engine Prices (2005$)
Class I Class II UL 125

$125 UL 250 $217 UL 500 $218 UL 250 $208 UL 500 $409 UL 1000 $757

9-44

### Economic Impact Analysis Table 9.3-10b: Small SI Nonhandheld Equipment Prices (2005$)

Application Class I Class II

UL 125 UL 250 UL 500 UL 250 UL 500 UL 1000 Agricultural/Construction/ General Industrial/ Material Handling Equip Utility and Rec Vehicles
Lawn Mowers
Tractors
Lawn and Garden Other
Gensets/ Welders Pumps/ Compressors/ Pressure Washers
Snowblowers $1,108

$570 $218

$245 $999 $96
$324 $1,621

$750 $420

$1,428 $661
$480 $2,133

$931 $2,786

$1,856 $1,225
$637 $1,825

$2,894

$1,937 $312 $666 $349
$665 $3,538

$3,981

$5,241 $969 $1,414 $1,485
$890 $5,251

$5,068

$6,841 $1,626 $2,162 $2,834 $1,115



### 9.3.2.2 Marine SI Initial Equilibrium Quantities and Prices

9.3.2.2.1 Marine SI Engine and Equipment InitialEquilibrium Quantities
The EIM uses the same engine sales quantities that are used in the Marine SI cost analysis presented in Chapter 6. The sales numbers for 2005 are reproduced in Tables 9.3-11 and 9.3-12. The engine sales data are derived for 2003 from certification databases for EPA and the California Air Resources Board and nationwide statistical data published by the National Marine Manufacturers Association (Samulski, 2004). These 2003 sales were adjusted to 2005 and future years using the growth rate described in 9.3.4.
Table 9.3-11: Marine SI Engine Sales (2005)

Vessel <25 hp 25-50 hp 51-100 hp 101-175 hp 176-300 hp >301 hp Total

PWC 19,327 53,137 3,496 75,960

SD/I Recreational 13,985 33,101 24,106 71,192 SD/I Luxury 8,877 12,027 20,904

OB Recreational 35,756 49,055 73,393 42,903 39,609 240,716
OB Luxury 8,393 8,393 16,785 OB loose engines 30,317 30,317

Total 66,073 49,055 92,720 118,417 93,476 36,133 455,875

9-45

### Final Regulatory Impact Analysis Table 9.3-12: Marine SI Vessel Sales (2005)

Vessel <25 hp 25-50 hp 51-100 hp 101-175 hp 176-300 hp >301 hp Total

PWC 19,327 53,137 3,496 75,960

SD/I Recreational 13,985 32,383 23,799 70,168 SD/I Luxury 7,081 7,927 15,009

OB Recreational 28,605 39,244 56,780 33,191 30,644 188,464
OB Luxury 3,357 3,357 6,714

Total 28,605 39,244 76,107 103,670 76,961 31,727 356,314



### 9.3.2.2.2 Marine SI Engine and Vessel Initial Equilibrium Prices
The Marine SI engine and vessel initial equilibrium prices are contained in Tables 9.3-13 and 9.3-14. They are based on advertised prices in trade literatures and on the web and on statistical data collected by the National Marine Manufacturers Association (Samulski, 2004). For the estimated vessel prices, replacement engines are included but are discounted at 7 percent for outboard recreational and luxury outboard and sterndr ive vessels. The discount is used to account for the assumption that replacement engines are purchased several years after the boat is purchased. For this analysis, the discount is based on the average useful engine life estimates in the NONROAD2005 model. The original price data was 2003 data; these were adjusted by applying the Product Price Index Series publishe d by the U.S. Bureau of Labor Statistics. 12



### Table 9.3-13: Marine SI Engine Prices (2005$)

Vessel <25 hp 25-50 hp 51-100 hp 101-175 hp 176-300 hp >301 hp

PWC N/A N/A N/A

SD/I Recreational $7,577 $12,604 $18,715
SD/I Luxury $16,508 $31,959

OB Recreational $2,606 $5,693 $9,114 $13,481 $20,786
OB Luxury $26,001 $40,074
OB loose engines $2,491

12 For Marine SI engines, the PPI for Gasoline Engines (except aircraft, automobile, highway truck, bus, and tank; PCU3336183336181) was used; the ratio for this index is 110.1/105.7 = 1.042. For marine vessel, the PPI for Boat Building (PCU 336612336612) was used; the ratio for this index is 206.7/194.2 = 1.064.

9-46

### Economic Impact Analysis Table 9.3-14: Marine SI Vessel Prices* (2005$)

Vessel <25 hp 25-50 hp 51-100 hp 101-175 hp 176-300 hp >301 hp

PWC $7,566 $9,982 $11,960

SD/I Recreational $16,549 $32,356 $46,432
SD/I Luxury $58,024 $205,658

OB Recreational $3,658 $10,884 $21,561 $32,467 $49,420
OB Luxury $65,097 $104,562 

### *Includes replacement engines discounted at 7% for outboard recreational and luxury outboard in sterndrive/inboard vessels.

9.3.3 Compliance Costs
The social costs of the final standards are estimated by shocking the initial market equilibrium conditions by the amount of the compliance costs. The compliance costs used in this analysis are the engineering compliance costs described in Chapters 6 of this RIA and are summarized in this section.
This analysis applies fixed costs in the year in which they occur prior to the rule taking effect. The small SI exhaust standards begin in 2011 for Class II and 2012 for Class I. Fixed costs are applied during 3 years (2008 to 2010) for Class II or 4 years (2008-2011) for Class I. The fixed costs include research and development, tooling, certification, and 1065 compliance. The marine exhaust standards generally begin in 2010; however, there are some exceptions for SD/I engines, where additional lead time was given in specific instances to provide regulatory flexibility. All fixed costs associated with marine exhaust standards are applied in the year of 2008 and 2009. The implementation dates for the small SI evaporative emission standards are staggered beginning in 2008, with regulatory flexibility providing some small delays until as late as 2013. The implementation dates for the marine evaporative emission standards are staggered beginning in 2009, with regulatory flexibility providing some small delays until as late as 2015. Fixed costs due to evaporative emission standard are applied in the two years before the primary effective date for each of the evaporative emission standards (tank permeation, hose permeation, and diurnal emissions). For simplicity, all of the fixed costs associated with certification are applied in 2008 and 2009. Variable costs for either exhaust or evaporative emission standards on small SI and marine SI begin to be incurred only when the programs go into effect.

9-47

### Final Regulatory Impact Analysis

9.3.3.1 Small SI Market Compliance Costs
The Small SI engine and equipment compliance costs are summarized in Tables 9.3-15 and 9.3- 16. There is one set of compliance costs for HH engines, since there is only one market. There are seven sets of engine compliance costs for NHH engines, one for each engine market. These costs begin in 2008 for HH and NHH; the costs changes over time reflecting the phase-in of the different standards.
There are no equipment compliance cost estimates for HH or for Class I NHH equipment. Since the HH market is integrated, all costs are applied to engines. For NHH Class I equipment, the engine manufacturers typically produce a complete engine and fuel system package. Therefore, the final program is not expected to impose any additional costs on the equipment manufacturers. Costs are provided for NHH Class II equipment, re flecting the need for evaporative and emission controls. An average cost for Class II equipment was applied in this analysis to each of the equipment categories.

Table 9.3-15: Compliance Costs per Engine - Small SI (2005$)

Class Useful life Cost type 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017+ Handheld All engines Variable $0.00 $0.65 $0.65 $0.65 $0.84 $0.84 $0.71 $0.71 $0.71 $0.71
Fixed $0.30 $0.30 $0.27 $0.26 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Total $0.30 $0.95 $0.92 $0.91 $0.84 $0.84 $0.71 $0.71 $0.71 $0.71 Nonhandheld
1 125 Variable $0.34 $0.34 $0.53 $0.53 $12.71 $12.58 $12.58 $12.58 $12.58 $11.34 Fixed $0.51 $0.50 $1.90 $1.87 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Total $0.85 $0.84 $2.44 $2.40 $12.71 $12.58 $12.58 $12.58 $12.58 $11.34
1 250 Variable $0.34 $0.34 $0.53 $0.53 $15.11 $14.98 $14.98 $14.98 $14.98 $13.66 Fixed $3.24 $3.19 $8.36 $8.21 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Total $3.58 $3.52 $8.89 $8.75 $15.11 $14.98 $14.98 $14.98 $14.98 $13.66
1 500 Variable $0.34 $0.34 $0.53 $0.53 $14.65 $14.52 $14.52 $14.52 $14.52 $13.21 Fixed $4.44 $4.36 $12.09 $11.88 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Total $4.77 $4.70 $12.63 $12.41 $14.65 $14.52 $14.52 $14.52 $14.52 $13.21
1 125/250/500 Variable $0.34 $0.34 $0.53 $0.53 $2.94 $2.81 $2.81 $2.81 $2.81 $2.33

snow- Fixed $0.13 $0.13 $0.18 $0.18 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 blower Total $0.47 $0.47 $0.71 $0.71 $2.94 $2.81 $2.81 $2.81 $2.81 $2.33
2 250 Variable $0.00 $0.00 $0.00 $16.80 $16.80 $16.80 $16.80 $14.24 $14.24 $14.24 Fixed $1.40 $3.55 $3.49 $0.12 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Total $1.40 $3.55 $3.49 $16.92 $16.80 $16.80 $16.80 $14.24 $14.24 $14.24
2 500 Variable $0.00 $0.00 $0.00 $12.05 $12.05 $12.05 $12.05 $9.98 $9.98 $9.98 Fixed $5.82 $13.16 $12.93 $0.83 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Total $5.82 $13.16 $12.93 $12.88 $12.05 $12.05 $12.05 $9.98 $9.98 $9.98
2 1,000 Variable $0.00 $0.00 $0.00 $30.56 $30.56 $30.56 $30.56 $25.71 $25.71 $25.71 Fixed $11.41 $31.34 $30.80 $0.59 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Total $11.41 $31.34 $30.80 $31.15 $30.56 $30.56 $30.56 $25.71 $25.71 $25.71

9-48

### Economic Impact Analysis Table 9.3-16: Compliance Costs per Equipment - Small SI (2005$)

Class Useful life Cost type 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017+ Handheld All engines Variable Fixed Total No equipment costs for HH, all cost s are allocated to engine manufacturers

Nonhandheld
1 125-500 Variable Fixed Total No equipment costs for NHH Class I, all costs are allocated to engine manufacturers

2 250 ag/const Variable Fixed Total $1.29 $0.26

$1.55 $1.29 $4.47 $5.76 $1.29 $4.13 $5.42 $9.60 $0.00 $9.60 $9.60 $0.00 $9.60 $9.47 $0.00 $9.47 $9.47 $0.00 $9.47 $9.47 $0.00 $9.47 $8.16 $0.00 $8.16 $8.16 $0.00 $8.16
2 250
tractor res Variable Fixed Total $1.21 $0.26

$1.47 $1.21 $4.84 $6.05 $1.21 $4.50 $5.71 $7.07 $0.00 $7.07 $7.07 $0.00 $7.07 $6.94 $0.00 $6.94 $6.94 $0.00 $6.94 $6.94 $0.00 $6.94 $6.08 $0.00 $6.08 $6.08 $0.00 $6.08
2 250 L&G other Variable Fixed Total $0.60 $0.26

$0.86 $0.60 $3.68 $4.28 $0.60 $3.36 $3.96 $5.44 $0.00 $5.44 $5.44 $0.00 $5.44 $5.32 $0.00 $5.32 $5.32 $0.00 $5.32 $5.32 $0.00 $5.32 $4.63 $0.00 $4.63 $4.63 $0.00 $4.63
2 250
pumps Variable Fixed Total $0.96 $0.26

$1.22 $0.96 $4.32 $5.28 $0.96 $3.99 $4.95 $8.53 $0.00 $8.53 $8.53 $0.00 $8.53 $8.41 $0.00 $8.41 $8.41 $0.00 $8.41 $8.41 $0.00 $8.41 $7.23 $0.00 $7.23 $7.23 $0.00 $7.23
2 250 utility Variable Fixed Total $1.00 $0.26 $1.26 $1.00 $4.14 $5.14 $1.00 $3.81 $4.81 $7.96 $0. 00 $7.96 $7.96 $0.00 $7.96 $7.83 $0.00 $7.83 $7.83 $0.00 $7.83 $7.83 $0.00 $7.83 $6.76 $0.00 $6.76 $6.76 $0.00 $6.76
2 250 weld/press Variable Fixed Total $1.34 $0.26

$1.60 $1.34 $4.58 $5.93 $1.34 $4.25 $5.59 $10.09 $0.00 $10.09 $10.09 $0.00 $10.09 $9.96 $0.00 $9.96 $9.96 $0.00 $9.96 $9.96 $0.00 $9.96 $8.58 $0.00 $8.58 $8.58 $0.00 $8.58
2 500 ag/const Variable Fixed Total $1.29 $0.26

$1.55 $1.29 $22.36 $23.65 $1.29 $21.72 $23.01 $9.60 $0.00 $9.60 $9.60 $0.00 $9.60 $9.47 $0.00 $9.47 $9.47 $0.00 $9.47 $9.47 $0.00 $9.47 $8.16 $0.00 $8.16 $8.16 $0.00 $8.16
2 500
tractor com Variable Fixed Total $1.21 $0.26

$1.47 $1.21 $22.73 $23.94 $1.21 $22.08 $23.29 $7.07 $0.00 $7.07 $7.07 $0.00 $7.07 $6.94 $0.00 $6.94 $6.94 $0.00 $6.94 $6.94 $0.00 $6.94 $6.08 $0.00 $6.08 $6.08 $0.00 $6.08
2 500 L&G other Variable Fixed Total $0.60 $0.26

$0.86 $0.60 $21.58 $22.18 $0.60 $20.95 $21.55 $5.44 $0.00 $5.44 $5.44 $0.00 $5.44 $5.32 $0.00 $5.32 $5.32 $0.00 $5.32 $5.32 $0.00 $5.32 $4.63 $0.00 $4.63 $4.63 $0.00 $4.63
2 500
pumps Variable Fixed Total $0.96 $0.26

$1.22 $0.96 $22.21 $23.17 $0.96 $21.57 $22.53 $8.53 $0.00 $8.53 $8.53 $0.00 $8.53 $8.41 $0.00 $8.41 $8.41 $0.00 $8.41 $8.41 $0.00 $8.41 $7.23 $0.00 $7.23 $7.23 $0.00 $7.23
2 500 utility Variable Fixed Total $1.00 $0.26 $1.26 $1.00 $22.04 $23.04 $1.00 $21.39 $22.40 $7.96 $0. 00 $7.96 $7.96 $0.00 $7.96 $7.83 $0.00 $7.83 $7.83 $0.00 $7.83 $7.83 $0.00 $7.83 $6.76 $0.00 $6.76 $6.76 $0.00 $6.76
2 500 weld/press Variable Fixed Total $1.34 $0.26

$1.60 $1.34 $22.48 $23.82 $1.34 $21.83 $23.17 $10.09 $0.00 $10.09 $10.09 $0.00 $10.09 $9.96 $0.00 $9.96 $9.96 $0.00 $9.96 $9.96 $0.00 $9.96 $8.58 $0.00 $8.58 $8.58 $0.00 $8.58
2 1,000 ag/const Variable Fixed Total $1.29 $0.26

$1.55 $1.29 $16.22 $17.51 $1.29 $15.68 $16.97 $9.60 $0.00 $9.60 $9.60 $0.00 $9.60 $9.47 $0.00 $9.47 $9.47 $0.00 $9.47 $9.47 $0.00 $9.47 $8.16 $0.00 $8.16 $8.16 $0.00 $8.16

9-49

### Final Regulatory Impact Analysis

Class Useful life Cost type 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017+ 2 1,000

tractor com Variable
Fixed Total $1.21
$0.26

$1.47 $1.21
$16.59 $17.80 $1.21
$16.04 $17.25 $7.07
$0.00 $7.07 $7.07
$0.00 $7.07 $6.94
$0.00 $6.94 $6.94
$0.00 $6.94 $6.94
$0.00 $6.94 $6.08
$0.00 $6.08 $6.08
$0.00 $6.08
2 1,000 L&G other Variable Fixed Total $0.60 $0.26

$0.86 $0.60 $15.44 $16.04 $0.60 $14.91 $15.51 $5.44 $0.00 $5.44 $5.44 $0.00 $5.44 $5.32 $0.00 $5.32 $5.32 $0.00 $5.32 $5.32 $0.00 $5.32 $4.63 $0.00 $4.63 $4.63 $0.00 $4.63
2 1,000
pumps Variable Fixed Total $0.96 $0.26

$1.22 $0.96 $16.07 $17.03 $0.96 $15.53 $16.49 $8.53 $0.00 $8.53 $8.53 $0.00 $8.53 $8.41 $0.00 $8.41 $8.41 $0.00 $8.41 $8.41 $0.00 $8.41 $7.23 $0.00 $7.23 $7.23 $0.00 $7.23
2 1,000 utility Variable Fixed Total $1.00 $0.26 $1.26 $1.00 $15.89 $16.89 $1.00 $15.36 $16.36 $7.96 $0. 00 $7.96 $7.96 $0.00 $7.96 $7.83 $0.00 $7.83 $7.83 $0.00 $7.83 $7.83 $0.00 $7.83 $6.76 $0.00 $6.76 $6.76 $0.00 $6.76
2 1,000 weld/press Variable Fixed Total $1.34 $0.26

$1.60 $1.34 $16.33 $17.68 $1.34 $15.79 $17.14 $10.09 $0.00 $10.09 $10.09 $0.00 $10.09 $9.96 $0.00 $9.96 $9.96 $0.00 $9.96 $9.96 $0.00 $9.96 $8.58 $0.00 $8.58 $8.58 $0.00 $8.58
2 250/500/1000

snowblower Variable Fixed Total $0.51 $0.26 $0.77 $0.51 $0.47 $0.97 $0.51 $0.20 $0.71 $3.98 $0.00 $3.98 $3.98 $0.00 $3.98 $3.85 $0.00 $3.85 $3.85 $0.00 $3.85 $3.85 $0.00 $3.85 $3.27 $0.00 $3.27 $3.27 $0.00 $3.27



### 9.3.3.2 Marine SI Market Compliance Costs
The Marine SI engine and equipment compliance costs are summarized in Tables 9.3-17 and 9.3-18. Cost estimates are given for each of the 15 engine/equipment combinations, plus cost estimates for loose OB engines. The engine costs begin in 2008 and increase in 2010 when the variable costs for exhaust emission standards begin to be incurred. In addition, we apply a one time learning curve correction to the variable cost in the sixth year. The engine compliance costs remain the same for 2015 and later years. The equipment costs are more complicated due to the phase in of the different standards. They begin in 2009, increase in 2011 or 2012 , and then decrease in 2015. Equipment compliance costs remain the same for 2015 and later years.

9-50Table 9.3-17: Compliance Costs per Engine - Marine SI (2005$)ApplicationCategoryHPCategoryCostType20082009201020112012201320142015201620172018-232024+PWC50-100Variable$0$0$870$870$870$870$870$696$696$696$696$696Fixed$73$73$0$0$0$0$0$0$0$0$0$0Total$73$73$870$870$870$870$870$696$696$696$696$696PWC100-175Variable$0$0$85$85$85$85$85$68$68$68$68$68Fixed$34$34$0$0$0$0$0$0$0$0$0$0Total$34$34$85$85$85$85$85$68$68$68$68$68PWC175-300Variable$0$0$1,290$1,290$1,290$1,290$1,290$1,032$1,032$1,032$1,032$1,032Fixed$113$113$0$0$0$0$0$0$0$0$0$0Total$113$113$1,290$1,290$1,290$1,290$1,290$1,032$1,032$1,032$1,032$1,032SD/I100-175Variable$0$0$465$465$465$465$465$372$372$372$372$372recreationalFixed$45$45$0$0$0$0$0$0$0$0$0$0Total$45$45$465$465$465$465$465$372$372$372$372$372SD/I175-300Variable$0$0$320$320$320$320$320$256$256$256$256$256recreationalFixed$50$50$0$0$0$0$0$0$0$0$0$0Total$50$50$320$320$320$320$320$256$256$256$256$256SD/I300+Variable$0$0$297$297$297$297$297$238$238$238$238$238recreationalFixed$57$57$0$0$0$0$0$0$0$0$0$0Total$57$57$297$297$297$297$297$238$238$238$238$238SD/I175-300Variable$0$0$320$320$320$320$320$256$256$256$256$256luxuryFixed$50$50$0$0$0$0$0$0$0$0$0$0Total$50$50$320$320$320$320$320$256$256$256$256$256SD/I300+Variable$0$0$297$297$297$297$297$238$238$238$238$238luxuryFixed$57$57$0$0$0$0$0$0$0$0$0$0Total$57$57$297$297$297$297$297$238$238$238$238$238ApplicationCategoryHPCategoryCostType20082009201020112012201320142015201620172018-232024+OB<25Variable$0$0$69$69$69$69$69$55$55$55$55$55recreationalFixed$12$12$0$0$0$0$0$0$0$0$0$0Total$12$12$69$69$69$69$69$55$55$55$55$55OB25-50Variable$0$0$216$216$216$216$216$173$173$173$173$173recreationalFixed$14$14$0$0$0$0$0$0$0$0$0$0Total$14$14$216$216$216$216$216$173$173$173$173$173OB50-100Variable$0$0$203$203$203$203$203$162$162$162$162$162recreationalFixed$20$20$0$0$0$0$0$0$0$0$0$0Total$20$20$203$203$203$203$203$162$162$162$162$162OB100-175Variable$0$0$338$338$338$338$338$270$270$270$270$270recreationalFixed$37$37$0$0$0$0$0$0$0$0$0$0Total$37$37$338$338$338$338$338$270$270$270$270$270OB175-300Variable$0$0$690$690$690$690$690$552$552$552$552$552recreationalFixed$67$67$0$0$0$0$0$0$0$0$0$0Total$67$67$690$690$690$690$690$552$552$552$552$552OB100-175Variable$0$0$338$338$338$338$338$270$270$270$270$270luxuryFixed$37$37$0$0$0$0$0$0$0$0$0$0Total$37$37$338$338$338$338$338$270$270$270$270$270OB175-300Variable$0$0$690$690$690$690$690$552$552$552$552$552luxuryFixed$67$67$0$0$0$0$0$0$0$0$0$0Total$67$67$690$690$690$690$690$552$552$552$552$552OB<25Variable$0$0$69$69$69$69$69$55$55$55$55$55loose enginesFixed$12$12$0$0$0$0$0$0$0$0$0$0Total$12$12$69$69$69$69$69$55$55$55$55$55Table 9.3-18: Compliance Costs per Equipment- Marine SI (2005$)ApplicationCategoryHPCategoryCostType20082009201020112012201320142015201620172018-232024+PWC50-100Variable$0.0$1.6$1.6$9.7$9.7$9.7$9.7$9.7$9.7$9.7$9.7$9.7Fixed$0.9$15.5$14.7$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0Total$0.9$17.1$16.2$9.7$9.7$9.7$9.7$9.7$9.7$9.7$9.7$9.7PWC100-175Variable$0.0$1.9$1.9$11.2$11.2$11.2$11.2$11.2$11.2$11.2$11.2$11.2Fixed$0.9$17.0$16.1$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0Total$0.9$18.9$18.1$11.2$11.2$11.2$11.2$11.2$11.2$11.2$11.2$11.2PWC175-300Variable$0.0$1.9$1.9$11.2$11.2$11.2$11.2$11.2$11.2$11.2$11.2$11.2Fixed$0.9$17.0$16.1$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0Total$0.9$18.9$18.1$11.2$11.2$11.2$11.2$11.2$11.2$11.2$11.2$11.2SD/I100-175Variable$0.0$3.8$3.8$31.4$67.2$67.2$67.2$67.2$61.7$56.3$56.3$56.3recreationalFixed$1.5$1.5$0.3$0.3$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0Total$1.5$5.3$4.1$31.7$67.2$67.2$67.2$67.2$61.7$56.3$56.3$56.3SD/I175-300Variable$0.0$4.6$4.6$43.7$94.4$94.4$94.4$94.4$86.6$80.7$80.7$80.7recreationalFixed$1.5$1.5$0.3$0.3$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0Total$1.5$6.2$4.9$44.0$94.4$94.4$94.4$94.4$86.6$80.7$80.7$80.7SD/I300+Variable$0.0$5.2$5.2$71.6$157.6$157.6$157.6$157.6$144.3$137.4$137.4$137.4recreationalFixed$1.5$1.5$0.3$0.3$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0Total$1.5$6.8$5.5$71.9$157.6$157.6$157.6$157.6$144.3$137.4$137.4$137.4SD/I175-300Variable$0.0$5.7$5.7$53.6$115.7$115.7$115.7$115.7$106.1$98.9$98.9$98.9luxuryFixed$1.9$1.9$0.4$0.4$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0Total$1.9$7.5$6.0$54.0$115.7$115.7$115.7$115.7$106.1$98.9$98.9$98.9ApplicationCategoryHPCategoryCostType20082009201020112012201320142015201620172018-232024+SD/I300+Variable$0.0$7.8$7.8$107.2$236.1$236.1$236.1$236.1$216.2$205.8$205.8$205.8luxuryFixed$2.3$2.3$0.4$0.4$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0Total$2.3$10.1$8.3$107.7$236.1$236.1$236.1$236.1$216.2$205.8$205.8$205.8OB<25Variable$0.0$3.9$5.5$10.8$10.8$10.8$10.8$10.4$10.4$10.4$10.4$10.4recreationalFixed$0.7$10.8$10.1$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0Total$0.7$14.6$15.5$10.8$10.8$10.8$10.8$10.4$10.4$10.4$10.4$10.4OB25-50Variable$0.0$5.5$5.5$21.6$38.6$38.6$38.6$38.6$35.4$29.5$29.5$29.5recreationalFixed$1.6$1.6$0.4$0.4$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0Total$1.6$7.2$5.9$22.0$38.6$38.6$38.6$38.6$35.4$29.5$29.5$29.5OB50-100Variable$0.0$8.3$8.3$34.6$61.6$61.6$61.6$61.6$56.4$49.9$49.9$49.9recreationalFixed$1.7$1.7$0.4$0.4$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0Total$1.7$10.0$8.7$34.9$61.6$61.6$61.6$61.6$56.4$49.9$49.9$49.9OB100-175Variable$0.0$10.0$10.0$52.4$95.4$95.4$95.4$95.4$86.9$79.8$79.8$79.8recreationalFixed$1.7$1.7$0.4$0.4$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0Total$1.7$11.7$10.4$52.8$95.4$95.4$95.4$95.4$86.9$79.8$79.8$79.8OB175-300Variable$0.0$11.7$11.7$74.9$138.3$138.3$138.3$138.3$125.6$117.6$117.6$117.6recreationalFixed$1.7$1.7$0.4$0.4$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0Total$1.7$13.3$12.0$75.2$138.3$138.3$138.3$138.3$125.6$117.6$117.6$117.6OB100-175Variable$0.0$19.4$19.4$101.4$184.5$184.5$184.5$184.5$168.1$154.3$154.3$154.3luxuryFixed$3.2$3.2$0.7$0.7$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0Total$3.2$22.6$20.1$102.1$184.5$184.5$184.5$184.5$168.1$154.3$154.3$154.3OB175-300Variable$0.0$22.6$22.6$144.8$267.4$267.4$267.4$267.4$243.0$227.5$227.5$227.5luxuryFixed$3.2$3.2$0.7$0.7$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0Total$3.2$25.8$23.3$145.5$267.4$267.4$267.4$267.4$243.0$227.5$227.5$227.5OB<25Variable$0.0$3.1$4.4$8.6$8.6$8.6$8.6$8.3$8.3$8.3$8.3$8.3looseFixed$0.6$8.6$8.1$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0engineTotal$0.6$11.7$12.4$8.6$8.6$8.6$8.6$8.3$8.3$8.3$8.3$8.3

### Economic Impact Analysis
9.3.4 Growth Rates
The growth rates used in this analysis for future Small SI and Marine SI engines and equipment sales are from EPA's Nonroad 2005 model and are the same the same as those use for the cost analysis (EPA 2004b). Because the gr owth rates are linear, the annual growth rate decreases over time. For Small SI, the growth rate is approximately 2 percent per year beginning in 2008 to decreases to approximately 1.5 percent for 2020 and later years. The growth rate for Marine SI is about 0.8 percent per year in the early years and 0.6 percent in later years.

9.3.5 Fuel Savings
As noted in Section 9.2.4.2, there are fuel savings attributable to the final emission control program, reflecting the reduction in evaporative emissions and the use of more fuel-efficient engine technology to meet the final engine exhaust standards. As explained in that section, these savings are included in the economic welfare analysis as a separate line item. Consumers of Small SI and Marine SI engines and equipment will realize an increase in their welfare equivalent to the amount of gallons of gasoline saved multiplied by the retail price of the gasoline (post-tax price). In the engineering cost analysis the fuel savings are estimated in this manner. However, in the context of the social welfare analysis, some of this increase in consumer welfare is offset by lost tax revenues to local, state, and federal governments. These welfare losses must be accounted for as well. Therefore, the net change in social welfare is the difference between the increase in consumer welfare and the lost tax revenues. This is equivalent to using the pre-tax price of gasoline to estimate the fuel savings for the social welfare analysis.
The amount of gallons of gasoline fuel saved is composed of two parts. First, upgrades in engine technology is expected to reduce fuel consumption rates. These fuel consumption reductions were calculated using the NONROAD2005 model. In addition, fuel savings due to evaporative emission control is estimated based on the VOC reductions attributable to these controls. Tons of annual VOC reductions are translated to gallons of gasoline saved using a fuel density of 6 lbs per gallon (for lighter hydrocarbons which evaporate first).
Because the gallons of gasoline saved are based on estimated national reductions and were not estimated by PADD, we estimated a national average retail gasoline price (RTI, Memorandum on Calculation Motor Gasoline Prices in Small SI rule EIA, 2006). This estimate is the sum of the weighted average of pre-tax gasoline prices by PADD and the weighted average gasoline tax by PADD, using data from the 2005 Petroleum Marketing Annual (DoE 2005, Table 31). The results of this analysis are shown in Tables 13.3-19 and 13.3-20.

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### Table 9.3-19: Estimated National Average Fuel Prices (2005$)

PADD Weight Pre-tax Price/Gallon Average State Taxes Federal Tax Post-Tax Price/Gallon

PADD 1 0.40 $1.819 $0.207 $0.184 $2.210

PADD 2 0.31 $1.792 $0.209 $0.184 $2.185

PADD 3 0.18 $1.787 $0.194 $0.184 $2.165

PADD 4 0.04 $1.848 $0.225 $0.184 $2.257

PADD 5 (excluding CA) 0.07 $1.938 $0.198 $0.184 $2.320

Total $1.814 $2.204 Source: 2005 Petroleum Marketing Annual (Table 31). U.S. Department of Energy, Energy Information Administration (DoE 2005). Memorandum on Calculation Motor Gasoline Prices in Small SI Rule EIA, RTI, 2006.



### From 2008 until 2020 the estimated consumer savings associated with reduced gasoline consumption from the small SI and marine SI programs gas can controls increases sharply, from $3.2 million to $201 million. After 2020 the savings continue to accrue, but at a reduced rate as the engines and equipment population turns over and fuel savings are due to the continuing benefits of using compliant engines and equipment. Similarly, the tax revenue losses are expected to be increased from $0.7 million in 2008 to $43 million in 2020.

### Economic Impact Analysis

Table 9.3-20: Estimated Fuel Savi ngs and Tax Revenue Impacts (2005$)

Tax Consumer Revenue Net Fuel Small SI Marine SI Fuel Savings Impacts Savings Year Gallons Gallons Total Gallons (Million$) (Million$) (Million$)
2008 1,748,394 0 1,748,394 $3.9 $0.7 $3.2
2009 4,060,953 398,339 4,459,291 $9.8 $1.7 $8.1
2010 6,304,081 4,488,257 10, 792,339 $23.8 $4.2 $19.6
2011 14,982,484 9,200,101 24, 182,584 $53.3 $9.4 $43.9
2012 24,473,425 14,543,630 39, 017,055 $86.0 $15.2 $70.8
2013 32,954,248 19,806,738 52, 760,987 $116.3 $20.6 $95.7
2014 38,823,924 25,044,187 63, 868,112 $140.8 $24.9 $115.9
2015 43,779,918 30,265,803 74, 045,720 $163.2 $28.9 $134.3
2016 47,746,869 35,426,120 83, 172,989 $183.3 $32.4 $150.9
2017 50,580,035 40,529,842 91, 109,877 $200.8 $35.5 $165.3
2018 52,702,739 45,571,856 98, 274,595 $216.6 $38.3 $178.3
2019 54,429,770 50,527,419 104, 957,189 $231.3 $40.9 $190.4
2020 55,917,371 55,085,140 111, 002,511 $244.6 $43.3 $201.4
2021 57,171,954 59,222,320 116, 394,274 $256.5 $45.4 $211.1
2022 58,309,088 63,220,853 121, 529,941 $267.9 $47.4 $220.5
2023 59,361,292 67,056,116 126, 417,408 $278.6 $49.3 $229.3
2024 60,376,870 70,326,971 130, 703,841 $288.1 $51.0 $237.1
2025 61,369,887 73,270,886 134, 640,773 $296.7 $52.5 $244.2
2026 62,353,284 75,906,088 138, 259,372 $304.7 $53.9 $250.8
2027 63,326,668 78,313,723 141, 640,391 $312.2 $55.2 $256.9
2028 64,292,904 80,527,973 144, 820,877 $319.2 $56.5 $262.7
2029 65,253,036 82,543,743 147, 796,779 $325.7 $57.6 $268.1
2030 66,207,356 84,310,121 150, 517,478 $331.7 $58.7 $273.0
2031 67,157,496 85,894,203 153, 051,700 $337.3 $59.7 $277.6
2032 68,105,401 87,275,207 155, 380,608 $342.5 $60.6 $281.9
2033 69,050,694 88,524,271 157, 574,965 $347.3 $61.5 $285.8
2034 69,993,828 89,672,904 159, 666,732 $351.9 $62.3 $289.6
2035 70,935,570 90,731,710 161, 667,280 $356.3 $63.1 $293.3
2036 71,874,840 91,713,009 163, 587,849 $360.5 $63.8 $296.7
2037 72,811,766 92,624,481 165, 436,247 $364.6 $64.5 $300.1

9-57

### Final Regulatory Impact Analysis

9.3.6 Supply and Demand Elasticity Estimates
The estimated market impacts and economic welfare costs of this emission control program are a function of the ways in which producers and consumers of the Small SI and Marine SI engines and equipment affected by the standards change their behavior in response to the costs incurred in complying with the standards. These behavioral responses are incorporated in the EIM through the price elasticity of supply and demand (reflected in the slope of the supply and demand curves), which measure the price sensitivity of consumers and producers.
Because we were unable to find published supply and demand elasticities for the Small SI and Marine SI markets, we estimated these parameters using the procedures described in Appendix 9E. These methods are well-documented and are consistent with generally accepted econometric practice. It should be noted that these elasticities reflect intermediate-run behavioral changes. In the long run, supply and demand elasticities are expected to be more elastic. It should also be noted that the aggregate data (6 digits NAICS code or 4 digit SIC code industry data) we used to estimate elasticities include data on other markets as well as the Small SI or Marine SI markets. If we had been able to obtain market-specific data for Small SI or Marine SI only, the estimated price elasticities may have been different.
The estimated supply and demand elasticities were based on best data we could find. For supply elasticities, we used the establishment-level or plant-level data from Census of Manufactures, conducted by the U. S. Census Bureau to estimate the production function for affected industries by this rule. The estimated coefficients of the production function were then used to calculate the supply elasticity for the industry. Establishments-level data were selected from 6 digit NAICS code industry for five Census years between 1972 and 1997. The supply elasticities estimated from plant-level data are more elastic than industry-level data, as we previously used for the EIA chapter in the NPRM
For demand elasitcities, we used the industry-level data published by the National Bureau of Economic Research (NBER)-Center for Economic Studies (Bartlesman, Becker, and Gray, 2000). In addition to NBER data, we also used the Current Industrial Reports (CIR) series from the U.S. Census Bureau to produce an annual summary of the production of motors and generators and a summary of production of several types of lawn and garden equipment; both of these reports include the number of units manufactured and the value of production (U.S. Census Bureau, 1998; 2000). For walk-behind lawnmowers, we used several data series reported in a study by Air Improvement Resource, Inc., and National Economic Research Associates (AIR/NERA, 2003). The U.S. Census Bureau publishes historical data on household income and housing starts (U.S. Census Bureau, 2002; 2004), and we collected price, wage, and material cost indexes from the Bureau of Labor Statistics (BLS, 2004a,b,c,d,e). In cases where a price index was not available, we used the most recent implicit gross domestic product (GDP) price deflator reported by the U.S. Bureau of Economic Analysis (BEA, 2004). 13

13 In estimating demand elasticity, all values are expressed in 1987$.

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### Economic Impact Analysis Tables 9.3-21 and 9.3-22 provide a summary of the demand and supply elasticities used to estimate the economic impact of the final rule.
The estimated supply elasticities for all of the equipment and engine markets are elastic, ranging from 3.8 for all recreational marine except PWC, to 8.8 for generators, 5.2 for PWCs and, 10 for all Small SI applications except generators, and 9.5 for engines. This means that quantities supplied are expected to be fairly sensitive to price changes (e.g., a 1 percent change in price yields a 8.8 percent change in quantity of generator producers are willing to supply ).
On the demand side, the Marine SI equipment market estimated demand elasticity is elastic, at -2.0. This is consistent with the discretionary nature of purchases of recreational marine vessels (consumers can easily decide to spend their recreational budget on other alternatives).
The estimated demand elasticity for handheld equipment is elastic, at -1.9. This suggests that consumers are more sensitive to price changes for handheld equipment than for other Small SI equipment. In other words, they are more likely to change their purchase decision for a small change in the price of a string trimmer, perhaps opting for trimmer shears or deciding to forego trimming altogether.
The estimated demand elasticity for lawnmowers is very inelastic at -0.2. This suggests that consumers of this equipment are not very sensitive to price changes. Most of this equipment is sold to individual homeowners, who are often required by local authorities to keep their lawns trimmed. Household ownership of a gasoline lawnmower is often their least expensive option. Lawncare services are more expensive since the price for these services includes labor and other factors of production. Purchasing other equipment ma y also not be attractive, since electric and diesel mowers are generally more expensive and often less convenient. Finally, the option of using landscape alternatives (e.g., prairie, wildflower, or rock gardens) may not be attractive for home homeowners who may also use their yards for recreational purposes. For all these reasons, the price sensitivity of homeowners to lawnmower prices would be expected to be inelastic.
All the other demand elasticities, for gensets, welders, compressors, and agriculture/ construction equipment, are about unit elastic, at -1.0 meaning a 1 percent change in price is expected to result in a 1 percent change in demand.
The demand elasticities for the engine markets are internally derived as part of the process of running the model. This is an important feature of the EIM, which allows it to link the engine and equipment components of each model and simulate how compliance costs can be expected to ripple through the affected market. In actual markets, for example, the quantity of lawnmowers produced in a particular period depends on the price of engines (the Small SI engine market) and the demand for equipment by residential consumers. Similarly, the number of engines produced depends on the demand for engines (the lawnmower market), which depends on consumer demand for equipment. Changes in conditions in one of these markets will affect the others. By designing the model to derive the engine demand elasticities, the EIM simulates these connections between supply and demand among the product markets and replicates the economic interactions between producers and consumers.

9-59

### Final Regulatory Impact Analysis
As discussed in 9.2.3.2, the EIM model uses a derived demand approach for the engine market to incorporate the interaction between the equipment and engine markets. The demand curve for the engine market is solely derived from the equipment market. The derived demand is not affected by the product attributes that could shift the demand curve. In other words, as explained in 9.2.3.1, the demand curves for either the equipment or engine markets do not shift in response to any change in consumer preferences that may occur due to the compliance strategies of the producers in the analysis. We explore the impacts of relaxing this assumption in a sensitivity analysis (see 9.H.4). The engine and equipment changes needed to meet emission standards may affect the demand because of the potential changes to fuel consumption and engine performance. Section 9H.1 contains a sensitivity analysis that evaluates the effect of increased or decreased demand elasticities on the estimates of social cost of the rule. How this demand change affects the total social welfare of the rule is outside the sc ope of the analysis presented in Chapter 9 because the corresponding market failure (e.g., the health effects of air pollution) is not explicitly modeled; for example the economic impact of this regulation through reducing selected air pollutants is discussed separately in Chapter 8.
Because the elasticity estimates are a key input to the model, a sensitivity analysis for supply and demand elasticity parameters was performed as part of this analysis in considering the uncertainty involved in the estimated elasticities. The results are presented in Appendix 9H.

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### Economic Impact Analysis

Table 9.3-21: Summary of Market Supply Elasticities Used in EIM

Market Estimate Source Method Input Data Source
Engine Markets Small SI and Marine SI 9.5 EPA econometric estimate Cobb-Douglas production function Census of Manufacture, US Census Bureau; five years between 1972 and 1997; NAICS 333618
Marine Equipment Markets

PWC

All other vessel types 5.2

3.8 EPA econometric estimate

EPA econometric estimate Cobb-Douglas production function

Cobb-Douglas production function Census of Manufacture, US Census Bureau; five years between 1972 and 1997; NAICS 336999

Census of Manufacture, US Census Bureau; five years between 1972 and 1997; NAICS 336612
Small SI Equipment Markets

Gensets/welders

All other Small SI equipment (handheld and nonhandheld) 8.8

10.0 EPA econometric estimate

EPA econometric estimate Cobb-Douglas production function

Cobb-Douglas production function Census of Manufacture, US Census Bureau; five years between 1972 and 1997; NAICS 335312

Census of Manufacture, US Census Bureau; five years between 1972 and 1997; NAICS 333618

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### Final Regulatory Impact Analysis
Table 9.3-22: Summary of Market Demand Elasticities Used in EIM

Market Estimate Source Method Input Data Source
Engine Markets Small SI and Marine SI Derived Demand

Marine Equipment Markets

All vessel types -2.0 EPA econometric estimate Simultaneous equation (3SLS) Bartlesman et al (2000); Manufacturing Industry Data from US Census Bureau: 1958-1996; SIC 3732
Small SI Equipment Markets

HANDHELD: All -1.9 EPA econometric estimate

NONHANDHELD

Lawn mowers -0.2 EPA econometric estimate Other lawn and garden -0.9 EPA econometric estimate

Gensets/welders - Class I -1.4 EPA econometric estimate

Gensets/welders - Class II -1.1 EPA econometric estimate

All other nonhandheld -1.0 EPA econometric estimate Simultaneous equation (2SLS)

Simultaneous equation (3SLS)

Simultaneous equation (2SLS)

Simultaneous equation (2SLS)

Simultaneous equation (2SLS)

Simultaneous equation (2SLS) U.S. Census Bureau, Current Industrial Reports, MA333A 2000 and selected previous years; 1980-1997

AIR/NERA (2003); 1973-2002
Bureau, Current Industrial Reports, MA333A 2000 and selected previous years; 1980-1997
Bureau, Current Industrial Reports, MA333A 2000 and selected previous years; 1980-1997
Bureau, Current Industrial Reports, MA333A 2000 and selected previous years; 1980-1997
U.S. Census Bureau, Current Industrial Reports, MA333A 2000 and selected previous years; 1980-1997

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9.3.7 Economic Impact Model Structure

9.3.7.1 Computing Baseline and With-Regulation Equilibrium Conditions
The economic impact analysis is conducted using the data and the supply and demand framework described above. The price and quantity data, along with the supply and demand elasticities, are used to identify the market supply and demand curves. The regulatory costs are then used to shift the supply curve, and the resulting new equilibrium determines the market impacts and distribution of social impacts.
Figure 9.3-1 illustrates the economic impact modeling structure. Point A represents the initial baseline equilibrium price and quantity (corresponding to the prices and quantities presented in section 9.3.2). The slope of the supply and demand curves passing through the baseline point A are determined by applying the appropriate supply and demand elasticities presented in section 9.3.6. These slopes reflect the responsiveness of producers and consumers when prices change and determine how much of the compliance costs producers are able to pass along to consumers in the with-regulation equilibrium.
The compliance costs associated with the regulation (presented in Section 9.3.3) enter the model expressed as per-unit costs and result in an upward shift in the supply curve from S 0 

### to S 1 

### in Figure 9.3-1. Note that the demand curve does not shift because consumer preferences and income are not affected by the regulation.
With the addition of the compliance costs, if prices were not allowed to adjust demanders would still want to consume the quantity at point A, but suppliers would only be willing to supply the quantity at point B (i.e., demand exceeds supply at the baseline price, P). The model then solves for the new equilibrium price (P*) where the quantity demanded equals the quantity supplied. The movement from the baseline equilibrium point A to with-regulation equilibrium point C determines the market impacts (changes in price and quantity) as well as the distribution of social costs. Appendix 9D describes the set of supply and demand equations included in the model. Given the number of equations included in the model, the solution algorithm described below is used to identify the new with-regulation set of equilibrium prices and quantities (Point C).
The analysis illustrated in Figure 9.3-1 is repeated for each year included in the period of analysis. For future years, a projected time series of prices and quantities are developed and used as the baseline (point A) from which market cha nges are evaluated. The engineering cost analysis provides quantities for future years using historical annual growth rates. In contrast, there is much more uncertainty surrounding future prices for these markets. As a result, we use a constant 2005 observed prices for the relevant markets during the period of analysis.

9.3.7.2 Solution Algorithm
Supply responses and market adjustments can be conceptualized as an interactive process. Producers facing increased production costs due to compliance are willing to supply smaller quantities at the baseline price. This reduction in market supply leads to an increase in the market

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price that all producers and consumers face, which leads to further responses by producers and consumers and thus new market prices, and so on. The new with-regulation equilibrium is the result of a series of iterations in which price is adjusted and producers and consumers respond, until a set of stable market prices arises where total market supply equals market demand. Market price adjustment takes place based on a price-revision rule, described below, that adjusts price upward (downward) by a given percentage in response to excess demand (excess supply).
The EIM model uses a similar type of algorithm for determining with-regulation equilibria and the process can be summarized by six recursive steps:

1. Impose the control costs on affected supply segments, thereby affecting their supply decisions.

2. Recalculate the market supply in each market. Excess demand currently exists.

3. Determine the new prices via a price revision rule. We use a rule similar to the factor price revision rule described by Kimbell and Harrison (1986). P i 

### is the market price at iteration I, q d 

### is the quantity demanded, and q s 

### is the quantity supplied. The parameter z influences the magnitude of the price revision and speed of convergence. The revision rule increases the price when excess demand exists, lowers the price when excess supply exists, and leaves the price unchanged when market demand equals market supply. The price adjustment is expressed as follows:

P i+1 

### = P 1 

### • 

### ⎛ ⎜ ⎝ q

q d

s 

### ⎞

⎟ ⎠ z 

### (10.1)

4. Recalculate market supply with new prices,

5. Compute market demand in each market.

6. Compare supply and demand in each market. If equilibrium conditions are not satisfied, go to Step 3, resulting in a new set of market prices. Repeat until equilibrium conditions are satisfied (i.e., the ratio of supply and demand is arbitrarily close to one). When the ratio is appropriately close to one, the market-clearing condition of supply equals demand is satisfied.

9.3.7.3 Estimating Impacts
Using the static partial equilibrium analysis, the EIM model loops through each year calculating new market equilibriums based on the projected baseline economic conditions and compliance cost estimates that shift the supply curves in the model. The model calculates price and quantity changes and uses these measures to estimate the social costs of the rule and partition the impact between producers and consumers.



## 9.4 Methods for Describing Uncertainty

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Every economic impact analysis examining the market and social welfare impacts of a regulatory program is limited to some extent by limitations in model capabilities, deficiencies in the economic literatures with respect to estimated values of key variables necessary to configure the model, and data gaps. In this EIA, there are three main potential sources of uncertainty: (1) uncertainty resulting from the way the EIM is designed, particularly from the use of a partial equilibrium model; (2) uncertainty resulting from the values for key model parameters, particularly the price elasticity of supply and demand; and (3) uncertainty resulting from the values for key model inputs, particularly baseline equilibrium price and quantities. Sources of uncertainty that have a bearing on the results of the EIA for the final program are listed and described in more detail in Table 9.4-1.
The values used for the price elasticities of supply and demand are critical parameters in the EIM. The values of these parameters have an impact on both the estimated change in price and quantity produced expected as a result of compliance with the final standards and on how the burden of the social costs will be shared among producer and consumer groups. In selecting the values to use in the EIM it is important that they reflect the behavioral responses of the industries under analysis.
The first source of values for elasticities of supply and demand is the published economic literature. These estimates are peer reviewed and generally constitute reasonable estimates for the industries in question. In this analysis, because we were unable to find published supply and demand elasticities for the Small SI and Marine SI markets, we estimated these parameters econometrically using the procedures described in Appendix 9E.
The previous estimates of supply elasticities reflect a production function approach using data at the aggregate industry level. This method was chosen because of limitations with the available data; we were not able to obtain firm-level or plant-level production data for companies that operate in the affected sectors. However, the use of aggregate industry level data may not be appropriate or an accurate way to estimate the price elasticity of supply compared to firm-level or plant-level data. This is because, at the aggregate industry level, the size of the data sample is limited to the time series of the available years and because aggregate industry data may not reveal each individual firm or plant production functi on (heterogeneity). There may be significant differences among the firms that may be hidden in the aggregate data but that may affect the estimated elasticity. In addition, the use of time series aggregate industry data may introduce time trend effects that are difficult to isolate and control.
To address these concerns, EPA has investigated estimates for the price elasticity of supply for the affected industries for which published estimates are not available, using alternative methods and data inputs. This research program used the cross-sectional data model at the firm-level or plant level from the U.S. Census Bureau to estimate these elasticities. We used the results of this research for the analysis.
Table 9 .4-1 Primary Sources of Uncertaint y in the Economic Impact Analysis

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Source of Uncertainty Description Potential Impact

UNCERTAINTIES ASSOCIATED WITH ECONOMIC IMPACT MODEL STRUCTURE Partial equilibrium model The EIM domain is limited to the economic sectors directly affected by the emission control program; impacts on secondary markets are not accounted for. However, such impacts are not expected to be large since directly affected products and services (small SI equipment and marine SI vessels) are mostly used by households and only a very small portion of these engines and equipment are used as production inputs to other industry (e.g., agriculture, manufacturing, construction). In addition, Small SI engines and equipment would not be a large share of total production costs for final goods and services in those commercial markets. Results understate social costs; magnitude of impact is uncertain.

National level model The EIM considers only national-level impacts; regional impacts are not modeled. This is appropriate because Small SI engine and equipment or Marine SI engine and vessel markets are national markets. While there may be some regional differences these are likely to be small due to the competitive nature of the manufacture industry. Impacts uncertain

Supply side assumptions On the supply side, industries are assumed to be mature and behave linearly within the range of analysis; no substitution between production inputs. This is appropriate because per unit compliance costs are not large enough to prompt a major change in product design or assembly. Impacts uncertain

Demand side assumption On the demand side, end consumer’s preferences or consumption patterns are assumed to be constant and behave linearly within the range of analysis. This is appropriate because all other factors in the demand function will not be changed by the final rule. Impacts uncertain

Constant price assumption Prices are assumed to be constant across the period of analysis. This is a reasonable assumption since it is not possible to predict changes in these prices over time (see Appendix G). Impacts uncertain

Period of analysis Each period of analysis is assumed to be independent of previous period and producers are assumed to not engage in long-term planning to smooth the compliance costs over a longer period of time. Because the new exhaust standards will not go into effect for several years after the program is finalized, producers may in fact take the full program into account in production plans to minimize their costs. Estimated price changes may be too high for early periods, too low for later periods; magnitude of impact is uncertain

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Market shock In the EIM, the market is shocked by either fixed or variable compliance costs. This is appropriate because producers in these industries may not engage in R&D on a continuous basis and thus the product changes that would be required to comply with the final standards would require manufacturers to devote new funds and resources to product redesign. Results may overstate distribution of social costs to some producers, understate market impacts; magnitude of impact is uncertain

UNCERTAINTIES ASSOCIATED WITH PRICE ELASTICITY ESTIMATION Uncertainty resulting from the functional form used in the estimation, the data used (aggregate or firm-level), the time period involved, sample size. Impacts on distribution of social costs among stakeholders (e.g., higher supply elasticity would result in less social costs for manufacturers and more social costs for consumers)
Impacts on market analysis (change in price, change in quantity produced)
Magnitude of impact is uncertain

UNCERTAINTIES ASSOCIATED WITH DATA INPUTS Submarket groupings Submarket data is assumed to be representative and capture the range of affected equipment. However, the product groupings in NAICS or SIC 4-digit categories may include other engines or equipment that may not have the same production or consumption characteristics; these groupings not behave the same way as the directly-affected industries. Impacts on social welfare and market analyses uncertain

Baseline equilibrium prices Estimated baseline equilibrium prices are assumed to be representative and capture the range of affected equipment, and reflect actual transaction prices. However, the actual prices paid by consumers may be different. Also, the mix of products included in price analysis may not be representative of the population. Impacts on market analysis uncertain

Baseline equilibrium quantities Estimated baseline equilibrium quantities and future quantities assumed to be representative; these are the same as the cost analysis. Impacts on market analysis uncertain



### To explore the effects of key sources of uncertainty, we performed a sensitivity analysis in which we examine the results of using alternative values for the price elasticity of supply and demand (using the upper and lower bound of at 95 percent confidence interval around the point estimate for each elasticity estimate), and alternative baseline equilibrium prices for lawnmowers

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and tractors. The results of these analyses are contained in Appendix 9H. A summary of the results are presented in Table 9.4-2.
Table 9.4-2. Results of Sensitivity Analysis

Parameter Year Change in Value Impact Price Elasticity of Supply 2014 More elastic (upper bound of 95 percent confidence interval for each elasticity estimate) Negligible impact on expected price increase and quantity decrease (less than 0.2 additi onal increase in price increase compared to primary analysis; less than 0.2 additional increase in quantity decrease compared to primary analysis)
More elasticity price elasticity of supply associated with increase in social cost burden for users of Small SI and Marine SI engines and equipment (shift of about 3.6 percent of burden of compliance costs from producers to consumers in Marine SI market; shift of about 2.5 percent of burden of compliance costs from producers to consumers in Small SI market)

2014 Less Elastic (lower bound of 95 percent confidence interval for each elasticity estimate) Negligible impact on expected price increase and quantity decrease (less than 0.2 additi onal increase in price increase compared to primary analysis; less than 0.2 percent additional increase in quantity decrease compared to primary analysis)
Higher value associated with in crease in social cost burden for producers of Small SI and Marine SI engines and equipment (shift of about 6 percent of burden of compliance costs from consumers to producers in Marine SI market; shift of about 6 percent of burden of compliance costs from consumers to producers in Small SI market) Price Elasticity of Demand 2014 More Elastic (upper bound of 95 percent confidence interval for each elasticity estimate) Negligible impact on expected price increase and quantity decrease (less than 0.5 percent additional increase in price increase compared to primary analysis; less than 1.5 percent additional increase in quantity decrease, compared to primary analysis)
More elastic price elasticity of demand associated with increase in social cost burden for producers of Small SI and Marine SI engines and equipment (shift of about 11 percent of burden of compliance costs from consumers to producers in Marine SI market; shift of about 5 percent of burden of compliance costs from consumers to producers in Small SI market)

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2014 Less Elastic (lower bound of 95 percent confidence interval for each elasticity estimate) Negligible impact on expected price increase and quantity decrease (less than 1 percent additional increase in price increase compared to primary analysis; less than 3 additional increase in quantity decrease, co mpared to primary analysis)
Less elastic price elasticity of demand associated with increase in social cost burden for users of Small SI and Marine SI engines and equipment (shift of about 22 percent of burden of compliance costs from producers to consumers in Marine SI market; shift of about 6 percent of burden of compliance costs from producers to consumers in Small SI market)

Alternative Baseline Equilibrium Price - Lawnmowers and Tractors 2014 Lower baseline equilibrium price Larger percent increase in price and percent decrease in quantity, although absolute changes are smaller (less than 2 percent additional price change for both sectors compared to primary analysis; about 0.3 percent additional quantity decrease for lawn mowers and about 1 percent additional quantity decrease for tractors compared to primary analysis)
Social welfare impacts unchanged.

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## Chapter 9 References

Air Improvement Resource, Inc. and National Economic Research Associates, Inc. (AIR/NERA).2003. “Cost-Effectiveness Analyses of Alternative California Air Resources Board Tier 3 NonHandheld Exhaust Emission Proposals.” Prepared for Engine Manufacturers Association and Outdoor Power Equipment Institute. Do cket Identification EPA-HQ-OAR-2004-0008-0458

Allen, R.G.D. 1938. Mathematical Analysis for Economists . New York: St. Martin’s Press.
Baumol, William. "Contestable Markets: An Uprising in the theory of Industry Structure," American Economic Review, 72, March 1982:1-15.
Baumol, William, John Panzer, and Robert Willig. 1982. Contestable Markets and the Theory of Industry Structure , San Diego, CA: Harcourt, Brace, Jovanovich.
Berck, P., and S. Hoffmann. 2002. “Assessing the Employment Impacts.” Environmental and Resource Economics 22:133-156.
Bingham, T.H., and T.J. Fox. 1999. “Model Complexity and Scope for Policy Analysis.” Public Administration Quarterly 23(3).
Caffrey, C, and Cle Jackson, Zuimdie Guerra. September 2006. Memorandum to Docket EPAHQ-OAR-2004-0008 Re: Small SI Engine Sales and Price Estimates. A copy of this document is available in Docket EPA-HQ-OAR-2004-0008. Docket Identification EPA-HQ-OAR-2004-0008- 0491.

Fullerton, D., and G. Metcalf. 2002. “Tax Incidence.” In A. Auerbach and M. Feldstein, eds., Handbook of Public Economics , Vol.4, Amsterdam: Elsevier.
Harberger, Arnold C. 1974. Taxation and Welfare. Chicago: University of Chicago Press.
Hicks, J.R., 1961. Marshall’s Third Rule: A Further Comment. Oxford Economic Papers 13:262-65. Docket Identification EPA-HQ-OAR-2004-0008-0459
Hicks, J.R., 1966. The Theory of Wages. 2 nd 

### Ed. New York: St. Martins Press, pp. 233-247. Docket Identification EPA-HQ-OAR-2004-0008-0460
Kimbell, L.J., and G.W. Harrison. 1986. “On the Solution of General Equilibrium Models.” Economic Modeling 3:197-212.
Li, Chi. June 6, 2008. Memorandum to Docket EPA-HQ-OAR-2004-0008 Detailed Results From Economic Impact Model for the Final Rule.
Li, Chi. May 19, 2008. Memorandum to Docket EPA-HQ-OAR-2004-0008 Supply Elasticity Estimation Report.

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NBER-CES. National Bureau of Economic Resear ch and U.S. Census Bureau, Center for Economic Research. 2002. NBER-CES Manufacturing Industry Database, 1958 - 1996. http://www.nber.org/nberces/nbprod96.htm

Nicholson, W. 1998. Microeconomic Theory: Basic Principles and Extensions . Fort Worth: Dryden Press.
Office Management and Budget (OMB). 1996. Executive Analysis of Federal Regulations Under Executive Order 12866. Executive Office of the President, Office Management and Budget. January 11, 1996. A copy of this document is available at http://www.whitehouse.gov/omb/inforeg/print/riaguide.html.
Outdoor Power Equipment & Engine Service Association. OPE-IN-THE-KNOW, Volume LXXIV, December 30, 2004. “The Business of Outdoor Power Equipment”. Docket Identification EPA-HQ-OAR-2004-0008-0478.
Raboy, David. 1987. “Results of an Economic Analysis of Proposed Excise Taxes on Boats.” Washington, DC. Docket Identification EPA-HQ-OAR-2004-0008-0462.
RTI International (RTI). 2005. “Economic Impact Analysis (EIA) for Additional Tier of Emissions Standards for Nonroad Spark Ignition Engines and Equipment: Revised Draft Analysis Plan.” EPA Contract No. 68-D-99-024. Docket Identification EPA-HQ-OAR-2004-0008-0463.
RTI International (RTI). 2006a. “Draft Industry Profile for Recreational Marine Industry.”Research Triangle Park, NC: RTI. EPA Contract No. 68-D-99-024. Docket Identification EPAHQ-OAR-2004-0008-0492
RTI International (RTI). 2006b. “Draft Industry Profile for Small Nonroad Spark-Ignition Engines and Equipment.” Research Triangle Park, NC : RTI. EPA Contract No. 68-D-99-024. Docket Identification EPA-HQ-OAR-2004-0008-0469.
RTI International (RTI). 2006c. “Memorandum on Calculation Motor Gasoline Prices in Small SI rule EIA”. EPA Contract No. 68-D-99-024. A copy of th is document is available in EPA-HQOAR-2004-0008. Docket Identif ication EPA-HQ-OAR-2004-0008-0449.
Samulski, M. August 2004. Memorandum to Docket EPA-HQ-OAR-2004-0008 Re: Draft Marine SI Sales and Prices Estimates. Dock et Identification EPA-HQ-OAR-2004-0008-0448.

U.S. Bureau of Economic Analysis. 2004. Table 1.1.9, Implicit Price Deflators for Gross Domestic Product. Last revised April 29, 2004. Dock et Identification EPA-HQ-OAR-2004-0008-0473.

U.S. Bureau of Labor Statistics. 2004a. Producer Price Index Industry Data: (1) Plastic Material and Resins Manufacturing. Series ID: PCU325211325211 (May 14, 2004), (2) Consumer Nonriding Lawn, Garden, and Snow Equipment. Series ID: PCU3331123331121 (May 20, 2004),

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(3) Other Engine Equipment Manufacturing. Series ID: PCU3336183336181 (May 20, 2004), (4) Rotary, Push Type Gasoline Engine Powered. Series ID: WPU12660201 ( August 10, 2004). A copy of this document is available in the Docket. Docket Identification EPA-HQ-OAR-2004-0008- 0474.

U.S. Bureau of Labor Statistics. 2004b. Average Hourly Earnings of Production Workers (Boat Building: Series ID CEU3133661206; Farm Machinery and Equipment: Series ID EEU31352306). Obtained May 18, 2004. Docket Identification EPA-HQ-OAR-2004-0008-0474.

U.S. Census Bureau. 1998 and selected other previous years. Current Industrial Reports. Motors and Generators. MA335H (MA36H prior to 1998). Washington, DC: U.S. Government Printing Office. Docket Identification EPA-HQ-OAR-2004-0008-0475.

U.S. Census Bureau. 2000 and selected other pr evious years. Current Industrial Reports. Farm Machinery and Lawn and Garden Equipment. MA333A (MA35A prior to 1998). Washington, DC: U.S. Government Printing Office. Do cket Identification EPA-HQ-OAR-2004-0008-0476.

U.S. Census Bureau. 2005. Survey of Plant Capacity: 2004. Current Industrial Reports MQC1(04). Table 1. A copy of this document can be found at <http://www.census.gov/prod/2005pubs/mqc1-04.pdf>. Table 1a.

U.S. Department of Energy, Energy Information Administration. 2006. “Petroleum Marketing Annual 2005.” A copy of this document can be found at http://www.eia.doe.gov/oil_gas/petroleum/data _publications/petroleum_marketing_annual/pma.ht ml. Table 31.

U.S. Environmental Protection Agency. 1999. OAQPS Economic Analysis Resource Document

. Research Triangle Park, NC: EPA. A copy of this document can be found at http://www.epa.gov/ttn/ecas/econdata/6807-305.pdf.

U.S. Environmental Protection Agency. 2000. Guidelines for Preparing Economic Analyses. EPA-240-R-00-003, September 2000.

U.S. Environmental Protection Agency. 2004. Final Regulatory Analysis: Control of Emissions from Nonroad Diesel Engines . EPA-420-R-04-007. Research Triangle Park, NC: EPA.

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## Appendix 9A: Impacts on Small SI Markets

This appendix provides the time series of impacts from 2008 through 2037 for the following Small SI engines and equipment markets; a complete set of results for all markets can be found in the docket for this rule (Li, 2008). Results are presented for equipment in the Class I UL125 and Class II UL250 categories because those are the categories with the highest sales.

• Class I engines

• Class II engines

• Handheld equipment

• Agriculture/construcion/general industrial, UL125 and UL250

• Utility and recreational vehicles, UL125 and UL250

• Lawn mowers, UL125

• Tractors, UL250

• Lawn and garden other, UL125 and UL250

• Gensets/welders, UL125 and 250

• Pumps/compressors, pressure washers, UL125 and UL250

• Snowblowers, UL125 and UL250
Table 9A-1 through Table 9A-17 provide the time series of impacts for each engine class market and each selected equipment market, respectively, includes the following:

• average engine or equipment price

• average engineering costs (variable and fixed) per engine or equipment

• absolute change in the market price ($)

• relative change in market price (%)

• relative change in market quantity (%)

• total engineering costs associated with each engine or equipment market

• changes in producer surplus associated with each engine or equipment market
All prices and costs are presented in 2005 dollars and real engine or equipment prices are assumed to be constant during the period of analysis. Net present values were estimated using social discount rates of 3 percent and 7 percent over the period of analysis.

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Table 9A-1: Impact on Small SI Engine Market

Class I (Average Price per Engine = $140) a,b Small SI Engine (Class I) Total Change in Engine Absolute Change in Engineering Manufacturers Engineering Change in Change in Quantity Costs Surplus Year Cost/Unit Price Price (%) (%) (million $) (million $) 2008 $1 $1 0.8% –0.1% $11.4 –$0.1 2009 $1 $1 0.8% –0.1% $11.5 –$0.2 2010 $3 $3 2.3% –0.4% $32.3 –$0.6 2011 $3 $3 2.2% –0.4% $32.4 –$0.5 2012 $12 $12 8.9% –1.9% $131.3 –$2.8 2013 $12 $12 8.8% –1.9% $132.2 –$2.7 2014 $12 $12 8.8% –1.9% $134.4 –$2.8 2015 $12 $12 8.8% –1.9% $136.6 –$2.8 2016 $12 $12 8.8% –1.9% $138.8 –$2.9 2017 $11 $11 7.9% –1.7% $127.1 –$2.6 2018 $11 $11 7.9% –1.7% $129.1 –$2.6 2019 $11 $11 7.9% –1.7% $131.1 –$2.7 2020 $11 $11 7.9% –1.7% $133.1 –$2.7 2021 $11 $11 7.9% –1.7% $135.1 –$2.8 2022 $11 $11 7.9% –1.7% $137.1 –$2.8 2023 $11 $11 7.9% –1.7% $139.1 –$2.8 2024 $11 $11 7.9% –1.7% $141.1 –$2.9 2025 $11 $11 7.9% –1.7% $143.1 –$2.9 2026 $11 $11 7.9% –1.7% $145.1 –$3.0 2027 $11 $11 7.9% –1.7% $147.1 –$3.0 2028 $11 $11 7.9% –1.7% $149.1 –$3.0 2029 $11 $11 7.9% –1.7% $151.2 –$3.1 2030 $11 $11 7.9% –1.7% $153.2 –$3.1 2031 $11 $11 7.9% –1.7% $155.2 –$3.2 2032 $11 $11 7.9% –1.7% $157.2 –$3.2 2033 $11 $11 7.9% –1.7% $159.2 –$3.2 2034 $11 $11 7.9% –1.7% $161.3 –$3.3 2035 $11 $11 7.9% –1.7% $163.3 –$3.3 2036 $11 $11 7.9% –1.7% $165.3 –$3.4 2037 $11 $11 7.9% –1.7% $167.3 –$3.4 NPV (3%) $2,340.8 –$47.5 NPV (7%) $1,331.1 –$27.0

a Figures are in 2005 dollars.
b Average price per engine is a wei ghted average price of engines by UL.

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### Economic Impact Analysis Table 9A-2. Impact on Small SI Engine Market

Class II (Average Price per Engine = $310) a,b Small SI Engine (Class II) Total Change in Engine Absolute Change in Change in Engineering Manufacturers Engineering Change in Price Quantity Costs Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $3 $3 1.1% –0.3% $15.4 –$0.4 2009 $9 $8 2.7% –0.9% $40.6 –$1.5 2010 $9 $8 2.7% –0.9% $40.6 –$1.5 2011 $19 $18 5.8% –1.9% $89.4 –$2.5 2012 $18 $18 5.7% –1.9% $89.7 –$2.5 2013 $18 $18 5.7% –1.9% $91.2 –$2.6 2014 $18 $18 5.7% –1.9% $92.8 –$2.6 2015 $16 $15 4.8% –1.7% $79.7 –$2.3 2016 $16 $15 4.8% –1.6% $80.9 –$2.3 2017 $16 $15 4.8% –1.6% $82.2 –$2.3 2018 $16 $15 4.8% –1.6% $83.5 –$2.4 2019 $16 $15 4.8% –1.6% $84.9 –$2.4 2020 $16 $15 4.8% –1.6% $86.2 –$2.4 2021 $16 $15 4.8% –1.6% $87.5 –$2.5 2022 $16 $15 4.8% –1.6% $88.8 –$2.5 2023 $16 $15 4.8% –1.6% $90.1 –$2.5 2024 $16 $15 4.8% –1.6% $91.4 –$2.6 2025 $16 $15 4.8% –1.6% $92.7 –$2.6 2026 $16 $15 4.8% –1.6% $94.0 –$2.7 2027 $16 $15 4.8% –1.6% $95.3 –$2.7 2028 $16 $15 4.8% –1.6% $96.6 –$2.7 2029 $16 $15 4.8% –1.6% $97.9 –$2.8 2030 $16 $15 4.8% –1.6% $99.2 –$2.8 2031 $16 $15 4.8% –1.6% $100.6 –$2.8 2032 $16 $15 4.8% –1.6% $101.9 –$2.9 2033 $16 $15 4.8% –1.6% $103.2 –$2.9 2034 $16 $15 4.8% –1.6% $104.5 –$2.9 2035 $16 $15 4.8% –1.6% $105.8 –$3.0 2036 $16 $15 4.8% –1.6% $107.1 –$3.0 2037 $16 $15 4.8% –1.6% $108.4 –$3.1 NPV (3%) $1,633.5 –$46.6 NPV (7%) $967.4 –$27.8

a Figures are in 2005 dollars.
b Average price per engine is a wei ghted average price of engines by UL.

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### Final Regulatory Impact Analysis
Table 9A-3: Impact on Small SI Equipment Market Handheld (Average Price per Equipment = $210) a Small SI Equipment (Handheld) Total Absolute Change Change in Engineering Change in Equipment Engineering Change in in Price Quantity Costs Manufacturers Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $0 $0 0.1% –0.2% $2.6 –$0.4 2009 $1 $1 0.4% –0.7% $8.3 –$1.3 2010 $1 $1 0.4% –0.7% $8.2 –$1.3 2011 $1 $1 0.4% –0.7% $8.3 –$1.3 2012 $1 $1 0.3% –0.6% $7.8 –$1.2 2013 $1 $1 0.3% –0.6% $7.9 –$1.3 2014 $1 $1 0.3% –0.5% $6.8 –$1.1 2015 $1 $1 0.3% –0.5% $6.9 –$1.1 2016 $1 $1 0.3% –0.5% $7.0 –$1.1 2017 $1 $1 0.3% –0.5% $7.1 –$1.1 2018 $1 $1 0.3% –0.5% $7.3 –$1.2 2019 $1 $1 0.3% –0.5% $7.4 –$1.2 2020 $1 $1 0.3% –0.5% $7.5 –$1.2 2021 $1 $1 0.3% –0.5% $7.6 –$1.2 2022 $1 $1 0.3% –0.5% $7.7 –$1.2 2023 $1 $1 0.3% –0.5% $7.8 –$1.3 2024 $1 $1 0.3% –0.5% $7.9 –$1.3 2025 $1 $1 0.3% –0.5% $8.0 –$1.3 2026 $1 $1 0.3% –0.5% $8.2 –$1.3 2027 $1 $1 0.3% –0.5% $8.3 –$1.3 2028 $1 $1 0.3% –0.5% $8.4 –$1.3 2029 $1 $1 0.3% –0.5% $8.5 –$1.4 2030 $1 $1 0.3% –0.5% $8.6 –$1.4 2031 $1 $1 0.3% –0.5% $8.7 –$1.4 2032 $1 $1 0.3% –0.5% $8.8 –$1.4 2033 $1 $1 0.3% –0.5% $8.9 –$1.4 2034 $1 $1 0.3% –0.5% $9.1 –$1.5 2035 $1 $1 0.3% –0.5% $9.2 –$1.5 2036 $1 $1 0.3% –0.5% $9.3 –$1.5 2037 $1 $1 0.3% –0.5% $9.4 –$1.5 NPV (3%) $151.3 –$24.2 NPV (7%) $92.8 –$14.8

a Figures are in 2005 dollars.

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### Economic Impact Analysis Table 9A-4: Impact on Small SI Equipment Market: Class I Ag/Constr./Gen. Ind/ Material Handling Equipment UL 125 (Average Price per Equipment = $1,108) a

Class 1 Agricultural/Construct ion/General Industrial/ Material Handling Equipment UL 125 Total Absolute Change Change in Engineering Change in Equipment Engineering Change in in Price Quantity Costs Manufacturers Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $0 $1 0.1% –0.1% $0.0 $0.0 2009 $0 $1 0.1% –0.1% $0.0 $0.0 2010 $0 $2 0.2% –0.2% $0.0 $0.0 2011 $0 $2 0.2% –0.2% $0.0 $0.0 2012 $0 $11 1.0% –1.0% $0.0 –$0.1 2013 $0 $11 1.0% –1.0% $0.0 –$0.1 2014 $0 $11 1.0% –1.0% $0.0 –$0.1 2015 $0 $11 1.0% –1.0% $0.0 –$0.1 2016 $0 $11 1.0% –1.0% $0.0 –$0.1 2017 $0 $10 0.9% –0.9% $0.0 –$0.1 2018 $0 $10 0.9% –0.9% $0.0 –$0.1 2019 $0 $10 0.9% –0.9% $0.0 –$0.1 2020 $0 $10 0.9% –0.9% $0.0 –$0.1 2021 $0 $10 0.9% –0.9% $0.0 –$0.1 2022 $0 $10 0.9% –0.9% $0.0 –$0.1 2023 $0 $10 0.9% –0.9% $0.0 –$0.1 2024 $0 $10 0.9% –0.9% $0.0 –$0.1 2025 $0 $10 0.9% –0.9% $0.0 –$0.1 2026 $0 $10 0.9% –0.9% $0.0 –$0.1 2027 $0 $10 0.9% –0.9% $0.0 –$0.1 2028 $0 $10 0.9% –0.9% $0.0 –$0.1 2029 $0 $10 0.9% –0.9% $0.0 –$0.1 2030 $0 $10 0.9% –0.9% $0.0 –$0.1 2031 $0 $10 0.9% –0.9% $0.0 –$0.1 2032 $0 $10 0.9% –0.9% $0.0 –$0.1 2033 $0 $10 0.9% –0.9% $0.0 –$0.1 2034 $0 $10 0.9% –0.9% $0.0 –$0.1 2035 $0 $10 0.9% –0.9% $0.0 –$0.1 2036 $0 $10 0.9% –0.9% $0.0 –$0.1 2037 $0 $10 0.9% –0.9% $0.0 –$0.1 NPV (3%) $0.0 –$1.7 NPV (7%) $0.0 –$1.0

a Figures are in 2005 dollars.

9-77

### Final Regulatory Impact Analysis Table 9A-5: Impact on Small SI Equipment Market: Class I Utility and Recreational Vehicles UL 125 (Average Price per Equipment = $570) a Small SI Equipment (Class I Utility and Recreational Vehicles UL 125) Total Absolute Change Change in Engineering Change in Equipment Engineering Change in in Price Quantity Costs Manufacturers Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $0 $1 0.1% –0.1% $0.0 $0.0 2009 $0 $1 0.1% –0.1% $0.0 $0.0 2010 $0 $2 0.4% –0.4% $0.0 $0.0 2011 $0 $2 0.4% –0.4% $0.0 $0.0 2012 $0 $11 2.0% –2.0% $0.0 –$0.1 2013 $0 $11 2.0% –2.0% $0.0 –$0.1 2014 $0 $11 2.0% –2.0% $0.0 –$0.1 2015 $0 $11 2.0% –2.0% $0.0 –$0.1 2016 $0 $11 2.0% –2.0% $0.0 –$0.1 2017 $0 $10 1.8% –1.8% $0.0 –$0.1 2018 $0 $10 1.8% –1.8% $0.0 –$0.1 2019 $0 $10 1.8% –1.8% $0.0 –$0.1 2020 $0 $10 1.8% –1.8% $0.0 –$0.1 2021 $0 $10 1.8% –1.8% $0.0 –$0.1 2022 $0 $10 1.8% –1.8% $0.0 –$0.1 2023 $0 $10 1.8% –1.8% $0.0 –$0.1 2024 $0 $10 1.8% –1.8% $0.0 –$0.1 2025 $0 $10 1.8% –1.8% $0.0 –$0.1 2026 $0 $10 1.8% –1.8% $0.0 –$0.1 2027 $0 $10 1.8% –1.8% $0.0 –$0.1 2028 $0 $10 1.8% –1.8% $0.0 –$0.1 2029 $0 $10 1.8% –1.8% $0.0 –$0.1 2030 $0 $10 1.8% –1.8% $0.0 –$0.1 2031 $0 $10 1.8% –1.8% $0.0 –$0.1 2032 $0 $10 1.8% –1.8% $0.0 –$0.1 2033 $0 $10 1.8% –1.8% $0.0 –$0.1 2034 $0 $10 1.8% –1.8% $0.0 –$0.1 2035 $0 $10 1.8% –1.8% $0.0 –$0.1 2036 $0 $10 1.8% –1.8% $0.0 –$0.1 2037 $0 $10 1.8% –1.8% $0.0 –$0.1 NPV (3%) $0.0 –$1.9 NPV (7%) $0.0 –$1.1

a Figures are in 2005 dollars.

9-78

### Economic Impact Analysis Table 9A-6: Impact on Small SI Equipment Market: Class I Lawn Mowers UL 125 (Average Price per Equipment = $218) a Small SI Equipment (Class I Lawn Mowers UL 125) Total Absolute Change Change in Engineering Change in Equipment Engineering Change in in Price Quantity Costs Manufacturers Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $0 $1 0.4% –0.1% $0.0 –$0.1 2009 $0 $1 0.4% –0.1% $0.0 –$0.1 2010 $0 $2 1.1% –0.2% $0.0 –$0.3 2011 $0 $2 1.1% –0.2% $0.0 –$0.3 2012 $0 $12 5.6% –1.1% $0.0 –$1.6 2013 $0 $12 5.5% –1.1% $0.0 –$1.6 2014 $0 $12 5.5% –1.1% $0.0 –$1.7 2015 $0 $12 5.5% –1.1% $0.0 –$1.7 2016 $0 $12 5.5% –1.1% $0.0 –$1.7 2017 $0 $11 5.0% –0.9% $0.0 –$1.6 2018 $0 $11 5.0% –0.9% $0.0 –$1.6 2019 $0 $11 5.0% –0.9% $0.0 –$1.6 2020 $0 $11 5.0% –0.9% $0.0 –$1.6 2021 $0 $11 5.0% –0.9% $0.0 –$1.7 2022 $0 $11 5.0% –0.9% $0.0 –$1.7 2023 $0 $11 5.0% –0.9% $0.0 –$1.7 2024 $0 $11 5.0% –0.9% $0.0 –$1.7 2025 $0 $11 5.0% –0.9% $0.0 –$1.8 2026 $0 $11 5.0% –0.9% $0.0 –$1.8 2027 $0 $11 5.0% –0.9% $0.0 –$1.8 2028 $0 $11 5.0% –0.9% $0.0 –$1.8 2029 $0 $11 5.0% –0.9% $0.0 –$1.9 2030 $0 $11 5.0% –0.9% $0.0 –$1.9 2031 $0 $11 5.0% –0.9% $0.0 –$1.9 2032 $0 $11 5.0% –0.9% $0.0 –$1.9 2033 $0 $11 5.0% –0.9% $0.0 –$2.0 2034 $0 $11 5.0% –0.9% $0.0 –$2.0 2035 $0 $11 5.0% –0.9% $0.0 –$2.0 2036 $0 $11 5.0% –0.9% $0.0 –$2.0 2037 $0 $11 5.0% –0.9% $0.0 –$2.1 NPV (3%) $0.0 –$28.6 NPV (7%) $0.0 –$16.2

a Figures are in 2005 dollars.

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### Final Regulatory Impact Analysis Table 9A-7: Impact on Small SI Equipment Market: Class I Other Lawn and Garden Equipment UL 125 (Average Price per Equipment = $245) a Small SI Equipment (Class I Other Lawn and Garden Equipment UL 125) Total Absolute Change Change in Engineering Change in Equipment Engineering Change in in Price Quantity Costs Manufacturers Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $0 $1 0.3% –0.3% $0.0 –$0.1 2009 $0 $1 0.3% –0.3% $0.0 –$0.1 2010 $0 $2 0.9% –0.8% $0.0 –$0.1 2011 $0 $2 0.9% –0.8% $0.0 –$0.1 2012 $0 $11 4.7% –4.2% $0.0 –$0.7 2013 $0 $11 4.6% –4.1% $0.0 –$0.8 2014 $0 $11 4.6% –4.1% $0.0 –$0.8 2015 $0 $11 4.6% –4.1% $0.0 –$0.8 2016 $0 $11 4.6% –4.1% $0.0 –$0.8 2017 $0 $10 4.2% –3.7% $0.0 –$0.7 2018 $0 $10 4.2% –3.7% $0.0 –$0.7 2019 $0 $10 4.2% –3.7% $0.0 –$0.7 2020 $0 $10 4.2% –3.7% $0.0 –$0.8 2021 $0 $10 4.2% –3.7% $0.0 –$0.8 2022 $0 $10 4.2% –3.7% $0.0 –$0.8 2023 $0 $10 4.2% –3.7% $0.0 –$0.8 2024 $0 $10 4.2% –3.7% $0.0 –$0.8 2025 $0 $10 4.2% –3.7% $0.0 –$0.8 2026 $0 $10 4.2% –3.7% $0.0 –$0.8 2027 $0 $10 4.2% –3.7% $0.0 –$0.8 2028 $0 $10 4.2% –3.7% $0.0 –$0.8 2029 $0 $10 4.2% –3.7% $0.0 –$0.9 2030 $0 $10 4.2% –3.7% $0.0 –$0.9 2031 $0 $10 4.2% –3.7% $0.0 –$0.9 2032 $0 $10 4.2% –3.7% $0.0 –$0.9 2033 $0 $10 4.2% –3.7% $0.0 –$0.9 2034 $0 $10 4.2% –3.7% $0.0 –$0.9 2035 $0 $10 4.2% –3.7% $0.0 –$0.9 2036 $0 $10 4.2% –3.7% $0.0 –$0.9 2037 $0 $10 4.2% –3.7% $0.0 –$1.0 NPV (3%) $0.0 –$13.1 NPV (7%) $0.0 –$7.4

a Figures are in 2005 dollars.

9-80

### Economic Impact Analysis Table 9A-8: Impact on Small SI Equipment Market: Class I Gensets/Welders UL 125 (Average Price per Equipment = $999) a Small SI Equipment (Class I Gensets/Welders UL 125) Total Absolute Change Change in Engineering Change in Equipment Engineering Change in in Price Quantity Costs Manufacturers Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $0 $1 0.1% –0.1% $0.0 $0.0 2009 $0 $1 0.1% –0.1% $0.0 $0.0 2010 $0 $2 0.2% –0.3% $0.0 –$0.1 2011 $0 $2 0.2% –0.3% $0.0 –$0.1 2012 $0 $11 1.1% –1.5% $0.0 –$0.5 2013 $0 $11 1.1% –1.5% $0.0 –$0.5 2014 $0 $11 1.1% –1.5% $0.0 –$0.5 2015 $0 $11 1.1% –1.5% $0.0 –$0.5 2016 $0 $11 1.1% –1.5% $0.0 –$0.5 2017 $0 $10 1.0% –1.4% $0.0 –$0.5 2018 $0 $10 1.0% –1.4% $0.0 –$0.5 2019 $0 $10 1.0% –1.4% $0.0 –$0.5 2020 $0 $10 1.0% –1.4% $0.0 –$0.5 2021 $0 $10 1.0% –1.4% $0.0 –$0.5 2022 $0 $10 1.0% –1.4% $0.0 –$0.5 2023 $0 $10 1.0% –1.4% $0.0 –$0.5 2024 $0 $10 1.0% –1.4% $0.0 –$0.5 2025 $0 $10 1.0% –1.4% $0.0 –$0.5 2026 $0 $10 1.0% –1.4% $0.0 –$0.5 2027 $0 $10 1.0% –1.4% $0.0 –$0.6 2028 $0 $10 1.0% –1.4% $0.0 –$0.6 2029 $0 $10 1.0% –1.4% $0.0 –$0.6 2030 $0 $10 1.0% –1.4% $0.0 –$0.6 2031 $0 $10 1.0% –1.4% $0.0 –$0.6 2032 $0 $10 1.0% –1.4% $0.0 –$0.6 2033 $0 $10 1.0% –1.4% $0.0 –$0.6 2034 $0 $10 1.0% –1.4% $0.0 –$0.6 2035 $0 $10 1.0% –1.4% $0.0 –$0.6 2036 $0 $10 1.0% –1.4% $0.0 –$0.6 2037 $0 $10 1.0% –1.4% $0.0 –$0.6 NPV (3%) $0.0 –$8.7 NPV (7%) $0.0 –$4.9

a Figures are in 2005 dollars.

9-81

### Final Regulatory Impact Analysis Table 9A-9: Impact on Small SI Equipment Market: Class I Pumps/Compressors/Pressure Washers UL 125 (Average Price per Equipment = $96) a Small SI Equipment (Class I Pumps/Compressors/Pressure Washers UL 125) Total Absolute Change Change in Engineering Change in Equipment Engineering Change in in Price Quantity Costs Manufacturers Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $0 $1 0.8% –0.7% $0.0 $0.0 2009 $0 $1 0.8% –0.7% $0.0 –$0.1 2010 $0 $2 2.3% –2.3% $0.0 –$0.1 2011 $0 $2 2.2% –2.2% $0.0 –$0.1 2012 $0 $11 11.8% –11.8% $0.0 –$0.7 2013 $0 $11 11.7% –11.6% $0.0 –$0.7 2014 $0 $11 11.7% –11.6% $0.0 –$0.8 2015 $0 $11 11.6% –11.6% $0.0 –$0.8 2016 $0 $11 11.6% –11.6% $0.0 –$0.8 2017 $0 $10 10.5% –10.4% $0.0 –$0.7 2018 $0 $10 10.5% –10.4% $0.0 –$0.7 2019 $0 $10 10.5% –10.4% $0.0 –$0.7 2020 $0 $10 10.5% –10.4% $0.0 –$0.8 2021 $0 $10 10.5% –10.4% $0.0 –$0.8 2022 $0 $10 10.5% –10.4% $0.0 –$0.8 2023 $0 $10 10.5% –10.4% $0.0 –$0.8 2024 $0 $10 10.5% –10.4% $0.0 –$0.8 2025 $0 $10 10.5% –10.4% $0.0 –$0.8 2026 $0 $10 10.5% –10.4% $0.0 –$0.8 2027 $0 $10 10.5% –10.4% $0.0 –$0.8 2028 $0 $10 10.5% –10.4% $0.0 –$0.8 2029 $0 $10 10.5% –10.4% $0.0 –$0.9 2030 $0 $10 10.5% –10.4% $0.0 –$0.9 2031 $0 $10 10.5% –10.4% $0.0 –$0.9 2032 $0 $10 10.5% –10.4% $0.0 –$0.9 2033 $0 $10 10.5% –10.4% $0.0 –$0.9 2034 $0 $10 10.5% –10.4% $0.0 –$0.9 2035 $0 $10 10.5% –10.4% $0.0 –$0.9 2036 $0 $10 10.5% –10.4% $0.0 –$0.9 2037 $0 $10 10.5% –10.4% $0.0 –$0.9 NPV (3%) $0.0 –$13.0 NPV (7%) $0.0 –$7.4

a Figures are in 2005 dollars.

9-82

### Economic Impact Analysis Table 9A-10: Impact on Small SI Equipment Market: Class I Snowblowers UL 125 (Average Price per Equipment = $324) a Small SI Equipment (Class I Snowblowers UL 125) Total Absolute Change Change in Engineering Change in Equipment Engineering Change in in Price Quantity Costs Manufacturers Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $0 $0 0.1% –0.1% $0.0 $0.0 2009 $0 $0 0.1% –0.1% $0.0 $0.0 2010 $0 $1 0.2% –0.2% $0.0 $0.0 2011 $0 $1 0.2% –0.2% $0.0 $0.0 2012 $0 $3 0.8% –0.8% $0.0 –$0.2 2013 $0 $2 0.8% –0.8% $0.0 –$0.2 2014 $0 $2 0.8% –0.8% $0.0 –$0.2 2015 $0 $2 0.8% –0.8% $0.0 –$0.2 2016 $0 $2 0.8% –0.8% $0.0 –$0.2 2017 $0 $2 0.6% –0.6% $0.0 –$0.2 2018 $0 $2 0.6% –0.6% $0.0 –$0.2 2019 $0 $2 0.6% –0.6% $0.0 –$0.2 2020 $0 $2 0.6% –0.6% $0.0 –$0.2 2021 $0 $2 0.6% –0.6% $0.0 –$0.2 2022 $0 $2 0.6% –0.6% $0.0 –$0.2 2023 $0 $2 0.6% –0.6% $0.0 –$0.2 2024 $0 $2 0.6% –0.6% $0.0 –$0.2 2025 $0 $2 0.6% –0.6% $0.0 –$0.2 2026 $0 $2 0.6% –0.6% $0.0 –$0.2 2027 $0 $2 0.6% –0.6% $0.0 –$0.2 2028 $0 $2 0.6% –0.6% $0.0 –$0.2 2029 $0 $2 0.6% –0.6% $0.0 –$0.2 2030 $0 $2 0.6% –0.6% $0.0 –$0.2 2031 $0 $2 0.6% –0.6% $0.0 –$0.2 2032 $0 $2 0.6% –0.6% $0.0 –$0.2 2033 $0 $2 0.6% –0.6% $0.0 –$0.2 2034 $0 $2 0.6% –0.6% $0.0 –$0.2 2035 $0 $2 0.6% –0.6% $0.0 –$0.2 2036 $0 $2 0.6% –0.6% $0.0 –$0.2 2037 $0 $2 0.6% –0.6% $0.0 –$0.2 NPV (3%) $0.0 –$2.8 NPV (7%) $0.0 –$1.6

a Figures are in 2005 dollars.

9-83

### Final Regulatory Impact Analysis Table 9A-11: Impact on Small SI Equipment Market: Class II Agri/Constr./G. Ind/ Material Handling Equipment UL 250 (Average Price per Equipment = $1,825) a

Small SI Equipment (Class II Agri cultural/Construction/ General Industrial/ Material Handling Equipment UL 250) Total Absolute Change Change in Engineering Change in Equipment Engineering Change in in Price Quantity Costs Manufacturers Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $2 $3 0.1% –0.1% $0.0 $0.0 2009 $6 $8 0.5% –0.5% $0.5 –$0.1 2010 $5 $8 0.4% –0.4% $0.5 –$0.1 2011 $10 $24 1.3% –1.3% $0.8 –$0.2 2012 $10 $24 1.3% –1.3% $0.8 –$0.2 2013 $9 $23 1.3% –1.3% $0.8 –$0.2 2014 $9 $23 1.3% –1.3% $0.9 –$0.2 2015 $9 $21 1.2% –1.2% $0.9 –$0.2 2016 $8 $20 1.1% –1.1% $0.8 –$0.2 2017 $8 $20 1.1% –1.1% $0.8 –$0.2 2018 $8 $20 1.1% –1.1% $0.8 –$0.2 2019 $8 $20 1.1% –1.1% $0.8 –$0.2 2020 $8 $20 1.1% –1.1% $0.8 –$0.2 2021 $8 $20 1.1% –1.1% $0.8 –$0.2 2022 $8 $20 1.1% –1.1% $0.8 –$0.2 2023 $8 $20 1.1% –1.1% $0.9 –$0.2 2024 $8 $20 1.1% –1.1% $0.9 –$0.2 2025 $8 $20 1.1% –1.1% $0.9 –$0.2 2026 $8 $20 1.1% –1.1% $0.9 –$0.2 2027 $8 $20 1.1% –1.1% $0.9 –$0.2 2028 $8 $20 1.1% –1.1% $0.9 –$0.2 2029 $8 $20 1.1% –1.1% $0.9 –$0.2 2030 $8 $20 1.1% –1.1% $0.9 –$0.2 2031 $8 $20 1.1% –1.1% $1.0 –$0.2 2032 $8 $20 1.1% –1.1% $1.0 –$0.2 2033 $8 $20 1.1% –1.1% $1.0 –$0.2 2034 $8 $20 1.1% –1.1% $1.0 –$0.2 2035 $8 $20 1.1% –1.1% $1.0 –$0.3 2036 $8 $20 1.1% –1.1% $1.0 –$0.3 2037 $8 $20 1.1% –1.1% $1.0 –$0.3 NPV (3%) $15.7 –$3.7 NPV (7%) $9.3 –$2.2

a Figures are in 2005 dollars.

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### Economic Impact Analysis Table 9A-12: Impact on Small SI Equipment Market: Class II Utility and Recreational Vehicle UL 250 (Average Price per Equipment = $2,894) a Small SI Equipment (Class II Utility and Recreational Vehicle UL 250) Total Absolute Change Change in Engineering Change in Equipment Engineering Change in in Price Quantity Costs Manufacturers Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $1 $2 0.1% –0.1% $0.3 –$0.1 2009 $5 $8 0.3% –0.3% $1.0 –$0.2 2010 $5 $7 0.3% –0.3% $1.0 –$0.2 2011 $8 $22 0.8% –0.8% $1.7 –$0.5 2012 $8 $22 0.8% –0.8% $1.7 –$0.5 2013 $8 $22 0.8% –0.8% $1.7 –$0.5 2014 $8 $22 0.8% –0.8% $1.7 –$0.5 2015 $7 $20 0.7% –0.7% $1.8 –$0.5 2016 $7 $19 0.6% –0.6% $1.6 –$0.4 2017 $7 $19 0.6% –0.6% $1.6 –$0.4 2018 $7 $19 0.6% –0.6% $1.6 –$0.4 2019 $7 $19 0.6% –0.6% $1.6 –$0.5 2020 $7 $19 0.6% –0.6% $1.7 –$0.5 2021 $7 $19 0.6% –0.6% $1.7 –$0.5 2022 $7 $19 0.6% –0.6% $1.7 –$0.5 2023 $7 $19 0.6% –0.6% $1.7 –$0.5 2024 $7 $19 0.6% –0.6% $1.8 –$0.5 2025 $7 $19 0.6% –0.6% $1.8 –$0.5 2026 $7 $19 0.6% –0.6% $1.8 –$0.5 2027 $7 $19 0.6% –0.6% $1.8 –$0.5 2028 $7 $19 0.6% –0.6% $1.9 –$0.5 2029 $7 $19 0.6% –0.6% $1.9 –$0.5 2030 $7 $19 0.6% –0.6% $1.9 –$0.5 2031 $7 $19 0.6% –0.6% $1.9 –$0.5 2032 $7 $19 0.6% –0.6% $2.0 –$0.5 2033 $7 $19 0.6% –0.6% $2.0 –$0.6 2034 $7 $19 0.6% –0.6% $2.0 –$0.6 2035 $7 $19 0.6% –0.6% $2.0 –$0.6 2036 $7 $19 0.6% –0.6% $2.1 –$0.6 2037 $7 $19 0.6% –0.6% $2.1 –$0.6 NPV (3%) $31.8 –$8.5 NPV (7%) $19.0 $5.0

a Figures are in 2005 dollars.

9-85

### Final Regulatory Impact Analysis 

### Table 9A-13: Impact on Small SI Equipment Market: Class II Tractors UL 250 (Average Price per Equipment = $1,937) a Small SI Equipment (Class II Tractors UL 250) Total Absolute Change Change in Engineering Change in Equipment Engineering Change in in Price Quantity Costs Manufacturers Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $1 $3 0.1% –0.1% $2.9 –$0.5 2009 $6 $9 0.4% –0.4% $12.0 –$1.7 2010 $6 $8 0.4% –0.4% $11.6 –$1.7 2011 $7 $21 1.1% –1.1% $14.6 –$4.4 2012 $7 $21 1.1% –1.1% $14.8 –$4.5 2013 $7 $21 1.1% –1.1% $14.8 –$4.5 2014 $7 $21 1.1% –1.1% $15.1 –$4.6 2015 $7 $19 1.0% –1.0% $15.3 –$4.2 2016 $6 $18 0.9% –0.9% $13.7 –$4.1 2017 $6 $18 0.9% –0.9% $13.9 –$4.1 2018 $6 $18 0.9% –0.9% $14.1 –$4.2 2019 $6 $18 0.9% –0.9% $14.3 –$4.3 2020 $6 $18 0.9% –0.9% $14.5 –$4.3 2021 $6 $18 0.9% –0.9% $14.8 –$4.4 2022 $6 $18 0.9% –0.9% $15.0 –$4.5 2023 $6 $18 0.9% –0.9% $15.2 –$4.5 2024 $6 $18 0.9% –0.9% $15.4 –$4.6 2025 $6 $18 0.9% –0.9% $15.6 –$4.6 2026 $6 $18 0.9% –0.9% $15.9 –$4.7 2027 $6 $18 0.9% –0.9% $16.1 –$4.8 2028 $6 $18 0.9% –0.9% $16.3 –$4.8 2029 $6 $18 0.9% –0.9% $16.5 –$4.9 2030 $6 $18 0.9% –0.9% $16.7 –$5.0 2031 $6 $18 0.9% –0.9% $17.0 –$5.0 2032 $6 $18 0.9% –0.9% $17.2 –$5.1 2033 $6 $18 0.9% –0.9% $17.4 –$5.2 2034 $6 $18 0.9% –0.9% $17.6 –$5.2 2035 $6 $18 0.9% –0.9% $17.9 –$5.3 2036 $6 $18 0.9% –0.9% $18.1 –$5.4 2037 $6 $18 0.9% –0.9% $18.3 –$5.4 NPV (3%) $284.9 –$81.0 NPV (7%) $171.7 –$47.6

a Figures are in 2005 dollars.

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### Economic Impact Analysis Table 9A-14: Impact on Small SI Equipment Market: Class II Other Lawn and Garden Equipment UL 250 (Average Price per Equipment = $312) a Small SI Equipment (Class II Other Lawn and Garden Equipment UL 250) Total Absolute Change Change in Engineering Change in Equipment Engineering Change in in Price Quantity Costs Manufacturers Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $1 $2 0.6% –0.6% $0.1 $0.0 2009 $4 $7 2.2% –2.0% $0.6 –$0.1 2010 $4 $7 2.1% –1.9% $0.6 –$0.1 2011 $5 $20 6.4% –5.8% $0.8 –$0.3 2012 $5 $20 6.4% –5.7% $0.9 –$0.3 2013 $5 $20 6.4% –5.7% $0.9 –$0.3 2014 $5 $20 6.4% –5.7% $0.9 –$0.3 2015 $5 $18 5.6% –5.1% $0.9 –$0.3 2016 $5 $17 5.4% –5.0% $0.8 –$0.3 2017 $5 $17 5.4% –4.9% $0.8 –$0.3 2018 $5 $17 5.4% –4.9% $0.8 –$0.3 2019 $5 $17 5.4% –4.9% $0.8 –$0.3 2020 $5 $17 5.4% –4.9% $0.8 –$0.3 2021 $5 $17 5.4% –4.9% $0.8 –$0.3 2022 $5 $17 5.4% –4.9% $0.9 –$0.3 2023 $5 $17 5.4% –4.9% $0.9 –$0.3 2024 $5 $17 5.4% –4.9% $0.9 –$0.3 2025 $5 $17 5.4% –4.9% $0.9 –$0.3 2026 $5 $17 5.4% –4.9% $0.9 –$0.3 2027 $5 $17 5.4% –4.9% $0.9 –$0.3 2028 $5 $17 5.4% –4.9% $0.9 –$0.3 2029 $5 $17 5.4% –4.9% $0.9 –$0.3 2030 $5 $17 5.4% –4.9% $1.0 –$0.3 2031 $5 $17 5.4% –4.9% $1.0 –$0.3 2032 $5 $17 5.4% –4.9% $1.0 –$0.3 2033 $5 $17 5.4% –4.9% $1.0 –$0.3 2034 $5 $17 5.4% –4.9% $1.0 –$0.3 2035 $5 $17 5.4% –4.9% $1.0 –$0.3 2036 $5 $17 5.4% –4.9% $1.0 –$0.3 2037 $5 $17 5.4% –4.9% $1.0 –$0.3 NPV (3%) $16.2 –$5.0 NPV (7%) $9.7 –$2.9

a Figures are in 2005 dollars.

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### Final Regulatory Impact Analysis Table 9A-15: Impact on Small SI Equipment Market: Class II Gensets/Welders UL 250 (Average Price per Equipment = $666) a Small SI Equipment (Class II Gensets/Welders UL 250) Total Absolute Change Change in Engineering Change in Equipment Engineering Change in in Price Quantity Costs Manufacturers Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $2 $3 0.4% –0.4% $1.1 –$0.2 2009 $6 $8 1.2% –1.4% $4.2 –$0.7 2010 $6 $8 1.2% –1.3% $4.0 –$0.7 2011 $10 $24 3.5% –3.9% $7.4 –$2.1 2012 $10 $23 3.5% –3.9% $7.5 –$2.2 2013 $10 $23 3.5% –3.9% $7.6 –$2.2 2014 $10 $23 3.5% –3.9% $7.7 –$2.2 2015 $10 $21 3.2% –3.5% $7.8 –$2.1 2016 $9 $20 3.0% –3.3% $6.8 –$2.0 2017 $9 $20 3.0% –3.3% $7.0 –$2.0 2018 $9 $20 3.0% –3.3% $7.1 –$2.0 2019 $9 $20 3.0% –3.3% $7.2 –$2.1 2020 $9 $20 3.0% –3.3% $7.3 –$2.1 2021 $9 $20 3.0% –3.3% $7.4 –$2.1 2022 $9 $20 3.0% –3.3% $7.5 –$2.1 2023 $9 $20 3.0% –3.3% $7.6 –$2.2 2024 $9 $20 3.0% –3.3% $7.7 –$2.2 2025 $9 $20 3.0% –3.3% $7.8 –$2.2 2026 $9 $20 3.0% –3.3% $8.0 –$2.3 2027 $9 $20 3.0% –3.3% $8.1 –$2.3 2028 $9 $20 3.0% –3.3% $8.2 –$2.3 2029 $9 $20 3.0% –3.3% $8.3 –$2.4 2030 $9 $20 3.0% –3.3% $8.4 –$2.4 2031 $9 $20 3.0% –3.3% $8.5 –$2.4 2032 $9 $20 3.0% –3.3% $8.6 –$2.5 2033 $9 $20 3.0% –3.3% $8.7 –$2.5 2034 $9 $20 3.0% –3.3% $8.8 –$2.5 2035 $9 $20 3.0% –3.3% $9.0 –$2.6 2036 $9 $20 3.0% –3.3% $9.1 –$2.6 2037 $9 $20 3.0% –3.3% $9.2 –$2.6 NPV (3%) $139.8 –$38.9 NPV (7%) $83.1 –$22.8

a Figures are in 2005 dollars.

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### Economic Impact Analysis Table 9A-16: Impact on Small SI Equipment Market: Class II Pumps/Compressors/ Pressure Washers UL 250 (Average Price per Equipment = $349) a Small SI Equipment (Class II Pumps/Compressors/Pressure Washers UL 250) Total Absolute Change Change in Engineering Change in Equipment Engineering Change in in Price Quantity Costs Manufacturers Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $1 $2 0.7% –0.7% $0.4 –$0.1 2009 $5 $8 2.3% –2.3% $1.6 –$0.2 2010 $5 $8 2.2% –2.2% $1.5 –$0.2 2011 $9 $23 6.5% –6.6% $2.6 –$0.7 2012 $9 $23 6.5% –6.5% $2.7 –$0.7 2013 $8 $22 6.4% –6.4% $2.7 –$0.7 2014 $8 $22 6.4% –6.4% $2.7 –$0.7 2015 $8 $20 5.8% –5.9% $2.8 –$0.7 2016 $7 $19 5.5% –5.5% $2.4 –$0.6 2017 $7 $19 5.5% –5.5% $2.5 –$0.6 2018 $7 $19 5.5% –5.5% $2.5 –$0.7 2019 $7 $19 5.5% –5.5% $2.5 –$0.7 2020 $7 $19 5.5% –5.5% $2.6 –$0.7 2021 $7 $19 5.5% –5.5% $2.6 –$0.7 2022 $7 $19 5.5% –5.5% $2.7 –$0.7 2023 $7 $19 5.5% –5.5% $2.7 –$0.7 2024 $7 $19 5.5% –5.5% $2.7 –$0.7 2025 $7 $19 5.5% –5.5% $2.8 –$0.7 2026 $7 $19 5.5% –5.5% $2.8 –$0.7 2027 $7 $19 5.5% –5.5% $2.9 –$0.7 2028 $7 $19 5.5% –5.5% $2.9 –$0.8 2029 $7 $19 5.5% –5.5% $2.9 –$0.8 2030 $7 $19 5.5% –5.5% $3.0 –$0.8 2031 $7 $19 5.5% –5.5% $3.0 –$0.8 2032 $7 $19 5.5% –5.5% $3.1 –$0.8 2033 $7 $19 5.5% –5.5% $3.1 –$0.8 2034 $7 $19 5.5% –5.5% $3.1 –$0.8 2035 $7 $19 5.5% –5.5% $3.2 –$0.8 2036 $7 $19 5.5% –5.5% $3.2 –$0.8 2037 $7 $19 5.5% –5.5% $3.2 –$0.8 NPV (3%) $49.6 –$12.5 NPV (7%) $29.5 –$7.3

a Figures are in 2005 dollars.

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### Final Regulatory Impact Analysis Table 9A-17: Impact on Small SI Equipment Market: Class II Snowblowers UL 250 (Average Price per Equipment = $665) a Small SI Equipment (Class II Snowblowers UL 250) Total Absolute Change Change in Engineering Change in Equipment Engineering Change in in Price Quantity Costs Manufacturers Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $1 $1 0.1% –0.1% $0.4 $0.0 2009 $1 $1 0.1% –0.1% $0.5 –$0.1 2010 $1 $1 0.1% –0.1% $0.4 $0.0 2011 $4 $4 0.5% –0.5% $2.3 –$0.2 2012 $4 $4 0.5% –0.5% $2.3 –$0.2 2013 $4 $4 0.5% –0.5% $2.3 –$0.2 2014 $4 $4 0.5% –0.5% $2.3 –$0.2 2015 $4 $4 0.5% –0.5% $2.4 –$0.2 2016 $3 $3 0.4% –0.4% $2.0 –$0.2 2017 $3 $3 0.4% –0.4% $2.1 –$0.2 2018 $3 $3 0.4% –0.4% $2.1 –$0.2 2019 $3 $3 0.4% –0.4% $2.1 –$0.2 2020 $3 $3 0.4% –0.4% $2.2 –$0.2 2021 $3 $3 0.4% –0.4% $2.2 –$0.2 2022 $3 $3 0.4% –0.4% $2.2 –$0.2 2023 $3 $3 0.4% –0.4% $2.3 –$0.2 2024 $3 $3 0.4% –0.4% $2.3 –$0.2 2025 $3 $3 0.4% –0.4% $2.3 –$0.2 2026 $3 $3 0.4% –0.4% $2.4 –$0.2 2027 $3 $3 0.4% –0.4% $2.4 –$0.2 2028 $3 $3 0.4% –0.4% $2.4 –$0.2 2029 $3 $3 0.4% –0.4% $2.5 –$0.2 2030 $3 $3 0.4% –0.4% $2.5 –$0.2 2031 $3 $3 0.4% –0.4% $2.5 –$0.2 2032 $3 $3 0.4% –0.4% $2.6 –$0.2 2033 $3 $3 0.4% –0.4% $2.6 –$0.2 2034 $3 $3 0.4% –0.4% $2.6 –$0.2 2035 $3 $3 0.4% –0.4% $2.6 –$0.2 2036 $3 $3 0.4% –0.4% $2.7 –$0.2 2037 $3 $3 0.4% –0.4% $2.7 –$0.3 NPV (3%) $40.4 –$3.7 NPV (7%) $23.7 –$2.2

a Figures are in 2005 dollars.

9-90

### Economic Impact Analysis


## Appendix 9B: Impacts on Marine SI Markets

This appendix provides the time series of impacts from 2008 through 2037 for the following Small SI engines and equipment markets; a complete set of results for all markets can be found in the docket for this rule (Li, 2008). For engine markets, Results are presented for the aggregated categories by power. For the vessel markets, results are presented for the categories with the highest sales.

• Marine SI engines: <25 hp; 26-50 hp; 51-100 hp; 101-175 hp; 176-300 hp; >300 hp

• SD/I, 175-300 hp and >300 hp

• OB recreational, 50-100 hp

• OB luxury, 175-300 hp

• PWC 100-175 hp
Table 9B-1 through Table 9B-11 provide the time series of impacts for each engine class market and each selected equipment market, respectively, includes the following:

• average engine or equipment price

• average engineering costs (variable and fixed) per engine or equipment

• absolute change in the market price ($)

• relative change in market price (%)

• relative change in market quantity (%)

• total engineering costs associated with each engine or equipment market

• changes in producer surplus associated with each engine or equipment market
All prices and costs are presented in 2005 dollars and real engine or equipment prices are assumed to be constant during the period of analysis. Net present values were estimated using social discount rates of 3 percent and 7 percent over the period of analysis.

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### Final Regulatory Impact Analysis Table 9B-1: Impact on Marine SI Engine Market:

<25hp (Average Price per Engine = $2,500) a,b Marine SI Engine (<25hp) Total Change in Engine Absolute Change in Change in Engineering Manufacturers Engineering Change in Price Quantity Costs Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $12 $10 0.4% –0.8% $0.8 –$0.2 2009 $12 $8 0.3% –1.6% $0.8 –$0.3 2010 $69 $54 2.2% –5.5% $4.7 –$1.0 2011 $69 $55 2.2% –5.2% $4.8 –$1.0 2012 $69 $55 2.2% –5.2% $4.8 –$1.0 2013 $69 $55 2.2% –5.2% $4.8 –$1.0 2014 $69 $55 2.2% –5.2% $4.9 –$1.0 2015 $55 $44 1.7% –4.3% $3.9 –$0.8 2016 $55 $44 1.7% –4.3% $3.9 –$0.8 2017 $55 $44 1.7% –4.3% $4.0 –$0.8 2018 $55 $44 1.7% –4.3% $4.0 –$0.8 2019 $55 $44 1.7% –4.3% $4.0 –$0.8 2020 $55 $44 1.7% –4.3% $4.1 –$0.8 2021 $55 $44 1.7% –4.3% $4.1 –$0.8 2022 $55 $44 1.7% –4.3% $4.1 –$0.9 2023 $55 $44 1.7% –4.3% $4.1 –$0.9 2024 $55 $44 1.7% –4.3% $4.2 –$0.9 2025 $55 $44 1.7% –4.3% $4.2 –$0.9 2026 $55 $44 1.7% –4.3% $4.2 –$0.9 2027 $55 $44 1.7% –4.3% $4.3 –$0.9 2028 $55 $44 1.7% –4.3% $4.3 –$0.9 2029 $55 $44 1.7% –4.3% $4.3 –$0.9 2030 $55 $44 1.7% –4.3% $4.3 –$0.9 2031 $55 $44 1.7% –4.3% $4.4 –$0.9 2032 $55 $44 1.7% –4.3% $4.4 –$0.9 2033 $55 $44 1.7% –4.3% $4.4 –$0.9 2034 $55 $44 1.7% –4.3% $4.4 –$0.9 2035 $55 $44 1.7% –4.3% $4.5 –$0.9 2036 $55 $44 1.7% –4.3% $4.5 –$0.9 2037 $55 $44 1.7% –4.3% $4.5 –$0.9 NPV (3%) $78.2 –$16.1 NPV (7%) $47.7 –$9.8

a Figures are in 2005 dollars.
b Average price per engine is a weighted av erage price of engine by equipment type.

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### Economic Impact Analysis Table 9B-2: Impact on Marine SI Engine Market: 26–50hp (Average Price per Engine = $5,700) a,b Marine SI Engine (26–50hp) Total Change in Engine Absolute Change in Change in Engineering Manufacturers Engineering Change in Price Quantity Costs Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $14 $12 0.2% –0.2% $0.7 –$0.1 2009 $14 $12 0.2% –0.3% $0.7 –$0.1 2010 $216 $198 3.5% –3.0% $11.0 –$0.9 2011 $216 $197 3.5% –3.2% $11.1 –$1.0 2012 $216 $196 3.4% –3.4% $11.2 –$1.0 2013 $216 $196 3.4% –3.4% $11.2 –$1.1 2014 $216 $196 3.4% –3.4% $11.3 –$1.1 2015 $173 $156 2.7% –2.8% $9.1 –$0.9 2016 $173 $156 2.7% –2.8% $9.2 –$0.9 2017 $173 $157 2.7% –2.7% $9.2 –$0.9 2018 $173 $157 2.7% –2.7% $9.3 –$0.9 2019 $173 $157 2.7% –2.7% $9.4 –$0.9 2020 $173 $157 2.7% –2.7% $9.4 –$0.9 2021 $173 $157 2.7% –2.7% $9.5 –$0.9 2022 $173 $157 2.7% –2.7% $9.6 –$0.9 2023 $173 $157 2.7% –2.7% $9.6 –$0.9 2024 $173 $157 2.7% –2.7% $9.7 –$0.9 2025 $173 $157 2.7% –2.7% $9.8 –$0.9 2026 $173 $157 2.7% –2.7% $9.8 –$0.9 2027 $173 $157 2.7% –2.7% $9.9 –$0.9 2028 $173 $157 2.7% –2.7% $9.9 –$0.9 2029 $173 $157 2.7% –2.7% $10.0 –$0.9 2030 $173 $157 2.7% –2.7% $10.1 –$0.9 2031 $173 $157 2.7% –2.7% $10.1 –$0.9 2032 $173 $157 2.7% –2.7% $10.2 –$1.0 2033 $173 $157 2.7% –2.7% $10.3 –$1.0 2034 $173 $157 2.7% –2.7% $10.3 –$1.0 2035 $173 $157 2.7% –2.7% $10.4 –$1.0 2036 $173 $157 2.7% –2.7% $10.5 –$1.0 2037 $173 $157 2.7% –2.7% $10.5 –$1.0 NPV (3%) $179.6 –$16.6 NPV (7%) $108.8 –$10.0

a Figures are in 2005 dollars.
b Average price per engine is a weighted av erage price of engine by equipment type.

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### Final Regulatory Impact Analysis Table 9B-3: Impact on Marine SI Engine Market: 51–100hp (Average Price per Engine = $9,100) a,b Marine SI Engine (51–100hp) Total Change in Engine Absolute Change in Change in Engineering Manufacturers Engineering Change in Price Quantity Costs Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $20 $18 0.2% –0.2% $1.5 $1.5 2009 $20 $18 0.2% –0.2% $1.5 $1.5 2010 $203 $188 2.1% –1.5% $15.5 $15.5 2011 $203 $187 2.1% –1.7% $15.6 $15.6 2012 $203 $185 2.0% –1.8% $15.7 $15.7 2013 $203 $185 2.0% –1.8% $15.8 $15.8 2014 $203 $185 2.0% –1.8% $15.9 $15.9 2015 $162 $148 1.6% –1.5% $12.8 $12.8 2016 $162 $148 1.6% –1.5% $12.9 $12.9 2017 $162 $148 1.6% –1.5% $13.0 $13.0 2018 $162 $148 1.6% –1.5% $13.1 $13.1 2019 $162 $148 1.6% –1.5% $13.2 $13.2 2020 $162 $148 1.6% –1.5% $13.3 $13.3 2021 $162 $148 1.6% –1.5% $13.4 $13.4 2022 $162 $148 1.6% –1.5% $13.4 $13.4 2023 $162 $148 1.6% –1.5% $13.5 $13.5 2024 $162 $148 1.6% –1.5% $13.6 $13.6 2025 $162 $148 1.6% –1.5% $13.7 $13.7 2026 $162 $148 1.6% –1.5% $13.8 $13.8 2027 $162 $148 1.6% –1.5% $13.9 $13.9 2028 $162 $148 1.6% –1.5% $14.0 $14.0 2029 $162 $148 1.6% –1.5% $14.1 $14.1 2030 $162 $148 1.6% –1.5% $14.2 $14.2 2031 $162 $148 1.6% –1.5% $14.3 $14.3 2032 $162 $148 1.6% –1.5% $14.3 $14.3 2033 $162 $148 1.6% –1.5% $14.4 $14.4 2034 $162 $148 1.6% –1.5% $14.5 $14.5 2035 $162 $148 1.6% –1.5% $14.6 $14.6 2036 $162 $148 1.6% –1.5% $14.7 $14.7 2037 $162 $148 1.6% –1.5% $14.8 $14.8 NPV (3%) $253.5 –$21.6 NPV (7%) $153.8 –$13.0

a Figures are in 2005 dollars.
b Average price per engine is a weighted av erage price of engine by equipment type.

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### Economic Impact Analysis Table 9B-4: Impact on Marine SI Engine Market: 101–175hp (Average Price per Engine =$12,700) a,b Marine SI Engine (101–175hp) Total Change in Engine Absolute Change in Change in Engineering Manufacturers Engineering Change in Price Quantity Costs Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $39 $36 0.3% –0.2% $2.6 –$0.2 2009 $39 $36 0.3% –0.3% $2.6 –$0.2 2010 $365 $338 2.7% –2.0% $24.7 –$1.8 2011 $365 $336 2.6% –2.2% $24.9 –$2.0 2012 $365 $333 2.6% –2.4% $25.1 –$2.2 2013 $365 $333 2.6% –2.4% $25.3 –$2.2 2014 $365 $333 2.6% –2.4% $25.5 –$2.2 2015 $292 $266 2.1% –2.0% $20.5 –$1.9 2016 $292 $266 2.1% –2.0% $20.7 –$1.8 2017 $292 $266 2.1% –1.9% $20.8 –$1.8 2018 $292 $266 2.1% –1.9% $20.9 –$1.8 2019 $292 $266 2.1% –1.9% $21.1 –$1.8 2020 $292 $266 2.1% –1.9% $21.2 –$1.9 2021 $292 $266 2.1% –1.9% $21.4 –$1.9 2022 $292 $266 2.1% –1.9% $21.5 –$1.9 2023 $292 $266 2.1% –1.9% $21.7 –$1.9 2024 $292 $266 2.1% –1.9% $21.8 –$1.9 2025 $292 $266 2.1% –1.9% $21.9 –$1.9 2026 $292 $266 2.1% –1.9% $22.1 –$1.9 2027 $292 $266 2.1% –1.9% $22.2 –$1.9 2028 $292 $266 2.1% –1.9% $22.4 –$1.9 2029 $292 $266 2.1% –1.9% $22.5 –$2.0 2030 $292 $266 2.1% –1.9% $22.7 –$2.0 2031 $292 $266 2.1% –1.9% $22.8 –$2.0 2032 $292 $266 2.1% –1.9% $23.0 –$2.0 2033 $292 $266 2.1% –1.9% $23.1 –$2.0 2034 $292 $266 2.1% –1.9% $23.2 –$2.0 2035 $292 $266 2.1% –1.9% $23.4 –$2.0 2036 $292 $266 2.1% –1.9% $23.5 –$2.0 2037 $292 $266 2.1% –1.9% $23.7 –$2.1 NPV (3%) $406.1 –$34.9 NPV (7%) $246.7 –$21.1

a Figures are in 2005 dollars.
b Average price per engine is a weighted av erage price of engine by equipment type.

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### Final Regulatory Impact Analysis Table 9B-5: Impact on Marine SI Engine Market: 176–300hp (Average Price per Engine =$17,600) a,b Marine SI Engine (176–300hp) Total Change in Engine Absolute Change in Change in Engineering Manufacturers Engineering Change in Price Quantity Costs Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $59 $55 0.3% –0.2% $5.4 –$0.4 2009 $59 $54 0.3% –0.2% $5.5 –$0.4 2010 $517 $480 2.7% –1.7% $48.3 –$3.4 2011 $517 $477 2.7% –1.9% $48.6 –$3.7 2012 $517 $474 2.7% –2.0% $49.0 –$4.0 2013 $517 $474 2.7% –2.0% $49.3 –$4.1 2014 $517 $474 2.7% –2.0% $49.7 –$4.1 2015 $414 $378 2.1% –1.7% $40.0 –$3.4 2016 $414 $379 2.2% –1.7% $40.3 –$3.4 2017 $414 $379 2.2% –1.6% $40.6 –$3.4 2018 $414 $379 2.2% –1.6% $40.9 –$3.4 2019 $414 $379 2.2% –1.6% $41.2 –$3.4 2020 $414 $379 2.2% –1.6% $41.4 –$3.5 2021 $414 $379 2.2% –1.6% $41.7 –$3.5 2022 $414 $379 2.2% –1.6% $42.0 –$3.5 2023 $414 $379 2.2% –1.6% $42.3 –$3.5 2024 $414 $379 2.2% –1.6% $42.6 –$3.5 2025 $414 $379 2.2% –1.6% $42.8 –$3.6 2026 $414 $379 2.2% –1.6% $43.1 –$3.6 2027 $414 $379 2.2% –1.6% $43.4 –$3.6 2028 $414 $379 2.2% –1.6% $43.7 –$3.6 2029 $414 $379 2.2% –1.6% $44.0 –$3.7 2030 $414 $379 2.2% –1.6% $44.2 –$3.7 2031 $414 $379 2.2% –1.6% $44.5 –$3.7 2032 $414 $379 2.2% –1.6% $44.8 –$3.7 2033 $414 $379 2.2% –1.6% $45.1 –$3.8 2034 $414 $379 2.2% –1.6% $45.4 –$3.8 2035 $414 $379 2.2% –1.6% $45.7 –$3.8 2036 $414 $379 2.2% –1.6% $45.9 –$3.8 2037 $414 $379 2.2% –1.6% $46.2 –$3.9 NPV (3%) $793.5 –$65.0 NPV (7%) $482.1 –$39.2

a Figures are in 2005 dollars.
b Average price per engine is a weighted av erage price of engine by equipment type.

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### Economic Impact Analysis Table 9B-6: Impact on Marine SI Engine Market: 300+ hp (Average Price per Engine = $22,000) a,b Marine SI Engine (300+ hp) Total Change in Engine Absolute Change in Change in Engineering Manufacturers Engineering Change in Price Quantity Costs Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $57 $54 0.2% –0.1% $2.1 –$0.1
2009 $57 $54 0.2% –0.1% $2.1 –$0.1 2010 $297 $283 1.3% –0.6% $11.1 –$0.5 2011 $297 $280 1.3% –0.8% $11.2 –$0.6 2012 $297 $276 1.3% –1.0% $11.3 –$0.8 2013 $297 $276 1.3% –1.0% $11.4 –$0.8 2014 $297 $276 1.3% –1.0% $11.5 –$0.8 2015 $238 $220 1.0% –0.8% $9.2 –$0.7 2016 $238 $220 1.0% –0.8% $9.3 –$0.7 2017 $238 $221 1.0% –0.8% $9.4 –$0.7 2018 $238 $221 1.0% –0.8% $9.4 –$0.7 2019 $238 $221 1.0% –0.8% $9.5 –$0.7 2020 $238 $221 1.0% –0.8% $9.6 –$0.7 2021 $238 $221 1.0% –0.8% $9.6 –$0.7 2022 $238 $221 1.0% –0.8% $9.7 –$0.7 2023 $238 $221 1.0% –0.8% $9.8 –$0.7 2024 $238 $221 1.0% –0.8% $9.8 –$0.7 2025 $238 $221 1.0% –0.8% $9.9 –$0.7 2026 $238 $221 1.0% –0.8% $10.0 –$0.7 2027 $238 $221 1.0% –0.8% $10.0 –$0.7 2028 $238 $221 1.0% –0.8% $10.1 –$0.7 2029 $238 $221 1.0% –0.8% $10.1 –$0.7 2030 $238 $221 1.0% –0.8% $10.2 –$0.7 2031 $238 $221 1.0% –0.8% $10.3 –$0.7 2032 $238 $221 1.0% –0.8% $10.3 –$0.8 2033 $238 $221 1.0% –0.8% $10.4 –$0.8 2034 $238 $221 1.0% –0.8% $10.5 –$0.8 2035 $238 $221 1.0% –0.8% $10.5 –$0.8 2036 $238 $221 1.0% –0.8% $10.6 –$0.8 2037 $238 $221 1.0% –0.8% $10.7 –$0.8 NPV (3%) $184.7 –$12.8 NPV (7%) $112.8 –$7.7

a Figures are in 2005 dollars.
b Average price per engine is a weighted av erage price of engine by equipment type.

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### Final Regulatory Impact Analysis Table 9B-7: Impact on Marine Vessels Market: SD/I Recreational 175–300 hp (Average Price per Equipment = $32,356) a Marine Vessel (SD/I Recreational 175–300 hp) Total Absolute Change Change in Engineering Change in Equipment Engineering Change in in Price Quantity Costs Manufacturers Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $2 $33 0.1% –0.2% $0.1 –$0.6 2009 $6 $35 0.1% –0.2% $0.2 –$0.6 2010 $5 $205 0.6% –1.3% $0.2 –$3.6 2011 $44 $230 0.7% –1.4% $1.5 –$4.1 2012 $94 $261 0.8% –1.6% $3.2 –$4.7 2013 $94 $261 0.8% –1.6% $3.2 –$4.7 2014 $94 $261 0.8% –1.6% $3.3 –$4.8 2015 $94 $220 0.7% –1.4% $3.3 –$4.0 2016 $87 $216 0.7% –1.3% $3.0 –$4.0 2017 $81 $212 0.7% –1.3% $2.8 –$3.9 2018 $81 $212 0.7% –1.3% $2.9 –$4.0 2019 $81 $212 0.7% –1.3% $2.9 –$4.0 2020 $81 $212 0.7% –1.3% $2.9 –$4.0 2021 $81 $212 0.7% –1.3% $2.9 –$4.1 2022 $81 $212 0.7% –1.3% $2.9 –$4.1 2023 $81 $212 0.7% –1.3% $3.0 –$4.1 2024 $81 $212 0.7% –1.3% $3.0 –$4.1 2025 $81 $212 0.7% –1.3% $3.0 –$4.2 2026 $81 $212 0.7% –1.3% $3.0 –$4.2 2027 $81 $212 0.7% –1.3% $3.0 –$4.2 2028 $81 $212 0.7% –1.3% $3.1 –$4.2 2029 $81 $212 0.7% –1.3% $3.1 –$4.3 2030 $81 $212 0.7% –1.3% $3.1 –$4.3 2031 $81 $212 0.7% –1.3% $3.1 –$4.3 2032 $81 $212 0.7% –1.3% $3.1 –$4.4 2033 $81 $212 0.7% –1.3% $3.2 –$4.4 2034 $81 $212 0.7% –1.3% $3.2 –$4.4 2035 $81 $212 0.7% –1.3% $3.2 –$4.4 2036 $81 $212 0.7% –1.3% $3.2 –$4.5 2037 $81 $212 0.7% –1.3% $3.2 –$4.5 NPV (3%) $50.5 –$75.6 NPV (7%) $29.2 –$45.6

a Figures are in 2005 dollars.

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### Economic Impact Analysis Table 9B-8: Impact on Marine Vessels Market: SD/I Luxury 300+ hp (Average Price per Equipment = $205,658) a Marine Vessel (SD/I Luxury 300+ hp) Total

Absolute Change Change in Engineering Change in Equipment Engineering Change in in Price Quantity Costs Manufacturers Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $2 $56 0.0% –0.1% $0.0 –$0.2 2009 $10 $61 0.0% –0.1% $0.1 –$0.3 2010 $8 $291 0.1% –0.3% $0.1 –$1.3 2011 $108 $354 0.2% –0.3% $0.9 –$1.6 2012 $236 $435 0.2% –0.4% $2.0 –$1.9 2013 $236 $435 0.2% –0.4% $2.0 –$1.9 2014 $236 $435 0.2% –0.4% $2.0 –$2.0 2015 $236 $378 0.2% –0.4% $2.0 –$1.7 2016 $216 $365 0.2% –0.4% $1.9 –$1.7 2017 $206 $359 0.2% –0.3% $1.8 –$1.6 2018 $206 $359 0.2% –0.3% $1.8 –$1.7 2019 $206 $359 0.2% –0.3% $1.8 –$1.7 2020 $206 $359 0.2% –0.3% $1.8 –$1.7 2021 $206 $359 0.2% –0.3% $1.8 –$1.7 2022 $206 $359 0.2% –0.3% $1.8 –$1.7 2023 $206 $359 0.2% –0.3% $1.9 –$1.7 2024 $206 $359 0.2% –0.3% $1.9 –$1.7 2025 $206 $359 0.2% –0.3% $1.9 –$1.7 2026 $206 $359 0.2% –0.3% $1.9 –$1.7 2027 $206 $359 0.2% –0.3% $1.9 –$1.8 2028 $206 $359 0.2% –0.3% $1.9 –$1.8 2029 $206 $359 0.2% –0.3% $1.9 –$1.8 2030 $206 $359 0.2% –0.3% $1.9 –$1.8 2031 $206 $359 0.2% –0.3% $2.0 –$1.8 2032 $206 $359 0.2% –0.3% $2.0 –$1.8 2033 $206 $359 0.2% –0.3% $2.0 –$1.8 2034 $206 $359 0.2% –0.3% $2.0 –$1.8 2035 $206 $359 0.2% –0.3% $2.0 –$1.9 2036 $206 $359 0.2% –0.3% $2.0 –$1.9 2037 $206 $359 0.2% –0.3% $2.0 –$1.9 NPV (3%) $31.3 –$31.1 NPV (7%) $18.0 –$18.6

a Figures are in 2005 dollars.

9-99

### Final Regulatory Impact Analysis Table 9B-9: Impact on Marine Vessels Market: OB Recreational 50–100 hp (Average Price per Equipment = $21,561) a Marine Vessel (OB Recreational 50–100 hp) Total Absolute Change Change in Engineering Change in Equipment Engineering Change in in Price Quantity Costs Manufacturers Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $2 $16 0.1% –0.2% $0.1 $0.0 2009 $10 $21 0.1% –0.2% $0.6 –$0.2 2010 $9 $165 0.8% –1.5% $0.5 –$0.2 2011 $35 $181 0.8% –1.7% $2.1 –$0.7 2012 $62 $197 0.9% –1.8% $3.7 –$1.3 2013 $62 $197 0.9% –1.8% $3.7 –$1.3 2014 $62 $197 0.9% –1.8% $3.7 –$1.3 2015 $62 $165 0.8% –1.5% $3.8 –$1.3 2016 $56 $162 0.8% –1.5% $3.5 –$1.2 2017 $50 $158 0.7% –1.5% $3.1 –$1.1 2018 $50 $158 0.7% –1.5% $3.1 –$1.1 2019 $50 $158 0.7% –1.5% $3.1 –$1.1 2020 $50 $158 0.7% –1.5% $3.2 –$1.1 2021 $50 $158 0.7% –1.5% $3.2 –$1.1 2022 $50 $158 0.7% –1.5% $3.2 –$1.1 2023 $50 $158 0.7% –1.5% $3.2 –$1.1 2024 $50 $158 0.7% –1.5% $3.2 –$1.1 2025 $50 $158 0.7% –1.5% $3.3 –$1.1 2026 $50 $158 0.7% –1.5% $3.3 –$1.1 2027 $50 $158 0.7% –1.5% $3.3 –$1.1 2028 $50 $158 0.7% –1.5% $3.3 –$1.1 2029 $50 $158 0.7% –1.5% $3.3 –$1.2 2030 $50 $158 0.7% –1.5% $3.4 –$1.2 2031 $50 $158 0.7% –1.5% $3.4 –$1.2 2032 $50 $158 0.7% –1.5% $3.4 –$1.2 2033 $50 $158 0.7% –1.5% $3.4 –$1.2 2034 $50 $158 0.7% –1.5% $3.5 –$1.2 2035 $50 $158 0.7% –1.5% $3.5 –$1.2 2036 $50 $158 0.7% –1.5% $3.5 –$1.2 2037 $50 $158 0.7% –1.5% $3.5 –$1.2 NPV (3%) $56.6 –$19.5 NPV (7%) $33.3 –$11.4

a Figures are in 2005 dollars.

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### Economic Impact Analysis Table 9B-10: Impact on Marine Vessels Market: OB Luxury 175–300 hp (Average Price per Equipment = $104,562) a Marine Vessel (OB Luxury 175–300 hp) Total

Absolute Change Change in Engineering Change in Equipment Engineering Change in in Price Quantity Costs Manufacturers Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $3 $98 0.1% –0.2% $0.0 –$0.2 2009 $26 $111 0.1% –0.2% $0.1 –$0.2 2010 $23 $1,009 1.0% –1.9% $0.1 –$1.9 2011 $145 $1,079 1.0% –2.1% $0.5 –$2.0 2012 $267 $1,150 1.1% –2.2% $0.9 –$2.1 2013 $267 $1,150 1.1% –2.2% $1.0 –$2.2 2014 $267 $1,150 1.1% –2.2% $1.0 –$2.2 2015 $267 $951 0.9% –1.8% $1.0 –$1.8 2016 $243 $937 0.9% –1.8% $0.9 –$1.8 2017 $227 $928 0.9% –1.8% $0.8 –$1.8 2018 $227 $928 0.9% –1.8% $0.8 –$1.8 2019 $227 $928 0.9% –1.8% $0.8 –$1.8 2020 $227 $928 0.9% –1.8% $0.8 –$1.8 2021 $227 $928 0.9% –1.8% $0.9 –$1.8 2022 $227 $928 0.9% –1.8% $0.9 –$1.9 2023 $227 $928 0.9% –1.8% $0.9 –$1.9 2024 $227 $928 0.9% –1.8% $0.9 –$1.9 2025 $227 $928 0.9% –1.8% $0.9 –$1.9 2026 $227 $928 0.9% –1.8% $0.9 –$1.9 2027 $227 $928 0.9% –1.8% $0.9 –$1.9 2028 $227 $928 0.9% –1.8% $0.9 –$1.9 2029 $227 $928 0.9% –1.8% $0.9 –$1.9 2030 $227 $928 0.9% –1.8% $0.9 –$2.0 2031 $227 $928 0.9% –1.8% $0.9 –$2.0 2032 $227 $928 0.9% –1.8% $0.9 –$2.0 2033 $227 $928 0.9% –1.8% $0.9 –$2.0 2034 $227 $928 0.9% –1.8% $0.9 –$2.0 2035 $227 $928 0.9% –1.8% $0.9 –$2.0 2036 $227 $928 0.9% –1.8% $0.9 –$2.0 2037 $227 $928 0.9% –1.8% $0.9 –$2.0 NPV (3%) $14.9 –$34.4 NPV (7%) $8.7 –$20.8

a Figures are in 2005 dollars.

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### Final Regulatory Impact Analysis Table 9B-11: Impact on Marine Vessels Market: PWC 100–175 hp (Average Price per Equipment = $9,982) a Marine Vessel (PWC 100–175 hp) Total Absolute Change Change in Engineering Change in Equipment Engineering Change in in Price Quantity Costs Manufacturers Surplus Year Cost/Unit Price (%) (%) (million $) (million $) 2008 $35 $25 0.3% –0.5% $1.9 –$0.5 2009 $53 $38 0.4% –0.8% $2.9 –$0.8 2010 $103 $74 0.7% –1.5% $5.7 –$1.6 2011 $96 $69 0.7% –1.4% $5.3 –$1.5 2012 $96 $69 0.7% –1.4% $5.4 –$1.5 2013 $96 $69 0.7% –1.4% $5.4 –$1.5 2014 $96 $69 0.7% –1.4% $5.5 –$1.5 2015 $79 $57 0.6% –1.1% $4.5 –$1.3 2016 $79 $57 0.6% –1.1% $4.6 –$1.3 2017 $79 $57 0.6% –1.1% $4.6 –$1.3 2018 $79 $57 0.6% –1.1% $4.6 –$1.3 2019 $79 $57 0.6% –1.1% $4.6 –$1.3 2020 $79 $57 0.6% –1.1% $4.7 –$1.3 2021 $79 $57 0.6% –1.1% $4.7 –$1.3 2022 $79 $57 0.6% –1.1% $4.7 –$1.3 2023 $79 $57 0.6% –1.1% $4.8 –$1.3 2024 $79 $57 0.6% –1.1% $4.8 –$1.3 2025 $79 $57 0.6% –1.1% $4.8 –$1.3 2026 $79 $57 0.6% –1.1% $4.9 –$1.4 2027 $79 $57 0.6% –1.1% $4.9 –$1.4 2028 $79 $57 0.6% –1.1% $4.9 –$1.4 2029 $79 $57 0.6% –1.1% $5.0 –$1.4 2030 $79 $57 0.6% –1.1% $5.0 –$1.4 2031 $79 $57 0.6% –1.1% $5.0 –$1.4 2032 $79 $57 0.6% –1.1% $5.1 –$1.4 2033 $79 $57 0.6% –1.1% $5.1 –$1.4 2034 $79 $57 0.6% –1.1% $5.1 –$1.4 2035 $79 $57 0.6% –1.1% $5.2 –$1.4 2036 $79 $57 0.6% –1.1% $5.2 –$1.4 2037 $79 $57 0.6% –1.1% $5.2 –$1.4 NPV (3%) $92.7 –$25.6 NPV (7%) $57.4 –$15.8

a Figures are in 2005 dollars.

9-102

### Economic Impact Analysis 

## Appendix 9C: Time Series Projections of Social Cost

This appendix provides a time series of the rule’s projected social costs for each year through 2037. Costs are presented in 2005 dollars. In addition, this appendix includes the net present values by stakeholder using social discount rates of 3 percent and 7 percent over the period of analysis. As a result, it illustrates how the choice of the discount rate determines the present value of the total social costs of the program.

9-103Table 9C: Time Series Projection of Social Costs: 2008 to 2038 (Million $)a20082009201020112012201320142015201620172018Consumer Surplus Change, Total–$46.3–$109.2–$224.9–$272.1–$372.8–$376.1–$380.2–$349.8–$348.1–$338.8–$343.2Marine SIEnd users (households)–$13.2–$15.8–$113.2–$120.0–$128.2–$129.1–$130.0–$108.5–$107.9–$107.5–$108.2Small SIEnd users (households)–$33.1–$93.4–$111.7–$152.1–$244.6–$247.0–$250.2–$241.4–$240.2–$231.3–$235.0Producer Surplus Change, Total–$7.5–$17.0–$42.5–$52.0–$62.7–$63.2–$63.6–$57.0–$56.1–$55.0–$55.6Marine SI–$4.1–$5.7–$30.2–$34.5–$39.6–$39.9–$40.2–$34.7–$34.0–$33.5–$33.7Engine manufacturers–$1.0–$1.3–$8.8–$9.5–$10.3–$10.4–$10.5–$8.8–$8.7–$8.7–$8.7Equipment manufacturers–$3.1–$4.4–$21.4–$25.0–$29.3–$29.5–$29.7–$25.9–$25.3–$24.8–$25.0Small SI–$3.4–$11.3–$12.3–$17.5–$23.1–$23.3–$23.4–$22.3–$22.1–$21.5–$21.9Engine manufacturers–$0.6–$1.7–$2.1–$3.0–$5.3–$5.3–$5.4–$5.2–$5.1–$4.9–$5.0Equipment manufacturers–$2.9–$9.6–$10.2–$14.5–$17.8–$18.0–$18.1–$17.2–$16.9–$16.6–$16.9Fuel Savings$3.2$8.1$19.6$43.9$70.8$95.7$115.9$134.3$150.9$165.3$178.3Consumer savings$3.9$9.8$23.8$53.3$86.0$116.3$140.8$163.2$183.3$200.8$216.6Fuel$3.2$8.1$19.6$43.9$70.8$95.7$115.9$134.3$150.9$165.3$178.3Tax$0.7$1.7$4.2$9.4$15.2$20.6$24.9$28.9$32.4$35.5$38.3Government revenue–$0.7–$1.7–$4.2–$9.4–$15.2–$20.6–$24.9–$28.9–$32.4–$35.5–$38.3Total Surplus Change–$50.6–$118.1–$247.8–$280.2–$364.7–$343.6–$327.9–$272.5–$253.3–$228.5–$220.5(continued)Table 9C: Time Series Projection of Social Costs (Million $) (continued)20192020202120222023202420252026202720282029Consumer Surplus Change, Total–$347.6–$352.0–$356.4–$360.8–$365.2–$369.6–$374.0–$378.4–$382.8–$387.2–$391.7Marine SIEnd users (households)–$109.0–$109.7–$110.5–$111.2–$112.0–$112.7–$113.4–$114.2–$114.9–$115.7–$116.4Small SIEnd users (households)–$238.6–$242.3–$245.9–$249.6–$253.2–$256.9–$260.5–$264.2–$267.9–$271.6–$275.2Producer Surplus Change, Total–$56.2–$56.7–$57.3–$57.9–$58.5–$59.0–$59.6–$60.2–$60.7–$61.3–$61.9Marine SI–$34.0–$34.2–$34.4–$34.7–$34.9–$35.1–$35.4–$35.6–$35.8–$36.1–$36.3Engine manufacturers–$8.8–$8.8–$8.9–$9.0–$9.0–$9.1–$9.1–$9.2–$9.3–$9.3–$9.4Equipment manufacturers–$25.2–$25.4–$25.5–$25.7–$25.9–$26.0–$26.2–$26.4–$26.6–$26.7–$26.9Small SI–$22.2–$22.5–$22.9–$23.2–$23.6–$23.9–$24.2–$24.6–$24.9–$25.3–$25.6Engine manufacturers–$5.1–$5.1–$5.2–$5.3–$5.4–$5.4–$5.5–$5.6–$5.7–$5.8–$5.8Equipment manufacturers–$17.1–$17.4–$17.7–$17.9–$18.2–$18.5–$18.7–$19.0–$19.2–$19.5–$19.8Fuel Savings$190.4$201.4$211.1$220.5$229.3$237.1$244.2$250.8$256.9$262.7$268.1Consumer savings$231.3$244.6$256.5$267.9$278.6$288.1$296.7$304.7$312.2$319.2$325.7Fuel$190.4$201.4$211.1$220.5$229.3$237.1$244.2$250.8$256.9$262.7$268.1Tax$40.9$43.3$45.4$47.4$49.3$51.0$52.5$53.9$55.2$56.5$57.6Government revenue–$40.9–$43.3–$45.4–$47.4–$49.3–$51.0–$52.5–$53.9–$55.2–$56.5–$57.6Total Surplus Change–$213.4–$207.4–$202.6–$198.2–$194.3–$191.5–$189.3–$187.8–$186.6–$185.8–$185.4(continued)Table 9C: Time Series Projection of Social Costs (million $) (continued)20302031203220332034203520362037NPV (3%)NPV (7%)Consumer Surplus Change, Total–$396.1–$400.5–$404.9–$409.4–$413.8–$418.2–$422.6–$427.1–$6,551.1–$3,869.9Marine SIEnd users (households)–$117.2–$117.9–$118.7–$119.4–$120.2–$120.9–$121.7–$122.4–$2,079.0–$1,257.1Small SIEnd users (households)–$278.9–$282.6–$286.3–$290.0–$293.6–$297.3–$301.0–$304.7–$4,472.1–$2,612.8Producer Surplus Change, Total–$62.5–$63.0–$63.6–$64.2–$64.8–$65.3–$65.9–$66.5–$1,065.5–$636.3Marine SI–$36.5–$36.8–$37.0–$37.2–$37.5–$37.7–$37.9–$38.2–$641.5–$386.1Engine manufacturers–$9.4–$9.5–$9.6–$9.6–$9.7–$9.7–$9.8–$9.9–$167.0–$100.8Equipment manufacturers–$27.1–$27.3–$27.4–$27.6–$27.8–$27.9–$28.1–$28.3–$474.5–$285.2Small SI–$26.0–$26.3–$26.6–$27.0–$27.3–$27.7–$28.0–$28.4–$424.0–$250.2Engine manufacturers–$5.9–$6.0–$6.1–$6.2–$6.2–$6.3–$6.4–$6.5–$94.1–$54.8Equipment manufacturers–$20.0–$20.3–$20.6–$20.8–$21.1–$21.4–$21.6–$21.9–$329.9–$195.4Fuel Savings$273.0$277.6$281.9$285.8$289.6$293.3$296.7$300.1$3,374.6$1,774.7Consumer savings$331.7$337.3$342.5$347.3$351.9$356.3$360.5$364.6$4,100.2$2,156.3Fuel$273.0$277.6$281.9$285.8$289.6$293.3$296.7$300.1$3,374.6$1,774.7Tax$58.7$59.7$60.6$61.5$62.3$63.1$63.8$64.5$725.5$381.6Government revenue–$58.7–$59.7–$60.6–$61.5–$62.3–$63.1–$63.8–$64.5–$725.5–$381.6Total Surplus Change–$185.5–$185.9–$186.7–$187.7–$188.9–$190.3–$191.8–$193.5–$4,242.0–$2,731.4aFigures are in 2005 dollars.

### Economic Impact Analysis


## Appendix 9D: Overview of Model Equations and Calculation

To develop the economic impact model, we use set of nonlinear supply and demand equations for the affected markets and transform them into a set of linear supply and demand equations. These resulting equations describe stakeholder production and consumption responses to policy-induced cost and price changes in each market. They also are used to specify the conditions for a new with-policy equilibrium. We describe these equations in more detail below.
9D.1 Economic Model Equations
Supply Equations
First, we consider the formal definition of the elasticity of supply with respect to changes in own price:



### ε ≡ dQ
s 

### / Q
s



### . (9D.1)

s 

### dp / p
Next, we can use “hat” notation to transform Eq. (C.1) to proportional changes and rearrange terms: 

### Q 

s 

### = ε s 

### p

 (9D.1a) where 

### Q 

s 

### = percentage change in the quantity of market supply,



### g

s 

### = market elasticity of supply, and


### p  = percentage change in market price.
As Fullerton and Metcalf (2002) note, this approach takes the elasticity definition and turns it into a linear behavioral equation for each market.
To introduce the direct impact of the regulatory program, we assume the direct per-unit compliance cost (c) leads to a proportional shift in the marginal cost of production. Under the assumption of competitive market (price equals marginal cost), we can approximate this shift at the initial equilibrium point as follows:

^ 

### c c MC = = . (9D.2) 

### MC
o 

### p o 

### The with-regulation supply response to price and cost changes can now be written as:

∧ 

### Q 

s 

### = ε s 

### ( p 

− MC ) (9D.3)

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### Final Regulatory Impact Analysis For equipment producers, the supply response should also simultaneously accounts for changes in equilibrium input prices (engines). To do this, we modify Eq. (9D.2) as follows:

^ 

### c + α ( ∆ p engine 

### ) c + α ( ∆ p engine 

### ) MC = = MC
o 

### p o 

### (9D.3a) where 

### ) p engine 

### is the equilibrium change in the engine price and 

### " is the ratio of engines used per unit of equipment. For example, if one piece of equipment uses only one engine, then 

### " = 1. This equation can accommodate other engine to equipment ratios by multiplying 

### ) p eng 

### by the appropriate engine-to-equipment ratio ( 

### " ).
Demand Equations
Similar to supply, we can characterize equipment demand responses to price changes as:



### Q  d 

### = η d 

### p  (9D.4) where 

### Q  d 

### = percentage change in the quantity of market demand,



### 0 d 

### = market elasticity of demand, and


### p  = percentage change in market price.
In contrast to equipment demand, the demand for engines is a derived demand and is related to equipment supply decisions. In order to maintain a constant engine-to-equipment ratio, the demand for engines is specified as:



###  d 

### 

s 

### (9D.5) 

### Q engines = Q equipment

Market Equilibrium Conditions
In response to the exogenous increase in equipment and engine production costs, stakeholder responses are completely characterized by represented in Eq. (9D.3)(equipment and engine supply), Eq. (9D.4) (equipment demand) , and Eq. (9D.5)(engine demand). Next, we specify the relationship that must hold for markets to “clear”, that is, supply in each market equals demand. Given the equations specified above, the new equilibrium satisfies the condition that for each market, the proportional change in supply equals the proportional change in demand:



### Q  d 

### = Q 

s 

### (9D.6)

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### Economic Impact Analysis

9D.2 Computing With-Regulation Equilibrium Conditions
The choice of efficient model solution algorithms depends on several factors such as the number of markets included in the economic model, complexity of interactions between consumers and producers within these markets, and the software used to construct the model. To find the new market equilibrium prices and quantities, we used a solution algorithm that has proven very useful in “searching” for the equilibrium prices and quantities for partial equilibrium spreadsheet simulations with complicated relationships. We describe this approach in more detail below.
9D.2.1 Conceptual Description of RTI’s Spreadsheet Model Solution Algorithm: PE_Walrasian_Auctioneer©2005
The French economist Léon Walras proposed one early model of market price adjustment by using the following thought experiment. Suppose there is a hypothetical agent that facilitates market adjustment by playing the role of an “auctioneer.” He announces prices, collects information about supply and demand responses (without transactions actually taking place), and continues this process until market equilibrium is achieved.
For example, consider the with-regulation supply and demand conditions at the withoutregulation equilibrium price (P) (see Figure 9D-1a). The auctioneer determines that the quantity demanded (A) exceeds the quantity supplied (B) at this price and calls out a new (higher) price (P 

### N ) based on the amount of excess demand. Consumers and producers make new consumption and production choices at this new price (i.e., they move along their respective demand and supply functions), and the auctioneer checks again to see if excess demand or supply exists. This process continues until P = P* (point C in Figure 9D-1a) is reached (i.e., excess demand is zero in the market). A similar analysis takes place when excess supply exists. The auctioneer calls out lower prices when the price is higher than the equilibrium price.
Figure 9D-1a. Computing with Regulation Equilibrium

$/Q

P*

Price P ′ Increase

P

D

Q/t S 1 : W ith Regulation

A B Unit Cost Increase
S 0 : W ithout Regulation C

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### Final Regulatory Impact Analysis The model uses a similar type of algorithm for determining with-regulation equilibria, and the process can be summarized by six recursive steps:

1. Impose the control costs on affected supply segments, thereby affecting their supply decisions. 2. Recalculate the market supply in each market. Excess demand currently exists. 3. Determine the new prices via a price revision rule. We used a rule similar to the factor price revision rule described by Kimbell and Harrison (1986). P i 

### is the market price at iteration i, q d 

### is the quantity demanded, and q s 

### is the quantity supplied. The parameter z influences the magnitude of the price revision and the speed of convergence. The revision rule increases the price when excess demand exists, lowers the price when excess supply exists, and leaves the price unchanged when market demand equals market supply. The price adjustment is expressed as follows:


### ⎛ 

### q d 

### ⎞ z 

### P i+1 

### = P 1 

### • (9D.7) 

### ⎜ ⎝ ⎟ ⎠ 

### q s


### 4. Recalculate market supply with new prices. 5. Compute market demand in each market. 6. Compare supply and demand in each market. If equilibrium conditions are not satisfied, go to Step 3, resulting in a new set of market prices. Repeat until equilibrium conditions are satisfied (i.e., the ratio of supply and demand is arbitrarily close to one). When the ratio is appropriately close to one, the market-clearing condition of supply equals demand is satisfied.

9D.2.2 Consumer and Producer Welfare Calculations
The change in consumer surplus in the affected markets can be estimated using the following linear approximation method:



### ) CS = – Q 1 

### • 

### ) p + 0.5 • 

### ) Q • 

### ) p. (9D.8)
As shown, higher market prices and reduced consumption lead to welfare losses for consumers. A geometric representation of this calculation is illustrated in Figure 9D-1b.
For affected supply, the change in producer surplus can be estimated with the following equation: 

### ) PS = Q 1 

### • ( 

### ) p – c) – 0.5 • 

### ) Q • ( 

### ) p – c). (9D.9)
Increased regulatory costs and output declines have a negative effect on producer surplus, because the net price change ( 

### ) p – c) is negative. However, these losses are mitigated, to some degree, as a result of higher market prices. A geometric representation of this calculation is illustrated in Figure 9D-1b.

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### Economic Impact Analysis



### ) consumer surplus =–[fghd + dhc] 

### ) producer surplus =[fghd – aehb] – bdc 

### ) total surplus =–[aehb + dhc + bdc]

Figure 9D-1b. Welfare Calculations

Q 1 Q 0 Output P 1

P 0 h

c

a $

g

e d f Price Increase Unit Cost Increase S 1 : With Regulation

S 0 : Without Regulation

b

9-111

### Final Regulatory Impact Analysis



## Appendix 9E: Elasticity Parameters for Economic Impact Modeling

The Economic Impact Model (EIM) relies on elasticity parameters to estimate the behavioral response of consumers and producers to the regulation and its associated social costs. To operationalize the market model, supply and demand elasticities are needed to represent the behavioral adjustments that are likely to be made by market participants. The following parameters are needed:

• supply and demand elasticities for Marine SI equipment markets

• supply and demand elasticities for Small SI equipment markets

• supply elasticities for Marine SI engine markets

• supply elasticities for Small SI engine markets
Note that demand elasticities for the Marine SI and Small SI engine markets are not estimated because they are derived internally in the model. They are a function of changes in output levels in the equipment markets.
Tables 9E-1 and 9E-2 contain the demand and supply elasticities used to estimate the economic impact of the rule. Two methods were used to obtain the supply and demand elasticities used in the EIM. First, the professional literature was surveyed to identify elasticity estimates used in published studies. Second, when literature estimates were not available for specific markets, established econometric techniques were used to estimate supply and demand elasticity parameters directly. Since very few studies have been identified to quantify elasticities for Small SI and Marine SI markets in the literature survey, the supply and demand elasticities for all of the equipment and engine markets were estimated econometrically.
This appendix describes the methods used to estimate demand and supply elasticities for Marine SI and Small SI engines and equipment markets and presents the data sources and the regression results obtained from applying those methods.
Finally, it should be noted that these elasticities reflect intermediate run behavioral changes. In the long run, supply and demand are expected to be more elastic since more substitutes may become available.

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### Economic Impact Analysis

Table 9E-1: Summary of Market Supply Elas ticities Used in the Market Model

Markets Estimate Source Method Input Data Summary
Recreational Marine

All vessel types 3.8 EPA econometric except PWC estimate Table 9E-4

PWC 5.2 EPA econometric estimate Table 9E-5

Small SI

All lawn and 10.0 EPA econometric garden estimate equipment Table 9E-6

Gensets/welders 8.8 EPA econometric estimate Table 9E-7

All Engines 9.5 EPA econometric estimate Table 9E-3 Cobb-Douglas production function

Cobb-Douglas production function

Cobb-Douglas production function

Cobb-Douglas production function

Cobb-Douglas production function Census of Manufacture, US Census Bureau; five years between 1972 and 1997; NAICS 336612 Census of Manufacture, US Census Bureau; five years between 1972 and 1997; NAICS 336999

Census of Manufacture, US Census Bureau; five years between 1972 and 1997; NAICS 333112 Census of Manufacture, US Census Bureau; five years between 1972 and 1997; NAICS 335312 Census of Manufacture, US Census Bureau; five years between 1972 and 1997; NAICS 333618

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### Final Regulatory Impact Analysis

Table 9E-2: Summary of Market Demand El asticities Used in the Market Model Primary Input Data Market Estimate Source Method Summary Equipment
All recreational

! 2.0 EPA econometric Simultaneous Bartlesman et al.(2000); marine (including estimate equation (3SLS) Manufacturing Industry Data PWC) Table 9E-8 from US Census Bureau:; 1958–1996; SIC 3732
Lawnmowers

! 0.2 EPA econometric estimate Simultaneous Table 9E-9, equation (3SLS) Column 2 Lawn and garden –1.0 EPA econometric estimate Simultaneous tractors Table 9E-9, equation (2SLS) Column 5

Pumps/compressors/ –1.0 a EPA econometric estimate Simultaneous pressure washers, Table 9E-9, equation (2SLS) snowblowers Column 5

Agriculture, –1.0 a EPA econometric estimate Simultaneous construction, general Table 9E-9, equation (2SLS) industrial Column 5

Other lawn and –0.9 b EPA econometric estimate Simultaneous garden Table 9E-9, equation (2SLS) Column 3 AIR/NERA (2003); 1973–2002

U.S. Census Bureau, Current Industrial Reports, MA333A 2000 and selected previous years; 1980–1997
U.S. Census Bureau, Current Industrial Reports, MA333A 2000 and selected previous years; 1980–1997
U.S. Census Bureau, Current Industrial Reports, MA333A 2000 and selected previous years; 1980–1997
U.S. Census Bureau, Current Industrial Reports, MA333A 2000 and selected previous years; 1980–1997
All handheld lawn and garden equipment –1.9 EPA econometric estimate Table 9E-9, Column 4 Simultaneous equation (2SLS) U.S. Census Bureau, Current Industrial Reports, MA333A 2000 and selected years; 1980–1997
Gensets/welders Class 1 –1.4 EPA econometric estimate Table 9E-10, Column 2 Simultaneous equation (3SLS) U.S. Census Bureau, Current Industrial Reports, MA335H 2000 and selected years; 1980–1997
Gensets/welders Class 2 –1.1 EPA econometric estimate Table 9E-10, Column 3 Simultaneous equation (3SLS) U.S. Census Bureau, Current Industrial Reports, MA335H 2000 and selected years; 1980–1997 All Engines Derived demand NA

a Uses econometric estimate for lawn and garden tractors.
b Uses econometric estimate for commercial mowers.

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### Economic Impact Analysis 9E.1 Supply Elasticities
We use a two-step approach to estimate the price elasticity of supply 14 

### . In the first step, we estimate an industry production function by using the regression model. In the second step, we calculate the supply elasticity by the parameters estimated in the estimated production function. This section discusses the regression model used to estimate the industry production function, data sources used for the regression, and estimated results for supply elasticities. The economics theory on the relationship between the supply elasticity and the production function is discussed in Appendix 9F.
In economics, the production function is defined as the relationship between inputs and outputs of the production process. In this case, we assume that Small SI and Marine SI manufacturers follow the Cobb-Douglas production function with a stochastic error term U i t 

### - N(0,



### F 2 

### ), recognizing that we have observations on plant i at time t

" " " 

### Q i t 

### = A t 

### (K i t 

### ) K 

### (L i t 

### ) L 

### (M i t 

### ) M 

### e i t U 

### (9E.1) where

Q i t 

### = total value of shipment on plant i at time t, K i t 

### = total capital stock, including both structure and equipment, on plant i at time t, L i t 

### = total plant hours on plant i at time t, and M it 

### = cost of materials on plant i at time t.
This equation can be written in linear form by taking the natural logarithms of each side of the equation. The parameters of this model, 

### " K 

### , 

### " L 

### , 

### " M 

### , can then be estimated using linear regression techniques:
ln Q i t 

### = ln A t 

### + 

### " K 

### ln K i t 

### + 

### " L 

### ln L i t 

### + 

### " M 

### ln M i t 

### + U i t 

### (E9.2)
Under the assumptions of a competitive market, the elasticity of supply with respect to the price of the final product can be expressed in terms of the parameters of the production function: 15



### Supply Elasticity = ( 

### " L 

### + 

### " M 

### ) / (1 – 

### " L 

### – 

### " M 

### ). (9E.3)
Our main regressions were carried out imposing the constant returns to scale assumption ( 

### " K+ 

### " L+ 

### " M=1). We also tested regressions that did not constrain the three 

### " parameters, and obtained very similar estimates for the parameters. The estimated returns to scale, given by the sum of the three 

### " parameters, ranges from 1.01 to 1.03, supporting the assumption of constant returns. We estimate these regressions with and without including the dummies for single-plant firm and large plant. Table 9E-3 to Table 9E-7 present the estimated production function

14 Please refer to Supply Elasticity Estimation Report, Li, Chi



### . May 19, 2008. Memorandum to Docket EPA-HQ-OAR-2004-0008.

15 Appendix 9F provides the derivation of this result.

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### Final Regulatory Impact Analysis coefficients for the five industries including the dummies for single-plant firm and large plant.

9E.1.1 Data Sets

The data used to estimate these elasticities comes from Census of Manufactures, conducted by the Census Bureau every five years between 1972 and 1997. We had access to the plant-level data at the Boston Census Research Data Center, and gathered data for all plants that were identified as belonging to the five industries being studied. The Census data provided us with information on output as measured by TVS (Plant’s Total Value of Shipments), employment as measured by PH (Total Plant Hours), materials as measured by CM (Cost of Materials), and capital stock as measured by CAP (Total Capital Stock, including both Structure and Equipment) - the capital stock data are only available through 1997, which is why we do not include 2002 Census of Manufactures data in our analysis.
Based on comments from reviewers of an earlier supply elasticity analysis done for three other industries, we added two additional variables to the regression analysis, to control for possible differences across plants in their productivity levels. SINGLE is a dummy variable, indicating that the plant’s firm owns no other manufacturing plants (a single-plant firm). BIG is a dummy variable, indicating that this plant has a number of employees larger than the median value for all other plants in this industry (approximately 50% of the plants in an industry should have BIG=1).
The data were examined in detail to identify outliers, measured in terms of unusual ratios between the values (e.g. unusually high or low shipments per worker hour, relative to the other plants in the industry) or unusual swings from one observation to the next. Those cases were then adjusted, based on their values in surrounding years or on the ratios between variables for other plants in the same industry, to avoid biasing the results while retaining all observations for the analysis.
One potential complication in working with the Census of Manufactures over this time period is the considerable change in industry definitions in 1997, when the Census Bureau shifted from SIC (Standard Industry Classification) codes to NAICS (North American Industry Classification System) codes. For these five indus tries there were some definitional concerns, but we were able to solve them reasonably accurately using a combination of SIC and NAICS industry codes and detailed product codes.

9E.1.2 Results of Supply Elasticity Estimation By pooling data at establishment or plant level on selected years, we applied ordinary least square (OLS) procedure to estimate Eq. (9E.2) with two additional dummy variables. As shown in Tables 9E-3 through 9E-7, supply elasticity estimates for Small SI products range from 3.76 (Boat Building) to 9.96 (Lawn & Garden Equipment).

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### Economic Impact Analysis Table 9E-3: Gasoline Engines: NAICS 333618 (SIC 3519) Internal Combustion Engines, Not Elsewhere Classified.
Number of Observations = 1454 Root Mean Square Error = 0.316

Supply Elasticity = 9.46

Variable Estimated Coefficients t-statistic intercept 1.930 22.3
SINGLE -0.120 - 4.4
BIG 0.059 2.1 ln K 0.096 4.6 ln L 0.284 13.1 ln M 0.621 27.0

Table 9E-4: Gasoline-Powered Boats: NAICS 336612 (SIC 3732) Boat Building and Repairing.
Number of Observations = 10521 Root Mean Square Error = 0.239 Supply Elasticity = 3.76

Variable Estimated Coefficients t-statistic intercept 1.201 43.7
SINGLE -0.045 -4.0
BIG 0.113 18.6 ln K 0.210 14.4 ln L 0.141 15.8 ln M 0.650 45.3

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### Final Regulatory Impact Analysis Table 9E-5: PWCs, ATVs, Snowmobiles: NAICS 336999 (SIC 3799) Transportation Equipment, Not Elsewhere Classified.

Number of Observations = 2326 Total R-square = 0.237
Supply Elasticity = 5.20

Variable Estimated Coefficients t-statistic intercept 1.323 13.9
SINGLE -0.069 -3.1
BIG 0.072 7.0 ln K 0.161 7.0 ln L 0.184 9.9 ln M 0.654 19.2

Table 9E-6: Small Handheld/Nonhandheld: NAICS 333112 (SIC 3524) Lawn and Garden Tractors and Home Lawn and Garden Equipment.

Number of Observations = 839 Root Mean Square Error = 0.232
Supply Elasticity = 9.96

Variable Estimated Coefficients t-statistic intercept 1.162 12.3
SINGLE -0.012 -0.5
BIG 0.033 1.3 ln K 0.091 4.5 ln L 0.156 7.3 ln M 0.753 23.4

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### Economic Impact Analysis Table 9E-7: Gensets and Marine Generators: NAICS 335312 (SIC 3621) Motors and Generators.

Number of Observations = 2681 Root Mean Square Error = 0.288
Supply Elasticity = 8.79

Variable Estimated Coefficients t-statistic intercept 1.812 30.8
SINGLE -0.096 -5.3
BIG -0.041 -2.3 ln K 0.102 7.3 ln L 0.242 15.4 ln M 0.655 33.7

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9E.2 Demand Elasticities
To obtain demand elasticity parameters, we estimated a simultaneous system of demand and supply equations using instrumental variab les methodology by either two-stage least squares (2SLS) or three-stage least squares (3SLS) regression. This type of partial equilibrium market supply/demand model is specified as a system of interdependent equations in which the price and output of a product are simultaneously determined by the interaction of producers and consumers in the market. In simultaneous equation models, where variables in one equation feed back into variables in another equation, the error terms are correlated with the endogenous variables (price and output). Use of a single-equation ordinary least squares (OLS) estimation of individual equations will lead to biased and inconsistent parameter estimates because it does not account for the correlation of the error term with the endoge nous variables. In 2SLS or 3SLS, however, each equation is identified through the inclusion of exogenous variables as instruments that control for shifts in the supply and demand curves over time.
Exogenous variables influencing the demand for gasoline-powered boats and Small SI equipment include measures of general economic activity (per capita household or disposable income, number of households or housing starts). Exogenous variables influencing the cost of production and supply of boats and Small SI equipm ent include changes in prices of key inputs like labor and raw materials.
The supply/demand system for gasoline powered equipment can be defined as follows:

Q t d 

### = f(P t 

### ,Z t 

### ) + u t 

### (9E.4) Q t s 

### = g(P t 

### ,W t 

### ) + v t 

### (9E.5) Q t d 

### = Q t s 

### (9E.6)
Eq. (9E.4) shows quantity demanded as a function of price, P t 

### ; a vector of demand shifters, Z t 

### (e.g., measures of economic activity); and an error term, u t 

### . Eq. (9E.5) represents quantity supplied as a function of price and a vector of supply shifters, W t 

### (e.g., input prices), and an error term, v t 

### , while Eq. (9E.6) specifies the equilibrium condition that quantity supplied equals quantity demanded, creating a system of three equations with three endogenous variables. The interaction of the specified market forces solves this system, generating equilibrium values for the variables P t * 

### and Q t * 

### = Q t d* 

### = Q t s*



### . To generate demand and supply elasticity estimates simultaneously, we used 2SLS and/or 3SLS procedures. For the 2SLS estimates, observed price is regressed against the exogenous instruments (i.e., the supply and demand “shifter” variables). The fitted (or predicted) values for the price variable are then employed as observations of the right-hand side price variable in the supply and demand equations. In the second stage, the 2SLS estimators are generated by running OLS on these calculated instrumental variables. Also, the 2SLS estimates are used to estimate errors in the structural equations, which then can be used to estimate the variance-covariance matrix of the structural equations' errors. For the 3SLS estimates, this information is used at the third stage to perform a generalized least squares (GLS) estimation of a single large equation

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### Economic Impact Analysis composed from the individual structural equations. If this process is done with all variables expressed in natural logarithms, the coefficient on the price variable in the demand equation yields an estimate of the constant elasticity of demand.
9E.2.1 Demand Equation Estimation
Demand equations were estimated using a general specification where the quantity of boats or Small SI equipment consumed is expressed as a function of price, number of households or housing starts, per capita household or disposable income, and a time trend. Trends were included as a general way to model the effects of changes in tastes and preferences. All price and income variables were deflated by the implicit gross domestic product (GDP) deflator. The endogenous variables in the equations are unit sales and own-price. The exogenous variables include the household and income variables and the time trend. The list of instruments includes these exogenous variables and supply factors influencing the price of the product: wages and a producer price index for material inputs.

9E.2.2 Data Sets
The National Bureau of Economic Research (NBER) data discussed in the supply elasticity section of the analysis plan ( RTI, 2005) contain data on production quantities, price indices, and suitable instruments to inform a demand analysis for recreational boats (SIC 3732). In its Current Industrial Reports (CIR) series, the U.S. Census Bureau produces an annual summary of the production of motors and generators and a summary of production of several types of lawn and garden equipment; both of these reports include the number of units manufactured and the value of production (U.S. Census Bureau, 1998; 2000). For the walk-behind lawnmowers regression, we used several data series reported in a study by Air Improvement Resource, Inc., and National Economic Research Associates (AIR/NERA, 2003). The U.S. Census Bureau publishes historical data on household income and housing starts (U .S. Census Bureau, 2002; 2004), and we collected price, wage, and material cost indexes from the Bureau of Labor Statistics (BLS) (BLS, 2004a,b,c,d,e). Lastly, we obtained an implicit GDP price deflator from the U.S. Bureau of Economic Analysis (BEA) (BEA, 2004). The following variables from these sources were used in the regression:



### C unit sales of boats (Bartlesman et al., 2000),



### C price index for boats (Bartlesman et al., 2000),



### C lawn and garden equipment units produced (U.S. Census Bureau, AIR/NERA),



### C lawn and garden equipment value of production (U.S. Census Bureau),



### C producer price index for walk-behind lawnmowers (BLS),



### C households (U.S. Census Bureau),



### C housing starts (U.S. Census Bureau),



### C per capita income and population (U.S. Census Bureau, 2002; BEA, 2004),



### C average hourly earnings for production workers (BLS; Bartlesman et al., 2000),



### C price index for plastic and other materials and engines (BLS; Bartlesman et al., 2000), and GDP deflator (BEA).
Some care was needed in using the time series from the CIR data set. Occasional changes

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### Final Regulatory Impact Analysis in category definition and the Census Bureau’s need to suppress some data to maintain confidentiality created difficulties in constructing consistent data series over the 2-decade time period. Nonetheless, we were able to assemble the following series: commercial nonriding mowers, commercial riding mowers, consumer lawn mowers, tillers and two-wheel tractors, snow throwers, edgers and trimmers, vacuums and blowers, and lawn and garden tractors. Statistically significant parameter estimates were obtained for commercial nonriding mowers, tillers/two-wheel tractors, edgers/trimmers, and lawn and garden tractors.
We were not able to obtain a useful elasticity estimate for consumer lawn mowers using CIR data, perhaps because of aggregation biases in that category of the CIR data set. Because consumer lawn mowers are a critical segment of the entire Small SI sector, we used an alternate data set for our demand elasticity estimate. The data AIR/NERA used in their recent study proved very useful in this regard (AIR/NERA, 2003). In that study, the authors used a single-equation OLS regression to obtain a demand elasticity parameter, a procedure that RTI believes to be inadequate because the market process simultaneously determines price and quantity in the demand equation. However, using the same data series cited by AIR/NERA supplemented by data collected by RTI, we were able to obtain a reasonable estimate using the 3SLS regression described above.
9E.2.3 Results of Demand Elasticity Estimation
In this section, we present regression results used in the EIA. Table 9E-8 shows the parameter estimate for the marine sector, which is –2.0. Although the methodology and data sets are quite different, this result is consistent with the ones obtained by Raboy (1987) in his study almost 20 years ago.

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### Economic Impact Analysis Table 9E-8: Results of Econometric Estimation of Boat Demand Equation: 1958 to 1996
Recreational Boats—SIC 3732 Dependent Variable—Regression Unit Sales per Capita Intercept –27.9 (–10.3)
Price –2.0 (–2.04) Disposable income per capita 1.83 (5.85)
Trend –0.19 (–2.15) Adjusted R 2 0.81 Observations (years) 39 (1958–1996)


### Notes: 1. Numbers in parentheses are t-ratios (coefficient estimate divided by its standard error) (except for the year ranges in the last row of the table). 2. All exogenous and endogenous variables are in natural log.

In Table 9E-9, we present demand elasticity results for Small SI equipment. Our estimate for walk-behind lawnmowers is –0.2 (inelastic). The value obtained for other nonhandheld categories such as commercial nonriding mowers and lawn and garden tractors is higher at (–0.9, –1.0). In contrast, the demand estimate for edgers/trimmers is elastic (–1.9), suggesting that consumers are more willing to forego purchases of these items at higher prices. The edgers/trimmers’ value was used for all handheld equipment. Results for generators, which range from –1.1 to –1.4, are shown in Table 9E-10.

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### Final Regulatory Impact Analysis Table 9E-9: Results of Econometric Estimation of Small SI Demand Equations: 1980 to 1997 (1973–2002 for Consumer Mowers)

De pendent Variable— Regression Consumer WalkBehind Mowers Units Sold per

Household Commercial Mowers

Units Produced Edgers and Trimmers

Units Produced Lawn and Garden Tractors

Units Produced
Method 3SLS 2SLS 2SLS 2SLS Intercept –0.64 (–2.71) –35.19 (–4.41) –4.69 (–0.63) –7.22 (–1.46)

Price –0.2 (–3.73) –0.9 (–2.74) –1.9 (–6.05) –1.0 (–2.29) Per capita income — 4.8 (5.76) 1.47 (1.79) 2.2 (4.36) Housing starts per HH (1 lag) 0.23 (4.71) — — —

Trend — –0.20 (–1.58) 0.32 (2.52) 0.02 (0.26) Adjusted or system weighted R 2 0.547 0.663 0.877 0.939

Observations (years) 29 (1973–2002) 18 (1980–97) 18 (1980–97) 18 (1980–97)

Notes: 1. Numbers in parentheses are t-ratios (coefficient estimate divided by its standard error) (except for the year ranges in the last row of the table). 2. All exogenous and endogenous variables are in natural log. 3. For lawnmowers, the income variable is actually per capita disposable income.

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### Economic Impact Analysis Table 9E-10: Results of Econometric Estimation of Gasoline-Powered Generators Demand Equations: 1973 to 1998

Units Produced
Dependent Variable-Regression Small Generators (<5kW) Large Generators (>15kW)
Intercept 16.4 (2.64) –14.3 (–2.48)

Price –1.4 (–3.64) –1.1 (–8.59)
Per capita income –0.46 (–0.71) 2.7 (4.34)

Trend –0.02 (–0.51) –0.16 (–1.53) Adjusted R 2 0.609 0.723 Observations (years) 26 (1973–1998) 26 (1973–1998)

Notes: 1. Numbers in parentheses are t-ratios (coefficient estimate divided by its standard error) (except for the year ranges in the last row of the table). 2. All exogenous and endogenous variables are in natural log.

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### Final Regulatory Impact Analysis 

## Appendix 9F: Derivation of Supply Elasticity

In economics, a production function is used to describe the relationship between inputs and outputs of the production process. The producti on function in general is defined as follows

Q s 

### = f (L, K, M, t)

Q s 

### = the quantity of the outputs supplied L

= the labor input or the number of labor hours K

= real capital stock or real capital consumed in the production M = the material inputs
t = a time trend variable to reflect technology changes
In the competitive market, market forces constrain firms to produce at the cost minimizing output level. Cost minimization allows for the duality mapping of a firm’s technology (summarized by the firm’s production function) to the firm’s economic behavior (summarized by the firm’s cost function). The total cost function of an industry in the short term follows:

TC = h( C, K, t, Q s 

### )
where TC is the total cost of production, C is the variable cost of production (such as the cost of materials and labor), and the other variables have previous defined. This approach assumes that capital stock is fixed, or a sunk cost of production. This assumption is consistent with the goal of the modeling post-control market changes likely to occur. Firms facing final regulatory emission controls will consider embedded capital stock as a fixed or sunk cost in economic decision making. Differentiating the total cost function with respect to Q s 

### derives the marginal cost function:

MC = h’ ( C, K, t, Q s 

### )
where MC is the marginal cost of production and all other variables have been previously defined.
Profit maximizing competitive firms will choose to produce the quantity of output that equate the market price (P) to the marginal cost of the production (MC). Setting the price equal to the preceding marginal cost function and solving for Q s 

### yields the following implied supply function:

Q s 

### = S (P, P L , 

### P M, 

### , K, t, )
where P is the market price of the products, P L 

### is the price of the labor, P M 

### is the price of materials, and all other variables have been previously defined.
To illustrates how the supply elasticity used in Appendix 9E can be expressed in terms of the parameters of the production function (Equation 9E.3), we assume that production function is represented by a Cobb-Douglas function with only two inputs (capital [K] and labor [L]) with a

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### Economic Impact Analysis constant return to scale,

Q = L " 

### K 1– " 

### (9F.1) where Q = output, L = labor input, and K = cap ital input. The cost function is written as

TC = wL + rK (9F.2)

where w = wage rate or unit labor cost, r = interest cost or unit capital cost. From equation (9F.1), L can be written as,

L = Q 1/ " 

### K ( " -1 )/ " 

### (9F.3)

Substituting L in the cost function with equation (9F.3),

TC = wL + rK = w {Q 1/ " 

### K ( " -1 )/ " 

### } + r K

Differentiating cost function with respect to Q, the marginal cost function is

MC = w { (1/ 

### " ) Q (1/ " ) -1 

### K ( " -1 )/ " 

### } = (w / 

### " ) Q (1 - " ) / " 

### K ( " -1 )/ "



### According to the competitive condition, P = MC, that is

MC = (w / 

### " ) Q (1 - " ) / " 

### K ( " -1 )/ " 

### = P

To rearrange the above equation, Q is expressed by a function of P and K,

Q = {( 

### " /w) P K (1- " ) / " 

### } " / (1– " ) 

### We have

Q = ( 

### " /w) " / (1– " ) 

### P " / (1– " ) 

### K (9F.4)
Taking log function on both sides,

ln Q = 

### " /(1- 

### " ) ln ( 

### " /w)+ 

### " /(1- 

### " ) ln P + ln K (9F.5) The price elasticity of supply can be written as

Supply elasticity = 

### M ln Q/ 

### M ln P = 

### " /(1- 

### " ) (9F.6)

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### Final Regulatory Impact Analysis



## Appendix 9G: Initial Market Equilibrium - Price Forecasts

The EIM analysis begins with current market conditions: equilibrium supply and demand. To estimate the economic impact of a regulation, standard practice uses projected market equilibrium (time series of prices and quantities) as the baseline and evaluates market changes from this projected baseline. Consequently, it is necessary to forecast equilibrium prices and quantities for future years.
Equilibrium price forecasts typically use one of two approaches (EPA 1999, p 5-25). The first assumes a constant (real) price of goods and services over time. The second models a specific time series where prices may change over time due to exogenous factors.
In the absence of shocks to the economy or the supply of raw materials, economic theory suggests that the equilibrium market price for goods and services should remain constant over time. As shown in Figure 7G-1, demand grows over time, in the long run, capacity will also grow as existing firms expand or new firms enter the market and eliminate any excess profits. This produces a flat long run supply curve. Note that in the short to medium run time frame the supply curve has a positive slope due to limitations in how quickly firms can react.

Figure 9G-1. Prices and Quantities in Long Run Market Equilibrium

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If capacity is constrained (preventing the outwa rd shift of the baseline supply curve) or if the price of production inputs increase (shifting the baseline supply curve upward over time), then prices may trend upward reflecting that either the growth in demand is exceeding supply or the commodity is becoming more expensive to produce.
It is very difficult to develop forecasts events (such as those mentioned above) that influence long run prices. As a result, the approach used in this analysis is to use a constant 2005 observed price.

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# Appendix 9H: Sensitivity Analysis

The Economic Impact Analysis presented in this Chapter 9 is based on the Economic Impact Model (EIM) developed for this analysis. The EIM reflects certain assumptions about behavioral responses (modeled by supply and demand elasticities), and what the baseline equipment prices are used in the model. This appendix presents a sensitivity analysis for alternatives in the model. Three scenarios are examined:



### # Scenario 1: alternative market supply and demand elasticity parameters



### # Scenario 2: alternative baseline prices for lawn mower and tractor



### # Scenario 3: alternative gasoline price for social costs



### # Scenario 4: change in consumer’s behavior due this rule
The results of these sensitivity analyses are presented below. The results from Scenario 1 are presented for 2014 (the highest cost year) only with 2005$. The results for the Small SI and Marine SI engine and equipment markets do not in clude the fuel savings. Instead, fuel savings are added into the total social costs as a separate item.
In general, varying the elasticity parameters does not significantly change the results of the economic impact assessment analysis presented above. The expected price increase remains relative stable across the scenarios in comparing with the primary case for the Small SI and Marine SI engine and equipment. The difference in expected price change between alternative and primary scenarios is less than 0.5 percent. Total social costs are about the same across all sensitivity analysis scenarios, $444 million. In addition, varying these model parameters does not significantly affect the way the social costs are borne. In all cases, the end user (households) bear the majority of the burden (over 76 percent), although there are differences in the way the costs are borne among the scenarios between the change in either demand or supply elasticity. The share of social costs end users (households) bear, for example, ranges from 66 to 98 percent.
With regard to the scenario of alternative baseline prices, although the difference in prices is about 27%and 52% for lawn mower and tractors, respectively, the estimates on absolute price change and social cost for each market are approximately the same as in the base case. However, given that the baseline prices are different in these scenarios, there is some variation in projected relative price and quantity change across the scenarios. The expected changes in relative prices and quantity increase under the lower alternative baseline market price scenarios.
A recent higher gasoline price will have the impacts to our analyses. A higher gasoline price is expected to increase the fuel savings estimated from primary analysis thus to reduce the net social cost of the final emission standards. In addition, we will describe qualitatively how the consumers would response to the fuel efficiency gains that result from applying technologies to achieve the evaporative emission standards being finalized in this rule in Scenario 4.

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### Economic Impact Analysis 

## 9H.1 Model Elasticity Parameters

Consumer demand and producer supply responsiveness to changes in the commodity prices are referred to by economists as “elasticity.” The measure is typically expressed as the percentage change in quantity (demanded or supplied) brought about by a percent change in own price. A detailed discussion regarding the estimation and selection of the elasticities used in the EIM are discussed in Appendix 9E. This component of the sensitivity analysis examines the impact of changes in selected elasticity values, holding other parameters constant. The goal is to determine whether alternative elasticity values significantly alter conclusions in this report.
9H.1.1 Alternative Supply and Demand Elasticity Parameters
The choice of supply and demand elasticities for the engine and equipment market is important because changes in quantities in the equipment markets are the key drivers in the derived demand functions used to link impacts in the engine and equipment markets. In addition, the distribution of regulatory costs depends on the relative supply and demand elasticities used in the analysis. For example, consumers will bear less of the regulatory burden if they are more responsive to price changes than producers.
Table 9H-1 reports the upper- and lower-bound values of the engine and equipment market elasticity parameters (supply and demand) used in the sensitivity analysis. The engine and equipment market supply elasticities are derived econometrically. Therefore, the upper and lower bound values were computed using the coefficient and standard error values associated with the econometric analysis and reflected 95 percent confidence interval.

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### Final Regulatory Impact Analysis

Table 9H-1: Alternative Supply and Demand Elas ticities Used in Sensitivity Analysis a ,b
Para meter/Market Upper Bound Primary Case Lower Bound Supply Elasticities Engines
Marine and Small SI 5.0 9.5 13.9 Equipment
Marine SI All other vessel types 3.1 3.8 4.4

PWC 3.5 5.2 6.9
Small SI Small SI (handheld/nonhandheld) 5.1 10.0 14.8
Gensets/welders 6.2 8.8 11.4

Demand Elasticities Engines
Marine and Small SI Derived Dema nd Derived Demand Derived Demand Equipment
Marine SI All vessel types –3.9 –2.0 –0.1
Small SI
Handheld –2.5 –1.9 –1.3

Lawn mowers –0.3 –0.2 –0.1 Other lawn and garden –1.5 –0.9 –0.3
Gensets/welders—Class I –2.2 –1.4 –0.6
Gensets/welders—Class II –1.4 –1.1 –0.8
All other handheld –1.9 –1.0 –0.1

a

For the demand elasticity, EPA computed upper- and lower- bound estimates using the coefficient and standard error values associated with its econometric analysis and reflect a 95 percent confidence interval.
b For the supply elasticity, see Li, May 19, 2008, memorandum prepared for this Docket, “Supply Elasticity Estimation Report”, for the interval estimates.



### 9H.1.2 Engines and Equipment Market (Supply Elasticity Parameters)
The results of the EIM using these alternative supply elasticity values for the Small SI and Marine SI engine and equipment markets are reported in Tables 9H-2. As can be seen in the table, projected changes in market prices are stable across the upper- and lower-bound sensitivity scenarios. The relative change in price is around the primary case by 0.3 percent. Absolute

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### Economic Impact Analysis quantities vary but the percentage changes in output are negligible for the two scenarios. The change in total social surplus for 2014 also remains nearly unchanged across all scenarios and is approximately the same as for the rule ($444 million).
However, varying the supply elasticity changes the social impacts (how the burden is shared across markets). Manufacturers bear a smaller share of the social costs when they are more responsive to price changes (supply upper bound scenario). As shown for the Small SI market, engine and equipment manufacturers bear approximately 1.4 and 4.7 percent, respectively, in the supply upper bound scenario compared to 2.0 and 6.6 percent in the base case. In contrast, they bear a higher share of social cost when they are less responsive to price changes relative to the base case (the supply lower bound scenario). For the Marine SI market, engine and equipment manufacturers bear approximately 4.5 and 15.4 percent, respectively, in supply upper bound scenario compared to 6.2 and 17.5 percent in the base case. In contrast, they bear a higher share when they are less responsive to price changes relative to the base case (supply lower bound scenario).

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### Final Regulatory Impact Analysis Table 9H-2: Sensitivity Analysis for Engine and Equipment Market Supply Elasticities for 2013 a,b
Primary Case Supply Lower Bound Supply Upper Bound Scenario Absolute Relative b Absolute Relative b Absolute Relative b
Marine

Market-Level Impacts

Price

Engines $266.5 2.4% $249.3 2.2% $273.5 2.5% Equipment $285.4 1.6% $252.1 1.4% $307.0 1.7% Quantity

Engines -10,883 -2.7% -9,385 -2.3% -11,838 -2.9% Equipment -12,229 -3.2% -10,684 -2.8% -13,203 -3.5% Welfare Impacts (million $)

Change in engine manufacturers surplus $10.5 6.2% $17.4 10.2% $7.7 4.5% Change in equipment manufacturers $29.7 17.5% $34.1 20.0% $26.3 15.4% surplus Change in end user (households) surplus $130.0 76.4% $119.2 69.8% $136.0 80.0% Small SI

Market-Level Impacts

Price

Engines $13.7 8.3% $13.5 8.1% $13.8 8.3% Equipment $9.5 2.6% $8.9 2.4% $9.8 2.6%

Class I $16.6 6.2% $15.7 5.9% $16.9 6.3% Class II $23.7 2.6% $22.1 2.4% $24.5 2.7%
HH $0.3 0.2% $0.3 0.1% $0.4 0.2% Quantity

Engines –303.992 –1.9% –279,592 –1.7% –314,636 –1.9% Equipment –360.310 –1.4% –326,161 –1.2% –367,250 –1.4%

Class I –209,284 –2.1% –194,465 –2.0% –215,513 –2.2% Class II –101,104 –2.8% –92,979 –2.6% –104,638 –2.9%
HH –49,992 –0.3% –38,717 –0.2% –47,100 –0.3% Welfare Impacts (million $)

Change in engine manufacturers surplus $5.4 2.0% $9.31 3.4% $3.76 1.4% Change in equipment manufacturers $18.1 6.6% $30.4 11.1% $12.9 4.7% surplus Change in end user (households) surplus $250.2 91.4% $234.1 85.5% $256.9 93.9% Subtotal Social Costs (million $) $443.8 $444.4 $443.4 Fuel Savings (million $) $115.9 $115.9 $115.9 Total Social Costs (million $) $327.9 $328.6 $327.6

a Figures are in 2005 dollars.
b For “prices” rows the “relative” column refers to the re lative change in price (with regulation) from the baseline

price. For “Surplus” rows, the “relative” column cont ains the distribution of total surplus changes among stakeholders (consumers and producers).



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### Economic Impact Analysis 9H.1.3 Equipment Market (Demand Elasticity Parameters)
Sensitivity analysis was also conducted for the equipment market demand elasticities. The range of demand elasticity values evaluated for each market is provided in Table 9H-1. The demand elasticities for the engine markets are derived as part of the model, and therefore sensitivity analysis was not conducted on those parameters. 16 

### In other words, the change in the equipment market quantities determines the demand responsiveness in the engine market. As a result, the demand sensitivity analysis for engine markets is indirectly shown in Table 9H-2.

16 For a discussion of the concept of derived dema nd, see Section 9.2.3.2 Incorporating Multimarket Interactions.



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### Final Regulatory Impact Analysis

9-136 Table 9H-3: Sensitivity Analysis for Equi pment Market Demand Elasticities for 2013 a,b
Primary Case Demand Lower Bound Demand Upper Bound Scenario Absolute Relative b Absolute Relative b Absolute Relative b
Marine

Market-Level Impacts

Price

Engines $266.5 2.4% $290.5 2.7% $255.7 2.3% Equipment $285.4 1.6% $443.4 2.5% $211.2 1.2% Quantity

Engines -10,883 -2.7% –905 –0.2% –15,198 –3.7% Equipment -12,229 -3.2% –934 –0.2% –17,854 –4.7% Welfare Impacts (million $)

Change in engine manufacturers surplus $10.5 6.2% $0.9 0.5% $14.7 8.7% Change in equipment manufacturers surplus $29.7 17.5% $2.3 1.3% $42.8 25.4%

Change in end user (households) surplus $130.0 76.4% $170.4 98.2% $110.9 65.8% Small SI

Market-Level Impacts

Price

Engines $13.7 8.4% $14.0 8.4% $13.5 8.2% Equipment $9.5 2.6% $10.1 2.7% $9.0 2.5%

Class I $16.6 6.2% $17.2 6.4% $15.9 6.0% Class II $23.7 2.6% $25.1 2.7% $22.5 2.5%
HH $0.3 0.2% $0.3 0.2% $0.3 0.2% Quantity

Engines –303.992 –1.9% –99,098 –0.6% –486,671 –3.0% Equipment –360.310 –1.4% –146,272 –0.6% –558,525 –2.1%

Class I –209,284 –2.1% –66,388 –0.8% –340,554 –3.3% Class II –101,104 –2.8% –35,948 –1.9% –156,182 –3.6%
HH –49,992 –0.3% –43,939 –0.3% –61,788 –0.4% Welfare Impacts (million $)

Change in engine manufacturers surplus $5.4 2.0% $1.8 0.7% $8.4 3.1% Change in equipment manufacturers surplus $18.1 6.6% $6.2 2.3% $28.3 10.4%

Change in end user (households) surplus $250.2 91.4% $267.3 97.1% $235.4 86.5% Subtotal Social Costs (million $) $443.8 $448.8 $440.6 Fuel Savings (million $) $115.9 $115.9 $115.9 Total Social Costs (million $) $327.9 $333.0 $324.7

a Figures are in 2005 dollars.
b For “prices” rows the “relative” column refers to the re lative change in price (with regulation) from the baseline

price. For “Surplus” rows, the “relative” column cont ains the distribution of total surplus changes among stakeholders (consumers and producers).

### Economic Impact AnalysisAs shown in Tables 9H-3, market prices are relative stable across the upper- and lowerbound sensitivity scenarios. The relative change in price is around the primary case by 0.5 percent. Absolute quantities vary and the percentage changes in output are small for the two scenarios. There is also a small change in total social surplus for 2014 compared to the primary case ($444 million) but this is negligible in terms of the percentage change.
In comparing Table 9H-3 with Table 9H-2 , all quantitative estimates for the market impacts (price and quantity changes) by the EIM model are a little more sensitive to the alternative demand elasticities than the alternative supply elasticities. However, theses changes remain in a reasonable range when compared with the rule, across both the upper and lower bound demand elasticity scenarios for the equipment markets.
It should be noted, varying the demand elasticity changes the social impacts (how the burden is shared across markets) as in the case of changing the supply elasticity. Manufacturers bear a smaller share of the social costs when consumers are less responsive to price changes (demand lower bound scenario). As shown for the Small SI market, engine and equipment manufacturers bear approximately 0.7 and 2.3 percent, respectively, in the demand lower bound scenario compared to 2.0 and 6.6 percent in the base case. In contrast, they bear a higher share of social cost when consumers are more responsive to price changes relative to the base case (the demand upper bound scenario). For the Marine SI market, engine and equipment manufacturers bear approximately 0.5 and 1.3 percent, respectively, in demand lower bound scenario compared to 6.2 and 17.5 percent in the base case. In contrast, they bear a higher share when consumers are more responsive to price changes relative to the base case (demand upper bound scenario).

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### Final Regulatory Impact Analysis
9H.2 Alternative Baseline Prices for Lawn Mower & Tractor
As discussed in Section 9.3.2, the starting point for the economic impact analysis is initial market equilibrium conditions (prices and quantities) that exist prior to the implementation of new standards. At the pre-control market equilibrium conditions, consumers are willing to purchase the same amount of a product that producers are willing to produce at the market price. Since the lawn mower and tractor equipment are the most popular equipment in the Small SI market and their prices range widely, a sensitivity analysis was performed to examine how alternative baseline prices for lawn mower and tractor influence the EIM results.
Table 9H-4: Market Sensitivity Analysis for Alternative Baseline for Lawnmower & Tractor Prices in 2014 a

Scenario Average Baseline

Price Market Results Welfare Results

Change in

Price (Absolute) Change in Price

(%) Change in Quantity (Absolute) Change in Quantity (%) Change in End Users (Households) Surplus (Million $) Change in Equipment Manufacture r Surplus (Million $) Change in Total Surplus (Million $)

Lawn Mowers (UL 125) Primary $218 $12.07 5.5% –76,121 –1.1% –$87.0 –$1.7 –$88.7 scenario Low price $159 $12.03 7.6% –104,068 –1.4% –$86.5 –$1.7 –$88.2 scenario

Tractors (UL 250) Primary $1,937 $21.11 1.1% –23,690 –1.1% –$45.6 –$4.6 –$50.2 scenario Low price $928 $20.98 2.3% –49,134 –2.3% –$45.1 –$4.5 –$49.6 scenario

a Figures are in 2005 dollars.


### We selected the lower end market prices as the alternative baseline prices for lawn mower and tractor in this sensitivity analysis. As shown in Table 9H-4, when these pre-control baseline prices are allowed to vary, the absolute change in market prices remains nearly unchanged when compared with the rule, although the relative price change and absolute quantity change are expected to be higher in the alternative baseline price case. This is because the change in absolute price is ultimately determined by the per unit compliance cost and market supply and demand elasticities. In contrast, the change in relative price is determined by the ratio between the per-unit compliance cost and the baseline price. The lower the initial baseline price, the higher the ratio is for a given per unit compliance cost. Therefore, the change in the relative price is higher. In this market, consumers are expected to response to the higher relative price change by purchasing less equipment. As a result, the expected change for quantity is higher in the lower baseline prices case. Also as seen in Table 9H-4, varying the baseline prices are not expected to substantially change the social cost estimates in these markets or alter the distribution of the social costs across

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### Economic Impact Analysis the stakeholders.

9H.3 Alternative Gasoline Price for Social Costs
As discussed in 9.2.4.2, there are fuel savings attributed to the final emission control programs, reflecting the use of more fuel effi cient technology to meet evaporative and exhaust emission requirements. These fuel savings are included in the social cost analysis because they are savings that accrue to society.
For the social costs analysis, EPA calculated fuel savings using the 2005 pre-tax price of gasoline of $1.81 per gallon and this value is held constant for each future years (see section 9.3.5). Because of the recent trend of increasing gasoline prices, we may be understating the fuel savings in our cost analysis. This is reflected in recent fuel price projections from the EIA’s 2008 Annual Energy Outlook. 18 

### To investigate the sensitivity of the net social cost to future fuel prices, we used the AEO “reference case” and “high price case” scenarios, as described in section 6.7.1.
As indicated in Table 9H-5, comparing the AEO 2008 reference case with the primary case, the annual net social cost of the final standards is lower because of a higher fuel savings. The net present value of social cost decreases from $4.2 billion to $3.9 billion using a 3 percent discount rate. The net present value of social costs for the period of analysis falls from $2.7 billion to $2.6 billion using a 7 percent discount rate.
As shown in Table 9H-6, fuel savings are even higher in the AEO 2008 high price case. Based on these fuel price projections, the increased fuel savings estimates would actually be higher than the projected costs, once the new equipment is fully phased in. In comparison with the primary case, the net present value of social costs decreases from $4.2 billion to $2.0 billion using a 3 percent discount rate. Using a 7 percent discount rate, the net present value of social costs for the period of analysis falls from $2.7 billion to $1.6 billion

.

18 Energy Information Administration, “Annual Energy Outlook 2008; with Projections to 2030,” DOE/EIA-0383(2008), June 2008.



### 9-139

### Final Regulatory Impact Analysis Table 9.H-5: Sensitivity of Gasoline Price to Net Social Cost -AEO 2008 Reference Case

Year Total Engineering Costs Total Social Costs Fuel Savings

AEO 2008 Reference Case Projected Gasoline Price Net Social Costs

AEO 2008 Reference case Projected Gasoline Price Net Social Costs

2005 Constant Gasoline Price (Primary Analysis)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 $54 $127 $271 $329 $442 $445 $450 $412 $409 $398 $403 $408 $413 $418 $423 $428 $433 $438 $443 $449 $454 $459 $464 $469 $474 $479 $484 $489 $494 $499 $54 $5 $49 $51 $126 $11 $116 $118 $267 $24 $243 $248 $324 $52 $272 $280 $435 $80 $355 $365 $439 $105 $334 $344 $444 $126 $318 $328 $407 $140 $266 $273 $404 $153 $251 $253 $394 $168 $225 $229 $399 $184 $215 $221 $404 $204 $200 $213 $409 $221 $187 $207 $414 $228 $185 $203 $419 $241 $178 $198 $424 $251 $172 $194 $429 $259 $169 $191 $434 $269 $164 $189 $439 $278 $160 $188 $444 $287 $157 $187 $449 $297 $152 $186 $454 $306 $147 $185 $459 $314 $144 $186 $464 $319 $144 $186 $469 $324 $144 $187 $474 $329 $145 $188 $479 $333 $146 $189 $484 $337 $147 $190 $489 $341 $148 $192 $494 $345 $149 $193 NPV at 3% NPV at 7% $7,705 $4,559 $7,617 $3,743 $3,873 $4,242 $4,506 $1,956 $2,550 $2,731



### 9-140

### Economic Impact Analysis Table 9.H-6: Sensitivity of Gasoline Price to Net Social Cost - AEO 2008 Higher Case

Year Total Engineering Costs Total Social Costs Fuel Savings

AEO 2008 Higher Case

Projected Gasoline Price Net Social Costs

AEO 2008 Higher Case

Projected Gasoline Price Net Social Costs

2005 Constant Gasoline Price (Primary Analysis)

2008 $54 2009 $127 2010 $271 2011 $329 2012 $442 2013 $445 2014 $450 2015 $412 2016 $409 2017 $398 2018 $403 2019 $408 2020 $413 2021 $418 2022 $423 2023 $428 2024 $433 2025 $438 2026 $443 2027 $449 2028 $454 2029 $459 2030 $464 2031 $469 2032 $474 2033 $479 2034 $484 2035 $489 2036 $494 2037 $499 $54 $126 $267 $324 $435 $439 $444 $407 $404 $394 $399 $404 $409 $414 $419 $424 $429 $434 $439 $444 $449 $454 $459 $464 $469 $474 $479 $484 $489 $494 $5 $11 $27 $61 $100 $137 $169 $198 $226 $253 $277 $301 $325 $351 $371 $386 $402 $411 $423 $437 $450 $464 $479 $487 $494 $501 $507 $514 $520 $525 $49 $51 $115 $118 $240 $248 $263 $280 $336 $365 $302 $344 $274 $328 $209 $273 $179 $253 $141 $229 $122 $221 $102 $213 $84 $207 $63 $203 $47 $198 $37 $194 $27 $191 $23 $189 $16 $188 $7 $187 ($2) $186 ($11) $185 ($20) $186 ($23) $186 ($25) $187 ($27) $188 ($29) $189 ($30) $190 ($31) $192 ($32) $193 NPV at 3% $7,705 NPV at 7% $4,559 $7,617 $4,506 $5,585 $2,886 $2,032 $4,242 $1,620 $2,731



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### Final Regulatory Impact Analysis
9H.4 Discussion of Fuel Savi ngs Effects on EIA Analysis
The final evaporative and exhaust controls are expected to result in fuel savings for consumers due to the use of more fuel efficient technology to meet evaporative and exhaust emission requirements. Although these fuel savings represent a cost savings for consumers, our EIM model assumes that consumers do not consider these fuel savings in their purchasing decisions. As a result, the EIM model does not include a shift in the demand curve due to more fuel efficient products causing the demand curve in each small SI or marine SI equipment market to remain unchanged. This has been explained in Section 9.2.4.2. Although the fuel savings are not directly incorporated in the market model, the benefits to society are captured as an added line item to offset the total social costs of the program.
Figure 9H.1- (a) summarizes the EIA primary analysis that was presented earlier. The market equilibrium of a representative equipment market is at point A prior to the regulation (the baseline case). With the regulation, compliance costs lead to an upward shift in the market supply curve. The new market equilibrium is at point B (the primary case). In this case, the demand curve for the equipment remains unchanged; the regulatory program only influences the supply side of the market (e.g. additional costs of the program [S 0 

### to S 1 

### ]); and fuel savings are added as a line item to the social costs.
This section explores an alternative way to treat the fuel savings in the analysis by assuming consumers are fully aware of the fuel savings and realize that these improvements will lower the future cost of using equipment. Since many consumers may prefer more fuel efficient equipment, they may be willing to initially pay more for Small SI and Marine SI equipment because of these future operation savings. This leads to a change in demand and shifts the demand curve upward.
This concept may be described using illustrations of supply and demand curves. As indicated in Figure 9H.1-(b), if the fuel savings (lower costs of operating equipment) are incorporated in the model as a demand shift (D A 

### to D C 

### ) that ultimately raises the quantity that buyers wish to purchase at a higher market price. The new equilibrium that includes this demand shift is at point C (the alternative case). Incorporating this demand shift in the model would lead to the following effects:

• Equipment price and quantity : Including the demand shift due to fuel savings in the model will increase the projected price and quantity in the equipment market relative to the primary case. Consumers are willing to purchase more Small SI and Marine SI equipment at a higher price b ecause of fuel efficiency characteristics. Since the equipment has become more desirable, producers could sell these equipment at a higher price. In comparing with the primary case (P B 

### and Q B 

### ), the new market equilibrium price and quantity (P C 

### and Q C 

### ) in the alternative case are higher.

• Fuel Savings : At a given Q, consumers are willing to pay more for the equipment with fuel efficiency technology. The fu el savings are measured by difference in

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### Economic Impact Analysis consumer’s willingness to pay as indicated in the shaded area in Figure 9.H.1-(b)

• Social costs : Including the demand shift due to fuel savings will increase total social welfare as indicated in Figure 9.H.2. by the area GFBC. This is because consumers are willing to purchase more at a higher price and producers are charging more and selling more. Both consumer surplus and producer surplus are increased because the fuel efficient technology. The social cost is measured as the change in total social welfare and is now lower in the alternative case.

• Distribution of social costs : the primary case assumes all the fuel savings benefits are attributed to the consumer. In the alternative case, consumers and producers share these benefits since the demand shift leads to high equipment prices and higher sells. If producers are more responsive to equipment price changes than consumers (e.g. their supply elasticity is higher than the consumer’s demand elasticity), they may receive a higher share of the fuel savings benefits in the form of higher profits from equipment sales.
The likelihood of consumers considering fuel savings in their purchasing decisions is dependent on the magnitude of the fuel savings relative to their income. For the small handheld equipment and lawnmowers used for personal lawn maintenance, operation cost savings would likely have a small influence on equipment purchase decisions. In contrast, for operators of large recreational boats or lawnmowers used by lawn care businesses, the additional gasoline cost savings could influence purchase decisions. While the directional effects of these decisions are discussed above, EPA does not have the sufficient data and information to quantify these effects.

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### Final Regulatory Impact Analysis Figure 9.H.1: Demand Side Effect of Fuel Savings in the Equipment Market

Figure 9.H.2: Social Welfare Change

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### Small-Business Flexibility Analysis


# CHAPTER 10: Small-Business Flexibility Analysis

This chapter presents our Small Business Flexibility Analysis (SBFA) which evaluates the impacts of the rule on small businesses. Prior to issuing our proposed rule, we analyzed the potential impacts of our program on small businesses. As a part of this analysis, we convened a Small Business Advocacy Review Panel (SBAR Panel or ‘the Panel’), under the requirements of the Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996, 5 USC 601 et seq . Through the Panel process, we gathered advice and recommendations from small entity representatives (SERs) who would be affected by the regulation. The Panel issued a report recommending that EPA consider and seek comment on a wide range of regulatory alternatives to mitigate the impacts of the rulemaking on small businesses. The Panel report has been placed in the rulemaking record.
In the proposal, EPA proposed provisions consistent with each of the Panel’s recommendations and sought comments on all of the small business provisions. We received a number of comments during the comment period after we issued the proposal. A summary of all comments pertaining to the small business provisions can be found in our Summary and Analysis of Comments document contained in the public docket for this rulemaking. A list of the small business provisions being adopted with the final rule is presented in section 10.7 below.



## 10.1 Overview of the Regulatory Flexibility Act

In accordance with section 603 of the RFA, EPA prepared an initial regulatory flexibility analysis (IRFA) for the proposed rule and convened a Small Business Advocacy Review Panel to obtain advice and recommendations of representatives of the regulated small entities in accordance with section 609(b) of the RFA (see 72 FR 28098, May 18, 20007). A detailed discussion of the Panel's advice and recommendations is found in the Panel Report contained in the docket for this rulemaking. A summary of the Panel's recommendations is presented at (72 FR 28098).
Section 609(b) of the Regulatory Flexibility Act further directs the Panel to report on the comments of small entity representatives and make findings on issues related to identified elements of the IRFA under section 603 of the Re gulatory Flexibility Act. Key elements of an IRFA are:

- A description of and, where feasible, an estimate of the number of small entities to which the proposed rule will apply;

- Projected reporting, record keeping, and other compliance requirements of the proposed rule, including an estimate of the classes of small entities which will be subject to the requirements and the type of professional skills necessary for preparation of the report or record;

- An identification to the extent practicable, of all other relevant Federal rules which may

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### Final Regulatory Impact Analysis
duplicate, overlap, or conflict with the proposed rule;

- Any significant alternatives to the proposed rule which accomplish the stated objectives of applicable statutes and which minimize any significant economic impact of the proposed rule on small entities.
The Regulatory Flexibility Act was amended by SBREFA to ensure that concerns regarding small entities are adequately considered during the development of new regulations that affect those entities. Although we are not required by the Clean Air Act to provide special treatment to small businesses, the Regulatory Flexibility Act requires us to carefully consider the economic impacts that our rules will have on small entities. The recommendations made by the Panel may serve to help lessen these economic impacts on small entities when consistent with Clean Air Act requirements.
For purposes of assessing the impacts of this action on small entities, a small entity is defined as: (1) a small business as defined by the Small Business Administration's (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of smaller than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.
After considering the economic impacts of today's final rule on small entities, we believe that this action will not have a significant economic impact on a substantial number of small entities. The small entities directly regulated by this final rule cover a wide range of small businesses including engine manufacturers, equipment manufacturers, boat manufacturers, fuel tank manufacturers, and fuel hose manufacturers. No small governmental jurisdictions or small non-profits are impacted by this final rule. We have determined that 61 small businesses will experience an impact of greater than 1 percent. These 61 companies represent less than 5 percent of the small business identified by EPA.
Despite the determination that this rule will not have a significant economic impact on a substantial number of small entities, we have prepared a Small Business Flexibility Analysis that has all the components of a final regulatory flexibility analysis (FRFA). An FRFA examines the impact of the final rule on small businesses along with regulatory alternatives that could reduce that impact. The Small Business Flexibility Analysis is presented in this chapter.



## 10.2 Need for and Objective of the Rulemaking

A detailed discussion on the need for and objectives of this final rule are located in the preamble to the final rule. As presented in Chapter 8, controlling exhaust and evaporative emissions from Small SI engines and equipment and Marine SI engines and vessel has important public health and welfare benefits.
Section 213(a) of the CAA directs EPA to: (1) conduct a study of emissions from nonroad engines and vehicles; (2) determine whether emissions of CO, NOx, and VOCs from nonroad engines and vehicles are significant contri butors to ozone or CO in more than one area

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### Small-Business Flexibility Analysis
which has failed to attain the National Ambient Air Quality Standard (NAAQS) for ozone or CO; and (3) if nonroad emissions are determined to be significant, regulate those categories or classes of new nonroad engines and vehicles th at cause or contribute to such air pollution. Section 213(a)(3) states that the emission standards “shall achieve the greatest degree of emission reduction achievable through the app lication of technology” giving appropriate consideration to cost, noise, energy, safety, and lead time.
The Nonroad Engine and Vehicle Emissi on Study required by section 213(a)(1) was completed in November 1991. The determination of the significance of emissions from nonroad engines and vehicles in more than one NAAQS nonattainment area was published on June 17,1994. At the same time, the first set of regulations for new land-based nonroad compressionignition (CI) engines at or above 37 kW was pr omulgated. EPA has also issued proposed or final rules for most other categories of nonroad engines, including engines used in lawn and garden equipment, recreational marine vessels, forklifts, recreational vehicles, locomotives, and ships. In addition, EPA has revised the emission standards for many of these categories of nonroad engines one or more times to achieve further emission reductions.
In addition to the general authority to regulate nonroad engines under the CAA, section 428 of the Omnibus Appropriations Bill for 2004 requires EPA to propose and finalize new regulations for nonroad spark-ignition engines le ss than 50 horsepower (hp). The Bill directs EPA to propose regulations by December 1, 2004 and finalize them by December 31, 2005. EPA’s assessment of new standards is to be carried out under section 213 of the CAA.
Finally, section 205 of Public Law 109-54 included an additional requirement that EPA complete a technical study, to look at safety issues related to the potential standards called for under the Omnibus Appropriations Bill for 2004. The law directed EPA to complete the study prior to issuing the proposal called for in the Omnibus Appropriations Bill for 2004. In response to this requirement, EPA prepared a technical study on safety in coordination with the Consumer Product Safety Commission (CPSC). The study analyzes the incremental risk of fire and burn to consumers that could result from the new standards. EPA published the study in March 2006.
In response to these requirements, today’s action adopts controls on exhaust and evaporative emissions from Small SI engines a nd equipment and Marine SI engines and vessels.



## 10.3 Summary of Significant Public Comments

In the proposal, EPA proposed provisions consistent with each of the Panel's recommendations and sought comments on all of the small business provisions (see 72 FR 28245, May 18, 2007). As noted earlier, we received a number of comments during the comment period after we issued the proposal. A summary of all comments pertaining to the small business provisions can be found in our Summary and Analysis of Comments document contained in the public docket for this rulemaking. A few changes have been made to some of the proposed flexibilities in response to the comments as well as other changes made in the rulemaking. Those changes are noted in section 10.7.1 below.

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### Final Regulatory Impact Analysis



## 10.4 Definition and Description of Small Entities

Small entities include small businesses, small organizations, and small governmental jurisdictions. As noted earlier, for the purposes of assessing the impacts of a rule on small entities, a small entity is defined as: (1) a small business that meets the definition for business based on the Small Business Administration’s (SBA) size standards (see Table 10.4-1); (2) a small governmental jurisdiction that is a governme nt of a city, county, town, school district orspecial district with a population of less than 50,000; and (3) a small organization that is any notfor-profit enterprise which is independently owned and operated and is not dominant in its field. Table 10.4-1 provides an overview of the primary SBA small business categories that will be affected by this regulation.
Table 10.4-1: Small Business Definitions for Entities Affected by this Rule Industry NAICS Codes a 

### Defined as small entity by SBA if less than or equal to: b 

### Nonroad SI Engine Manufacturers 333618 1,000 employees Equipment Manufacturers: Farm Machinery Lawn and Garden Construction Sawmill and Woodworking Pumps Air and Gas Compressors Generators 333111 333112 333120 333210 333911 333912 335312 500 employees 500 employees 750 employees 500 employees 500 employees 500 employees 1,000 employees Boat Builders 336612 500 employees Fuel Tank Manufacturers: Other Plastic Products Metal Stamping Metal Tank (Heavy Gauge) 326199 332116 332420 500 employees 500 employees 500 employees Fuel Hose Manufacturers: Rubber and Plastics Hoses 326220 500 employees

a 

### North American Industry Classification System
b 

### As defined in SBA’s regulations at 13 CFR part 121.

10.4.1 Small SI Engines and Equipment
For Small SI engines and equipment, the SBA small business size standards are 1,000 employees for engine manufacturers, 1,000 employees for generator manufacturers, 750 employees for construction equipment manufacturers, and 500 employees for manufacturers of other types of equipment. To identify companies that meet these criteria, we compiled a list of engine manufacturers and equipment manufacturers using information from a database prepared by Power Systems Research (PSR) that contains data on Small SI engines and equipment sold in the United States. EPA augmented this information with the list of engine manufacturers

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### Small-Business Flexibility Analysis
currently certifying with EPA under the Small SI engine regulations. We then found employment data for each company (or parent company if an individual company is part of a larger group) using databases such as the Thomas Register and Dunn and Bradstreet.
The SBA small business size standard for manufacturers that produce fuel tanks or fuel hose is 500 employees. To identify companies that meet this criterion, we compiled a list of manufacturers that produce fuel tanks and fuel hoses for the Small SI equipment market. The list was based on information from the California Air Resources Board, who has recently adopted requirements for Small SI engine fuel tank and fuel hose manufacturers, and additional information from Small SI equipment manufacturers and the Association of Rotational Molders International. We then found employment data for each of the companies (or parent company if an individual company is part of a larger group) using databases such as Thomas Register and onesourceexpress.com and discussions with some of the manufacturers.

10.4.2 Marine SI Engines and Vessels
For Marine SI engines and vessels, the SBA small business size standards are 1,000 employees for engine manufacturers and 500 employees for boat builders. To identify companies that meet these criteria, we used a number of different sources. For engine manufacturers, we compiled a list based on the engine manufacturers currently certifying with EPA and the California Air Resources Board (CARB) under the existing Marine SI engine regulations and augmented the list with additional information on SD/I manufacturers, who do not currently have to certify with EPA. We gathered additional information from boat shows, the Internet, trade magazines, the National Marine Manufacturers Association (NMMA), and discussions with individual manufacturers. For vessel manufacturers, we used information from a database of boat builders maintained by the U.S. Coast Guard.
The SBA small business size standard for manufacturers that produce fuel tanks or fuel hose is 500 employees. For fuel tank and fuel hose manufacturers, we compiled a list based on information gathered from the NMMA, trade shows, the Internet and discussions with manufacturers. We then found employment data for these companies (or parent company if an individual company is part of a larger group) using databases such as Thomas Register and discussions with trade groups and individual manufacturers.



## 10.5 Type and Numbers of Small Entities Affected

As noted above, for each sector impacted by this final rule, SBA defines small entities by number of employees. This section gives an overview of the Small SI engine and equipment industries and the Marine SI engine and vessel industries, specifically related to small businesses.

10.5.1 Small SI Engines and Equipment

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### Final Regulatory Impact Analysis

Based on EPA certification records, the Small SI nonhandheld engine industry is made up primarily of large manufacturers including Briggs and Stratton, Tecumseh, Honda, Kohler and Kawasaki. The Small SI handheld engine industry is also made up primarily of large manufacturers including Electrolux Home Products, MTD, Homelite, Stihl and Husqvarna. EPA has identified 10 Small SI engine manufacturers that qualify as a small business under SBA definitions. Half of these small manufacturers certify gasoline engines and the other half certify liquefied petroleum gas (LPG) engines.
The Small SI equipment market is dominated by a few large businesses including Toro, John Deere, MTD, Briggs and Stratton, and Electrolux Home Products. While the Small SI equipment market may be dominated by just a handful of companies, there are many small businesses in the market; however these small businesses account for less than 10 percent of equipment sales. We have identified over three hundred equipment manufacturers that qualify as a small business under the SBA definitions. More than 90 percent of these small companies manufacture less than 5,000 pieces of equipment per year. The median employment level is 65 employees for nonhandheld equipment manufacturers and 200 employees for handheld equipment manufacturers. The median sales revenue is approximately $9 million for nonhandheld equipment manufacturers and $20 million for handheld equipment manufacturers.
EPA has identified 25 manufacturers that produce fuel tanks for the Small SI equipment market that meet the SBA definition of a small business. Fuel tank manufacturers rely on three different processes for manufacturing plastic tanks – rotational molding, blow molding and injection molding. EPA has identified small business fuel tank manufacturers using the rotational molding and blow molding processes but has not identified any small business manufacturers using injection molding. In addition, EPA has identified two manufacturers that produce fuel hose for the Small SI equipment market that meet the SBA definition of a small business. The majority of fuel hose in the Small SI market is made by large manufacturers including Avon Automotive and Dana Corporation.

10.5.2 Marine SI Engines and Vessels
Based on EPA certification records, the OB/PWC market is made up primarily of large manufacturers including, Brunswick (Mercury), Bombardier Recreational Products, Yamaha, Honda, Kawasaki, Polaris, Briggs & Stratton, and Nissan. Two companies qualify as a small business under the SBA definitions. Tohatsu makes outboard engines. The other small business is Surfango which makes a small number of motorized surfboards and has certified their product as a PWC.
The SD/I market is made up mostly of small businesses; however, these businesses account for less than 20 percent of engine sales. Two large manufacturers, Brunswick (Mercruiser) and Volvo Penta, dominate the market. We have identified 28 small entities manufacturing SD/I marine engines. The third largest company is Indmar, which qualifies as a small business based on the SBA threshold of 1,000 employees. Based on sales estimates, number of employees reported by Thomas Register , and typical engine prices, we estimate that

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### Small-Business Flexibility Analysis
the average revenue for the larger small SD/I manufacturers is about $50-60 million per year. However, the vast majority of the SD/I engine manufacturers produce low production volumes of engines and typically have less than 50 employees.
The two largest boat building companies are Brunswick and Genmar. Brunswick owns approximately 25 boat companies and Genmar owns approximately 12 boat companies. Based on a manufacturer list maintained by the U.S. Coast Guard, there are over 1,600 boat builders in the United States. We estimate that, based on manufacturer identification codes, more than 1,000 of these companies produce boats using gasoline marine engines. According to the National Marine Manufacturers Association (NMMA ), most of these boat builders are small businesses. These small businesses range from individuals building one boat per year to businesses near the SBA small business threshold of 500 employees.
We have identified 14 marine fuel tank manufacturers in the United States that qualify as small businesses under the SBA definition. These manufacturers include five rotational molders, two blow molders, six aluminum fuel tank manufacturers, and one specialty fuel tank manufacturer. The small rotational molders average less than 50 employees while the small blow-molders average over 100 employees.
We have only identified one small hose manufacturer that produces for the Marine SI market. Novaflex primarily distributes hoses made by other manufacturers, but does produce its own fill neck hose. Because we expect vessel manufacturers will design their fuel systems such that there will not be standing liquid fuel in the fill neck (and therefore the low permeation fuel hose requirements will not apply to the fill neck), we have not included this manufacturer in our analysis. The majority of fuel hose in the Marine SI market is made by large manufacturers including Goodyear and Parker-Hannifin.



## 10.6 Reporting, Recordkeeping, and Compliance Requirements

For any emission control program, EPA must have assurances that the regulated products will meet the standards. Historically, EPA programs for Small SI engines and Marine SI engines have included provisions placing engine manufacturers responsible for providing these assurances. The program that EPA is adopting for manufacturers subject to this final rule will include testing, reporting, and record keepi ng requirements for manufacturers of engines, equipment, and vessels, and will also include fuel system component manufacturers if they choose to certify their fuel tank, fuel hose, and fuel cap products.
For Small SI engine manufacturers and OB/PWC engine manufacturers, EPA is generally continuing the same reporting, record keeping, and compliance requirements prescribed in the current regulations. For SD/I engine manufactur ers, which are not currently subject to EPA regulation, EPA is planning to apply similar reporting, record keeping, and compliance requirements to those for OB/PWC engine manufacturers. Testing requirements for engine manufacturers will include certification emission (including deterioration factor) testing and production line testing. Reporting requirements will include emission test data and technical data on the engines. Manufacturers will also need to keep records of this information.

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### Final Regulatory Impact Analysis
Because of the new evaporative emission requirements, there will be new reporting, record keeping and compliance requirements for Small SI equipment manufacturers. Small SI equipment manufacturers participating in the transition program will also be subject to reporting, record keeping and compliance requirements. Depending on who chooses to certify fuel system components, there may also be new reporting, record keeping and compliance requirements for fuel tank manufacturers, fuel hose manufacturers, fuel cap manufacturers, and marine vessel manufacturers. Testing requirements for these manufacturers will include certification emission testing. Reporting requirements will include emissi on test data and technical data on the designs. Manufacturers will also need to keep records of this information.



## 10.7 Steps Taken to Minimize the Impact on Small Entities

The Panel developed a wide range of regulatory alternatives to mitigate the impacts of the rulemaking on small businesses, and recommended that we propose and seek comment on the flexibilities. The Panel’s findings and discussions were based on the information that was available during the term of the Panel and issues that were raised by the SERs during the outreach meetings and in their written comments. It was agreed that EPA should consider the issues raised by the SERs (and issues raised in the course of the Panel) and that EPA should consider the comments on flexibility alternatives that would help to mitigate any negative impacts on small businesses. Alternatives discussed throughout the Panel process included those offered in the development of the upcoming rule. Though some of the recommended flexibilities may be appropriate to apply to all entities affected by the rulemaking, the Panel’s discussions and recommendations were focused mainly on the impacts, and ways to mitigate adverse impacts, on small businesses. A summary of the Panel’s recommendations can be found in the SBREFA Final Panel Report. 1



### A list of the small business provisions being adopted with the final rule are presented in the following section.

10.7.1 Small SI Exhaust Emission Standards
Described below are the regulatory alternatives being adopted with the final rule related to the Small SI nonhandheld engine exhaust emission standards.

10.7.1.1 Regulatory Flexibility Options for Nonhandheld Engine Manufacturers
The following section contains a discussion of the provisions in the final rule for small business nonhandheld engine manufacturers.
Additional Lead Time for Nonhandheld Engine Manufacturers - Small-volume engine manufacturers can delay implementation of the Phase 3 exhaust emission standards for two years (see §1045.145). Small-volume engine manufacturers will be required to comply with the Phase 3 exhaust emission standards beginning in model year 2014 for Class I engines and model year 2013 for Class II engines. Under this approach, small-volume engine manufacturers can apply this delay to all their nonhandheld engines or to just a portion of their production. They could

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### Small-Business Flexibility Analysis
therefore sell engines that meet the Phase 3 standards on some product lines while delaying introduction of emission control technology on more challenging product lines. This option provides more time for small-volume engine manufacturers to redesign their products. They would also be able to learn from some of the hurdles overcome by larger manufacturers.
Assigned Deterioration Factors - Small-volume engine manufacturers will be able to rely on an assigned deterioration factor to demonstrate compliance with the standards rather than doing service accumulation and additional testing to measure deteriorated emission levels at the end of the regulatory useful life (see §1054.240). EPA is not adopting actual levels for the assigned deterioration factors with this final rule. EPA intends to analyze emissions deterioration information that becomes available over the next few years to determine what deterioration factors would be appropriate fo r nonhandheld engines. This data is likely to include deterioration data for engines certified to comply with CARB’s Tier 3 standards and engines certified early to EPA’s Phase 3 standards. Prior to the implementation date for the Phase 3 standards, EPA expects to provide guidance to engine manufacturers specifying the levels of the assigned deterioration factors for small-volume engine manufacturers.
Production Line Testing Exemption - Small-volume engine manufacturers will be exempt from the production-line testing requirements for all of their nonhandheld engine families (see §1054.301).
Broader Definition of Engine Family - Small-volume engine manufacturers may use a broader definition of engine family than generally applies for certification purposes. Under the existing engine family criteria specified in the regulations, manufacturers group their various engine lines into engine families that have similar design characteristics including the combustion cycle, cooling system, cylinder conf iguration, number of cylinders, engine class, valve location, fuel type, aftertreatment design, a nd useful life category. With this final rule, we are allowing small-volume engine manufacturers to group all of their nonhandheld engines into a single engine family for certification by engine class and useful life category, subject to good engineering judgment (see §1054.230).
Eligibility for the Small Business Flexibilities - We are retaining the current criteria (i.e., 10,000 units per year of nonhandheld engines) for determining who is a small-volume engine manufacturer and, as a result, eligible for the Phase 3 flexibilities described above (see §1054.801). Based on confidential sales data provided to EPA by engine manufacturers, the 10,000 unit cut-off for engine manufacturers would include all of the small business engine manufacturers using SBA’s employee-based definition. However to ensure all small businesses that meet SBA’s employee-based definition have access to the flexibilities described above, EPA is also allowing engine manufacturers which exceed the production cut-off level of 10,000 units but have fewer than 1,000 employees, to request treatment as a small volume engine manufacturer (see §1054.635). In such a case, the manufacturer would need to provide information to EPA demonstrating that the manufacturer has fewer employees than the 1,000 cut-off level established by SBA.

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### Final Regulatory Impact Analysis

10.7.1.2 Regulatory Flexibility Options for Nonhandheld Equipment Manufacturers
The following section contains a discussion of the provisions in the final rule for small business nonhandheld equipment manufacturers.
Additional Lead Time for Small SI Equipment Manufacturers - Small-volume equipment manufacturers will have two extra years beyond the implementation dates for the Phase 3 standards to continue using Phase 2 engines in their Class II equipment. Alternatively, the manufacturer can use Phase 3 engines without the catalysts, provided the engine manufacturer submitted data at the time of certif ication showing that the engine without the catalyst complied with EPA’s Phase 2 standards. As described in Section V.E.3 of the preamble, EPA is adopting a flexibility program for all equipment manufacturers that produce Class II equipment. Under that program, equipment manufacturers can install Phase 2 engines in limited numbers of Class II equipment over the first four years the Phase 3 standards apply (i.e., 2011 through 2015). The number of equipment that can use Phase 2 engines is based on 30 percent of an average annual production level of Class II equipment. In an effort to provide additional flexibility to small-volume equipment manufacturers within the context of the flexibility program, EPA is adopting provision that allow small-volume equipment manufacturers to use Phase 2 engines at a level of 200 percent of an average annual production level of Class II equipment over the four year period (see §1054.625). Therefore, a small-volume equipment manufacturer can potentially use Phase 2 engines on all their Class II equipment for two years (consistent with the SBAR Panel’s recommendation) or they may, for example, sell half their Class II equipment with Phase 2 engines for four years.
Simplified Engine Certification for Equipment Manufacturers - We are adopting a simplified engine certification procedure for small-volume equipment manufacturers. (As discussed in Section V.E.4 of the preamble, we are also adopting this provision for other manufacturers, regardless of the company’s size.) Generally, it has been engine manufacturers who certify with EPA for the exhaust emission standards because the standards are engine-based standards. However, because the Phase 3 standards under consideration are expected to result inthe use of catalysts, a number of equipment manufacturers, especially those that make lowvolume models, believe it may be necessary to certify their own unique engine/muffler designs with EPA, but using the same catalyst substrate already used in a muffler certified by the engine manufacturer. In order to allow the possibility of an equipment manufacturer certifying an engine/muffler design with EPA, we are adopti ng a simplified engine certification process for small-volume equipment manufacturers (see §1054.612). Under such a simplified certification process, the equipment manufacturer will need to demonstrate that it is using the same catalyst substrate as the approved engine manufacturer’s family, provide information on the differences between their engine/exhaust system and the engine/exhaust system certified by the engine manufacturer, and explain why the emissions deterioration data generated by the engine manufacturer is representative for the equipment manufacturer’s configuration.
Eligibility for the Small Business Flexibilities - EPA is retaining the current criteria (i.e., 5,000 units per year of nonhandheld equipment) for determining who is a small-volume equipment manufacturer and, as a result, eligible for the Phase 3 flexibilities described above

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### Small-Business Flexibility Analysis
(see §1054.801). Based on sales data, the 5,000 unit cut-off for equipment manufacturers wouldinclude the vast majority of the small business equipment manufacturers using SBA’s employeebased definition. However to ensure all small businesses that meet SBA’s employee-based definition have access to the flexibilities described above, EPA will also allow equipment manufacturers which exceed the production cut-off level noted above but have fewer employees than the SBA definition of small business (i.e., 500 employees for manufacturers of most types of equipment), to request treatment as a small-volume equipment manufacturer (see §1054.635). In such a case, the manufacturer will need to provide information to EPA demonstrating that the manufacturer has fewer employees than the applicable employee cut-off level established by SBA.

10.7.2 Marine SI Exhaust Emission Standards—Regulatory Flexibility Options for SD/I Engine Manufacturers
Described below are the regulatory alternatives being adopted with the final rule related to the SD/I engine exhaust emission standards.
Additional Lead Time for SD/I Engine Manufacturers - We are adopting an implementation date of 2011 for 

### # 373 kW SD/I engines produced by small business marine engine manufacturers and a date of 2013 for sm all business manufacturers of high-performance (>373 kW) marine engines (see §1045.145). These dates provide 1 year of additional leadtime for small businesses producing 

### # 373 kW SD/I engines and 3 years of additional leadtime for small businesse producing >373 kW SD/I engines compared the implementation dates for large manufacturers.

Exhaust Emission ABT - We are adopting an averaging, banking, and trading (ABT) credit program for exhaust emissions from 

### # 373 kW SD/I marine engines (see part 1045, subpart H). Under the proposal, the ABT program would have applied to >373 kW SD/I engines as well. However, as described in section 3.4 of the Summary and Analysis of Comments document for the Final Rule, we are adopting different standards for high performance SD/I engines than originally proposed. High performance (>373 kW) SD/I engines are required to meet the new standards without the use of an ABT program.
Early Credit Generation for ABT - We are adopting an early banking program in which bonus credits can be earned for certifying early (see §1045.145). This program, combined with the additional lead time for small businesses noted above, give small-volume manufacturers of SD/I engines 

### # 373 kW ample opportunity to bank emission credits prior to the implementation date of the standards and provide greater incentive for more small business engine manufacturers to introduce advanced technology earlier than would otherwise occur. Because the ABT program being adopted with the final rule only applies to SD/I engines 

### # 373 kW, the early credit provisions will not apply to high-performance (>373 kW) SD/I engines.
Assigned Emission Rates for High Performance (>373 kW) SD/I Engines - In the proposal, we noted that in the case where an engine manufacturer is using emission credits to comply with the standard, the manufacturer will still need to test engines to calculate how many

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### Final Regulatory Impact Analysis
emission credits are needed. In order to minimize this testing burden, we proposed to allow manufacturers to use assigned baseline emission rates for certification based on previously generated emission data. As discussed in section 3.4 of the Summary and Analysis of Comments document for the Final Rule, we are adopting less stringent standards for high-performance (>373 kW) SD/I engines that do not allow for the use of the ABT program for demonstrating compliance with the standards. Therefore, we are not adopting baseline HC+NOx and CO emission rates for high-performance SD/I engines since the proposed levels were higher than the standards being adopted and therefore, are of no use without an ABT program.
Alternative Standards for High Performance (>373 kW) SD/I Engines - In the proposal, EPA cited concerns raised by small businesses that catalysts had not been demonstrated on high-performance engines and that they may not be practicable for this application and therefore requested comments on the need for and level of alternative standards for high-performance marine engines. As described in section 3.4 of the Summary and Analysis of Comments document for the Final Rule, we are adopting a less stringent set of exhaust emission standards for high performance (>373 kW) SD/I engines than originally proposed. These standards are not expected to result in the use of catalysts on high performance (>373 kW) SD/I engines.
Furthermore, we are not adopting NTE standa rds for high-performance SD/I engines (See §1045.105). This is consistent with the SBAR Panel recommendation that NTE standards not apply to any high-performance SD/I engines.
Broad Engine Families for High Performance (>373 kW) SD/I Engines - Typically in EPA engine and equipment programs, manufacturers are able to group their engine lines into engine families for certification to the standards. Engines in a given family must have many similar characteristics including the combustion cycle, cooling system, fuel system, air aspiration, fuel type, aftertreatment design, num ber of cylinders and cylinder bore sizes. A manufacturer would then only perform emission tests on the engine in that family that would be most likely to exceed an emission standard. We are adopting provisions that allow small businesses to group all of their high performance (>373 kW) SD/I engines into a single engine family for certification, subject to good e ngineering judgment (see §1045.230). A manufacturer will need to perform emission tests only on the engine design that will be most likely to exceed the emission standard.
Simplified Test Procedures for High Performance (>373 kW) SD/I Engines - Existing testing requirements include detailed specifications for the calibration and maintenance of testing equipment and tolerances for performing the actual tests. For high performance (>373 kW) SD/I engines, it may be difficult to hold the engine at idle or high power within the tolerances currently specified by EPA in the test procedures. Therefore, we are adopting less restrictive specifications and tolerances, for small businesses testing high performance (>373 kW) SD/I engines, which would allow the use of portable emission measurement equipment (see §1065.901(b)). This will facilitate less expensive testing for these small businesses without having a negative effect on the environment.

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### Small-Business Flexibility Analysis
Reduced Testing Requirements for SD/I Engine Manufacturers - We are adopting provisions to allow small-volume engine manufactur ers to use an assigned deterioration factor to demonstrate compliance with the standards for the purposes of certification rather than doing service accumulation and additional testing to measure deteriorated emission levels at the end of the regulatory useful life (see §1045.240). EPA is not specifying actual levels for the assigned deterioration factors in this final rule. EPA intends to analyze available emission deterioration information to determine appropriate deterioration factors for SD/I engines. The data will likely include durability information from engines certified to California ARB's standards and may also include engines certified early to EPA's standards. Prior to the implementation date for the SD/I standards, EPA will provide guidance to engine manufacturers specifying the levels of the assigned deterioration factors for small-volume engine manufacturers.
We proposed to exempt small-volume manufacturers of SD/I engines from the production -line testing requirements. As noted in section 3.10 of the Summary and Analysis of Comments document for the Final Rule, we are dropping the production-line testing requirements for all engine manufacturers including large manufacturers. Therefore, no production-line testing will be required of any SD/I engine manufacturer (see §1045.301).
Eligibility for the Small Business Flexibilities - For purposes of determining which engine manufacturers are eligible for the small business flexibilities described above for SD/I engine manufacturers, we are adopting criteria based on the number of employees. SD/I engine manufacturers that have no more than 250 employees will be considered a small business for the purposes of the flexibilities being adopted with the final rule. We originally proposed criteria based on a production cut-off of 5,000 SD/I engine s per year. However, engine manufacturers commented that it was more appropriate to use an employee level than a production level for defining which companies are small businesses. We believe a 250 employee limit should be roughly consistent with the production level we targeted in our proposal, although some manufacturers would likely be able to produce more than 5,000 units. Under the small-volume engine manufacturer definition being adopted for the final rule, there will be no option to consider the production volume instead of the 250 employee count.

10.7.3 Small SI and Marine SI Evaporative Em ission Standards— Flexibility Alternatives for Equipment, Vessel, and Fuel Tank Manufacturers
Described below are the regulatory alternatives being adopted with the final rule related to the evaporative emission standards for Small SI engines and equipment and Marine SI engines and vessels. The provisions discussed below applied to Small SI equipment and to SD/I marine vessels, except where noted. Because the majority of fuel tanks produced for the Small SI equipment and the SD/I marine vessel market are made by small businesses, the flexibility provisions being adopted for fuel tank manuf acturers apply regardless of whether the manufacturer was a small business or not.
Consideration of Appropriate Lead Time - We are adopting an implementation schedule that we believe provides sufficient lead time for blow-molded and marine rotational molded fuel tanks. For Small SI equipment, we are establishing tank permeation implementation dates of

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### Final Regulatory Impact Analysis
2011 for Class II equipment and 2012 for Class I equipment. For marine fuel tanks, we are implementing the tank permeation standards in 2011 with an additional year (2012) for installed fuel tanks which are typically rotational-molded marine fuel tanks (see §1054.110 and §1045.107).
With regard to the diurnal requirements for marine vessels, we are providing an additional year of lead time, compared to the proposal. This means that the diurnal standard willll apply beginning with the 2011 model year. In addition, we are adopting an interim allowance program that will give additional time for a limited number of boats. Under this program, each boat builder will be allowed to sell these boats without the diurnal emission controls that would otherwise be required. Specifically, each boat builder will have a total of 1,200 allowances that may be used, at the manufacturer's discretion, for boats produced before December 31, 2012. These allowances are intended to help boat builders engage in an orderly transition to the new standards and will only be available for boats produced in 2011 and 2012. This allowance program applies only to boats with installed fuel tanks that are expected to use carbon canisters to meet the diurnal emission standards. Therefore, it does not apply to portable fuel tanks or personal watercraft. This provision will apply to both small and large businesses because we believe that even large businesses may have specific, small-volume models where additional lead time may be especially helpful due to atypical design constraints. For very small companies, we expect that this allowance program will result in an additional year, or even two, of lead time for them to address potential installation issues related to carbon canisters.
Fuel Tank ABT and Early Incentive Program - We are adopting an ABT program for fuel tank permeation and an early-allowance program for fuel tank permeation. In the proposal, we requested comment on including service tanks in the ABT program. (Service tanks are fuel tanks sold as replacement parts for in-use equipment.) Based on comments received, we do not believe it is appropriate to include such tanks in the ABT program. Equipment manufacturers will be required to demonstrate that their equipment models meet the evaporative emission standards. If the certified equipment uses a fuel tank included in the ABT program, the credits generated were based on a useful life of five year s. Therefore, if the tank being replaced is less than five years old, the replacement tank would result in double counting of some of the credits. While manufacturers could potentially gather information to account for the age of the fuel tank being replaced, we do not want to complicate th e provisions of the ABT program and therefore we are not including replacement tanks in the fuel tank ABT program.
Broad Definition of Evaporative Emission Family for Fuel Tanks - We are adopting provisions that allow fuel tank emission families to be based on type of material (including additives such as pigments, plasticizers, and UV inhibitors), emission control strategy, and production methods. This would allow fuel tanks of different sizes, shapes, and wall thicknesses can be grouped into the same emission family (see §1045.230 and §1054.230). In addition, Small SI and Marine SI fuel tanks could be allowed in the same emission family if the tanks meet these criteria. Manufacturers therefore will be able to broadly group similar fuel tanks into the same emission family and then only test the configuration most likely to exceed the emission standard.

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### Small-Business Flexibility Analysis
Compliance Progress Review for Marine Fuel Tanks - We believe the 2012 fuel permeation standards are technologically feasible for rotationally-molded marine fuel tanks. This conclusion is supported by data presented in the Regulatory Impact Analysis. In addition, several rotationally-molded tank manufacturers support EPA's proposed standards and implementation dates and have provided information to support their positions. However, several other rotationally-molded tank manufacturers are not as far along in their technological progress toward meeting the standards and are not certain about their ability meet the EPA requirements in 2012. To address this situation, these manufactures requested that EPA perform a technical review in 2010 to determine whether the compliance dates should be adjusted. However, for the reasons discussed above, we believe that the tank permeation standards have been demonstrated to be technologically feasible in the 2012 time frame and do not look favorably upon the request for a technology review of the permeation standard.
Nevertheless, we are concerned about the potential long-term impacts on the small businesses that have not yet developed technology that meets the requirements. During the next few years, EPA intends to hold periodic progress reviews with small businesses that rotationally mold fuel tanks. The purpose of these progress reviews will be to monitor the progress of individual companies towards compliance with the tank permeation standards and to provide feedback as needed. Rather than conducting a broad program with the entire industry, we will conduct separate, voluntary reviews with each interested company. These sessions will be instrumental to EPA in following the progress for these companies and assessing their efforts and potential problems.
To help address small business concerns, we expect we would rely on the small volume manufacturer hardship relief provisions cont ained in 40 CFR 1068.250, and described in the following section. In the event that a small business is unsuccessful in the 2012 model year and seeks hardship relief, the progress reviews described above would provide an important foundation in determining whether a manufacturer has taken all steps to comply with the permeation standards in a timely and orderly manner.
Design-Based Certification - We are adopting design-based certification for carbon canisters for boats. For the carbon canisters, the design requirement call for a ratio of carbon volume (liters) to fuel tank capacity (gallons) of 0.04 liter/gallon for boats less than 26 feet in length, and 0.016 liter/gallon for larger boats. We are also adopting design-based certification for certain fuel tanks. For fuel tanks, we will allow design-based certification for metal tanks as well as plastic fuel tanks with a continuous EVOH barrier.
The National Marine Manufacturers Association (NMMA) the American Boat and Yacht Council (ABYC) and the Society of Automotive Engineers (SAE) have industry recommended practices for boat designs that must be met as a condition of NMMA membership. We will allow this data to be used as part of EPA certification as long as it is collected consistent with the test procedures and other requirements described in this final rule.
Additional Lead Time for Small SI Fuel Hose Requirement - We proposed an implementation date of 2008 for Small SI hose permeation standards for non-handheld

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### Final Regulatory Impact Analysis
equipment (see §90.127). Given that we are not adopting the final rule until mid-2008, we have delayed the implementation of the low permeation fuel line requirement until 2009 for nonhandheld equipment. However, we are keeping the 2009 implementation date for low-permeation fuel line for small businesses producing Small SI nonhandheld equipment. We believe the 2009 date is feasible for all equipment manufacturers, given that fuel line meeting the low permeation standards is already widely av ailable and manufacturers selling most types of nonhandheld equipment in California were required to use such hose starting in 2007 or 2008.

10.7.4 Hardship Provisions—Regulatory Fl exibility Options for Engine, Equipment, Vessel, and Fuel System Component Manufacturers
The following section summarizes the hardship provisions we are adopting which would be available to engine manufacturers, equipm ent manufacturers, vessel manufacturers, and fuel system component manufacturers (i.e., fuel ta nk, fuel hose, and fuel cap manufacturers).
Unusual Circumstances Hardship - Under the unusual circumstances hardship provision, manufacturers can apply for hardship re lief if circumstances outside their control cause the failure to comply and if failure to sell the subject engines or equipment will jeopardize the company’s solvency (see §1068.245). The terms and time frame of the relief will depend on the specific circumstances of the company and the situation involved. As part of its application for hardship, a company will be required to provide a compliance plan detailing when and how it will achieve compliance with the standards. Th is hardship provision will be available to all business engine manufacturers, equipment manufacturers, vessel manufacturers, and fuel system component manufacturers, regardless of size.
Economic Hardship - Under the economic hardship provision, small business manufacturers can petition EPA for limited additional lead time to comply with the standards (see §1068.250). A manufacturer will have to make the case that it has taken all possible business, technical, and economic steps to comply, but the burden of compliance costs will have a significant impact on the company’s solvency. Hardship relief may include requirements for interim emission reductions and/or purchase and use of emission credits. The length of the hardship relief will be established during the in itial review and will likely need to be reviewed annually thereafter. As part of its application for hardship, a company will be required to provide a compliance plan detailing when and how it will achieve compliance with the standards. This hardship provision will be available only to engine manufacturers, equipment manufacturers, vessel manufacturers, and fuel sy stem component manufacturers that are small businesses.



## 10.8 Projected Economic Effects of the Rulemaking

The following section summarizes the economic impact on small businesses of the new exhaust and evaporative emission standards for both Small SI engines and equipment and Marine SI engines and vessels. As noted earlier, the types of companies that will be affected by the new Marine SI standards include OB/PWC engine manufacturers, SD/I engine manufacturers, boat builders, and marine fuel system component manufacturers (e.g., fuel tank and fuel hose

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### Small-Business Flexibility Analysis
manufacturers). Similarly, the types of companies that will be affected by the Small SI standards include nonhandheld engine manufacturers, equipment manufacturers, and Small SI fuel system component manufacturers (e.g., fuel tank and fuel hose manufacturers). For the purposes of this analysis, it is assumed that engine manufacturers will bear the cost of complying with the exhaust emission standards, whereas equipment manufacturers and vessel manufacturers will bear the cost of complying with the evaporative emission standards.
To gauge the impact of the new standards on small businesses, EPA employed a cost-to

sales ratio test to estimate the number of small businesses that would be impacted by less than one percent, between one and three percent, and above three percent. The costs used in this analysis are based on the cost estimates developed in Chapter 6 of this Final RIA with the exception of the costs used for Small SI engine and equipment manufacturers. A description of the inputs used for each affected industry sector (except small SI engine and equipment manufacturers) and the methodology used to develop the estimated impact on small businesses in each industry sector is presented in the docket for this rulemaking. 2



### For small SI engine and equipment manufacturers, we relied on the costs from the proposal instead of the final rule. The basic cost inputs for the final rule (e.g., the cost of the various technologies, the number of engine and equipment models, etc.) have not changed from the proposal. However, recent certification data suggests that a number of Class II engines may be able to comply with the standards without the use of a catalyst. Our cost analysis for the final rule reflects this change and results in significantly lower costs for Class II. Because we project that more than half of the engines in Class II will use catalysts, but we do not know which engines small business equipment manufacturers will purchase for their equipment, we believe it is appropriate to continue using the higher costs associated with the proposal rather than the final rule cost numbers in gauging the potential costs of the new standards on small manufacturers. We believe this approach will result in an overestimation of the impacts (i.e., a conservative estimate) of the new standards on small SI engine and equipment manufacturers.
For OB/PWC engine manufacturers, EPA iden tified two small businesses. One of the small businesses identified by EPA manufactures personal watercraft today using four-stroke engines with certified emission levels below the new standards, so we project negligible incremental costs resulting from our rule. The other small business manufactures outboard engines. Several of their currently certified engines already comply with the new standards, while the remaining engines would need to be recalibrated, which we project would cost on the order of less than $10 per engine. Given the cost of personal watercraft and outboard engines, we therefore believe the impact of the rule is well below one percent of revenues for both of these OB/PWC engine manufacturers.
For <373 kW SD/I engine manufacturers, EPA identified nine small businesses. Of these companies, eight produce conventional SD/I engines and the remaining one company produces SD/I engines for airboats. Of the conventional SD/I small business engine manufacturers, five of the small businesses may incur compliance costs between one and three percent of their annual revenues. Three of the small businesses that produce <373 kW SD/I engines as part of a much broader line of work (such as engine rebuilding or selling land-based engines) will be impacted

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### Final Regulatory Impact Analysis
by less than one percent of annual revenues.
Using available information for the airboat engine manufacturer, we project that the manufacturer will have compliance costs between one and three percent of annual revenues. Some of this company’s engines are >373 kW, so their estimated compliance burden reflects a combination of costs for conventional SD/I engi nes and for high-performance >373 kW engines. (They are included in the conventional SD/I category for this impact analysis.) This company is unique in that it manufacturers many of its engines for sale to other airboat manufacturers, resulting in a concentrated cost impact relative to their revenues.

We also identified a number of other airboat manufacturers. These small businesses making engines for airboats are less reliant on selling engines to other boat builders, instead making engines for the boats they build themselves. Most of these businesses are very small, with little ability to marshal the technical resources needed to comply with emission standards. If these companies would take on the effort to design and certify compliant engines, they would likely experience compliance costs exceeding three percent of their revenues. However, given their place in the market and the fact that they are primarily boat builders with the resourcefulness to make their own engines, we believe the most likely approach for these companies is to buy a certified engine from ma nufacturers of conventional SD/I engines. As such, these companies would be treated with other boat builders, in which case their main compliance cost is related to evaporative emissions (as described below). We therefore do not consider any of these companies as engine manufacturers for the purposes of analyzing the impact of the new standards on engine manufacturers.
For >373 kW SD/I engine manufacturers, EPA identified 19 small businesses. Of the >373 kW SD/I small business engine manufacturers, all of the small businesses are projected to be impacted by less than one percent of annual revenues.

For boat builders, EPA believes there are over 1,000 small business manufacturers. Many of these companies make small numbers of vessels for certain segments of the marine market. Given the high cost of most boats, EPA believes the cost impact will be below one percent for all small business boat builders, including those that manufacture SD/I vessels, and OB/PWC boat manufacturers as well.
While boat builders have the primary responsibility under the new regulations for complying with evaporative emission standards, fuel hose and fuel tank manufacturers will have to certify their product with EPA. EPA has iden tified one small business that manufactures fuel hose for marine applications and 14 small businesses that manufacturer fuel tanks for marine applications. The company producing fuel hos e primarily distributes hoses made by other manufacturers but does produce its own fill neck hose. Because we expect vessel manufacturers will design their fuel systems such that there will not be standing liquid fuel in the fill neck (and therefore the new low permeation fuel hose requirements will not apply to the fill neck), we have not included this manufacturer in our analysis . Of the 14 fuel tank manufacturers, EPA has estimated that all of them will incur costs below one percent of annual revenues.

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### Small-Business Flexibility Analysis
For Small SI engine and equipment manufacturers, EPA has identified 370 small businesses. 3 

### Ten of the small businesses are engine manufacturers and the remaining companies are equipment manufacturers. Based on an analysis of sales revenues by company, EPA projects that 314 of the small businesses are estimated to incur compliance costs representing less than 1 percent of their annual revenues. EPA projects that 38 companies will incur compliance costs between 1 and 3 percent of their annual revenues, and 18 companies will incur compliance costs representing more than 3 percent of their annual revenues.
Similar to the requirements noted above for boat manufacturers under the Marine SI evaporative emission regulations, equipment manufacturers will have the primary responsibility under the regulations for complying with the Small SI evaporative emission standards. However, fuel hose and fuel tank manufacturers will have to certify their product with EPA. EPA has identified two small businesses that manufactures fuel hose for Small SI applications and 25 small businesses that manufacturer fuel tanks for Small SI applications. Of these companies, EPA has estimated that all of these companies will incur costs below one percent of annual revenues.
Table 10.8-1 summarizes the impacts of the new regulations on small businesses impacted by the exhaust and evaporative emission standards for Small SI engines and equipment and Marine SI engines and vessels.
Table 10.8-1: Summary of Impacts on Small Businesses
Market Sector 0-1 percent 1 - 3 percent > 3 percent

Manufacturers of Marine OB/PWC engines 2 0 0 Manufacturers of Marine SD/I engines < 373 kW 4 5 0 Manufacturers of Marine SD/I engines > 373 kW (high-performance) 19 0 0

Boat Builders >1,000 0 0
Manufacturers of Fuel Hose and Fuel Tanks for Marine SI Vessels 14 0 0

Small SI engines and equipment 314 38 18
Manufacturers of Fuel Hose and Fuel Tanks for Small SI Applications 27 0 0

Total 380 plus >1,000 boat

builders 43 18

After considering the economic impacts of today's final rule on small entities, we believe

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### Final Regulatory Impact Analysis
this action will not have a significant economic impact on a substantial number of small entities. The small entities directly regulated by this final rule cover a wide range of small businesses including engine manufacturers, equipment manufacturers, boat manufacturers, fuel tank manufacturers, and fuel hose manufacturers. Small governmental jurisdictions and small organizations as described above will not be impacted. We have determined that the estimated effect of the rule is to impact 43 companies with costs between one and three percent of revenues, and 18 additional companies with costs over three percent of revenues. These 61 companies represent less than 5 percent of the total number of small businesses impacted by the new regulations. All remaining companies (over 1,000 of them) would be impacted with costs by less than one percent of revenues. It should be noted that this estimate is based on the highest level of estimated cost in the first years of the program. We estimate substantially lower long-term costs as manufacturers learn to produce compliant products at a lower cost over time.
For a complete discussion of the economic impacts of the final rulemaking, see Chapter 9, the Economic Impact Analysis chapter, of this Final Regulatory Impact Analysis.

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### Small-Business Flexibility Analysis
Chapter 10 References

1. Final Panel Report of the Small Business Advocacy Review Panel on EPA's Planned Proposed Rule—Control of Emissions from Nonroad Spark-Ignition Engines and Equi pment, October 17, 2006. (A copy has been placed in docket EPA-HQ-OAR-2004-0008.)

2. “Small Business Impact Memo, Control of Emissions from Nonroad Spark-Ignition Engines and Equipment

- Determination of No SISNOSE,” EPA memorandum from Phil Carlson to Alex Cristofaro, March 13, 2008. (Docket Identification EPA-HQ-OAR-2004-0008-____.)

3. “Small Entity Analysis of Small Spark Ignition N onroad Engine and Equipment Manufacturers,” memorandum from Alex Rogozhin and Brooks Depro, RTI Interational, to Phil Carlson, U.S. EPA, December 15, 2006. (Docket Identification EPA-HQ-OAR-2004-0008-0541.)

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### Regulatory Alternatives


# CHAPTER 11: Regulatory Alternatives

Our program represents a blend of exhaust and evaporative emission standards for small nonroad spark-ignition (SI) engines used in land-based or auxiliary marine applications, and also recreational Marine SI engines. We believe that the combination of emission standards and their associated timing are superior to the alternative program options we considered given their feasibility, cost, and environmental impact. In this chapter we present and discuss the options that we evaluated in order to make this determination.
Section 11.1 presents each element of our requirements and discusses a variety of specific alternatives that are either less and more stringent. After this initial assessment, options that merit a more rigorous examination are identified for analysis in subsequent sections. Section 11.2 describes the cost of the selected options for each affected engine or system. Section 11.3 presents the emissions inventory impacts associated with each option. Section 11.4 describes the cost effectiveness ($/ton of emission reduced) of the selected options. Finally, we present our assessment of the rationale, feasibility, and issues associated with each alternative in Section 11.5.
The costs, emission reductions, and cost effectiveness of the options analyzed in Sections 11.2 through 11.5 are incremental to the base case (i.e., current requirements) ignoring this rule, unless otherwise specified. For example, the more stringent recreational marine exhaust standards for OB/PWC are evaluated as follow-on requirements to the new requirements and would begin in a later year. Therefore, the analysis for that option reflects only the more stringent subsequent standards.
For the more stringent options, it is important to note that the analyses depend on data supporting them. Generally, a scenario was picked for analysis because there was evidence to suggest that controls such as those identified in the write-ups could be technically feasible at some point in the future. However, there is some uncertainty with regard to the technical feasibility of implementing the standards or requirements across all products, the level of the potential standards selected for analysis (if applicable), the timing for potential introduction, and the costs of control. However, while these standards were ultimately not selected as the basis for this rule, it appears that in some cases they could form the basis for potential future rulemaking actions.



## 11.1 Identification of Alternative Program Options

This section provides our description of potential options for each element of our rule. Options that do not merit further consideration are eliminated and those that warrant additional analysis in subsequent sections are identified.

11-1

### Final Regulatory Impact Analysis

11.1.1 Alternative Exhaust Emission Requirements

11.1.1.1 Small SI Engine HC+NOx Standards

11.1.1.1.1 Class I
We considered, but rejected, a less stringe nt HC+NOx emission standard for Class I spark-ignition engines. The standard of 10 g/kW-hr is readily achievable with reasonably priced emission control technology. Furthermore, the lead time for implementing the standard in 2012 is adequate for applying the catalyst-based technology that will be used on many of these engines. A less stringent emission standard w ould not be consistent with the requirements of section 213 of the Clean Air Act.
A more stringent standard was also considered. Under this option an 8 g/kW-hr HC+NOx standard would be implemented. For purposes of this analysis we elected to begin the requirement in the 2015 model year. Due to the technical design relationship between the engine and running loss control requirement we modeled running loss controls to start in 2015 as well. This standard represents about a 50 reduction from the existing Phase 2 standard, rather than the approximately 38 percent reduction associated with the final standards. As analyzed this option also provides 3 more years of lead time. We believe that manufacturers of side-valve (SV) engines would choose to convert these families to overhead-valve (OHV) designs. The emissions from OHV engine are typically lower a nd deteriorate less than SV engines and thereby result in the need for only a slightly more active catalyst and improved cooling relative to the technology changes needed for the final standards. Cooling for the slightly more active OHV catalyst would be supplied by the engine improvements anticipated for this rule, such as include optimized head design for cooling and fan design for cooling air generation. The slightly more active catalyst can be achieved with either a larger volume and/or a more active mix of precious metals in the catalyst substrate. It may be possible for SV engines to meet the more stringent emission standards using catalysts. For SV engines the catalysts would likely need to be larger and more active. This would result in higher costs and greater catalyst heat generation which may or may not be able to be handled by the engine’s cooling system.

11.1.1.1.2 Class II
For Class II spark-ignition engines, we considered an alternative program option that was less stringent than the final standards. However, for the same reasons previously stated for Class I engines, we rejected this alternative from further consideration; the standards are readily achievable at a reasonable cost within the lead time provided. A less stringent standard, such as one at a level not depending on catalyst technology, w ould not have been consistent with section 213 of the Clean Air Act.
An alternative for a more stringent exhaust HC+NOx emission standard would be 4.0 g/kW-hr along with a delay in the corresponding running loss requirement such that engine changes are made at one time. For analytical purposes we started this requirement in 2015, four years beyond that for the new standard. Such an exhaust emission standard represents a 67

11-2

### Regulatory Alternatives
percent reduction relative to the existing Phase 2 standard, rather than the 34 percent reduction associated with the new standards. It also provides four more years of lead time; a phase-in could be needed since implementation would require the equipment manufacturers involvement for non-integrated products. In order to achieve the 4.0 g/kW-hr HC+NOx emission standard, we expect manufacturers would need to make widespread use of closed loop control EFI and three-way catalysts. The EFI systems would keep engine air-to-fuel mixture closer to stoichiometry and provide an optimum environment for the maximum reduction in HC+NOx by a three way catalyst. Changes to the catalyst would likely involve a more active mix of precious metals in the catalyst substrate. In addition, engine upgrades would be required in some of the Class II engines commonly used in residential lawn care equipment.

11.1.1.2 Marine Auxiliary Engine CO Standard
The standards for marine auxiliary engines include a CO standard that would require the use of highly efficient catalytic control. This standard would require the use of technology to meet emission levels demanded by the market. Manufacturers of gasoline marine generators are equipping their engines with catalysts for the primary purpose of reducing ambient CO concentrations around boats. Therefore, we do not believe that it would be useful to consider a less stringent standard which could enable mark et penetration of new engine offerings which potentially endanger public health. At the same time, the standard is very stringent and manufacturers are already designing for reductions which are more than 95 percent below the current CO emission standard. A more stringent standard would do little more to push technology. Thus, we do not believe that it would be useful to analyze a more stringent standard.

11.1.1.3 Outboard/Personal Watercraft (OB/PWC) Engine HC+NOx and CO Emission Standards
The standards for OB/PWC are based on technology that manufacturers are already certifying and selling nationwide. To meet the new requirements, manufacturers would continue to sell this technology and discontinue their sa le of high-emitting old technology carbureted twostroke engines. Because the standards can be met with existing technology, we do not believe that there is an alternative between the new standards and the current standards which would be consistent with the CAA section 213 requirement. Therefore, we did not analyze a less stringent alternative.
For a more stringent alternative, we considered an addition tier of standards beginning in 2012. For OB/PWC engines greater than 40 kW these would be at a level of 10 g/kW-hr. For engines less than 40 kW, we use an equation of 28 - 0.45 × rated power(kW) to maintain a continuous curve function. This alternative also considers a lower CO standard of 200 g/kW-hr for engines greater than 40 kW with an adjusted standard of 500 - 7.5 × rated power(kW) for engines less than 40 kW to maintain a continuous standard function. Such standards would be consistent with currently certified emission levels from some four-stroke outboard engines. Although many four-stroke engines may be able to meet a 10 g/kW-hr standard with improved engine calibration, it is not clear that all engine s could meet this standard without applying yet unproven catalyst technology in this application. To model this scenario, we evaluated the costs

11-3

### Final Regulatory Impact Analysis
and emission reductions that could be achieved through the combined use of calibrated fourstroke engines and four-stroke engines with catalytic control. This analysis applied catalytic control to larger OB/PWC engines, which already use or are expected to use electronic fuel injection.

11.1.1.4 Sterndrive/Inboard (SD/I) En gine HC+NOx and CO Standards
For the purposes of this analysis, we subdivided the SD/I category into traditional and high-performance engine categories. Based on our definitions, high-performance engines have a rated power greater than or equal to 373 kW (500 hp).

11.1.1.4.1 SD/I <373 kW
In developing regulatory alternatives for SD /I engines, we considered both what was achievable without catalysts and what could be achievable with larger, more efficient catalysts than those we evaluated in our test programs.
With regard to a less stringent option, we considered non-catalyst based standards to be implemented in the 2010 model year. Chapter 4 presents data on SD/I engines equipped with exhaust gas recirculation (EGR). HC+NOx emission levels below 10 g/kW-hr were achieved for each of the engines. CO emissions ranged from 25 to 185 g/kW-hr. For this less stringent alternative, we consider standards of 10 g/kW-hr HC+NOx and 150 g/kW-hr CO. The current California HC+NOx standard for these engines is 160 g/kW-hr.
For a more stringent option, we considered more stringent catalyst-based standards. Many of the SD/I marine engines with catalysts described in Chapter 4 had HC+NOx emission rates appreciably below 5 g/kW-hr, even with deteriorated catalysts. In the development testing for this rulemaking, we did not investigate larger catalysts for SD/I applications. The goal of the development testing was to demonstrate catalysts that would work within the packaging constraints associated with water jacketing the exhaust and fitting the engines into engine compartments on boats. However, we did perform testing on engines equipped with both catalysts and EGR. These engines showed emission results in the 2-3 g/kW-hr range. We expect that these same reductions could be achieved more simply through the use of larger catalysts or catalysts with higher precious me tal loading. As a more stringent regulatory alternative, we considered a standard of 2.5 g/kW-hr HC+NOx, with no change in the CO standard, based on the use of larger catalysts. To account for additional development work that would need to be performed by manufacturers to achieve a lower standard than the existing California standard, we consider a later implementation date of 2012 for this more stringent alternative with no standard before that time.

11.1.1.4.2 SD/I 

### $ 373 kW
For high-performance SD/I marine engines, we originally proposed a standard based on the use of catalysts and then considered a less stringent alternative based on engine fuel system upgrades, calibration, or other minor changes such as an air injection pump rather than catalytic control. However, manufacturers commented that catalysts are not be practical for these engines

11-4

### Regulatory Alternatives
due to the high exhaust flow rates, high emission rates, and low useful life period between rebuild. In the final rule, we are establishing standards that can be met through the use of engine controls, similar to the alternative standard that was analyzed in the proposal. Because we do not consider catalyst-based standards to be feasible for high-performance engines at this time, we are not modeling a more stringent alternative.

11.1.2 Alternative Evaporative Emission Requirements

11.1.2.1 Small SI Engines
For Small SI engines, we are finalizing bot h permeation and venting emission standards. The permeation standards are for fuel tanks and fuel lines. We believe that the standards are reflective of available technology and represent a step change in emissions performance. Venting emissions include diurnal breathing losses, diffusion, and running loss emissions. For nonhandheld Small SI engines (i.e., Classes I and II), we are finalizing standards for running loss 1 

### but not for diurnal emissions. We are not finaliz ing any type of venting emissions control for handheld equipment.
For a less stringent alternative, we considered not requiring running loss emission control for non-handheld Small SI engines. These requirements would be deleted from the rule and thus modeled as being deleted in the years otherwise required.
For a more stringent alternative, we considered applying running loss and diurnal standards to handheld equipment and setting a diurnal standard for non-handheld (Classes I and II). In these alternatives, we consider an implementation date of 2012 for handheld and Class I equipment, and a date of 2011 for Class II equipment.

11.1.2.2 Marine
Similar to the analysis described above for Small SI equipment, we base the less stringent and more stringent regulatory alternatives on changes in the venting emission standards. For marine vessels, we are adopting diurnal emission standards for all vessel types. For portable fuel tanks and PWC fuel tanks, the control technology of a sealed system with pressure relief is fairly straightforward and commonly used today. Howe ver, we anticipate that the diurnal emissions standards for vessels with installed fuel tanks would be based on the use of passively purged carbon canisters. For a less stringent alternative, we consider not setting a diurnal emission standard for marine vessels. 2 

### For a more stringent scenario, we consider a diurnal requirement wherein boat builders would be required to employ active purge of carbon canister with installed tanks. This means that, when the engine is operating, it would draw air through the canister to purge the stored hydrocarbons. These purged gasoline vapors would be used in the engine as

1 

### We anticipate that running loss control measures will also reduce diffusion emissions.

2 Note that PWC already meet the standard and would not be affected differently for the less stringent standard. PWC use sealed systems with pr essure relief to prevent fuel spillage during operation.

11-5

### Final Regulatory Impact Analysis

fuel.

11.1.3 Summary of Alternative Standards
Table 11.1-1 and Table 11.1-2 show the alternative program options that were selected above for further consideration.
Table 11.1-1: Exhaust Alternative Program Options for Quantitative Analysis Source Alt Target Standard less/

more Alternative Description

Exhaust 1 Class I C 10 g/kW-hr HC+NOx

C Begins 2012 more C 8 g/kW-hr HC+NOx

C Begins 2015 in lieu of standard 2 Class II C 8 g/kW-hr HC+NOx

C Begins 2011 more C 3.5 g/kW-hr HC+NOx

C Begins 2015 in lieu of standard 3 OB/PWC C Decreases with power output (P)

C 2008 California HC+NOx equation

C CO g/kW-hr equation is 500-5Pfor <40 kW

C 300 g/kW-hr CO for >40kW

C Begins 2010 more < 40kW

C power output (P)

C HC+NOx g/kW-hr equation is 28-0.45P

C COg/kW-hr equation is 500-7.5P

> 40 kW

C 10 g/kW-hr HC+NOx

C 200 g/kW-hr CO

C Both begin 2012 in addition to 2010 standards 4 SD/I <373 kW C 5 g/kW-hr HC+NOx

C 75 g/kW-hr CO

C Begins 2010 a less C 10 g/kW-hr HC+NOx

C 150 g/kW-hr CO

C Same effective dates as standard 5 more C 2.5 g/kW-hr HC+NOx

C 75 g/kW-hr CO

C Begins 2012 in lieu of standards a

a 2011 for certain engine blocks. Does not include small bus iness flexibilities that will delay the effective date of the requirements for some companies.

### Regulatory Alternatives
Table 11.1-2: Evaporative Alternative Progr am Options for Quantitative Analysis Source Alt Target Standard less/

more Alternative Description

Evap 6 HH diurnal/ running loss C None more C Begins 2012

7 Class I & Class II running loss C Running loss is a “zero emission” design standard

C Class I begins 2012 and Class II begins 2011 less C No running loss

8 Class I C None more C Requirement would begin in 2012 for Class & Class I and 2011 for Class II II diurnal 9 Installed C 0.4g/gal/day HC less C No diurnal for 2010 marine trailerable boat fuel tank diurnal C 0.16 g/gal/day HC non-trailerable boat

C Begins 2011 10 more C More stringent test procedure. If charcoal canister is used, active purge required.

C Would begin 2011

11 Portable marine fuel tank diurnal C Diurnal is a “zero emission” design standard

C Begins 2010 less C No diurnal



## 11.2 Cost per Engine

This section describes the estimated cost of complying with the alternative program options. We developed the costs for individual technologies using estimates from ICF Incorporated, 1,2,3 

### conversations with manufacturers, other information including the published literature, and our best technical judgment. Also, the cost estimates for the alternatives rely heavily on the methodology and in some cases the actual cost data, used to characterize the standards. For ease of presentation, we have not repeated the methodology or those detailed cost data here. Instead, we focus on presenting information regarding the requirements or changes that we expect will be needed to comply with the alternative options. The reader is encouraged to refer to Chapter 6 for more information. Finally, we did not specifically analyze the incremental costs of setting standards which would not result in technology which would allow certification in all 50 states (a harmonized program).
The costs of complying with the alternative program options are presented as incremental to the base case (current requirements) without considering the final standard. The only exception to this is the second phase of OB/PWC standards where costs are incremental to the final standard. The alternatives and the requisite technology are described in Section 11.1. Further, results are provided as the average cost per affected engine and the total net present value (NPV) for a 30-year period beginning in 2008. The NPV estimates are based on a seven

11-7

### Final Regulatory Impact Analysis
percent discount rate. All costs are in 2005 dollars.

11.2.1 Costs for Exhaust Emission Standards

11.2.1.1 More Stringent Small SI Engine HC+NOx Standards

11.2.1.1.1 Class I
Meeting more stringent standards would requi re OHV engines to use a slightly larger or more active catalyst than for the final standards. For current SV engines they would need to utilize larger and more active catalysts than considered in the analysis for the final standards, or convert to OHV design and use a slightly larger catalyst or more active catalyst than for the final standards.
The cost for the SV sized catalyst is outlined in Chapter 6. The cost for the conversion from SV to OHV design is drawn from ICF International’s 2006 report “Small SI Engine Technologies and Costs 4 

### ,” and is listed as $9.42 in variable costs per engine, $2,010,147 in tooling changes and design and development, as well as $15 million in facility upgrades per Class I SV engine family. The 2005 EPA certifica tion database lists five SV engine families certified to Phase 2 of which two engines have OHV engine designs in the same power range and one engine family is listed as a small volume engine family. The remaining two engine families have sales estimates in the millions of engines. As a result, fixed costs are applied two engine families and variable costs are applied to all SV engines.
The cost for improvements in OHV current engine designs includes improved cylinder head design for improved engine cooling, redesi gn of the engine flywheel to provide optimum cooling for the catalyst muffler as well as carburetor improvements. Research and development and tooling for these changes are estimated at $456,450 per engine family as shown in Chapter 6.
Upgrades in catalysts for OHV engines include additional precious metal for more active catalysts. The catalyst estimates for the SV engine families, that are replaced by OHV engine families, are also replaced with the OHV catalyst costs. These costs for improved OHV engines, upgraded catalysts for OHV engines are included in Table 11.2-1 together with those for SV engines.

11.2.1.1.2 Class II
Technologies for the more stringent option include improved engine design (redesign of cooling fins, fan design, combustion chamber design), closed loop control electronic fuel injection (EFI), catalysts and pressurized oil lube system for engines intended for residential use. The fixed costs for improved engine design are $456,000 per engine family and include R&D and tooling costs, as listed in Chapter 6. The same Chapter lists EFI variable costs at $79 per engine when it includes the credit for the removal of the carburetor. The fixed costs for closed loop fuel injection design is estimated at $103,000 per engine family. Increased catalyst

11-8

### Regulatory Alternatives
efficiency is achieved through use of a larger catalyst and increased precious metal loading at an estimated increased catalyst cost of $4 (1000 hr engine) - $16 (250 hr engine) per engine. A pressurized lube oil system is listed by ICF 5 

### to be $15.48 in variable costs and $210,000 in fixed costs per engine family for the residential engines which often do not use it in today’s design. Overall, fuel savings would be increased due to th e application of electronic fuel injection to all Class II engines.
Table 11.2-1: Small SI Per-Engine Cost Estimates (Without Fuel Savings) Sales Weighted Averages

Short Term (years 1-5) Long Term (years 6-10)

Standard Class I Class II $10-$26 $17-$60 $10-$12 $12-$30 More Stringent Class I

Class II $17-$23 $110-$149 $12-$18 $76-$89

11.2.1.2 Outboard/Personal Watercraft (OB/PWC) Engine HC+NOx and CO Emission Standards
We believe that, to meet the more stringent alternative considered here, manufacturers would need to convert their product lines primarily to a mix of calibrated four-stroke engines and engines equipped with catalysts. To model this approach, we looked at a technology mix that would achieve the 10 g/kW-hr HC+NOx limit, with appropriate considerations given to emissions deterioration rates and compliance margins. This technology mix was developed by assuming that all carbureted two-stroke engine s would be removed from the fleet and replaced with four-stroke engines. All engines over 75 kW (100 hp) were modeled as using catalytic control. Detailed costs for converting engines from two-stroke to four-stroke and for equipping OB/PWC engines with catalysts are presented in Chapter 6. Table 11.2-2 compares the average per-engine equipment costs for the primary and the more stringent alternatives for OB/PWC engines.

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### Final Regulatory Impact Analysis
Table 11.2-2: OB/PWC Per-Engine Cost Estimates (Without Fuel Savings) Sales Weighted Averages

Short Term (years 1-5) Long Term (years 6-10)

Standard OB PWC $291 $359 $224 $272 More Stringent OB PWC $388 $528 $275 $392

Incremental Cost a 

### OB PWC $102 $169 $51 $120

a Incremental cost is presented here because the more stringent alternative for OB/PWC includes the primary standard in 2010 plus a second, more stringent, standard in 2012.


### We did not model differences in fuel savings between the primary and more stringent alternatives. The fuel savings for all three alternatives primarily come from the replacement of carbureted two-stroke engines with cleaner e ngine designs. In both the primary and more stringent scenarios, we model the discontinuati on of sales of carbureted two-stroke engines.

11.2.1.3 Sterndrive/Inboard (SD/I) Engine HC+NOx and CO Emission Standards
With regard to the less stringent alternative, Chapter 4 presents costs for using exhaust gas recirculation (EGR) on SD/I engines. To estimate the costs for the less stringent alternative, all SD/I engines less than 373 kW were modeled to be equipped with electronic closed loop control fuel injection and EGR.
For the more stringent case, we consider a larger catalyst size with a higher precious metal loading for engines. Specifically, for engines less than 373 kW, we model a 25 percent larger catalyst and an additional 25 percent precious metal loading. We do not model a difference in fuel consumption for any of these scenarios because, in each case, all engines are anticipated to use electronic fuel injection. Table 11.2-3 compares the per-engine cost estimates for the primary, less stringent, and more stringent alternatives. As discussed above, we do not including high-performance engines in this analysis.
Table 11.2-3: SD/I <373 kW Per-Engine Co st Estimates (Without Fuel Savings) Sales Weighted Averages

Short Term (years 1-5) Long Term (years 6-10)

Standard $355 $266 Less Stringent $200 $149 More Stringent $431 $333

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### Regulatory Alternatives

11.2.2 Costs for Evaporative Emission Standards

11.2.2.1 Small SI Engine
For the less stringent case, we simply subtract the costs of running loss controls for nonhandheld equipment. For the more stringent case, we add the incremental costs of diurnal emission control for all nonhandheld engines and diurnal emission and running loss control for handheld engines. These technology costs are presented in Chapter 6. Table 11.2-4 compares the per-equipment cost estimates for the primary, less stringent, and more stringent alternatives.
Table 11.2-4: Evaporative Small SI Per-Equipm ent Cost Estimates (Without Fuel Savings) Sales Weighted Averages

Short Term (years 1-5) Long Term (years 6-10) Standard Aggregate Handheld Class I Class II $3.27 $0.82 a 

### $3.05 $6.73 $2.46 $0.69 a 

### $2.20 $5.16 Less Stringent Aggregate Handheld Class I Class II $1.86 $0.82 a 

### $1.13 $4.50 $1.34 $0.69 a 

### $0.67 $3.38

More Stringent Aggregate Handheld Class I Class II $6.76 $4.40 $6.01 $11.08 $5.25 $3.55 $4.57 $8.64

a 

### Values reflect the final permeation standards. These costs are used in the alternative analysis only to develop aggregate values for comparison purposes.

11-11

### Final Regulatory Impact Analysis

Table 11.2-5 presents the fuel savings for the three alternatives, based on the evaporative emission reductions for each of the scenarios. Because evaporative emissions are basically gasoline vapor lost to the atmosphere, these hydrocarbon reductions can be directly translated to gasoline savings using a gasoline cost of $1.81 per gallon. Cost savings are presented both with a 3 percent and a 7 percent discount factor over the life of the equipment.
Table 11.2-5: Projected Evaporative Fu el Savings for Small SI Equipment Sales Weighted Averages
Lifetime Gallons Saved Discounted Cost Savings 3 percent 7 percent Standard Aggregate Handheld Class I Class II 1.4 0.2 0.8 4.7 $2.36 $0.33 $1.41 $6.53 $2.17 $0.31 $1.31 $5.96 Less Stringent Aggregate Handheld Class I Class II 0.9 0.2 a 

### 0.5 3.0 $1.53 $0.33 a 

### $0.92 $4.16 $1.41 $0.31 a 

### $0.85 $3.80

More Stringent Aggregate Handheld Class I Class II 1.5 0.3 0.9 5.3 $2.63 $0.49 $1.53 $7.32 $2.41 $0.46 $1.41 $6.69

a Values reflect the final permeation standards. These cost s are used in the alternative analysis only to develop aggregate values for comparison purposes.

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### Regulatory Alternatives

11.2.2.2 Marine
For the less stringent case, we simply subtract the costs of diurnal emission controls from marine vessels with installed and portable fuel tanks. For the more stringent case, we add the incremental costs of actively purged diurnal emission control for vessels with installed fueltanks. These technology costs are presented in Chapter 6. Table 11.2-6 compares the perequipment cost estimates for the primary, less stringent, and more stringent alternatives. Cost savings are presented both with a 3 percent and a 7 percent discount factor over the life of the vessel.
Table 11.2-6: Per-Vessel Cost Estimates (Without Fuel Savings) Sales Weighted Averages Short Term (years 1-5) Long Term (years 6-10) Standard Aggregate portable PWC

installed $55 $12 $17 $74 $45 $8 $11 $62 Less Stringent Aggregate portable PWC

installed $33 $11 $17 a 

### $42 $27 $7 $11 a 

### $36 More Stringent Aggregate portable PWC

installed $69 $12 a 

### $17 a 

### $94 $56 $8 a 

### $11 a 

### $77

a Values reflect the final permeation and diurnal standards. These costs used in the alternative analysis only to develop aggregate values for comparison purposes.

11-13

### Final Regulatory Impact Analysis

Table 11.2-7 presents the fuel savings for the three alternatives. These fuel savings are based on the evaporative emission reductions for each of the scenarios. Because evaporative emissions are basically gasoline vapor lost to the atmosphere, preventing these hydrocarbon emissions can be directly translated to gasoline savings using a gasoline cost of $1.81 per gallon.
Table 11.2-7: Projected Evaporative Fuel Savings for Marine Vessels Sales Weighted Averages
Lifetime Gallons Saved Discounted Cost Savings 3 percent 7 percent Standard Aggregate portable PWC

installed 28 13 9 38 $42 $20 $14 $54 $33 $17 $12 $42 Less Stringent Aggregate portable PWC

installed 20 11 9 a 

### 26 $30 $17 $14 a 

### $37 $24 $14 $12 a 

### $29

More Stringent Aggregate portable PWC

installed 30 13 a 

### 9 a 

### 39 $44 $20 a 

### $14 a 

### $57 $34 $17 a 

### $12 a 

### $44

a Values reflect the final permeation and diurnal standards. These costs used in the alternative analysis only to develop aggregate values for comparison purposes.

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### Regulatory Alternatives

11.2.3 Cost Summary of Regulatory Alternatives
Table 11.2-8 summarizes the average cost per engine for the various alternative program options described above. The costs presented are for the short term and do not include fuel savings.

Table 11.2-8: Engine Cost Summary Range for Alternative Program Options ($/Engine) Sales Weighted Averages of Short-Term Costs without Fuel Savings, 2005$ Source Alt Target Standard Scenario Alternative Exhaust 1 Class I $10-$26 more $17-$23 2 Class II $17-$60 more $110-$149 3 a 

### OB/PWC $- more $70 4 SD/I <373 kW $360 less $216 5 more $435 Evap 6 b 

### HH $- more $3.58 7 Class I & Class II $4.32 less $2.30 8 b 

### Class I & Class II $- more $3.45 9 Installed marine fuel tank $74 less $42 10 more $94 11 Portable marine fuel tank $12 less $11

a Costs are presented incremental to the standards for OB /PWC because, for this alternative, a second stage of standards is considered in 2012 beyond the final standards. b Only considers standards for venting emission control whic h are not in the final standards. The venting emission standards considered here are diurnal for Cla ss I and Class II and diurnal/running loss for handheld.



### Table 11.2-9 summarizes the 30-year net present value for costs for the standards and the various alternative program options described in Table 11.2-1. Cost results are provided as the total net present value (NPV) for a 30-year period. The NPV estimates are based on a 7 percent discount rate. These costs do not include fuel savings. Table 11.2-10 presents the same information with a 3 percent discount rate.

11-15

### Final Regulatory Impact Analysis
Table 11.2-9: 30-Year Net Present Value Cost Summary for Alternative Program Options with a 7 Percent Discount Rate (Million 2005$) Source Alt Target Standard Scenario Alternative Exhaust 1 Class I $1,228 more $1,558 2 Class II $1,146 more $4,040 3 a 

### OB/PWC $- more $347 4 SD/I <373 kW $343 less $194 5 more $388 Evap 6 b 

### HH $- more $318 7 Class I & Class II $718 less $394 8 b 

### Class I & Class II $- more $570 9 Installed marine fuel tank $250 less $144 10 more $310 11 Portable marine fuel tank $8 less $7

a Costs are presented incremental to the final standards fo r OB/PWC because, for this alternative, a second stage of standards is considered in 2012 beyond the final standards. b Only considers standards for venting emission control whic h are not in the final standards. The venting emission standards considered here are diurnal for Cla ss I and Class II and diurnal/running loss for handheld.



### Table 11.2-10: 30-Year Net Present Value Cost Summary for Alternative Program Options with a 3 Percent Discount Rate (Million 2005$) Source Alt Target Standards Scenario Alternative Exhaust 1 Class I $2100 more $2,944 2 Class II $1831 more $7,366 3 a 

### OB/PWC $- more $556 4 SD/I <373 kW $541 less $304 5 more $626 Evap 6 b 

### HH $- more $544 7 Class I & Class II $1,180 less $630 8 b 

### Class I & Class II $- more $962 9 Installed marine fuel tank $413 less $239 10 more $512 11 Portable marine fuel tank $12 less $11

a Costs are presented incremental to the standards for OB /PWC because, for this alternative, a second stage of standards is considered in 2012 beyond the final standards. b Only considers standards for venting emission control whic h are not in the final standards. The venting emission standards considered here are diurnal for Cla ss I and Class II and diurnal/running loss for handheld.



## 11.3 Emission Reduction

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### Regulatory Alternatives

This section describes the estimated emission reductions associated with each of the alternative program options. We developed these estimates using the NONROAD emissions inventory model and methodology described in Chapter 3. The modeling inputs for alternative options are provided in Appendix 11A and Appendix 11B.
The incremental emission reductions of complying with the alternative program options are presented as incremental to the base case without the final standards. The only exception to this is the second phase of OB/PWC standards. The alternatives and the requisite technology are described in Section 11.1. Further, emission inventory results are provided as the total net present value (NPV) for a 30-year period. The NPV estimates are calculated based on both a 7 percent and a 3 percent discount rate. Small SI and Marine SI emission reductions are presented separately in Tables 11.3-1 and 11.3-2.

Table 11.3-1: 30-Year Net Present Value Emission Reduction Summary for Alternative Program Options with a 7 Percent Discount Rate (Million Tons) Source Alt Target Standard Scenario Alternative Exhaust 1 Class I 0.73 more 0.63 2 Class II 1.05 more 1.27 3 a 

### OB/PWC 0 more 0.26 4 SD/I <373 kW 0.33 less 0.22 5 more 0.32 Evap 6 b 

### HH 0 more 0.04 7 Class I & Class II 1.04 less 0.63 8 b 

### Class I & Class II 0 more 0.12 9 Installed marine fuel tank 0.36 less 0.26 10 more 0.38 11 Portable marine fuel tank 0.07 less 0.06

a Tons reduced are presented incremental to the standards for OB/PWC because, for this alternative, a second stage of standards is considered in 2012 beyond the final standards. b Only considers standards for venting emission control whic h are not in the final standards. The venting emission standards considered here are diurnal for Cla ss I and Class II and diurnal/running loss for handheld.

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### Final Regulatory Impact Analysis

Table 11.3-2: 30-Year Net Present Value Emission Reduction Summary for Alternative Program Options with a 3 Percent Discount Rate (Million Tons) Source Alt Target Standard Scenario Alternative Exhaust 1 Class I 1.33 more 1.22 2 Class II 1.90 more 2.52 3 a 

### OB/PWC 0 more 0.50 4 SD/I <373 kW 0.64 less 0.42 5 more 0.65 Evap 6 b 

### HH 0 more 0.07 7 Class I & Class II 1.83 less 1.09 8 b 

### Class I & Class II 0 more 0.21 9 Installed marine fuel tank 0.70 less 0.50 10 more 0.73 11 Portable marine fuel tank 0.13 less 0.11

a Tons reduced are presented incremental to the standards for OB/PWC because, for this alternative, a second stage of standards is considered in 2012 beyond the final standards. b Only considers standards for venting emission control whic h are not in the final standards. The venting emission standards considered here are diurnal for Cla ss I and Class II and diurnal/running loss for handheld.

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## 11.4 Cost Effectiveness

This section describes the cost effectivene ss associated with each of the alternative program options. The costs are expressed as millions of dollars and the emission reductions are in terms of short tons. All results are presented as incremental to the base case without the final standards. The only exception to this is the second phase of OB/PWC standards where the values are calculated based on costs and emission reductions incremental to the final standards. Tables 11.4-1 and 11.4-2 present cost per ton estimates, using both a 7 percent and a 3 percent discount rate, for Small SI engines/equipment and Marine SI engines/vessels as outlined in Table 11.2-1.
Table 11.4-1: Comparison of Cost Effectiveness for Final Standards and Alternatives Without Fuel Savings, 7 Percent Discount Rate ($/ton) 2005$ Source Alt Target Standard Scenario Alternative Exhaust 1 Class I $1,680 more $2,540 2 Class II $1,086 more $3,170 3 a 

### OB/PWC $790 more $1,340 4 SD/I <373 kW $1,030 less $880 5 more $1,210 Evap 6 b 

### HH NA more $8,150 7 Class I & Class II $690 less $630 8 b 

### Class I & Class II NA more $4,900 9 Installed marine fuel tank $690 less $550 10 more $820 11 Portable marine fuel tank $115 less $120

a Cost effectiveness of more stringent alternative is pr esented incremental to the standards for OB/PWC because, for this alternative, a second stage of standards is considered in 2012 beyond the final standards. b Only considers standards for venting emission control whic h are not in the final standards. The venting emission standards considered here are diurnal for Cla ss I and Class II and diurnal/running loss for handheld.

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### Final Regulatory Impact Analysis
Table 11.4-2: Comparison of Cost Effectiveness for Final Standards and Alternatives Without Fuel Savings, 3 Percent Discount Rate ($/ton) 2005$ Source Alt Target Standard Scenario Alternative Exhaust 1 Class I $1,580 more $2,410 2 Class II $965 more $2,930 3 a 

### OB/PWC $670 more $1100 4 SD/I <373 kW $840 less $720 5 more $970 Evap 6 b 

### HH NA more $7,620 7 Class I & Class II $640 less $580 8 b 

### Class I & Class II NA more $4560 9 Installed marine fuel tank $590 less $500 10 more $700 11 Portable marine fuel tank $100 less $100

a Cost effectiveness of more stringent alternative is pr esented incremental to the standards for OB/PWC because, for this alternative, a second stage of standards is considered in 2012 beyond the final standards. b Only considers standards for venting emission control whic h are not in the final standards. The venting emission standards considered here are diurnal for Cla ss I and Class II and diurnal/running loss for handheld.



### Ideally, this analysis would include an assessment of the monetized benefits which would potentially accompany each alternative as was provided in Chapter 8. This would provide further information for decision making and comparison to the final program. Unfortunately, the emissions data needed to conduct such an analysis, such as the potential PM benefits for the more stringent exhaust emission scenarios, is not available for this NPRM. This limits the utility of any comparisons which could be made since monetized benefits are partially dependent on PM health benefits.



## 11.5 Summary and Analysis of Alternative Program Options

This section presents a comparative summary of the important aspects related to the various alternative program options and our rationale for not pursuing an option relative to the final standards.

11.5.1 Exhaust Emission Standards

11.5.1.1 Small SI Engine HC+NOx Standards

11.5.1.1.1 Class I
This alternative considers a more stringent standard of 50 percent HC+NOx emission reduction beginning in 2015 for Phase 3 Class I engines instead of a reduction of 38 percent

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### Regulatory Alternatives
beginning in 2012 . While these emission standards may be feasible, it is clearly in the in the longer term relative to the timing of the final standards. For analytical purposes the time line to begin implementation of the new standards was set at the 2015 model year. This is three model years past the implementation year for the final standards. For the analytical period we considered, the final standards provide more emission reductions than the alternative by 202,600 tons between 2012 and 2020. Postponing the exhaust emission standards to 2015 could likely also lead to postponing controls on running loss emissions with an additional loss of 47,000 tons of control. States with air quality problems would benefit from emission reductions in an earlier time frame. Thus, while both approaches are cost effective, we elected to go with the 38 percent reduction in 2012. In the context of section 213(a)(3) of the Clean Air Act, it represents the most stringent standards feasible within the lead time considered.

11.5.1.1.2 Class II
This alternative considers a more stringent standard of 4 g/kW-hr HC+NOx , a reduction of about 67 percent for Class II engines over phase 2. These standards assume the use of closed loop electronic fuel injection and catalysts on all Class II engines. We are expecting engine manufacturers to meet the final standards by applying closed loop EFI on a portion of their Vtwin engines and for the engine manufacturers or equipment manufacturers to use catalytic mufflers on the remaining engines. While these emission standards may be feasible it is clearly in the in the longer term relative to the timing of the final standards. For analytical purposes the time line to begin implementation of the new standards was set at the 2015 model year. This is four model years past the implementation year for the final standards. For the 30 year analytical period we considered, the final rule provides fewer overall emission reductions than the alternative, but between 2011 and 2020 the final rule gives 150,300 tons more reduction than the alternative assuming that running loss control is also postponed to begin in the 2015 model year. States with air quality problems would benefit from emission reductions in an earlier time frame. Thus, while both approaches are cost effective, we elected to go with the 34 percent reduction in 2011. In the context of section 213(a)(3) of the Clean Air Act, it represents the most stringent standards feasible within the lead time considered.

11.5.1.2 Outboard/Personal Watercraft (OB/PWC) Engine HC+NOx and CO Emission Standards
We analyzed the costs and emission reductions associated with more stringent standards for OB/PWC engines. We have concerns with this second tier of OB/PWC standards at this time. While some four-stroke engines may be able to meet a 10 g/kW-hr standard with improved calibrations, it is not clear that all engines could meet this standard without applying catalyst technology. Direct injection two-stroke s engines would face additional challenges. At this time, we believe it is not appropriate to base standards in this rule on the use of catalysts for OB/PWC engines. Although this technology may be attractive in the longer term, little development work has been performed on the application of 3-way catalysts to OB/PWC engines. For this alternative, our modeling assumes all OB/PWC engines which need to can successfully apply aftertreatment technology.

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### Final Regulatory Impact Analysis

11.5.1.3 Sterndrive/Inboard (SD/I) Engine HC+NOx and CO Emission Standards
With regard to less stringent standards, we believe that EGR would be a technologically feasible and cost-effective approach to reducing emissions from SD/I marine engines. However, we believe that greater reductions could be achieved through the use of catalysts. We considered basing an interim standard on EGR, but were concerned that this would divert manufacturers' resources away from catalyst deve lopment and could have the effect of delaying emission reductions from this sector. Setting a less stringent standard would likely be inconsistent with the requirements of section 213 of the Clean Air Act because at least one SD/I engine manufacturer offers a compliant product for sale in the US. In the NPRM we do ask for comment on a short-phase-in to deal with a change in the engine a supplier’s product lines.
With regard to more stringent requirements, we do not believe that they would necessarily lead to any further significant emission reductions in HC+NOx. Because this is the first generation of emission standards for this category of recreational marine engines, we believe that most manufacturers will strive to achieve emission levels below the final standards to give them certainty that they will pass the standards in-use, especially as catalysts on SD/I engines are a new technology. Therefore, we do not believe that it is necessary at this time to consider a lower standard for these engines.

11.5.2 Evaporative Emission Standards

11.5.2.1 Small SI Engine
We analyzed requiring diurnal and running loss control from handheld equipment in 2012. Even though it would be feasible from a strict technical perspective it is not a attractive option at this time. Fuel tanks from this equipment are very small, most less than one liter, and, with the exception of commercial equipment, their use is less than 15 hours per year. Adding hardware to control diurnal and running loss emissions would add weight which could be problematic on handheld equipment. In addition, it could create the potential for fuel leaks in equipment which can be used in rotated and inverted positions in the field. In addition, this option does not appear cost effective. For these reasons we elected not to pursue it.
With regard to controlling running loss emissions control from non-handheld equipment we believe it is feasible at a relatively low cost. Running loss emissions can be controlled by sealing the fuel cap and routing vapors from the fuel tank to the engine intake. This emission control approach is relatively straight-forward and inexpensive and do not have the weight and in-use position issues such as mentioned above for handheld equipment. Deleting the requirement does not meaningfully improve the cost effectiveness. Not finalizing these requirements would be inconsistent with the section 213 of the Clean Air Act.
California requires control diurnal fuel tank emissions from Class I and Class II equipment as part of its overall fuel evaporative certification requirements. California requires an active purge of the control system. We evaluated the alternative of adding a diurnal requirement like that in California. Even t hough it would be feasible from a strict technical

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### Regulatory Alternatives
perspective it is not a attractive option at this time. While workable, there are some important issues would need to be resolved for diurnal emission control, such as cost, packaging, and vibration. Also, California requires an active purge, but we believe that a substantial reduction on the order of 50 percent could be achieved with a less complicated and less expensive passive purge approach. Finally, the cost and cost effectiveness of this program sub-element are of concern given the relatively low emissions levels (on a per-equipment basis) from such small fuel tanks. Overall, we do not consider this to be an attractive option at this time for Small SI engines as a group.

11.5.2.2 Marine
Although we considered the alternative of not requiring diurnal emission control for installed fuel tanks, we believe that carbon canisters are feasible for boats at relatively low cost. Carbon canisters have been installed on fourteen boats by industry in a pilot program intended to demonstrate the feasibility of this technology. The final standards are achievable through engineering design-based certification with canisters that are much smaller than the fuel tanks. In addition, sealed systems, with pressure control strategies would be accepted under the engineering design-based certification provisions. Eliminating these requirements would not meaningfully affect the cost effectiveness of the marine evaporative program. Not finalizing these controls would be inconsistent with the requirements of section 213 of the Clean Air Act.
We also considered the feasibility of requi ring the use of carbon canisters with active purging to control diurnal emissions. However, we are concerned that active purging would occur infrequently due to the low hours of operation per year seen by many boats. In addition, active purge adds complexity into the system in that the engine must be integrated into the control strategy. This could end up involving engine, tank, and vessel manufacturers in certification processes. Although we did not model it, this approach would undoubtedly require more lead time to implement because it is more complex and involves more entities. Based on data presented in Chapter 5, carbon canisters can be used to reduce emissions by more than 50 percent with passive purging. This passive purging occurs during the normal tank breathing process caused by ambient temperature changes wit hout creating any significant pressure in the fuel tank. The small additional benefit of an actively purged diurnal control system would likely not justify the cost and complexity of implementing such a system, even though it appears to be cost effective.
Portable marine fuel tanks are used in vessels with outboard motors. Many of these tanks employ self-sealing vents which close the tank to the atmosphere when it is not in-use. This is quite straightforward, and it can be applied to all such tanks in the future for a reasonable cost. Not finalizing these controls would be inconsistent with the requirements of section 213 of the Clean Air Act.

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### Final Regulatory Impact Analysis 

## APPENDIX 11A: Emission Factors for the Less Stringent Alternative

11A.1 Exhaust Emission Factors and Deterioration Rates

11A.1.1 Small SI Exhaust
No less stringent exhaust emission standards were quantitatively analyzed for either Class I or Class II Small SI engines.

11A.1.2 Marine SI Exhaust
In the less stringent alternative, the same standards are considered for OB/PWC engines as for the primary scenario. However, for SD/I engines, we consider less stringent standards. As discussed above, these standards are based on the use of EGR for SD/I engines less than 373 kW and engine calibration for larger engines. For engines less than 373 kW we considered less stringent alternative standards of 10 g/kW-hr HC+NOx and 150 g/kW-hr CO for SD/I engines less than 373 kW. For high-performance engines, we did not model alternative scenarios, as discussed above. Because these emission factors are based on engine-out emissions, we use the same deterioration factors (DF) as for the baseline case. Table A-1 presents the zero-hour SD/I emission factors and the accompanying deterioration factors used to model the less stringent alternative.
Table 11A-1: Less Stringent Alternative EFs [g/kW-hr] and DFs for SD/I

Engine Category HC NOx CO BSFC EF DF EF DF EF DF
<373 kW SD/I 4.05 1.26 4.00 1.03 96.3 1.35 345

11A.2 Evaporative Emission Factors
As discussed above, no changes in the hose and tank permeation standards were considered in the less stringent alternative. The less stringent scenario was modeled for Small SI equipment by using the baseline running loss and diffusion rates for Class I and Class II equipment. For marine, the less stringent alternative was modeled by using the baseline diurnal emission rates for vessels with installed fuel tanks.

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### Regulatory Alternatives 

## APPENDIX 11B: Emission Factors for the More Stringent Alternative

11B.1 Exhaust Emission Factors and Deterioration Rates

11B.1.1 Small SI Exhaust
For analytical purposes, we identified a more stringent program option of 8 g/kW-hr HC+NOx standard for Class I engines that would be implemented beginning in 2015. This standard represents about a 50 reduction from the existing Phase 2 standard, rather than the approximately 38 percent reduction associated with the final rule. The option also provides 3 more years of lead time. For Class II engines, we identified an alternative for a more stringent exhaust HC+NOx emission standard of 4.0 g/kW-hr beginning in 2015. (This option also includes an associated delay in the corresponding running loss requirement such that engine changes are made simultaneously.) Such an exhaust emission standard represents a 67 percent reduction relative to the existing Phase 2 standard, rather than the 34 percent reduction associated with the final rule.
In modeling this more stringent option, we assumed the same phase-in schedule that reflects a number of flexibilities for engine and equipment manufacturers, and allows them to sell some Phase 2 compliant engines in the early years of the program. We also assumed that Class I side-valve technology would be completely replaced with overhead valve designs, and that all of the Class II engines would require clos ed loop control electronic fuel injection (EFI). Since EFI equipped engines enjoy a 10 percent fuel consumption advantage over their carbureted counterparts, we also revised the br ake-specific fuel consumption (BSFC) for Class II engines. The new BSFC value is 0.666 lb/hp-hr.
All the modeling inputs were developed using a methodology consistent with that described in Chapter 3 of this draft RIA. The alternative emission standards and phase-in assumptions are shown in Table B-1. The emission factors are shown in Table B-2.

Table 11B-1: More Stringent Phase 3 Emission Standards and Implementation Schedule for Class I and II Small SI Engines (g/kW-hr or Percent) Engine Class Requirement 2015 2016 2017 2018 2019+

Class I HC+NOx 8 8 8 8 8 Required Sales Percentage 95 95 100 100 100

Class II HC+NOx 4 4 4 4 4 Required Sales Percentage 83 83 93 93 100

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### Final Regulatory Impact Analysis
Table 11B-2: More Stringent Phase 3 Modeling Emission Factors for Small SI Engines (g/KW-hr) Class/ Technology HC ZML HC "A" NOx ZML NOx "A" CO ZML CO "A"

Class I - SV 4.48 1.011 1.12 0.470 319.76 0.070 Class I - 4.07 1.011 1.53 0.470 325.06 0.070 Class II 2.13 1.011 0.67 0.470 391.13 0.080



### 11B.1.2 Marine SI Exhaust
For OB/PWC engines, the more stringent alternative considers exhaust emissions standards that are about 40 percent lower for HC+NOx and about 30 percent lower for CO than the final standard. The more stringent alternative emission standards are modeled as a second phase of standards, beyond the primary, beginning in 2012. In determining the combined HC+NOx emission factor, we used the final emission standards with a 10 percent compliance margin (with deterioration factor applied). To determine the NOx emission factors, we used certification data and other emissions data presented in Chapter 4, to determine the sales weighted average NOx for low emission tec hnologies in each power bin. HC was then determined as the difference between the HC+NOx and the NOx emission factors. Because we are finalizing the same standards for OB and PWC and because they use similar engines, we use the same HC+NOx emission factors and deterior ation factors for both engine types. Because the final CO standard primarily acts as a cap on CO for many of the engines, the CO emission factors differ somewhat for CO based on data in the certification database for low CO engines. We use the same deterioration rates as in the primary case. Table B-3 presents the zero-hour OB/PWC emission factors used in analyzing the more stringent alternative.
Table B-3: More Stringent Alternative Em ission Factors for OB/PWC [g/kW-hr]
Power Bin HC NOx CO OB PWC BSFC

0-2.2 kW 2.3-4.5 kW 4.6-8.2 kW 8.3-11.9 kW 12.0-18.6 kW 18.7-29.8 kW 29.9-37.3 kW 37.4-55.9 kW 55.9-74.6 kW 74.7-130.5 kW 130.6+ kW 11.7 10.9 10.5 9.0 9.5 7.5 5.7 5.2 5.2 5.4 6.3 3.02 2.25 3.50 4.22 2.69 3.55 3.70 3.38 3.38 3.13 2.30 362 238 195 165 137 120 114 115 115 101 93 426 359 162 154 145 137 137 137 137 135 119 563 560 555 552 543 528 507 471 471 415 387

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### Regulatory Alternatives
For SD/I engines greater than 373 kW, we did not model the use of catalysts for reasons discussed above. However, for SD/I engines less than 373 kW, we considered a more stringent HC+NOx standard of 2.5 g/kW-hr. To model th is standard, we used zero-hour emission factors of 0.90 g/kW-hr HC and 0.80 g/kW-hr NOx. No changes were made in other emission factors for this more stringent alternative. In addition, the same deterioration factors were used here as in the primary alternative.
11B.2 Evaporative Emission Factors
As discussed above, no changes in the hose and tank permeation standards were considered in the more stringent alternative. The more stringent scenario modeled for Small SI equipment by considering diurnal standards beginning in 2011 for Class II and 2012 for handheld and Class I equipment. This diurnal emission standards was modeled using a 60 percent reduction from baseline. Also, the more aggressive option for Class II exhaust standards was modeled as also including a corresponding delay in the running loss requirement such that engine changes are made simultaneously.
For marine, the more stringent alternative was a standard requiring active purging of canisters for vessels with installed fuel tanks. This was modeled by using a 70 percent reduction in diurnal emissions compared to the baseline.

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### Final Regulatory Impact Analysis 

## Chapter 11 References

1. “Small SI Engine Technologies and Costs, Final Report,” ICF International, August 2006.

2. “Marine Outboard and Personal Watercraft SI Engine Technologies and Costs,” ICF Consulting, prepared for the U.S. Environmental Protection Agency, July 2006, Docket Identification EPA-HQ-OAR-2004-0008-0452.

3. “Sterndrive and Inboard Marine SI Engine Technol ogies and Costs,” ICF Consulting, prepared for the U.S. Environmental Protection Agency, July 2006, Docket Identification EPA-HQ-OAR-2004-0008-0453.

4. “Small SI Engine Technologies and Costs, Final Report,” ICF International, August 2006.

5. “Small SI Engine Technologies and Costs, Final Report,” ICF International, August 2006.

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