STAFF REPORT

INITIAL STATEMENT OF REASONS FOR PROPOSED RULEMAKIN G PUBLIC HEARING TO CONSIDER AMENDMENTS TO THE CURREN T REGULATIONS FOR LARGE SPARK-IGNITION ENGINES WITH A N ENGINE

DISPLACEMENT LESS THAN OR EQUAL TO ONE LITER

Date of Release: October 3, 2008 Scheduled for Consideration: November 20, 2008

Location:

Air Resources Board Byron Sher Auditorium 1001 “I” Street Sacramento, CA 95814

This report has been reviewed by the staff of the C alifornia Air Resources Board and approved for publication. Approval does not signif y that the contents necessarily reflect the views and policies of the Air Resources Board, nor does mention of trade names or commercial products constitute endorsement or recom mendation for use.1 TABLE OF CONTENTS

EXECUTIVE SUMMARY ..................................

................................................... .........................................2

1. INTRODUCTION.......................................

................................................... ........................................4

2. BACKGROUND .........................................

................................................... .......................................4

2.1 L EGAL A UTHORITY

................................................... ................................................... ...................4 2.2 R EGULATORY H ISTORY

................................................... ................................................... ............5 2.3 E MISSIONS I NVENTORY

................................................... ................................................... .............6 2.4 R ELATED F EDERAL R EGULATIONS

................................................... ...............................................7 2.5 P UBLIC P ROCESS

................................................... ................................................... .....................8

3. DISCUSSION .........................................

................................................... ...........................................9

3.1 E XHAUST E MISSION S TANDARDS

................................................... .................................................9 3.1.1 Overview...........................................

................................................... ..................................10 3.1.2 Engines ≤ 825 cc............................................

................................................... ....................11 3.1.3 Engines > 825 cc - ≤ 1.0 L.............................................

................................................... .....11 3.2 E VAPORATIVE E MISSION R EQUIREMENTS

................................................... ...................................14 3.3 O FF -H IGHWAY R ECREATIONAL V EHICLES

................................................... ...................................15

4. ENVIRONMENTAL AND ECONOMIC IMPACTS .................

................................................... .........16

4.1 E NVIRONMENTAL I MPACT

................................................... ................................................... ........16 4.1.1 Emission Reductions................................

................................................... ..........................16 4.1.2 Environmental Justice ..............................

................................................... ..........................16
4.2 C OST AND C OST -E FFECTIVENESS

................................................... ..............................................17 4.2.1 Near-Term (2011) Emission Standards ................

................................................... .............17 4.2.2 Long-Term (2015) Emission Standards ................

................................................... .............20 4.3 E CONOMIC I MPACT ON THE E CONOMY OF THE S TATE

................................................... ..................22 4.3.1 Legal Requirement ..................................

................................................... ...........................23 4.3.2 Businesses Affected................................

................................................... ...........................23 4.3.3 Impact on Small Businesses .........................

................................................... .....................24 4.3.4 Potential Impact on Distributors and Dealers.......

................................................... ..............24 4.3.5 Potential Impact on Business Competitiveness .......

................................................... ..........25 4.3.6 Potential Impact on Employment.....................

................................................... ...................25

5. ALTERNATIVES CONSIDERED............................

................................................... ........................25

5.1 T AKE N O A CTION

................................................... ................................................... ...................25 5.2 A DOPT M ORE S TRINGENT LSI E NGINE E MISSION S TANDARDS

................................................... ....26 5.3 A DOPT THE U.S. EPA’ S E MISSION S TANDARDS FOR LSI E NGINES ≤ 1.0 L......................................26 5.4 A DOPT EMA’ S P ROPOSAL

................................................... ................................................... ......26
5.5 S UMMARY OF A LTERNATIVES E VALUATED

................................................... ..................................27

6. CONCLUSIONS AND RECOMMENDATIONS ....................

................................................... ..........27

7. REFERENCES.........................................

................................................... .......................................28

APPENDIX A: Proposed Amendments to the Large Spark- Ignition Engines Exhaust Emission Regulation APPENDIX B: Proposed Amendments to the California E xhaust and Evaporative Emission Standards

and Test Procedures for New 2010 and Later Off-Road Large Spark-Ignition Engines2 

### EXECUTIVE SUMMARY

To address California’s acute air quality problems, the federal Clean Air Act granted California the unique authority to adopt and enforc e rules to control mobile source emissions within California. The California Clean Air Act requires the Air Resources Board (ARB or Board) to achieve the maximum degree of emission reductions possible from vehicular and other mobile sources in order to attain the State ambient air quality standards by the earliest practicable date.

The large spark-ignition (LSI) engine category is d efined as off-road spark-ignition engines greater than 19 kilowatts. New LSI engines with an engine displacement less than or equal to one liter ( ≤ 1.0 L) are typically used in such applications as portable generators, large turf care equipment, and industri al equipment. The Board initially adopted exhaust emission standards for these engine s in 1998. The existing regulations for LSI engines ≤ 1.0 L include exhaust emission standards, emission s test procedures, and provisions for warranty and product ion compliance programs (California Code of Regulations, Title 13, Chapter 9, Sections 2430 through 2439). The regulations were first implemented in 2002.

In May of 2006, the Board approved more stringent r egulations for LSI engines with an engine displacement greater than one liter. LSI en gines ≤ 1.0 L were not addressed in that regulation. In recent years, the population o f LSI engines ≤ 1.0 L, the number of engine families, and the maximum power ratings of t hese engines have grown significantly, making emissions from these engines a greater concern. To address this concern, staff’s proposal would amend the existing California exhaust emission regulations for new LSI engines ≤ 1.0 L to include more stringent exhaust emission standards and, for the first time, evaporative emis sions requirements. The proposed exhaust emissions standards are presented in the fo llowing table.

Current and Proposed Exhaust Emissions Standards fo r LSI Engines ≤ 1.0 L

Model Year Engine Displacement HC+NO x (g/kW-hr) CO

(g/kW-hr)

Current 2002 - 2010 ≤ 1.0 L 12.0 549

2011 and subsequent ≤ 825 cc* 8.0 549

2011 - 2014 > 825 cc* - ≤ 1.0 L 6.5 375

2015 and subsequent > 825 cc* - ≤ 1.0 L 0.8 20.6

* cc: cubic centimeters3

The major proposed amendments include the following :

• More stringent exhaust emission standards,

• Evaporative emission standards and requirements,

• Off-highway recreational vehicles (OHRV) test proc edures for LSI engines used in OHRV-like applications.

Staff’s proposal would reduce hydrocarbons plus oxi des of nitrogen (HC+NO x ) by 4.5 tons per day in 2020, at an estimated cost of $ 0.01 - $7.16 per pound.

Staff held two public workshops to allow for contin uing public involvement and input throughout the development of the proposed regulati ons. In addition, staff considered alternatives to the proposal, including taking no a ction, setting more stringent standards, adopting the United States Environmental Protection Agency emission standards, and adopting an Engine Manufacturers Association propos al. Staff has determined that adopting its current proposal is both technological ly feasible and cost-effective.4

PUBLIC HEARING TO CONSIDER AMENDMENTS TO THE CURREN T REGULATIONS FOR LARGE SPARK-IGNITION ENGINES WITH A N ENGINE

DISPLACEMENT LESS THAN OR EQUAL TO ONE LITER

1. INTRODUCTION

Off-road large spark-ignition (LSI) engines run on gasoline or an alternative fuel such as liquefied petroleum gas (LPG) or compressed natural gas (CNG), and are rated above 19 kilowatts (kW). Typical applications for off-ro ad LSI engines include forklifts, portable generators, large turf care equipment, irrigation p umps, welders, air compressors, scrubber/sweepers, airport ground support equipment , and a wide array of other agricultural, construction, and general industrial equipment. Exhaust and evaporative emissions from LSI engines and equipment are a sign ificant source of hydrocarbon (HC) and oxides of nitrogen (NO x ) emissions in California.

This report presents staff’s proposal for amending the current LSI engine regulations to include more stringent exhaust and evaporative emis sion requirements for LSI engines less than or equal to one liter ( ≤ 1.0 L) in displacement. Compliance with the propo sed emission standards will substantially reduce HC and NO x emissions from new 2011 and later engines.

This report addresses the need for the proposed reg ulatory changes, provides a summary of the proposed changes, presents the envir onmental and economic impacts of the proposal, and discusses alternatives to staf f’s proposal. Appendix A contains the proposed amendments to the current regulation, and Appendix B contains the proposed amendments to the test procedures.

2. BACKGROUND

2.1 Legal Authority

In 1988, the Legislature enacted the California Cle an Air Act, which declared that attainment of state ambient air quality standards i s necessary to promote and protect public health, particularly the health of children, older people, and those with respiratory diseases. The Legislature also directed that these standards be attained by the earliest practicable date.

Health and Safety Code sections 43013 and 43018 dir ect ARB to achieve the maximum feasible and cost-effective emission reductions fro m all off-road mobile source categories.5

2.2 Regulatory History

The Board first approved regulations for LSI engine s and equipment in 1998. The regulations include exhaust emission standards and test procedures, labeling requirements, warranty, in-use compliance testing, production line testing, and fleet requirements (California Code of Regulations (CCR), Title 13, Chapter 9, Sections 2430 through 2439).

The LSI engine category is divided based on engine displacement. For LSI engines larger than one liter (> 1.0 L) in displacement, em ission control requirements were implemented beginning with the 2001 model year (MY) . This engine size category is almost exclusively made up of automotive-derived en gines which are readily adapted to use existing automotive emission controls. The sma ller displacement engines, LSI engines ≤ 1.0 L, are typically used in such applications as portable generators (approximately 40 percent), large turf care equipme nt (approximately 30 percent), and industrial equipment (approximately 30 percent). A t the time of the initial rulemaking for LSI engines in 1998, industry argued that the LSI e ngines ≤ 1.0 L were more similar to small off-road engines (SORE) than to the LSI engin es > 1.0 L and therefore it would be more appropriate that they be required to meet the SORE emission standards. The Board agreed and approved emission standards equiva lent to those for SORE engines greater than or equal to 225 cubic centimeters (SOR E ≥ 225 cc). Thus, beginning with the 2002 MY (see Table 2.1, below), LSI engines ≤ 1.0 L were subject to a 12.0 grams per kilowatt-hour (g/kW-hr) HC+NO x standard and a 549 g/kW-hr carbon monoxide (CO) standard. In 2003, the Board approved an 8.0 g/kW-hr HC+NO x standard for SORE ≥ 225 cc for 2008 MY and later. Staff did not propo se to tighter the smaller LSI engine exhaust emission standards at that time.

Table 2.1 Exhaust Emission Standards For SORE ≥ 225 cc and LSI Engines ≤ 1.0L

Model Year Engine Category HC+NO x (g/kW-hr) CO

(g/kW-hr)

SORE ≥ 225 cc 12.0 549

2002

LSI ≤ 1.0 L 12.0 549

SORE ≥ 225 cc 8.0 549

2008

LSI ≤ 1.0 L 12.0 5496

In May 2006, the Board approved new regulations for LSI engines > 1.0 L. As shown in Table 2.2, for the 2007 through 2009 MY, these engi nes are required to meet emission standards of 2.7 g/kW-hr HC+NO x and 4.4 g/kW-hr CO. For 2010 and subsequent MY, the HC+NO x

emission standard drops to 0.8 g/kW-hr. Note that the CO emission standard was relaxed to allow for the “trade-off” o f significantly more HC+NO x benefits. Like the 2003 rulemaking, this rulemaking did not i nclude revisions to the emission standards for LSI engines ≤ 1.0 L.

Table 2.2

Exhaust Emissions Standards for LSI Engines > 1.0 L

Model Year HC+NO x (g/kW-hr) CO

(g/kW-hr)

2007 - 2009 2.7 4.4

2010 and subsequent 0.8 20.6

2.3 Emissions Inventory

Figures 2.1 and 2.2 illustrate the total statewide population and HC+NOx emissions inventory, respectively, for LSI engines ≤ 1.0 L in 2000, 2010, and 2020. Since the implementation of exhaust emission standards for th ese engines, their engine-out emission levels have decreased substantially. Howe ver, as a result of population growth between 2010 and 2020, the emissions contrib ution from these engines is expected to rise.

Figure 2.1 LSI Engines ≤ 1.0 L Statewide Population Estimates

0 50,000 100,000 150,000 200,000

2000 2010 20207 Figure 2.2 LSI Engines ≤ 1.0 L Statewide HC+NO x Emissions

Exhaust Evap

Exhaust Evap

Exhaust Evap

0 2 4 6 8 10 12 14Tons Per Day

2000 2010 2020

2.4 Related Federal Regulations

Large spark-ignition engines are regulated federall y under Title 40 of the Code of Federal Regulations (CFR), part 1048, which general ly harmonizes with the California emission standards until 2010, when more stringent California standards go into effect for LSI engines > 1.0 L. The federal LSI engine re gulations allow manufacturers to certify LSI engines ≤ 1.0 L that are between 19 kW and 30 kW to the nonr oad sparkignition engines (i.e., SORE) requirements of 40 CF R Part 90 or 1054.

On September 4, 2008, the United States Environment al Protection Agency (U.S. EPA) finalized its phase 3 HC+NO x emission standard of 8.0 g/kW-hr for the SORE ≥ 225 cc and LSI engines ≤ 1.0 L starting in the 2011 MY, as shown in Table 2 .3 (U.S. EPA 2008). Both the phase 2 and phase 3 U.S. EPA stand ards are less stringent than staff’s proposed exhaust emissions standards for LSI engine s ≤ 1.0 L.

Table 2.3 U.S. EPA Exhaust Emissions Standards for LSI Engine s ≤ 1.0 L

(also apply to SORE ≥ 225 cc)

Model Year HC+NO x (g/kW-hr) CO

(g/kW-hr)

Phase 2 2005 - 2010 12.1 610

Phase 3 2011 and subsequent 8.0 6108

2.5 Public Process

Staff met with interested stakeholders and solicite d input numerous times during the development of this proposal. Staff conducted publ ic workshops on November 14, 2007 and April 21, 2008 to aid in developing the propose d regulations. Workshop notices were sent out via email on the msprog listserve lis t and orspark listserve list to all stakeholders, including environmental organizations , engine manufacturers, equipment manufacturers, and trade associations, as well as o ther interested parties. At the workshops and subsequently, staff shared draft prop osed regulatory language. Public information concerning the development of this prop osal was also made available on ARB's website at www.arb.ca.gov/msprog/offroad/orsp ark/orspark.htm.

Staff met with many of the engine and equipment man ufacturers to discuss individual concerns. Staff also sent an extensive survey to L SI engine and equipment manufacturers to help evaluate the level of technol ogy currently utilized by industry as well as examine specific issues including equipment cost, engine durability, and market trends. Staff received replies from 14 manufacture rs (including some who have indicated they do not intend to participate in the LSI engine ≤ 1.0 L market), representing approximately 70 percent of the market . A listing of stakeholder meetings, along with meeting dates, is shown below in Table 2 .4.

Table 2.4 Stakeholder Meetings and Survey Responses

Stakeholder Date(s) Briggs & Stratton Corp. 2/8/08, 4/3/08, 8/12/08, 8/ 14/08 China Motor Company 3/14/08* Daihatsu Motor Company, LTD 3/14/08* Engine Manufacturers Association 2/8/08, 4/24/08, 6 /24/08, 8/12/08 Generac Power Systems, Inc. 3/14/08* John Deere 8/12/08 Kawasaki Heavy Industries, LTD 2/8/08, 8/12/08 Kohler Company 2/7/08, 2/8/08, 4/21/08, 4/24/08, 8/ 12/08 Kubota Corp. 3/16/08*
MECA 11/29/07, 5/16/08 Nissan Motor Co., Ltd. 2/27/08* Outdoor Power Equipment Institute 2/8/08, 4/24/08, 5/6/08, 8/12/08 Polaris Industries Inc. 2/19/08, 4/8/08, 7/8/08 The Toro Company 2/8/08, 4/24/08, 8/12/08 Toyota Industrial Equipment Mfg. Inc. 2/27/08* Vantage Power Vehicle, Inc. 3/5/08, 3/20/08 Wisconsin Motors 2/25/08* Zenith Power Products, LLC 3/5/08* * Survey only9

As a result of the oral and written comments receiv ed, staff made significant changes to the proposed regulations and test procedures, which are reflected in the staff’s proposal.

3. DISCUSSION

3.1 Exhaust Emission Standards

As shown in Figure 3.1, the current standards for L SI engines ≤ 1.0 L (2 nd bar) are significantly less stringent than those for LSI eng ines > 1.0 L, and in fact are even less stringent than ARB’s recently implemented tier 3 emission standards for SORE ≥ 225 cc. In addition, the growing population and p ower ratings within this category also concern staff. As shown previously i n Figure 2.1, and shown below in Figure 3.2, the population and number of engine fam ilies of the LSI engines ≤ 1.0 L have grown significantly since 2002, when emission standards first went into effect.

Figure 3.1 Adopted HC+NO x Emission Standards for SORE ≥ 225 cc and LSI Engines

8 12

2.7

0.8

0 2 4 6 8 10 12HC+NOx, g/kW-hr

SORE ≥ 225cc
2008 & later LSI engines ≤ 1.0 L

2002 & later LSI engines > 1.0 L

2007-2009 LSI engines > 1.0 L

2010 & later10 Figure 3.2 Number of Certified LSI Engine Families

0 10 20 30 40 50 60 70No. of Engine Families

2002 2003 2004 2005 2006 2007 2008

Model Year LSI > 1.0 L

LSI ≤ 1.0 L

3.1.1 Overview

To evaluate the industry’s ability to meet more str ingent standards, staff examined data from a variety of sources 1 , including the most recent certification emission data submitted by manufacturers. As shown below in Tabl e 3.1, the HC+NO x emission levels for gasoline powered LSI engines ≤ 1.0 L without catalysts are in the range of 5.1 to 11.2 g/kW-hr (standard is 12.0 g/kW-hr). Howeve r, catalyst-equipped engines within the category display emission levels as low as 0.5 g/kW-hr HC+NO x . This demonstrates the technical feasibility of achieving significantly lower HC+NO x emissions utilizing currently available emission control tech nologies.

Table 3.1 HC+NO x Emissions Levels of 2008 MY Certified LSI Engines ≤ 1.0 L (g/kW-hr)

2008 MY Certification Data Gasoline Fueled LSI Engines ≤ 1.0 L without Catalyst All LSI Engines ≤ 1.0 L

Max 11.2 11.2

HC+NO x Avg 7.9 6.6

Min 5.1 0.5

(1) Southwest Research Institute (1999), Southwest Research Institute (2004), U.S. EPA (2007), and MECA (2008).11

Based on a review of the available data and an asse ssment of available technology, staff proposes the emissions standards summarized i n Table 3.2 below. In addition to the more stringent emission standards, staff is pro posing a new engine displacement cutpoint at 825 cc, as explained in further detail below.

Table 3.2 Current and Proposed Emission Standards for LSI Eng ines ≤ 1.0 L

Model Year Engine Displacement HC+NO x

(g/kW-hr) CO

(g/kW-hr)

Current 2002 and

subsequent ≤ 1.0 L 12.0 549

2011 and subsequent ≤ 825 cc 8.0 549

2011 - 2014 > 825 cc - ≤ 1.0 L 6.5 375 Proposed

2015 and

subsequent > 825 cc - ≤ 1.0 L 0.8 20.6

3.1.2 Engines ≤ 825 cc

There are currently no engine families certified wi th displacements between 775 cc and 850 cc. During development of staff’s proposal, E MA suggested that engines below 825 cc should be treated separately from those betw een 825 cc and 1.0 L. Although the engines below 825 cc do not currently differ in technology from engines between 825 cc and 1.0 L, they do tend to be used in much l ess expensive equipment, which would be less able to absorb increased costs of mor e advanced technologies like an electronic fuel injection system. Thus, staff prop oses that these engines meet emission standards equivalent to the tier 3 emission standar ds for SORE ≥ 225 cc. Most of these smaller LSI engines are designed for turf care equi pment, and their performance and operation characteristics are comparable to those o f SORE ≥ 225 cc. Currently, three out of four certified 2008 MY LSI engine families i n this range can meet the proposed emission standards, demonstrating both the technica l and the economic feasibility of the proposal.

3.1.3 Engines > 825 cc - ≤ 1.0 L

Engines greater than 825 cc are a larger concern. Currently, 86 percent of the certified 2008 MY LSI engine families ≤ 1.0 L have engine displacements greater than 825 c c. As shown in Figure 3.3, this is an increase of 11 e ngine families compared to the 2003 MY.12 Figure 3.3 Comparison of the Number of Certified LSI Engine Fa milies

in 2003 MY and 2008 MY

0 5 10 15 20 25 30 3545050055060065070075080085090095010001050110011501200125013001350140014501500155016001650170017501800185019001950> 2000

Engine Displacement (cc)No. of Engine Families 2003 2008

The projected sales of LSI engines ≤ 1.0 L are approaching 50 percent of the total LSI engines sales, up from the 15 percent estimated in 2002. Simultaneously, the number of engine families offered with displacements betwe en 1.0 L and 1.6 L has declined to zero. This suggests that there is a migration from the more stringently regulated LSI engines > 1.0 L category to the significantly more lenient LSI engines ≤ 1.0 L category. Staff’s proposal would result in the same emission standard for LSI engines > 825 cc, in a two-step process.

3.1.3.1 Near-Term (2011) Emission Standards

As shown previously in Table 3.2, staff proposes a 6.5 g/kW-hr HC+NO x emission standard to be implemented in 2011. During develop ment of the 1998 LSI engine rulemaking, staff had originally considered a 6.5 g /kW-hr HC+NO x emission standard, based on testing performed by the Southwest Researc h Institute (SwRI, 1999). But, as mentioned previously, industry argued that the engi nes had more similarities to SORE than to the larger LSI engines and therefore it wou ld be more appropriate that they meet the less-stringent SORE standard. Currently, howev er, with the increase in engine size and power ratings, staff believes 6.5 g/kW-hr HC+NO x and 375 g/kW-hr CO are appropriate near-term emission standards. These pr oposed emission standards are13

already being met, as shown below in Table 3.3. Th irty-seven percent of the 2008 MY LSI engine families ≤ 1.0 L were certified with emissions of 6.5 g/kW-hr HC+NO x

or less, representing 48 percent of the projected California sales.

Table 3.3 Engine Families Certified in 2008 Model Year Meeting the Proposed Near-Term HC+NO x Emission Standard

Scenario HC+NO x ( g/kW-hr) Engine

Families No. of

Manufacturers Projected

Sales

Proposed > 825 cc - ≤ 1.0 L 2011 – 2014 standard 6.5 37% (9 out of 24) 8 48% (4,000)

3.1.3.2 Long-Term (2015) Emission Standards

For the longer term, beginning with the 2015 MY, st aff proposes to harmonize the emission standards for LSI engines between 825 cc a nd 1.0 L with the existing emission standards for LSI engines > 1.0 L (0.8 g/kW-hr HC+N O x , 20.6 g/kW-hr CO). As shown in Table 3.4, three engine families are already cer tified at the proposed long-term HC+NO x emission standard.

Table 3.4

Engine Families Certified in 2008 Model Year Meeting Proposed Long-Term HC+NO x Emission Standard

Scenario HC+NO x ( g/kW-hr) Engine

Families No. of

Manufacturers Projected

Sales

Proposed > 825 cc - ≤ 1.0 L 2015 and later standard 0.8 12% (3 out of 24) 3 6% (500)

Some manufacturers have expressed concerns primaril y over the economic impact of staff’s proposal, citing that these three engine fa milies represent only a small segment of the market, and that the engines are primarily u sed in vehicular applications, such as utility vehicles. Manufacturers have also indicate d that the proposed emission standards would require liquid-cooling, closed-loop electronic fuel injection systems, and three-way catalysts.

Staff agrees with industry with regard to the techn ology most likely needed to comply with the proposed emission standards. However, alt hough many engines in the category are air-cooled currently, almost every man ufacturer has experience with liquid14

cooling 2 . The 2008 MY certification applications show that 15 of the 24 engine families above 825 cc are liquid-cooled. Although some manu facturers have expressed concern that liquid-cooled engines might not be accepted in the market, liquid-cooled engines offer several advantages, primarily because they ar e capable of running cooler than aircooled engines. With adequate cooling, a manufactu rer can usually increase the horsepower of a given engine without increasing its size 3 . This trend of achieving more horsepower without increasing engine size is a comm on marketing tool and design goal of manufacturers. In addition, liquid-cooled engin es run more fuel efficiently reducing production of carbon dioxide, a greenhouse gas.

Closed-loop electronic fuel injection and catalysts , although not as common in this category, are also well understood technologies com monly used on LSI engines > 1.0 L. Of the 24 engine families between 825 cc and 1.0 L that are certified for the 2008 MY, four of them have a three-way catalyst and closed-l oop electronic fuel injection system.

While staff acknowledges industry’s concerns, the f easibility of the proposed standards is technically sound. With regard to the potential economic impact, the proposed emission standards are also cost-effective, as disc ussed in greater detail later in this report. Furthermore, the proposed 2015 implementat ion would allow seven years of lead time for manufacturers who do not yet meet the proposed standards to develop the requisite technology to be compatible with their en gine designs and products.

3.2 Evaporative Emission Requirements

As shown previously in Figure 2.2, equipment with L SI engines ≤ 1.0 L contribute 1.3 tons per day of evaporative HC emissions statew ide in 2000. If left uncontrolled, the emissions will increase to 2.6 tons per day in 2020 , due to population growth.

To control the evaporative emissions, staff propose s that 2011 and later MY equipment with LSI engines ≤ 1.0 L meet the same evaporative emission requireme nts as SORE ≥ 225 cc equipment, as shown below in Table 3.5. Ho wever, while the evaporative requirements for SORE equipment allow f or a small volume exemption for fuel tanks produced in less than 400 units, staff’s proposal for the LSI engines ≤ 1.0 L does not allow for this exemption. This is because there are several cost-effective solutions available that enable manufacturers to pr oduce low-cost compliant fuel tanks 4

.

(2) Only one manufacturer of currently-certified L SI engines does not offer at least one liquid-coole d engine family in the SORE or LSI engine categories. (3) For a given displacement engine, increasing ho rsepower is usually accomplished by modifying a variety of engine parameters (e.g., increased compr ession ratio, higher engine speeds). Because these modifications cause the engine to “work harder”, mo re heat is generated. (4) The cost of complying fuel tanks are also more easily absorbed for LSI engines and equipment than for SORE because of the higher base prices of LSI e ngines and equipment.15 Table 3.5 Proposed Evaporative Emissions Performance and Design Standards

Requirements 2011 2012 2013+

Performance Requirements Diurnal Standard

g HC/day 1.20 + 0.056 × tank vol.(L)

Fuel Hose Permeation g ROG*/m

2 /day 15

Fuel Tank Permeation g ROG/m

2 /day 2.5 1.5 Design Requirements Carbon Canister or

Equivalent Butane Working Capacity, g

HC 1.4 g/L (tanks ≥ 3.78 L) or 1.0 g/L (tanks < 3.78 L)
*ROG: Reactive Organic Gases 5

3.3 Off-Highway Recreational Vehicles

Some LSI engines ≤ 1.0 L are used in vehicles that meet all the requi rements of the “Off-Road Sport Vehicle,” or “Off-Road Utility Vehi cle” definitions in CCR, Title 13, Section 2411(a) (13),(17), or (18), with the except ion of payload capacity. The current definitions of off-road sport vehicles and off-road utility vehicles include a maximum limit on rear payload capacity. This limit was establish ed to ensure that the vehicles were truly designed and used for recreational purposes, rather than for industrial or commercial purposes. Staff now believes that this limit is inappropriate given that the current trend for recreational vehicles is to signi ficantly increase payload, beyond the limits of the existing regulations.

Staff proposes that most LSI engines used in vehicl es similar to off-highway recreational vehicles be subject to the proposed near-term 2011 emission standards, but be allowed to use the off-highway recreational vehicle test pr ocedures and certification procedures. This would simplify the certification process and p rovide flexible testing options as the chassis-based testing becomes a federal requirement for off-highway recreational vehicles in 2014. These engines form a subset of L SI engines ≤ 1.0 L that would most appropriately be regulated in the off-highway recre ational vehicle category. Therefore, this proposal would exclude these engines from the proposed 2015 standards; staff’s long-term goal is to amend the current off-highway recreational vehicle regulations to incorporate this type of engine.

(5) Reactive organic gases (ROG) are a subset of hy drocarbons (HC) that excludes methane and other photochemically non-reactive hydrocarbons that do n ot contribute to the formation of ozone. The exhaus t emission standards are usually established for HC, but the permeation standards and emission modeling for ozone impact use ROG.16

4. ENVIRONMENTAL AND ECONOMIC IMPACTS

4.1 Environmental Impact

4.1.1 Emission Reductions

Table 4.1 shows the statewide emissions benefit of the staff’s proposal in 2014 and 2020. In 2014, the statewide ROG+NO x emissions would be reduced by 1.9 tons per day. In 2020, the proposal would reduce approximat ely 4.5 tons per day of ROG+NO x .

Table 4.1 Estimated Benefit of the Proposal, Statewide Annual Average

ROG+NO x Emission Reductions

(tons per day) Staff Proposal Element
2014 MY 2020 MY

Exhaust emission standards 1.7 4.1

Evaporative emission requirements 0.2 0.4

Total 1.9* 4.5*

* Benefits have been rounded to the nearest tenth.

4.1.2 Environmental Justice

State law defines environmental justice as the fair treatment of people of all races, cultures, and incomes with respect to the developme nt, adoption, implementation, and enforcement of environmental laws, regulations, and policies (Senate Bill 115, Solis; Stats 1999, Ch. 690; Government Code § 65040.12(c)) . The Board has established a framework for incorporating environmental justice i nto the ARB's programs consistent with the directives of State law. The policies dev eloped apply to all communities in California, but recognize that environmental justic e issues have been raised more in the context of low income and minority communities, whi ch sometimes experience higher exposures to some pollutants as a result of the cum ulative impacts of air pollution from multiple mobile, commercial, industrial, area wide, and other sources. Over the past twenty-five years, the ARB, local air districts, an d federal air pollution control programs have made substantial progress towards improving th e air quality in California. However, some communities continue to experience hi gher exposures than others as a result of the cumulative impacts of air pollution f rom multiple mobile and stationary sources and thus may suffer a disproportionate leve l of adverse health effects. Since the same ambient air quality standards apply to all regions of the State, all communities, including environmental justice communities, will b enefit from the air quality benefits associated with the proposal. Alternatives to the proposed recommendations, such as recommending no change to the current program could adversely affect all17

communities. As additional relevant scientific evi dence becomes available, the LSI engine emission standards will be reviewed again to make certain that the health of the public is protected with an adequate margin of safe ty.

To ensure that everyone has an opportunity to stay informed and participate fully in the development of the proposal, staff has held worksho ps in El Monte and has distributed information through the internet, as described in s ection 2.5.

4.2 Cost and Cost-Effectiveness

To determine the economic impact of the proposed re gulations, staff evaluated cost information supplied by engine and equipment manufa cturers, the Outdoor Power Equipment Institute, Inc., Engine Manufacturers Ass ociation, Manufacturers of Emission Controls Association, and U.S. EPA.

4.2.1 Near-Term (2011) Emission Standards

4.2.1.1 Engine Development Costs

Based on responses to a survey sent to manufacturer s, the proposed exhaust and evaporative emission standards would require minima l lead time and would impose relatively minor engine and equipment development c osts, as shown in Table 4.2. The wide range of development costs reflect the situati on where in some cases, there would be no need for additional engine development since the engine family already meets the proposed emission standards. In fact, 48 percent o f the 2008 MY engine families already meet the proposed standards, as noted in Se ction 3.1.3.1.

Table 4.2 Estimated Engine and Equipment Development Costs to Meet the 2011 Emission Standards

Item Cost

Research, engine development, tooling, and equipment redesign cost per engine family $0 - 100,000

Weighted average cost per engine* $8.14

Source: LSI engine and equipment manufacturers surv ey results, April 2008. * Weighted average cost per engine assumes 4 years of production meet the standards.

4.2.1.2 Emission Controls Costs

The 2011 exhaust emission standards should not requ ire any additional emission control components. Engine modifications and air/f uel ratio calibration changes should be sufficient to bring the engines that do not meet the standards into compliance.18

However, meeting the evaporative standards could re quire modifications to fuel tanks, fuel hoses, and fuel caps, as well as the addition of a carbon canister. Since the evaporative standards and procedures are equivalent to those for SORE ≥ 225 cc, staff has assumed costs identical to those noted in the 2 003 SORE staff report. As shown in Table 4.3, the estimated emission controls cost for manufacturers of LSI engines ≤ 1.0 L would be in the range of $16.21 - $70.21 per unit.

Table 4.3 Estimated Emission Controls Cost to Meet the 2011 Emission Standards

Item Cost Range ($/engine)

Tank Permeation $1.00-$27.00

Fuel Cap $1.00

Fuel hose Permeation $1.00 - $2.00

Venting Control (Carbon Canister) $10.00 - $37.00

Testing $3.21

Total $16.21 - $70.21

Source: SORE 2003 evaporative control cost estimate s.

Staff did not calculate a weighted average for the emission controls cost, since specific information is not available on whether a given cur rently certified engine family already is equipped with the necessary emissions controls ( e.g., fuel tank permeation) 6 . Thus, it is unknown at this time whether all engines would r equire the addition of all the identified controls. However, to ensure that costs were not underestimated the worst case emission controls cost ($70.21) was used in al l cost and cost-effectiveness calculations. Thus, the combined total engine cos ts would be approximately $78 per
unit.

4.2.1.3 Equipment Redesign Costs

Industry did not provide specific cost-estimates fo r possible equipment redesign to accommodate the cleaner engines. However, the chan ges envisioned for the 2011 standards should not require any major equipment re design, as engine changes would

(6) In general, information on a manufacturer’s in tent to use specific emission controls is provided in the manufacturer’s application for certification. The emission controls discussed here are not required a t this point. Thus, the information is not (yet) availabl e because a manufacturer will not be required to no te such information in its certification application u ntil the proposed regulations are implemented.19

be internal (e.g., calibration changes) and fuel sy stem changes are primarily a matter of using improved components and the addition of a rel atively small carbon canister.

4.2.1.4 Comparison of Cost Increase to Equipment Co st

The cost range for an LSI engine ≤ 1.0 L is $500 to $8,000, and equipment or vehicle costs range from $2,700 to $50,000 (covering both c onsumer products and professional products). A comparison of the estimated worst-cas e cost increase ($78) to the base price of equipment indicates that for extremely low -cost equipment, emission controls could approach three percent of the base cost. It should be recognized that many of these engines (both the smaller as well as the larg er engines > 825 cc) meet the proposed exhaust standards already.

4.2.1.5 Cost-Effectiveness

To determine the cost-effectiveness of the near-ter m emission standards, staff divided the total cost by the ROG+NO x emission reductions expected over the average life time of the equipment. Separate values were calculated for the major categories of equipment that use LSI engines ≤ 1.0 L. As shown in Table 4.4, the resulting cost-effectiveness ranges from $0.01 to $0.15 per p ound of ROG+NO x reduced. The 2011 emission standards are very cost-effective whe n compared with recently adopted control measures.

Table 4.4

Lifetime Emission Reductions per Unit and Cost-Effe ctiveness

For the 2011 Emission Standards

Equipment Type ROG, Exh (lb) ROG, Evap (lb) NO x (lb) ROG+NO x

(lb) Cost-Effectiveness

(Cost per pound ROG+NO x

reduced)

Generator Sets 2,966 746 496 4,208 $0.02

Lawn and Garden Tractors 277 338 63 678 $0.12

Commercial Turf Equipment 184 317 45 546 $0.14

Other Lawn and Garden Equipment 1,757 385 294 2,436 $0.03

Sweepers/Scrubbers 4,813 148 746 5,707 $0.01

Other General Industrial Equipment 285 173 63 521 $0.1520

4.2.2 Long-Term (2015) Emission Standards

4.2.2.1 Engine Development Costs

Based on the responses to the survey sent to manufa cturers, the proposed exhaust emission standards would require one to four years of lead time and would impose additional development costs, as shown in Table 4.5 . The actual price increases for research and engine development are expected to be much lower than those estimated by the manufacturers, because the likely technologi es to be used are the same as that used in the automotive industry for many years. Ne vertheless, to be conservative, staff used the $840 figure shown in the table.

Table 4.5 Estimated Incremental Engine and Equipment Developm ent Costs

to Meet the 2015 Emission Standards

Item Cost

Research, engine development, and tooling cost per engine family $0 - $15,000,000

Weighted average cost per engine* $840

Source: LSI engine and equipment manufacturers surv ey results, April 2008. *Weighted average cost per engine assumes 4 years o f production meet the standards.

4.2.2.2 Emission Controls Costs

Each engine manufacturer has its own strategy to me et the proposed emission standards. Some of them would convert air-cooled e ngines to liquid-cooled engines equipped with a three-way catalyst and closed-loop electronic fuel injection system, while some already use these technologies and can m eet the proposed HC+NO x standards without the need for additional emission controls. Unlike the 2011 emission standard analysis, staff was able to calculate a we ighted average for the emission control costs. As shown in Table 4.6, the weighted average emission controls cost for manufacturers of LSI engines ≤ 1.0 L would be $400 per unit. The combined weight ed average engine costs would thus be approximately $1 ,240 per unit.21 Table 4.6 Estimated Incremental Emission Controls Cost to Meet the 2015 Emission Standards

Item Cost Range ($/engine)
Air-cooled to liquid-cooled (radiators, etc.) $0 - $200

Closed-loop Electronic Fuel Injection $0 - $600

Catalyst $0 - $150

Secondary air injection $0 - $15

Exhaust gas recirculation $0 - $40

Total $0 - $1005

Weighted average cost per engine $400
Source: LSI engine and equipment manufacturers’ sur vey results, April 2008

4.2.2.3 Equipment Redesign Costs

Industry did not provide specific cost-estimates fo r possible equipment redesign to accommodate the cleaner engines and exhaust aftertr eatment systems. However, some products such as zero turn radius mowers are c urrently offered in both air-cooled and liquid-cooled configurations, at a dealer repor ted cost differential of approximately $700. Staff considers this to be a reasonable esti mate for the cost of equipment redesign. The resulting weighted average cost incr ease to comply with the regulations would thus be $1,940 per unit.

4.2.2.4 Comparison of Cost Increase to Equipment Co st

A comparison of the weighted average cost increase ($1,940) to the base price of equipment ($2,700 to $50,000) indicates that for th e least expensive equipment, emission controls could be more than seventy percen t of the base cost. However, it should be recognized that the long lead-time allows a longer period for amortization of research and development costs, although only four years was used in staff’s calculations. Additionally, manufacturers would ha ve the option to downsize the engines to displacements below 825 cc, which would subject them to more lenient and less costly emissions standards. Although some man ufacturers have expressed the opinion that all engines in the category might be d ownsized to avoid the more stringent standards, staff believes that customer demand for greater power and the advantages offered by liquid-cooled and electronic controlled engines would prevent this from becoming an overall trend, particularly on equipmen t with a higher initial base cost.22

4.2.2.5 Cost-Effectiveness

To determine the cost-effectiveness of the 2015 emi ssion standards, staff divided the weighted average cost increase by the incremental ROG+NO x

lifetime emission reductions (i.e., above and beyond the near-term em ission standard reductions). Again, separate values were calculated for the major categ ories of equipment that use LSI engines ≤ 1.0 L. As shown in Table 4.7, the resulting cost- effectiveness ranges from $0.52 to $7.16 per pound of ROG+NO x reduced. The 2015 emission standards are cost-effective when compared with recently adopted control measures.

Table 4.7 Lifetime Emission Reductions per Unit and Increment al Cost-Effectiveness

For the 2015 Emission Standards

Equipment Type ROG, Exh (lb) NO x (lb) ROG+NO x

(lb) Cost-Effectiveness

(Cost per pound ROG+NO x

reduced)

Generator Sets 1,636 968 2,604 $0.75

Lawn and Garden Tractors 264 110 374 $5.19

Commercial Turf Equipment 195 76 271 $7.16

Other Lawn and Garden Equipment 967 573 1,540 $1.26

Sweepers/Scrubbers 2,255 1,500 3,755 $0.52

Other General Industrial Equipment 260 111 371 $5.23

4.3 Economic Impact on the Economy of the State

The proposed regulations are not expected to impose a significant cost burden to engine or equipment manufacturers. Staff anticipate s manufacturers will pass on any added costs to consumers.

Although a price increase for equipment with LSI en gines ≤ 1.0 L may persuade a consumer to delay the purchase in the short-term, i t is not expected to significantly impact the long-term demand because equipment event ually wears out and is replaced. Based on the above assumptions, staff expects the p roposed regulations to impose no adverse impact on California competitiveness and em ployment. The following sections are intended to fulfill ARB’s legal requirements re lated to economic analysis and economic impact for stakeholders affected by these proposed regulations.23

4.3.1 Legal Requirement

Section 11346.3 of the Government Code requires Sta te agencies to assess the potential for adverse economic impacts on Californi a business enterprises and individuals when proposing to adopt or amend any ad ministrative regulations. The assessment must include a consideration of the impa ct of the proposed regulations on California jobs, business expansion, elimination or creation, and the ability of California business to compete.

Also, section 11346.5 of the Government Code requir es State agencies to estimate the cost or savings to any state, local agency and scho ol district in accordance with instructions adopted by the Department of Finance. The estimate must include any non-discretionary cost or savings to local agencies and the cost or savings in federal funding to the state.

4.3.2 Businesses Affected

Any business involved in the manufacturing of LSI e ngines ≤ 1.0 L and equipment will potentially be affected by the proposed regulations . Also potentially affected are businesses that supply engines and parts to these m anufacturers, and those businesses that buy and sell equipment in Californi a. The focus of the discussion below, however, will be on the engine and equipment manufacturers because these businesses would be directly affected by the propos ed regulations.

4.3.2.1 Engine Manufacturers

There are currently 13 manufacturers of LSI engines ≤ 1.0 L that market certified engines in California, as shown in Table 4.8. Some of these manufacturers produce engines for off-road utility vehicle or off-road sp ort vehicle applications, which have been certified under the off-highway recreational v ehicles regulations starting with the 2008 MY. None of the manufacturers is located in C alifornia although some have small repair and distribution operations in California.

Table 4.8 Manufacturers with LSI Engines ≤ 1.0 L Certified in California

BRIGGS & STRATTON CORPORATION POLARIS INDUSTRIES, I NC.

DAIHATSU MOTOR CO., LTD. TIGER TRUCK, LLC.

GENERAC POWER SYSTEMS, INC. VANTAGE POWER VEHICLE, INC.

KAWASAKI HEAVY INDUSTRIES, LTD. YAMAHA MOTOR CO., L TD.

KOHLER COMPANY YANMAR DIESEL ENGINE CO., LTD.

KUBOTA CORPORATION ZENITH POWER PRODUCTS, LLC

MAG INTERNATIONAL24

4.3.2.2 Equipment Manufacturers

There are over 1,000 manufacturers of equipment wit h LSI engines ≤ 1.0 L nationwide. Many are “small” manufacturers that do not, however , meet the definition of a “Small Business” as defined in Government Code Section 113 42.610. The majority of equipment is manufactured outside California. Thes e manufacturers produce a wide variety of products. The affected equipment manufa cturers fall into different industry classifications. A list of the industries that sta ff has been able to identify is provided in Table 4.9.

Table 4.9

Industries with Potentially Affected Manufacturers

Standard Industrial Classification Code Industry

3621 Motors and Generators
3523 Farm Machinery and Equipment 3524 Lawn and Garden Tractors/Equipment 3531 Construction Machinery
3561 Pumps and Pumping Equipment

4.3.3 Impact on Small Businesses

The proposed LSI engine regulations will have some impact, although not significant, on small businesses that buy and sell portable generat ors, large turf care equipment, and industrial equipment. For small retailers, during the initial years of implementation, the increased cost of equipment may lead to a slight dr op in demand that could result in lower profits. The retailer would carry over unsol d stock to the next year, possibly incurring less profit on the sale of these units.

4.3.4 Potential Impact on Distributors and Dealers

Most engine and equipment manufacturers sell their products through distributors and dealers, some of which are owned by manufacturers a nd some are independent. Most independently owned dealers are small businesses. Some low-volume manufacturers also deal directly with their customers. The distr ibutors and dealers sell about 9,000 pieces of equipment with LSI engines ≤ 1.0 L per year in California. This number is expected to grow substantially by 2020, as evidence d by the expected overall population growth (Figure 2.1). Although distribut ors and dealers are not directly affected by the proposed amendments, the amendments may affect them indirectly. If an increase in the price of engines and equipment r educes sales volume, dealers’ revenue would be affected adversely.25

4.3.5 Potential Impact on Business Competitiveness

The proposed amendments would have no significant i mpact on the ability of California engine and equipment manufacturers to compete with manufacturers of similar products in other states. This is because all manufacturers that produce these engines and equipment for sale in California are subject to the proposed amendments regardless of their location. Furthermore, all of the engine man ufacturers, and most of the equipment manufacturers, are located outside of California.

4.3.6 Potential Impact on Employment

The proposed regulations are not expected to cause a noticeable reduction in California employment because California accounts for only a s mall share of manufacturing employment in off-road engine, equipment, and compo nent production. However, some small businesses operating outside of California ma y leave the California market due to cost increases, which may result in a few jobs bein g eliminated.

5. ALTERNATIVES CONSIDERED

Staff evaluated four additional alternatives to the currently proposed regulations. These included:

• Take no action

• Adopt More Stringent LSI Engine Emission Standards

• Adopt the U.S. EPA’s Emission Standards for LSI En gines ≤ 1.0 L

• Adopt EMA’s proposal

These alternatives are discussed in detail below.

5.1 Take No Action

The first alternative evaluated was to take no acti on. Under this alternative, it is likely that few, if any, engine and equipment manufacturer s would voluntarily incorporate additional emission control technology into their d esigns. The few manufacturers that did would be at a competitive disadvantage compared to manufacturers electing not to incorporate the emission control technology. Clear ly, most of the exhaust and evaporative emission control technologies used in c ars have not been adapted for use in LSI engines ≤ 1.0 L and equipment because manufacturers perceive the costs outweigh performance and fuel usage benefits. As t he emission standards for LSI engines > 1.0 L, SORE, and off-road compression-ign ition engines become more stringent, manufacturers would have greater incenti ve to market products that would fall into the LSI engines ≤ 1.0 L category.

Therefore, this alternative would result in no emis sion reductions and would not contribute to the State Implementation Plan’s (SIP) control strategy to attain Federal26

and State ambient air quality standards for ozone. The cost to the state is the potential loss of Federal highway funding, should an adequate SIP not be implemented.

5.2 Adopt More Stringent LSI Engine Emission Standa rds

Another alternative considered was to propose emiss ion standards for LSI engines ≤ 1.0 L to be set at 0.8 g/kW-hr earlier than the 20 15 date being proposed. As noted in section 3.1, there are three engine famili es that meet that level today establishing both technical feasibility and some ab ility for the market to support the costs of cleaner engines. The emission benefits fo r this alternative would exceed those from staff’s proposal. However, the earlier implem entation would likely cause more disruption in the market, as manufacturers that do not currently offer liquid-cooled catalyst equipped engines would have less time to d evelop controls. Thus, this alternative was rejected in favor of a proposal whi ch allows more time for development and cost recovery.

5.3 Adopt the U.S. EPA’s Emission Standards for LSI Engines ≤ 1.0 L

A third alternative would be to adopt the U.S. EPA’ s emission standards for LSI engines ≤ 1.0 L. U.S. EPA’s phase 3 HC+NO x emission standard, starting in 2011 MY, is at the same level of stringency as the current S ORE emission standard of 8.0 g/kWhr. The LSI engine industry supported this alterna tive. Although the U.S. EPA's emission standards were based on nationwide economi c and environmental impacts as a whole, they do not adequately address the unique and compelling circumstances faced in California. The federal emissions standar ds ignore the technical capability of cleaner engines that are already available. There would be minimal emission benefit from this alternative and it would not contribute s ufficiently to the SIP's control strategy to attain the Federal and State ambient air quality standards for ozone. The cost to the state is the potential loss of Federal highway fund ing, should an adequate SIP not be implemented.

5.4 Adopt EMA’s Proposal

In the development of this control measure, ARB sta ff has met with industry on numerous occasions to discuss emission standards an d test procedures that would ensure emission reductions while addressing concern s raised by industry. Throughout this process, industry has raised several points, m any of which have been integrated into staff’s proposal. In the June 24, 2008 meetin g with EMA and manufacturer representatives, a proposal was brought forth to ad d two new classes of engines under the SORE category. A new class of SORE with an eng ine displacement between 225 cc and 825 cc would have an HC+NO x exhaust emission standard of 8.0 g/kW-hr, which is same as the current SORE ≥ 225 cc emission standard, beginning in 2011. For the larger engines with an engine displacement > 825 cc and ≤ 1.0 L, EMA proposed an HC+NO x exhaust emission standard of 6.5 g/kW-hr, beginnin g in 2011, to be reduced to 5.0 g/kW-hr in 2014. CO standard levels for both e ngine classes would remain equal to the CO standard for SORE ≥ 225 cc.27

Staff did incorporate the majority of the proposal for LSI engines ≤ 825 cc. However, for the LSI engines > 825 cc and ≤ 1.0 L, the EMA proposal would provide less emissio n reductions (only 3.8 tons per day HC+NO x in 2020) and would not approach the emission levels being reached by some engines today . Similar to the alternative to adopt the U.S. EPA’s emission standards, the cost t o the state is the potential loss of Federal highway funding, should an adequate SIP not be implemented.

5.5 Summary of Alternatives Evaluated

Each of the alternatives to the proposal falls shor t of staff’s proposal. The alternatives are either unnecessarily relaxed achieving little o r no emission s benefit compared to staff’s proposal or are overly aggressive and likel y to cause major market disruption.

6. CONCLUSIONS AND RECOMMENDATIONS

In developing the proposed regulations for LSI engi nes ≤ 1.0 L, staff’s goal was to achieve the greatest possible emission reductions i n a technologically feasible and costeffective manner. Meeting the requirements of staf f’s proposal is achievable using existing technologies and manufacturing processes, and the available lead time. The emission reductions are cost-effective when compare d to recent control measures adopted by the Board. The proposed regulations are necessary to meet emissions reduction goals and to achieve health based ambient air quality standards.

No alternatives considered by the Board would be mo re effective in achieving the purpose for which the regulations are proposed or w ould be as effective as or less burdensome to affected private persons than the pro posed regulations.

The staff recommends that the Board approve its pro posal.28

7. REFERENCES

Air Resources Board, “Staff Report: Public Hearing to Consider Adoption of Emission Standards and Test Procedures for New 2001 and Late r Off-Road Large Spark-Ignition Engines,” September 4, 1998.

Air Resources Board, "Notice of Public Meeting to C onsider the Approval of California’s Off-Road Large Spark-Ignited Engine Emissions Inven tory,” California Air Resources Board, October 22

, 1998.

Manufacturers of Emission Controls Association (MEC A), “MECA Responses to ARB Questions Regarding Closed-loop EFI Engine with Thr ee Way Catalyst Technology for LSI Applications, prepared by Dr. Rasto Brezny, May 16, 2008.

Southwest Research Institute (SwRI), ARB Contract N o. 95-340, “Three-Way Catalyst Technology for Off-Road Equipment Powered by Gasoli ne and LPG Engines,” April 1999.

Southwest Research Institute, SwRI Project No. 08.0 5734, “Durability of Low-Emissions Small Off-Road Engines,” April 2004.

U.S. EPA, 2002. “Control of Emissions from Nonroad Large Spark-Ignition Engines, and Recreational Engines (Marine and Land Based); Final Rule,” Federal Register, Volume 67, Number 217, pages 68242 - 68447, November 8, 20 02.

U.S. EPA, 2007. “Control of Emissions from Nonroad Spark-Ignition Engines and Equipment; Proposed Rule,” Federal Register, Volume 72, pages 28097-28393, May 18, 2007.

U.S. EPA, 2008. “Regulatory Announcement: EPA Final izes Emission Standards for New Nonroad Spark-Ignition Engines, Equipment, and Vessels, September 4, 2008.29

APPENDIX A: Proposed Amendments to the Large Spark- Ignition Engines Exhaust

Emission Regulation30

APPENDIX B: Proposed Amendments to the California E xhaust and Evaporative

Emission Standards and Test Procedures for New 2010 and Later OffRoad Large Spark-Ignition Engines