From: Ghanta, Venu

Sent: Thursday, May 02, 2013 5:29 PM

To: 'Chad_S_Whiteman@omb.eop.gov'

Cc: Cullen, Angela; Stout, Alan; Spears, Matthew; Charmley, William; Simon, Karl; Nickerson, William; 'lily.smith@dot.gov'; 'james.tamm@dot.gov'; 'Timothy.Mullins@dot.gov'; Horowitz, Michael; Blubaugh, Jim; Johnson, Dennis; Stewart, Lori Subject: 5/2 EPA/NHTSA Response pertaining to Heavy

- Duty Technical Amendments [RIN 2060

- AR48]
Attachments: EO12866_EPA

- NHTSA joint HD_ NR Technical_Amendment 2060

- AR48 DFR and Final Rule FRN_ 20130502.docx

Hi Chad

Please find our attached passback which addresses all of OMB’s remaining comments. I know you had additional questions on a few elements of the package that we address below.

First, all of the EPA elements of this regulatory action exist both in the Direct Final Rule portion of the package and in the Notice of Proposed Rulemaking portion of the package. As explained in the Preamble, we are doing this because , while we do not expect any adverse comment to these technical amendments, we are providing a full opportunity for the public to receive notice and submit comments
to this action.

Second, regarding the need to revise or create an ICR for this package, NH TSA and EPA have reviewed the amendments package in detail, and both agencies confirmed that we are making no changes that would call for a new or revised Information Collection Request. There are no amendments in this package that change the content of su bmitted information and the burden reflected in the approved ICRs continues to represent our best estimate of the impact of these collections on the industry.

Third, here is some additional background on the replacement engine amendments.

The original re placement engine provisions were implemented in 1996. At that time engine manufacturers requested this exemption to accommodate the nonroad market where expensive equipment, such as farm combines, may experience an urgent need to replace a failed engine. Absent an exemption, the emission standards would apply based on the model year of the new engine used to replace the older engine. This facilitated the continued use of older equipment in cases where a new engine, certified to the latest emissions stand ards, could not meet the physical dimensions or performance requirements to power the equipment. Replacement engine exemption provisions were eventually adopted for all nonroad sectors (except locomotives, which have unique provisions tailored
to that ind ustry’s practices). The replacement engine exemption provisions have been successful and effective at meeting industry and customer needs without sacrificing the significant environmental benefits of our Clean Diesel Programs.

However, in 2008 we expande d the replacement engine exemption flexibility to better manage the practice of selling partial engines as replacement “components.” To avoid creating a significant opportunity to circumvent emissions standards by selling partial engines instead of fully compliant complete engines, we added anti

- circumvention language to limit the scenarios in which one would qualify for the replacement engine exemption (e.g., only for replacing engines that fail prematurely).This change to the regulation had the uninten ded consequence of prohibiting some of the replacement

engine practices that were intended by the original provisions. In particular, many nonroad Tier 4 engines have exhaust aftertreatment systems that do not generally fit within the size constraints tha t

most non

- Tier 4 engines can meet. For example, a Tier 3 nonroad diesel engine oftentimes may be installed to replace a Tier 1 engine, which will provide a significant net reduction in emissions, even though the Tier 3 engine is not certified to the nonr oad Tier 4 standards.

Therefore, it has been within the past year or so of the nonroad Tier 4 standards’ implementation that EPA has received a significant number of comments from manufacturers, distributors, and dealers, as
well as comments from administ rators of state and regional environmental grant programs, that the clean diesel emissions reduction programs that replace old dirty engines with clean newer engines have had to stop. This has been due to the 2008 expansion in flexibilities, along with it s needed anti

circumvention provisions, combined with the implementation of the aftertreatment forcing nonroad
Tier 4 standards.

The amendments in this package address this issue by replacing the current anti

- circumvention provisions with revisions to the criteria that spell out how one qualifies for the replacement engine exemption. We are removing some of the restrictions of the anti

- circumvention language to allow for replacing an engine even if there is no indication it may fail prematurely. To preve nt this new flexibility from being abused by indefinitely circumventing the Tier 4 standards, we are adding a new provision to reasonably limit the use of the exemption by disallowing an exemption for cases where the original equipment is more than 25 year s old. This is intended to represent a point at which equipment operators should be looking to retire the old equipment and purchase new equipment (with engines certified to current standards). Based upon these details and the change that was made, it sh ould be clearer now that the amendments would not increase the stringency of the replacement engine provisions. In fact, they would increase flexibility and restore the exemption to be effective in accommodating industry’s desire to meet the needs of cust omers who wish to participate in the incentive programs that are geared toward strategic engine replacements to decrease emissions.

Let us know if you have any additional questions.

Thanks,

Venu Ghanta Office of Transportation and Air Quality US Environmental Protection Agency
202

- 564

- 1374 (phone)