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production line testing program. For 

example, given the small sales volumes 

associated with marine engines it may 

be appropriate to include a production 

verification program for marine engines 

as part of a manufacturer’s broader 

production verification programs for its 

non-marine engines. We believe these 

existing provisions already address the 

concerns raised to us by the 

manufacturers. 

We are adding provisions to allow 

manufacturers to use special procedures 

for production line testing of catalystequipped engines. Under the existing 

Part 92 and Part 94 programs, a 

manufacturer of a catalyst-equipped 

locomotive or Category 2 marine engine 

would be required to assemble and test 

the engine with a complete catalyst 

system. At the manufacturer’s choice, 

the engine could be broken in by 

operating it for up to 300 hours or it 

could be tested in a ‘‘green’’ state and 

its measured emissions adjusted by 

applying ‘‘green engine factors’’. The 

new regulations in Parts 1033 and 1042 

will continue to allow these options, but 

will also include additional options. 

For locomotives, the new regulations 

will allow a locomotive to be used in 

service for up to 1,000 hours before it 

is tested. This will be sufficient time to 

degreen a catalyst. We believe that this 

approach should work well for 

locomotives given the very close 

working relationships between the 

manufacturers and the major railroads. 

(See section IV.A.(8) for additional 

interim provisions related to 

production-line testing of locomotives.) 

We do not believe this locomotive 

approach would work for marine 

engines because the marine market is 

much more diverse and the very close 

working relationships cannot be 

assumed. Therefore, we will rely on our 

general authority to approve alternate 

PLT programs. Should a consensus 

develop in the future about how to 

appropriately verify that engines and 

catalysts are produced to conform to the 

regulations, we may adopt specific 

regulatory provisions to address these 

marine engines. 

(12) Evaporative Emission Requirements 

While nearly all locomotives 

currently subject to part 92 are fueled 

with diesel fuel, § 92.7 includes 

evaporative emission provisions that 

would apply for locomotives fueled by 

a volatile liquid fuel such as gasoline or 

ethanol. These regulations do not 

specify test procedures or specific 

numerical limits, but rather set ‘‘good 

engineering’’ requirements. We are 

adopting these same requirements in 

part 1033. 

We are also adopting similar 

requirements for marine engines and 

vessels that run on volatile fuels. We are 

not aware of any compression-ignition 

marine engines currently being 

produced that would be subject to these 

requirements but believe that it is 

appropriate to adopt these requirements 

now rather than waiting until such 

engines are produced. In this final rule, 

we are adopting requirements for 

controlling evaporative emissions that 

are identical to those for locomotives. 

As described in the proposal, we intend 

to apply to compression-ignition marine 

engines and vessels the same 

requirements we will be adopting for 

spark-ignition engines and vessels 

before the end of 2008 (as proposed at 

72 FR 28098). We therefore intend to 

modify part 1042 in the final rule 

corresponding to that proposal related 

to spark-ignition marine engines and 

vessels. Specifically, if someone were to 

build a marine vessel with a 

compression-ignition engine that runs 

on a volatile liquid fuel, the engine 

would be subject to the exhaust 

emission standards of part 1042, but the 

fuel system would be subject to the 

evaporative emission requirements of 

the recently proposed part 1045.160 

(13) Small Business Provisions 

There are a number of small 

businesses that will be subject to this 

rule because they are locomotive 

manufacturers/remanufacturers, 

railroads, marine engine manufacturers, 

post-manufacture marinizers, vessel 

builders, or vessel operators. We largely 

continue the existing provisions that 

were adopted previously for these small 

businesses in the 1998 Locomotive and 

Locomotive Engines Rule (April 16, 

1998; 63 FR 18977); our 1999 

Commercial Marine Diesel Engines Rule 

(December 29, 1999; 64 FR 73299) and 

our 2002 Recreational Diesel Marine 

program (November 8, 2002; 67 FR 

68304). These provisions, which are 

discussed below, are designed to 

minimize regulatory burdens on small 

businesses needing added flexibility to 

comply with emission standards while 

still ensuring the greatest emissions 

reductions achievable. (See section IX.C 

of this rule for discussion of our 

outreach efforts with small entities.) 

(a) Locomotive Sector 

(i) Production-Line and In-Use Testing 

Does not Apply 

Production-line and in-use testing 

requirements do not apply to small 

locomotive manufacturers until January 

160 Part 1045 was proposed on May 18, 2007 (72 

FR 28097). 

1, 2013, which is up to five calendar 

years after this program becomes 

effective. 

In the 1998 Locomotive Rule (April 

16, 1998; 63 FR 18977), the in-use 

testing exemption was provided to small 

remanufacturers with locomotives or 

locomotive engines that became new 

during the 5-year delay, and this 

exemption was applicable to these 

locomotives or locomotive engines for 

their entire useful life (the exemption 

was based on model years within the 

delay period, but not calendar years as 

we are promulgating today). As an 

amendment to the existing in-use testing 

exemption, small remanufacturers with 

these new locomotives or locomotive 

engines must now begin complying with 

the in-use testing requirements after the 

five-year delay on January 1, 2013 

(exemption based on calendar years). 

Thus, they are no longer exempt from 

in-use testing for the entire useful life of 

a locomotive or a locomotive engine. We 

are finalizing this provision to ensure 

that small remanufacturers comply with 

our standards in-use, and subsequently, 

the public is assured they are receiving 

the air quality benefits of today’s 

standards. In addition, this amendment 

provides a date certain for small 

remanufacturers when in-use testing 

requirements begin to apply. 

We received a number of comments 

asking us to clarify whether or not we 

were still planning to require 

production-line audits or verification for 

small locomotive remanufacturers 

during this 5-year delay (until January 1, 

2013). In response, we are clarifying that 

we did not intend to exempt small 

locomotive remanufacturers from 

production-line audits during the 5-year 

delay (our intent was to exempt these 

entities from production-line and in-use 

testing requirements). We believe this 

requirement is of minimal regulatory 

burden to small locomotive 

remanufacturers. Moreover, we have 

clarified the general auditing regulations 

to explicitly allow audits to be 

conducted by the owner/operator, 

which further minimizes the burden. 

(ii) Class III Railroads Exempt From 

New Standards for Existing Fleets 

EPA is limiting the category of small 

railroads which are exempt from the 

Tier 0, 1 and 2 remanufacturing 

requirements for existing fleets to those 

railroads that qualify as Class III 

railroads and that are not owned by a 

large parent company. Under the 

current Surface Transportation Board 

classification system, this exemption is 

limited to railroads having total revenue 

less than $25.5 million per year. This 

change requires that all Class II 
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37146 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

railroads, when remanufacturing their 

locomotives, meet the new standards 

finalized for existing fleets. 

EPA had requested comment on 

whether the small railroads exemption 

from emissions standards for existing 

fleets had been effective and appropriate 

and whether they should continue 

under the new program finalized today. 

Under part 92, only railroads qualifying 

as ‘‘large’’ businesses, as defined by the 

Small Business Administration (SBA) 

were subject to the standards for their 

pre-existing fleet. The SBA definition of 

a large railroad is based on employment. 

For line-haul railroads the threshold is 

1,500 or more employees, and for shorthaul railroads it is 500 or more 

employees. Additionally, any railroad 

owned by a parent company that is large 

by SBA definition is also subject to the 

current existing fleet requirements. 

Although this excludes a majority of the 

more than 500 U.S. freight railroads, it 

addresses the vast majority of the 

emissions because it includes all Class 

I railroads. 

The majority of comments supported 

revising the criterion for exempting 

railroads from emissions standards for 

existing fleets. While some of these 

commenter’s felt that a revenue based 

approach exempting Class III railroads 

was appropriate, others disagreed, and 

argued that all railroads, regardless of 

classification or revenues should be 

subject to the new emission standards 

for existing fleets. These commenters 

felt no exemption would be legitimate 

because of both the extremely long 

operational life of these locomotive 

engines and the predominance of Class 

II and III railroads in various 

nonattainment areas of the country 

which contribute to air quality 

problems. Those commenters opposing 

any change to the existing exemption 

scheme argued that the current 

approach of exempting all small 

railroads should be retained because the 

costs involved in meeting new 

standards for existing fleets would 

impose a heavy financial burden on 

small railroads currently exempt from 

the program. Additionally, these 

commenters argued that small railroads’ 

emissions are trivial and do not impact 

air quality. 

In finalizing this new approach, EPA 

believes that continuing to exempt Class 

III railroads with annual revenues under 

$25.5 million while including all Class 

II railroads in the existing fleet program 

is a reasonable approach that addresses 

both industry concerns regarding costs 

while also recognizing that small 

railroads do contribute to air pollution 

in areas they service including 

nonattainment areas throughout the U.S. 

We are clarifying our definition that 

intercity passenger or commuter 

railroads are not included as railroads 

that are small businesses because they 

are typically governmental or are large 

businesses. Due to the nature of their 

business, these entities are largely 

funded through tax transfers and other 

subsidies. Thus, the only passenger 

railroads that could qualify for the small 

railroad provisions will be small 

passenger railroads related to tourism. 

(iii) Small Railroads Excluded From InUse Testing Program 

The railroad in-use testing program 

continues to apply to Class I freight 

railroads only, and thus no small 

railroads are subject to this testing 

requirement. It is important to note 

many Class II and III freight railroads 

qualify as small businesses. This 

provision provides flexibility to all 

Class II and III railroads, which includes 

small railroads. All Class I freight 

railroads are large businesses.161 

(iv) Hardship Provisions 

Section 1068.245 of the existing 

regulations in title 40 contains hardship 

provisions for engine and equipment 

manufacturers, including those that are 

small businesses. We will apply this 

section for locomotives as described 

below. 

Under the unusual circumstances 

hardship provision, locomotive 

manufacturers may apply for hardship 

relief if circumstances outside their 

control cause their failure to comply 

and if the failure to sell the subject 

locomotives will have a major impact on 

the company’s solvency. An example of 

an unusual circumstance outside a 

manufacturer’s control may be an ‘‘Act 

of God,’’ a fire at the manufacturing 

plant, or the unforeseen shut down of a 

supplier with no alternative available. 

The terms and time frame of the relief 

depend on the specific circumstances of 

the company and the situation involved. 

As part of its application for hardship, 

a company is required to provide a 

compliance plan detailing when and 

how it will achieve compliance with the 

standards. 

(b) Marine Sector 

(i) Revised Definitions of Small-Volume 

Manufacturer and Small-Volume Boat 

Builder 

As proposed, we are revising the 

definitions of small-volume 

161 U.S. EPA, Assessment and Standards Division, 

Memorandum from Chester J. France to Alexander 

Cristofaro of U.S. EPA’s Office of Policy, 

Economics, and Innovation, Locomotive and 

Marine Diesel RFA/SBREFA Screening Analysis, 

September 25, 2006. 

manufacturer (SVM) and small-volume 

boat builder to include worldwide 

production. Currently, an SVM is 

defined as a manufacturer with annual 

U.S.-directed production of fewer than 

1,000 engines (marine and nonmarine 

engines), and a small-volume boat 

builder is defined as a boat 

manufacturer with fewer than 500 

employees and with annual U.S.-

directed production of fewer than 100 

boats. By including worldwide 

production in these definitions, we 

prevent a manufacturer or boat builder 

with a large worldwide production of 

engines or boats, or a large worldwide 

presence, from receiving relief from the 

requirements of this program. The 

provisions that apply to small-volume 

manufacturers and small-volume boat 

builders as described below are 

intended to minimize the impact of this 

rule for those entities that do not have 

the financial resources to quickly 

respond to requirements in the rule. 

(ii) Broader Engine Families and Testing 

Relief 

Broader engine families: We are 

finalizing as proposed the provision that 

post-manufacture marinizers (PMMs) 

and SVMs be allowed to continue to 

group all commercial Category 1 engines 

into one engine family for certification 

purposes, all recreational engines into 

one engine family, and all Category 2 

engines into one family. As with 

existing regulations, these entities are 

responsible for certifying based on the 

‘‘worst-case’’ emitting engine. This 

approach minimizes certification testing 

because the marinizer and SVMs can 

use a single engine in the first year to 

certify their whole product line. In 

addition, marinizers and SVMs may 

then carry over data from year to year 

until changing engine designs in a way 

that might significantly affect emissions. 

As described in the proposal, this 

broad engine family provision still 

requires a certification test and the 

associated burden for small-volume 

manufactures. We realize that the test 

costs are spread over low sales volumes, 

and we recognize that it may be difficult 

to determine the worst-case emitter 

without additional testing but we need 

a reliable, test-based, technical basis to 

issue a certificate for these engines. 

However, manufacturers will be able to 

use carryover test data to spread costs 

over multiple years of production. 

Production-line and deterioration 

testing: In addition, as proposed, SVMs 

producing engines less than or equal to 

600 kW (800 hp) are exempted from 

production-line and deterioration 

testing for the Tier 3 standards. We will 

assign a deterioration factor for use in 
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Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 37147 

calculating end-of-useful life emission 

factors for certification. This approach 

minimizes compliance testing since 

production-line and deterioration 

testing is more extensive than a single 

certification test. As described in the 

proposal, Tier 3 standards for these 

engines are not expected to require the 

use of aftertreatment—similar to the 

existing Tier 1 and Tier 2 standards. The 

Tier 4 standards for engines greater than 

600 kW are expected to require 

aftertreatment emission-control devices. 

Currently, we are not aware of any 

SVMs that produce engines greater than 

600 kW, except for one marinizer that 

plans to discontinue their production in 

the near future.162 

We are finalizing provisions that 

require SVMs to undertake productionline and deterioration testing in the 

future if they begin producing these 

larger engines due to the sophistication 

of manufacturers that produce engines 

with aftertreatment technology. We 

believe these manufacturers will have 

the resources to conduct both the design 

and development work for the 

aftertreatment emission-control 

technology, along with production-line 

and deterioration testing. 

(iii) Delayed Standards 

One-year delay: As described in the 

proposal, post-manufacture marinizers 

(PMMs) generally depend on engine 

manufacturers producing base engines 

for marinizing. This can delay the 

certification of the marinized engines. 

There may be situations in which, 

despite its best efforts, a marinizer 

cannot meet the implementation dates, 

even with the provisions described in 

this section. Such a situation may occur 

if an engine supplier without a major 

business interest in a marinizer were to 

change or drop an engine model very 

late in the implementation process or 

was not able to supply the marinizer 

with an engine in sufficient time for the 

marinizer to recertify the engine. Based 

on this concern, we are finalizing as 

proposed to allow a one-year delay in 

the implementation dates of the Tier 3 

standards for post-manufacture 

marinizers qualifying as small 

businesses (the definition of small 

business, not SVM, used by EPA for 

these provisions for manufacturers of 

new marine diesel engines—or other 

engine equipment manufacturing—is 

1,000 or fewer employees; as defined by 

the Small Business Administration’s 

(SBA) regulations at 13 CFR 121.201) 

162 U.S. EPA, Assessment and Standards Division, 

Memorandum from Chester J France to Alexander 

Cristofaro of U.S. EPA’s Office of Policy, 

Economics, and Innovation, Locomotive and 

Marine Diesel RFA/SBREFA Screening Analysis, 

September 25, 2006. 

and producing engines less than or 

equal to 600 kW (800 hp). 

As described above and in the 

proposal, the Tier 4 standards for 

engines greater than 600 kW (800hp) are 

expected to require aftertreatment 

emission-control devices. We will not 

apply this one-year delay to small 

PMMs that begin marinizing these larger 

engines in the future due to the 

sophistication of entities that produce 

engines with aftertreatment technology. 

We expect that the large base engine 

manufacturer (with the needed 

resources), not the small PMM, will 

conduct both the design and 

development work for the aftertreatment 

emission-control technology and that 

they will also take on the certification 

responsibility in the future. Thus, the 

small PMM marinizing large engines 

will not need a one-year delay. 

Three-year delay for not-to-exceed 

(NTE) requirements: As described in the 

proposal, additional lead time is also 

appropriate for PMMs to demonstrate 

compliance with NTE requirements. 

Their reliance on another company’s 

base engines affects the time needed for 

the development and testing work 

needed to comply. Thus, as proposed, 

PMMs qualifying as small businesses 

and producing engines less than or 

equal to 600 kW (800hp) may also delay 

compliance with the NTE requirements 

by up to three years, for the Tier 3 

standards. Three years of extra lead time 

(compared to one year for the primary 

certification standards) is appropriate 

considering their more limited 

resources. As described above and in 

the proposal, the Tier 4 standards for 

engines greater than 600 kW are 

expected to require aftertreatment 

emission-control devices. We do not 

apply this three-year delay to small 

PMMs that begin marinizing these larger 

engines in the future due to the 

sophistication of entities that produce 

engines with aftertreatment technology. 

We expect that the large base engine 

manufacturer (with the needed 

resources), not the small PMM, will 

conduct both the design and 

development work for the aftertreatment 

emission-control technology and that 

they will also take on the certification 

responsibility in the future. Thus, the 

small PMM marinizing large engines 

does not need a three-year delay for 

compliance with the NTE requirements. 

Five-year delay for recreational 

engines: For recreational marine diesel 

engines, the existing regulations (2002 

Recreational Diesel Marine program; 

November 8, 2002, 67 FR 68304) allow 

small-volume manufacturers up to a 

five-year delay for complying with the 

standards. However, as proposed, we 

will not continue this provision. As 

discussed above and in the proposal, the 

Tier 3 standards for these engines are 

expected to be engine-out standards 

which do not require the use of 

aftertreatment—similar to the existing 

Tier 1 and Tier 2 standards. The Tier 4 

standards will not apply to recreational 

engines. Also, Tier 3 engines are 

expected to require far less in terms of 

new hardware, and in fact, are expected 

to only require upgrades to existing 

hardware (i.e., new fuel systems). In 

addition, manufacturers have 

experience with engine-out standards 

from the existing Tier 1 and Tier 2 

standards, and thus, they have learned 

how to comply with such standards. 

Thus, small-volume manufacturers of 

recreational marine diesel engines do 

not need more time to meet the new 

standards. For small PMMs of 

recreational marine diesel engines, the 

one-year delay described earlier will 

provide enough time for these entities to 

meet today’s standards. 

(iv) Engine Dressing Exemption 

We are finalizing as proposed that 

marine engine dresser will continue to 

be exempt from certification and 

compliance requirements. As described 

in the proposal, many marine diesel 

engine manufacturers take a new, landbased engine and modify it for 

installation on a marine vessel. Some of 

these companies modifying an engine 

make no changes that might affect 

emissions. Instead, the modifications 

may consist of adding mounting 

hardware and a generator or reduction 

gears for propulsion. It can also involve 

installing a new marine cooling system 

that meets original manufacturer 

specifications and duplicates the 

cooling characteristics of the land-based 

engine but with a different cooling 

medium (such as sea water). In many 

ways, these manufacturers are similar to 

nonroad equipment manufacturers that 

purchase certified land-based nonroad 

engines to make auxiliary engines. This 

simplified approach of producing an 

engine can more accurately be described 

as dressing an engine for a particular 

application. As indicated above, engine 

dressers make changes to an engine 

without affecting the emission 

characteristics of the engine, which 

would include modifications that do not 

affect aftertreatment emission-control 

devices or systems (as stated earlier, 

Tier 4 standards for engines greater than 

600 kW (800 hp) are expected to require 

aftertreatment). 

Because the modified land-based 

engines are subsequently used on a 

marine vessel, however, these modified 

engines are considered marine diesel 
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37148 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

engines, which then fall under these 

requirements. As described in the 

proposal, while we continue to consider 

them to be manufacturers of a marine 

diesel engine, they are not be required 

to obtain a certificate of conformity (as 

long as they ensure that the original 

label remains on the engine and report 

annually to EPA that the engine models 

that are exempt pursuant to this 

provision). This extends section 94.907 

of the existing regulations. For further 

details of engine dressers 

responsibilities see section 1042.605 of 

the regulations. 

(v) Vessel Builder Provisions 

Current recreational marine engines 

regulations (2002 Recreational Diesel 

Marine program; November 8, 2002, 67 

FR 68304) allow manufacturers with a 

written request from a small-volume 

boat builder to produce a limited 

number of uncertified engines (over a 

five year period)—an amount equal to 

80 percent of the boat builders sales for 

one year. For builders with very small 

production volumes, this 80 percent 

allowance could be exceeded, as long as 

sales did not exceed 10 engines in any 

one year nor 20 total engines over five 

years and applied only to engines less 

than or equal to 2.5 liters per cylinder. 

We are not continuing this provision 

because recreational marine engines are 

subject only to the Tier 3 standards that 

are not expected to change the physical 

characteristics of engines (Tier 3 

standards will not result in a larger 

engine or otherwise require any more 

space within a vessel). Because of the 

similarity to Tier 2 engine standards 

there will be no need for boat builders 

to redesign engine compartments thus 

eliminating the need for this 5 year 

delay provision. 

(vi) Small Vessel Operators Exempt 

From New Standards for Existing Fleet 

In the proposed rule, we requested 

comment on an alternative program 

option (Alternative 5: Existing Engines) 

that would for the first time set emission 

standards for marine diesel engines on 

existing vessels—the marine existing 

fleet or remanufacture program. As 

described earlier in section III.B.2.b, 

Remanufactured Marine Standards, we 

plan to finalize only the first part of this 

option requiring the owner of a marine 

diesel engine (vessel operator) to use a 

certified marine remanufacture system 

when the engine is remanufactured if 

such a system is available. 

The marine existing fleet program will 

apply only to those commercial marine 

diesel engines (C1 and C2 engines) 

which meet the following criteria:

• Greater than 600 kW (800 hp); 

• Tier 0 or Tier 1 engines for C1 

engines;

• Tier 0, Tier 1 or Tier 2 engines for 

C2 engines; 

• Built in model year 1973 or later; 

and 

• Have a certified kit available at time 

of remanufacture. 

We estimate that about 4 percent (or 

about 3,885 of 105,406 engines) of all C1 

and C2 engines are subject to the 

existing fleet program and are likely to 

have certified kits available at the time 

of remanufacture. Thus, the percentage 

of vessels impacted by the 

remanufacture program is estimated to 

be similar. 

Industry commented that a small 

portion of the vessel operators with 

engines greater than 600 kW (800 hp) 

are small businesses that would be 

significantly burdened by the existing 

fleet program. To address these 

comments, the requirements of the 

marine existing fleet program do not 

apply to owners of marine diesel 

engines or vessel operators with less 

than $5 million in gross annual sales 

revenue. This threshold includes annual 

sales revenue from parent companies or 

affiliates of the owners/operators. (Small 

Business Administration’s (SBA’s) 

regulations at 13 CFR 121.103 describe 

how SBA determines affiliation.) If at 

some future date gross annual sales 

revenues are $5 million or more, they 

become subject to the existing fleet 

program at that point. The $5 million 

limit was chosen because a substantial 

sample of data for vessel operators— 

with vessels that have C1 and C2 

engines greater than 600 kW—indicates 

that a significant portion of the total 

revenue for this sample set, about 80 

percent, is generated by operators with 

$5 million or more in annual sales 

revenue.163 

We expect that the amount of 

emissions from this sector correlates 

reasonably well with the amount of 

revenue generated (anticipate that 

revenue corresponds to activity which 

correlates well to emissions), and thus, 

most of the emissions from vessel 

operators (with engines greater than 600 

kW (800 hp)) is obtained from those 

operators with $5 million or greater in 

revenue. The $5 million threshold for 

annual sales revenue is estimated to 

include about 8 percent less of the total 

vessel operator revenue compared to a 

$10 million limit, while reflecting 15 

percent more revenue than a $1 million 

threshold. About 90 percent of all vessel 

operators with C1 and C2 engines have 

less than $5 million in revenue. The 

163 The Waterways Journal, Inc., 2006 Inland 

River Record. 

cost to remanufacture engines is a 

greater burden to the vessel operators 

with less than $5 million in revenue 

(larger fraction of revenue, etc.) than 

those above this limit. Therefore, the $5 

million revenue threshold eliminates 

the regulatory burden for a substantial 

number of small vessel operators, while 

capturing a significant portion of the 

emissions from operators in the marine 

remanufacture program. 

(vii) Hardship Provisions 

Sections 1068.245, 1068.250 and 

1068.255 of the existing title 40 

regulations contain hardship provisions 

for engine and equipment 

manufacturers, including those that are 

small businesses. As proposed, we will 

apply these sections for marine 

applications such as PMMs, SVMs, and 

small-volume boat builders, which will 

effectively continue existing hardship 

provisions for these entities as described 

below. 

In addition, for the marine existing 

fleet or remanufacture program, we are 

now providing these same hardship 

provisions to vessel operators or marine 

remanufacturers that qualify as small 

businesses. These provisions are 

described below. 

Post-Manufacture Marinizers (PMMs), 

Small-Volume Manufacturers (SVMs), 

and Vessel Operators (or Marine 

Remanufacturers): As proposed, we are 

continuing two existing hardship 

provisions for PMMs and SVMs. In 

addition, we now extend these two 

provisions to small vessel operators or 

small marine remanufacturers for the 

marine existing fleet program. All of 

these entities may apply for this relief 

on an annual basis. First, under an 

economic hardship provision, PMMs, 

SVMs, and vessel operators (or marine 

remanufacturers) may petition us for 

additional lead time to comply with the 

standards. They must show that they 

have taken all possible business, 

technical, and economic steps to 

comply, but the burden of compliance 

costs will have a major impact on their 

company’s solvency. As part of its 

application of hardship, a company is 

required to provide a compliance plan 

detailing when and how it plans to 

achieve compliance with the standards. 

Hardship relief could include 

requirements for interim emission 

reductions and/or purchase and use of 

emission credits. The length of the 

hardship relief decided during initial 

review is up to one year, with the 

potential to extend the relief as needed. 

We anticipate that one to two years is 

normally sufficient. Also, for PMMs and 

SVMs, if a certified base engine is 

available, they must generally use this 
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Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 37149 

engine. We believe this provision will 

protect PMMs and SVMs from undue 

hardship due to certification burden. 

Also, some emission reduction can be 

gained if a certified base engine 

becomes available. See the regulatory 

text in 40 CFR 1068.250 for additional 

information. 

Second, under the unusual 

circumstances hardship provision, 

PMMs, SVMs, and vessel operators (or 

marine remanufacturers) may also apply 

for hardship relief if circumstances 

outside their control cause the failure to 

comply and if the failure to sell the 

subject engines will have a major impact 

on their company’s solvency. An 

example of an unusual circumstance 

outside a manufacturer’s control may be 

an ‘‘Act of God,’’ a fire at the 

manufacturing plant, or the unforeseen 

shut down of a supplier with no 

alternative available (the second 

example is mainly for PMMs and 

SVMs). The terms and time frame of the 

relief depend on the specific 

circumstances of the company and the 

situation involved. As part of its 

application for hardship, a company is 

required to provide a compliance plan 

detailing when and how it will achieve 

compliance with the standards. We 

consider this relief mechanism to be an 

option of last resort. We believe this 

provision will protect PMMs, SVMs, 

and vessel operators (or marine 

remanufacturers) from circumstances 

outside their control. We, however, do 

not envision granting hardship relief if 

contract problems with a specific 

company prevent compliance for a 

second time. See the regulatory text in 

40 CFR 1068.245 for additional 

information. 

Small-volume boat builders: As 

proposed, we are continuing the 

unusual circumstances hardship 

provision for small-volume boat 

builders (those with less than 500 

employees and worldwide production 

of fewer than 100 boats). Small-volume 

boat builders may apply for hardship 

relief if circumstances outside their 

control cause the failure to comply and 

if the failure to sell the subject vessels 

will have a major impact on the 

company’s solvency. An example of an 

unusual circumstance outside a boat 

builder’s control may be an ‘‘Act of 

God,’’ a fire at the boat building facility, 

or the unforeseen breakdown of a 

supply contract with an engine supplier. 

This relief allows the boat builder to use 

an uncertified engine and is considered 

a mechanism of last resort. The terms 

and time frame of the relief depend on 

the specific circumstances of the 

company and the situation involved. As 

part of its application for hardship, a 

company is required to provide a 

compliance plan detailing when and 

how it plans to achieve compliance with 

the standards. See the regulatory text in 

40 CFR 1068.250 for additional 

information. 

In addition, as described in the 

proposal, small-volume boat builders 

generally depend on engine 

manufacturers to supply certified 

engines in time to produce complying 

vessels by the date emission standards 

begin to apply. We are aware of other 

applications where certified engines 

have been available too late for 

equipment manufacturers to adequately 

accommodate changing engine size (for 

engines meeting Tier 4 standards, which 

are described in section III.B.2 of today’s 

rule) 164 or performance characteristics. 

To address this concern, we are 

allowing small-volume boat builders to 

request up to one extra year before using 

certified engines if they are not at fault 

and will face serious economic hardship 

without an extension. See the regulatory 

text in 40 CFR 1068.255 for additional 

information. 

(14) Alternate Tier 4 NOX+HC Standards 

We proposed to continue our existing 

emission averaging programs for the 

new Tier 4 NOX and HC standards for 

locomotives and marine engines. 

However, the existing averaging 

programs do not allow manufacturers to 

show compliance with HC standards 

using averaging. Because we are 

concerned that this could potentially 

limit the benefits of our averaging 

program as a phase-in tool for 

manufacturers, we are establishing an 

alternate NOX+HC standard of 1.4 

g/bhp-hr that could be used as part of 

the averaging program. Manufacturers 

that were unable to comply with the 

Tier 4 HC standard would be allowed to 

certify to a NOX+HC FEL, and use 

emission credits to show compliance 

with the alternate standard instead of 

the otherwise applicable NOX and HC 

standards. For example, a manufacturer 

may choose to use banked emission 

credits to gradually phase in its Tier 4 

1200 kW marine engines by producing 

a mix of Tier 3 and Tier 4 engines 

during the early part of 2014. NOX+HC 

credits and NOX credits could be 

averaged together without discount. 

164 Tier 3 engine-out standards are not expected 

to change the physical characteristics of marine 

engines. Tier 3 standards will not result in a larger 

engine or otherwise require any more space within 

a vessel. For Tier 4 standards, we expect that 

vessels will be designed to accommodate emission 

components that engine manufacturers specify as 

necessary to meet these new standards (e.g., ensure 

adequate space is available to package 

aftertreatment components). 

The value of this alternate standard 

(1.4 g/bhp-hr) is the rounded sum of the 

Tier 4 NOX and HC standards. We 

proposed to set this value at the level of 

the NOX standard (1.3 g/bhp-hr). 

However, based on the comments 

received, we no longer believe this to be 

appropriate. See the Summary and 

Analysis of Comments for more 

discussion of this issue. 

(15) Other Issues 

We are finalizing other minor changes 

to the compliance program. For 

example, engine manufacturers will be 

required to provide installation 

instructions to vessel manufacturers and 

kit installers to ensure that engine 

cooling systems, aftertreatment exhaust 

emission controls, and other emission 

controls are properly installed. Proper 

installation of these systems is critical to 

the emission performance of the 

equipment. Vessel manufacturers and 

kit installers will be required to follow 

the instructions to avoid improper 

installation that could render emission 

controls inoperative. Improper 

installation would subject them to 

penalties equivalent to those for 

tampering with the emission controls. 

We are also clarifying the general 

requirement that no emission controls 

for engines subject to this final rule may 

cause or contribute to an unreasonable 

risk to public health, welfare, or safety, 

especially with respect to noxious or 

toxic emissions that may increase as a 

result of emission-control technologies. 

The regulatory language, which 

addresses the same general concept as 

the existing §§ 92.205 and 94.205, 

implements sections 202(a)(4) and 

206(a)(3) of the Act and clarifies that the 

purpose of this requirement is to 

prevent control technologies that would 

cause unreasonable risks, rather than to 

prevent trace emissions of any noxious 

compounds. This requirement prevents 

the use of emission-control technologies 

that produce pollutants for which we 

have not set emission standards but 

nevertheless pose a risk to the public. 

As is described in Section III and the 

Summary and Analysis of Comments 

document, this provision does not 

preclude the use of urea-based SCR 

emission controls. 

Some marine engine manufacturers 

have expressed concern over the current 

provisions in our regulation for 

selection of an emission data engine. 

Part 94 specifies that a marine 

manufacturer must select for testing 

from each engine family the engine 

configuration which is expected to be 

worst-case for exhaust emission 

compliance on in-use engines. Some 

manufacturers have interpreted this to 
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37150 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

mean that they must test all the ratings 

within an engine family to determine 

which is the worst-case. 

Understandably, this interpretation 

could cause production problems for 

many manufacturers due to the lead 

time needed to test a large volume of 

engines. Our view is that the current 

provisions do not necessitate testing of 

all ratings within an engine family. 

Rather, manufacturers are allowed to 

base their selection on good engineering 

judgment, taking into consideration 

engine features and characteristics 

which, from experience, are known to 

produce the highest emissions. This 

methodology is consistent with the 

provisions for our on-highway and 

nonroad engine programs. Therefore, we 

are keeping essentially the same 

language in part 1042 as is in part 94. 

We are adopting similar language for 

locomotives and will apply it in the 

same manner as we do for marine 

engines. 

B. Compliance Issues Specific to 

Locomotives 

(1) Refurbished Locomotives 

Section 213(a)(5) of the Clean Air Act 

directs EPA to establish emission 

standards for ‘‘new locomotives and 

new engines used in locomotives.’’ In 

the previous rulemaking, we defined 

‘‘new locomotive’’ to mean a freshly 

manufactured or remanufactured 

locomotive.165 We defined 

‘‘remanufacture’’ of a locomotive as a 

process in which all of the power 

assemblies of a locomotive engine are 

replaced with freshly manufactured 

(containing no previously used parts) or 

reconditioned power assemblies. In 

cases where all of the power assemblies 

are not replaced at a single time, a 

locomotive is considered to be 

‘‘remanufactured’’ (and therefore 

‘‘new’’) if all of the power assemblies 

from the previously new engine had 

been replaced within a five year period. 

Our new regulations clarify the 

definition of ‘‘freshly manufactured 

locomotive’’ when an existing 

locomotive is substantially refurbished 

including the replacement of the old 

engine with a freshly manufactured 

engine. The existing definition in 

§ 92.12 states that freshly manufactured 

locomotives are locomotives that do not 

contain more than 25 percent (by value) 

previously used parts. We allowed 

freshly manufactured locomotives to 

165 As is described in this section, freshly 

manufactured locomotives, repowered locomotives, 

refurbished locomotives, and all other 

remanufactured locomotives are all ‘‘new 

locomotives’’ in both the previous and new 

regulations. 

contain up to 25 percent used parts 

because of the current industry practice 

of using various combinations of used 

and unused parts. This 25 percent value 

applies to the dollar value of the parts 

being used rather than the number 

because it more properly weights the 

significance of the various used and 

unused components. We chose 25 

percent as the cutoff because setting a 

very low cutoff point would have 

allowed manufacturers to circumvent 

the more stringent standards for freshly 

manufactured locomotives by including 

a few used parts during the final 

assembly. On the other hand, setting a 

very high cutoff point could have 

required remanufacturers to meet 

standards applicable to freshly 

manufactured locomotives, but such 

standards may not have been feasible 

given the technical limitations of the 

existing chassis. 

We are adding to § 1033.901 a 

definition of ‘‘refurbish’’ which will 

mean the act of modifying an existing 

locomotive such that the resulting 

locomotive contains less than 50 

percent (by value) previously used parts 

(but more than 25 percent). We believe 

that where an existing locomotive is 

improved to this degree, it is 

appropriate to consider it separately 

from locomotives that are simply 

remanufactured in a conventional sense. 

As described below, we are specifying 

provisions for refurbished locomotives 

that vary by application (switch or linehaul) and model year (before or after 

2015). See also section IV.B(2), which 

describes minimum credit proration 

factors for refurbished locomotives. 

We are also clarifying that any 

locomotives built before 1973 become 

‘‘new’’ and thus subject to our emission 

standards when refurbished. In the 1998 

rulemaking, we determined that pre1973 locomotives should not be 

considered ‘‘new’’ when 

remanufactured.166 An important policy 

consideration in making that 

determination was our analysis of the 

feasibility of such locomotives to meet 

the Tier 0 emission standards. However, 

that analysis is not valid for refurbished 

locomotives. Given the degree to which 

such locomotives are redesigned and 

reconfigured, there is no reason that 

they should be considered differently 

from 1973 locomotives simply because 

their frames (or some other parts) were 

originally manufactured earlier. 

We requested comment on setting 

more stringent standards for refurbished 

locomotives, considering that these 

166 ‘‘Locomotive Emission Standards: Regulatory 

Support Document’’, APPENDIX L, ‘‘Exclusion of 

Pre-1973 Locomotives’’, April 1998. 

locomotives are restored to a condition 

likely to allow for many years of 

continued service. Industry commenters 

expressed concern that our subjecting 

refurbished locomotives to more 

stringent standards could prove 

counterproductive, because state and 

local programs that currently help fund 

voluntary refurbishments to very clean 

emission levels could lose their 

incentive to continue doing so, given 

that these refurbishments would now 

just be meeting EPA standards. It was 

further argued that these refurbishments 

would also lose any opportunity to 

generate valuable ABT credits, given the 

challenge just in meeting the standards. 

We believe that the need for financial 

incentives will be just as clear and just 

as strong under the new program as 

before. Refurbishing a locomotive 

effectively removes an old, highemitting locomotive from the fleet and 

replaces it with a clean one. The 

substantial cost of doing so and the 

potential that, absent incentives, old 

locomotives (especially switchers) 

would continue in operation almost 

indefinitely are the true drivers for 

creating incentives, regardless of the 

standards involved. We expect that state 

and local government officials involved 

in this process are well aware of this 

and will act accordingly. The ABT 

credits that can be gained from these 

refurbishments have not been a major 

factor to date and, considering that the 

credits can subsequently be used to 

produce other, less clean locomotives, 

we do not believe that state and local 

governments would or should be 

satisfied to help finance clean 

locomotives that result in dirtier 

locomotives elsewhere. As detailed 

below, we are therefore adopting more 

stringent standards for refurbished 

locomotives and phasing in these 

standards in a way that we believe best 

facilitates continued refurbishment of 

existing locomotives, while recognizing 

differences between the switch and linehaul locomotive fleets and the emission 

reduction trends resulting from our 

tiered approach to standards-setting. 

Currently, small numbers of old lowhorsepower locomotives are being 

refurbished as significantly loweremitting switch locomotives. The 

regulations in part 92 subject these 

locomotives to the Tier 0 standards 

(unless they contain less than 25 

percent previously used parts) and 

allow them to generate emission credits 

if they are cleaner than required. The 

regulations in part 1033 will continue 

this approach through model year 2014. 

It is important to note that since most 

of these locomotives were originally 

manufactured before 1973, simply by 
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meeting the Tier 0 standards they will 

achieve significant emission reductions. 

For similar reasons, we are adopting 

an interim program for slightly larger 

locomotives with power between 2300 

and 3000 horsepower refurbished 

through model year 2014. These 

locomotives, which are frequently used 

as road switchers, would also be subject 

to the Tier 0 standards for this period. 

We do not believe, however, that it 

would be appropriate to allow switch 

locomotives to be refurbished to the Tier 

0+ standards in the long term. Once the 

Tier 4 standards begin to apply, we will 

allow these locomotives to be certified 

to the Tier 3 switch locomotive 

standards, which will still provide the 

opportunity to generate some emission 

credits as an incentive. 

The story is slightly different for 

higher power line-haul locomotives, 

which are currently not being 

refurbished. Nearly all of these 

remaining in the Class I railroad fleets 

were originally manufactured in or after 

1973 and are already subject to the Tier 

0 or later standards. Therefore there will 

be less of an air quality incentive to 

fund their refurbishment, and so we are 

specifying that refurbished line-haul 

locomotives be subject to the same 

standards as freshly manufactured 

locomotives. The regulations would 

treat them the same except for emission 

credit proration factors, which are 

described in section IV.B.(2) 

Another important consideration is 

the potential for refurbishment to be 

used as a loophole to circumvent the 

freshly manufactured standards for linehaul locomotives. Railroads currently 

turn over their line-haul fleets much 

faster than their switch fleets. However, 

it is not hard to envision a scenario in 

which railroads began refurbishing their 

locomotives rather than buying freshly 

manufactured locomotives, especially as 

the Tier 4 standards went into effect. A 

long-term program requiring that 

refurbished line-haul locomotives meet 

the same standards as freshly 

manufactured locomotives prevents 

refurbishment from being used as such 

a loophole. 

TABLE IV–2.—PROVISIONS FOR REFURBISHED SWITCH LOCOMOTIVES 

Applicable tier of Minimum prostandards ration factor 

Locomotives refurbished before 2015 ..................................................................................................................
 Tier 0+ ..............
 0.60 

Locomotives refurbished in 2015 or later .............................................................................................................
 Tier 3 ................
 0.60 

TABLE IV–3.—PROVISIONS FOR REFURBISHED LINE-HAUL LOCOMOTIVES 

Applicable tier of Minimum prostandards ration factor 

Locomotives refurbished before 2015 ..................................................................................................................
 Tier 2+/3 ...........
 0.60 

Locomotives refurbished in 2015 or later .............................................................................................................
 Tier 4 ................
 0.60 

(2) Averaging, Banking and Trading 

For the most part, our new regulations 

will continue the existing averaging 

banking and trading provisions for 

locomotives. This section only 

highlights the provisions that are most 

significant in the context of this Final 

Rule. The reader is encouraged to read 

subpart H of part 1033 for details of this 

program. 

In order to ensure that the ABT 

program is not used to delay the 

implementation of the Tier 4 

technology, we are applying a 

restriction similar to the averaging 

restriction that was adopted for Tier 2 

locomotives in the previous locomotive 

rulemaking. We are restricting the 

number of Tier 4 locomotives that could 

be certified using credits to no more 

than 50 percent of a manufacturer’s 

annual production. As was true for the 

earlier restriction, this is intended to 

ensure that progress is made toward 

compliance with the advanced 

technology expected to be needed to 

meet the Tier 4 standards. This will 

encourage manufacturers to make every 

effort toward meeting the Tier 4 

standards, while allowing some use of 

banked credits to provide needed lead 

time in implementing the Tier 4 

standards by 2015, allowing them to 

appropriately focus research and 

development funds. 

We proposed to allow the carryover of 

all Part 92 credits except for PM credits 

generated from Tier 0 or Tier 1 

locomotives. The Tier 0 and Tier 1 PM 

standards under part 92 were set above 

the average baseline level to act as caps 

on PM emissions rather than 

technology-forcing standards. While 

Part 92 allows credits generated only 

relative the estimated average baseline 

rather than the standards, we were still 

concerned that such credits might have 

been windfall credits. However, as is 

described in the Summary and Analysis 

of Comments document, after further 

analysis we now believe that allowing 

the carryover of all part 92 PM credits 

is appropriate and will allow such 

credits to be used under part 1033. 

We are also updating the proration 

factors for credits generated or used by 

remanufactured locomotives. The 

updated proration factors better reflect 

the difference in service time for linehaul and switch locomotives. The ABT 

program is based on credit calculations 

that assume as a default that a 

locomotive would remain at a single 

FEL for its full service life (from the 

point it is originally manufactured until 

it is scrapped). However, when we 

established the existing standards, we 

recognized that technology would 

continue to evolve and that locomotive 

owners may wish to upgrade their 

locomotives to cleaner technology and 

certify the locomotive to a lower FEL at 

a subsequent remanufacture. We 

established proration factors based on 

the age of the locomotive to make 

calculated credits for remanufactured 

locomotives consistent with credits for 

freshly manufactured locomotives in 

terms of lifetime emissions. These 

proration factors are shown in 

§ 1033.705 of the new regulations. These 

replace the existing proration factors of 

§ 92.305. For example, using the new 

proration factors, a 15-year-old line-haul 

locomotive certified to a new FEL that 

was 1.00 g/bhp-hr below the applicable 

standard would generate the same 

amount of credit as a freshly 

manufactured locomotive that was 

certified to an FEL that was 0.43 g/bhphr below the applicable standard 

because the proration factor would be 

0.43. For comparison, under the old 

regulations, the proration factor would 

have been 0.50. 
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37152 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

We are correcting how the proration 

factors apply for refurbished 

locomotives to more appropriately give 

credits to railroads for upgrading old 

locomotives to use clean engines, rather 

than to continue using the old high 

emission engines indefinitely. As with 

the rest of the program, credits will be 

calculated from the difference between 

the applicable standard and the 

emissions of the new refurbished 

locomotive, adjusted to account for the 

projected time the locomotive would 

remain in service. The correction creates 

a floor for the credit proration factor for 

refurbished locomotives of 0.60. This is 

equal to the proration factor for 20-yearold switchers and would also be 

equivalent to a proration factor for a 

locomotive that was just over 10 years 

old. For example, refurbishing a 35-

year-old switch locomotive to an FEL 

1.0 g/bhp-hr below the Tier 0 standard 

would generate the same amount of 

credit as a conventional remanufacture 

of a 20-year-old switch locomotive to an 

FEL 1.0 g/bhp-hr below the Tier 0 

standard. This is because we believe 

that such refurbished switch 

locomotives will almost certainly 

operate as long as a 20-year-old 

locomotive that was remanufactured at 

the same time. Similarly, we believe 

that refurbished line-haul locomotives 

would likely operate as long as a 10-

year-old locomotive that was 

remanufactured at the same time. 

Finally, we are finalizing special 

provisions for credits generated and 

used by Tier 3 and later locomotives. 

Under the current part 92 ABT program, 

credits are segregated based on the cycle 

over which they are generated but not 

by how the locomotive is intended to be 

used (switch, line-haul, passenger, etc.). 

Line-haul locomotives can generate 

credits for use by switch locomotives, 

and vice versa, because both types of 

locomotives are subject to the same 

standards. However, for the Tier 3 and 

Tier 4 programs, switch and line-haul 

locomotives are subject to different 

standards with emissions generally 

measured only for one test cycle. We 

will allow credits generated by Tier 3 or 

later switch locomotives over the switch 

cycle to be used by line-haul 

locomotives to show compliance with 

line-haul cycle standards. As proposed, 

we are not allowing such cross-cycle use 

of line-haul credits (or switch credits 

generated by line-haul locomotives) by 

Tier 3 or later switch locomotives. 

To make this approach work without 

double-counting of credits, we are also 

adopting a special calculation method 

where the credit using locomotive is 

subject to standards over only one duty 

cycle while the credit generating 

locomotive is subject to standards over 

both duty cycles (and can thus generate 

credits over both cycles). In such cases, 

we would require the use of credits 

under both cycles. For example, for a 

Tier 4 line-haul engine family needing 

1.0 megagram of NOX credits to comply 

with the line-haul emission standard, 

the manufacturer would have to use 1.0 

megagram of line-haul NOX credits and 

1.0 megagram of switch NOX credits if 

the line-haul credits were generated by 

a locomotive subject to standards over 

both cycles. 

(3) Phase-In and Reasonable Cost Limit 

The new Tier 0 and 1 emission 

standards become applicable on January 

1, 2010. We also proposed a 

requirement for 2008 and 2009 when a 

remanufacturing system is certified to 

these new standards. If such a system is 

available before 2010 for a given 

locomotive model at a reasonable cost, 

remanufacturers of those locomotives 

may no longer remanufacture them to 

the previously applicable standards. 

They must instead comply with the new 

Tier 0 or 1 emission standards when 

they are remanufactured. Similarly, we 

are requiring them to use certified Tier 

2 systems for 2008 through 2012 when 

a remanufacturing system is certified to 

the new Tier 2 standards. For the 

purposes of this provision, ‘‘reasonable 

cost’’ means that the total incremental 

cost to the operators of the locomotive 

(including initial hardware, increased 

fuel consumption, and increased 

maintenance costs) during the useful 

life of the locomotive must be less than 

$250,000. This cost limit is based on the 

upper cost we think likely to be 

required to meet these standards and 

reflects comments on our NPRM from 

remanufacturers. 

As part of this phase-in requirement, 

we are requiring certifiers to notify 

customers that they are applying for 

certificate such that their locomotives 

will become subject to the new 

standards. We would then allow 

owners/operators a minimum 90-day 

grace period (after we issue the 

certificate) in which they could 

remanufacture their locomotives to the 

previously applicable standards once 

they are notified by the certificate 

holder that such systems are available. 

This allows them to use up inventory of 

older parts. However, where the 

certifiers do not immediately notify 

them, railroads would be allowed a 

grace period of at least 120 days after 

they are notified. This combined 

approach allows sufficient time to find 

out about the availability of kits and to 

make appropriate plans for compliance. 

We are also adding a new provision for 

owners/operators that limits the total 

number of locomotives that would need 

to meet the new standards during 2008 

and 2009 to a fraction of the total 

number of remanufactures they do 

between October 3, 2008 and December 

31, 2009 that are subject to either the 

old or new standards. 

We are adding provisions that would 

allow Tier 0/1 remanufacturers to use 

during the phase-in period an assigned 

deterioration factor of 0.03 g/bhp-hr for 

PM and assume that all other 

deterioration factors are zero. We will 

also apply an in-use PM add-on of 0.03 

g/bhp-hr. These two provisions are 

intended to address lead time concerns 

raised by commenters. The commenters 

correctly point out that the available 

lead time is not sufficient to allow 

remanufacturers to verify durability of 

the emission controls in a more 

conventional way. By addressing this 

lead time issue, we will make it more 

likely that the low emission kits will be 

brought to market early. 

(4) Recertification Without Testing 

Once manufacturers have certified an 

engine family, we have historically 

allowed them to obtain certificates for 

subsequent model years using the same 

test data if the engines remain 

unchanged from the previous model 

year. We refer to this type of 

certification as ‘‘carryover.’’ We are also 

extending this allowance to owner/ 

operators. Specifically, we are adding 

the following paragraph to the end of 

§ 1033.240: 

(c) An owner/operator remanufacturing its 

locomotive to be identical to the previously 

certified configuration may certify by design 

without new emission test data. To do this, 

submit the application for certification 

described in § 1033.205, but instead of 

including test data, include a description of 

how you will ensure that your locomotives 

will be identical in all material respects to 

their previously certified condition. You 

have all of the liabilities and responsibilities 

of the certificate holder for locomotives you 

certify under this paragraph. 

(5) Railroad Testing 

Section 92.1003 requires Class I 

freight railroads to annually test a small 

sample of their locomotives. We 

proposed to adopt the same 

requirements in § 1033.810, but asked 

for comments on whether this program 

should be changed. In particular, we 

requested suggestions to better specify 

how a railroad selects which 

locomotives to test, which has been a 

source of some confusion in recent 

years. In this final rule, we are adopting 

a revised approach that should reduce 

this confusion. The regulations provide 

four options for railroads to select 
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Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 37153 

locomotives for testing and require EPA 

to notify the railroad by January 1st for 

any year in which we choose to specify 

which locomotives should be tested. 

In addition, the maximum annual 

testing rate is being lowered to 0.075 

percent, from the previously applicable 

rates of 0.15 to 0.10 percent. This new 

rate will require Class I railroads to test 

approximately 20 locomotives per year. 

We believe that this number of tests (in 

addition to the testing required for 

certificate holders) will be enough to 

allow us to appropriately monitor the 

emission performance of in-use 

locomotives. 

(6) Test Conditions and Corrections 

In our previous rule, we established 

test conditions that are representative of 

in-use conditions. Specifically, we 

required that locomotives comply with 

emission standards when tested at 

temperatures from 45°F to 105°F and at 

both sea level and altitude conditions 

up to about 4,000 feet above sea level. 

One of the reasons we established such 

a broad range was to allow outdoor 

testing of locomotives. While we only 

required that locomotives comply with 

emission standards when tested at 

altitudes up to 4,000 feet for purposes 

of certification and in-use liability, we 

also required manufacturers to submit 

evidence with their certification 

applications, in the form of an 

engineering analysis, that shows that 

their locomotives were designed to 

comply with emission standards at 

altitudes up to 7,000 feet. We included 

correction factors that are used to 

account for the effects of ambient 

temperature and humidity on NOX 

emission rates. 

We are now changing how the 

regulations deal with the test 

temperatures. We are specifying that 

testing without correction may be 

performed down to a lower limit of 

60°F. In implementing the prior 

regulations, we found that the broad 

temperature range with correction, 

which was established to make testing 

more practical, was problematic. Given 

the uncertainty with the existing 

correction, manufacturers have 

generally tried to test in the narrower 

range being adopted today. However, we 

will still allow manufacturers to test at 

lower temperatures but will require 

them to develop correction factors 

specific to their locomotive designs. 

We are also changing the altitude 

requirements for switch locomotives in 

response to a comment noting that 

switch locomotives will rarely operate 

above 5,500 feet. For switch 

locomotives, we will only require 

manufacturers to show that their 

locomotives comply with emission 

standards at altitudes up to 5,500 feet. 

(7) Duty Cycles and Calculations 

(a) Idle Weighting Adjustments 

While we did not propose any 

changes to the weighting factors for the 

locomotive duty cycles, we did request 

comment on whether such changes 

would be appropriate in light of the 

proposed idle reduction requirements. 

The regulations specify an alternate 

calculation for locomotive equipped 

with idle shutdown features. This 

provision allows a manufacturer to 

appropriately account for the inclusion 

of idle reduction features as part of its 

emission control system. There are three 

primary reasons why we are not 

changing the calculation procedures 

with respect to the idle requirements. 

First, different shutdown systems will 

achieve different levels of idle reduction 

in use. Thus, no single adjustment to the 

cycle would appropriately reflect the 

range of reductions that will be 

achieved. Second, the existing 

calculation provides an incentive for 

manufacturers to design shutdown 

systems that achieve in the greatest 

degree of idle reduction that is practical. 

Finally, our feasibility analysis is based 

in part on the emission reductions 

achievable relative to the existing 

standards. Since some manufacturers 

already rely on the calculated emission 

reductions from shutdown features 

incorporated into many of their 

locomotive designs, our feasibility is 

based in part on allowing such 

calculations. 

We are adopting a slight change to the 

way this adjustment works as compared 

to the previous regulations. We are 

specifying that idle emission rates for 

locomotives meeting our minimum 

shutdown requirements in § 1033.115 be 

reduced by 25 percent, unless the 

manufacturer demonstrates that greater 

idle reduction will be achieved. 

(b) Representative Cycles 

We also recognize that the potential 

exists for locomotives to include 

additional power notches, or even 

continuously variable throttles, and that 

the standard FTP sequence for such 

locomotives would result in an 

emissions measurement that does not 

accurately reflect their in-use emissions 

performance. Moreover, some 

locomotives may not have all of the 

specified notches, making it impossible 

to test them over the full test. Under the 

previous regulations, we handled such 

locomotives under our discretion to 

allow alternate calculations (40 CFR 

92.132(e)). We are now adopting more 

specific provisions in § 1033.520. In 

general, for locomotives missing 

notches, we believe the existing duty 

cycle weighting factors should be 

reweighted without the missing notches. 

For locomotives without notches or 

more than 8 power notches, the 

regulations reference following 

information provided to us by 

manufacturers for the previous 

rulemaking that shows typical notch 

power levels expressed as a percentage 

of the rated power of the engine. 

In response to comments we are also 

adding provisions to address 

locomotives that include new design 

features that will result in changes to 

the in-use duty cycle. Specifically, the 

regulations state that manufacturers 

must notify us if they are adding design 

features that will make the expected 

average in-use duty cycle of their engine 

family significantly different from the 

otherwise applicable test cycle. They 

must also recommend an alternate test 

cycle that represents the expected 

average in-use duty cycle. We will 

specify whether to use the default duty 

cycle, the recommended cycle, or a 

different cycle, depending on which 

cycle we believe best represents 

expected in-use operation. For 

locomotives subject to both line-haul 

and switch cycle standards, the 

regulations specify that a single set of 

standards would apply for the 

representative cycle. 

(c) Energy Saving Design Features 

We are adopting special provisions for 

locomotives equipped with energysaving design features, such as 

sophisticated electronic optimization of 

throttle and brake settings based on 

route data or locomotive operation in a 

consist, electronically controlled 

pneumatic (ECP) brakes, and hybrid 

technology. The provisions we are 

adopting recognize that to whatever 

degree the total work done by a 

locomotive is reduced, the mass 

emissions would likely also be reduced. 

For example, if certain design features 

reduced by three percent the amount of 

work needed to pull a typical train, then 

the mass emission rate (g/hr) would 

generally also be reduced by three 

percent. Under the new provisions, 

manufacturers will be allowed to adjust 

their locomotives’ emissions to reflect 

this, based on data gathered prior to 

certification. 

Manufacturers choosing to adjust 

emissions under these provisions must 

present a test plan to EPA for approval 

prior generating the in-use data 

necessary to estimate their emissions 

reductions. The degree to which 

manufacturers would be allowed to take 
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a credit at certification would be 

determined from a statistical analysis of 

their supporting data to address the 

uncertainty in their estimate. This 

would minimize the possibility that 

manufacturers would be given credit for 

emission reductions that did not 

actually occur. Later, additional data on 

the in-use fleet using the feature could 

be gathered to improve the statistical 

certainty and this could then be factored 

into subsequent certifications. In 

concept, however, if we had perfect 

data, we would grant the manufacturers 

full credit for the savings. 

Since our standards are specified as 

brake-specific emission limits, no credit 

or adjustment will be allowed for 

features that only improve the engine’s 

brake-specific fuel consumption. The 

nature of the test procedure itself 

already properly credits such features. 

Thus, allowing additional credits to be 

calculated would be double-counting of 

credits. 

(8) Non-OEM Remanufacturing Parts 

We are adopting measures in 

§ 1033.645 to help provide for the 

continued participation in 

remanufacturing by parts manufacturers 

willing to take responsibility for the 

long-term emissions performance of 

their parts but who lack the 

wherewithal to design and certify entire 

locomotive remanufacture systems that 

may include complex emissions control 

systems far beyond their expertise. 

Under this program, we would 

determine, based on an upfront 

engineering analysis, that the part 

supplier has a reasonable basis for 

concluding that use of their part would 

be equivalent to the OEM part in use. 

We would later verify its emission 

performance through in-use emission 

testing. 

The exact nature of the engineering 

analysis necessary to demonstrate that 

the part supplier has a reasonable basis 

for concluding that use of their part (or 

parts) will not cause emissions to 

increase beyond the level expected from 

the OEM part in use, is expected to vary. 

We see four possible paths to 

accomplish this. 

• The part is shown to be identical to 

the original part in all material respects. 

• The part differs physically from the 

original in a small number of ways and 

each of these is evaluated to show that 

the aftermarket part will be as good as 

or better than the original with respect 

to emissions performance. 

• Measurable emission-critical 

parameters such as fuel injection profile 

or engine oil consumption rate are 

established and an engine (or relevant 

engine subsystem) using the aftermarket 

part is shown through testing to perform 

as good or better than one with the 

original part with respect to these 

parameters.

• Emissions testing and durability 

demonstration is performed in 

essentially the same manner as for 

remanufactured system certification. 

For example, cylinder liners differing 

only in color and part number from the 

OEM liners would be identical in all 

material respects. Those having 

different bore groove patterns would not 

be considered identical, but an analysis 

of the difference this makes in the oil’s 

interaction with the cylinder wall and 

rings (which could have an impact on 

PM emissions) could suffice to make the 

demonstration. Chrome-plated cylinder 

liners in combination with a specified 

piston ring set used in place of original 

rings and non-plated liners could be 

expected to affect the emission-critical 

parameter of oil consumption, 

especially later in the locomotive useful 

life due to differences in wear rates. 

Bench or field testing over time 

demonstrating lower oil consumption 

trends than original equipment could 

provide a sufficient demonstration, 

provided no other emission-critical 

parameters are involved. We do not 

believe it is necessary or even possible 

to specify in the regulations the 

appropriate emission-critical parameters 

for all of the locomotive aftermarket 

components identified in this provision 

or to specify the test procedures and 

criteria by which these parameters are 

evaluated. Instead, we are establishing 

broad criteria and requiring the part 

suppliers to propose the appropriate 

emission-critical parameters and 

corresponding test or analytical 

methods appropriate to the part they 

produce. 

We would allow railroads to use the 

non-OEM part during remanufacturing 

once we have approved the supplier’s 

engineering analysis. Once the part has 

been installed in at least 250 

locomotives, we would require one of 

them to be tested. One additional 

locomotive would need to be tested 

from the next additional 500 

locomotives that use the part. If any 

locomotives fail to meet all standards, 

we generally require one additional 

locomotive to be tested for each 

locomotive that fails. We would 

generally allow the supplier to include 

testing performed by others. For 

example, if a railroad tests a locomotive 

with the part under § 1033.810, the 

supplier could submit those test data as 

fulfillment of its test obligations. 

We are adopting these provisions to 

address the specific issue of parts that 

are typically replaced during 

remanufacturing and for which there is 

an active aftermarket. Therefore, we are 

only specifying cylinder liners, cylinder 

heads, pistons, rings, and fuel injectors 

as being covered by this program. We 

reserve the authority to expand the 

program to cover other parts. 

(9) Use of Nonroad Engines Certified 

Under 40 CFR Parts 89 and 1039 

Section 92.907 currently allows the 

use of a limited number of nonroad 

engines in locomotive applications 

without certification under the 

locomotive program. We believe a 

similar allowance should also be 

included in the new regulations. 

However, we are making some changes 

to these procedures. In general, 

manufacturers have not taken advantage 

of these previously existing provisions. 

In some cases, this was because the 

manufacturer wanted to produce more 

locomotives than allowed under the 

exemption. However, in most cases, it 

was because the customer wanted a full 

locomotive certification with the longer 

useful life and additional compliance 

assurances. We are adopting new 

separate approaches for the long term 

(§ 1033.625) and the short term 

(§ 1033.150), each of which addresses at 

least one of these issues. 

For the long term, we are replacing 

the existing allowance that relies on part 

89 certificates with a designcertification program that makes the 

locomotives subject to the locomotive 

standards in use but does not require 

new testing to demonstrate compliance 

at certification. Specifically, this 

program allows switch locomotive 

manufacturers using nonroad engines to 

introduce up to 30 locomotives of a new 

model prior to completing the 

traditional certification requirements. 

While the manufacturer would be able 

to certify without new testing, the 

locomotives would have locomotive 

certificates. Thus, purchasers would 

have the compliance assurances they 

desire. 

As is described in section III B (1)(b), 

the short-term program is more flexible 

and does not require that the 

locomotives comply with the switch 

cycle standards; instead the engines 

would be subject to the part 1039 

standards. The manufacturers would be 

required to use good engineering 

judgment to ensure that the engines’ 

emission controls would function 

properly when installed in the 

locomotives. For example, the 

locomotive manufacturer would need to 

ensure that sufficient cooling capacity 

was available to cool the engine intake 

air. Given the relative levels of the part 

1039 standards and those being 
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proposed in 1033, we do believe there 

is little environmental risk with this 

short-term allowance and thus are not 

including any limits of the sales of such 

locomotives. Nevertheless, we are 

limiting this allowance to model years 

through 2017. This provides sufficient 

time to develop these new switchers. 

These locomotives would not be exempt 

from the part 1033 locomotive standards 

when remanufactured, unless the 

remanufacturing of the locomotive took 

place prior to 2018 and involved 

replacement of the engines with 

certified new nonroad engines. 

Otherwise, the remanufactured 

locomotive will be required to be 

covered by a part 1033 remanufacturing 

certificate. 

(10) Mexican and Canadian 

Locomotives 

Under the prior regulations, Mexican 

and Canadian locomotives are subject to 

the same requirements as U.S. 

locomotives if they operate extensively 

within the U.S. The regulation 40 CFR 

92.804(e) states: 

Locomotives that are operated 

primarily outside of the United States, 

and that enter the United States 

temporarily from Canada or Mexico are 

exempt from the requirements and 

prohibitions of this part without 

application, provided that the operation 

within the United States is not extensive 

and is incidental to their primary 

operation. 

We are changing this exemption to 

make it subject to our prior approval, 

since we have found that the current 

language has caused some confusion. 

When we created this exemption, it was 

our understanding that Mexican and 

Canadian locomotives rarely operated in 

the U.S. and the operation that did 

occur was limited to within a short 

distance of the border. We are now 

aware that there are many Canadian 

locomotives that do operate extensively 

within the U.S. and relatively few that 

meet the conditions of the exemption. 

We have also learned that some 

Mexican locomotives may be operating 

more extensively in the United States. 

Thus, it is appropriate to make this 

exemption subject to our prior approval. 

To obtain this exemption, a railroad will 

be required to submit a detailed plan for 

our review prior to using uncertified 

locomotives in the U.S. We will grant an 

exemption for locomotives that we 

determine will not be used extensively 

in the U.S. and that such operation will 

be incidental to their primary operation. 

Mexican and Canadian locomotives that 

do not have such an exemption and do 

not otherwise meet EPA regulations may 

not enter the United States. 

(11) Other Locomotive Issues 

The regulations in part 92 allow 

locomotive owners to voluntarily 

subject their pre-1973 locomotives to 

the Tier 0 standards or to include in the 

locomotive program low-horsepower 

locomotives that would otherwise be 

excluded based on their rated power. 

We are also including these options in 

the new part 1033. We will also provide 

two additional options. First, we will 

allow Tier 0 switch locomotives, which 

are normally not subject to line-haul 

cycle standards, to be voluntarily 

certified to the line-haul cycle 

standards. Second, we will allow any 

locomotives to be voluntarily certified 

to a more stringent tier of standards. An 

example of where these options may be 

desirable would be a case in which a 

customer wants to purchase a 

refurbished switch locomotive that 

meets the Tier 2 standards. While it may 

seem obvious that it would be allowed, 

the old regulations are unclear. The part 

1033 regulations eliminate this 

confusion. 

The existing and proposed regulations 

both specified that railroads are 

required to perform emission-related 

maintenance. In response to comments, 

we have added to the regulations a 

clarification that unscheduled 

maintenance has to be performed in a 

timely manner, no later than at the next 

‘‘92-day’’ inspection required by the 

Federal Railroad Administration. 

Railroads expressed concern that the 

regulations, as previously written, 

would have required them to 

immediately remove a locomotive from 

service to make emission-related 

repairs. This was not our intent. Rather, 

the maintenance provision was 

intended to merely require that the 

maintenance be performed in a timely 

manner. For many repairs, it may be 

appropriate to wait until the next 92-day 

inspection. However, for many others it 

would be appropriate to make the repair 

sooner to the extent practical. 

In response to comments, we are 

adding an interim allowance to simplify 

certification testing of locomotive 

engines. Specifically, for model years 

before 2014, we will allow 

manufacturers to test locomotive 

engines for certification without 

replicating the transient behavior in the 

locomotive. This will make it easier for 

manufacturers to certify new cleaner 

remanufacturing systems for the full 

range of locomotive models. 

C. Compliance Issues Specific to Marine 

Engines 

(1) Remanufacturing 

As discussed in Section III, above, we 

are adopting a marine remanufacture 

program for marine diesel engines over 

600 kW built from 1973 through Tier 2 

that requires the use of a certified 

remanufacture system when such an 

engine is remanufactured, if one is 

available. Certified remanufacture 

systems must achieve at least a 25 

percent reduction in PM emissions. This 

section briefly describes several 

certification and compliance provisions 

for the marine remanufacture program; 

the full program is contained in the 

regulations for this rule. 

In general, the normal certification 

requirements for new marine diesel 

engines would apply, with minor 

variations as needed to accommodate 

the characteristics of remanufactured 

engines. For example, engine families 

are based on the same criteria as for 

freshly manufactured engines, and 

testing, reporting, the application for 

certification, and warranty requirements 

closely follow the provisions that apply 

for freshly manufactured engines. 

In general, remanufactured engines 

are considered to be ‘‘new’’ engines, and 

they remain new until sold or placed 

back into service after the replacement 

of the last cylinder liner. The standards 

do not apply for engines that are rebuilt 

without removing cylinder liners. For a 

new engine to be placed into service, it 

must be covered by a certificate of 

conformity. 

As is the case with our other emission 

control programs, certification testing 

for conformity demonstration will be 

performed on the most common 

configuration within an engine family. 

An engine family is a group of engines 

that have the same characteristics with 

respect to combustion cycle and fuel, 

cooling system, method of air 

aspiration, method of exhaust 

aftertreatment, combustion chamber 

design, bore and stroke, and mechanical 

or electronic controls. Other 

configurations may be included if it can 

be shown based on good engineering 

judgment that they are likely to provide 

a PM reduction similar to the 

configuration tested. Compliance for 

these other configurations is based on 

an engineering demonstration that the 

remanufacturing system reduces PM 

emissions by 25 percent without 

increasing NOX emissions. Engine 

families may also include 

remanufacturing systems corresponding 

to engines that were originally produced 

over multiple model years, as long as 

the configuration does not change in a 
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37156 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

way that affects the validity of 

certification for the remanufacturing 

system. 

To certify a remanufacture system, a 

manufacturer must measure baseline 

emissions and emissions from an engine 

remanufactured using its system. A 

baseline emission rate would be 

established by remanufacturing an 

engine following normal procedures. 

That engine or a second engine of the 

same configuration is then tested for 

emissions after remanufacturing with 

the expected emission controls. The 

remanufacturing system meets the 

emission standards of the program by 

demonstrating a minimum 25 percent 

reduction in PM emissions and no 

increase in NOX emissions (within 5 

percent). The remanufacturer must also 

demonstrate that the remanufacturing 

system does not adversely affect engine 

reliability or power. 

The remanufacturer must also 

demonstrate that the total marginal cost 

of the remanufacturing system is less 

than $45,000 per ton of PM reduction. 

For the purpose of this demonstration, 

marginal cost means the difference in 

costs between remanufacturing the 

engine using the remanufacture system 

and remanufacturing the engine 

conventionally. Total marginal costs 

over the period of one useful life are 

divided by the projected PM emissions 

over one useful life to obtain the cost of 

the remanufacture system per ton of PM 

reduced. Costs to be considered include 

hardware costs, labor costs, operating 

costs over one useful life period, and 

other costs (such as shipping). 

The useful life provisions established 

for freshly manufactured engines would 

apply equally to remanufactured 

engines. In general, remanufacturers 

would be responsible for meeting 

emission standards for 10 years or 

10,000 hours of operation for Category 

1 engines, and 10 years or 20,000 hours 

of operation for Category 2 engines. 

Certification will rely on a 

deterioration factor, similar to freshly 

manufactured engines. The certifying 

company may either use an assigned 

value of 0.015 g/kW-hr for PM or 

develop a new deterioration factor based 

on engine testing. For Tier 2 engines, 

the certifying company needs to add the 

deterioration factor to measured 

emission levels for certification. The 

deteriorated number must be less than 

the applicable PM standard. For Tier 1 

and earlier engines, the deterioration 

factor is added to the emission level 

established for the certified 

configuration and that higher emission 

level serves as the emission standard for 

any in-use testing after certification. 

The regulations allow for simplified 

certification requirements for 

remanufacture systems that are already 

certified under the locomotive program. 

This would require only an engineering 

analysis demonstrating that the system 

would achieve emission reductions 

from marine engines similar to those 

from locomotives. Because the marine 

remanufacture program requires only a 

PM reduction, locomotive 

remanufacture system manufacturers 

may modify those locomotive systems 

with respect to NOX emissions. In that 

case, the system will have to be 

recertified as a marine remanufacture 

system based on measured values and 

subject to all of the other certification 

requirements of the marine 

remanufacture program. 

Remanufactured engines are not 

eligible for generating or using emission 

credits for averaging, banking, or 

trading. This is appropriate because the 

program we are finalizing is only 

mandatory if a system has been certified 

for the relevant engine. We will 

reconsider allowing systems to be based 

on emission credits when we consider 

whether to adopt a mandatory marine 

remanufacture program (Part 2 of the 

proposed program) at a later date. 

Not-to-exceed standards do not apply 

to remanufacturing. This is appropriate 

because the base engine in most cases is 

not subject to NTE requirements. In 

addition, NTE is most appropriately 

considered in the initial engine design 

phase; requiring remanufactured 

engines to meet the NTE requirements 

would likely require more intensive 

engine redesign than is anticipated by 

the simpler program we are finalizing. 

Finally, other provisions such as 

those governing maintenance intervals, 

warranties, duty cycles, test fuel, 

labeling, recordkeeping, etc. are the 

same as or similar to those for freshly 

manufactured engines. 

(2) Replacement Engines 

We are revising certain aspects of our 

existing provisions with regard to 

replacement engines, as described 

below. These requirements apply to all 

marine diesel engines, propulsion or 

auxiliary, regardless of marine 

application. Section 1042.601(c) 

provisions apply instead of the 

provision of section 1068.240(b)(3) that 

applies for other nonroad engines. 

(a) Replacement With a Freshly 

Manufactured Engine 

Under the current marine diesel 

engine program, an engine manufacturer 

is generally prohibited from selling a 

marine engine that does not meet the 

standards that are in effect when that 

engine is produced. However, we 

recognize that there may be situations in 

which a vessel owner may require an 

engine certified to an earlier tier of 

standards. The two most likely 

situations are (1) when a vessel has been 

designed to use a particular engine such 

that it cannot physically accommodate a 

different engine due to size or weight 

constraints (e.g., a new engine model 

will not fit into the existing engine 

compartment); or (2) when the engine is 

matched to key vessel components such 

as the propeller, or when a vessel has a 

pair of engines that must be matched for 

the vessel to function properly. 

To address these extreme situations, 

we amended existing regulation 40 CFR 

94.1103(b)(3) to allow a manufacturer to 

produce a new engine which meets an 

earlier tier of standards if the 

Administrator determined that no new 

engine certified to the emission limits in 

effect at that time is produced by any 

manufacturer with the appropriate 

physical or performance characteristics 

needed to repower the vessel. An engine 

manufactured pursuant to this provision 

is subject to certain conditions: The 

replacement engine must meet 

standards at least as stringent as those 

of the original engine; the engine 

manufacturer must take possession of 

the original engine or confirm it is 

destroyed; and the replacement engine 

must be clearly labeled to show that it 

does not comply with the standards and 

that sale or installation of the engine for 

any purpose other than as a replacement 

engine is a violation of federal law and 

subject to civil penalty. 

We subsequently revised this 

provision to allow the engine 

manufacturer to make the determination 

of whether an engine compliant with 

the current standards would fit a vessel, 

but solely in cases of catastrophic 

failure (see 70 CFR 40419, July 13, 

2005). This change was made to reflect 

industry concerns that obtaining prior 

EPA approval would take too long. The 

engine manufacturer may make the 

determination in catastrophic failure 

situations provided that the following 

conditions are met: The manufacturer 

must determine that no certified engine 

is available, either from its own product 

lineup or that of the manufacturer of the 

original engine (if different); and the 

engine manufacturer must document the 

reasons why an engine of a newer tier 

is not usable, and this report must be 

made available to us upon request. We 

also specified in § 94.1103(a)(8) that no 

other significant modifications to the 

vessel can be made as part of the 

process of replacing the engine, or for a 

period of 6 months thereafter. 

In response to comments on the 

proposal for this rulemaking, we are 
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Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 37157 

finalizing three additional revisions to 

the replacement engine provisions. 

First, engine manufacturers may now 

make the determination with respect to 

the feasibility of using a current tier 

engine in both noncatastrophic and 

catastrophic situations. This is a 

significant change to the program. 

Engine manufacturers and user groups 

were concerned about the amount of 

time that would be needed to obtain 

prior EPA approval, even in these 

noncatastrophic cases. Even though the 

noncatastrophic engine replacement is 

more typically planned in advance, it is 

still the case that the determination 

must be made in a timely manner to 

ensure the engine manufacturer has 

time to produce the engine before the 

vessel is taken out of service for the 

replacement. Therefore, we are revising 

the program to allow the engine 

manufacturer to make such 

determinations, provided certain 

additional conditions are met: The 

engine manufacturer must examine the 

suitability of replacement with any 

current tier engine, either produced by 

that manufacturer or any other 

manufacturer; the engine manufacturer 

must make a record of each 

determination, which must be kept for 

eight years and contain specific 

information; the record must be 

submitted to EPA within 30 days after 

shipping each engine along with a 

statement certifying that the information 

contained in that record is true. We may 

reduce the reporting and recordkeeping 

requirements in this section after a 

manufacturer has established a 

consistent level of compliance with the 

requirements of this section. 

These records will be used by EPA to 

evaluate whether engine manufacturers 

are properly making the feasibility 

determination and applying the 

replacement engine provisions. We may 

void any exemptions we determine do 

not conform to the applicable 

requirements. When assessing penalties 

under this provision we would consider 

whether the manufacturer acted in good 

faith. Thus manufacturers are 

encouraged to keep additional records 

to support their good faith attempt to 

comply with the regulations. For 

example, manufacturers could keep 

records of requests for replacement 

engines that are denied. 

In making the determination that a 

current tier engine is not a feasible 

replacement engine for a vessel, we 

expect the engine manufacturer will 

evaluate not just engine dimensions and 

weight but may also include other 

pertinent vessel characteristics. These 

pertinent characteristics would include 

downstream vessel components such as 

drive shafts, reduction gears, cooling 

systems, exhaust and ventilation 

systems, and propeller shafts; electrical 

systems for diesel generators (indirect 

drive engines); and such other ancillary 

systems and vessel equipment that 

would affect the choice of an engine. At 

the same time, there are differences 

between the new tier and original tier 

engines that should not affect this 

determination, such as the warranty 

period or life expectancy of a newer tier 

engine, or its cost or production lead 

time. These characteristics should not 

be part of the determination of whether 

or not a new tier engine can be used as 

a replacement engine. With regard to the 

warranty period or life expectancy for 

the new tier engine, an exception may 

be if these are significantly shorter for 

the new tier engine than for an older tier 

engine or the original engine and the 

shorter warranty period or life 

expectancy for the newer model is 

consistent with industry practices. 

In addition, in the case of a vessel 

with two or more paired engines, if the 

engine not in need of replacement has 

accumulated service in excess of 75 

percent of its useful life we specify that 

the determination must consider 

replacement of both engines in the pair. 

This requirement is necessary to prevent 

circumvention of the freshly 

manufactured engine requirements by 

replacing one engine at a time and 

relying on the need to pair the engines 

as the sole justification for producing an 

engine to an earlier tier. We are also 

specifying that no additional 

modifications may be made to a vessel 

for six months after installing a new 

replacement engine made to a previous 

tier. This is to avoid circumvention of 

the requirement to use a freshly 

manufactured engine when a vessel is 

refurbished such that it becomes a new 

vessel. 

The second change to the replacement 

engine provision is necessary to 

accommodate the new tiers of standards 

we are adopting in this rulemaking. 

Specifically, in making the feasibility 

determination the engine manufacturer 

is now required to consider all previous 

tiers and use any of their own engine 

models from the most recent tier that 

meets the vessel’s physical and 

performance requirements. If an engine 

manufacturer can produce an engine 

that meets a previous tier of standards 

representing better control of emissions 

than that of the engine being replaced, 

the manufacturer would need to supply 

the engine meeting the tier of standards 

with the lowest emission levels. For 

example, if a Tier 1 engine is being 

replaced after the Tier 3 standards go 

into effect, the engine manufacturer 

would have to demonstrate why a Tier 

2 as well as a Tier 3 engine cannot be 

used before a Tier 0 engine can be 

produced and installed. Similarly, for 

an engine built prior to 2004, the engine 

manufacturer would have to 

demonstrate why a Tier 1, Tier 2, or a 

Tier 3 engine cannot be used. It should 

be noted, in the case of Tier 0 engines, 

that MARPOL Annex VI prohibits 

replacing an existing engine at or above 

130 kW with a freshly manufactured 

engine unless it meets the Tier 1 

standards. 

The third change to the replacement 

engine provisions pertains to Tier 4 

engines. We are making the advance 

determination that Tier 4 engines 

equipped with aftertreatment 

technology to control either NOX or PM 

are not required for use as replacement 

engines for engines from previous tiers 

in accordance with this regulatory 

replacement engine provision. Note, 

however, that Tier 4 engines will be 

required to be used as replacement 

engines if the original engine being 

replaced is a Tier 4 engine. We are 

making this determination in advance 

because we expect that installing such 

a Tier 4 engine in a vessel that was 

originally designed and built with a 

previous tier engine could require 

extensive vessel modifications (e.g., 

addition of a urea tank and associated 

plumbing; extra room for a SCR or PM 

filter; additional control equipment) that 

may affect important vessel 

characteristics (e.g., vessel stability). It 

should be noted that by making this 

advance determination, EPA is not 

implying that Tier 4 engines are never 

appropriate for use as replacement 

engines for engines from previous tiers; 

this determination is intended to 

simplify the search across engines and 

is based on the presumption that Tier 4 

engines may not fit in most cases. We 

are also not intending to prevent states 

or local entities from including Tier 4 

engines in incentive programs that 

encourage vessel owners to replace 

previous tier existing engines with new 

Tier 4 engines or to retrofit control 

technologies on existing engines, since 

those incentive programs often are 

designed to offset some of the costs of 

installing and/or using advanced 

emission control technology solutions. 

This advance determination is being 

made solely for Tier 4 marine diesel 

replacement engines that comply with 

the Tier 4 standards through the use of 

catalytic aftertreatment systems. Should 

an engine manufacturer develop a Tier 

4 compliant engine solution that does 

not require the use of such technology, 

then this automatic determination will 
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37158 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

not apply. Instead our existing provision 

will apply and it will be necessary to 

show that a non-catalytic Tier 4 engine 

would not meet the required physical or 

performance needs of the vessel. 

(b) Replacement With an Existing 

Engine 

Our current marine diesel engine 

program does not contain provisions 

that address the case in which an engine 

is replaced with an existing used 

engine. This means that if a vessel 

owner replaces an existing engine with 

a used engine, then that replacement 

engine is not required to be certified to 

our marine standards. It should be 

noted, however, that engines greater 

than 600 kW that are built after 1973 

would still be subject to the 

remanufacture program described in 

Section III(C)(2)(b). This means if the 

existing engine that is the replacement 

engine has all of its cylinder liners 

replaced, it will be required to be 

remanufactured using a certified 

remanufacture system if one is available 

for that engine. It is our expectation that 

a vessel owner would not replace an 

existing engine above 600 kW with a 

partially-rebuilt engine, and therefore 

we do not expect to see replacement 

engines that are not remanufactured if 

there is a certified remanufacture system 

available. 

These remanufacture requirements 

would apply whether the owner is 

obtaining an identical existing (used) 

replacement engine due to an engine 

failure or through an engine exchange 

for a periodic engine rebuild. These 

requirements would also apply if a 

vessel owner is obtaining a different 

model existing (used) replacement 

engine, for whatever reason. 

It should be noted that pursuant to the 

definition of ‘‘new marine engine,’’ used 

engines brought into the marine market 

from other segments (e.g., locomotive, 

land-based nonroad, or highway sectors) 

are considered to be new marine diesel 

engines when they are marinized or 

modified for use on a vessel, and must 

meet the standards for newly 

manufactured engines in effect when 

such an engine is marinized or modified 

for installation on a vessel. 

(c) Swing Engines 

A swing engine is an additional 

engine that is purchased at the time the 

vessel is constructed as part of a rebuild 

strategy. When an engine is due for 

rebuild, that engine is removed from the 

vessel and replaced with the swing 

engine. The removed engine is rebuilt 

and then becomes the swing engine. 

Note that a swing engine is not meant 

to be a replacement engine in case of 

engine failure. Rather, it is a 

maintenance practice. 

It is our expectation that the swing 

engine would undergo a complete 

rebuild, including cylinder liner 

replacement, before it is made available 

as the swing engine. That would 

constitute remanufacturing, and the 

engine would be required to comply 

with the engine remanufacture 

requirements. In general, this means 

that all engines that are part of a swing 

engine rebuild practice are expected to 

comply with the remanufacture 

requirements over time, providing a 

certified remanufacture system is 

available. 

(d) Vessel Refurbishing 

Our current program specifies that in 

addition to newly manufactured vessels, 

a vessel is considered to be ‘‘new’’ if it 

is modified such that the value of the 

modifications exceeds 50 percent of the 

value of the modified vessel. Such a 

refurbished vessel would be required to 

have an engine that is compliant with 

the standards in place when the vessel 

is modified. We expect that most vessel 

modifications will not trigger this 

threshold, but the requirement is 

necessary to accommodate those cases 

where a major structural change is done 

to a vessel that make it like-new. 

We are revising this provision to 

specify how temporary modifications 

will be treated under this provision. In 

general, temporary modifications to a 

vessel would not be considered to be 

vessel refurbishing for the purpose of 

the ‘‘new vessel’’ definition. We are 

defining temporary modifications as 

modifications to a vessel that are made 

pursuant to a written contract between 

the vessel owners and the purchaser of 

the vessel’s services and that are made 

for the purpose of fulfilling the 

purchaser’s marine service 

requirements. To be considered to be 

temporary, the modifications must be 

removed from the vessel upon 

expiration of the contract or after a 

period of one year, whichever is shorter. 

While we will allow a vessel owner to 

petition EPA for a longer period of time, 

we will generally assume that changes 

that are necessary for longer than one 

year are quasi-permanent. We do not 

expect there to be many petitions for 

longer periods of time because 

temporary modifications that exceed 50 

percent of the vessel’s value would be 

considerable and would likely involve 

the vessel’s power plant. 

(3) Personal Use Exemption 

The current marine diesel engine 

emission control program contains 

certain exemptions from the standards, 

including the following: test engines; 

manufacturer-owned engines; display 

engines; competition engines; export 

engines; and certain military engines. 

We also provide an engine dresser 

exemption that applies to marine diesel 

engines that are produced by marinizing 

a certified highway, nonroad, or 

locomotive engine without changing it 

in any way that may affect the emissions 

characteristics of the engine. 

In addition to these existing 

exemptions we are also adding a new 

provision that exempts an engine 

installed on a vessel manufactured by a 

person for his or her own use (see 40 

CFR 1042.630). This is intended to 

address the hobbyists and fishermen 

who make their own vessel (from a 

personal design, for example, or to 

replicate a vintage vessel) and who 

would otherwise be considered to be a 

manufacturer subject to the full set of 

emission standards by introducing a 

vessel into commerce. The exemption is 

intended to allow such a person to 

install a rebuilt engine, an engine that 

was used in another vessel owned by 

the person building the new vessel, or 

a reconditioned vintage engine (to add 

greater authenticity to a vintage vessel). 

The exemption is not intended to allow 

such a person to order a new 

uncontrolled engine from an engine 

manufacturer. We expect this exemption 

to involve a very small number of 

vessels, so the environmental impact of 

this exemption will be negligible, while 

the cost would otherwise be high to 

install a certified compliant engine. 

Because the exemption is intended for 

hobbyists and fishermen, we are setting 

additional constraints. First, the vessel 

may not be used for general commercial 

purposes. The one exception to this is 

that the exemption allows a fisherman 

to use the vessel for his or her own 

commercial fishing. Second, the 

exemption is limited to one such vessel 

over a ten-year period and does not 

allow exempt engines to be sold for at 

least five years. We believe these 

restrictions are not unreasonable for a 

true hobby builder or comparable 

fisherman. Moreover, we require that 

the vessel generally be built from 

unassembled components, rather than 

simply completing assembly of a vessel 

that is otherwise similar to one that 

must use a freshly manufactured engine 

certified to meet the applicable emission 

standards. The person also must be 

building the vessel him- or herself, and 

not simply ordering parts for someone 

else to assemble. Finally, the vessel 

must be a vessel that is not classed or 

subject to Coast Guard inspections or 

surveys. 
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Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 37159 

(4) Lifeboat/Rescue Boat Exemption 

Our current marine diesel engine 

program does not exempt lifeboats or 

rescue boats, and we did not propose to 

revise that approach. This approach was 

developed for the Tier 2 marine diesel 

engine standards. As we explained in 

our 1999 FRM, the technologies that 

would meet Tier 2 standards would not 

have inherent negative effect on the 

performance or power density of an 

engine, and we expected that 

manufacturers would be able to use the 

range of technologies available to 

maintain or even improve the 

performance capabilities and reliability 

of their engines. We also note that landbased emergency engines such as 

standby generators are not exempt from 

our emission control requirements in 

either highway or nonroad applications. 

We received several comments from 

manufacturers of lifeboats and rescue 

boats requesting that we reconsider this 

approach and exempt engines on 

lifeboats and rescue boats from the Tier 

3 and Tier 4 standards. They noted that 

engines on lifeboats and rescue boats are 

not regularly used as they are intended 

for use only during emergencies, and 

they are generally only operated for 3 

minutes once a week and are water 

tested for a short period only a few 

times a year. Boat manufacturers were 

also concerned about the reliability of 

electronic controls and advanced 

technology aftertreatment systems in 

these situations, especially when the 

boats are stored on deck and exposed to 

the elements. 

We’ve also learned that at least some 

engine manufacturers that have certified 

engines in the past for use on Coast 

Guard approved lifeboats and rescue 

boats pursuant to Coast Guard and 

international (International Convention 

for the Safety of Life at Sea—SOLAS) 

requirements have not yet done so for 

Tier 2 engines and may elect not to do 

so at all.167 The Coast Guard and 

SOLAS certification requirements are 

meant to ensure that an engine will 

perform after it is inverted, will operate 

when submerged up to the crankshaft, 

and will readily start at temperatures as 

low as ¥15 degrees C. This certification 

is expensive and time-consuming, and 

those costs may be difficult to recover 

over the limited U.S. market for 

lifeboats and rescue boats (100 to 150 

boats per year). Manufacturers of those 

lifeboats that use those engines must 

either find an alternative engine for 

their product, and recertify the boats to 

167 See http://www.uscg.mil/hq/g-m/mse4/ 

boatlb.htm#LIFEBOAT_FOR_ 

MERCHANT_VESSELS for Coast Guard 

requirements for lifeboats and rescue boats. 

the Coast Guard and SOLAS 

requirements, or exit the market. 

After considering these comments, we 

conclude that it is reasonable to modify 

our program for engines used on Coast 

Guard approved lifeboats and rescue 

boats. First, our final program exempts 

engines intended to be used on lifeboats 

and rescue boats from the Tier 4 

standards. This exemption is 

appropriate for technological reasons. 

We expect the Tier 4 standards to be 

met through the application of 

aftertreatment technology. While we 

believe these technologies will be 

durable and reliable, it is also the case 

the additional complexity could 

possibly affect engine performance in an 

emergency, which is the sole situation 

in which these engines would be used. 

For example, it would be necessary to 

ensure the engines on the lifeboat or 

rescue boat have onboard at all times an 

adequate supply of urea that meets the 

quality requirements of an SCR system. 

In addition, if the engine on the lifeboat 

or rescue boat is only run for very short 

periods of time for periodic onboard 

tests, the PM filter may not have time to 

regenerate. This could result in a small 

risk of plugging. Therefore, it is 

reasonable to exempt these engines from 

the Tier 4 requirements. It is worth 

noting that most lifeboat engines are less 

than 600 kW and thus would not be 

subject to Tier 4 standards. 

Second, to avoid a situation in which 

an engine certified to the Coast Guard 

and SOLAS requirements is not 

available for use in a lifeboat or rescue 

boat application, we are providing an 

exemption that would have the effect of 

delaying the date of the emission 

standards for engines used on those 

boats until SOLAS certified engines of 

the respective emissions tier become 

available. Specifically, we will grant 

exemptions for engines not complying 

with the Tier 3 requirements for use in 

a Coast Guard approved lifeboat or 

rescue boat until such time as a 

comparable Tier 3 engine that meets the 

weight, size, and performance 

requirements of the boat is certified 

under the Coast Guard and SOLAS 

requirements. Once such an engine 

becomes available, the non Tier 3 

compliant engines may not be sold for 

use in these applications. This provision 

is necessary because the Coast Guard 

has observed a precipitous drop in 

available SOLAS certified engines with 

the emissions tier change from the Tier 

1 emissions standards to the Tier 2 

emissions standards. Given the high 

cost of SOLAS certification and the low 

sales of SOLAS certified engines, engine 

manufacturers have delayed SOLAS 

certification of new emission tier 

engines. After considering the high cost 

of SOLAS certification, the need for 

additional lead time to complete the 

SOLAS certification process and the 

importance of lifeboats and rescue boats 

to safety, we have concluded it is 

appropriate to provide this exemption. 

We are not requiring engine 

manufacturers to certify these engines 

by a specified date. However, we 

anticipate that engine manufacturers 

will over time certify their Tier 3 

engines to the Coast Guard and SOLAS 

requirements, or modify their existing 

Coast Guard certified engines as 

necessary to comply with the Tier 3 

requirements. Most of the marine diesel 

engines used on lifeboats and rescue 

boats are derived from land-based 

highway or nonroad engines. Once the 

Tier 3 requirements for those engines go 

into effect and the Tier 2 or Tier 1 

counterparts are retired from the fleet, it 

will become more expensive to continue 

to provide parts and service for these 

older engines, and engine manufacturers 

will prefer to provide newer tier engines 

for lifeboats and rescue boats globally. 

Because it is not possible to determine 

when that change will take place, the 

final program specifies that when they 

do become available, they must be used. 

Finally, we are extending this 

exemption to Tier 2 engines as well. We 

have learned that some lifeboat and 

rescue boat manufacturers are having 

trouble obtaining engines that meet the 

Tier 2 standards. Note that because Tier 

2 engines are not regulated under part 

1042, this exemption is included in a 

new section in part 94 (94.914). As with 

the Tier 3 exemption, once a Tier 2 

engine becomes available that meets the 

weight, size, and performance 

requirements of the boat and is certified 

under the Coast Guard and SOLAS 

requirements the exemption will no 

longer be available for freshly 

manufactured engines. 

Engines that are produced to an 

earlier tier pursuant to these provisions 

must be labeled to make clear that their 

use is limited to lifeboats or rescue boats 

approved by the U.S. Coast Guard under 

approval series 160.135 or 160.156. 

Using such a vessel as for a purpose 

other than a lifeboat or rescue boat is a 

violation of the regulations. 

The above provisions are applicable 

only to engines in lifeboats and rescue 

boats used solely for emergency 

purposes. This is an important 

distinction because there are cases in 

which a lifeboat may serve dual use on 

a vessel, both for general transportation 

(e.g., tenders) and for emergencies. 

Engines in lifeboats and rescue boats 

that are not used solely for emergency 

purposes are not exempt. These engines 
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37160 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

are not expected to remain idle long 

enough for urea storage or PM trap 

regeneration to be a problem. For all 

these reasons, the Tier 2 and 3 

flexibility and Tier 4 exemption will 

apply only to engines intended for 

installation on lifeboats approved by the 

U.S. Coast Guard under approval series 

160.135 (except those which are also 

approved for use as launches or tenders) 

and rescue boats approved by the U.S 

Coast Guard under series 160.156. 

(5) Stand-By Emergency Auxiliary 

Engines 

We are exempting certain stand-by 

emergency auxiliary engines from the 

Tier 4 standards. This exemption is 

necessary due to the fact that these 

engines are rarely used, their operation 

being limited to periodic testing of 

several minutes duration. While the 

technologies that will be used to achieve 

the Tier 4 standards are expected to be 

durable, it is also the case that operation 

for such short periods of time may not 

be enough to engage the aftertreatment 

regeneration strategy. In addition, these 

auxiliary engines would need separate 

urea tanks, rendering them more 

complicated to maintain and use in an 

emergency situation. 

This exemption is limited to 

dedicated stand-by emergency auxiliary 

engines subject to United States Coast 

Guard requirements set out in 46 CFR 

part 112. In general, these stand-by 

emergency auxiliary engines are 

supplemental to the ships’ main 

auxiliary engines. They are located 

away from the main engine 

compartment, have separate fuel tanks, 

and are connected to the ships’ power 

system in such a way as to provide for 

emergency power only to emergency 

equipment and not the ship’s power 

grid generally. These engines must be 

labeled for use as marine stand-by 

emergency auxiliary engines only. 

Marine stand-by emergency engine 

means any marine auxiliary engine 

whose operation is limited to 

unexpected emergency situations on a 

vessel; these engines are subject to 

testing and maintenance required by the 

United States Coast Guard. They are 

generally used to produce power for 

critical networks or equipment 

(including power supplied to portions 

of a vessel) when electric power from 

the main auxiliary engine(s) is 

interrupted. Marine auxiliary engines 

used to supply power to the vessel’s 

general electric grid or that are operated 

on a constant basis are not considered 

to be emergency marine auxiliary 

engines. 

Exempted engines are required to 

meet the applicable Tier 3 standards (in 

part 89 or part 94, as applicable). See 40 

CFR 1068.265 for the provisions that 

apply for such exempt engines. The 

engines must also be labeled to make 

clear that they are exempt and their use 

is limited to emergency stand-by 

auxiliary power as specified in United 

States Coast Guard requirements set out 

in 46 CFR part 112. 

(6) Gas Turbine Engines 

While gas turbine engines168 are used 

extensively in naval ships, they are not 

used very often in commercial ships. 

Because of this and because we do not 

currently have sufficient information, 

we are not including marine gas 

turbines in this rulemaking. 

Nevertheless, we believe that gas 

turbines could likely meet the new 

standards (or similar standards) since 

they generally have lower emissions 

than diesel engines and may reconsider 

gas turbines in a future rulemaking. 

(7) Natural Gas Engines 

The increasing deployment of tankers 

carrying liquefied natural gas has led to 

greater numbers of large marine engines 

running on natural gas instead of diesel 

fuel. Depending on the technological 

approach engine manufacturers take, 

these engines could fall under our 

definition for spark-ignition engines 

even though their design and 

development is more like compressionignition engines. Without some 

clarifying provision, these engines 

would therefore be subject to the 

standards that we are developing for 

inboard spark-ignition engines, which 

are based on automotive technologies. 

Since this is clearly not appropriate, we 

are adopting a provision to specify that 

natural gas engines above 250 kW are 

subject to standards for marine 

compression-ignition engines regardless 

of our regulatory definitions for sparkignition and compression-ignition 

engines. Since the analysis of control 

technology and the estimated costs and 

emission reductions are very similar to 

that for diesel-fueled engines, we have 

made no effort to separately analyze 

these engines relative to the new 

emission standards. 

(8) Residual Fuel Engines 

The vast majority of Category 1 and 2 

marine diesel engines subject to EPA’s 

emission standards operate on distillate 

diesel fuel. There are cases, however, in 

which the owner of a vessel may prefer 

168 Gas turbine engines are internal combustion 

engines that can operate using diesel fuel, but do 

not operate on a compression-ignition or other 

reciprocating engine cycle. Power is extracted from 

the combustion gas using a rotating turbine rather 

than reciprocating pistons. 

to operate a Category 2 engine on 

another type of diesel fuel. This is 

mainly the case for auxiliary engines on 

ocean-going vessels, to allow them to 

use the same fuel that is used in the 

propulsion engine (typically residual 

fuel). There are also a few vessels 

operated on the Great Lakes that use 

residual fuel or residual fuel blends. 

Our marine diesel engine program 

requires engine manufacturers to 

perform certification testing using the 

same type of fuel that will be used in 

actual engine operation. This 

requirement, which was also included 

in our 1999 Tier 2 rule, is intended to 

ensure that engines meet the emission 

limits in operation. In our proposal, we 

noted that engine manufacturers have 

not certified Category 1 or 2 engines that 

can be operated on residual fuel to the 

Tier 2 standards. Manufacturers 

explained that it is not profitable to do 

so due to the small size of the U.S. 

market for these engines. They also 

informed us that it would be difficult to 

meet EPA’s PM standards on residual 

fuel. 

Some owners expressed concern to 

EPA about the unavailability of large 

auxiliary engines certified to the Tier 2 

standards on residual fuel. These 

owners expressed a preference for 

auxiliary engines run on the same fuel 

as propulsion engines to simplify ship 

operations. To respond to this concern, 

we asked for comment on a compliance 

consisting of an alternative PM standard 

and a tighter NOX standard. The 

alternative standards would be available 

for auxiliary engines to be installed on 

vessels with Category 3 propulsion 

engines. Certification testing would still 

be required on residual fuel but we 

would allow alternative PM 

measurement procedures. To ensure 

that questions of test fuel and PM 

measurement are resolved before 

certification testing, manufacturers 

would have to apply to EPA to exercise 

this flexibility. 

The alternative of exempting residual 

fuel engines from the test fuel 

requirement and allowing them to be 

tested on distillate fuel is not 

appropriate. All of our mobile source 

emission control programs are 

predicated on an engine meeting the 

emission standards in use. The test fuel 

requirement is one of several provisions 

that help ensure in-use compliance, 

including useful life periods, emission 

deterioration factors, durability testing, 

and not-to-exceed zone. Amending the 

test fuel provisions to allow 

manufacturers to certify residual fuel 

engines using distillate fuel would 

introduce considerable uncertainty into 

the in-use performance of these engines, 
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Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 37161 

would weaken the emission standards, 

and would be contrary to the goals of 

our program. 

We received no comments supporting 

the compliance flexibility described 

above, and therefore we are not revising 

our program with respect to test fuels or 

the standards that apply to engines with 

per cylinder displacement below 30 

liters that use residual fuel. We expect 

to revisit this issue in the context of our 

upcoming rulemaking for Category 3 

marine diesel engines. 

(9) Duty Cycles for Marine Engines 

Manufacturers pointed out two 

inconsistencies between the proposal 

and existing requirements for marine 

engines related to the proposed duty 

cycles for marine propulsion engines 

less than 37 kW and the proposed duty 

cycle for propeller-law auxiliary 

engines. We agree that the existing 4-

mode duty cycle (E3) should be used for 

these applications and have corrected 

this in the final rule. 

We received comment that the 8-

mode (C1) duty cycle was not designed 

to represent variable-speed propulsion 

engines intended for use with variablepitch or electrically-coupled propellers. 

Caterpillar provided an example of a 

power curve for a variable-speed engine 

designed to operate with a controllable 

pitch propeller where the operation is 

limited at low and mid-range speeds. In 

this case, we agree that the constant 

speed (E2) test duty cycle, combined 

with the NTE requirements, is more 

representative of the operation of this 

engine than the proposed C1 cycle. For 

this engine, the power and torque at the 

C1 intermediate speed is relatively low, 

leading to a heavy weighting of low 

power operation. In addition, the power 

limit curve, for overload protection, is at 

lower power than even the E3 duty 

cycle. 

Controllable pitch propellers are also 

used with variable speed engines that 

have power curves that are more similar 

to those seen for nonroad engines or 

marine engines used with fixed pitch 

propellers. We are concerned that the E2 

duty cycle would not be representative 

of the operation of these engines. 

Therefore, we are finalizing the E3 duty 

cycle for variable-speed propulsion 

engines intended for use with variablepitch or electrically-coupled propellers. 

In the case where the engine is not 

capable of operating over the E3 duty 

cycle in-use, the E2 duty cycle would be 

used. For the purposes of this 

requirement, we consider an engine 

capable of operating over the E3 duty 

cycle if the engine can safely achieve 

more than 1.15 times the power 

specified in the E3 duty cycle at 63, 80, 

and 91 percent of maximum test speed. 

(10) Definition of Recreational Marine 

Diesel Vessel 

We are adopting a revised the 

definition of recreational marine diesel 

vessel in part 1042 that will essentially 

return to the definition we originally 

adopted in 1999. This revision will 

effectively rescind that change we made 

in our 2003 recreational engine rule (68 

FR 9745, February 28, 2003). As is 

described later, in that rulemaking we 

revised the definition of recreational 

vessel by adding a reference to the Coast 

Guard definition in 46 U.S.C. 2101. 

However, since then, it has become 

clear that the revision resulted in 

significant confusion for industry. 

As described above, the Tier 3 

standards that apply to recreational 

marine diesel engines are different than 

those that apply to standard power 

density commercial engines and 

recreational engines are not subject to 

the Tier 4 standards. Recreational 

engines are also subject to different 

compliance requirements, notably the 

duty cycle for certification testing and 

their useful life. These programmatic 

differences reflect the different way in 

which these engines are used, with 

recreational engines generally having a 

higher power/density ratio, operating at 

a higher load, and being used for fewer 

hours over their life than commercial 

engines. 

Recreational engines are defined 

based on whether or not they are 

intended by the engine manufacturer to 

be installed on a recreational vessel. In 

our 1999 Tier 2 marine diesel engine 

rule, we defined recreational vessel as a 

vessel intended by the vessel operator to 

be operated primarily for pleasure or 

leased to another for the latter’s 

pleasure, with the exception of (i) 

vessels less than 100 gross tons that 

carry more than six passengers; and (ii) 

vessels more than 100 gross tons that 

carry one or more passengers, where 

passenger means someone who pays to 

be on the vessel. 

The goal of this definition was to 

exclude so-called recreational vessels 

that are in fact operated like commercial 

vessels: Those that are operated many 

hours a year (for example, charter 

fishing vessels and smaller tour vessels 

that are rented on an individual basis, 

with or without a crew). A personal 

vessel owned by an individual for his 

personal use and not for hire was 

intended to be considered to be a 

recreational vessel. For smaller vessels, 

this is achieved by requiring that there 

be fewer than six paying passengers; 

this allows an individual to invite 

friends onboard his or her vessel in 

return for some pecuniary arrangement 

(e.g., paying for the gas). For larger 

vessels, above 100 gross tons, the 

presence of any paying passenger 

prevents the vessel from being 

characterized as recreational; this is 

intended to cover luxury yachts that 

recover costs by taking paying 

passengers onboard. The specified 

paying passenger thresholds are high 

enough to make them likely to be 

known at the time the vessel is 

purchased. 

In the 2003 rule, we revised the 

definition of recreational vessel, by 

adding a reference to the Coast Guard 

definition. However, the Coast Guard 

definition and EPA’s definition have 

different intents. Coast Guard’s 

requirements are safety related to ensure 

adequate lifesaving equipment is 

onboard a recreational vessel. For 

example, the Coast Guard definitions 

differentiate between charter and 

noncharter vessels based on whether 

vessels are operated with or without a 

crew. The intent of EPA’s approach is to 

identify those vessels that are intended 

for pleasure as opposed to commercial 

applications. Thus our definition needs 

to rely on features that can be known at 

the time of manufacture. For example, 

by setting a six passenger threshold for 

small vessels our intent was to identify 

those vessels clearly identified by the 

manufacturer as being intended for 

charter use and not used as a charter 

either incidentally or unintentionally. 

Since the Coast Guard definitions do 

not reflect the intent of EPA’s program 

and are inconsistent with EPA’s 

definitions, we are revising the 

definitions to remove the references to 

the Coast Guard definitions and 

reverting back to the original definitions 

adopted in 1999. While the new 

definition is being adopted in part 1042, 

§ 94.12(i) of part 94 will allow 

manufacturers to use this new definition 

for certification under part 94. 

Commercial vessels that were 

categorized as recreational prior to that 

time due to confusion about the 

meaning of the definitions will not be 

affected by the revised definitions. 

(11) Engine Stockpiling by Vessel 

Builders 

Our existing marine diesel engine 

program specifies in § 94.1103(a)(5) that 

it is a prohibited act to introduce into 

commerce a new vessel containing an 

engine not covered by a certificate of 

conformity applicable for an engine 

model year the same as or later than the 

calendar year in which the manufacture 
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37162 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

of the new vessel is initiated.169 

However, as an exception, we allow 

vessel manufacturers to use up their 

normal inventory of engines not 

certified to new, more stringent 

emission standards if they were built 

before the date on which the new 

standards apply (subject to stockpiling 

prohibitions). With the adoption of the 

Tier 3 and 4 emission standards, the 

location of this provision transfers to 

§ 1068.101(a)(1), including the 

exception noted above, now being 

located in § 1068.105(a). 

The normal inventory approach above 

was developed in response to traditional 

business practice in automotive and 

other industries where vehicles and 

equipment are serially manufactured. 

Although this scheme works well for 

most manufacturers of small, seriallyproduced marine vessels, its application 

to manufacturers of large, commercial 

marine vessels may not be so 

straightforward. In this latter case there 

are typically long lead-time build 

schedules and low production volumes, 

which translate to vessel manufacturers 

maintaining lean inventory onsite at the 

shipyard. Vessel manufacturers usually 

order engines from dealers upon 

entering into a vessel construction 

agreement with an end customer. Due to 

lengthy build schedules, which for 

many projects can be counted in years, 

and the location of some shipyards in 

low-lying coastal areas subject to 

seasonal flooding, engines are often 

delivered and warehoused at the 

dealers’ offsite location until such time 

as the vessels are ready to receive them 

for installation. Especially in projects 

where construction agreements involve 

multiple vessels, engines for all vessels 

may be ordered and delivered to the 

dealer during the same year in which 

construction of the first vessel is 

initiated. Due to this type of business 

practice, we will allow vessel 

manufacturers to consider as part of 

their normal inventory those engines 

that are warehoused at offsite 

dealerships and for which the vessel 

manufacturer entered into a purchase 

agreement prior to a change in 

applicable emission standards, provided 

this practice is consistent with the 

vessel manufacturers past engine 

ordering practices. We will allow this 

normal inventory of engines to be used 

up after new emission standards apply. 

169 The manufacture of a vessel is initiated when 

the keel is laid, or the vessel is at a similar stage 

of construction. ‘‘A similar stage of construction’’ 

means: (1) the stage at which construction 

identifiable with a specific vessel begins, and (2) 

assembly of that vessel has commenced comprising 

at least 50 tons or one percent of the estimated mass 

of all structural material, whichever is less. 

It should be noted, however, that this 

clarification does not extend to engines 

that are not the subject of a prior 

purchase agreement, and would not 

allow a vessel manufacturer to search 

for a previous tier engine among engine 

dealers to evade the standards. Also, if 

a dealer has previous tier engines that 

are not the subject of a prior purchase 

agreement after a new tier of standards 

goes into effect, those engines may be 

used only as replacement engines, 

subject to § 1042.615; those engines may 

not be sold for use in new vessels. 

(12) Other Issues 

Several commenters, including the 

United States Coast Guard, raised 

questions regarding the possibility that 

advanced aftertreatment based emission 

control systems for marine diesel 

engines may need to be by-passed or 

otherwise modified or disabled in order 

to guarantee safe operation under 

emergency conditions. In general terms, 

the commenters speculated that the 

catalyst systems could fail in such a 

manner as to restrict exhaust flow 

reducing engine power and potentially 

endangering vessel safety. 

Marine vessels that lose power to a 

main propulsion engine or generating 

engine providing essential power to 

main propulsion engine auxiliaries 

could go adrift with almost no control. 

Unlike trucks and locomotives, marine 

vessels have no brakes and can literally 

‘‘coast’’ for miles and due to their 

enormous tonnage have an incredible 

amount of momentum and can cause 

catastrophic damage via collisions, 

allisions, and groundings. In the past, 

main propulsion failures on marine 

vessels have resulted in severe loss of 

life, property, and damage to the marine 

environment. Due to this precedent, a 

loss of main propulsion is defined as a 

‘‘marine casualty or accident’’ in 46 CFR 

4.03–1(b)(2)(ix) and 46 CFR 4.05–1 

requires the occurrence to be 

immediately reported to the Coast 

Guard. To avoid potential loss of 

propulsion 46 CFR 58.01–35 effectively 

requires that main propulsion auxiliary 

machinery be provided in duplicate to 

prevent single point of failure. 

Our discussions with the engine 

manufacturers regarding the 

technologies they expect to use to 

comply with the rules we are finalizing 

today, lead us to conclude that such 

failure mechanisms are extremely 

unlikely given the robust nature of the 

technologies.170 However, reflecting the 

170 We should note here that the standards in our 

rules are performance-based rather than a 

prescription for the application of a specific 

technology. Our rules do not prevent a 

high priority everyone places on safety 

and the reality that no one can say today 

with absolute certainty how emission 

control systems will be designed in the 

future, we are continuing several 

regulatory provisions that further ensure 

safe vessel operation under all 

circumstances. Consistent with Coast 

Guard’s requirements for main 

propulsion auxiliary machinery, we feel 

these provisions address the single 

point of failure concern in the design of 

emission control systems. 

First, we are continuing our general 

regulatory requirement found in 

§ 1042.115(e) stating that a manufacturer 

may not design engines with emissioncontrol devices, systems, or elements of 

design that cause or contribute to an 

unreasonable risk to public health, 

welfare, or safety while operating. 

Likewise, our regulations continue to 

make clear that actions taken by the 

operators of marine vessels in order to 

respond to a temporary emergency will 

not be considered tampering under 

§ 1068.101(b)(1) provided the system is 

returned to its proper function as soon 

as possible. Lastly, in evaluating 

auxiliary emission control devices 

(AECDs) for marine diesel engines we 

will continue to recognize that AECDs, 

such as those that eliminate a single 

point of failure, are not defeat devices 

as defined under § 1042.115(f) if the 

AECDs are necessary to prevent engine 

(or vessel) damage or accidents. In the 

case of AECD approval, we will 

continue our current practice of 

reviewing manufacturer certification 

applications to ensure that these 

provisions are only used when 

necessary. Further, it is our general 

expectation that engine manufacturers 

will provide diagnostic systems to alert 

vessel operators when such AECDs are 

active and if the AECD requires the 

operator to take an action, the diagnostic 

system should give the vessel operator 

as much advance warning as reasonably 

possible. 

V. Costs and Economic Impacts 

In this section, we present the 

projected cost impacts and cost 

effectiveness of the standards, and our 

analysis of the expected economic 

impacts on affected markets. The 

projected benefits and benefit-cost 

analysis are presented in Section VI. 

The benefit-cost analysis explores the 

net yearly economic benefits to society 

of the reduction in mobile source 

emissions expected to be achieved by 

manufacturer from developing and applying new or 

different technology at some future time as long as 

it meets the performance basis in the rules (e.g., a 

0.04 g/kW-hr standard PM). 
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Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 37163 

this rulemaking. The economic impact 

analysis explores how the costs of the 

rule will likely be shared across the 

manufacturers and users of the engines 

and equipment that will be affected by 

the standards. Unless noted otherwise, 

all costs are in 2005 dollars. 

The annual monetized health benefits 

of this rule in 2030 will range from $9.2 

and $11 billion, assuming a 3 percent 

discount rate, or between $8.4 billion to 

$10 billion, assuming a 7 percent 

discount rate. The social costs of the 

new standards are estimated to be 

approximately $738 million in 2030.171 

The impact of these costs on society are 

estimated to be small, with the prices of 

rail and marine transportation services 

estimated to increase by about 1 

percent. 

Further information on these and 

other aspects of the economic impacts of 

our final rule are summarized in the 

following sections and are presented in 

more detail in the Final RIA for this 

rulemaking. 

A. Engineering Costs 

The following sections briefly discuss 

the various engine and equipment cost 

elements considered for this cost 

analysis and present the total 

engineering costs we have estimated for 

this rulemaking; the reader is referred to 

Chapter 5 of the final RIA for a complete 

discussion of our engineering cost 

estimates. When referring to 

‘‘equipment’’ costs throughout this 

discussion, we mean the locomotive 

and/or marine vessel related costs as 

opposed to costs associated with the 

diesel engine being placed into the 

locomotive or vessel. Estimated freshly 

manufactured engine and equipment 

engineering costs depend largely on 

both the size of the piece of equipment 

and its engine, and on the technology 

package being added to the engine to 

ensure compliance with the standards. 

The wide size variation of engines 

covered by this program (e.g., small 

marine engines with less than 37 kW (50 

horsepower, or hp) through locomotive 

and marine C2 engines with over 3000 

kW (4000 hp) and the broad application 

variation (e.g., small pleasure crafts 

through large line haul locomotives and 

171 The estimated 2030 social welfare cost of $738 

million is based on draft compliance costs for this 

final rule of $740 million for that year. The final 

compliance cost estimate for 2030 is somewhat 

higher, at $759 million; see section VI.C for an 

explanation. This difference is not expected to have 

an impact on the results of the market analysis or 

on the expected distribution of social costs among 

stakeholders. 

172 ‘‘Economic Analysis of Diesel Aftertreatment 

System Changes Made Possible by Reduction of 

Diesel Fuel Sulfur Content,’’ Engine, Fuel, and 

Emissions Engineering, Incorporated, December 15, 

cargo vessels) that exists in these 

industries makes it difficult to present 

an estimated cost for every possible 

engine and/or piece of equipment. 

Nonetheless, for illustrative purposes, 

we present some example per engine/ 

equipment engineering cost impacts 

throughout this discussion. This 

engineering cost analysis is presented in 

detail in Chapter 5 of the final RIA. 

Note that the engineering costs here 

do not reflect changes to the fuel used 

to power locomotive and marine 

engines. Our Nonroad Tier 4 rule (69 FR 

38958) controlled the sulfur level in all 

nonroad fuel, including that used in 

locomotives and marine engines. The 

sulfur level in the fuel is a critical 

element of the locomotive and marine 

program. However, since the costs of 

controlling locomotive and marine fuel 

sulfur have been considered in our 

Nonroad Tier 4 rule, they are not 

considered here. This analysis considers 

only those costs associated with the 

locomotive and marine program being 

finalized today. Also, the engineering 

costs presented here do not reflect any 

savings that are expected to occur 

because of the engine ABT program and 

the various flexibilities included in the 

program which are discussed in section 

IV of this preamble. As discussed there, 

these program features have the 

potential to provide savings for both 

engine and locomotive/vessel 

manufacturers. 

(1) Freshly Manufactured Engine and 

Equipment Variable Engineering Costs 

Engineering costs for exhaust 

emission control devices (i.e., catalyzed 

DPFs, SCR systems, and DOCs) were 

estimated using a methodology 

consistent with the one used in our 

2007 heavy-duty highway rulemaking. 

In that rule, surveys were provided to 

nine engine manufacturers seeking 

information relevant to estimating the 

engineering costs for and types of 

emission-control technologies that 

might be enabled with ultra low-sulfur 

diesel fuel (15 ppm S). The survey 

responses were used as the first step in 

estimating the engineering costs of 

advanced emission control technologies 

anticipated for meeting the 2007 heavy1999, Public Docket No. A–2001–28, Docket Item 

II–A–76. 173 The PM/NOX+NMHC cost allocations for 

variable costs used in this cost analysis are as 

follows: SCR systems including marinization costs 

on marine applications are 100% NOX+NMHC; DPF 

systems including marinization costs on marine 

applications are 100% PM; and, equipment 

hardware costs are split evenly. 174 Throughout our cost and economic impact 

analyses, net present value (NPV) calculations are 

based on the period 2006–2040, reflecting the 

period when the NPRM analysis was completed. 

duty highway standards. We then built 

upon these engineering costs using 

input from members of the 

Manufacturers of Emission Controls 

Association (MECA). We also used this 

information in our recent nonroad Tier 

4 (NRT4) rule. Because the anticipated 

emission control technologies expected 

to be used on locomotive and marine 

engines are the same as or similar to 

those expected for highway and 

nonroad engines, and because the 

expected suppliers of the technologies 

are the same for these engines, we have 

used that analysis as the starting point 

for estimating the engineering costs of 

these technologies in this rule.172 

Importantly, the analysis summarized 

here and detailed in the final RIA takes 

into account specific differences 

between the locomotive and marine 

products when compared to on-highway 

trucks (e.g., engine size). 

Engineering costs of control include 

variable costs (for new hardware, its 

assembly, and associated markups) and 

fixed costs (for tooling, research, 

redesign efforts, and certification). We 

are projecting that the Tier 3 standards 

will be met by optimizing the engine 

and emission controls that will exist on 

locomotive and marine engines in the 

Tier 3 timeframe. Therefore, we have 

estimated no hardware costs associated 

with the Tier 3 standards. For the Tier 

4 standards, we are projecting that SCR 

systems and DPFs will be the most 

likely technologies used to comply. 

Upon installation in a new locomotive 

or a new marine vessel, these devices 

would require some new equipment 

related hardware in the form of brackets, 

new sheet metal, and a reductant storage 

and delivery system. The annual 

variable costs for example years, the 

PM/NOX split of those engineering 

costs, and the net present values that 

would result are presented in Table V– 

1.173 As shown, we estimate the net 

present value for the years 2006 through 

2040 of all variable costs at $1.5 billion 

using a three percent discount rate, with 

$1.3 billion of that being engine-related 

variable costs.174 Using a seven percent 

discount rate, these costs are $674 

million and $575 million, respectively. 

This has the consequence of discounting the current 

year costs, effectively 2007, and all subsequent 

years are discounted by an additional year. The 

result is a slightly smaller NPV of engineering costs 

than by calculating the NPV over 2007–2040 (3% 

smaller for 3% NPV and 7% smaller for 7% NPV). 

The same convention applies for the emission 

inventories as shown in Table V–7. We have used 

2006 because we intended to publish the proposal 

in 2006. For the final analysis, we have chosen to 

continue with 2006 to make comparisons between 

proposal and final analyses more clear. 

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37164 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

TABLE V–1.—FRESHLY MANUFACTURED ENGINE AND EQUIPMENT VARIABLE ENGINEERING COSTS 

[Millions of 2005 dollars] 

Year 

Engine variable engineering costs Equipment 

variable engineering costs 

Total variable 

engineering 

costs 

Total for PM Total for 

NOX+NMHC 

2008 ..................................................................................... 

2009 ..................................................................................... 

2010 ..................................................................................... 

2011 ..................................................................................... 

2012 ..................................................................................... 

2015 ..................................................................................... 

2020 ..................................................................................... 

2030 ..................................................................................... 

2040 ..................................................................................... 

NPV at 3% ........................................................................... 

NPV at 7% ........................................................................... 

$0 

$0 

$0 

$0 

$0 

$60 

$82 

$99 

$98 

$1,255 

$575 

$0 

$0 

$0 

$0 

$0 

$11 

$14 

$18 

$17 

$220 

$100 

$0 

$0 

$0 

$0 

$0 

$71 

$96 

$117 

$115 

$1,475 

$674 

$0 

$0 

$0 

$0 

$0 

$37 

$50 

$61 

$60 

$772 

$353 

$0 

$0 

$0 

$0 

$0 

$34 

$46 

$56 

$55 

$703 

$321 

We can also look at these variable 

engineering costs on a ‘‘per engine’’ and 

a ‘‘per piece of equipment’’ basis rather 

than an annual total basis. Doing so 

results in the costs summarized in Table 

V–2. The costs shown represent the total 

engine-related and equipment-related 

engineering hardware costs associated 

with all of the new emissions standards 

to which the given power range and 

market segment would need to comply. 

For example, a commercial marine 

engine below 600 kW (805 hp) would 

need to comply with the Tier 3 

standards as its final tier and would, 

therefore, incur no new hardware costs. 

In contrast, a commercial marine engine 

over 600 kW is expected to comply with 

both Tier 3 and then Tier 4 and would, 

therefore, incur hardware costs 

associated with the Tier 4 standards. 

The costs also represent long term costs 

or those costs after expected learning 

effects have occurred and warranty costs 

have stabilized. 

(2) Freshly Manufactured Engine and 	 before the locomotive and marine believe that the technologies used to 

Equipment Fixed Engineering Costs 	 emission standards take effect, and comply with the locomotive and marine 

Because these technologies are being because engine manufacturers will have standards will have undergone

had several years complying with the 	 significant development before reaching researched for implementation in the 

highway and nonroad markets well highway and nonroad standards, we locomotive and marine production, and 
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Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 37165 

we have considered this in estimating and improvements in engine The total of fixed engineering costs and 

the costs for research and development. management. There would also have to the net present values of those costs are 

Chapter 5 of the final RIA details our be some level of tooling expenditures to shown in Table V–3.175 As shown, we 

approach which differs from our make possible the fitting of new have estimated the net present value for 

approach in the draft RIA. We anticipate hardware on locomotive and marine the years 2006 through 2040 of all fixed 

that engine manufacturers would engines. We also expect that engineering costs at $549 million using 

introduce a combination of primary locomotives and marine vessels being a three percent discount rate, with $471 

technology upgrades to meet the new fitted with Tier 4 engines would have to million of that being engine-related 

emission standards. Achieving very low undergo some level of redesign to research costs. Using a seven percent 

NOX emissions requires basic research accommodate the aftertreatment devices discount rate, these costs are $422 

on NOX emission-control technologies expected to meet the Tier 4 standards. million and $371 million, respectively. 

TABLE V–3.—FRESHLY MANUFACTURED ENGINE AND EQUIPMENT FIXED ENGINEERING COSTS 

[Millions of 2005 dollars] 

Year Engine 

research Engine tooling Engine certification 

Equipment 

redesign 

Total fixed 

engineering 

costs 

Total for PM Total for NOX 

+NMHC 

2008 ............................. $34 $0 $0 $0 $34 $11 $23 

2009 ............................. 34 0 0 0 34 11 23 

2010 ............................. 68 0 0 0 68 23 46 

2011 ............................. 114 19 5 0 138 50 88 

2012 ............................. 80 0 0 0 80 27 54 

2015 ............................. 46 17 1 13 76 30 46 

2020 ............................. 0 0 0 3 3 1 1 

2030 ............................. 0 0 0 3 3 1 1 

2040 ............................. 0 0 0 0 0 0 0 

NPV at 3% ................... 471 33 6 39 549 194 354 

NPV at 7% ................... 371 24 5 22 422 148 274 

Some of the estimated fixed 

engineering costs would occur in years 

prior to the Tier 3 standards taking 

affect in 2012. Engine manufacturers 

would need to invest in engine tooling 

and certification prior to selling engines 

that meet the standards. Engine research 

is expected to begin five years in 

advance of the standards for which the 

research is done. We have estimated 

some engine research for both the Tier 

3 and Tier 4 standards, although the 

research associated with the Tier 4 

standards is expected to be higher since 

it involves work on aftertreatment 

devices which only the Tier 4 standards 

would require. By 2016, the Tier 4 

standards would be fully implemented 

and engine research toward the Tier 4 

standards would be completed. 

Similarly, engine tooling and 

certification efforts would be completed. 

We have estimated that equipment 

redesign, driven mostly by marine 

vessel redesigns, would continue for 

many years given the nature of the 

marine market. Therefore, by 2017 all 

engine-related fixed engineering costs 

would be zero, and by 2033 all 

equipment-related fixed engineering 

costs would be zero. 

(3) Freshly Manufactured Engine 

Operating Costs 

We anticipate an increase in costs 

associated with operating locomotives 

and marine vessels. We anticipate three 

sources of increased operating costs: 

Reductant use; DPF maintenance; and a 

fuel consumption impact. Increased 

operating costs associated with 

reductant use would occur only in those 

locomotives/vessels equipped with a 

SCR engine using a reductant like urea. 

Maintenance costs associated with the 

DPF (for periodic cleaning of 

accumulated ash resulting from 

unburned material that accumulates in 

the DPF) would occur in those 

locomotives/vessels that are equipped 

with a DPF engine. The fuel 

consumption impact is anticipated to 

occur more broadly—we expect that a 

one percent fuel consumption increase 

would occur for all new Tier 4 engines, 

locomotive and marine, due to higher 

exhaust backpressure resulting from 

aftertreatment devices. These costs and 

how the fleet cost estimates were 

generated are detailed in Chapter 5 of 

the final RIA and are summarized in 

Table V–4.176 

TABLE V–4.—FRESHLY MANUFACTURED ENGINE ESTIMATED INCREASED OPERATING COSTS 

[Millions of 2005 dollars] 

Year Reductant use DPF 

maintenance 

Fuel consumption impact Total operating 

costs Total for PM Total for NOX+NMHC 

2008 ......................................................... $0 $0 $0 $0 $0 $0 

2009 ......................................................... 0 0 0 0 0 0 

2010 ......................................................... 0 0 0 0 0 0 

2011 ......................................................... 0 0 0 0 0 0 

2012 ......................................................... 0 0 0 0 0 0 

2015 ......................................................... 23 0 7 30 4 26 

175 The PM/NOX+NMHC cost allocations for fixed are split evenly; and, equipment redesign costs are follows: Reductant costs are 100% NOX+NMHC; 

costs used in this cost analysis are as follows: split evenly. DPF maintenance costs are 100% PM; and, fuel 

Engine research expenditures are 67% NOX+NMHC 176 The PM/NOX+NMHC cost allocations for consumption impacts are split evenly. 

and 33% PM; engine tooling and certification costs operating costs used in this cost analysis are as 
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37166 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

TABLE V–4.—FRESHLY MANUFACTURED ENGINE ESTIMATED INCREASED OPERATING COSTS—Continued 

[Millions of 2005 dollars] 

Year Reductant use DPF 

maintenance 

Fuel consumption impact Total operating 

costs Total for PM Total for NOX+NMHC 

2020 ......................................................... 143 3 42 187 24 164 

2030 ......................................................... 409 8 118 535 67 468 

2040 ......................................................... 619 12 175 806 99 707 

NPV at 3% ............................................... 4,031 75 1,157 5,264 654 4,610 

NPV at 7% ............................................... 1,575 29 453 2,057 256 1,801 

As shown, we have estimated the net 

present value for the years 2006 through 

2040 of the annual operating costs at 

$5.2 billion using a three percent 

discount rate and $2.1 billion using a 

seven percent discount rate. The 

operating costs are zero until Tier 4 

engines start being sold since only the 

Tier 4 engines are expected to incur 

increased operating costs (note that 

operating costs associated with the 

remanufacturing programs are discussed 

below). Reductant use represents the 

largest source of increased operating 

costs. Because reductant use is meant 

for controlling NOX emissions, most of 

the operating costs are associated with 

NOX+NMHC control. 

(4) Engineering & Operating Costs 

Associated With the Remanufacturing 

Programs 

We have also estimated engineering 

costs associated with the locomotive 

and marine remanufacturing programs. 

The remanufacturing process is not a 

low cost endeavor. However, it is much 

less costly than purchasing a freshly 

manufactured engine. The engineering 

costs we have estimated associated with 

the remanufacturing program are not 

meant to capture the remanufacturing 

process but rather the incremental 

engineering costs to that process. 

Therefore, the remanufacturing costs 

estimated here are only those 

engineering and operating costs 

resulting from the requirement to meet 

a more stringent standard than the 

engine was designed to meet at its 

original sale. In addition to incremental 

hardware costs, we expect that some 

remanufactured engines will see a fuel 

consumption impact. We expect a one 

percent fuel consumption increase will 

occur for remanufactured Tier 0 

locomotives because we believe that the 

tighter NOX standard will be met using 

retarded timing. For the same reason, 

we expect a two percent fuel 

consumption increase for 

remanufactured C2 marine engines. The 

marine engines will have timing 

retarded to the same degree as 

locomotives, but the relative degree of 

timing retard will be greater for marine 

engines given their initial state of 

control. These engineering and 

operating costs and how they were 

generated are detailed in Chapter 5 of 

the final RIA and are summarized in 

Table V–5.177 As shown, we have 

estimated the net present value for the 

years 2006 through 2040 of the annual 

engineering and operating costs 

associated with the locomotive and 

marine remanufacturing programs at 

$2.1 billion using a 3 percent discount 

rate and $1.2 billion using a 7 percent 

discount rate. 

TABLE V–5.—ESTIMATED HARDWARE AND OPERATING COSTS ASSOCIATED WITH THE LOCOMOTIVE & MARINE
 

REMANUFACTURING PROGRAMS
 

[Millions of 2005 dollars] 


Year Locomotive Marine Total Total for PM Total for 

NOX+NMHC 

2008 ..................................................................................... 

2009 ..................................................................................... 

2010 ..................................................................................... 

2011 ..................................................................................... 

2012 ..................................................................................... 

2015 ..................................................................................... 

2020 ..................................................................................... 

2030 ..................................................................................... 

2040 ..................................................................................... 

NPV at 3% ........................................................................... 

NPV at 7% ........................................................................... 

$59 

32 

58 

111 

91 

52 

37 

94 

158 

1,669 

864 

$16 

21 

27 

32 

44 

37 

26 

12 

3 

450 

289 

$75 

54 

85 

143 

135 

89 

63 

106 

161 

2,120 

1,153 

$38 

27 

42 

71 

68 

44 

31 

53 

80 

1,060 

577 

$38 

27 

42 

71 

68 

44 

31 

53 

80 

1,060 

577 

(5) Total Engineering & Operating Costs 

The total engineering and operating 

costs associated with today’s final rule 

are the summation of the new engine 

177 Costs associated with the remanufaturing 

program are split evenly between NOX+NMHC and 

PM. Note that the costs associated with the marine 

and new equipment engineering costs, 

both fixed and variable, the new engine 

operating costs for freshly manufactured 

engines, and the hardware and 

remanufacturing program are consistent with the 

inventory reductions discussed in section II. Our 

estimate of the number of remanufactured engines 

operating costs associated with the 

locomotive and marine remanufacturing 

programs. These costs are summarized 

in Table V–6. 

is presented in a memorandum from Amy Kopin to 

the docket for this rule (see Docket Item No. EPA– 

HQ–OAR–2003–0190–0847). 
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Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 37167 

TABLE V–6.—TOTAL ENGINEERING & OPERATING COSTS OF THE FINAL PROGRAM 

(Millions of 2005 dollars] 

Year 

Freshly manufactured engine related 

engineering 

costs 

Freshly manufactured equipment related 

engineering 

costs 

Freshly manufactured engine & equipment operating 

costs 

Hardware and 

operating 

costs associated with the 

remanufacturing programs 

Total engineering costs Total PM costs 

Total 

NOX+NMHC 

costs 

2008 ............................. $34 $0 $0 $75 $109 $49 $60 

2009 ............................. 34 0 0 54 87 38 49 

2010 ............................. 68 0 0 85 153 65 88 

2011 ............................. 138 0 0 143 281 121 160 

2012 ............................. 80 0 0 135 215 94 121 

2015 ............................. 123 24 30 89 266 116 150 

2020 ............................. 82 17 187 63 349 106 242 

2030 ............................. 99 20 535 105 759 181 578 

2040 ............................. 98 17 806 161 1,082 240 842 

NPV at 3% ................... 1,764 260 5,264 2,120 9,407 2,680 6,727 

NPV at 7% ................... 974 122 2,057 1,153 4,307 1,333 2,973 

As shown, we have estimated the net 

present value of the annual engineering 

costs for the years 2006 through 2040 at 

$9.4 billion using a three percent 

discount rate and $4.3 billion using a 

seven percent discount rate. Roughly 

half of these costs are operating costs, 

with the bulk of those being reductant 

related costs. As explained above in the 

operating cost discussion, because 

reductant use is meant for controlling 

NOX emissions, most of the operating 

costs and, therefore, the majority of the 

total engineering costs are associated 

with NOX+NMHC control. 

Figure V–1 graphically depicts the 

annual engineering costs associated 

with the program being finalized today. 

The engine costs shown represent the 

engineering costs associated with engine 

research and tooling, etc., and the 

incremental costs for new hardware 

such as DPFs and reductant SCR 

systems. The equipment costs shown 

represent the engineering costs 

associated with equipment redesign 

efforts and the incremental costs for 

new equipment-related hardware such 

as reductant storage and delivery 

systems, sheet metal and brackets. The 

remanufacturing program costs include 

incremental hardware and operating 

costs for the locomotive and marine 

remanufacturing programs. The 

operating costs include incremental 

increases in operating costs associated 

with reductant use, DPF maintenance, 

and a one percent fuel consumption 

increase for new Tier 4 engines. The 

total program engineering costs are 

shown in Table V–6 as $9.4 billion at a 

three percent discount rate and $4.3 

billion at a seven percent discount rate. 

BILLING CODE 1505–01–D 

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37168 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

BILLING CODE 1505–01–C 

B. Cost Effectiveness 

As discussed in section VI, this rule 

is very cost beneficial, with social 

benefits far outweighing social costs. 

However, this does not shed light on 

how cost effective this control program 

is compared to other control programs at 

providing the expected emission 

reductions. One tool that can be used to 

assess the value of the final program is 

the ratio of engineering costs incurred 

per ton of emissions reduced and 

comparing that ratio to other control 

programs. As we show in this section, 

the PM and NOX emissions reductions 

from the new locomotive and marine 

diesel program compare favorably—in 

terms of cost effectiveness—to other 

mobile source control programs that 

have been or will soon be implemented. 

We note that today’s action builds upon 

the efforts undertaken by the engine 

manufacturing industry to comply with 

our recent 2007/2010 heavy-duty 

highway and nonroad Tier 4 (NRT4) 

rulemakings. As such, and as discussed 

at length in Chapter 5 of the final RIA, 

much of the research and development 

associated with diesel emission controls 

builds upon the work done to comply 

with those earlier rules. This does not 

change the conclusion that the cost 

effectiveness of today’s action compares 

favorably with other actions deemed 

appropriate for society. 

We have calculated the cost per ton of 

our program based on the net present 

value of all engineering costs incurred 

and all emission reductions generated 

from the current year 2006 through the 

year 2040. This approach captures all of 

the costs and emissions reductions from 

our program including those costs 

incurred and emissions reductions 

generated by the locomotive and marine 

remanufacturing programs. The baseline 

case for this evaluation is the existing 

set of engine standards for locomotive 

and marine diesel engines and the 

existing remanufacturing requirements. 

The analysis timeframe is meant to 

capture both the early period of the 

program when very few new engines 

that meet the standards would be in the 

fleet, and the later period when 

essentially all engines would meet the 

new standards. 

Table V–7 shows the emissions 

reductions associated with today’s rule. 

These reductions are discussed in more 

detail in section II of this preamble and 

Chapter 3 of the final RIA. 
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Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 37169 

TABLE V–7.—ESTIMATED EMISSIONS REDUCTIONS ASSOCIATED WITH THE NEW LOCOMOTIVE AND MARINE PROGRAM 

(Short tons) 

Year PM2.5 PM10 a NOX NMHC 

2015 ................................................................................................................. 

2020 ................................................................................................................. 

2030 ................................................................................................................. 

2040 ................................................................................................................. 

NPV at 3% ....................................................................................................... 

NPV at 7% ....................................................................................................... 

7,000 

14,000 

27,000 

37,000 

308,000 

134,000 

8,000 

15,000 

27,000 

38,000 

318,000

139,000

161,000 

371,000 

795,000 

1,144,000 

8,757,000 

3,708,000 

14,000 

26,000 

40,000 

52,000 

492,000 

221,000 

Note: (a) Note that, PM2.5 is estimated to be 97 percent of the more inclusive PM10 emission inventory. 

In Section II we generate and present a means of comparing control measures resultant cost per ton numbers depend 

PM2.5 inventories since recent research to one another, we use PM10 and NMHC on how the engineering costs presented 

has determined that these are of greater in our cost effectiveness calculations for above are allocated to each pollutant. 

health concern. Similarly, NMHC is comparisons to past control measures. Therefore, as described in section V.A, 

estimated to be 93 percent of the more Using the engineering costs shown in we have allocated costs as closely as 

inclusive VOC emission inventory. Table V–6 and the emission reductions possible to the pollutants for which they 

Traditionally, we have used PM10 and shown in Table V–7, we can calculate are incurred. These allocations are also 

NMHC in our cost effectiveness the $/ton associated with today’s rule. discussed in detail in Chapter 5 of the 

calculations. Since cost effectiveness is These are shown in Table V–8. The final RIA. 

TABLE V–8.—FINAL PROGRAM AGGREGATE COST PER TON AND LONG-TERM ANNUAL COST PER TON 

Pollutant 

2006 thru 

2040 discounted lifetime cost per 

ton at 3% 

2006 thru 

2040 discounted lifetime cost per 

ton at 7% 

Cost per ton in 

2030 

Cost per ton in 

2040 

NOX+NMHC ..................................................................................................... 

PM .................................................................................................................... 

$730 

8,440 

$760 

9,620 

$690 

6,620 

$700 

6,360 

The costs per ton shown in Table V– specific years. These numbers are also generating substantial NOX+NMHC and 

8 for 2006 through 2040 use the net shown in Table V–8. All of the costs per PM reductions. This can be seen by 

present value of the annualized ton include costs and emission comparing the cost effectiveness with 

engineering costs and emissions reductions that will occur from the the cost effectiveness of a number of 

reductions associated with the program locomotive and marine remanufacturing standards that EPA has adopted in the 

for the years 2006 through 2040. We programs. past. Table V–9 and Table V–10 

have also calculated the costs per ton of In comparison with other emissions summarize the cost per ton of several 

emissions reduced in the years 2030 and control programs, we believe that the past EPA actions to reduce emissions of 

2040 using the annual engineering costs new locomotive and marine program NOX+NMHC and PM from mobile 

and emissions reductions in those represents a cost effective strategy for sources. 

TABLE V–9.—NEW LOCOMOTIVE AND MARINE PROGRAM COMPARED TO PREVIOUS MOBILE SOURCE PROGRAMS FOR 

NOX+NMHC 

Program 

Today’s locomotive & marine standards .........................................................................................................
 

Tier 4 Nonroad Diesel (69 FR 39131) .............................................................................................................
 

Tier 2 Nonroad Diesel (EPA420–R–98–016, Chapter 6) ................................................................................
 

Tier 3 Nonroad Diesel (EPA420-R–98–016, Chapter 6) .................................................................................
 

Tier 2 vehicle/gasoline sulfur (65 FR 6774) ....................................................................................................
 

2007 Highway HD (66 FR 5101) .....................................................................................................................
 

2004 Highway HD (65 FR 59936) ...................................................................................................................
 

$/ton NOX+NMHC 

$730 

1,140 

710 

480 

1,580—2,650 

2,530 

250—480 

Note: Costs adjusted to 2005 dollars using the Producer Price Index for Total Manufacturing Industries. 

TABLE V–10.—NEW LOCOMOTIVE AND MARINE STANDARDS COMPARED TO PREVIOUS MOBILE SOURCE PROGRAMS FOR 

PM 

Program $/ton PM 

Today’s locomotive & marine standards .........................................................................................................
 $8,440 

Tier 4 Nonroad Diesel (69 FR 39131) .............................................................................................................
 12,630 

Tier 1/Tier 2 Nonroad Diesel (EPA420–R–98–016, Chapter 6) .....................................................................
 2,700 
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37170 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

TABLE V–10.—NEW LOCOMOTIVE AND MARINE STANDARDS COMPARED TO PREVIOUS MOBILE SOURCE PROGRAMS FOR 

PM—Continued 

Program $/ton PM 

2007 Highway HD (66 FR 5101) .....................................................................................................................
 15,990 

Note: Costs adjusted to 2005 dollars using the Producer Price Index for Total Manufacturing Industries. 

C. EIA 

We prepared an Economic Impact 

Analysis (EIA) to estimate the social 

costs associated with the final control 

program to estimate the market-level 

changes in prices and outputs for 

affected markets, the social costs of the 

program, and the expected distribution 

of those costs across stakeholders. As 

defined in EPA’s Guidelines for 

Preparing Economic Analyses, 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.178 

A quantitative Economic Impact 

Model (EIM) was developed to estimate 

price and quantity changes and total 

social costs associated with the 

emission control program. 

The EIM is a computer model 

comprised of a series of spreadsheet 

modules that simulate the supply and 

demand characteristics of each of the 

markets under consideration. The model 

methodology is firmly rooted in applied 

microeconomic theory and was 

developed following the methodology 

set out in OAQPS’s Economic Analysis 

Resource Document.179 Chapter 7 of the 

RIA contains a detailed description of 

the EIM, including the economic theory 

behind the model and the data used to 

construct it, the baseline equilibrium 

market conditions, and the model’s 

behavior parameters. The EIM and the 

estimated compliance costs presented 

above are used to estimate the economic 

impacts of the program. The results of 

this analysis are summarized below. 

The engineering costs we used in the 

EIA are an earlier version of the 

estimated compliance costs developed 

for this final rule. The net present value 

of the engineering costs used in the EIA 

is estimated to be approximately $9.17 

billion (NPV over the period of analysis 

at 3 percent discount rate), which is 

178 EPA Guidelines for Preparing Economic 

Analyses, EPA 240–R–00–003, September 2000, p 

113. A copy of this document can be found at 

http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/ 

Guidelines.html. 

179 U.S. Environmental Protection Agency, Office 

of Air Quality Planning and Standards, Innovative 

Strategies and Economics Group, OAQPS Economic 

Analysis Resource Document, April 1999. A copy 

of this document can be found at http:// 

www.epa.gov/ttn/ecas/econdata/Rmanual2/. 

about $240 million less than the net 

present value of the final estimated 

engineering costs of about $9.41 billion. 

This difference is the sum of various 

cost adjustments, the largest of which 

are an increase of about $222 million in 

operating costs for the marine markets 

and $42 million in the operating costs 

for the rail markets (NPV over the 

period of analysis at 3 percent discount 

rate). These changes are not expected to 

have a substantial impact on the market 

level results because the differences are 

relatively small on an annual basis. For 

example, operating costs for C2 marine 

markets increase by about 15 percent in 

2030 (from $107 million to $123 

million). The previous estimate of $107 

million was associated with an increase 

of approximately 1.1 in the price of 

marine transportation services and a 

decrease of approximately 0.5 percent in 

the quantity of marine transportation 

services provided. A small increase in 

operating costs is not likely to change 

those results by very much. The marketlevel impacts on the other downstream 

markets are also likely to be very small 

and not economically significant. 

Finally, the difference in compliance 

costs will not affect the distribution of 

social costs, which is a function of the 

price elasticity of supply and demand. 

(1) Market Analysis Results 

In the market analysis, we estimate 

how prices and quantities of goods and 

services affected by the emission control 

program can be expected to change once 

the program goes into effect. 

The compliance costs associated with 

the new locomotive and marine diesel 

engine standards are expected to lead to 

price and quantity changes in these 

markets. A summary of the market 

analysis results is presented in Table V– 

11 for 2012, which is representative of 

the first year of the Tier 3 standards; 

2016, which is representative of the first 

year of the Tier 4 standards; and 2030, 

which represents market impacts of the 

program in the long-term. Results for all 

years can be found in Chapter 7 of the 

RIA. 

For all markets, the market impacts 

for the early years of the program are 

driven by the transportation markets. In 

these years, the only direct compliance 

costs are associated with the 

remanufacture programs; there are no 

variable costs associated with the Tier 3 

standards and therefore no direct 

compliance costs. The transportation 

markets will experience operating costs 

increases; these will result in small 

increases in transportation market 

prices, which will translate to small 

contractions in demand for locomotives 

and marine diesel engines and vessels. 

This is expected exert marginal 

downward pressure on prices in those 

markets, of less than 0.1 percent. The 

production decreases are also expected 

to be very small, at 0.1 percent or less. 

The Tier 4 programs are expected to 

result in larger market changes due to 

the direct compliance costs associated 

with Tier 4 standards and the 

continuing costs of the remanufacture 

programs. For the locomotive markets, 

the price increases in 2016 are expected 

to be about 4 percent for line haul 

locomotives and about one percent for 

switchers in 2016. In the long term (by 

2030), prices are expected to increase to 

about 3.2 percent for line haul 

locomotives and about 1.5 percent for 

switchers. These small price increases 

reflect the relative amount of the 

compliance costs compared to the total 

cost of a locomotive or switcher (the 

engine is only a small part of the total 

cost of the locomotive). In all cases, the 

decrease in the quantity of line haul 

locomotives or switchers produced is 

expected to be less than 0.5 percent. 

In the marine markets, price increases 

for engines are expected to be larger in 

2016, varying from about 9 percent for 

C1 engines above 600 kW (800 hp) to 17 

percent for auxiliary engines and C2 

engines above 600 kW.180 The price 

increases for vessels that use these 

engines, however, are smaller (about 2 

percent and 7 percent, respectively), 

reflecting the relative amount of the 

compliance costs compared to the price 

of a commercial marine vessel. 

Production quantities are expected to 

decrease by less than 4 percent for 

engines and vessels. The long-term price 

impacts are similar, with expected price 

increases of about 12 percent for engines 

C2 above 600 kW and 7 percent for C1 

engines above 600 kW, and vessel price 

180 Results presented in this section are by marine 

engine category in kW; the actual EIA analysis 

presented in Chapter 7 of the RIA was performed 

using marine engine categories by hp. 
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Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 37171 

increases of less than 5 percent. Long-	 term production quantity decreases are 

expected to be less than 3 percent. 

TABLE V–11.—ESTIMATED MARKET IMPACTS FOR 2012, 2016, 2030 

(2005$) 

Market c 

Average 

variable 

engineering 

cost per unit 

Change in price Change in quantity 

Absolute Percent Absolute Percent 

2012 

Rail Sector: 

Locomotives ...................................................................................... 

Switcher/Passenger .......................................................................... 

Transportation Services .................................................................... 

Marine Sector 

Engines: 

Auxiliary >600 kW ............................................................................. 

C1>600 kW ................................................................................ 

C2>600 kW ................................................................................ 

Other marine .............................................................................. 

Vessels 

C1>600 kW ....................................................................................... 

C2>600 kW ....................................................................................... 

Other marine ..................................................................................... 

Transportation Services ........................................................................... 

2016 

Rail Sector: 

Locomotives ...................................................................................... 

Switcher/Passenger .......................................................................... 

Transportation Services .................................................................... 

Marine Sector 

Engines: 

Auxiliary >600 kW ............................................................................. 

C1>600 kW ................................................................................ 

C2>600 kW ................................................................................ 

Other marine .............................................................................. 

Vessels: 

C1>600 kW ....................................................................................... 

C2>600 kW ....................................................................................... 

Other marine ..................................................................................... 

Transportation Services ........................................................................... 

2030 

Rail Sector: 

Locomotives ...................................................................................... 

Switcher/Passenger .......................................................................... 

Transportation Services .................................................................... 

Marine Sector 

Engines: 

Auxiliary >600 kW ............................................................................. 

C1>600 kW ................................................................................ 

C2>600 kW ................................................................................ 

Other marine .............................................................................. 

Vessels: 

C1>600 kW ....................................................................................... 

C2>600 kW ....................................................................................... 

Other marine ..................................................................................... 

Transportation Services ........................................................................... 

$0 

0 

NA 

0 

0 

0 

0 

0 

0 

0 

NA 

84,274 

14,175 

NA 

37,097 

18,483 

71,806 

0 

8,277 

12,107 

0 

NA 

65,343 

21,139 

NA 

28,359 

14,131 

54,893 

0 

6,933 

10,169 

0 

NA 

¥535 

¥348 

a NA 

¥47 

¥8 

¥139 

0 

¥174 

¥2,419 

¥3 a NA 

83,227 

13,494 a NA 

35,569 

16,384 

71,602 

0 

b 34,043 b 255,143 

¥4 a NA 

63,019 

19,628 a NA 

27,021 

12,479 

54,264 

¥1 

b 25,768 b 164,774 

¥12 

a NA 

¥0.03 

¥0.03 

0.1 

0.00 

0.00 

¥0.03 

0.00 

¥0.01 

¥0.07 

0.00 

0.2 

4.2 

1.0 

0.3 

17.1 

8.5 

16.3 

0.00 

2.1 

7.0 

0.00 

0.4 

3.2 

1.5 

0.6 

13.0 

6.5 

12.3 

0.0 

1.6 

5.1 

0.0 

1.1 

¥1 

0 a NA 

0 

0 

0 

0 

0 

0 

1 a NA 

¥1 

0 a NA 

¥11 

¥15 

0 

0 

¥14 

0 

¥1 a NA 

¥4 

¥1 a NA 

¥11 

¥13 

¥1 

0 

¥12 

0 

¥4 a NA 

¥0.1 

¥0.1 

¥0.1 

¥0.1 

0.0 

¥0.1 

0.0 

0.0 

¥0.1 

0.0 

¥0.1 

¥0.1 

¥0.1 

¥0.1 

¥3.4 

¥3.7 

¥0.2 

0.0 

¥3.7 

¥0.2 

0.0 

¥0.2 

¥0.3 

¥0.3 

¥0.3 

¥2.8 

¥2.9 

¥0.5 

0.0 

¥2.9 

¥0.5 

0.0 

¥0.5 

Notes: 

a The prices and quantities for transportation services are normalized ($1 for 1 unit of services provided) and therefore it is not possible to estimate the absolute change price or quantity; see 7.3.1.5. b The estimated vessel impacts include the impacts of direct vessel compliance costs and the indirect impacts of engine markets for both propulsion and auxiliary engines. See Chapter 7 of the RIA. c Results presented in this table are by marine engine category in kW; the actual EIA analysis presented in Chapter 7 of the RIA was performed using marine engine categories by hp. 

(2) Economic Welfare Analysis 	 The total estimated social costs of the for those years. The slight reduction in 

program are about $221 million, $284 social costs when compared to In the economic welfare analysis, we million, $332 million and $738 million 	 compliance costs occurs because the look at the total social costs associated for 2012, 2016, 2020, and 2030. These 	 total engineering costs do not reflect the with the program and their distribution estimated social costs are nearly 	 decreased sales of locomotives, engines across key stakeholders. identical to the total compliance costs 	 and vessels that are incorporated in the 
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37172 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

total social costs. Results for all years million in 2030.181 The rail sector is producers and users of locomotive and 

are presented in Chapter 7 of the RIA. expected to bear about 62.5 percent of marine transportation services (about 98 

Table V–12 shows how total social the social costs of the program in 2030, percent). The remaining 2 percent is 

costs are expected to be shared across and the marine sector is expected to expected to be borne by locomotive, 

stakeholders for selected years. bear about 37.5 percent. In each of these marine engine, and marine vessel 

We estimate the net social costs of the two sectors, these social costs are manufacturers and fishing and 

program to be approximately $738 expected to be born primarily by recreational users. 

TABLE V–12.—SUMMARY OF ESTIMATED SOCIAL COSTS FOR 2012, 2016, 2020, 2030 (2005$, $MILLION) 

Stakeholder group a 

2012 2016 

Surplus 

change 

($) 

Percent 

Surplus 

change 

($) 

Percent 

Locomotives: 

Locomotive producers .............................................................................................. 

Line haul producers .................................................................................................. 

Switcher/Passenger producers ................................................................................. 

Rail transportation service providers ........................................................................ 

Rail transportation service consumers ..................................................................... 

Total locomotive sector ............................................................................................ 

Marine: 

Marine engine producers .......................................................................................... 

Auxiliary > 600 kW ................................................................................................... 

C1 > 600 kW ............................................................................................................ 

C2 > 600 kW ............................................................................................................ 

Other marine ............................................................................................................. 

Marine vessel producers .......................................................................................... 

C1 > 600 kW ............................................................................................................ 

C2 > 600 kW ............................................................................................................ 

Other marine ............................................................................................................. 

Recreational and fishing vessel consumers ............................................................. 

Marine transportation service providers ................................................................... 

Marine transportation service consumers ................................................................ 

Auxiliary engines < 600 kW ...................................................................................... 

Total marine sector ................................................................................................... 

¥35.1 

¥27.8 

¥7.2 

¥21.4 

¥68.4 

¥124.9 

¥45.8 

¥16.0 

¥19.0 

¥10.7 

0.0 

¥0.3 

¥0.1 

¥0.1 

¥0.1 

0.0 

¥11.9 

¥38.1 

0.0 

¥96.1 

15.9 

12.6 

3.3 

9.7 

31.0 

56.6 

20.7 

7.3 

8.6 

4.9 

0.0 

0.1 

0.0 

0.1 

0.0 

0.0 

5.4 

17.3 

0.0 

43.5 

¥8.3 

¥0.9 

¥7.4 

¥43.4 

¥138.9 

¥190.6 

¥2.1 

¥0.5 

¥1.6 

0.0 

0.0 

¥15.8 

¥13.5 

¥2.2 

¥0.1 

0.0 

¥18.1 

¥57.9 

0.0 

¥93.8 

2.9 

0.3 

2.6 

15.3 

48.8 

67.0 

0.7 

0.2 

0.5 

0.0 

0.0 

5.6 

4.7 

0.8 

0.0 

0.0 

6.4 

20.3 

0.0 

33.0 

Total Program .................................................................................................... ¥221.0 .................... ¥284.4 .................... 

2020 2030 

Stakeholder group Surplus 

change 

($) 

Percent 

Surplus 

change 

($) 

Percent 

Locomotives: 

Locomotive producers .............................................................................................. 

Line haul producers ........................................................................................... 

Switcher/Passenger producers ......................................................................... 

Rail transportation service providers ............................................................................... 

Rail transportation service consumers ............................................................................ 

Total locomotive sector .................................................................................................... 

Marine: 

Marine engine producers .......................................................................................... 

Auxiliary > 600 kW ............................................................................................ 

C1 > 600 kW ..................................................................................................... 

C2 > 600 kW ..................................................................................................... 

Other marine ..................................................................................................... 

Marine vessel producers .......................................................................................... 

C1 > 600 kW ..................................................................................................... 

C2 > 600 kW ..................................................................................................... 

Other marine ..................................................................................................... 

Recreational and fishing vessel consumers ..................................................... 

Marine transportation service providers ................................................................... 

Marine transportation service consumers ................................................................ 

Auxiliary engines < 600 kW ...................................................................................... 

Total marine sector ................................................................................................... 

¥1.1 

¥1.0 

¥0.1 

¥46.4 

¥148.6 

¥196.1 

¥1.8 

¥0.4 

¥1.3 

0.0 

0.0 

¥10.3 

¥8.8 

¥1.3 

¥0.1 

0.0 

¥29.5 

¥94.4 

0.0 

¥135.9 

0.3 

0.3 

0.0 

14.0 

44.8 

59.1 

0.5 

0.1 

0.4 

0.0 

0.0 

3.1 

2.7 

0.4 

0.0 

0.0 

8.9 

28.4 

0.0 

40.9 

¥3.1 

¥2.7 

¥0.4 

¥109.0 

¥348.9 

¥461.1 

¥2.0 

¥0.5 

¥1.4 

¥0.1 

0.0 

¥9.2 

¥8.2 

¥0.7 

¥0.3 

0.0 

¥63.3 

¥202.5 

0.0 

¥277.0 

0.4 

0.4 

0.1 

14.8 

47.3 

62.5 

0.3 

0.1 

0.2 

0.0 

0.0 

1.2 

1.1 

0.1 

0.0 

0.0 

8.6 

27.4 

0.0 

37.5 

Total Program .................................................................................................... ¥332.0 .................... ¥738.1 .................... 

Note: a Results presented in this table are by marine engine category in kW; the actual EIA analysis presented in Chapter 7 of the RIA was 

performed using marine engine categories by hp. 

181 All estimates presented in this section are in 

2005$. 
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Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 37173 

Table V–13 shows the distribution of and that most of the costs are expected expected to be borne by the marine 

total surplus losses for the program from to be borne by the rail transportation transportation consumers. This is 

2007 through 2040. This table shows consumers. The marine sector is consistent with the structure of the 

that the rail sector is expected to bear expected to bear about 38 percent of the program, which leads to high 

about 62 percent of the total program total program social costs through 2040 compliance costs for the rail marine 

social costs through 2040 (NPV 3%), (NPV 3%), most of which are also transportation sectors. 

TABLE V–13. ESTIMATED NET SOCIAL COSTS 2007 THROUGH 2040 BY STAKEHOLDER ($MILLION, 2005$) 

Stakeholder Groups a Surplus 

change 

Percent of 

total surplus 

Surplus 

change 

Percent of 

total surplus 

Locomotives ..................................................................................................................... 

Locomotive producers ..................................................................................................... 

Line Haul .......................................................................................................................... 

Switcher/Passenger ......................................................................................................... 

Rail transportation service providers ............................................................................... 

Rail transportation service consumers ............................................................................ 

Total locomotive sector .................................................................................................... 

Marine .............................................................................................................................. 

Marine engine producers ................................................................................................. 

Auxiliary > 600 kW ........................................................................................................... 

C1 > 600 kW .................................................................................................................... 

C2 > 600 kW .................................................................................................................... 

Other marine .................................................................................................................... 

Marine vessel producers ................................................................................................. 

C1 > 600 kW .................................................................................................................... 

C2 > 600 kW .................................................................................................................... 

Other marine .................................................................................................................... 

Recreational and fishing vessel consumers .................................................................... 

Marine transportation service providers .......................................................................... 

Marine transportation service consumers ....................................................................... 

Auxiliary Engines <600 kW .............................................................................................. 

Total marine sector .......................................................................................................... 

NPV 3% 

¥$221.1 

¥172.2 

¥48.9 

¥1,302.7 

¥4,168.7 

¥5,692.6 

¥307.5 

¥87.3 

¥106.8 

¥56.8 

¥56.7 

¥150.0 

¥126.8 

¥19.7 

¥3.5 

0.2 

¥704.6 

¥2,254.7 

¥40.2 

3,456.7 

.................... 

2.4 

14.2 

45.6 

62.6 

3.4 

1.6 

7.7 

24.6 

0.4 

37.8 

NPV 7% 

¥$160.4 

¥124.5 

¥35.9 

¥568.6 

¥1,819.5 

¥2,548.5 

¥229.4 

¥64.0 

¥74.6 

¥42.6 

¥48.1 

¥72.5 

¥60.8 

¥10.2 

¥1.5 

0.1 

¥308.4 

¥986.9 

¥34.2 

¥1,631.3 

3.8 

13.6 

43.5 

61.0 

5.5 

1.7 

7.4 

23.6 

¥0.8 

39.0 

Total Program ........................................................................................................... ¥9.149.2 ¥4,179.8 

Note: a Results presented in this table are by marine engine category in kW; the actual EIA analysis presented in Chapter 7 of the RIA was 

performed using marine engine categories by hp. 

(3) What Are the Significant Limitations 

of the Economic Impact Analysis? 

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 three 

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. 

Uncertainty associated with the 

economic impact model structure arises 

from the use of a partial equilibrium 

approach, the use of the national level 

of analysis, and the assumption of 

perfect competition. These features of 

the model mean it does not take into 

account impacts on secondary markets 

or the general economy, and it does not 

consider regional impacts. The results 

may also be biased to the extent that 

firms have some control over market 

prices, which would result in the 

modeling over-estimating the impacts 

on producers of affected goods and 

services. 

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 new 

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. 

Finally, uncertainty in measurement 

of data inputs can have an impact on the 

results of the analysis. This includes 

measurement of the baseline 

equilibrium prices and quantities and 

the estimation of future year sales. In 

addition, there may be uncertainty in 

how similar engines and equipment 

were combined into smaller groups to 

facilitate the analysis. There may also be 

uncertainty in the compliance cost 

estimations. 

While variations in the above model 

parameters may affect the distribution of 

social costs among stakeholders and the 

estimated market impacts, they will not 

affect the total social costs of the 

program. This is because the total social 

costs are directly related to the total 

compliance costs. To explore the effects 

of key sources of uncertainty on the 

distribution of social costs and on 

estimated price and quantity impacts, 

we performed a sensitivity analysis in 

which we examine the results of using 

alternative values for several model 

parameters. The results of these 

analyses are contained in Appendix 7H 

of the RIA prepared for this rule. 

Despite these uncertainties, we 

believe this economic impact analysis 

provides a reasonable estimate of the 

expected market impacts and social 

welfare costs of the new standards in 

future. Acknowledging benefits 

omissions and uncertainties, we present 

a best estimate of the social costs based 

on our interpretation of the best 

available scientific literature and 

methods supported by EPA’s Guidelines 

for Preparing Economic Analyses and 
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37174 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

the OAQPS Economic Analysis 

Resource Document. 

VI. Benefits 

This section presents our analysis of 

the health and environmental benefits 

that are estimated to occur as a result of 

the final locomotive and marine engine 

standards throughout the period from 

initial implementation through 2030. 

Nationwide, the engines that are subject 

to the emission standards in this rule 

are a significant source of mobile source 

air pollution. The standards will reduce 

exposure to NOX and direct PM 

emissions and help avoid a range of 

adverse health effects associated with 

ambient PM2.5 and ozone levels. In 

addition, the standards will help reduce 

exposures to diesel PM exhaust, various 

gaseous hydrocarbons and air toxics. As 

described below, the reductions in PM 

and ozone from the standards are 

expected to result in significant 

reductions in premature deaths and 

other serious human health effects, as 

well as other important public health 

and welfare effects. 

EPA typically quantifies and 

monetizes PM- and ozone-related 

impacts in its regulatory impact 

analyses (RIAs) when possible. 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. The science underlying 

the analysis is based on the current 

ozone criteria document.182 To estimate 

the incidence and monetary value of the 

health outcomes associated with this 

final rule, we used health impact 

functions based on published 

epidemiological studies, and valuation 

functions derived from the economics 

literature.183 Key health endpoints 

analyzed include premature mortality, 

hospital and emergency room visits, 

school absences, and minor restricted 

activity days. The analytic approach to 

characterizing uncertainty is consistent 

182 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?deid=137307 [March 2006] 

183 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. 

with the analysis used in the RIA for the 

proposed O3 NAAQS. 

The benefits modeling 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. These methods are 

consistent with benefits analyses 

performed for the recent analysis of the 

proposed Ozone NAAQS and the final 

PM NAAQS analysis.184, 185 They are 

described in detail in the RIAs prepared 

for those rules. 

The range of PM benefits associated 

with the final standards is estimated 

based on risk reductions estimated 

using several sources of PM-related 

mortality effect estimates. In order to 

provide an indication of the sensitivity 

of the benefits estimates to alternative 

assumptions about PM mortality risk 

reductions, in Chapter 6 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 recent PM 

mortality expert elicitation.186 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-related premature 

mortality. 

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 

184 U.S. Environmental Protection Agency. 

August 2007. Proposed Regulatory Impact Analysis 

(RIA) for the Proposed National Ambient Air 

Quality Standards for Ozone. Prepared by: Office of 

Air and Radiation. Available at http://www.epa.gov/ 

ttn/ecas/ria.html#ria2007. 185 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. 

186 Industrial Economics, Incorporated (IEc). 

2006. Expanded Expert Judgment Assessment of the 

Concentration-Response Relationship Between 

PM2.5 Exposure and Mortality. Peer Review Draft. 

Prepared for: Office of Air Quality Planning and 

Standards, U.S. Environmental Protection Agency, 

Research Triangle Park, NC. August. 

Study (NMMAPS),187 which was used 

as the primary basis for the risk analysis 

in the ozone Staff Paper 188 and 

reviewed by the Clean Air Science 

Advisory Committee (CASAC).189 We 

also use three studies that synthesize 

ozone mortality data across a large 

number of individual studies.190, 191, 192 

Note that there are uncertainties within 

each study that are not fully captured by 

this range of estimates. 

Recognizing that additional research 

is necessary to clarify the underlying 

mechanisms causing these effects, we 

also consider the possibility that the 

observed associations between ozone 

and mortality may not be causal in 

nature. EPA has requested advice from 

the National Academy of Sciences on 

how best to quantify uncertainty in the 

relationship between ozone exposure 

and premature mortality in the context 

of quantifying benefits associated with 

ozone control strategies. 

The range of total ozone- and PMrelated benefits associated with the final 

standards is presented in Table VI–1. 

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 VI–1) to estimates of PMrelated premature mortality, derived 

from either the epidemiological 

literature or the expert elicitation. The 

estimates in Table VI–1, and all 

monetized benefits presented in this 

section, are in year 2006 dollars. 

187 Bell, M.L., et al. 2004. Ozone and short-term 

mortality in 95 US urban communities, 1987–2000. 

Jama, 2004. 292(19): p. 2372–8. 

188 U.S. EPA (2007) Review of the National 

Ambient Air Quality Standards for Ozone, Policy 

Assessment of Scientific and Technical 

Information. OAQPS Staff Paper. EPA–452/R–07– 

003. This document is available in Docket EPA– 

HQ–OAR–2003–0190. This document is available 

electronically at: http:www.epa.gov/ttn/naaqs/ 

standard/ozone/s_o3_cr_sp.html. 

189 CASAC (2007). Clean Air Scientific Advisory 

Committee’s (CASAC) Review of the Agency’s Final 

Ozone Staff Paper. EPA–CASAC–07–002. March 26. 

190 Bell, M.L., F. Dominici, and J.M. Samet. A 

meta-analysis 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. 

191 Ito, K., S.F. De Leon, and M. Lippmann. 

Associations between ozone and daily mortality: 

analysis and meta-analysis. Epidemiology, 2005. 

16(4): p. 446–57. 

192 Levy, J.I., S.M. Chemerynski, and J.A. Sarnat. 

2005. Ozone exposure and mortality: an empiric 

bayes metaregression analysis. Epidemiology, 2005. 

16(4): p. 458–68. 
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Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 37175 

TABLE VI–1.—ESTIMATED 2030 MONETIZED PM- AND OZONE-RELATED HEALTH BENEFITS OF THE FINAL LOCOMOTIVE
 

AND MARINE ENGINE STANDARDS a
 

Premature ozone mortality function or assumption Reference 

Mean total benefits 

(billions, 2006$, 3% 

discount rate) c, d 

Mean total benefits 

(billions, 2006$, 7% 

discount rate) c, d 

2030 Total Ozone and PM Benefits—PM Mortality Derived From American Cancer Society Analysis a 

NMMAPS .............................................................. Bell et al., 2004 .................................................... $9.7 ........................ $8.9. 

Meta-analysis ....................................................... Bell et al., 2005 .................................................... $11 ......................... $9.8. 

Ito et al., 2005 ...................................................... $11 ......................... $10. 

Levy et al., 2005 .................................................. $11 ......................... $10. 

Assumption that association is not causal ............................................................................................. $9.2 ........................ $8.4. 

2030 Total Ozone and PM Benefits—PM Mortality Derived From Expert Elicitation b 

NMMAPS .............................................................. Bell et al., 2004 .................................................... $5.2 to $37 ............ $4.8 to $34. 

Meta-analysis ....................................................... Bell et al., 2005 .................................................... $6.2 to $38 ............ $5.8 to $35. 

Ito et al., 2005 ...................................................... $6.7 to $39 ............ $6.3 to $35. 

Levy et al., 2005 .................................................. $6.7 to $39 ............ $6.4 to $35. 

Assumption that association is not causal ............................................................................................. $4.7 to $37 ............ $4.4 to $33. 

Notes: 

a Total includes ozone and PM2.5 benefits. Range was developed by adding the estimate from the ozone premature mortality function to the estimate of PM2.5-related premature mortality derived from the ACS study (Pope et al., 2002). 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 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 include a number of unquantified benefits categories. A detailed listing of unquantified health 

and welfare effects is provided in Table VI–6. 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. 

(1) Quantified Human Health and 

Environmental Effects of the Final 

Standards 

In this section we discuss the ozone 

and PM2.5 health and environmental 

impacts of the final standards. We 

discuss how these impacts are 

monetized in the next section. It should 

be noted that the emission control 

scenarios used in the air quality and 

benefits modeling are slightly different 

than 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 

air 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 

assumptions used for the air quality 

modeling and the final emission control 

scenario. 

Estimated Ozone and PM Impacts 

To model the ozone and PM air 

quality benefits of this rule we used the 

Community Multiscale Air Quality 

(CMAQ) model. CMAQ simulates the 

numerous physical and chemical 

processes involved in the formation, 

transport, and deposition of particulate 

matter. This model is commonly used in 

regional applications to estimate the 

ozone and PM reductions expected to 

occur from a given set of emissions 

controls. The meteorological data input 

into CMAQ are developed by a separate 

model, the Penn State University / 

National Center for Atmospheric 

Research Mesoscale Model, known as 

MM5. The modeling domain covers the 

entire 48-State U.S., as modeled in 

proposed ozone NAAQS analysis.193 

The grid resolution for the modeling 

domain was 12 x 12 km. 

While this rule will reduce ozone 

levels generally and provide national 

ozone-related health benefits, this is not 

always the case at the local level. Due 

to the complex photochemistry of ozone 

production, reductions in NOX 

emissions lead to both the formation 

and destruction of ozone, depending on 

the relative quantities of NOX, VOC, and 

ozone catalysts such as the OH and HO2 

radicals. In areas dominated by fresh 

emissions of NOX, ozone catalysts are 

removed via the production of nitric 

acid which slows the ozone formation 

rate. Because NOX is generally depleted 

more rapidly than VOC, this effect is 

usually short-lived and the emitted NOX 

can lead to ozone formation later and 

further downwind. The terms ‘‘NOX 

193 See the Regulatory Impact Analysis for the 

Proposed Ozone NAAQS (EPA–452/R–07–008, July 

2007). This document is available at http:// 

www.epa.gov/ttn/ecas/ria.html#ria2007. 

disbenefits’’ or ‘‘ozone disbenefits’’ refer 

to the ozone increases that can result 

from NOX emissions reductions in these 

localized areas. According to the North 

American Research Strategy for 

Tropospheric Ozone (NARSTO) Ozone 

Assessment, these disbenefits are 

generally limited to small regions 

within specific urban cores and are 

surrounded by larger regions in which 

NOX control is beneficial.194 For this 

analysis, we observed two urban areas 

that, to some degree, experience ozone 

disbenefits: Southern California and 

Chicago. 

Marginal changes in ozone in these 

areas are much more dependent upon 

baseline air quality conditions than PM 

due to nonlinearities present in the 

chemistry of ozone formation. A 

marginal decrease in NOX emissions 

modeled on its own in these areas, as 

194 The NARSTO Assessment Document 

synthesizes the scientific understanding of ozone 

pollution, giving special consideration to behavior 

on expanded scales over the North American 

continent, encompassing Canada, the United States, 

and Mexico. Successive drafts of this Assessment 

Document experienced progressive stages of review 

by its authors and by outside peers, and transcripts 

were recorded containing the review comments and 

the corresponding actions. This included an 

external review by the NRC, the comments of which 

were addressed and incorporated in the final draft. 

NARSTO, 2000. An Assessment of Tropospheric 

Ozone Pollution—A North American Perspective. 

NARSTO Management Office (Envair), Pasco, 

Washington. http://narsto.org/ 
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37176 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

was done for this analysis, may yield a 

very different ambient ozone 

concentration than if it were modeled in 

combination with other planned or 

future controls. For example, recent 

California SIP modeling indicates that 

with a combined program of national 

and local controls, California can reach 

ozone attainment by 2024 through a 

mixture of substantial NOX (and VOC) 

reductions.195 In areas prone to ozone 

disbenefits, our ability to draw 

conclusions based on air quality 

modeling conducted for the final rule is 

limited because the yet-to-occur 

emission reductions in these areas are 

not accounted for in our analytical 

approach. Within these regions, it is 

expected that the additional NOX 

reductions from SIP-based controls 

would lead to fewer ozone disbenefits 

from the marginal changes modeled 

here. More detailed information about 

the air quality modeling conducted for 

195 SCAQMD (2007). Final 2007 Air Quality 

Management Plan. Available at: http:// 

www.aqmd.gov/aqmp/07aqmp/index.html. 

Accessed November 8, 2007. 

this analysis is included in the air 

quality modeling technical support 

document (TSD), which is located in the 

docket for this rule. 

The modeled ambient air quality data 

serves as an input to the Environmental 

Benefits Mapping and Analysis Program 

(BenMAP).196 BenMAP is a computer 

program developed by EPA that 

integrates a number of the modeling 

elements used in previous Regulatory 

Impact Analyses (e.g., interpolation 

functions, population projections, 

health impact functions, valuation 

functions, analysis and pooling 

methods) to translate modeled air 

concentration estimates into health 

effects incidence estimates and 

monetized benefits estimates. 

The addition of ozone mortality to our 

health impacts analysis has led to an 

increased focus on the issue of ozone 

disbenefits for two related reasons: (1) 

The monetized value of ozone-related 

benefits, in terms of ozone’s 

196 Information on BenMAP, including 

downloads of the software, can be found at http:// 

www.epa.gov/air/benmap. 

contribution to total rule-related 

benefits, has increased due to the 

inclusion of ozone mortality; and (2) 

The overall ozone impacts of NOX 

reductions in certain geographic regions 

of the U.S., when modeled on the 

margin, may be negative. 

Figure 1 shows the diurnal pattern of 

ozone concentrations in the 2030 

baseline and post-control scenarios for a 

grid cell in Orange County, CA during 

July. From this figure it is clear that the 

disbenefits (points when the control 

case ozone levels are higher than the 

baseline) are occurring primarily during 

nighttime hours when ozone is 

generally low. 

This diurnal pattern means that the 

extent of the disbenefits is not as large 

as one might have thought. Our 

conversion from using a 24-hour metric 

to using the maximum 8-hour average 

metric in the ozone mortality studies 

(see page 6–4 and the health impacts 

section) excludes the nighttime hours 

when NOX-related disbenefits are most 

likely to occur. 

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Table VI–2 presents the estimates of 

ozone- and PM-related health impacts 

for the years 2020 and 2030, which are 

based on the modeled air quality 

changes between a baseline, pre-control 

scenario and a post-control scenario 

reflecting the final emission control 

strategy. 

The use of two sources of PM 

mortality reflects two different sources 

of information about the impact of 

reductions in PM on reduction in the 

risk of premature death, including both 

the published epidemiology literature 

and an expert elicitation study 

conducted by EPA in 2006. In 2030, 

based on the estimate provided by the 

ACS study, we estimate that PM-related 

emission reductions related to the final 

rule will result in 1,100 fewer premature 

fatalities annually. The number of 

premature mortalities avoided increases 

to 2,600 when based on the Six Cities 

study. When the range of expert opinion 

is used, we estimate between 500 and 

4,900 fewer premature mortalities in 

2030. We also estimate 680 fewer cases 

of chronic bronchitis, 2,500 fewer nonfatal heart attacks, 870 fewer 

hospitalizations (for respiratory and 

cardiovascular disease combined), 

720,000 fewer days of restricted activity 

due to respiratory illness and 

approximately 120,000 fewer work-loss 

days. This analysis projects substantial 

health improvements for children from 

reduced upper and lower respiratory 

illness, acute bronchitis, and asthma 

attacks. These results are based on an 

assumed cutpoint in the long-term 

mortality concentration-response 

functions at 10 μg/m3, and an assumed 

cutpoint in the short-term morbidity 

concentration-response functions at 10 

μg/m3. The impact using four alternative 

cutpoints (3 μg/m3, 7.5 μg/m3, 12 μg/m3, 

and 14 μg/m3) has on PM 2.5-related 

mortality incidence estimation is 

presented in Chapter 6 of the RIA. 

For ozone, we estimate a range of 

between 54–250 fewer premature 

mortalities as a result of the final rule 

in 2030, assuming that there is a causal 

relationship between ozone exposure 

and mortality. We also estimate that by 

2030, the final rule will result in over 

500 avoided respiratory hospital 

admissions and emergency room visits, 

290,000 fewer days of restricted activity 

due to respiratory illness, and 110,000 

school loss days avoided. 

TABLE VI–2.—ESTIMATED REDUCTION IN INCIDENCE OF ADVERSE HEALTH EFFECTS RELATED TO THE FINAL LOCOMOTIVE
 

AND MARINE ENGINE STANDARDS a
 

2020 2030 

Health Effect Mean Incidence Reduction 

(5th–95th percentile) 

PM-Related Endpoints 

Premature Mortality—Derived from 

Epidemiology Literature. 

Adult, age 30+—ACS cohort 

study (Pope et al., 2002). 

490 (190–790) .............................. 1,100 (440–1,800) 

Adult, age 25+—Six-Cities study 

(Laden et al., 2006). 

1,100 (610–1,600) ........................ 2,600 (1,400–3,700) 

Infant, age <1 year—Woodruff et 

al. 1997. 

1 (1–2) .......................................... 2 (1–3) 

Premature Mortality—Derived from 

Expert Elicitation b. 

Adult, age 25+—Lower Bound 

(Expert K). 

220 (0–1,100) ............................... 500 (0–2,400) 

Adult, age 25+—Upper Bound 

(Expert E). 

2,200 (1,100–3,300) ..................... 4,900 (2,500–7,500) 

Chronic bronchitis (adult, age 26 and over) ............................................. 310 (56–560) ................................ 680 (130–1,200) 

Acute myocardial infarction (adults, age 18 and older) ............................ 1,000 (550–1,500) ........................ 2,500 (1,300–3,600) 

Hospital admissions—respiratory (all ages) c ........................................... 120 (58–170) ................................ 270 (130–400) 

Hospital admissions—cardiovascular (adults, age >18) d ......................... 240 (150–330) .............................. 600 (380–820) 

Emergency room visits for asthma (age 18 years and younger) ............. 410 (240–580) .............................. 890 (520–1,300) 

Acute bronchitis (children, age 8–12) ....................................................... 1,000 (¥35–2,100) ....................... 2,300 (¥77–4,600) 

Lower respiratory symptoms (children, age 7–14) ................................... 9,200 (4,400–14,000) ................... 20,000 (9,700–31,000) 

Upper respiratory symptoms (asthmatic children, age 9–18) ................... 6,700 (2,100–11,000) ................... 15,000 (4,600–25,000) 

Asthma exacerbation (asthmatic children, age 6–18) .............................. 8,400 (920–24,000) ...................... 19,000 (2,000–53,000) 

Work loss days (adults, age 18–65) ......................................................... 59,000 (51,000–67,000) ............... 120,000 (110,000–140,000) 

Minor restricted-activity days (adults, age 18–65) .................................... 350,000 (290,000–400,000) ......... 720,000 (610,000–830,000) 

Ozone-Related Endpoints 

Premature Mortality, All ages—Derived from NMMAPS. 

Premature Mortality, All ages—Derived from Meta-analyses. 

Bell et al., 2004 ............................ 

Bell et al., 2005 ............................ 

Ito et al., 2005 .............................. 

Levy et al., 2005 ........................... 

13 (¥22–49) ................................. 

44 (¥47–140) ............................... 

60 (¥34–150) ............................... 

62 (¥14–140) ............................... 

54 (¥43–150) 

180 (¥69–420) 

240 (¥14–500) 

250 (44–450) 

Premature Mortality—Assumption that association between ozone and 

mortality is not causal. 

Hospital admissions—respiratory causes (children, under 2; adult, 65 

and older) e. 

Emergency room visit for asthma (all ages) ............................................. 

Minor restricted activity days (adults, age 18–65) .................................... 

School absence days ................................................................................ 

0 .................................................... 

14 (¥150–170) ............................. 

69 (¥89–270) ............................... 

84,000 (43,000–120,000) ............. 

33,000 (¥17,000–77,000) ............ 

0 

260 (¥350–890) 

250 (¥190–830) 

290,000 (150,000–430,000) 

110,000 (¥15,000–240,000) 
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Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 37179 

Notes: 

(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-scale expert elicitation assessing the uncertainty in the concentration-response function for 

PM-related premature mortality (IEc, 2006).197 

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 effect estimate are not evenly distributed across the range illustrated 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 include total cardiovascular and subcategories for ischemic heart disease, dysrhythmias, and 

heart failure. 

(e) Respiratory hospital admissions for ozone include admissions for all respiratory causes and subcategories for COPD and pneumonia. 

(2) Monetized Benefits 	 These estimates account for growth in $400 million in 2030, as shown in Table 

real gross domestic product (GDP) per VI–3. Table VI–3 presents the estimated 

monetary value of reductions in the 	 capita between the present and the years Table VI–3, VI–4 and VI–5 do not 

2020 and 2030. As the tables indicate, 	 incidence of health and welfare effects. 
 include those additional health and

Tables VI–4 and VI–5 present the total environmental benefits of the rule that
 total benefits are driven primarily by the 

annual PM- and ozone-related health reduction in premature fatalities each we were unable to quantify or monetize. 

benefits, which are estimated to be year. These effects are additive to the estimate 

between $9.2 and $11 billion in 2030, The above estimates of monetized of total benefits, and are related to two 

assuming a 3 percent discount rate, or benefits include only one example of primary sources. First, there are many 

between $8.4 and $10 billion, assuming non-health related benefits. Changes in human health and welfare effects 

a 7 percent discount rate, using the the ambient level of PM 2.5 are known to associated with PM, ozone, and toxic air 

ACS-derived estimate of PM-related affect the level of visibility in much of pollutant reductions that remain 

premature mortality (Pope et al., 2002) the U.S. Individuals value visibility unquantified because of current 

and the range of ozone-related both in the places they live and work, limitations in the methods or available 

premature mortality studies derived in the places they travel to for data. A full appreciation of the overall 

from the epidemiological literature. The recreational purposes, and at sites of economic consequences of the final 

range of benefits expands to between unique public value, such as at National standards requires consideration of all 

$4.7 and $39 billion, assuming a 3 Parks. For the final standards, we benefits and costs projected to result 

percent discount rate, when the estimate present the recreational visibility from the new standards, not just those 

includes the opinions of outside experts benefits of improvements in visibility at benefits and costs which could be 

on PM and the risk of premature death, 86 Class I areas located throughout expressed here in dollar terms. A list of 

or between $4.4 and $35 billion, California, the Southwest, and the the benefit categories that could not be 

assuming a 7 percent discount rate. All Southeast. These estimated benefits are quantified or monetized in our benefit 

monetized estimates are stated in 2006$. approximately $170 million in 2020 and estimates are provided in Table VI–6. 

TABLE VI–3.—ESTIMATED MONETARY VALUE IN REDUCTIONS IN INCIDENCE OF HEALTH AND WELFARE EFFECTS 

[In millions of 2006$] a, b 

2020 2030 

PM2.5-Related Health Effect ...................................................................... Estimated Mean Value of Reductions 

(5th and 95th percentile) 

Premature Mortality—Derived from Adult, age 30+—ACS study (Pope 

Epidemiology Studies c, d. et al., 2002) 

3% discount rate ........................... $3,400 ($810–$7,000) .................. $8,100 ($1,900–$16,000) 

7% discount rate ........................... $3,100 ($730–$6,300) .................. $7,300 ($1,700–$15,000) 

Adult, age 25+—Six-cities study 

(Laden et al., 2006) 

3% discount rate ........................... $7,800 ($2,200–$15,000) ............. $18,000 ($5,100–$35,000) 

7% discount rate ........................... $7,000 ($1,900–$13,000) ............. $17,000 ($4,600–$32,000) 

Infant Mortality, <1 year—(Woodruff et al. 1997) 

3% discount rate ........................... $7 ($2–$14) .................................. $13 ($3.5–$26) 

7% discount rate ........................... $7 ($2–$13) .................................. $12 ($3.1–$23) 

Premature mortality—Derived from 

Expert Elicitation c, d, e. 

Adult, age 25+—Lower bound 

(Expert K) 

3% discount rate ........................... $1,500 ($0–$7,700) ...................... $3,600 ($0–$18,000) 

7% discount rate ........................... 

Adult, age 25+—Upper bound 

(Expert E) 

$1,400 ($0–$7,000) ...................... $3,200 ($0–$16,000) 

3% discount rate ........................... $15,000 ($4,100–$30,000) ........... $36,000 ($9,500–$70,000) 

7% discount rate ........................... $14,000 ($3,700–$27,000) ........... $32,000 ($8,600–$63,000) 

197 Industrial Economics, Incorporated (IEc). PM 2.5 Exposure and Mortality. Peer Review Draft. Standards, U.S. Environmental Protection Agency, 

2006. Expanded Expert Judgment Assessment of the Prepared for: Office of Air Quality Planning and Research Triangle Park, NC. August. 

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37180 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

TABLE VI–3.—ESTIMATED MONETARY VALUE IN REDUCTIONS IN INCIDENCE OF HEALTH AND WELFARE EFFECTS—
 

Continued 


[In millions of 2006$] a, b
 

2020 2030 

Chronic bronchitis (adults, 26 and over) ................................................... 

Non-fatal acute myocardial infarctions: 

$150 ($12–$500) .......................... $340 ($28–$1,100) 

3% discount rate ................................................................................ $110 ($34–$230) .......................... $260 ($74–$550) 

7% discount rate ................................................................................ $110 ($31–$230) .......................... $250 ($69–$540) 

Hospital admissions for respiratory causes .............................................. $2.1 ($1.0–$3.2) ........................... $4.9 ($2.4–$7.3) 

Hospital admissions for cardiovascular causes ........................................ $6.7 ($4.2–$9.2) ........................... $17 ($11–$23) 

Emergency room visits for asthma ........................................................... $0.15 ($0.08–$0.23) ..................... $0.33 ($0.18–$0.49) 

Acute bronchitis (children, age 8–12) ....................................................... $0.08 ($0–$0.2) ............................ $0.17 ($0–$0.42) 

Lower respiratory symptoms (children, 7–14) .......................................... $0.18 ($0.07–$0.33) ..................... $0.40 ($0.15–$0.73) 

Upper respiratory symptoms (asthma, 9–11) ........................................... $0.21 ($0.06–$0.46) ..................... $0.46 ($0.13–$1.0) 

Asthma exacerbations ............................................................................... $0.45 ($0.05–$1.3) ....................... $1.0 ($0.11–$2.9) 

Work loss days .......................................................................................... $8.9 ($7.7–$10) ............................ $18 ($16–$21) 

Minor restricted-activity days (MRADs) .................................................... $22 ($13–$32) .............................. $46 ($27–$66) 

Recreational Visibility, 86 Class I areas ................................................... $170 (na)f ..................................... $400 (na) 

Ozone-related Health Effect 

Premature Mortality, All ages—Derived from NMMAPS. Bell et al., 2004 ............................ $100 (¥$170–$420) ..................... $440 (¥$340–$1,400) 

Premature Mortality, All ages—Derived from Meta-analyses. Bell et al., 2005 ............................ $340 (¥$360–$1,200) .................. $1,400 (¥$550–$3,900) 

Ito et al., 2005 .............................. $460 (¥$260–$1,400) .................. $1,900 (¥$120–$4,700) 

Levy et al., 2005 ........................... $480 (¥$110–$1,300) .................. $2,000 ($280–$4,400) 

Premature Mortality—Assumption that association between ozone and 

mortality is not causal. 

$0 .................................................. $0 

Hospital admissions—Respiratory causes (children, under 2; adult, 65 

and older). 

¥$0.54 (¥$4.6–$3.3) .................. $2.7 (¥$11–$17) 

Emergency room visit for asthma (all ages) ............................................. $0.03 (¥$0.03–$0.1) .................... $0.09 (¥$0.07–$0.30) 

Minor restricted activity days (adults, age 18–65) .................................... $2.5 (¥$4.0–$9.9) ........................ $8.8 (¥$7.8–$28) 

School absence days ................................................................................ $2.9 (¥$1.5–$6.8) ........................ $11 (¥$1.3–$21) 

Worker Productivity ................................................................................... $0.53 (na) f .................................... $2.9 (na) f 

Notes: 

(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, derived either from the epidemiology literature or the expert elicitation, is not additive. Rather, 

the valuations represent a range of possible mortality benefits. 

(e) Based on effect estimates derived from the full-scale expert elicitation assessing the uncertainty in the concentration-response function for 

PM-related premature mortality (IEc, 2006).198 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 effect estimate are not evenly distributed across the range illustrated by arraying the highest and lowest expert means. 

(f) 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 VI–4.—TOTAL MONETIZED BENEFITS OF THE FINAL LOCOMOTIVE AND MARINE ENGINE RULE—3% DISCOUNT RATE 

2020 2030 

Ozone mortality function Reference Mean total benefits Ozone mortality function Reference Mean total benefits 

Total Ozone and PM Benefits (Billions, 2006$)—PM Mortality Derived From the ACS Study 

NMMAPS .................... 

Meta-analysis ............. 

Bell et al., 2004 ......... 

Bell et al., 2005 ......... 

Ito et al., 2005 ........... 

Levy et al., 2005 ....... 

$4.0 ........................... 

$4.2 ........................... 

$4.4 ........................... 

$4.4 ........................... 

NMMAPS .................. 

Meta-analysis ............ 

................................... 

................................... 

Bell et al., 2004 ......... 

Bell et al., 2005 ......... 

Ito et al., 2005 ........... 

Levy et al., 2005 ....... 

$9.7 

$11 

$11 

$11 

198 Industrial Economics, Incorporated (IEc). PM2.5 Exposure and Mortality. Peer Review Draft. Standards, U.S. Environmental Protection Agency, 

2006. Expanded Expert Judgment Assessment of the Prepared for: Office of Air Quality Planning and Research Triangle Park, NC. August. 

Concentration-Response Relationship between 
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Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 37181 

TABLE VI–4.—TOTAL MONETIZED BENEFITS OF THE FINAL LOCOMOTIVE AND MARINE ENGINE RULE—3% DISCOUNT
 

RATE—Continued 


2020 2030 

Ozone mortality function Reference Mean total benefits Ozone mortality function Reference Mean total benefits 

Assumption that association is not causal $3.9 ........................... Assumption that association is not causal $9.2 

Total Ozone and PM Benefits (Billions, 2006$)—PM Mortality Derived From Expert Elicitation (Lowest and Highest Estimate) 

NMMAPS .................... 

Meta-analysis ............. 

Bell et al., 2004 ......... 

Bell et al., 2005 ......... 

Ito et al., 2005 ........... 

Levy et al., 2005 ....... 

$2.1 to $16 ................ 

$2.4 to $16 ................ 

$2.5 to $16 ................ 

$2.5 to $16 ................ 

NMMAPS .................. 

Meta-analysis ............ 

................................... 

................................... 

Bell et al., 2004 ......... 

Bell et al., 2005 ......... 

Ito et al., 2005 ........... 

Levy et al., 2005 ....... 

$5.2 to $37 

$6.2 to $38 

$6.7 to $39 

$6.7 to $39 

Assumption that association is not causal $2.0 to $16 ................ Assumption that association is not causal $4.7 to $37 

TABLE VI–5.—TOTAL MONETIZED BENEFITS OF THE FINAL LOCOMOTIVE AND MARINE ENGINE RULE—7% DISCOUNT RATE 

Total Ozone and PM Benefits (Billions, 2006$)—PM Mortality Derived From Epidemiology Studies (ACS and Six Cities) 

2020 2030 

Ozone mortality function Reference Mean total benefits Ozone mortality function Reference Mean total benefits 

NMMAPS .................... 

Meta-analysis ............. 

Bell et al., 2004 ......... 

Bell et al., 2005 ......... 

Ito et al., 2005 ........... 

Levy et al., 2005 ....... 

$3.7 ........................... 

$3.9 ........................... 

$4.0 ........................... 

$4.0 ........................... 

NMMAPS .................. 

Meta-analysis ............ 

................................... 

................................... 

Bell et al., 2004 ......... 

Bell et al., 2005 ......... 

Ito et al., 2005 ........... 

Levy et al., 2005 ....... 

$8.9 

$9.8 

$10 

$10 

Assumption that association is not causal $3.6 ........................... Assumption that association is not causal $8.4 

Total Ozone and PM Benefits (Billions, 2006$)—PM Mortality Derived From Expert Elicitation (Lowest and Highest Estimate) 

2020 2030 

Ozone mortality function Reference Mean total benefits Ozone mortality function Reference Mean total benefits 

NMMAPS .................... 

Meta-analysis ............. 

Bell et al., 2004 ......... 

Bell et al., 2005 ......... 

Ito et al., 2005 ........... 

Levy et al., 2005 ....... 

$2.0 to $14 ................ 

$2.2 to $15 ................ 

$2.3 to $15 ................ 

$2.3 to $15 ................ 

NMMAPS .................. 

Meta-analysis ............ 

................................... 

................................... 

Bell et al., 2004 ......... 

Bell et al., 2005 ......... 

Ito et al., 2005 ........... 

Levy et al., 2005 ....... 

$4.8 to $34 

$5.8 to $35 

$6.3 to $35 

$6.4 to $35 

Assumption that association is not causal $1.9 to $14 ................ Assumption that association is not causal $4.4 to $33 

TABLE VI–6.—UNQUANTIFIED AND NON-MONETIZED POTENTIAL EFFECTS OF THE FINAL LOCOMOTIVE AND MARINE ENGINE
 

STANDARDS
 

Pollutant/Effects 


Ozone Health a .........................................................................
 

Ozone Welfare .........................................................................
 

PM Health c ...............................................................................
 

PM Welfare ...............................................................................
 

Effects Not Included in Analysis—Changes in: 

Chronic respiratory damage b 

Premature aging of the lungs b 

Non-asthma respiratory emergency room visits 

Exposure to UVb (+/¥) e 

Yields for 

—commercial forests 

—some fruits and vegetables 

—non-commercial crops 

Damage to urban ornamental plants 

Impacts on recreational demand from damaged forest aesthetics 

Ecosystem functions 

Exposure to UVb (+/¥) e 

Premature mortality—short term exposures d 

Low birth weight 

Pulmonary function 

Chronic respiratory diseases other than chronic bronchitis 

Non-asthma respiratory emergency room visits 

Exposure to UVb (+/¥) e 

Residential and recreational visibility in non-Class I areas 

Soiling and materials damage 

Damage to ecosystem functions 
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37182 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

TABLE VI–6.—UNQUANTIFIED AND NON-MONETIZED POTENTIAL EFFECTS OF THE FINAL LOCOMOTIVE AND MARINE ENGINE 

STANDARDS—Continued 

Pollutant/Effects 

Nitrogen and Sulfate Deposition Welfare .................................
 

CO Health .................................................................................
 

HC/Toxics Health f ....................................................................
 

HC/Toxics Welfare ...................................................................
 

Effects Not Included in Analysis—Changes in: 

Exposure to UVb (+/¥) e 

Commercial forests due to acidic sulfate and nitrate deposition 

Commercial freshwater fishing due to acidic deposition 

Recreation in terrestrial ecosystems due to acidic deposition 

Existence values for currently healthy ecosystems 

Commercial fishing, agriculture, and forests due to nitrogen deposition 

Recreation in estuarine ecosystems due to nitrogen deposition 

Ecosystem functions 

Passive fertilization 

Behavioral effects 

Cancer (benzene, 1,3-butadiene, formaldehyde, acetaldehyde) 

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) 

Reproductive and developmental effects (1,3-butadiene) 

Irritation of eyes and mucus membranes (formaldehyde) 

Respiratory irritation (formaldehyde) 

Asthma attacks in asthmatics (formaldehyde) 

Asthma-like symptoms in non-asthmatics (formaldehyde) 

Irritation of the eyes, skin, and respiratory tract (acetaldehyde) 

Upper respiratory tract irritation and congestion (acrolein) 

Direct toxic effects to animals 

Bioaccumulation in the food chain 

Damage to ecosystem function 

Odor 

Notes: 

(a) The public health impact of biological responses such as increased airway responsiveness to stimuli, inflammation in the lung, acute inflammation and respiratory cell damage, and increased susceptibility to respiratory infection are likely partially represented by our quantified 

endpoints. 

(b) The public health impact of effects such as chronic 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 doctor visits and 

decreased athletic performance, remain unquantified. 

(c) 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 altered host defense mechanisms. The public health impact of these biological responses may be partly represented by our quantified endpoints. 

(d) While some of the effects of short-term exposures are likely to be captured in the estimates, there may be premature mortality due to shortterm exposure to PM not captured in the cohort studies used in this analysis. However, the PM mortality results derived from the expert 

elicitation do take into account premature mortality effects of short term exposures. 

(e) May result in benefits or disbenefits. 

(f) Many of the key hydrocarbons related to this rule are also hazardous air pollutants listed in the Clean Air Act. 

(3) What Are the Significant Limitations 

of the Benefit-Cost Analysis? 

Every benefit-cost analysis examining 

the potential effects of a change in 

environmental protection requirements 

is limited to some extent by data gaps, 

limitations in model capabilities (such 

as geographic coverage), and 

uncertainties in the underlying 

scientific and economic studies used to 

configure the benefit and cost models. 

Limitations of the scientific literature 

often result in the inability to estimate 

quantitative changes in health and 

environmental effects, such as potential 

increases in premature mortality 

associated with increased exposure to 

carbon monoxide. Deficiencies in the 

economics literature often result in the 

inability to assign economic values even 

to those health and environmental 

outcomes which can be quantified. 

These general uncertainties in the 

underlying scientific and economics 

literature, which can lead to valuations 

that are higher or lower, are discussed 

in detail in the RIA and its supporting 

references. Key uncertainties that have a 

bearing on the results of the benefit-cost 

analysis of the final standards include 

the following: 

• The exclusion of potentially 

significant and unquantified benefit 

categories (such as health, odor, and 

ecological benefits of reduction in air 

toxics, ozone, and PM);

• Errors in measurement and 

projection for variables such as 

population growth; 

• Uncertainties in the estimation of 

future year emissions inventories and 

air quality;

• Uncertainty in the estimated 

relationships of health and welfare 

effects to changes in pollutant 

concentrations including the shape of 

the C–R function, the size of the effect 

estimates, and the relative toxicity of the 

many components of the PM mixture; 

• Uncertainties in exposure 

estimation; and 

• Uncertainties associated with the 

effect of potential future actions to limit 

emissions. 

As Table VI–3 indicates, total benefits 

are driven primarily by the reduction in 

premature mortalities each year. Some 

key assumptions underlying the 

premature mortality estimates include 

the following, which may also 

contribute to uncertainty:

• Inhalation of fine particles is 

causally associated with premature 

death at concentrations near those 

experienced by most Americans on a 

daily basis. Although biological 

mechanisms for this effect have not yet 

been completely established, the weight 

of the available epidemiological, 

toxicological, and experimental 

evidence supports an assumption of 

causality. The impacts of including a 

probabilistic representation of causality 

were explored in the expert elicitation-
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Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 37183 

based results of the recently published 

PM NAAQS RIA. Consistent with that 

analysis, we discuss the implications of 

these results in the RIA for the final 

standards. 

• All fine particles, regardless of their 

chemical composition, are equally 

potent in causing premature mortality. 

This is an important assumption, 

because PM produced via transported 

precursors emitted from locomotive and 

marine engines may differ significantly 

from PM precursors released from 

electric generating units and other 

industrial sources. However, no clear 

scientific grounds exist for supporting 

differential effects estimates by particle 

type. 

• The C–R function for fine particles 

is approximately linear within the range 

of ambient concentrations under 

consideration (above the assumed 

threshold of 10 μg/m3). Thus, the 

estimates include health benefits from 

reducing fine particles in areas with 

varied concentrations of PM, including 

both regions that may be in attainment 

with PM2.5 standards and those that are 

at risk of not meeting the standards.

• There is considerable uncertainty in 

the magnitude of the association 

between ozone and premature mortality. 

The range of ozone benefits associated 

with the final standards is estimated 

based on the risk of several sources of 

ozone-related mortality effect estimates. 

Recognizing that additional research is 

necessary to clarify the underlying 

mechanisms causing these effects, we 

also consider the possibility that the 

observed associations between ozone 

and mortality may not be causal in 

nature. EPA has requested advice from 

the National Academy of Sciences on 

how best to quantify uncertainty in the 

relationship between ozone exposure 

and premature mortality in the context 

of quantifying benefits. 

Despite these uncertainties, we 

believe this benefit-cost analysis 

provides a conservative estimate of the 

estimated economic benefits of the final 

standards in future years because of the 

exclusion of potentially significant 

benefit categories. Acknowledging 

benefits omissions and uncertainties, we 

present a best estimate of the total 

benefits based on our interpretation of 

the best available scientific literature 

and methods supported by EPA’s 

technical peer review panel, the Science 

Advisory Board’s Health Effects 

Subcommittee (SAB–HES). The 

National Academies of Science (NRC, 

2002) also reviewed EPA’s methodology 

for analyzing the health benefits of 

measures taken to reduce air pollution. 

EPA addressed many of these comments 

in the analysis of the final PM 

NAAQS.199, 200 The analysis of the final 

standards incorporates this most recent 

work to the extent possible. 

(4) Benefit-Cost Analysis 

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 

society. These costs do not consider 

transfer payments (such as taxes) that 

are simply redistributions of wealth. 

Table VI–7 contains the estimates of 

monetized benefits and estimated social 

welfare costs for the final rule and each 

of the final control programs. The 

annual social welfare costs of all 

provisions of this final rule are 

described more fully in Section VII of 

this preamble. 

The results in Table VI–7 suggest that 

the 2020 monetized benefits of the final 

standards are greater than the expected 

social welfare costs. Specifically, the 

annual benefits of the total program will 

range between $3.9 to $8.8 billion 

annually in 2020 using a three percent 

discount rate, or between $3.6 to $8.0 

billion assuming a 7 percent discount 

rate, compared to estimated social costs 

of approximately $330 million in that 

same year. These benefits are expected 

to increase to between $9.2 and $22 

billion annually in 2030 using a three 

percent discount rate, or between $8.4 

and $20 billion assuming a 7 percent 

discount rate, while the social costs are 

estimated to be approximately $740 

million. Though there are a number of 

health and environmental effects 

associated with the final standards that 

we are unable to quantify or monetize 

(see Table VI–6), the benefits of the final 

standards far outweigh the projected 

costs. When we examine the benefit-tocost comparison for the rule standards 

separately, we also find that the benefits 

of the specific engine standards far 

outweigh their projected costs. 

TABLE VI–7.—SUMMARY OF ANNUAL BENEFITS, COSTS, AND NET BENEFITS OF THE FINAL LOCOMOTIVE AND MARINE
 

ENGINE STANDARDS (MILLIONS, 2006$) a
 

Description 

2020 

(Millions of 2006 

dollars) 

2030 

(Millions of 2006 

dollars) 

Estimated Social Costs: b 

Locomotive: $200 ....................... $460. 

Marine: $140 ....................... $280. 

Total Social Costs ................................................................................................................................... 

Estimated Health Benefits of the Final Standards: c, d, e, f 

Locomotive: 

$330 ....................... $740. 

3 percent discount rate ............................................................................................................. $2,000 to $4,400 ... $4,300 to $11,000. 

7 percent discount rate ............................................................................................................. 

Marine: 

$1,900 to $4,000 ... $4,000 to $10,000. 

3 percent discount rate ............................................................................................................. $1,900 to $4,400 ... $4,900 to $11,000. 

7 percent discount rate ............................................................................................................. 

Total Benefits: 

$1,700 to $4,000 ... $4,400 to $10,000 

3 percent discount rate .................................................................................................................... $3,900 to $8,800 ... $9,200 to $22,000. 

7 percent discount rate .................................................................................................................... 

Annual Net Benefits (Total Benefits¥Total Costs): 

$3,600 to $8,000 ... $8,400 to $20,000. 

3 percent discount rate .................................................................................................................... $3,600 to $8,500 ... $8,500 to $21,000 

7 percent discount rate .................................................................................................................... $3,300 to $7,700 ... $7,700 to $19,000 

Notes: 

a All estimates represent annualized benefits and costs anticipated for the years 2020 and 2030. Totals may not sum due to rounding. 

199 National Research Council (NRC). 2002. 200 U.S. Environmental Protection Agency. by: Office of Air and Radiation. Available at 

Estimating the Public Health Benefits of Proposed October 2006. Final Regulatory Impact Analysis http://www.epa.gov/ttn/ecas/ria.html. Air Pollution Regulations. The National Academies (RIA) for the Proposed National Ambient Air 

Press: Washington, DC. Quality Standards for Particulate Matter. Prepared 
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c 

37184 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

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 7 of the RIA). In Section V, however, we do 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 OMB guidelines for preparing economic analyses. 

Total includes ozone and PM2.5 benefits. Range was developed by adding the estimate from the ozone premature mortality function, including an assumption that the association is not causal, to both estimates of PM2.5-related premature mortality derived from the ACS (Pope et al., 

2002) and Six-Cities (Laden et al., 2006) studies, respectively. 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).201, 202 

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 disbenefits are quantified and monetized in this analysis. Potential benefit categories that have not been quantified 

and monetized are listed in Table VI–6. 

VII. Alternative Program Options 

The program we are finalizing today 

represents a broad and comprehensive 

approach to reducing emissions from 

locomotive and marine diesel engines. 

As we developed this final rule, we 

considered a number of alternatives 

with regard to the scope and timing of 

the standards. After carefully evaluating 

these alternatives, we believe that our 

new program provides the best 

opportunity for achieving timely and 

substantial emission reductions from 

locomotive and marine diesel engines. 

Our final program balances a number of 

key factors: (1) Achieving significant 

emissions reductions as early as 

possible, (2) providing appropriate lead 

time to develop and apply advanced 

control technologies, and (3) 

coordinating requirements in this final 

rule with existing highway and nonroad 

diesel engine programs. The alternative 

scenarios described here were 

constructed to further evaluate each 

individual aspect of our program, and 

have enabled us to achieve the 

appropriate balance between these key 

factors. This section presents a summary 

of our analysis of these alternative 

control scenarios. For a more detailed 

explanation of our analysis, including a 

year by year breakout of expected costs 

and emission reductions, please refer to 

Chapter 8 of the Regulatory Impact 

Analysis (RIA) prepared for this final 

rulemaking. 

A. Summary of Alternatives 

(1) Alternative 1: Proposed Program 

From the Notice of Proposed 

Rulemaking 

Alternative 1 examines the differences 

between the program we proposed and 

the program we are finalizing in this 

rulemaking. The proposal consisted of a 

three-part program. First, it proposed 

more stringent standards for existing 

locomotives that would apply when 

they were remanufactured. These 

201 U.S. Environmental Protection Agency, 2000. 

Guidelines for Preparing Economic Analyses. 

www.yosemite1.epa.gov/ee/epa/eed/hsf/pages/ 

Guideline.html. 202 Office of Management and Budget, The 

Executive Office of the President, 2003. Circular A– 

4. http://www.whitehouse.gov/omb/circulars. 

standards would go into effect as soon 

as a certified remanufacture system 

became available. Second, we proposed 

a set of near-term emission standards, 

referred to as Tier 3, for freshly 

manufactured locomotives and marine 

engines that reflected the application of 

technologies to reduce engine-out PM 

and NOX. Third, we proposed longerterm standards, referred to as Tier 4, 

that utilized high-efficiency catalytic 

aftertreatment technology enabled by 

the availability of ULSD. These 

standards would phase in over time, 

beginning in 2014. In addition, we 

proposed eliminating emissions from 

unnecessary locomotive idling. 

The final rule makes a number of 

important changes to the program 

originally set out in the proposal which 

we believe will yield significantly 

greater overall NOX and PM reductions, 

especially in the critical early years of 

the program. In particular, the adoption 

of standards for remanufactured marine 

engines and a 2-year pull-ahead of the 

Tier 4 NOX requirements for line-haul 

locomotives and for 2000–3700 kW 

marine engines provide greater nearterm reductions than the proposal. The 

final rule also expands the 

remanufactured locomotive program to 

include Class II railroads. 

As a stand-alone program, through the 

year 2040 Alternative 1 provides PM2.5 

reductions of 286,000 tons NPV 3%, or 

121,000 tons NPV 7%, and NOX 

reductions of 8,140,000 tons NPV 3%, 

or 3,320,000 tons NPV 7%. The cost of 

this alternative through 2040 is 

estimated to be $8,760 million NPV 3%, 

or $3,900 million NPV 7%. In 2020, this 

alternative provides monetized health 

and welfare benefits of $3.3 billion at a 

3% discount rate, or $3.0 billion at a 7% 

discount rate, and $8.8 billion in 2030 

at a 3% discount rate, or $8.0 billion at 

a 7% discount rate. Through 2040 our 

final program provides additional PM2.5 

reductions of 22,000 tons NPV 3%, or 

13,000 tons NPV 7%, and additional 

NOX reductions of 620,000 tons NPV 

3%, or 390,000 tons NPV 7%. Through 

2040, the additional costs of our final 

program will be $650 million NPV 3%, 

or $410 million NPV 7%. The additional 

PM2.5 monetized health and welfare 

benefits in 2020 of our final program are 

$0.6 billion at a 3% discount rate, or 

$0.6 billion at a 7% discount rate, while 

in 2030 the additional monetized health 

and welfare benefits total $0.4 billion at 

a 3% discount rate, or $0.4 billion at a 

7% discount rate. 

(2) Alternative 2: Exclusion of 

Remanufacturing Standards 

Alternative 2 examines the potential 

impacts of the locomotive and marine 

remanufacturing programs by excluding 

them from the analysis (see sections 

III.B.(1)(a)(i), III.B.(1)(b), and III.B.(2)(b) 

of this Preamble for more details on the 

remanufacturing standards). As a standalone program, Alternative 2 provides 

PM2.5 reductions of 240,000 tons NPV 

3%, or 96,000 tons NPV 7%, and NOX 

reductions of 7,640,000 tons NPV 3%, 

or 3,030,000 tons NPV 7%, through the 

year 2040. The cost of this alternative 

through 2040 is estimated to be $8,080 

million NPV 3%, or $3,430 million NPV 

7%. In 2020, this alternative provides 

monetized health and welfare benefits 

of $2.5 billion at a 3% discount rate, or 

$2.3 billion at a 7% discount rate, and 

$8.2 billion in 2030 at a 3% discount 

rate, or $7.5 billion at a 7% discount 

rate. Compared to the final program, our 

analysis shows that by 2040 eliminating 

the locomotive and marine 

remanufacture programs lessen PM2.5 

emission reductions by 68,000 tons NPV 

3%, or 38,000 tons NPV 7%, and NOX 

emission reductions by nearly 1,120,000 

tons NPV 3%, or 680,000 tons NPV 7%. 

The cost of this alternative, as compared 

to our final program through 2040, is 

estimated to be $1,330 million less NPV 

3%, or $880 million less NPV 7%. 

Compared to our final program, 

eliminating the locomotive and marine 

remanufacture programs reduce the 

monetized health and welfare benefits 

by $1.4 billion at a 3% discount rate, or 

$1.3 billion at a 7% discount rate in 

2020, and $1.0 billion at a 3% discount 

rate, or $0.9 billion at a 7% discount 

rate in 2030. 

(3) Alternative 3: Elimination of Tier 3 

Alternative 3 eliminates the Tier 3 

standards, while retaining the Tier 4 

standards and the combined marine and 
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locomotive remanufacturing 

requirements. As a stand-alone program, 

Alternative 3 provides PM2.5 reductions 

of 237,000 tons NPV 3%, or 100,000 

tons NPV 7%, and NOX reductions of 

8,360,000 tons NPV 3%, or 3,530,000 

tons NPV 7%, through the year 2040. 

The cost of this alternative through 2040 

is estimated to be $9,240 million NPV 

3%, or $4,160 million NPV 7%. In 2020, 

this alternative provides monetized 

health and welfare benefits of $2.8 

billion at a 3% discount rate, or $2.6 

billion at a 7% discount rate, and $7.8 

billion in 2030 at a 3% discount rate, or 

$7.1 billion at a 7% discount rate. 

Comparing this alternative to our final 

program allows us to consider the value 

of the Tier 3 standards on their own 

merits. Specifically, this alternative 

would lessen PM2.5 emissions 

reductions by nearly 71,000 tons NPV 

3%, or 34,000 tons NPV 7%, and NOX 

emissions by 400,000 tons NPV 3%, or 

180,000 tons NPV 7%. The cost of this 

alternative, as compared to our final 

program through 2040, is estimated to 

be $170 million less at NPV 3%, or $150 

million less at NPV 7%. The monetized 

health and welfare benefits that would 

be forgone by eliminating Tier 3 are $1.1 

billion at a 3% discount rate, or $1.0 

billion at a 7% discount rate in 2020, 

and $1.4 billion at a 3% discount rate, 

or $1.3 billion at a 7% discount rate in 

2030. Although the remanufacturing 

programs provide substantial benefits in 

the near-term, as evidenced by the 

analysis of Alternative 2, it is clear that 

Tier 3 also plays an important role in 

providing both near- and long-term 

emission reductions. 

(4) Alternative 4: Tier 4 Exclusively in 

2013 

Alternative 4 most closely reflects the 

program described in our Advanced 

Notice of Proposed Rulemaking, 

whereby we would set new 

aftertreatment based emission standards 

as soon as possible. In this case, we 

believe the earliest that such standards 

could logically be started is in 2013 

(three months after the introduction of 

15 ppm ULSD in this sector). 

Alternative 4 eliminates our Tier 3 

standards along with the locomotive 

and marine remanufacturing standards, 

while pulling the Tier 4 standards ahead 

to 2013 for all portions of the Tier 4 

program. We are unable to make an 

accurate estimate of the cost for such an 

approach since we do not believe it to 

be technically feasible at this time. 

However, we have reported a cost in the 

summary table reflecting the same cost 

estimation method we used for our 

primary case and have denoted 

unestimated additional costs as ‘C’. 

These additional unestimated costs 

would include costs for additional 

engine test cells, engineering staff, and 

engineering facilities necessary to 

introduce Tier 4 early. As a stand-alone 

program, Alternative 4 provides PM2.5 

reductions of 249,000 tons NPV 3%, or 

101,000 tons NPV 7%, and NOX 

reductions of 8,320,000 tons NPV 3%, 

or 3,420,000 tons NPV 7% through the 

year 2040. In 2020, this alternative 

provides monetized health and welfare 

benefits of $3.0 billion at a 3% discount 

rate, or $2.8 billion at a 7% discount 

rate, and $8.4 billion in 2030 at a 3% 

discount rate, or $7.6 billion at a 7% 

discount rate. Through 2040, this 

alternative, as compared to our final 

program, would decrease PM2.5 

reductions by more than 59,000 NPV 

3% tons, or 33,000 tons NPV 7%, and 

NOX emissions by 440,000 tons NPV 

3%, or 290,000 tons NPV 7%. Compared 

to our final program, the reduction in 

monetized health and welfare benefits 

of this alternative would be $0.9 billion 

at a 3% discount rate, or $0.8 billion at 

a 7% discount rate in 2020, while in 

2030 the reductions in monetized 

benefits would be $0.8 billion at a 3% 

discount rate, or $0.8 billion at a 7% 

discount rate. 

B. Summary of Results 

A summary of the four alternatives is 

contained in Table VII–1 and Table VII– 

2 below. The PM and NOX emissions 

reductions from the alternatives 

described here compare favorably—in 

terms of cost effectiveness—to other 

mobile source control programs that 

have been or will soon be implemented. 

These alternatives show that each 

element of our comprehensive program: 

the locomotive and marine 

remanufacturing programs, the nearterm Tier 3 emission standards, and the 

long-term Tier 4 emission standards, 

represent valuable emission control 

programs on their own. The collective 

program results in the greatest emission 

reductions we believe to be possible 

giving consideration to all of the 

elements described in this final rule. 

Overall, our final program will provide 

very large reductions in PM, NOX, and 

toxic compounds in both the near-term 

and the long-term. These reductions 

will be achieved in a manner that: (1) 

Leverages technology developments in 

other diesel sectors, (2) aligns well with 

the clean diesel fuel requirements 

already being implemented, and (3) 

provides the lead time needed to deal 

with the significant engineering design 

workload that is involved. 

TABLE VII–1.—SUMMARY OF INVENTORY AND COSTS AT NPV 3% AND 7% 

Alternatives Standards 

Estimated PM2.5 reductions 

2006–2040 

Estimated NOX reductions 

2006–2040 

Total costs a millions 

2006–2040 

NPV 3% NPV 7% NPV 3% NPV 7% NPV 3% NPV 7% 

Final Rule ............... • Locomotive Remanufacturing .. 

• Marine Remanufacturing, 

• Tier 3 Near-term program, 

• Tier 4 Long-term standards 

308,000 134,000 8,760,000 3,710,000 $9,410 $4,310 

Alternative 1: Proposed Case 

(NPRM). 

• Proposed Locomotive Remanufacturing program,. 

• Proposed Tier 3 Near-term 

program, 

• Proposed Tier 4 Long-term 

standards 

286,000 121,000 8,140,000 3,320,000 8,760 3,900 

Alternative 2: Exclusion of Remanufacturing Standards. • Tier 3 Near-term program, ...... 

• Tier 4 Long-term standards 

240,000 96,000 7,640,000 3,030,000 8,080 3,430 

Alternative 3: Elimination of Tier 3. • Locomotive Remanufacturing, 

• Marine Remanufacturing, 

• Tier 4 Long-term standards 

237,000 10,000 8,360,000 3,530,000 9,240 4,160 
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37186 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

TABLE VII–1.—SUMMARY OF INVENTORY AND COSTS AT NPV 3% AND 7%—Continued 

Alternatives Standards 

Estimated PM2.5 reductions 

2006–2040 

Estimated NOX reductions 

2006–2040 

Total costs a millions 

2006–2040 

NPV 3% NPV 7% NPV 3% NPV 7% NPV 3% NPV 7% 

Alternative 4: Tier 4 

Exclusively in 

2013. 

• Tier 4 Long-term standards 

only in 2013. 

249,000 101,000 8,320,000 3,420,000 9,070+C 3950+C 

Note: a ‘C’ represents the additional costs necessary to accelerate the introduction of Tier 4 technologies that we are unable to estimate at this 

time. 

TABLE VII–2.—INVENTORY, COST, AND BENEFITS FOR 2020 AND 2030 

PM2.5 emissions NOX emissions Total costsa (mil­ Benefitsb,c (billions) Benefitsb,c (bilreductions (tons) reductions (tons) lions) PM2.5 only lions) PM2.5 only 

3% discount rate 7% discount rate 

2020 2030 2020 2030 2020 2030 2020 2030 2020 2030 

Final Rule ..................................... 14,000 27,000 370,000 790,000 $350 $760 $3.9 $9.2 $3.6 $8.4 

Alternative 1: Proposed Case 

(NPRM) ..................................... 13,000 26,000 310,000 780,000 300 750 3.3 8.8 3.0 8.0 

Alternative 2: Exclusion of Remanufacturing Standards ......... 8,800 24,000 280,000 760,000 290 720 2.5 8.2 2.3 7.5 

Alternative 3: Elimination of Tier 3 8,800 21,000 350,000 760,000 350 760 2.8 7.8 2.6 7.1 

Alternative 4: Tier 4 Exclusively in 

2013 .......................................... 10,000 24,000 350,000 790,000 360 780 3.0 8.4 2.8 7.6 

Notes: 

a ‘C’ represents the additional costs necessary to accelerate the introduction of Tier 4 technologies that we are unable to estimate at this time. b Note that the range of PM-related benefits reflects the use of an empirically-derived estimate of PM mortality benefits, based on the ACS cohort study (Pope et al., 2002). c 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). U.S. Environmental Protection Agency, 2000. Guidelines for Preparing Economic Analyses. http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/ 

Guidelines.html. 

VIII. Public Participation 

Many interested parties participated 

in the rulemaking process that 

culminates with this final rule. This 

process provided opportunity for 

submitting written public comments 

following the proposal that we 

published on April 3, 2007 (72 FR 

15938). We considered these comments 

in developing the final rule. In addition, 

we held public hearings on the 

proposed rulemaking on May 8 and 10, 

2007, and we have considered 

comments presented at the hearings. 

Throughout the rulemaking process, 

EPA met with stakeholders including 

representatives from industry, 

government, environmental 

organizations, and others. The program 

we are finalizing today was developed 

as a collaborative effort with these 

stakeholders. 

We have prepared a detailed 

Summary and Analysis of Comments 

document, which describes comments 

we received on the proposal and our 

response to each of these comments. 

The Summary and Analysis of 

Comments is available in the docket for 

this rule at the Internet address listed 

under ADDRESSES, as well as on the 

Office of Transportation and Air Quality 

Web site (www.epa.gov/otaq/ 

locomotv.htm and www.epa.gov/otaq/ 

marine.htm). In addition, comments and 

responses for key issues are included 

throughout this preamble. 

IX. Statutory and Executive Order 

Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review 

Under section 3(f)(1) of Executive 

Order (EO) 12866 (58 FR 51735, October 

4, 1993), this action is an ‘‘economically 

significant regulatory action’’ because it 

is likely to have an annual effect on the 

economy of $100 million or more. 

Accordingly, EPA submitted this action 

to the Office of Management and Budget 

(OMB) for review under EO 12866, and 

any changes made by EPA after 

submission to OMB have been 

documented in the docket for this 

action. 

In addition, EPA prepared an analysis 

of the potential costs and benefits 

associated with this action. This 

analysis is contained in the final 

Regulatory Impact Analysis that was 

prepared for this rulemaking, and is 

available in the docket at the docket 

internet address listed under ADDRESSES 

above. 

B. Paperwork Reduction Act 

The information collection 

requirements in this final rule have been 

submitted for approval to the Office of 

Management and Budget (OMB) under 

the Paperwork Reduction Act, 44 U.S.C. 

3501 et seq. EPA may not conduct the 

information collection requirements in 

this rule and may not penalize anyone 

for failing to comply with the 

information collection requirements in 

the rule unless they are currently 

approved by OMB. 

EPA plans to collect information to 

ensure that locomotives and marine 

diesel engines conform to the 

regulations throughout their useful 

lives. Section 208(a) of the Clean Air 

Act requires that manufacturers provide 

information the Administrator may 

reasonably require to determine 

compliance with the regulations; 

submission of the information is 

therefore mandatory. We will consider 

confidential all information meeting the 

requirements of Section 208(c) of the 

Clean Air Act. 

The annual public reporting and 

recordkeeping burden for this collection 

of information is estimated to be 287 

hours per respondent for locomotives, 

and 149 hours per respondent for 

marine. The projected number of 
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respondents and annual reporting, 

recordkeeping, and cost burdens to 

respondents are as follows: 

• Estimated total number of potential 

respondents: for locomotives—7; for 

marine—13. 

• Estimated total annual burden 

hours: for locomotives—14,040 (2,010 

per respondent); for marine—25,167 

(1,940 per respondent). 

• Estimated total annual costs: for 

locomotives—$1.65 million ($315,000 

per respondent); for marine—$1.45 

million ($112,000 per respondent). 

Burden means the total time, effort, or 

financial resources expended by persons 

to generate, maintain, retain, or disclose 

or provide information to or for a 

Federal agency. This includes the time 

needed to review instructions; develop, 

acquire, install, and utilize technology 

and systems for the purposes of 

collecting, validating, and verifying 

information, processing and 

maintaining information, and disclosing 

and providing information; adjust the 

existing ways to comply with any 

previously applicable instructions and 

requirements; train personnel to be able 

to respond to a collection of 

information; search data sources; 

complete and review the collection of 

information; and transmit or otherwise 

disclose the information. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to a collection of information 

unless it displays a currently valid OMB 

control number. The OMB control 

numbers for EPA’s regulations in 40 

CFR are listed in 40 CFR part 9. When 

this ICR is approved by OMB, EPA will 

publish a technical amendment to 40 

CFR part 9 in the Federal Register to 

display the OMB control number for the 

approved information collection 

requirements contained in this final 

rule. 

C. Regulatory Flexibility Act 

(1) Overview 

The Regulatory Flexibility Act (RFA) 

generally requires an agency to prepare 

a regulatory flexibility analysis of any 

rule subject to notice and comment 

rulemaking requirements under the 

Administrative Procedure Act or any 

other statute unless the agency certifies 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities. Small entities 

include small businesses, small 

organizations, and small governmental 

jurisdictions. 

For purposes of assessing the impacts 

of today’s rule on small entities, small 

entity is defined as: (1) A small business 

as defined by the Small Business 

Administration’s (SBA) regulations at 13 

CFR 121.201 (see Table IX–1, below); (2) 

a small governmental jurisdiction that is 

a government of a city, county, town, 

school district or special district with a 

population of less than 50,000; and (3) 

a small organization that is any not-forprofit enterprise which is independently 

owned and operated and is not 

dominant in its field. 

TABLE IX–1.—PRIMARY SBA SMALL BUSINESS CATEGORIES POTENTIALLY AFFECTED BY THIS REGULATION 

Industry NAICS a Codes 

Defined by SBA as a small 

business if less than or 

equal to:b 

Locomotive: 

Manufacturers, remanufacturers and importers of locomotives and locomotive engines .......... 333618, 336510 .... 1,000 employees. 

Railroad owners and operators ................................................................................................... 482110, 482111 .... 1,500 employees. 

482112 .................. 500 employees. 

Engine repair and maintenance .................................................................................................. 

Marine: 

488210 .................. $6.5 million annual sales. 

Manufacturers of freshly manufactured marine diesel engines .................................................. 333618 .................. 1,000 employees. 

Ship and boat building; ship building and repairing .................................................................... 336611, 346611 .... 1,000 employees. 

Engine repair and maintenance .................................................................................................. 811310 .................. $6.5 million annual sales. 

Water transportation, freight and passenger .............................................................................. 483 ........................ 500 employees. 

Water transportation, freight and passenger—Offshore Marine Services .................................. 483 ........................ $25.5 million annual sales. 

Scenic and Sightseeing Transportation, Water .......................................................................... 487210 .................. $6.5 million annual sales. 

Navigational Services to Shipping .............................................................................................. 488330 .................. $6.5 million annual sales. 

Commercial Fishing ..................................................................................................................... 114 ........................ $4.0 million annual sales. 

Boat building (watercraft not built in shipyards and typically of the type suitable or intended 

for personal use). 

336612 .................. 500 employees. 

Notes: 

a North American Industry Classification System 

b According to SBA’s regulations (13 CFR 121), businesses with no more than the listed number of employees or dollars in annual receipts are 

considered ‘‘small entities’’ for RFA purposes. 

After considering the economic 

impacts of today’s final rule on small 

entities, I certify 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 are shown in Table IX–1 

(and are not small governmental 

jurisdictions or small non-profit 

organizations). We have determined that 

about five small entities representing 

less than one percent of the total 

number of companies affected will have 

an estimated impact exceeding three 

percent of their annual sales revenues. 

The vast majority of small entities 

(about several thousand small 

companies) will have an estimated 

impact of less than one percent on their 

annual sales revenues. (An analysis of 

the impacts of the rule on small entities 

was performed for the rule, and can be 

found in the docket for this 

rulemaking.203, 204) 

203 U.S. EPA, Assessment and Standards Division, 

Locomotive and Marine Diesel RFA/SBREFA 

Screening Analysis, Memorandum from Chester J. 

France to Alexander Cristofaro of U.S. EPA’s Office 

of Policy, Economics, and Innovation, September 

25, 2006. 

Although this final rule will not have 

a significant economic impact on a 

substantial number of small entities, 

EPA nonetheless has tried to reduce the 

impact of this rule on small entities, as 

described below. 

204 U.S. EPA, Assessment and Standards Division, 

Supplement to Locomotive and Marine Diesel RFA/ 

SBREFA Screening Analysis—Marine Existing Fleet 

Program Impact Analysis, Memorandum from Lucie 

Audette and Bryan Manning to Docket EPA–HQ– 

OAR–2003–0190, December 12, 2007. 
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37188 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

(2) Outreach Efforts and Special 

Compliance Provisions for Small 

Entities 

In addition to the inputs we sought 

prior to issuing the proposed rule, we 

also received additional comments 

following its publication. First we 

summarize the pre-proposal outreach, 

followed by additional comments we 

received after the proposal was 

published. 

Early on, we sought the input of a 

number of small entities affected by the 

rule on potential regulatory flexibility 

provisions and the needs of these small 

businesses. For marine diesel engine 

manufacturers, we had separate 

meetings with the four small companies 

in this sector, which are postmanufacture marinizers (companies that 

purchase a complete or semi-complete 

engine from an engine manufacturer and 

modify it for use in the marine 

environment by changing the engine in 

ways that may affect emissions). We 

also met individually with one small 

commercial vessel builder and a few 

vessel trade associations whose 

members include small vessel builders. 

For locomotive manufacturers and 

remanufacturers, we met separately 

with the three small businesses in these 

sectors, which are all remanufacturers. 

In addition, we met with a railroad trade 

association whose members include 

small railroads. For nearly all meetings, 

EPA provided each small business with 

an outreach packet that included 

background information on this 

proposed rulemaking; and a document 

outlining some flexibility provisions for 

small businesses that we have 

implemented in past rulemakings. (This 

outreach packet and a complete 

summary of our discussions with small 

entities can be found in the docket for 

this rulemaking.) 205 

The primary feedback we received 

from these small entities pre-proposal 

was to continue the flexibility 

provisions that we have provided to 

small entities in earlier locomotive and 

marine diesel rulemakings. A number of 

these provisions are listed below. 

Therefore, we will largely continue the 

existing flexibility provisions finalized 

in the 1998 Locomotive and Locomotive 

Engines Rule (April 16, 1998; 63 FR 

18977); our 1999 Commercial Marine 

Diesel Engines Rule (December 29, 

1999; 64 FR 73299) and our 2002 

Recreational Diesel Marine program 

(November 8, 2002; 67 FR 68304). 

205 U.S. EPA, Summary of Small Business 

Outreach for Locomotive and Marine Diesel NPRM, 

Memorandum to Docket EPA–HQ–OAR–2003–0190 

from Bryan Manning, January 18, 2007. 

In the proposed rule, we requested 

comment on an alternative program 

option—a marine existing fleet or 

remanufacture program (Alternative 5: 

Existing Engines)—and as described 

earlier in this preamble, we are 

finalizing a portion of this alternative. 

Based on oral testimony at the hearings 

and written comments (from trade 

associations, small entities, etc.), we are 

providing flexibilities to vessel 

operators and/or marine 

remanufacturers as described below. For 

a complete description of the 

flexibilities in this final rule, please 

refer to the Certification and 

Compliance Program, section 

IV.A.(13)—Small Business Provisions. 

(a) Transition Flexibilities 

(i) Locomotive Sector 

Small locomotive remanufacturers are 

granted a waiver from production-line 

and in-use testing for up to five calendar 

years after this program becomes 

effective. 

Class III railroads qualifying as small 

businesses are exempt from new Tier 0, 

1, and 2 remanufacturing requirements 

for locomotives in their existing fleets. 

The Certification and Compliance 

Program section IV.A.(13) provides a 

discussion on the revisions being made 

in this program. 

Railroads qualifying as small 

businesses continue being exempt from 

the in-use testing program. 

(ii) Marine Sector 

Post-manufacture marinizers and 

small-volume manufacturers (annual 

worldwide production of fewer than 

1,000 engines) are allowed to group all 

engines into one engine family, based 

on the worst-case emitter. 

Small-volume manufacturers 

producing engines less than or equal to 

600 kW (800 hp) are exempted from 

production-line and deterioration 

testing (assigned deterioration factors) 

for Tier 3 standards. 

Post-manufacture marinizers 

qualifying as small businesses and 

producing engines less than or equal to 

600 kW (800 hp) may delay compliance 

with the Tier 3 standards by one model 

year. 

Post-manufacture marinizers 

qualifying as small businesses and 

producing engines less than or equal to 

600 kW (800 hp) may delay compliance 

with the Not-to-Exceed requirements for 

Tier 3 standards by up to three model 

years. 

Marine engine dressers (modify base 

engine without affecting the emission 

characteristics of the engine) are 

exempted from certification and 

compliance requirements. 

Post-manufacture marinizers, smallvolume manufacturers, and smallvolume boat builders (less than 500 

employees and annual worldwide 

production of fewer than 100 boats) 

have hardship relief provisions—i.e., 

apply for additional time. 

For the marine existing fleet or 

remanufacture program, vessel operators 

and marine remanufacturers qualifying 

as small businesses also have hardship 

relief provisions allowing them if 

necessary to apply for additional time to 

comply with program requirements. 

Vessel operators who earn less than 

$5 million in gross annual sales revenue 

are exempted from the marine existing 

fleet or remanufacture program. If at 

some future date annual gross revenues 

exceed $5 million, they become subject 

to the existing fleet program at that 

point. 

(b) Small Entity Compliance 

Information 

In addition to the above flexibilities, 

EPA is also preparing documentation to 

help small entities comply with this 

rule. This documentation will be 

available on the Office of Transportation 

and Air Quality Web site. Small entities 

may also contact our office to obtain 

copies of this documentation. 

D. Unfunded Mandates Reform Act 

Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA), P.L. 104– 

4, establishes requirements for Federal 

agencies to assess the effects of their 

regulatory actions on State, local, and 

tribal governments and the private 

sector. Under section 202 of the UMRA, 

EPA generally must prepare a written 

statement, including a cost-benefit 

analysis, for proposed and final rules 

with ‘‘Federal mandates’’ that may 

result in expenditures to State, local, 

and tribal governments, in the aggregate, 

or to the private sector, of $100 million 

or more in any one year. Before 

promulgating an EPA rule for which a 

written statement is needed, section 205 

of the UMRA generally requires EPA to 

identify and consider a reasonable 

number of regulatory alternatives and 

adopt the least costly, most costeffective or least burdensome alternative 

that achieves the objectives of the rule. 

The provisions of section 205 do not 

apply when they are inconsistent with 

applicable law. Moreover, section 205 

allows EPA to adopt an alternative other 

than the least costly, most cost-effective 

or least burdensome alternative if the 

Administrator publishes with the final 

rule an explanation why that alternative 

was not adopted. Before EPA establishes 

any regulatory requirements that may 

significantly or uniquely affect small 
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Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 37189 

governments, including tribal 

governments, it must have developed 

under section 203 of the UMRA a small 

government agency plan. The plan must 

provide for notifying potentially 

affected small governments, enabling 

officials of affected small governments 

to have meaningful and timely input in 

the development of EPA regulatory 

proposals with significant Federal 

intergovernmental mandates, and 

informing, educating, and advising 

small governments on compliance with 

the regulatory requirements. 

This rule contains no federal 

mandates for state, local, or tribal 

governments as defined by the 

provisions of Title II of the UMRA. The 

rule imposes no enforceable duties on 

any of these governmental entities. 

Nothing in the rule would significantly 

or uniquely affect small governments. 

EPA has determined that this rule 

contains federal mandates that may 

result in expenditures of more than 

$100 million to the private sector in any 

single year. Accordingly, EPA has 

evaluated under section 202 of the 

UMRA the potential impacts to the 

private sector. EPA believes that this 

rule represents the least costly, most 

cost-effective approach to achieve the 

statutory requirements of the rule. The 

costs and benefits associated with this 

rule are included in the final Regulatory 

Impact Analysis (RIA), as required by 

the UMRA. This analysis can be found 

in chapter 6 of the final RIA. A complete 

discussion of why the approach being 

finalized in this action was chosen is 

located in chapter 8 of the final RIA. 

EPA has determined that this rule 

contains no regulatory requirements that 

might significantly or uniquely affect 

small governments. 

Thus, this rule is not subject to the 

requirements of sections 202 and 205 of 

the UMRA. 

E. Executive Order 13132 (Federalism) 

Executive Order 13132, entitled 

‘‘Federalism’’ (64 FR 43255, August 10, 

1999), requires EPA to develop an 

accountable process to ensure 

‘‘meaningful and timely input by State 

and local officials in the development of 

regulatory policies that have federalism 

implications.’’ ‘‘Policies that have 

federalism implications’’ is defined in 

the Executive Order to include 

regulations that have ‘‘substantial direct 

effects on the States, on the relationship 

between the national government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government.’’ 

This final rule does not have 

federalism implications. It will not have 

substantial direct effects on the States, 

on the relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government, as specified in 

Executive Order 13132. Although 

section 6 of Executive Order 13132 does 

not apply to this rule, EPA did consult 

with representatives of various State 

and local governments in developing 

this rule. EPA consulted with 

representatives from the National 

Association of Clean Air Agencies 

(NACAA, formerly STAPPA/ALAPCO), 

the Northeast States for Coordinated Air 

Use Management (NESCAUM), and the 

California Air Resources Board (CARB). 

These organizations and other state 

organizations submitted comments on 

the proposed rule. Their comments are 

available in the rulemaking docket, and 

are summarized and addressed in the 

Summary and Analysis of Comments 

document (which is also available in the 

rulemaking docket). 

In the spirit of Executive Order 13132, 

and consistent with EPA policy to 

promote communications between EPA 

and State and local governments, EPA 

specifically solicited comment on the 

proposed rule from State and local 

officials. 

F. Executive Order 13175 (Consultation 

and Coordination with Indian Tribal 

Governments) 

Executive Order 13175, entitled 

‘‘Consultation and Coordination with 

Indian Tribal Governments’’ (65 FR 

67249, November 9, 2000), requires EPA 

to develop an accountable process to 

ensure ‘‘meaningful and timely input by 

tribal officials in the development of 

regulatory policies that have tribal 

implications.’’ This final rule does not 

have tribal implications, as specified in 

Executive Order 13175. The rule will be 

implemented at the Federal level and 

impose compliance costs only on 

locomotive manufacturers, locomotive 

engine manufacturers, locomotive 

operators, locomotive remanufacturers, 

marine engine manufacturers, and 

marine vessel manufacturers. Tribal 

governments will be affected only to the 

extent they purchase and use the 

regulated engines and vehicles. Thus, 

Executive Order 13175 does not apply 

to this rule. 

Although Executive Order 13175 does 

not apply to this rule, EPA did solicit 

additional comment on this rule from 

tribal officials. A comment was received 

from one tribal government; that 

comment is available in the rulemaking 

docket, and is summarized and 

addressed in the Summary and Analysis 

of Comments document (which is also 

available in the rulemaking docket). 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

and Safety Risks 

Executive Order 13045: ‘‘Protection of 

Children from Environmental Health 

Risks and Safety Risks’’ (62 FR 19885, 

April 23, 1997) applies to any rule that: 

(1) Is determined to be ‘‘economically 

significant’’ as defined under Executive 

Order 12866, and (2) concerns an 

environmental health or safety risk that 

EPA has reason to believe may have a 

disproportionate effect on children. If 

the regulatory action meets both criteria, 

the Agency must evaluate the 

environmental health or safety effects of 

the planned rule on children, and 

explain why the planned regulation is 

preferable to other potentially effective 

and reasonably feasible alternatives 

considered by the Agency. 

This final rule is subject to the 

Executive Order because it is an 

economically significant regulatory 

action as defined by Executive Order 

12866, and we believe that the 

environmental health or safety risk 

addressed by this action may have a 

disproportionate effect on children. 

Accordingly, we have evaluated the 

environmental health or safety effects of 

these risks on children. The results of 

this evaluation are discussed above in 

section II of this preamble, and in 

chapter 2 of the Regulatory Impact 

Analysis (RIA). 

EPA recently conducted an initial 

screening-level analysis of selected 

marine port areas and rail yards206, 207 to 

begin to understand the populations, 

including children, that are exposed to 

DPM emissions from these facilities. 

This screening-level analysis 208 

indicates that at the 47 marine ports and 

37 rail yards studied, at least 13 million 

people, including 3.5 million children 

live in neighborhoods that are exposed 

to higher levels of DPM from these 

206 ICF International. September 28, 2007. 

Estimation of diesel particulate matter 

concentration isopleths for marine harbor areas and 

rail yards. Memorandum to EPA under Work 

Assignment Number 0–3, Contract Number EP–C– 

06–094. This memo is available in Docket EPA– 

HQ–OAR–2003–0190. 

207 ICF International. September 28, 2007. 

Estimation of diesel particulate matter population 

exposure near selected harbor areas and rail yards. 

Memorandum to EPA under Work Assignment 

Number 0–3, Contract Number EP–C–06–094. This 

memo is available in Docket EPA–HQ–OAR–2003– 

0190. 

208 This type of screening-level analysis is an 

inexact tool and not appropriate for regulatory 

decision-making; it is useful in beginning to 

understand potential impacts and for illustrative 

purposes. Additionally, the emissions inventories 

used as inputs into our analysis are not official 

estimates and they likely underestimate overall 

emissions because they are not inclusive of all 

emissions sources at the individual ports in our 

sample. 
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37190 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

facilities than people living further 

away and will benefit from the controls 

being finalized in this action. 

With regard to children, the 

screening-level analysis shows that the 

age composition of the total affected 

population near both the marine ports 

and rail yards matches closely the age 

composition of the overall U.S. 

population. However, for some 

individual facilities the young appear to 

be over-represented in the affected 

population compared to the overall U.S. 

population. See section VI of this 

preamble and chapters 2 and 6 of the 

RIA for a discussion on the air quality 

and monetized health benefits of this 

rule, including the benefits to children’s 

health. 

This rulemaking will achieve 

significant reductions of various 

emissions from locomotive and marine 

diesel engines, including NOX, PM, and 

air toxics. These pollutants raise 

concerns regarding environmental 

health or safety risks that EPA has 

reason to believe may have a 

disproportionate effect on children, 

such as impacts from ozone, PM, and 

certain toxic air pollutants. 

EPA has evaluated several regulatory 

strategies for reductions in emissions 

from locomotive and marine diesel 

engines, and we believe that we have 

selected the most stringent and effective 

control reasonably feasible at this time 

(in light of the technology and cost 

requirements of the Clean Air Act), 

which will benefit the health of 

children. 

H. Executive Order 13211: Actions That 

Significantly Affect Energy Supply, 

Distribution, or Use 

Executive Order 13211, ‘‘Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use’’ (66 FR 28355 (May 

22, 2001)), requires EPA to prepare and 

submit a Statement of Energy Effects to 

the Administrator of the Office of 

Information and Regulatory Affairs, 

Office of Management and Budget, for 

certain actions identified as ‘‘significant 

energy actions.’’ Section 4(b) of 

Executive Order 13211 defines 

‘‘significant energy actions’’ as ‘‘any 

action by an agency (normally 

published in the Federal Register) that 

promulgates or is expected to lead to the 

promulgation of a final rule or 

regulation, including notices of inquiry, 

advance notices of proposed 

rulemaking, and notices of proposed 

rulemaking: (1)(i) that is a significant 

regulatory action under Executive Order 

12866 or any successor order, and (ii) is 

likely to have a significant adverse effect 

on the supply, distribution, or use of 

energy; or (2) that is designated by the 

Administrator of the Office of 

Information and Regulatory Affairs as a 

significant energy action.’’ We have 

prepared a Statement of Energy Effects 

for this action as follows. 

This rule’s potential effects on energy 

supply, distribution, or use have been 

analyzed and are discussed in detail in 

section 5.8 of the RIA. In summary, 

while we project that this rule would 

result in an energy effect that exceeds 

the 4,000 barrel per day threshold noted 

in E.O. 13211 in or around the year 2022 

and thereafter, the program consists of 

performance-based standards with 

averaging, banking, and trading 

provisions that make it likely that our 

estimated impact is overstated. Further, 

the fuel consumption estimates upon 

which we are basing this energy effect 

analysis, which are discussed in full in 

sections 5.4 and 5.5 of the RIA, do not 

reflect the potential fuel savings 

associated with automatic engine stop/ 

start (AESS) systems or other idle 

reduction technologies. Such 

technologies can provide significant fuel 

savings which could offset our projected 

estimates of increased fuel 

consumption. Nonetheless, our 

projections show that this rule could 

result in energy usage exceeding the 

4,000 barrel per day threshold noted in 

E.O. 13211. 

I. National Technology Transfer 

Advancement Act 

As noted in the proposed rule, 

Section 12(d) of the National 

Technology Transfer and Advancement 

Act of 1995 (‘‘NTTAA’’), Public Law No. 

104–113, 12(d) (15 U.S.C. 272 note) 

directs EPA to use voluntary consensus 

standards in its regulatory activities 

unless to do so would be inconsistent 

with applicable law or otherwise 

impractical. Voluntary consensus 

standards are technical standards (e.g., 

materials specifications, test methods, 

sampling procedures, and business 

practices) that are developed or adopted 

by voluntary consensus standards 

bodies. The NTTAA directs EPA to 

provide Congress, through OMB, 

explanations when the Agency decides 

not to use available and applicable 

voluntary consensus standards. 

This rule references technical 

standards adopted by EPA through 

previous rulemakings. No new technical 

standards are established in this rule. 

The standards referenced in today’s rule 

involve test procedures for measuring 

engine emissions. These measurement 

standards include those that were 

developed by EPA as well as the 

International Organization for 

Standardization (ISO) engine testing 

voluntary consensus standards, adopted 

in previous rulemakings. These 

standards have served EPA’s emissions 

control goals well since their 

implementation and have been well 

accepted by industry. Therefore, EPA 

will continue to use the ISO and 

existing EPA-developed standards 

referenced in 40 CFR Parts 94 and 1065. 

J. Executive Order 12898: Federal 

Actions to Address Environmental 

Justice in Minority Populations and 

Low-Income Populations 

Executive Order (EO) 12898 (59 FR 

7629 (Feb. 16, 1994)) establishes federal 

executive policy on environmental 

justice. Its main provision directs 

federal agencies, to the greatest extent 

practicable and permitted by law, to 

make environmental justice part of their 

mission by identifying and addressing, 

as appropriate, disproportionately high 

and adverse human health or 

environmental effects of their programs, 

policies, and activities on minority 

populations and low-income 

populations in the United States. 

EPA has determined that this final 

rule will not have disproportionately 

high and adverse human health or 

environmental effects on minority or 

low-income populations because it 

increases the level of environmental 

protection for all affected populations 

without having any disproportionately 

high and adverse human health or 

environmental effects on any 

population, including any minority or 

low-income population. 

This rulemaking will achieve 

significant reductions of various 

emissions from locomotive and marine 

diesel engines, including NOX, PM, and 

air toxics. Exposure to these pollutants 

raises concerns regarding environmental 

health for the U.S. population in general 

including the minority populations and 

low-income populations that are the 

focus of the environmental justice 

executive order. 

EPA has evaluated several regulatory 

strategies for reductions in emissions 

from locomotive and marine diesel 

engines, and we believe that we have 

selected the most stringent and effective 

control reasonably feasible at this time 

(in light of the technology and cost 

requirements of the Clean Air Act). 

The emission reductions from the 

stringent new standards finalized in the 

locomotive and marine diesel rule will 

have large beneficial effects on 

communities in proximity to port, 

harbor, waterway, railway, and rail yard 

locations, including low-income and 

minority communities. In addition to 

stringent exhaust emission standards for 

freshly manufactured and 
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Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 37191 

remanufactured engines, the final rule 

includes provisions targeted to further 

reduce emissions from regulated 

engines that directly impact low-income 

and minority communities. The idle 

reduction provision is one example: 

‘‘Even in very efficient railroad 

operations, locomotive engines spend a 

substantial amount of time idling, 

during which they emit harmful 

pollutants, consume fuel, create noise, 

and increase maintenance costs. A 

significant portion of this idling occurs 

in rail yards, as railcars and locomotives 

are transferred to build up trains. Many 

of these rail yards are in urban 

neighborhoods, close to where people 

live, work, and go to school’’ (from 

section III.C(1)(c) of this preamble). The 

final rule includes a mandatory 

locomotive idle reduction requirement 

that will begin to take effect as early as 

2008. Another example is the emission 

standards for freshly manufactured 

switch locomotives. Switch locomotives 

are major polluters in urban rail yards. 

These standards are earlier and more 

stringent than the line-haul locomotive 

standards, and include incentives for 

introducing cleaner switchers using Tier 

4 nonroad engines. Further examples 

can be found in averaging, banking, and 

trading program provisions aimed at 

ensuring that emissions are not shifted 

from line-haul locomotives operating in 

rural areas to rail yards in urban 

communities. 

EPA recently conducted an initial 

screening-level analysis of selected 

marine port areas and rail yards 209, 210 to 

better understand the populations, 

including minority and low-income, 

that are exposed to DPM emissions from 

these facilities. This screening-level 

analysis 211 indicates that at the 47 

marine ports and 37 rail yards studied 

at least 13 million people, including a 

high percentage of low-income 

households, African-Americans, and 

209 ICF International. September 28, 2007. 

Estimation of diesel particulate matter 

concentration isopleths for marine harbor areas and 

rail yards. Memorandum to EPA under Work 

Assignment Number 0–3, Contract Number EP–C– 

06–094. This memo is available in Docket EPA– 

HQ–OAR–2003–0190. 

210 ICF International. September 28, 2007. 

Estimation of diesel particulate matter population 

exposure near selected harbor areas and rail yards. 

Memorandum to EPA under Work Assignment 

Number 0–3, Contract Number EP–C–06–094. This 

memo is available in Docket EPA–HQ–OAR–2003– 

0190. 

211 This type of screening analysis is an inexact 

tool and not appropriate for regulatory decisionmaking; it is useful in beginning to understand 

potential impacts and for illustrative purposes. 

Additionally, the emissions inventories used as 

inputs into our analysis are not official estimates 

and they likely underestimate overall emissions 

because they are not inclusive of all emission 

sources at the individual ports in our sample. 

Hispanics, live in the vicinity of these 

facilities and are exposed to higher 

levels of DPM than urban background 

levels. Thus, these residents will benefit 

from the controls being finalized in this 

action. See section II.A and II.B of this 

preamble and chapter 2 of the RIA for 

a discussion on the benefits of this rule, 

including the benefits to minority and 

low-income communities. Because 

those living in the vicinity of marine 

ports and rail yards are more likely to 

be low-income and minority residents, 

these populations will receive a 

significant benefit from this rule. 

K. Congressional Review Act 

The Congressional Review Act, 5 

U.S.C. 801 et seq., as added by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996, generally provides 

that before a rule may take effect, the 

agency promulgating the rule must 

submit a rule report, which includes a 

copy of the rule, to each House of the 

Congress and to the Comptroller General 

of the United States. EPA will submit a 

report containing this rule and other 

required information to the U.S. Senate, 

the U.S. House of Representatives, and 

the Comptroller General of the United 

States prior to publication of the rule in 

the Federal Register. A Major rule 

cannot take effect until 60 days after it 

is published in the Federal Register. 

This action is a ‘‘major rule’’ as defined 

by 5 U.S.C. 804(2). This rule will be 

effective July 7, 2008. 

X. Statutory Provisions and Legal 

Authority 

Statutory authority for the controls in 

this final rule can be found in sections 

213 (which specifically authorizes 

controls on emissions from nonroad 

engines and vehicles), 203–209, 216, 

and 301 of the Clean Air Act (CAA), 42 

U.S.C. 7547, 7522, 7523, 7424, 7525, 

7541, 7542, 7543, 7550, and 7601. 

List of Subjects 

40 CFR Part 9 

Reporting and recordkeeping 

requirements. 

40 CFR Part 85 

Confidential business information, 

Imports, Labeling, Motor vehicle 

pollution, Reporting and recordkeeping 

requirements, Research, Warranties. 

40 CFR Part 86 

Administrative practice and 

procedure, Confidential business 

information, Labeling, Motor vehicle 

pollution, Reporting and recordkeeping 

requirements. 

40 CFR Part 89 

Environmental protection, 

Administrative practice and procedure, 

Confidential business information, 

Imports, Labeling, Motor vehicle 

pollution, Reporting and recordkeeping 

requirements, Research, Vessels, 

Warranties. 

40 CFR Part 92 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Confidential 

business information, Imports, 

Incorporation by reference, Labeling, 

Penalties, Railroads, Reporting and 

recordkeeping requirements, 

Warranties. 

40 CFR Part 94 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Confidential 

business information, Imports, 

Incorporation by reference, Labeling, 

Penalties, Vessels, Reporting and 

recordkeeping requirements, 

Warranties. 

40 CFR Part 1033 

Environmental protection, 

Administrative practice and procedure, 

Confidential business information, 

Incorporation by reference, Labeling, 

Penalties, Railroads, Reporting and 

recordkeeping requirements. 

40 CFR Part 1039 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Confidential 

business information, Imports, 

Incorporation by reference, Labeling, 

Penalties, Reporting and recordkeeping 

requirements, Warranties. 

40 CFR Part 1042 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Confidential 

business information, Imports, 

Incorporation by reference, Labeling, 

Penalties, Vessels, Reporting and 

recordkeeping requirements, 

Warranties. 

40 CFR Part 1065 

Environmental protection, 

Administrative practice and procedure, 

Incorporation by reference, Reporting 

and recordkeeping requirements, 

Research. 

40 CFR Part 1068 

Environmental protection, 

Administrative practice and procedure, 

Confidential business information, 

Imports, Motor vehicle pollution, 

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37192 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

Penalties, Reporting and recordkeeping OMB control 	 PART 86—CONTROL OF EMISSIONS 40 CFR citation requirements, Warranties. No. 	 FROM NEW AND IN-USE HIGHWAY 

Dated: March 14, 2008. VEHICLES AND ENGINES

* * * * 

Stephen L. Johnson, 	 Control of Emissions from Locomotives ■ 5. The authority citation for part 86 Administrator. 	 1033.825 ............................... 2060–0287 
 continues to read as follows: 

■ For the reasons set forth in the 

preamble, chapter I of title 40 of the 

Code of Federal Regulations is amended 

as follows: 

PART 9—OMB APPROVALS UNDER 

THE PAPERWORK REDUCTION ACT 

■ 1. The authority citation for part 9 

continues to read as follows: 

Authority: 7 U.S.C. 135 et seq., 136–136y; 

15 U.S.C. 2001, 2003, 2005, 2006, 2601–2671; 

21 U.S.C. 331j, 346a, 348; 31 U.S.C. 9701; 33 

U.S.C. 1251 et seq., 1311, 1313d, 1314, 1318 

1321, 1326, 1330, 1342 1344, 1345(d) and (e), 

1361; E.O. 11735, 38 FR 21243, 3 CFR, 1971– 

1975 Comp. p. 973; 42 U.S.C. 241, 242b, 243, 

246, 300f, 300g, 300g–1, 300g–2, 300g–3, 

300g–4, 300g–5, 300g–6, 300j–1, 300j–2, 

300j–3, 300j–4, 300j–9, 1857 et seq., 6901– 

6992k, 7401–7671q, 7542, 9601–9657, 11023, 

11048. 

■ 2. Section 9.1 is amended in the table 

by adding the center headings and the 

entries under those center headings in 

numerical order to read as follows: 

§ 9.1 OMB approvals under the Paperwork 

Reduction Act. 

* * * * * 

OMB control 40 CFR citation No. 

M = kV 10-4 

HC ( n ) 

* * * * * 

Subpart N—[Amended] 

■ 8. Section 86.1305–2010 is amended 

by revising paragraph (b) to read as 

follows: 

§ 86.1305–2010 Introduction; structure of 

subpart. 

* * * * * 

(b) Use the applicable equipment and 

procedures for spark-ignition or 

compression-ignition engines in 40 CFR 

part 1065 to determine whether engines 

meet the duty-cycle emission standards 

in subpart A of this part. Measure the 

emissions of all regulated pollutants as 

specified in 40 CFR part 1065. Use the 

duty cycles and procedures specified in 

§§ 86.1333–2010, 86.1360–2007, and 

* * * * * 

Control of Emissions From New and Inuse Marine Compression-ignition Engines and Vessels 

1042.825 ............................... 2060–0827 

* * * * * 

* * * * * 

PART 85—CONTROL OF AIR 


POLLUTION FROM MOBILE SOURCES 


■ 3. The authority citation for part 85 


continues to read as follows: 


Authority: 42 U.S.C. 7401–7671q. 

Subpart Y—[Amended] 

■ 4. Section 85.2401 is amended by 


revising paragraphs (a)(7) and (a)(8) to 


read as follows: 


§ 85.2401 To whom do these requirements 


apply? 


(a) * * * 

(7) Locomotives (See 40 CFR parts 92 


and 1033); 


(8) Marine engines (See 40 CFR parts 


91, 94, and 1042 and MARPOL Annex 


VI, as applicable); 


* * * * * 

 (CHC - rCCH OH ) PB (CHC - rCCH OH f 3 f f i 3 i i )PB  ­  Tf Ti  

86.1362–2007. Adjust emission results 

from engines using aftertreatment 

technology with infrequent regeneration 

events as described in § 86.004–28. 

* * * * * 

■ 9. Section 86.1333–2010 is amended 


by adding paragraph (d) to read as 


follows: 


§ 86.1333–2010 Transient test cycle 


generation. 


* * * * * 

(d) Determine idle speeds as specified 


in § 86.1337–2007(a)(9). 


■ 10. Section 86.1360–2007 is amended 


by adding paragraph (b)(3) to read as 


follows: 


Authority: 42 U.S.C. 7401–7671q. 

Subpart A—[Amended] 

■ 6. Section 86.007–11 is amended by 


revising paragraph (a)(2) introductory 


text to read as follows: 


§ 86.007–11 Emission standards and 

supplemental requirements for 2007 and 

later model year diesel heavy-duty engines 

and vehicles. 

* * * * * 

(a) * * * 

(2) The standards set forth in 

paragraph (a)(1) of this section refer to 

the exhaust emitted over the duty cycle 

specified in paragraphs (a)(2)(i) through 

(iii) of this section, where exhaust 

emissions are measured and calculated 

as specified in paragraphs (a)(2)(iv) and 

(v) of this section in accordance with 

the procedures set forth in subpart N of 

this part, except as noted in § 86.007– 

23(c)(2): 

* * * * * 

■ 7. Section 86.117–96 is amended by 

revising the first equation in paragraph 

(d)(2) to read as follows: 

§ 86.117–96 Evaporative emission 


enclosure calibrations. 


* * * * * 

(d) * * * 

(2) * * * 

  + (M HC,out HC,in - M ) 

 

§ 86.1360–2007 Supplemental emission 


test; test cycle and procedures. 


* * * * * 

(b) * * * 

(3) For engines certified using the 

ramped-modal cycle specified in 

§ 86.1362, perform the three discrete test 

points described in paragraph (b)(2) of 

this section as follows: 

(i) Allow the engine to idle as needed 

to complete equipment checks following 

the supplemental emission test 

described in this section, then operate 

the engine over the three additional 

discrete test points. 

(ii) Validate the additional discrete 

test points as a composite test separate 

from the supplemental emission test, 

but in the same manner. 
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Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 37193 

(iii) Use the emission data collected 

during the time interval from 35 to 5 

seconds before the end of each mode 

(excluding transitions) to perform the 

MAEL calculations in paragraph (f) of 

this section. 

* * * * * 

§ 86.1362–2007 [Amended] 

■ 11. Section 86.1362–2007 is amended 

by removing and reserving paragraph 

(d). 

■ 12. A new § 86.1362–2010 is added to 

read as follows: 

§ 86.1362–2010 Steady-state testing with a 

ramped-modal cycle. 

This section describes how to test 

engines under steady-state conditions. 

For model years through 2009, 

manufacturers may use the mode order 

described in this section or in 

§ 86.1362–2007. Starting in model year 

2010 manufacturers must use the mode 

order described in this section with the 

following exception: for model year 

2010, manufacturers may continue to 

use the cycle specified in § 86.1362– 

2007 as long as it does not adversely 

affect the ability to demonstrate 

compliance with the standards. 

(a) Start sampling at the beginning of 

the first mode and continue sampling 

until the end of the last mode. Calculate 

emissions as described in 40 CFR 

1065.650 and cycle statistics as 

described in 40 CFR 1065.514. 

(b) Measure emissions by testing the 

engine on a dynamometer with the 

following ramped-modal duty cycle to 

determine whether it meets the 

applicable steady-state emission 

standards: 

RMC mode Time in mode 

(seconds) 

Engine 

speed 12 

Torque 

(percent) 2 3 

1a Steady-state ....................................... 170 Warm Idle ................................................ 0 

1b Transition ............................................ 20 Linear Transition ...................................... Linear Transition. 

2a Steady-state ....................................... 173 A .............................................................. 100 

2b Transition ............................................ 20 Linear Transition ...................................... Linear Transition. 

3a Steady-state ....................................... 219 B .............................................................. 50 

3b Transition ............................................ 20 B .............................................................. Linear Transition. 

4a Steady-state ....................................... 217 B .............................................................. 75 

4b Transition ............................................ 20 Linear Transition ...................................... Linear Transition. 

5a Steady-state ....................................... 103 A .............................................................. 50 

5b Transition ............................................ 20 A .............................................................. Linear Transition. 

6a Steady-state ....................................... 100 A .............................................................. 75 

6b Transition ............................................ 20 A .............................................................. Linear Transition. 

7a Steady-state ....................................... 103 A .............................................................. 25 

7b Transition ............................................ 20 Linear Transition ...................................... Linear Transition. 

8a Steady-state ....................................... 194 B .............................................................. 100 

8b Transition ............................................ 20 B .............................................................. Linear Transition. 

9a Steady-state ....................................... 218 B .............................................................. 25 

9b Transition ............................................ 20 Linear Transition ...................................... Linear Transition. 

10a Steady-state ..................................... 171 C .............................................................. 100 

10b Transition .......................................... 20 C .............................................................. Linear Transition. 

11a Steady-state ..................................... 102 C .............................................................. 25 

11b Transition .......................................... 20 C .............................................................. Linear Transition. 

12a Steady-state ..................................... 100 C .............................................................. 75 

12b Transition .......................................... 20 C .............................................................. Linear Transition. 

13a Steady-state ..................................... 102 C .............................................................. 50 

13b Transition .......................................... 20 Linear Transition ...................................... Linear Transition. 

14 Steady-state ....................................... 168 Warm Idle ................................................ 0 

1 Speed terms are defined in 40 CFR part 1065. 

2 Advance from one mode to the next within a 20-second transition phase. During the transition phase, command a linear progression from the 

speed or torque setting of the current mode to the speed or torque setting of the next mode. 3 The percent torque is relative to maximum torque at the commanded engine speed. 

(c) During idle mode, operate the testing over the Federal Test Procedure, equation in paragraph (g)(1) to read as 

engine at its warm idle as described in consider the engine warm. Otherwise, follows: 

40 CFR part 1065. operate the engine to warm it up as § 86.1363–2007 Steady-state testing with a (d) See 40 CFR part 1065 for detailed described in 40 CFR part 1065, subpart discrete-mode cycle. specifications of tolerances and F. 

calculations. * * * * *

(e) Perform the ramped-modal test ■ 13. Section 86.1363–2007 is amended (a) Use the following 13-mode cycle 

with a warmed-up engine. If the by revising paragraph (a) and the in dynamometer operation on the test 

ramped-modal test follows directly after engine: 

Mode No. Engine 

speed 1 Percent load 2 Weighting 

factors 

Mode length 

(minutes) 3 

1 ......................................................................................................................... 

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

3 ......................................................................................................................... 

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

5 ......................................................................................................................... 

6 ......................................................................................................................... 

7 ......................................................................................................................... 

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

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

Warm Idle .... 

A .................. 

B .................. 

B .................. 

A .................. 

A .................. 

A .................. 

B .................. 

B .................. 

........................ 

100 

50 

75 

50 

75 

25 

100 

25 

0.15 

0.08 

0.10 

0.10 

0.05 

0.05 

0.05 

0.09 

0.10 

4 

2 

2 

2 

2 

2 

2 

2 

2 

mstockstill on PROD1PC66 with RULES3ER06MY08.009</MATH>

37194 Federal Register / Vol. 73, No. 126 / Monday, June 30, 2008 / Rules and Regulations 

Mode No. Engine 

speed 1 Percent load 2 Weighting 

factors 

Mode length 

(minutes) 3 

10 ....................................................................................................................... 

11 ....................................................................................................................... 

12 ....................................................................................................................... 

13 ....................................................................................................................... 

C 

C 

C 

C 

................. 

................. 

................. 

................. 

100 

25 

75 

50 

0.08 

0.05 

0.05 

0.05 

2 

2 

2 

2 

1 Speed terms are defined in 40 CFR part 1065. 


2 The percent torque is relative to the maximum torque at the commanded test speed. 


3 Upon Administrator approval, the manufacturer may use other mode lengths. 


* * * * * 

(g) * * * 

(1) * * * 

N 

∑[ AMi ⋅ WF i ] i=1 AWA = N 

∑[ A Pi ⋅ WF i ] i=2 

* * * * * 

Subpart P—[Amended] 

■ 14. Subpart P is amended by removing 

§ 86.1504–94. 

§§ 86.1501–94 through 86.1544–84 

[Redesignated] 

■ 15. Redesignate §§ 86.1501–94 

through 86.1544–84 as follows: 

Old section 

86.1501–94 

86.1502–84 

86.1503–84 

86.1505–94 

86.1506–94 

86.1509–84 

86.1511–84 

86.1513–94 

86.1514–84 

86.1516–84 

86.1519–84 

86.1522–84 

86.1524–84 

86.1526–84 

86.1527–84 

86.1530–84 

86.1537–84 

86.1540–84 

86.1542–84 

86.1544–84 

New section 

86.1501 

86.1502 

86.1503 

86.1505 

86.1506 

86.1509 

86.1511 

86.1513 

86.1514 

86.1516 

86.1519 

86.1522 

86.1524 

86.1526 

86.1527 

86.1530 

86.1537 

86.1540 

86.1542 

86.1544 

■ 16. Newly desginated § 86.1506 is 

amended by adding paragraph (b) to 

read as follows: 

§ 86.1506 Equipment required and 

specifications; overview. 

* * * * * 

(b) Through the 2009 model year, 

manufacturers may elect to use the 

appropriate test procedures in this part 

86 instead of the procedures referenced 

in 40 CFR part 1065 without getting 

advance approval by the Administrator. 

PART 89—CONTROL OF EMISSIONS 

FROM NEW AND IN-USE NONROAD 

COMPRESSION-IGNITION ENGINES 

■ 17. The authority citation for part 89 

continues to read as follows: 

Authority: 42 U.S.C. 7401–7671q. 

Subpart J—[Amended] 

■ 18. A new § 89.916 is added to read 

as follows: 

§ 89.916 Emergency-vessel exemption for 

marine engines below 37 kW. 

The prohibitions in § 89.1003(a)(1) do 

not apply to new marine engines used 

in lifeboats and rescue boats as 

described in 40 CFR 94.914. 

PART 92—CONTROL OF AIR 

POLLUTION FROM LOCOMOTIVES 

AND LOCOMOTIVE ENGINES 

■ 19. The authority citation for part 92 

continues to read as follows: 

Authority: 42 U.S.C. 7401–7671q. 

■ 20. Section 92.1 is amended by 

revising paragraph (a) introductory text 

and adding paragraph (e) to read as 

follows: 

§ 92.1 Applicability. 

(a) Except as noted in paragraphs (b), 

(d) and (e) of this section, the provisions 

of this part apply to manufacturers, 

remanufacturers, owners and operators 

of: 

* * * * * 

(e) The provisions of this part do not 

apply for locomotives that are subject to 

the emissions standards of 40 CFR part 

1033. 

■ 21. Section 92.2 is amended by 

revising the definition for ‘‘Freshly 

manufactured locomotive’’ to read as 

follows: 

§ 92.2 Definitions. 

* * * * * 

Freshly manufactured locomotive 

means a locomotive which is powered 

by a freshly manufactured engine, and 

which contains fewer than 25 percent 

previously used parts (weighted by the 

dollar value of the parts). See 40 CFR 

1033.640 for information about how to 


calculate this. 


* * * * * 


■ 22. Section 92.12 is amended by 

revising paragraph (b) and adding 

paragraphs (i) and (j) to read as follows: 

§ 92.12 Interim provisions. 

* * * * * 

(b) Production line and in-use testing. 

(1) The requirements of Subpart F of 

this part (i.e., production line testing) do 

not apply prior to January 1, 2002. 

(2) The testing requirements of 

subpart F of this part (i.e., production 

line testing) do not apply to small 

manufacturers/remanufacturers prior to 

January 1, 2013. Note that the 

production line audit requirements 

apply as specified. 

(3) The requirements of Subpart G of 

this part (i.e., in-use testing) only apply 

for locomotives and locomotive engines 

that become new on or after January 1, 

2002. 

(4) For locomotives and locomotive 

engines that are covered by a small 

business certificate of conformity, the 

requirements of Subpart G of this part 

(i.e., in-use testing) only apply for 

locomotives and locomotive engines 

that become new on or after January 1, 

2007. We will also not require small 

remanufacturers to perform any in-use 

testing prior to January 1, 2013. 

* * * * * 

(i) Diesel test fuels. Manufacturers and 

remanufacturers may use LSD or ULSD 

test fuel to certify to the standards of 

this part, instead of the otherwise 

specified test fuel, provided PM 

emissions are corrected as described in 

this paragraph (i). Measure your PM 

emissions and determine your cycleweighted emission rates as specified in 

subpart B of this part. If you test using 

LSD, add 0.04 g/bhp-hr to these 

weighted emission rates to determine 

your official emission result. If you test 

using ULSD, add 0.05 g/bhp-hr to these 

weighted emission rates to determine 

your official emission result. 

(j) Subchapter U provisions. For 

model years 2008 through 2012, certain 

locomotives will be subject to the 

requirements of this part 92 while 

others will be subject to the