[Federal Register Volume 62, Number 50 (Friday, March 14, 1997)]
[Notices]
[Pages 12166-12180]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6505]


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ENVIRONMENTAL PROTECTION AGENCY
[FRL-5710-3]


Retrofit/Rebuild Requirements for 1993 and Earlier Model Year 
Urban Buses; Approval of a Notification of Intent To Certify Equipment

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of agency approval of an application for equipment 
certification.

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SUMMARY: The Agency received an application dated March 22, 1996 from 
the Engelhard Corporation (Engelhard) with principle place of business 
at 101 Wood Avenue, Iselin, New Jersey for certification of urban bus 
retrofit/rebuild equipment pursuant to 40 CFR 85.1404-85.1415. The 
equipment is applicable to Detroit Diesel

[[Page 12167]]

Corporation's (DDC's) petroleum-fueled 6V92TA model engines having 
mechanical unit injectors (MUI) that were originally manufactured 
between January 1979 and December 1989. On May 6, 1996 EPA published a 
notice in the Federal Register that the notification had been received 
and made the notification available for public review and comment for a 
period of 45 days (61 FR 20249). EPA has completed its review and the 
Director of the Engine Programs and Compliance Division has determined 
that it meets all the requirements for certification. Accordingly, EPA 
certifies this equipment effective March 14, 1997.
    The certified equipment complies with the 0.10 gram per brake 
horsepower-hour (g/bhp-hr) particulate matter (PM) standard for the 
engines for which it is certified (see below). In addition, the 
equipment will be offered to all parties for $7,940 or less (in 1992 
dollars) incremental to the cost of a standard rebuild. The 
certification of this equipment triggers requirements for transit 
operators utilizing compliance Program 1 (excluding engines originally 
manufactured as meeting California emissions standards) that have 
engines in their fleet covered by this certification.

DATES: The effective date of certification is March 14, 1997.

ADDRESSES: The Engelhard application, as well as other materials 
specifically relevant to it, are contained in Public Docket A-93-42, 
Category VIII-A, entitled ``Certification of Urban Bus Retrofit/Rebuild 
Equipment''. Docket items may be inspected from 8:00 a.m. until 5:30 
p.m., Monday through Friday. As provided in 40 CFR Part 2, a reasonable 
fee may be charged by the Agency for copying docket materials.

FOR FURTHER INFORMATION CONTACT: Tom Stricker, Engine Programs and 
Compliance Division (6403J), U.S. Environmental Protection Agency, 401 
M St. SW, Washington, D.C. 20460. Telephone: (202) 233-9322.

SUPPLEMENTARY INFORMATION:

I. Background and Equipment Identification

    By a notification of intent to certify signed March 22, 1996, 
Engelhard Corporation (Engelhard) applied for certification of 
equipment applicable to Detroit Diesel Corporation's (DDC) 6V92TA model 
urban bus engines having mechanical unit injectors (MUI) that were 
originally manufactured between model years 1979 and 1993. Today's 
certification, however, applies only to 6V92TA MUI engines originally 
manufactured between model years 1979 and 1989, because DDC ceased 
production of the 6V92TA MUI after model year 1989. The certified 
equipment, referred to as the ETX kit, consists of an engine 
``upgrade'' kit, a CMX-5 catalytic converter-muffler, and a proprietary 
coating, referred to as GPX-5m, applied to the piston crowns and 
cylinder head combustion chambers. The engine upgrade portion of the 
kit consists of specified DDC cylinder kits, cylinder heads, camshafts, 
turbocharger, blower, blower drive gear (hardened or non-hardened, as 
appropriate), fuel injectors, and gasket kit. The specific combination 
of parts to be used depends upon the direction of engine rotation, 
orientation of the engine (tilt), and engine power level. Injector 
height and throttle delay must be set to 1.460 inches and 0.636 inches 
respectively for each of the three certified horsepower (HP) 
configurations (253 HP, 277 HP, and 294 HP).
    Using engine dynamometer testing conducted on January 26, 1996 in 
accordance with the Federal Test Procedure (FTP) for heavy-duty diesel 
engines, Engelhard documented in its March 22, 1996 notification, PM 
emissions below the 0.10 g/bhp-hr level. Engine throttle delay and fuel 
injector height settings for the ETX certification test were set to 
1.466 inches and 0.594 inches respectively in order to comply with FTP 
cycle statistics requirements. Baseline exhaust emissions data were 
developed by testing an engine rebuilt to a 1979 urban bus 
configuration. This testing occurred on April 4, 1994. This set of 
baseline and ETX test data, is hereafter referred to as the 
``original'' baseline and ETX certification tests, and are shown in 
Table A.

                           Table A.--``Original'' Baseline and ETX Certification Data                           
----------------------------------------------------------------------------------------------------------------
                                                                                  ``Original''                  
  ETX kit including coated exhaust manifolds, turbocharger Y-     ``Original''         ETX       1988/89 federal
 pipe, cylinder heads, and piston crowns, and throttle delay of   baseline 1979   certification      standard   
        1.466 inches and injector height of 0.594 inches           model year         test                      
----------------------------------------------------------------------------------------------------------------
Gaseous and particulate emissions (g/bhp-hr):                                                                   
    HC.........................................................           0.5              0.2               1.3
    CO.........................................................           1.5              0.4              15.5
    NO<INF>X........................................................          10.3             10.1              10.7
    PM.........................................................           0.213            0.08              0.6
Smoke emissions (% opacity):                                                                                    
    Accel......................................................          NA                0.9              20  
    Lug........................................................          NA                0.6              15  
    Peak.......................................................          NA                1.3              50  
----------------------------------------------------------------------------------------------------------------

    In response to comments from the public (discussed in detail 
below), Engelhard removed the coated exhaust components from the ETX 
kit, and respecified the throttle delay and injector height 
specifications to 1.460 inches and 0.636 inches respectively. 
Additional FTP testing of the ETX kit was conducted on September 27, 
1996, again documenting PM emissions below the 0.10 g/bhp-hr level, 
while complying with FTP statistical requirements. Additional baseline 
data were developed on October 7, 1996 by testing an engine rebuilt to 
a 1986 urban bus configuration. This set of baseline and ETX test data, 
submitted to EPA in letters of October 21, 1996 and October 2, 1996 
respectively, is hereafter referred to as the ``secondary'' baseline 
and ETX certification tests, and are shown in Table B.

                           Table B.--``Secondary'' Baseline and ETX Certification Data                          
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                                                                                  ``Secondary''                 
ETX kit including only coated cylinder heads and piston crowns,   ``Secondary''        ETX       1988/89 federal
and throttle delay of 1.460 inches and injector height of 0.636   baseline 1979   certification      standard   
                           inches.\1\                              model year         test                      
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Gaseous and particulate emissions (g/bhp-hr):                                                                   
    HC.........................................................           0.5             0.2                1.3

[[Page 12168]]

                                                                                                                
    CO.........................................................           1.4             0.5               15.5
    NO<INF>X........................................................          11.4            10.5               10.7
    PM.........................................................           0.194           0.083              0.6
Smoke emissions (% opacity):                                                                                    
    Accel......................................................          NA               1.4               20  
    Lug........................................................          NA               1.4               15  
    Peak.......................................................          NA               1.9              50   
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\1\ These are the injector height and throttle delay settings approved as part of today's certification.        

    Both sets of emissions test data provided by Engelhard demonstrate 
PM emission levels are below 0.10 g/bhp-hr. However, the ``secondary'' 
data represent the ETX equipment configuration upon which today's 
certification is granted. The data indicate that applicable engines 
with the certified equipment installed comply with the federal 1988 
model year emission standards for hydrocarbon (HC), carbon monoxide 
(CO), oxides of nitrogen (NO<INF>X), and smoke emissions.
    Engelhard's March 22, 1996 notification of intent to certify 
requests certification for DDC 6V92TA MUI engines originally certified 
as meeting both federal and California emissions standards. However, as 
described in more detail in the Summary and Analysis of Comments 
section below, today's certification is limited to 1979 through 1989 
DDC 6V92TA MUI engines originally certified as meeting federal 
emissions standards. Today's certification does not extend 
certification of equipment to engines originally certified as meeting 
California emissions standards. The impact of this decision on transit 
operators is discussed in more detail in the Transit Operator 
Requirements section below.
    Additionally, EPA approves several supply options proposed by 
Engelhard for transit operators to obtain this certified equipment. 
Transit operators must purchase the CMX-5 and the GPX-5m coated 
components of the ETX kit from Engelhard or its distributors. However, 
in order to provide as much flexibility to transit operators as 
possible while ensuring emissions reductions, EPA has approved several 
options for obtaining the remainder of the components of the kit. For 
the first supply option, transit operators purchase the entire ETX kit 
from Engelhard or its distributors. This supply option must be 
available to any and all transit operators, and is the option upon 
which life cycle costs have been determined, and upon which the 0.10 g/
bhp-hr standard is triggered. The second and third options, described 
below, may be available at Engelhard's discretion. Transit operators 
who choose either of the options below, do so voluntarily, and EPA 
makes no representation concerning the impacts of either on life cycle 
costs.
    For the second supply option, transit operators purchase the 
specified DDC upgrade parts (excluding the coated cylinder heads and 
piston kits, which must be obtained from Engelhard) through normal 
supply channels. Engelhard will provide the appropriate DDC parts list 
to the transit operator upon purchase of the CMX-5 and coated engine 
parts. ``Equivalent'' aftermarket parts are not permitted under this 
certification, because EPA has no assurance that such parts can achieve 
the 0.10 g/bhp-hr PM standard. Engelhard provides the applicable 
100,000 mile defect warranty and 150,000 mile emissions performance 
warranty for all parts included in the kit, whether purchased from 
Engelhard, or through normal supply channels. Manufacturers of 
``equivalent'' aftermarket parts may choose to certify their parts for 
use in the ETX kit in a separate proceeding subject to testing and 
certain warranty concerns.
    For the third supply option, the transit operator obtains most 
parts in the same manner described in the second option above, but 
rebuilds or remanufactures in-house the camshafts, blower, and/or 
turbocharger. Transit operators can perform in-house rebuilding of 
these three components provided the transit operator meets the 
requirements of the ``Engelhard Certified Remanufacturer Program'', and 
the camshafts, blower, and/or turbocharger are rebuilt to the specified 
DDC configuration.
    The Engelhard Certified Remanufacturer Program, to be administered 
by Engelhard, is covered by today's certification as it relates to the 
third supply option. For transit operators who choose to rebuild the 
camshafts, blower, and/or turbocharger in-house, the Certified 
Remanufacturer Program requires the transit operator to possess a 
minimum of five years remanufacturing experience. In addition, 
Engelhard will perform an initial inspection of the remanufacturing 
operation to assess facility capabilities, and will conduct a complete 
review of the quality control procedures and component reject rate of 
the remanufacturing operation. Transit operators who perform adequately 
will be designated by Engelhard as ``probational'' remanufacturing 
sites. This facility will then be required to maintain records of all 
critical measurements of remanufactured camshafts, blowers, and/or 
turbochargers. These records will be inspected periodically by 
Engelhard. Upon completion of at least two Engelhard periodic reviews 
without any problems, the facility may be upgraded to an ``Engelhard 
Certified Remanufacturer''. This option provides EPA with reasonable 
assurance that the 0.10 g/bhp-hr PM standard will be achieved, while 
providing transit operators with reasonable sourcing flexibility.
    Engelhard is required to provide a 100,000 mile defect warranty and 
150,000 mile emissions performance warranty for the ETX kit and all of 
its components regardless of which of the three approved supply options 
is used. Furthermore, EPA has authority to conduct in-use testing of 
certified equipment to determine compliance with the requirements of 
the program.
    As noted above, EPA is certifying option 2 and 3 to increase 
transit operator flexibility. The option 3 Engelhard Certified 
Remanufacturer Program is to be administered by Engelhard without 
further explicit involvement of EPA. As with any certification, if EPA 
determines that any supply option is not resulting in a certified 
engine configuration, then EPA has the authority pursuant to 40 CFR 
section 85.1413. Transit operator responsibilities are described in 
more

[[Page 12169]]

detail in Section IV of today's Federal Register notice.
    The ETX equipment is certified to a PM emission level of 0.10 g/
bhp-hr for all 1979 through 1989 DDC 6V92TA MUI urban bus engines using 
either diesel fuel <SUP>#1 or <SUP>#2 (excluding those originally 
certified as meeting California emissions standards). Table C lists the 
applicable engine models and certification levels associated with the 
certification announced in today's Federal Register.

                                         Table C.--Certification Levels                                         
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              Engine models                               Engine code                    Certified  PM level    
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1979-1989 Detroit diesel 6V92TA MUI......  all (excluding those originally           0.10 (g/bhp-hr)            
                                            certified as meeting California                                     
                                            emissions standards).                                               
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II. Summary and Analysis of Comments

    Comments were received from nine parties in response to the Federal 
Register notice (61 FR 50549, May 6, 1996). Commenters include Detroit 
Diesel Corporation (an engine manufacturer), Johnson Matthey (an 
equipment manufacturer), and several transit properties including 
Milwaukee County Transit System (Milwaukee County), Long Beach Transit, 
New York City Transit (NY MTA), New Jersey Transit (NJ Transit), Kansas 
City Area Transportation Authority (KCATA), Connecticut Transit (CT 
Transit), and Dallas Area Rapid Transit (DART).
    Comments generally fell into the following categories: kit 
applicability, maintenance, fuel economy, ability of the equipment to 
meet the 0.10 g/bhp-hr standard, backpressure, durability, toxic 
emissions, part sourcing, and supply options. Comments outside of these 
categories were also received, and are discussed separately below.
    In general, transit fleets commenting on this equipment are 
concerned with fuel economy impacts, part sourcing, and equipment cost. 
DDC, as the original manufacturer of the engines to which this 
equipment is intended, noted it's desire to ensure that certification 
of this equipment would not negatively impact the reliability, 
durability, performance, or fuel economy of its engines, or in any way 
damage their product reputation or relationship with their customers. 
EPA appreciates the extensive comments provided by DDC, which are 
discussed in more detail below. JMI also provided extensive comments 
related to this equipment. Most significant are JMI's concerns that the 
technology of spray coating components is unproven, and that 
Engelhard's proposed supply options may present barriers to 
competition. JMI's complete comments are also discussed in detail 
below.

a. Ability of the Kit to Meet 0.10 g/bhp-hr

    EPA received detailed comments from DDC regarding the ability of 
the ETX to meet the 0.10 g/bhp-hr PM standard. DDC performed Federal 
transient emissions testing of the ETX kit in various configurations. 
In addition, two transits, Long Beach and DART, raised question 
regarding the ability of the ETX to consistently achieve the 0.10 g/
bhp-hr level to which Engelhard requests certification.
    DDC performed testing on each of the three HP ratings described by 
Engelhard in its original notification. In addition, DDC performed 
testing to determine the relative PM reductions associated with 
catalyst alone versus the entire ETX kit. DDC was unable to demonstrate 
PM emissions at or below the 0.10 g/bhp-hr level on any of their tests, 
and suggested that additional verification of emission reductions be 
obtained prior to certification. In addition, DDC stated that it had 
experience with components using ceramic coatings, noting they have 
seen little, if any, benefits associated with the use of such coatings. 
DDC requested that EPA quantify the reductions associated with each 
facet of the ETX kit prior to certifying the equipment. The issues 
raised by DDC are discussed below.
    Regarding DDC's comments on the ability of the ETX kit to achieve 
0.10 g/bhp-hr, no explanation was provided by DDC for the difference in 
test results between it's testing and Engelhard's testing. DDC and 
Engelhard together reviewed test procedures, engine condition, parts 
condition, etc., and could not agree on why the test results differed.
    However, subsequent additional review by Engelhard revealed 
differences that Engelhard believes could potentially impact emission 
results. As described in a September 12, 1996 letter to EPA, prior to 
performing it's original certification test, Engelhard performed a 100-
hour break-in on the test engine to ensure proper and adequate seating 
of the piston rings and to stabilize emissions results. DDC, in it's 
testing of the ETX kit, performed only 25 hours of engine break-in. 
According to its July 18, 1996 comments, DDC believes that 25 hours is 
sufficient to stabilize emission results for these engines. Engelhard, 
however, pointed out that measured engine motoring losses at rated 
speed for the DDC testing was 280 Newton-meter (Nm), versus 250 Nm for 
the Engelhard testing, implying that the DDC test engine experienced 
more internal frictional loss compared to the Engelhard engine. 
Engelhard believes that the higher frictional loss measured by DDC 
resulted from insufficient break-in, and could explain the higher PM 
emissions measured by DDC.
    In a November 22, 1996 letter to EPA, DDC explained that the 280 Nm 
motoring loss was from the DDC's testing of the 253 HP version of the 
ETX kit, whereas the 250 Nm obtained in Engelhard's testing was from 
the 294 HP version of the ETX kit. DDC states that when it tested the 
294 HP version, the motoring loss was 274 Nm. DDC's published 
specification for running loss on the 294 HP version 6V92TA MUI is 268 
Nm. DDC believes that the measured motoring loss (274 Nm) is not 
unusually high, but rather, Engelhard's measured loss is unusually low. 
DDC believes that use of SAE30W lubrication oil, rather than the DDC-
specified SAE40W, may account for this difference.
    Engelhard also noted that DDC performed testing at a measured 
exhaust backpressure of 11.9 kPa (3.5 inches Hg.) compared to 6.77 kPa 
(2.0'' Hg.) for Engelhard's January 26, 1996 test. General industry 
practice is to test engines at 80 percent of manufacturer's recommended 
maximum backpressure at rated speed. The test engine specification for 
maximum recommended backpressure is 2.4'' Hg., resulting in a 
backpressure setting for testing of 2.0'' Hg. DDC claims to have been 
unable to achieve the 2.0'' Hg. setting, stating the catalyst unit 
itself imposed a backpressure of 2.9'' Hg. In its November 22, 1996 
letter to EPA, DDC noted a difference between the catalyst Engelhard 
used in its certification testing and the catalyst

[[Page 12170]]

Engelhard provided to DDC for their testing. DDC contends that 
Engelhard's certification testing was conducted with a simple flow-
through catalyst, rather than a catalytic muffler, as utilized in DDC's 
testing. DDC believes that the backpressure of a catalytic muffler is 
greater than that of a simple flow-through catalyst, thus explaining 
DDC's inability to obtain the 2.0'' Hg. backpressure specification.
    An October 17, 1996 conversation with Engelhard revealed that the 
catalyst utilized by Engelhard in its certification testing had to be 
modified, due to dynamometer interference, in order to be properly 
installed in the test cell. Such modification was not necessary for 
proper installation into DDC's test cell. Engelhard contends that the 
incremental backpressure associated with the muffler portion of the 
CMX-5 is minimal compared to the backpressure associated with the 
catalyst portion of the unit. Engelhard conducted additional hot-start 
FTP tests to demonstrate the impact of increased backpressure on the 
ability of the ETX kit to achieve the 0.10 g/bhp-hr standard. Two FTP 
transient FTP tests were conducted at 3.0'' Hg. and one at 4.5'' Hg. As 
discussed in a November 24, 1996 letter from Engelhard to EPA, in each 
case, PM results were below 0.10 g/bhp-hr, and were very close to 
Engelhard's original and secondary certification test results. 
Emissions of HC, CO and NO<INF>X remained below Federal standards. 
Based on this additional testing, EPA believes that the catalyst 
configuration difference and potential difference in backpressure does 
not explain the difference in PM results obtained by Engelhard and DDC.
    In a September 4, 1996 letter to EPA, Engelhard noted another 
difference between it's testing and DDC's is the fuel injectors. 
Engelhard's test engine used injectors which fall into the DDC-
designated category of ``premium'' Reliabuilt injectors. Engelhard 
states that fuel flow variances among premium injectors are less 
variable than on non-premium Reliabuilt injectors. The injectors used 
by DDC, although consistent with the part number identified by 
Engelhard, did not fall into this same category. At the time of 
Engelhard's original ETX certification test of January 26, 1996, 
Engelhard was unaware that the fuel injectors used in their test engine 
were ``premium''. Only after attempting to resolve the testing 
differences with DDC did Engelhard become aware of this fact. Engelhard 
believes the more consistent fuel distribution associated with premium 
injectors could impact emissions, and could account for some or all of 
the difference in measured emissions between Engelhard and DDC. As a 
result, Engelhard has specified the use of premium matched fuel 
injectors to be used with the ETX kit. In telephone follow-up with DDC 
on December 6, 1996, DDC stated that premium Reliabuilt injectors 
contain more new parts, and fewer remanufactured or used parts, 
compared to non-premium Reliabuilt injectors. DDC believes the 
emissions performance of Reliabuilt premium injectors is equivalent to 
the emissions performance of non-premium injectors, but acknowledges 
that premium injectors may demonstrate superior in-use durability due 
to the higher percentage of new parts in the injector.
    In spite of the differences noted by Engelhard between it's testing 
and DDC's testing, EPA believed that additional data were necessary in 
order to address the uncertainty raised by DDC's comments. To that end, 
EPA requested that Engelhard retest the ETX kit in the presence of an 
EPA test observer. This course of action is consistent with DDC's 
recommendation in its comments that EPA pursue ``additional 
verification'' of the ETX kit.
    On September 27, 1996, Engelhard performed a secondary ETX 
certification test at SouthWest Research Institute, in San Antonio, 
TX.<SUP>1 The results of this testing indicate that the ETX kit can 
achieve the 0.10 g/bhp-hr PM level. The EPA observer found no testing 
or procedural violations. According to DDC, two days prior to EPA's 
visit, a DDC representative observed testing of the Engelhard equipment 
at the same facility, and likewise found no indication of testing 
concerns.
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    \1\ As discussed elsewhere in today's notice, in response to EPA 
and public comments, Engelhard had modified the ETX kit by removing 
coated exhaust components from the kit, and returning the injector 
height and throttle delay settings to their original specifications. 
The testing performed on September 27, 1996 served three purposes; 
1) to address DDC's test data regarding the ability of the kit to 
achieve 0.10 g/bhp-hr; 2) to ensure that the 0.10 g/bhp-hr level 
could be achieved in spite of the removal of the coated exhaust 
components and resetting of injector height and throttle delay; and 
3) to provide additional data to be used for determining the fuel 
economy impact of the ETX kit.
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    In addition to conducting the above-noted additional test in the 
presence of an EPA observer, Engelhard provided additional hot-start 
transient test data in its September 4, 1996 letter (both with and 
without coated exhaust components) that supports the consistent ability 
of the ETX kit to meet the 0.10 g/bhp-hr standard.
    In summary, EPA believes that Engelhard has sufficiently 
demonstrated the ability of the ETX kit to achieve the 0.10 g/bhp-hr PM 
standard. Although there is no clear explanation for the difference in 
test results between Engelhard's testing and DDC's testing, EPA 
believes Engelhard has provided sufficient supplemental data which 
demonstrates the ability of the ETX kit to achieve the 0.10 g/bhp-hr PM 
standard. EPA retains authority to conduct in-use testing of certified 
equipment as described in 40 CFR Subpart O. In addition, equipment 
manufacturers must provide a 100,000 mile defect warranty, and a 
150,000 mile emission performance warranty on certified equipment.
    Regarding DDC's suggestion that Engelhard quantify the relative PM 
benefits associated with different aspects of the kit, EPA notes that 
no such requirement exists in the certification requirements of this 
program. EPA has in the past expressed its position that components 
that do not contribute to the ability of equipment to reduce emissions, 
or which are not reasonably necessary to provide the equipment 
manufacturer with adequate liability protection, will not be considered 
part of a certified equipment package. DDC comments that, based on it's 
past experience, the coatings used by Engelhard in this kit may not 
contribute to any PM reductions. However, DDC has not provided any 
evidence that coatings which DDC has evaluated are the same, or similar 
to, the GPX-5m coating of this equipment package. In fact, Engelhard 
provided EPA with a confidential description of the coating and it's 
application technique, that support Engelhard's claim that the coating 
composition has changed over time, and likely contributes to PM 
reduction. Without a clear indication that the current GPX-5m coating 
does not contribute to PM reduction, EPA believes it reasonable for 
Engelhard to include such coating as an emissions-related part of the 
ETX kit.

b. Equipment Durability

    Several commenters raised questions with regard to the durability 
of the ETX kit, or its components, in actual use. NY MTA comments that 
operating experience with the ETX kit is limited, and questions the 
performance characteristics of the ETX kit on in-service buses. Long 
Beach commented that there is no information to substantiate that this 
equipment will effectively provide an average engine life of 300,000 
miles after rebuild. KCTA stated that it has had an unfavorable 
experience with previous generation ceramic engine coatings. KCTA has 
used GPX coatings on three buses in the past. One bus is still in 
service (after 2\1/2\

[[Page 12171]]

years of operation), a second bus lasted only 5 months, and a third 
lasted only 10 months. No details were provided by KCTA explaining the 
reason these buses were removed from service. KCTA recommends 
additional testing of ceramic coatings prior to certification. NJ 
Transit expressed concern that degradation of the proprietary spray 
coating could leave them open to non-compliance penalties should an 
engine equipped with the ETX kit fail to meet emissions standards in-
use.
    DDC provided several comments regarding durability. First, DDC 
states that new engine manufacturers are required to conduct durability 
testing for new engine certification. DDC acknowledges that the urban 
bus retrofit/rebuild regulations do not require such testing, but 
expressed concern whether emissions would remain below the standard 
throughout the life of the rebuild. In addition, DDC states that some 
oxidation catalyst formulations can suffer from poisoning through 
contact with exhaust gases, and states that no data have been presented 
which shows this particular catalyst formulation is resistant to 
poisoning. Finally, DDC comments that its experience with ceramic 
coatings indicates that they can become overlaid with combustion 
deposits, reducing their efficiency. However, DDC also states that they 
have no reason to believe that thermal barrier coatings do not retain 
their thermal insulating properties over time.
    JMI also provided several comments regarding durability. First, JMI 
states that ceramic spray coatings are unproven technologies in diesel 
engines. JMI expressed concern that surface contaminants, such as oil, 
on both new and rebuilt parts may interfere with proper adhesion of the 
coating material to the coated engine part. In addition, JMI referenced 
a report prepared for the National Aeronautics and Space Administration 
(NASA) and U.S. Department of Energy (DOE) which concludes that 
``(r)eliability and durability of thermal barrier coatings remain major 
issues''.
    EPA appreciates that transit operators are concerned with the 
durability of this equipment, and subsequent additional costs or engine 
damage that potentially could result from premature equipment failure. 
EPA is also concerned, in general, with durability of equipment 
certified under this program because of the potential impacts on 
emissions. However, EPA notes that the urban bus retrofit/rebuild 
regulations do not require an in-service durability demonstration as a 
condition of certification, nor is certified equipment required to be 
durable for 300,000 miles. Rather, equipment certifiers, including 
Engelhard, are required pursuant to 40 CFR Section 85.1409 to provide a 
100,000 mile equipment defect warranty and a 150,000 mile emissions 
performance warranty.
    KCTA's limited experience with ceramic coated engine parts resulted 
unfavorably. Unfortunately, KCTA's comments do not correlate the early 
removal from service of the two KCTA buses with the use of previous 
generation ceramic coated engine components. Nonetheless, these 
comments raise a legitimate concern regarding durability--a concern 
also raised by DDC and JMI in their comments, which EPA addresses 
below.
    Regarding catalyst poisoning raised by DDC, EPA has no reason to 
believe, nor did DDC provide a reason to suspect, that the catalyst 
formulation used in this kit will suffer from exhaust gas poisoning. 
Engelhard's previously certified CMX catalytic converter (60 FR 28402, 
May 31, 1995) has been in use in the retrofit/rebuild program for over 
a year, during which time which EPA has not become aware of any 
incidents of catalyst poisoning. The catalyst in the ETX kit is an 
improved version of the CMX. EPA will continue to monitor problems with 
this, or other, certified equipment, and encourages transit operators 
to provide any information regarding catalyst poisoning.
    JMI bases its comments regarding the viability of spray coatings 
primarily on the conclusions reached in the NASA/DOE report prepared in 
1991. However, EPA cannot rely on the JMI comments as a basis to deny 
certification because JMI has provided no information to suggest the 
coating technology analyzed in the NASA/DOE report is the same as, or 
similar to, the GPX-5m coating used in the ETX equipment package. In 
fact, Engelhard's confidential description of the ceramic coating and 
it's application technique provided to EPA, highlights differences 
between the coatings examined in the NASA/DOE study compared to the 
coating Engelhard has developed for the ETX kit. The NASA/DOE findings 
of 1991 indicate that, at that time, additional development of coatings 
may have been necessary to make coating technology viable in the diesel 
engine market place. According to the confidential information provided 
by Engelhard, the ceramic coating technology has developed compared to 
that examined in the NASA/DOE study.
    EPA has previously certified an Engelhard equipment package 
utilizing GPX coatings (60 FR 47170, September 11, 1995). From the 
standpoint of physical durability of the coating, EPA is not aware of 
any premature wear or failure of this certified equipment. As mentioned 
previously, in response to concerns about the physical durability of 
the new GPX-5m coating, Engelhard provided EPA a detailed confidential 
description of the coating and its application technique. In addition, 
in a May 23, 1996 letter to EPA, Engelhard provided data from three in-
use buses using previous generation GPX-4 coatings. Coating thickness 
measurements were made on piston crowns and cylinder head combustion 
chambers, and were found to be within nominal design specifications at 
an average of 123,000 miles. In addition, deposit formations on the 
combustion surfaces were nearly non-existent. Engelhard indicates that 
design advances in the current GPX-5m coatings are intended to further 
reduce deposit formation and increase coating durability beyond that of 
the GPX-4 coating.
    EPA is concerned, in general, with equipment durability, and 
believes that certifiers will evaluate the durability of their 
equipment in order to minimize their liability resulting from the 
emissions performance warranty. However, program regulations do not 
require a durability demonstration. EPA believes the available 
information does not indicate a durability concern with the equipment 
certified in today's notice, and therefore, does not provide sufficient 
basis to deny certification on these grounds. EPA retains authority to 
conduct in-use testing of any certified equipment for compliance with 
the requirements of the program. In addition, equipment certifiers must 
provide a 100,000 mile defect warranty and a 150,000 mile emissions 
performance warranty on all certified equipment.
    Lastly, regarding NJ Transit's concern for being subject to 
penalties if degraded coatings cause an engine to fail to meet its 
certified PM level, EPA notes that the equipment certifier is 
responsible for the emissions performance of the engine through the 
150,000 mile emissions performance warranty period, if the transit 
properly installs and maintains equipment in accordance with the 
equipment manufacturer's instructions. The transit operator is 
responsible for proper installation and use of certified equipment, and 
is responsible for the emissions performance of equipment operated 
beyond the 150,000 miles emissions warranty period. Also, the retrofit/
rebuild program does not obviate compliance with any state or local 
emission requirements, such as inspection/maintenance (I/M) or smoke 
testing programs.

[[Page 12172]]

c. Exhaust Backpressure

    DDC provided comments related to the exhaust backpressure resulting 
from installation of the CMX-5 catalytic muffler, and its potential 
impact on engine performance and durability. DDC provided these 
comments in response to the proposed certification, and in a November 
22, 1996 letter to EPA.
    DDC notes that the maximum recommended exhaust backpressure for 
6V92TA MUI engines generally ranges from 2.5'' Hg. to 3.5'' Hg. at full 
rated power, with the majority of engines having a backpressure 
specification between 3.0'' Hg. and 3.5'' Hg. DDC is concerned that the 
backpressure imposed by the CMX-5 catalyst may cause engines to exceed 
the maximum exhaust backpressure specification recommended by DDC. DDC 
references chassis dynamometer testing performed on several engines 
utilizing the original CMX version catalytic muffler produced by 
Engelhard and certified by EPA under this program. DDC comments that 
the chassis testing shows average backpressure at rated speed and full 
load of 5.3'' Hg. with the CMX installed, versus 3.3'' Hg. with the 
standard exhaust muffler installed. Finally, DDC expressed its 
opposition to the procedure recommended by Engelhard for determining 
whether the catalyst unit requires cleaning. Engelhard's instructions 
involve operating the engine in a rated speed, no load condition (high 
idle) and recording the pressure drop across the CMX-5 unit. This is 
the same procedure recommended by Engelhard for determining 
backpressure across the original CMX catalytic muffler, and was derived 
from DDC Service Information Bulletin 7-D-95. DDC, however, contends 
that this service procedure was only intended for a limited population 
of 6V92TA engines that were originally equipped with particulate traps. 
Pursuant to an agreement with EPA, these traps were removed and 
replaced with catalytic converter-mufflers because of severe durability 
concerns.
    The chassis dynamometer data provided by DDC were generated on 
buses operated by a fleet located in the Northeast. The Agency's 
follow-up conversations with that fleet indicate that a venturi was 
improperly installed when measuring the backpressure, resulting in 
unusually high backpressure readings with the CMX installed. With the 
measurement conducted properly, exhaust backpressure was 3.2'' Hg., 
which is below the recommended maximum backpressure for those engines. 
Therefore, EPA does not believe that DDC's comments with respect to 
measured in-use backpressure are convincing.
    EPA does not dispute that a catalytic muffler, in general, may 
increase the engine exhaust backpressure compared to a standard noise 
muffler. In fact, when the ``secondary'' ETX certification test was 
conducted, EPA requested a backpressure comparison between a standard 
muffler and the CMX-5. EPA selected the standard muffler, and Engelhard 
measured the incremental difference between the muffler and the CMX-5 
at rated speed and full load. The test revealed a 0.6 inches Hg. 
difference in backpressure (2.0 inches Hg. with the muffler installed 
versus 2.6 inches Hg. with the CMX-5 installed). The previously-
certified CMX has been in service for over a year, and EPA has not 
become aware of any problems relating to or resulting from increased 
backpressure. During a December 17, 1996 conversation, representatives 
of the Washington Metropolitan Area Transit Agency (WMATA) stated they 
have not seen any discernable difference in backpressure or fuel 
economy associated with use of Engelhard's previously certified CMX 
catalyst. In a December 2, 1996 letter to EPA, Engelhard provided data 
demonstrating that the backpressure resulting from the CMX-5 unit is 
equal to, or lower than, the backpressure resulting from the certified 
CMX over a wide range of exhaust flow rates. Finally, DDC has provided 
no explanation of the difference, in terms of susceptibility to 
backpressure impacts, between the engines for which Service Information 
Bulletin 7-D-95 was intended, and those which are covered by this, and 
other, retrofit certifications utilizing catalytic mufflers.
    Any future information provided by interested parties regarding the 
impacts of certified equipment on exhaust backpressure would be taken 
under consideration. EPA appreciates that there may room for 
improvement in maintenance procedures of equipment certified under this 
program. Such concerns, in general, can also occur with procedures 
relating to new engines. EPA encourages all equipment certifiers to 
issue revised check procedures when appropriate. If Engelhard 
determines that another check is appropriate, or if EPA becomes aware 
that backpressure is exceeding manufacturer limits on in-use buses, 
then Engelhard should revise such procedures. Pursuant to 40 CFR 
Section 85.1413, EPA has authority to decertify equipment that does not 
comply with the requirements of the regulations.

d. Supply Options

    As originally proposed in an addendum dated March 25, 1996, three 
supply options would be available at Engelhard's discretion. Under 
proposed option 1, Engelhard would supply all components of the kit 
(GPX coated parts, CMX-5 converter muffler and all new and rebuilt 
parts specified in Attachment 1 of the notification of intent to 
certify) to the transit operator. Under option 2, Engelhard would 
supply the GPX coated components (exhaust manifolds, turbocharger Y-
pipes, cylinder kits, and cylinder heads) and the CMX-5 converter 
muffler. The other engine components (fuel injectors, camshafts, air 
inlet hose, blower, blower drive gear, blower bypass valve, 
turbocharger, turbocharger Y-pipe, exhaust manifolds, and gasket kit) 
would be purchased separately or supplied separately as long as such 
parts were Engelhard OEM specified components or their equivalent. 
Under option 3, Engelhard would provide the GPX coated parts described 
in option 2 above, as well as the CMX-5 converter muffler, and the new 
engine parts listed in Attachment 1 of the notification of intent to 
certify (gasket kit, cylinder kits, air inlet hose, and blower bypass 
valve). The remanufactured parts required to complete the kit (fuel 
injectors, camshafts, blower, blower drive gear, turbocharger, exhaust 
manifolds, and turbocharger Y-pipe) would be rebuilt in-house by the 
transit operator if the transit operator was deemed an ``Engelhard 
Certified Remanufacturer''. To obtain this status, transit operators or 
third parties would be required to undergo training from Engelhard, and 
be certified by Engelhard as capable of remanufacturing components 
within required tolerances. In addition, transit operators would be 
required to maintain records to demonstrate continued ability to meet 
these requirements.
    With regard to option 2 proposed by Engelhard, DDC commented that 
allowing the use of ``equivalent'' parts is not appropriate. DDC, as 
the original engine manufacturer to which this applies, has developed 
products over many years which encompass a myriad of subtle design 
features intended to ensure proper engine function, performance, and 
durability. DDC does not make it's specifications publicly available, 
and therefore, believes Engelhard is not qualified to determine 
``equivalency'' of parts. DDC notes that the certification tests 
conducted by Engelhard utilized DDC engine parts. DDC believes that 
additional tests on specific non-OE parts should be

[[Page 12173]]

required if these parts are eligible for use in this kit.
    DDC's comments regarding supply option 3 are similar to those 
described above. DDC does not believe that Engelhard can provide 
transit operators with the appropriate specifications, tolerances, and 
quality control procedures to which a transit operator must rebuild in 
order to become a Certified Engelhard Remanufactured. Finally, DDC 
comments that each supply option proposed by Engelhard should be 
evaluated separately for it's impact on life cycle cost.
    JMI provided substantial comments regarding the proposed supply 
options. Regarding option 1, JMI commented that Engelhard should be 
required to disclose the allowable sources and specification of 
``equivalent'' parts. JMI comments that coatings for engine parts will 
be provided by Engelhard's wholly owned technology division. JMI 
believes that EPA must account for the possibility of interrupted 
availability of coated components resulting from such interruptions as 
union problems, divesture, natural disaster, etc.
    Regarding option 2, JMI commented that it is beyond Engelhard's 
legal authority to create a qualified vendor list on behalf of a public 
transit agency, and that doing so would create a conflict of interest. 
KCTA mirrored this concern stating that the various supply options 
allow Engelhard to dictate parts choice of transit operators. In 
addition, JMI believes that allowing Engelhard discretion to choose 
which supply options will be made available represents a restraint of 
trade.
    Lastly, JMI comments that Engelhard's proposed supply options will 
result in labor problems for transit operators who may be forced to 
eliminate or close their repair operations.
    EPA, in general, shares many of the concerns noted by commenters 
regarding supply of the ETX kit. EPA believes that Engelhard, in 
proposing a flexible kit distribution plan, attempts to avoid many of 
the issues raised by commenters. However, EPA must be assured that any 
increase in flexibility does not undermine emissions reductions 
expected from certification of equipment. In order to resolve the 
extensive comments surrounding the proposed supply options, significant 
follow-up activity was pursued by EPA, as described below.
    EPA fundamentally agrees with DDC that certification should be 
limited to that equipment which has been demonstrated to achieve the 
claimed certification level. In this case, Engelhard conducted all 
testing of the ETX kit using DDC engine parts in conjunction with the 
Engelhard catalytic converter and coatings. Engelhard provided no 
demonstration or other assurances, other than it's required commitment 
to honor the urban bus warranties, that ``equivalent'' engine parts 
would result in PM emissions of 0.10 g/bhp-hr or less. EPA does not 
dispute the possibility that certain non-DDC parts may provide 
equivalent function, performance, and/or emissions characteristics as 
the DDC parts used in Engelhard's certification testing. However, none 
of these parts were tested, nor was any engineering argument made by 
Engelhard to indicate equivalent performance. In the absence of 
emissions data or technical argument relating to the characteristics or 
design features of OEM and non-OEM parts that affect emissions 
performance, EPA has no basis for certification of the Engelhard 
equipment when an engine is rebuilt using parts other than those which 
Engelhard has demonstrated will achieve the stated emissions level.
    EPA also agrees with JMI that, at a minimum, identification of 
allowable equivalent parts and the means by which this equivalency was 
determined is required in order to determine if such parts are 
potentially capable of achieving the claimed reductions.
    In an August 23, 1996 letter, EPA requested that Engelhard provide 
a listing of specific brands and part numbers which Engelhard 
determined to be ``equivalent'', and the means by which Engelhard 
determined this equivalency. In addition, EPA requested clarification 
as to what specifications Engelhard would provide a transit operator 
who wished to become a Certified Engelhard Remanufacturer and continue 
to rebuild engines in-house.
    In its September 4, 1996 response to EPA's request, Engelhard was 
unable to identify specific brands or part numbers which it believed to 
be ``equivalent'' to the DDC parts used in the certification testing. 
Engelhard will supply only DDC parts for those parts supplied under 
option 1. Under option 2, Engelhard specifies only DDC parts, which 
fleets can obtain through normal supply channels rather than from 
Engelhard, thus providing fleets with part sourcing flexibility while 
maintaining reasonable assurance that the claimed PM level is achieved. 
Therefore, under both option 1 and option 2, transit operators must use 
the specified DDC parts in conjunction with the remaining ETX kit 
components, as demonstrated by Engelhard to be capable of achieving the 
0.10 g/bhp-hr PM level. The practical difference between these two 
options is that under option 2 the fleet has flexibility to obtain DDC 
parts through it's normal channels, while option 1 requires purchase of 
all parts from Engelhard. Manufacturers of ``equivalent'' aftermarket 
parts may choose to certify their parts for use in the ETX kit in a 
separate proceeding subject to testing and certain warranty concerns.
    Regarding the option 3 Engelhard Certified Remanufacturer program, 
EPA supports the notion of fleets maintaining the ability to 
remanufacture and rebuild certain components in-house. Outside of the 
clear requirement to technology demonstrated to reduce PM exhaust 
emissions, the Urban Bus Retrofit/Rebuild Program was not intended to 
significantly impact current fleet rebuilding practices. With regard to 
the 25 percent PM reduction standard, transit operators currently have 
flexibility to choose add-on reduction equipment, thus allowing 
continued in-house rebuilding of engines and components. On the other 
hand, if EPA were to certify a trigger of the 0.10 g/bhp-hr PM standard 
that did not allow for continued rebuild of components in-house, and if 
this were the only equipment available to meet the 0.10 g/bhp-hr 
standard, then certain transits would be required to cease rebuilding 
these components or risk being in violation of program requirements.
    EPA believes it reasonable to allow in-house rebuild of certain 
components by transit operators utilizing the ETX kit, under certain 
conditions. First, in-house rebuilding is limited to camshafts, 
blowers, and turbochargers. EPA believes that allowing rebuild of other 
components, such as fuel injectors, cylinder liners and cylinder heads, 
would raise substantial concerns whether the resulting engine could 
meet the 0.10 g/bhp-hr standard because of their key role in oil and 
fuel control of the engine. Allowing in-house rebuild of camshafts, 
blowers and turbochargers introduces some uncertainty with respect to 
the PM emissions performance of the resulting engine because of their 
role in controlling combustion air flow within the engine. However, EPA 
imposes the following measures to mitigate this uncertainty. First, 
Engelhard must specify, and fleets must rebuild to, the relevant DDC 
camshaft, blower and turbocharger part number utilized in the 
certification test engine. Second, Engelhard will implement it's 
Engelhard Certified Remanufacturer program for any and all fleets 
affected by the Urban Bus Retrofit/Rebuild Program choosing to rebuild 
these components in-house. This parts supply option necessitates that 
participating fleets undergo periodic quality checks, performed by 
Engelhard,

[[Page 12174]]

of components rebuilt in-house. Unsatisfactory performance would result 
in the fleet losing, or not achieving, the status of Engelhard 
Certified Remanufacturer, and subsequently losing the option to rebuild 
these components in-house. Engelhard provides the defect and emissions 
performance warranties required pursuant to 40 CFR 85.1409 for engines 
using components rebuilt by Engelhard Certified Remanufacturers.
    EPA has been informed that the ability to continue some level of 
in-house rebuilding is important to the needs of transit operators. The 
Engelhard Certified Remanufacturer program, combined with the limited 
set of components that can be rebuilt in-house, result in increased 
flexibility for transit operators yet allow EPA to maintain reasonable 
assurance concerning PM reduction.
    Regarding DDC's comment that each supply option be evaluated 
separately for it's impact on life cycle costs, EPA believes this is 
unnecessary. EPA has determined that supply option 1--the option in 
which Engelhard supplies all necessary components of the kit--complies 
with the life cycle cost requirements of the Urban Bus Retrofit/Rebuild 
Program, as described below. At a minimum, this supply option must be 
provided to any and all transit operators. Therefore, certification of 
this supply option ``triggers'' the 0.10 g/bhp-hr standard. Use of the 
other two supply options is strictly voluntary, and any cost savings or 
added costs are accepted voluntarily by the fleet operator.

f. Life Cycle Cost

    Section 1403(b)(1)(ii) describes those items which must be 
considered when analyzing life cycle cost of equipment, including 
equipment purchase price, incremental fuel cost/savings, installation 
costs, maintenance costs, and other costs specific to fuel additives 
and fuel conversions. Most commenters provided input on at least one 
cost-sensitive topic area. Comments received are described below, and 
are grouped by general topic area within the larger context of life 
cycle costs.
i. Maintenance Cost
    NY MTA, NJ Transit, and CT Transit each expressed concern that 
Engelhard did not include any allowance in the life cycle cost analysis 
for maintenance of the equipment. EPA believes that the engine upgrade 
portion of this equipment requires no additional maintenance 
incremental to that required on a standard rebuild. In addition, the 
coated component portion of the kit cannot be serviced because the 
coated parts are internal to the engine. Therefore, no additional 
maintenance is expected related to the coated components. EPA believes 
any concerns related to incremental maintenance would apply only to the 
catalyst unit.
    Engelhard maintains that the CMX-5 catalyst unit is maintenance-
free over the emissions performance warranty period of 150,000 miles, 
and notes that the currently certified CMX has been in operation for 
over a year. During this time neither Engelhard nor EPA has become 
aware of any additional maintenance required to keep the unit 
functional, when the engine is maintained in accordance with 
instructions. Engelhard stated that several CMX catalysts which have 
accumulated over 150,000 miles without maintenance have been inspected 
and found to be functioning properly. EPA questioned Engelhard 
regarding the prescribed catalyst cleaning procedure, and the need for 
such a procedure if the unit is truly maintenance free. Engelhard 
responded that an improperly operating or improperly tuned engine could 
lead to clogging of the catalyst unit. To the extent this happens, 
transit operators must have instructions for cleaning the unit. Routine 
cleaning of the catalyst unit on properly tuned engines is not 
required, and thus no life cycle cost is associated with this cleaning 
procedure. Therefore, EPA has determined that no additional maintenance 
costs, incremental to costs associated with a standard rebuild, are 
associated with the use of this equipment.
ii. Incremental Fuel Cost
    EPA received numerous comments regarding the fuel economy impact of 
the ETX kit. DDC's testing of the ETX kit showed a brake-specific fuel 
consumption (BSFC) ranging from 0.469 to 0.472 lbs./bhp-hr. DDC 
believes that comparing these BSFC measurements with Engelhard's 
original 1979 and supplementary 1986 baseline tests (0.421 and 0.442 
lbs./bhp-hr) may not be appropriate given that DDC and Engelhard 
testing were conducted at different laboratories which may use 
different test procedures and equipment. However, DDC believes that 
comparing it's BSFC data for the ETX kit to a 1979 6V92TA baseline 
engine tested by DDC recently in its own retrofit certification program 
(60 FR 51472, October 2, 1995) is valid. Comparison of the original ETX 
certification test with DDC's baseline testing shows an average 2.2 
percent fuel economy penalty for the ETX kit. In its November 11, 1996 
and November 22, 1996 follow-up letters to EPA, DDC notes other 
factors, such as blower drive ratio and catalyst backpressure, which 
are consistent with increased fuel consumption with the ETX kit. 
Considering these qualitative factors, combined with its test data, DDC 
believes that a 2-4 percent fuel penalty is appropriate.
    JMI commented that a four percent fuel economy penalty, as 
demonstrated by Engelhard's original certification and baseline test 
data, should be used to assess the fuel economy impact of the ETX kit. 
In addition, JMI referenced a report prepared for the National 
Aeronautics and Space Administration (NASA) for the U.S. Department of 
Energy, which concludes that thermal barrier coatings on diesel engine 
combustion components can result in up to a two percent fuel economy 
penalty compared to baseline ``metal'' (i.e., non-coated) components. 
EPA notes that the relevancy of this report to this particular 
certification is unclear.
    Milwaukee County, Long Beach Transit, CT Transit, NJ Transit, and 
NY MTA all commented regarding the fuel economy impacts associated with 
the ETX kit. In general, these transits believe that the Federal 
transient test procedure does not represent real-world urban bus 
operation, and therefore, the actual fuel economy impact is unknown. 
One commenter suggested that fuel economy impact be determined through 
testing over the Advanced Design Bus Cycle chassis dynamometer test, 
which the commenter believed to be more representative of urban bus 
operation.
    Regarding the comments from transit operators, 40 CFR 
85.1407(a)(3)(ii) states, in part, that certifiers must include in 
their notification of intent to certify ``(t)he percent change in fuel 
economy * * * based on testing performed over the heavy-duty engine 
Federal test procedure or an approved alternative test procedure''. 
Engelhard complied with this requirement by providing the percent 
change in fuel economy resulting from use of this kit as measured over 
the heavy-duty engine Federal test procedure described at 40 CFR Part 
86 Subpart N. While test data generated using the Advanced Design Bus 
Cycle could be useful to EPA when determining fuel economy impacts, it 
is not required. In addition, in order to demonstrate compliance with 
the 0.10 g/bhp-hr PM standard, testing must be conducted using the 
engine-based Federal test procedure. Requiring additional testing to 
demonstrate fuel economy on a chassis-based test cycle would be an 
expense of unknown benefit.
    Regarding DDC and JMI comments, the following describes the 
available

[[Page 12175]]

data on the subject. Table D below summarizes the available transient 
BSFC data for both baseline engines and engines with the ETX kit.

                                 Table D.--Available Baseline and ETX Test Data                                 
----------------------------------------------------------------------------------------------------------------
                                                                                                        BSFC<SUP>1   
               Test description                                      Test date                        (lbs./bhp-
                                                                                                         hr)    
----------------------------------------------------------------------------------------------------------------
Engelhard's original 1979 baseline............  March 1, 1996......................................        0.421
Engelhard's original ETX certification test...  January 26, 1996...................................        0.438
Engelhard's supplementary 1986 baseline.......  October 4, 1996....................................        0.442
Engelhard's supplementary ETX certification     September 27, 1996.................................        0.447
 test.                                                                                                          
DDC's 1979 baseline...........................  NA.................................................        0.461
DDC's ETX test average........................  June/July 1996.....................................        0.471
----------------------------------------------------------------------------------------------------------------
Brake-specific fuel consumption measured in units of pounds per brake horsepower-hour.                          

    In it's original application for certification, Engelhard claimed 
no fuel economy penalty associated with the ETX kit, even though 
Engelhard's original certification data for the ETX configuration 
indicate a 4 percent fuel economy penalty compared to a standard 1979 
6V92TA MUI baseline rebuild.
    In a March 8, 1996 letter to EPA, Engelhard further explained its 
rationale for the claim of no fuel economy impact, noting that the 
cylinder liners (part number 8923348) used in the 1979 baseline rebuild 
have larger inlet ports compared to those currently available for 
rebuilding engines, thus improving volumetric efficiency of the engine. 
Such an improvement in volumetric efficiency, Engelhard claims, would 
lead to improved fuel economy compared to an engine with lower 
volumetric efficiency. In addition, Engelhard claims that the 1979 
liner used to rebuild the original baseline test engine allows more oil 
into the combustion chamber, causing an increase in PM, but also an 
improvement in fuel economy compared to cylinder kits with a smaller 
inlet port. Engelhard provided data showing a PM oil fraction for the 
1979 baseline test of 0.076 g/bhp-hr, compared to 0.046 g/bhp-hr for 
the January 26, 1996 ETX certification test.
    In addition, Engelhard argues that the 4 percent demonstrated on 
the original 1979 baseline is reasonably close to the plus/minus 3 
percent variability of the fuel economy measurement. This is supported 
by the supplemental baseline testing conducted on October 7, 1996 on an 
engine rebuilt to a 1986 6V92TA MUI configuration. The fuel consumption 
data for this test is shown in Table D above, and shows virtually no 
fuel economy impact (about 1 percent) compared to the ETX 
configuration.
    In its November 11, 1996 letter, DDC refutes Engelhard's claim that 
the larger port in the 1979 configuration improves the fuel economy 
relative to a smaller ported liner. DDC states that the liner port is 
dimensioned such that the bottom of the port remains constant in the 
liner, with the top of the port being higher in larger port sizes. In 
DDC's opinion, port size has a relatively small impact on fuel economy 
compared to factors such as engine exhaust backpressure and blower 
drive ratio. In addition, DDC notes that the liner used in Engelhard's 
original 1979 baseline test engine had 0.95 inch ports, which are still 
readily available today. EPA recognizes that fuel economy may vary from 
test to test depending on several factors including base engine design 
and measurement technique. The statistical determination of the 
variability of this combination would require additional testing and is 
beyond the practical requirements of the Urban Bus Program. EPA, 
therefore, makes the following decision on the impact of fuel economy 
on life cycle costs based on the available data. EPA believes the most 
reasonable approach, based on the available data, is to average the 
fuel economy impacts demonstrated by Engelhard on its 1979 and 1986 
rebuild configurations (about 1 percent and four percent, 
respectively), resulting in a fuel economy penalty of about 2 percent. 
This figure is consistent with that demonstrated by DDC (about 2 
percent), and other qualitative statements made by JMI and DDC. Using 
this 2 percent figure and the equations of Section 85.1403 of the 
program regulations, EPA determines the fuel economy impact associated 
with the ETX rebuild kit to be $563.36 (in 1992 dollars), or $635.64 
(in October 1996 dollars).
iii. Purchase Price (Cost of a Standard Rebuild)
    According to Section 85.1403(b)(1)(iii)of the program regulation, 
the purchase price of equipment is defined as ``the price at which the 
equipment *  *  * is offered to the operator'', and ``excludes *  *  * 
costs *  *  * for a standard rebuild''. In Engelhard's original 
notification of intent to certify, Engelhard proposed a purchase price 
plus installation cost of $13,502, and a standard rebuild cost of 
$5,562. Thus, the net incremental life cycle cost proposed by Engelhard 
totaled $7,940 (in 1992 dollars). Engelhard's proposed standard rebuild 
cost of $5,562 was based on the maximum purchase price guaranteed by 
DDC in it's April 11, 1995 application for certification of the 6V92TA 
MUI upgrade kit.
    DDC commented that Engelhard's proposed cost for a standard rebuild 
of $5,562 includes approximately $97 for the blower bypass valve, which 
is not always replaced during a standard rebuild. In addition, DDC 
noted some apparent inconsistencies with respect to current year 
dollars versus 1992 dollars. For example, Engelhard states in it's 
application that all costs are in 1992 dollars, while the $5,562 cost 
from DDC's April 11, 1995 application are in 1995 dollars.
    JMI commented that basing the cost of a standard rebuild on the 
price DDC proposed for it's upgrade kit is not representative of the 
cost of a standard rebuild. JMI stated that numerous fleets receive a 
minimum 18 percent discount on DDC parts compared to the list price 
upon which Engelhard's standard rebuild cost was based. Applying an 18 
percent discount to the $5,562 OE list price cost, JMI claims a 
standard rebuild cost of $4,561. In addition, JMI comments that fleets 
typically can rebuild using non-OE parts at a savings of 40 percent 
compared to OE list price. JMI states that this 40 percent discount 
results in a standard rebuild cost of $3,337. JMI did not indicate a 
cost associated with using a combination of non-OE parts and discounted 
OE parts, nor did they indicate which of these two proposed standard 
rebuild costs it considers more representative of the actual cost.
    In response to DDC comments, EPA notes that the blower bypass valve 
is not

[[Page 12176]]

included in the cost of a standard rebuild since it is not always 
replaced. Also, the cost analyses presented below are updated to 
reflect current dollars.
    EPA announced the certification of the DDC MUI upgrade kit on the 
basis of meeting life cycle cost requirements in a Federal Register 
notice dated July 19, 1996 (61 FR 37734). In that July 19, 1996 notice, 
EPA responded to comments relating to the cost of a standard 6V92TA MUI 
rebuild, and determined that a ``weighted'' rebuild, which accounts for 
use of OE, non-OE, and rebuilt parts is likely more representative of 
typical fleet rebuilding practices than using only OE parts. That 
weighted rebuild analysis resulted in a cost of $3,747.66 (in 1995 
dollars), and was based on the best information available at the time. 
Table E below provides a summary of that analysis, and is shown in 
December 1995 dollars.

                 Table E.--Cost of a Weighted Rebuild Summarized From 61 FR 37734, July 19, 1996                
                                                 [1995 Dollars]                                                 
----------------------------------------------------------------------------------------------------------------
                                                   OE list                   OE list      Weighted              
                  Item in kit                        cost     Non-OE cost    less 18%   rebuild \1\    DDC Kit  
----------------------------------------------------------------------------------------------------------------
Cylinder Kit...................................    $1,844.52    $1,139.94    $1,512.51    $1,391.05  ...........
Gasket Kit.....................................       220.16       132.10       180.53       164.74  ...........
Air Inlet Hose.................................        14.95         8.97        12.26        11.19  ...........
Blower Bypass Valve............................        97.36         0.00         0.00         0.00  ...........
Fuel Injectors.................................       444.96       266.98       364.87       332.96  ...........
LB Camshaft....................................       581.84       349.10       477.11       435.38  ...........
RB Camshaft....................................       581.84       349.10       477.11       435.38  ...........
Blower Assembly................................       442.80       199.26         0.00       199.26  ...........
Turbo Assembly.................................       783.00       352.35         0.00       352.35  ...........
Heads Assembly.................................       944.84       425.18         0.00       425.18  ...........
                                                ----------------------------------------------------------------
    Totals.....................................  ...........  ...........  ...........     3,747.48     5,561.92
----------------------------------------------------------------------------------------------------------------
\1\ The weighting factors used to arrive at each individual weighted component cost are described in detail in  
  the Federal Register notice referenced above.                                                                 

    In letters dated October 8, 1996, and October 21, 1996, Engelhard 
provided additional information to EPA in response to JMI's cost 
comments on the ETX kit, and in response to the weighted rebuild cost 
shown in Table E. As a result of contacting various fleets and parts 
distributors, Engelhard states that several adjustments to EPA's 
weighted cost approach are warranted.
    Engelhard states that the OE list prices for the various engine 
components have risen significantly since the DDC approval. Engelhard 
also states that JMI's assumption that fleets typically receive an 18 
percent discount from OE list is incorrect. DDC provided current OE 
list costs and suggested fleet costs of individual engine components. 
Table F below represents an update of the weighted cost analysis 
presented in the July 19, 1996 Federal Register, updated to reflect 
current (October 1996) OE list and fleet prices reported by DDC.

                                    Table F.--Cost of a Weighted Rebuild \1\                                    
                                             [October 1996 Dollars]                                             
----------------------------------------------------------------------------------------------------------------
                                                                OE list                   OE list      Weighted 
                         Item in kit                              cost     Non-OE cost    less 18%   rebuild \1\
----------------------------------------------------------------------------------------------------------------
Cylinder Kit................................................    $1,967.34    $1,174.02    $1,691.40    $1,522.74
Gasket Kit..................................................       234.82       140.89       201.27       181.59
Air Inlet Hose..............................................        16.20         9.72        13.88        12.52
Blower Bypass Valve.........................................       103.85         0.00         0.00         0.00
Fuel Injectors..............................................       484.98       290.99       447.96       396.79
LB Camshaft.................................................       738.80       443.28       633.25       571.32
RB Camshaft.................................................       738.80       443.28       633.25       571.32
Blower Assembly.............................................       488.01       219.60         0.00       219.60
Turbo Assembly..............................................       801.00       360.45         0.00       360.45
Heads Assembly..............................................     1,083.56       487.60         0.00       487.60
                                                             ---------------------------------------------------
    Totals..................................................  ...........  ...........  ...........     4,323.93
----------------------------------------------------------------------------------------------------------------
\1\ This table is intended to represent the weighted rebuild cost analysis from Table E above, update to reflect
  October 1996 dollars.                                                                                         

    In addition to updating EPA's previous cost analysis to reflect 
current prices, Engelhard identified several cost areas of the previous 
weighted cost analysis it felt should be modified. First, Engelhard 
states that typical non-OE parts cost 25 percent less than the OE part, 
compared to the 40 percent assumed in the weighted rebuild analysis of 
the July 19, 1996 Federal Register. Engelhard also notes that some 
aftermarket parts actually cost more than the OE part. Engelhard 
contacted DDC, two parts distributors, and various transits to obtain 
this information. JMI, on the other hand, contacted only one parts 
distributor to form the basis of it's comments. EPA believes that 
Engelhard's estimation of non-OE part cost differential is more 
consistent with information in a study conducted for the California Air 
Resources Board on heavy-duty diesel rebuilding.<SUP>2 The authors of 
the study contacted four parts distributors and found that aftermarket 
parts are generally less expensive than

[[Page 12177]]

OE parts. Comparing the cost differential of a limited number of parts, 
the aftermarket parts cost about 10 to 20 percent less than OE parts. 
Based on this information, and the sources contacted for that 
information, EPA believes that the 25 percent cost difference noted by 
Engelhard is likely more representative than the 40 percent difference 
claimed by JMI.
---------------------------------------------------------------------------

    \2\``Survey of Heavy-Duty Engine Rebuilding, Reconditioning, and 
Remanufacturing Practices'', August 1987, CARB Contract #A4-152-32, 
Prepared by Sierra Research, Inc.
---------------------------------------------------------------------------

    Second, Engelhard states that the weighted cost approach should be 
adjusted to reflect an additional cost to transit operators who rebuild 
in-house, because parts are occasionally unrebuildable due to 
catastrophic failure. Engelhard stated that 10 percent of turbochargers 
and blowers are not rebuildable, and that 50 percent of cylinder heads 
are not rebuildable. This information is consistent with EPA's current 
understanding based on discussions with DDC. When parts are 
unrebuildable, a transit operator would typically purchase a new 
component at fleet cost. The nominal cost of these components assumes 
the exchange of a rebuildable core. If the core is not rebuildable, 
then the operator pays a core charge plus the nominal cost of the 
component. The sum of the component fleet price plus the core charge 
represent additional costs to fleets that rebuild in-house, due to 
unrebuildable parts. When weighted based on the frequency at which the 
part is unrebuildable, it yields an additional cost on a per components 
basis. EPA's weighted rebuild from the July 19, 1996 Federal Register 
assumes in-house rebuild of three components: the turbocharger, the 
blower, and the heads. Therefore, Table G below summarizes estimates of 
the additional costs related to the in-house rebuild of these parts.

                                     Table G.--Impact of Unrebuildable Parts                                    
                                                 [1996 Dollars]                                                 
----------------------------------------------------------------------------------------------------------------
                                                                                         Added Cost   Actual in-
                                      OE fleet     In-house     Percent                  (OE fleet      house   
               Item                    price       rebuild      damaged    Core charge    price +      rebuild  
                                                     cost                                  core)         Cost   
-----------------------------------------------------------------------------------------(damaged)--------------
Blower............................      $450.73      $219.60           10      $466.00       $91.67      $311.28
Turbo.............................       739.81       360.45           10       300.00       103.98       464.43
Heads.............................     1,000.78       487.60           50       425.00       712.89     1,200.49
----------------------------------------------------------------------------------------------------------------

    Finally, Engelhard states that OE parts carry a 100,000 mile 
warranty, while transit remanufactured parts and non-OE parts carry 
less, if any, warranty. Engelhard believes the cost implications of the 
warranty coverage should be included in the analysis with respect to 
use of non-OE and transit remanufactured parts, and provides 
discussion.
    EPA does not dispute that some additional cost might be associated 
with different warranties provided by different part manufacturers. 
However, the cost impacts associated with warranties cannot be 
adequately quantified based on the available information. EPA believes 
that any additional cost would be related to repairs necessary for non-
OE parts failing beyond the warranty for the non-OE part, but within 
the warranty period required for equipment certified under this 
program. No information has been provided on this subject, but the 
impact of this analysis on life cycles costs is expected to be minimal.
    In summary, EPA is making the following three adjustments to its 
analysis of the cost of a weighted rebuild described in the July 19, 
1996 Federal Register. First, all costs are updated to reflect October 
1996 dollars (this singular revision is shown in Table F). Second, the 
weighted rebuild is modified to reflect non-OE parts cost of 25 percent 
less than OE cost, rather than 40 percent. Finally, the costs of 
unrebuildable parts cores are reflected in the costs of these three 
components, as discussed previously, for fleets rebuilding parts in-
house. Table H shows the cost of a weighted rebuild including the three 
aforementioned adjustments.

    Table H.--Cost of a Weighted Rebuild (Reflecting Impact of Unrebuidable Parts and 25 Percent Non-OE Parts   
                                                    Discount)                                                   
                                                 [1996 Dollars]                                                 
----------------------------------------------------------------------------------------------------------------
                                                                OE list                   OE fleet     Weighted 
                         Item in kit                              cost     Non-OE Cost     price       rebuild  
----------------------------------------------------------------------------------------------------------------
Cylinder Kit................................................    $1,967.34    $1,174.02    $1,691.40    $1,522.74
Gasket Kit..................................................       234.82       176.12       201.27       193.07
Air Inlet Hose..............................................        16.20        12.15        13.88        13.32
Blower Bypass Valve.........................................       103.85         0.00         0.00         0.00
Fuel Injectors..............................................       484.98       363.74       447.96       420.50
LB Camshaft.................................................       738.80       554.10       633.25       607.45
RB Camshaft.................................................       738.80       554.10       633.25       607.45
Blower Assembly.............................................       488.01       311.28         0.00       311.28
Turbo Assembly..............................................       801.00       464.43         0.00       464.43
Heads Assembly..............................................     1,083.56     1,200.49         0.00     1,200.49
                                                             ---------------------------------------------------
    Totals..................................................  ...........  ...........  ...........     5,340.72
----------------------------------------------------------------------------------------------------------------

    EPA believes that, for the purposes of determining purchase price 
for the Engelhard ETX kit, the cost of a standard rebuild for a DDC 
6V92TA MUI engine is best approximated by the weighted rebuild costs 
shown in Table H. EPA uses the $5,340.72 cost (in 1996 dollars) as the 
cost of a standard rebuild to determine the life cycle cost of this 
equipment.

[[Page 12178]]

iv. Catalyst Installation
    As defined in 40 CFR 85.1403 (b)(1)(ii)(B), the installation cost 
of certified equipment is ``the labor cost of installing the equipment 
on an urban bus engine, incremental to a standard rebuild, based on a 
labor rate of $35 per hour'' (in 1992 dollars). Engelhard states the 
CMX-5 catalyst unit requires a maximum time of six hours to install on 
an urban bus engine, or $210 (in 1992 dollars). The urban bus engines 
for which this equipment is intended were not originally equipped with 
catalytic convertors. Therefore, the muffler unit must be removed from 
the engine, and the CMX-5 unit installed in its place. As a result, the 
$210 is incremental to the cost of a standard rebuild.
v. Life Cycle Cost Calculation
    In a December 16, 1996 letter to EPA, Engelhard revised the price 
it will charge transit operators for the ETX kit. The maximum purchase 
price for the ETX kit purchased wholly from Engelhard (the supply 
option upon which EPA is basing its determination of compliance with 
the life cycle cost requirements) is stated to be $13,425 (in October 
1996 dollars). This cost includes all components of the ETX kit, 
including the coated cylinder heads and piston kits, the CMX-5 
converter muffler, and the turbocharger, blower, blower drive gear, 
blower bypass valve, camshafts, fuel injectors, air inlet hose, and 
gasket kit.
    Based on this maximum purchase price, EPA determines that the ETX 
kit complies with the $7940 (in 1992 dollars) life cycle cost 
requirement of section 85.1403(b) for equipment meeting the 0.10 g/bhp-
hr PM standard. A summary of life cycle costs is shown in Table I 
below.

                   Table I.--Life Cycle Cost Analysis                   
------------------------------------------------------------------------
                                           Cost in 1996    Cost in 1992 
                Cost item                     dollars         dollars   
------------------------------------------------------------------------
Maximum ETX Kit Purchase Price..........     $13,425.00      $11,898.47 
2% Fuel Economy Penalty.................         635.64          563.36 
Catalyst Installation (6 hours).........         236.94          210.00 
Cost of Standard Rebuild................      (5,340.72)      (4,733.44)
                                         -------------------------------
    Total Life Cycle Cost...............       8,956.83        7,938.37 
------------------------------------------------------------------------

g. California Engines

    DDC commented that Engelhard's request for certification of the ETX 
system on California engines is unsupported by any data. DDC notes that 
the NO<INF>X standard for California engines for 1984 and later model 
years is more stringent than the corresponding federal NO<INF>X 
standard. While Engelhard's test engine NO<INF>X level of 10.5 g/bhp-hr 
(secondary ETX certification test) complies with the 1989 and earlier 
federal NO<INF>X standard, it exceeds the California standards for 
these same model years. DDC comments that while the fuel injector part 
number listed in the NIC for the 277 HP and 253 HP California versions 
of the ETX kit have a slight internal timing retard which would tend to 
reduce NO<INF>X, these same injectors would also tend to increase PM. 
DDC also comments that the NO<INF>X reductions resulting from the 
slight internal timing retard would not be sufficient to ensure that 
California engines remained below applicable California NO<INF>X 
standards. DDC believes the certification of the ETX kit for California 
engines must be predicated on evidence which shows such engines comply 
with the 0.10 g/bhp-hr PM standard and comply with applicable 
California NO<INF>X standards.
    EPA agrees with DDC and determines that insufficient data have been 
provided to justify certification of the ETX kit for use on engines 
originally certified as meeting California emissions standards. Section 
85.1406(a)(1) of the program regulations state, in part, that the 
equipment certifier must demonstrate that the equipment ``will not 
cause the urban bus engine to fail to meet any applicable Federal 
emission requirements set for that engine''.
    However, a unique situation exists with respect to engines 
originally certified as meeting California standards. The DDC 6V92TA 
MUI engines have, since the 1977 model year, been certified to a more 
stringent NO<INF>X standard in California. EPA has granted California 
several waivers of federal preemption in order to allow these more 
stringent standards. Engelhard must provide emission data to 
demonstrate that California engines, when retrofit with the ETX kit, 
will not exceed applicable California standards. Engelhard has provided 
no such data. In fact, the data which were presented indicate that 
engines with the ETX kit installed will substantially exceed the 
California NO<INF>X standard. EPA agrees with DDC that if modifications 
were made to the ETX kit or its components to reduce NO<INF>X from the 
level demonstrated by Engelhard's test engine, to the levels required 
to comply with California standards, then, in the absence of additional 
PM data, it is unclear whether the equipment would comply with the 0.10 
g/bhp-hr standard. This is because, generally speaking, engine design 
measures taken to reduce NO<INF>X emissions would likely increase PM 
emissions. Therefore, EPA is not certifying this equipment for use in 
California at this time, and today's Federal Register notice does not 
trigger the 0.10 g/bhp-hr PM standard of the urban bus retrofit program 
for engines originally certified as meeting California emissions 
standards.
    Engelhard may submit an additional notification of intent to 
certify the ETX kit for use on engines certified as meeting California 
emissions standards. EPA would make the notification available for a 
45-day public review and comment period. After resolution of comments 
and concerns, EPA would render a certification decision. In addition, 
EPA understands the California Air Resources Board's (ARB's) view that 
equipment certified under the urban bus program, to be used in 
California, must be provided with an executive order exempting it from 
the anti-tampering prohibitions of that State.

h. Other Comments

    In its November 22, 1996 letter, DDC stated its concern that the 
description of the ETX kit has changed substantially since the May 6, 
1996 Federal Register notice seeking public comment. Specifically, DDC 
states that the removal of coated exhaust parts and the changing of 
fuel injector height and throttle delay settings should have prompted 
another opportunity for public comment.
    EPA notes that only two substantive changes have been made to the 
ETX since the initial notification of intent to certify. Removal of 
coated exhaust parts by Engelhard was done in response to

[[Page 12179]]

public comments, including DDC's. Concerns were expressed by both the 
public and EPA about the ability to control the coating process on such 
parts considering the part-to-part variability in surface area, shape, 
etc. Engelhard acknowledged that the coated exhaust parts were 
originally included in the ETX kit to provide an extra compliance 
margin relative to the 0.10 g/bhp-hr PM standard, but were not 
absolutely necessary to comply. Since these parts were not considered 
``essential'' by Engelhard to comply with the standard, they were 
removed from the kit. Engelhard believes that the coating on the piston 
crowns and combustion chambers is necessary to provide an adequate 
compliance margin. Any additional public comment on this matter would 
be moot since the coated exhaust components are no longer present in 
the kit.
    The second change to the ETX kit involved the fuel injector height 
and throttle delay settings. Engelhard originally proposed settings of 
1.460 inches and 0.594 inches, respectively (the OEM settings for most 
engines covered by this application are 1.466 inches and 0.636 inches, 
respectively). The reason Engelhard modified the OEM settings in its 
original application was to ensure compliance with FTP cycle 
performance statistics, rather than for any specific engine or 
emissions related performance reasons. (In fact, the settings 
originally proposed by Engelhard would tend to have a negative impact 
on PM emissions.) When Engelhard conducted supplemental testing 
requested by EPA to address fuel economy and emissions issues, 
Engelhard was able to comply with FTP cycle statistics using the OEM 
settings of 0.636 inches and 1.466 inches. While returning these 
settings to the OEM specifications is a change, EPA believes it does 
not warrant reopening the comment period because the change is minor 
and directionally would tend to reduce PM emissions.
    JMI and DART expressed concern about possible toxic emissions 
related to the ETX kit. DART questions whether, during assembly of the 
engine, coating material may become ``airborne'', resulting in a 
potential health concern. In addition, DART and JMI question whether 
the combustion process may result in undesirable products. JMI 
postulates that free heavy metals, such as cobalt, molybdenum, nickel, 
chromium, boron, silicon, and vanadium, may be released if the coating 
becomes cracked or spalled. Such free metals, JMI states, when exposed 
to sulfur from diesel fuel at high temperatures and pressures (2200 
degrees Fahrenheit, and 5 to 8 atmospheres), could react to form ``a 
variety of toxic compounds''. In addition, JMI states this could result 
in deactivation of the catalyst unit located in the exhaust stream.
    EPA does not believe the conditions upon which JMI's (and DART's) 
concern is based will be present in engines using the ETX kit. 
Primarily, JMI's concern is based on an assumption that the GPX-5m 
coating is not durable, and thus will spall and crack, allowing free 
metals to react with sulfur. As described elsewhere in today's notice, 
durability testing is not required under this program. However, as 
discussed above, the available data does not indicate that the GPX-5m 
coating is not durable. In addition, Engelhard contends that any metals 
used in the GPX-5m coating are applied to surfaces in such manner that 
machining is required for removal.
    DDC comments that it should not be responsible for providing 
emission defect or performance warranties under the urban bus retrofit/
rebuild program for equipment certified by Engelhard, even though DDC 
parts are required to be used.
    Engelhard, as the equipment certifier, must provide all warranties 
required by the urban bus retrofit/rebuild regulation. Engelhard is 
aware of its responsibility to provide such warranties, including cases 
where transit operators obtain DDC parts from Engelhard or through 
their normal supply channels under the approved supply options.

III. Certification Approval

    The Agency has reviewed this notification, along with comments 
received from interested parties, and finds the equipment described in 
this notification of intent to certify:
    (1) Complies with a particulate matter emissions standard of 0.10 
g/bhp-hr, without causing the applicable engine families to exceed 
other exhaust emission standards;
    (2) Will not cause an unreasonable risk to the public health, 
welfare or safety;
    (3) Will not result in any additional range of parameter 
adjustability; and
    (4) Meets other requirements necessary for certification under the 
Retrofit/Rebuild Requirements for 1993 and Earlier Model Year Urban 
Buses (40 CFR Sections 85.1401 through 85.1415).
    The Agency hereby certifies this equipment for use in the Urban Bus 
Retrofit/Rebuild Program as described below in Section IV.

IV. Transit Operator Responsibilities

    Today's Federal Register notice announces certification of the 
above-described Engelhard equipment, when properly applied, as meeting 
the 0.10 g/bhp-hr particulate matter standard of the Urban Bus 
Retrofit/Rebuild Program for urban buses originally certified as 
meeting Federal emissions standards. Urban buses of the type described 
in Table C of today's notice, which were originally certified as 
meeting California emissions standards, are not covered the 
certification announced today. Affected urban bus operators who choose 
to comply with program 1 are required to use this, or other equipment 
that is certified as meeting the 0.10 g/bhp-hr particulate matter 
standard, for any engines listed in Table C which are rebuilt or 
replaced on or after September 15, 1997. The 0.10 g/bhp-hr PM standard 
is not triggered for urban buses originally certified as meeting 
California emission standards. Therefore, operators of such urban 
buses, who choose to comply with program 1, are not required to use 
such equipment until the 0.10 g/bhp-hr PM standard has been triggered 
for such engines.
    Urban bus operators who choose to comply with program 2 may use the 
certified Engelhard equipment immediately, and those who use this 
equipment may claim the respective particulate matter certification 
level from Table C when calculating their Fleet Level Attained (FLA). 
Again, because this equipment is not certified as meeting the 0.10 g/
bhp-hr PM standard for engines originally certified as meeting 
California emission standards, operators of such urban buses, who 
choose to comply with program 2, may not use this equipment to meet 
program requirements. In addition, such operators, when calculating 
their FLA, may not claim the PM levels shown in Table C because the 
program requires use of certified equipment.
    As stated in the program regulations (40 CFR 85.1401 through 
85.1415), operators should maintain records for each engine in their 
fleet to demonstrate that they are in compliance with the requirements 
of the Urban Bus Retrofit/Rebuild Program beginning on January 1, 1995. 
These records include purchase records, receipts, and part numbers for 
the parts and components used in the rebuilding of urban bus engines. 
Urban bus operators using supply options 2 and 3, as described 
previously in today's Federal Register notice, must be aware of their 
responsibility for maintenance of records pursuant to 40 CFR 85.1403 
through 85.1404, because they do not purchase the complete ETX kit from 
Engelhard. Urban bus operators using supply option 2 or 3 must be able 
demonstrate that all parts used in the

[[Page 12180]]

rebuilding of engines are in compliance with program requirements. In 
other words, such urban bus operators must be able demonstrate that all 
components of the kit certified in today's Federal Register notice are 
installed on applicable engines.

    Dated: March 7, 1997.
Mary D. Nichols,
Assistant Administrator for Air and Radiation.
[FR Doc. 97-6505 Filed 3-13-97; 8:45 am]
BILLING CODE 6560-50-P