Document ID: EPA-HQ-OAR-2007-0652-0009
Agency: epa
Document Type: Rule
Title: Partial Removal of Direct Final Rule and Revision of the Nonroad Diesel Technical Amendments and Tier 3 Technical Relief Provision
Posted Date: 2007-12-26T05:00Z

[Federal Register: December 26, 2007 (Volume 72, Number 246)]
[Rules and Regulations]               
[Page 72955-72958]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26de07-14]                         

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 89

[EPA-HQ-OAR-2007-0652; FRL-8509-9]
RIN 2060-A037

 
Partial Removal of Direct Final Rule and Revision of the Nonroad 
Diesel Technical Amendments and Tier 3 Technical Relief Provision

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule; partial removal; revision.

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SUMMARY: Because EPA received adverse comment, we are making a partial 
withdrawal and revision of the direct final rule for ``Nonroad Diesel 
Technical Amendments and Tier 3 Technical Relief Provision'' published 
on September 18, 2007.

DATES: This rule and partial withdrawal are effective December 26, 
2007.

FOR FURTHER INFORMATION CONTACT: Zuimdie Guerra, Assessment and 
Standards Division, Office of Transportation and Air Quality, 2000 
Traverwood Drive, Ann Arbor, MI, 48105; telephone number: (734) 214-
4387; fax number: (734) 214-4050; e-mail address: 
guerra.zuimdie@epa.gov.

SUPPLEMENTARY INFORMATION: On September 18, 2007 EPA published a direct 
final rule for ``Nonroad Diesel Technical Amendments and Tier 3 
Technical Relief Provision'' (72 FR

[[Page 72956]]

53118). We stated in that direct final rule that if we received adverse 
comment by October 18, 2007, we would publish a timely withdrawal in 
the Federal Register. EPA subsequently received adverse comments to 
Tier 3 technical relief provision in 40 CFR 89.102(i) through (m). 
Although we were not able to accomplish this action prior to the 
effective date of the direct final rule, we are now, in light of the 
adverse comment, withdrawing the direct final rule's revisions to 40 
CFR 89.102 paragraphs (i) through (m). The other provisions of the the 
direct final rule are not affected by this partial withdrawal and are 
incorporated into the Federal Register as of the effective date of 
November 18, 2007 direct final action.
    Concurrent with the direct final rule, we published a separate 
notice of proposed rulemaking, to provide for the contingency of 
adverse comments on the DFR. (72 FR 53294). We are now issuing a final 
rule based on the notice of proposed rulemaking and on comments 
received. Notice and an opportunity for additional comment on the 
withdrawal of the direct final rule is unnecessary, within the meaning 
of 5 U.S.C. 553(b)(B). EPA has a legal obligation to withdraw those 
portions of the direct final rule that were subject to adverse 
comments[j1]. In addition, by its terms, the direct final rule would 
become effective only in the absence of adverse comment.
    [j2] In today's final rule, EPA is adopting the 
technical relief provisions originally proposed as 40 CFR 89.102 
paragraphs (i) through (m), including a variety of modifications to 
address the comments received. The main comment EPA received was to 
correct an inappropriate cross-reference in the rule language, and this 
final rule corrects this inadvertent drafting error as the commenter 
properly suggested. We made the changes the commenter properly 
suggested. The provision on technical relief is now found in paragraph 
(i) exclusively.
    We responded to comments that did not require changes to the rule 
in a memo to the docket. One concern of the commenter was that 
manufacturers may ask for more relief than is needed. The rule is clear 
that the Agency is not obligated to provide any amount of technical 
relief if the Agency is not convinced of the need for it. The other 
concern of the commenter was that manufacturers that use the Tier 3 
technical relief may request additional relief for Tier 4 equipment. 
Manufacturers are aware of this provision in advance of Tier 4 so 
manufacturers should be able to reconcile their Tier 3 and Tier 4 
relief needs.

List of Subjects in 40 CFR Part 89

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Confidential business information, Imports, 
Penalties, Reporting and recordkeeping requirements, Warranties.

    Dated: December 17, 2007.
Stephen L. Johnson,
Administrator.

0
For the reasons set forth in the preamble, title 40, chapter I of the 
Code of Federal Regulations is amended as follows:

PART 89--CONTROL OF EMISSIONS FROM NEW AND IN-USE NONROAD 
COMPRESSION-IGNITION ENGINES

0
1. The authority citation for part 89 is continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart B--[Amended]

0
2. Section 89.102 is amended by revising paragraph (i) and removing 
paragraphs (j) through (m).
    The revison reads as follows:

Sec.  89.102  Effective dates, optional inclusion, flexibility for 
equipment manufacturers.

* * * * *
    (i) Additional exemptions for technical or engineering hardship. 
You may request additional engine allowances under paragraph (d)(1) of 
this section for 56-560 kW power categories or, if you are a small 
equipment manufacturer, under paragraph (d)(2) of this section for 
engines at or above 37 and below 75 kW. However, you may use these 
extra allowances only for those equipment models for which you, or an 
affiliated company, do not also produce the engine. After considering 
the circumstances, we may permit you to introduce into U.S. commerce 
equipment with such engines that do not comply with Tier 3 emission 
standards, as follows:
    (1) We may approve additional exemptions if extreme and unusual 
circumstances that are clearly outside your control and that could not 
have been avoided with reasonable discretion have resulted in technical 
or engineering problems that prevent you from meeting the requirements 
of this part. You must show that you exercised prudent planning and 
have taken all reasonable steps to minimize the scope of your request 
for additional allowances.
    (2) To apply for exemptions under this paragraph (i), send the 
Designated Compliance Officer and the Designated Enforcement Officer a 
written request as soon as possible before you are in violation. In 
your request, include the following information:
    (i) Describe your process for designing equipment.
    (ii) Describe how you normally work cooperatively or concurrently 
with your engine supplier to design products.
    (iii) Describe the engineering or technical problems causing you to 
request the exemption and explain why you have not been able to solve 
them. Describe the extreme and unusual circumstances that led to these 
problems and explain how they were unavoidable.
    (iv) Describe any information or products you received from your 
engine supplier related to equipment design--such as written 
specifications, performance data, or prototype engines--and when you 
received it.
    (v) Compare the design processes of the equipment model for which 
you need additional exemptions and that for other models for which you 
do not need additional exemptions. Explain the technical differences 
that justify your request.
    (vi) Describe your efforts to find and use other compliant engines, 
or otherwise explain why none is available.
    (vii) Describe the steps you have taken to minimize the scope of 
your request.
    (viii) Include other relevant information. You must give us other 
relevant information if we ask for it.
    (ix) Estimate the increased percent of production you need for each 
equipment model covered by your request, as described in paragraph 
(i)(3) of this section. Estimate the increased number of allowances you 
need for each equipment model covered by your request, as described in 
paragraph (i)(4) of this section.
    (3) We may approve your request to increase the allowances under 
paragraph (d)(1) of this section, subject to the following limitations:
    (i) The additional allowances will not exceed 50 percent for each 
power category.
    (ii) You must use up the allowances under paragraph (d)(1) of this 
section before using any additional allowance under this paragraph (i).
    (iii) Any allowances we approve under this paragraph (i)(3) expire 
24 months after the provisions of this section start for a given power 
category. You may use these allowances only for the specific equipment 
models covered by your request.

[[Page 72957]]

    (4) We may approve your request to increase the allowances for the 
37-75 kW power category under paragraph (d)(2) of this section, subject 
to the following limitations:
    (i) You are eligible for additional allowances under this paragraph 
(i)(4) only if you are a small equipment manufacturer and you do not 
use the provisions of paragraph (i)(3) of this section to obtain 
additional allowances for the 37-75 kW power category.
    (ii) You must use up all the available allowances for the 37-75 kW 
power category under paragraph (d)(2) of this section in a given year 
before using any additional allowances under this paragraph (i)(4).
    (iii) Base your request only on equipment you produce with engines 
at or above 37 kW and below 75 kW. You may use any additional 
allowances only for equipment you produce with engines at or above 37 
kW and below 75 kW.
    (iv) Any allowances we approve under this paragraph (i)(4) expire 
24 months after the provisions of this section start for this power 
category. These additional allowances are not subject to the annual 
limits specified in paragraph (d)(2) of this section. You may use these 
allowances only for the specific equipment models covered by your 
request.
    (v) The total allowances under paragraph (d)(2) of this section for 
the 37-75 kW power category will not exceed 700 units. The total 
allowances under this paragraph (i)(4) follow the requirements under 
paragraph (d)(2) of this section for the 37-75 kW power category and 
will not exceed 200 units. Therefore, the total maximum allowances for 
the 37-75 kW power category will not exceed 900 units.
    (5) For purposes of this paragraph (i), small equipment 
manufacturer means an equipment manufacturer that had annual U.S.-
directed production volume of equipment using nonroad diesel engines 
between 37 and 75 kW of no more than 3,000 units in 2002 and all 
earlier calendar years, and has 750 or fewer employees (500 or fewer 
employees for nonroad equipment manufacturers that produce no 
construction equipment or industrial trucks). For manufacturers owned 
by a parent company, the production limit applies to the production of 
the parent company and all its subsidiaries and the employee limit 
applies to the total number of employees of the parent company and all 
its subsidiaries.
    (6) The following provisions for adjusted flexibilities for Tier 4 
engines apply to equipment manufacturers that are granted additional 
exemptions for technical or engineering hardship:
    (i) If you use the additional allowance under this paragraph (i) 
you shall forfeit percent of production flexibility plus technical or 
engineering hardship exemptions available for Tier 4 engines in the 
amounts shown in Table 1 of this section.
    (ii) Table 1 of this section shows the percent of production 
flexibility and technical or engineering hardship exemptions that you 
must forfeit for Tier 4 engines. The amount of Tier 4 flexibility 
forfeited by each equipment manufacturer depends on the percent of 
production flexibility used for Tier 2 engines and the technical or 
engineering hardship exemptions granted for Tier 3 engines in the 
proportions shown in Table 1. For example, if you used 45 percent of 
your production flexibility for Tier 2 engines, you must forfeit 2 
percent of your production flexibility for Tier 4 engines for every 1 
percent of technical or engineering hardship flexibility granted for 
Tier 3 engines. In addition you must also forfeit 1 percent of any 
technical or engineering hardship exemptions available for Tier 4 
engines for every 1 percent technical or engineering hardship 
exemptions available for Tier 3 engines. If you use the Tier 3 
technical or engineering hardship allowances for 5 percent of your 
equipment in each of two different years, you have used a total 
allowance of 10 percent. Therefore you must forfeit a total of 20 
percent of production flexibility for Tier 4 engines plus 10 percent of 
any technical or engineering hardship exemptions available for Tier 4 
engines.

     Table 1 of Sec.   89.102.--Adjustments to Tier 4 Flexibilities
------------------------------------------------------------------------
                                                 Percent of   Percent of
                                                  forfeit      forfeit
 Percent of use Tier 2 production flexibility      Tier 4       Tier 4
                                                 production   tech./eng.
                                                flexibility   exemption
------------------------------------------------------------------------
Greater than 0% and up to 20%.................            0            1
Greater than 20% and up to 40%................            1            1
Greater than 40% and up to 60%................            2            1
Greater than 60% and up to 80%................            3            1
------------------------------------------------------------------------

    (iii) Because the Tier 3 and Tier 4 rules have different power 
category ranges, the availability of technical relief will be further 
adjusted based on the sales volume by power category. Table 2 of this 
section shows the applicable power categories for Tier 3 and Tier 4. 
The Tier 3 power categories of 37kW to 75kW and 75kW to 130kW 
correspond to the Tier 4 power category of 56kW to 130kW. For the Tier 
3 equipment in the 37 to 75kW category, you must only use the sales 
volume for equipment that uses engines with a rated power greater than 
56kW. For example, if you have a Tier 3 piece of equipment that uses a 
40 kW engine, the sales of the equipment are counted in the Tier 4 
power category of 19kW to 56kW. If you have a Tier 3 piece of equipment 
that uses a 60kW engine, the sales of the equipment are counted in the 
Tier 4 power category of 56kW to 130kW. The Tier 3 power categories of 
130kW to 225kW, 225kW to 450kW and 450kW to 560kW correspond to the 
Tier 4 power category of 130kW to 560kW. You will need to sum the sales 
of the Tier 3 power categories that correspond to the Tier 4 power 
category during each calendar year in which Tier 3 technical relief is 
used. The sum of all the Tier 3 units that are produced and exempted by 
the technical relief divided by the sum of all the Tier 3 units sold in 
the corresponding Tier 4 power category will determine the percentage 
of Tier 4 flexibility affected. For example, if you produce 50 units 
using Tier 3 technical relief in the range of 130kW to 225kW, and you 
produce 50 units using Tier 3 technical relief in the range of 225 to 
450kW, and no units are produced in the 450kW to 560kW range, and your 
overall sales volume for the power ranges of 130kW to 560kW in Tier 3 
is 400 units, the amount of Tier 3 technical relief used is 100/400 or 
25 percent. Because you forfeit 1 percent of your Tier 4 technical 
relief for every 1 percent of Tier 3 technical relief used, then you 
will lose 25 percent of your Tier 4 technical relief in the 130kW to 
560kW power range category. If you used 45 percent of your production 
flexibility for Tier 2 engines, you must forfeit 2 percent of 
production flexibility for Tier 4 engines for every 1 percent of Tier 3 
technical relief. Therefore, you will forfeit 50 percent of your Tier 4 
production allowance in the 130kW to 560kW power range category.

[[Page 72958]]

    Table 2 of Sec.   89.102.--Corresponding Tier 3 and Tier 4 Power
                               Categories
------------------------------------------------------------------------
         Tier 3  power categories             Tier 4  power  categories
------------------------------------------------------------------------
37< =kW< 75\*\..............................  19< =kW< 56
37< =kW< 75\**\, 75< =kW< 130.................  56< =kW< 130
130< =kW< 225, 225< =kW< 450, 450< =kW< 560.....  130< =kW< =560
------------------------------------------------------------------------
\*\ Applies only to use of engines rated between 37kW and 56kW by small
  volume equipment manufacturers.
\**\ Includes only equipment that uses engines with a rated power
  greater than 56kw.

    (iv) Manufacturers using allowances under this paragraph (i) must 
comply with the notification and reporting requirements specified in 
paragraph (i)(7) of this section.
    (7) Notification and reporting. You must notify us of your intent 
to use the technical relief provisions of this paragraph (i) and send 
us an annual report to verify that you are not exceeding the 
allowances, as follows:
    (i) Before the first year you intend to use the provisions of this 
section, send the Designated Compliance Officer and the Designated 
Enforcement Officer a written notice of your intent, including:
    (A) Your company's name and address, and your parent company's name 
and address, if applicable.
    (B) Whom to contact for more information.
    (C) The calendar years in which you expect to use the exemption 
provisions of this section.
    (D) The name and address of the company that produces the engines 
you will be using for the equipment exempted under this section.
    (E) Your best estimate of the number of units in each power 
category you will produce under this section and whether you intend to 
comply under paragraph (d)(1) or (d)(2) of this section.
    (F) The number of units in each power category you have sold in 
previous calendar years under paragraph (d) of this section.
    (ii) For each year that you use the provisions of this section, 
send the Designated Compliance Officer and the Designated Enforcement 
Officer a written report by March 31 of the following year. Include in 
your report the total number of engines you sold in the preceding year 
for each power category, based on actual U.S.-directed production 
information. Also identify the percentages of U.S.-directed production 
that correspond to the number of units in each power category and the 
cumulative numbers and percentages of units for all the units you have 
sold under this section for each power category. You may omit the 
percentage figures if you include in the report a statement that you 
will not be using the percent-of-production allowances in paragraph (d) 
of this section.
    (8) Recordkeeping. Keep the following records of all equipment with 
exempted engines you produce under this paragraph (i) for at least five 
full years after the final year in which allowances are available for 
each power category:
    (i) The model number, serial number, and the date of manufacture 
for each engine and piece of equipment.
    (ii) The maximum power of each engine.
    (iii) The total number or percentage of equipment with exempted 
engines, as described in paragraph (d) of this section and all 
documentation supporting your calculation.
    (iv) The notifications and reports we require under paragraph 
(i)(7) of this section.
    (9) Equipment Labeling. Any engine produced under this paragraph 
(i) must meet the labeling requirements of 40 CFR 89.110, but add the 
following statement instead of the compliance statement in 40 CFR 
89.110 (b)(10): THIS ENGINE MEETS U.S. EPA EMISSION STANDARDS UNDER 40 
CFR 89.102. SELLING OR INSTALLING THIS ENGINE FOR ANY PURPOSE OTHER 
THAN FOR THE EQUIPMENT FLEXIBILITY PROVISIONS OF 40 CFR 89.102 MAY BE A 
VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.
    (10) Enforcement. Producing more exempted engines or equipment than 
we allow under this paragraph (i) or installing engines that do not 
meet the applicable Tier 1 emission standards described in Sec.  89.112 
violates the prohibitions in Sec.  89.1003(a)(1). You must give us the 
records we require under this paragraph (i) if we ask for them (see 
Sec.  89.1003(a)(2)).

[FR Doc. E7-24976 Filed 12-21-07; 8:45 am]

BILLING CODE 6560-50-P