Source: https://www.federalregister.gov/documents/2014/02/06/2014-02612/nonroad-technical-amendments
Timestamp: 2017-10-21 16:10:17
Document Index: 597965602

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Federal Register :: Nonroad Technical Amendments
This final rule is effective on March 10, 2014, except for Sec. 1039.625(m) which will be effective on February 6, 2014.
79 FR 7077
7077-7087 (11 pages)
II. Replacement Engine Exemption
III. Nonroad Diesel Engine Technical Hardship Program
https://www.federalregister.gov/d/2014-02612 https://www.federalregister.gov/d/2014-02612
This final rule is effective on March 10, 2014, except for § 1039.625(m) which will be effective on February 6, 2014.
Alan Stout, Environmental Protection Agency, Office of Transportation and Air Quality, Assessment and Standards Division, 2000 Traverwood Drive, Ann Arbor, Michigan 48105; telephone number: (734) 214-4805; email address: stout.alan@epa.gov.
End Further Info End Preamble Start Supplemental Information Start Printed Page 7078
This action affects companies that manufacture or remanufacture nonroad engines and equipment in the United States. Regulated categories and entities include the following:
Industry 333618 Manufacturers of new nonroad engines.
Industry 333111 Manufacturers of farm machinery.
Industry 333120 Manufacturers of construction equipment.
This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely covered by these rules. This table lists the types of entities that the agencies are aware may be regulated by this action. Other types of entities not listed in the table could also be regulated. To determine whether your activities are regulated by this action, you should carefully examine the applicability criteria in the referenced regulations. You may direct questions regarding the applicability of this action to the persons listed in the preceding FOR FURTHER INFORMATION CONTACT section.
EPA published a direct final rule on June 17, 2013, to amend various aspects of the regulations that apply for heavy-duty highway engines and vehicles and for nonroad engines and equipment (78 FR 36370). For most of those changes, we did not receive adverse comment and most of the amendments became effective as published. We received adverse comments on certain amendments, which led us to withdraw those regulatory changes in a notice published August 16, 2013 (78 FR 49963).
On the same day that we published the direct final rule, we published a companion proposed rule that included all the content of the direct final rule (78 FR 36135). This final rule follows up on two broad areas from the proposed rule that were the subject of adverse comment—the replacement engine exemption for nonroad engines, and the technical hardship and related provisions for nonroad diesel engine and equipment manufacturers transitioning to Tier 4 compliance.
In 1996, EPA adopted a provision allowing manufacturers in limited circumstances to produce new engines for replacing failed engines that are exempt from the requirement to be certified to current emission standards (61 FR 58102, November 12, 1996). With this approach, manufacturers have been able to make new, exempt engines in cases where engines certified to current standards do not have the physical or performance characteristics needed to power equipment that was originally equipped with an older engine. Without this provision, some equipment owners would have been forced to prematurely scrap otherwise working equipment (sometimes worth millions of dollars) because no engine meeting current emission standards could be adapted for installation within the space occupied by the original engine.
In the June 2013 direct final rule and companion proposed rule, EPA amended these provisions to remove the overly restrictive anti-circumvention provisions and replaced them with a variety of more specific conditions and requirements that were intended to more effectively ensure that the exemption would be used appropriately. We received adverse comment on some of the most recent amendments in § 1068.240(b). Based on these comments, we withdrew all the amendments to § 1068.240(a) through (d), leaving intact the change to remove the anti-circumvention provisions in § 1068.240(g), with the understanding that we would revisit all the intended changes from § 1068.240(a) through (d) in this subsequent final rule.
EPA continues to believe that new, exempt replacement engines should be used only in cases where a currently certified engine cannot practically be installed to power the old equipment. EPA believes the proposed regulatory language in § 1068.240 serves this purpose without the unintended consequences described above associated with the anti-circumvention provisions. EPA expects manufacturers and operators following the regulations to continue to use the exemption provisions appropriately and not for the purpose of circumventing the emission standards. EPA is adding language to explicitly limit this provision to equipment that has been in service 40 years or less (at the point of installation) so that manufacturers and operators do not use this provision to keep older dirtier equipment in operation beyond its normal lifetime by continually using new, exempt engines to replace old engines. EPA has adopted a similar restriction for stationary engines under 40 CFR 60.4210(i), except that the maximum equipment age is 15 years for stationary engines. EPA will continue to monitor compliance with the amended exemption provisions and will consider any appropriate changes to the regulation in the future to ensure that the exemption is properly used toward this purpose. This 40-year limit does not apply for marine diesel engines, since those engines are subject to separate replacement engine provisions.
We included a 25-year limit in the proposed rule, but four commenters weighed in on this age limit. The California Air Resources Board stated that it did not oppose the proposal and appreciated the intent of the provision to ensure against older technology engines being available indefinitely. However, CARB did not believe it was necessary to incorporate the limit into Start Printed Page 7079the California program because the state's in-use programs are expected to require fleet modernization for most nonroad applications well in advance of the proposed 25 year cut-off. The Northeast States for Coordinated In-Use Management supported the 25-year limit as a reasonable measure to address circumvention concerns. The National Groundwater Association objected to the 25-year limit, noting that their members have thousands of powered drilling units with an expected lifetime of 50 years or more. They stated that limiting access to the replacement engine exemption and thereby requiring operators to prematurely buy expensive new equipment would cause significant economic hardship. They acknowledged that a 40-year limit for groundwater drilling applications would be more appropriate. Case New Holland also described the potential for significant adverse impacts if the 25-year limit were applied to agricultural equipment; they favored simply removing the age specification but also stated that changing to a 40-year limit would provide substantial relief. As a result, we are replacing the proposed 25-year limit with a 40-year limit.
The “tracked option” specified in § 1068.240(b) also includes an additional step to qualify for the replacement engine exemption for equipment not experiencing premature engine failure. In particular, manufacturers would need to make a determination that the replacement engine is designed with the greatest degree of emission control that is available for the particular application (i.e., “cleanest available”). For example, consider an engine being replaced that was built before the Tier 1 standards started to apply and that engines of its power category are currently subject to Tier 4 standards. In addition to the exemption provision requiring the manufacturer to determine that a Tier 4 engine does not have the necessary physical or performance characteristics, the manufacturer must also consider whether any Tier 1, Tier 2, or Tier 3 engines are being produced with the appropriate physical and performance characteristics for replacing the old engine. If a Tier 3 engine is available with the appropriate physical and performance characteristics for a given installation, Tier 1 and Tier 2 engines emitting at levels above the Tier 3 standards would not qualify for an exemption for that equipment. This requirement to use the cleanest available engine fits with the intent of the amendments facilitating voluntary incentive programs involving replacement engine upgrades toward the goal of reducing emissions from in-use equipment, but without imposing a requirement that would involve new technology development or impractical equipment design changes. A provision similar to this has already been in place for marine diesel engines in § 1042.615. In the case of equipment experiencing premature engine failure, we will continue to apply the simpler requirement that the replacement engine must meet emission standards that are the same as or better than the standards that applied to the old engine. We received no adverse comment on this provision.
We are also revising the provisions related to the disposition of the old engine in § 1068.240(b). The engine manufacturer making the exempt new replacement engine must take possession of the old engine or confirm that it has been destroyed. Although this is not a new requirement, we are including an additional new provision to explicitly allow the re-use of the old engine block, but to limit such re-use. Specifically, to be re-introduced into U.S. commerce, the old engine must either meet current emission standards or qualify for an exemption as if it were a new engine. For example, the old engine could be re-used as a replacement engine for a different piece of equipment under certain circumstances. Under this approach, an engine made with a used engine block and any mix of new or used additional parts would be treated in a consistent way. For example, the recycled replacement engine would be subject to all the demonstrations and documentation requirements of § 1068.240(b), or it could alternatively count toward the engine manufacturer's allowance to produce a limited number of exempt replacement engines under § 1068.240(c). For engines covered by the “tracked option” under § 1068.240(b) that are not re-introduced into U.S. commerce, the engine manufacturer making the new exempt engine must destroy the old engine or confirm that it has been destroyed. We note that destroying an engine means altering it so it can never be used again in any form as a working engine. However, we believe manufacturers will rarely choose to destroy an engine that could be remanufactured as a replacement engine under § 1068.240.
North American Repower provided comments describing their objection to the amendments related to the disposition of the engines being replaced. Their comments focused primarily on their desire for a steady source of old engine blocks to supply their remanufacturing activities. However, their objection seems to be directed at the existing restriction rather than the proposed flexibility regarding the disposition of engine cores. The existing requirement for the engine manufacturer to take possession of the old engine (or confirm that it was destroyed) has never allowed replaced engines under the “tracked option” in § 1068.240(b) to be reused by other parties. This restriction was put in place in the past because the “tracked option” does not limit the number of exempt replacement engines a manufacturer may produce. Thus, it is important to restrict the re-use of these replaced engines so this option cannot be used to significantly increase the number of older-technology engines in use. To the extent that the provision in question has any impact on the availability of these engine cores, it can only make them more available. The revised regulations explicitly allow for re-use of the replaced engines if they are modified to meet current emission standards, or if they qualify for exemptions that apply for new engines. For example, a manufacturer taking possession of a replaced engine may remanufacture that engine in a certified configuration, or they may sell it as an exempt replacement engine if they take the steps and meet the conditions that apply under § 1068.240. The manufacturer may also sell the engine core to another remanufacturing company under the provisions of § 1068.262; such a transaction was not specifically authorized under the previous regulation. Additionally, we note that these provisions do not limit the ability of remanufacturing companies to recover engine cores from scrapped equipment or from engines replaced by used engines. Because of limits on producing exempt new replacement engines, it is likely that the number of these other engines will typically be much higher than the number of engines replaced with new exempt replacement engines under § 1068.240(b) in any given year. We are finalizing these provisions as proposed. Note that a more detailed discussion of North American Repower's comments can be found in the docket for this rulemaking.[1]
EPA is also adding some clarification to the replacement engine regulations to address questions that have arisen, as well as making the following changes that did not receive adverse comment:Start Printed Page 7080
Revising the labeling requirements to account for the possibility of using a new replacement engine to replace a previously exempted replacement engine. To the extent that the revised label statement differs from that specified by California ARB, we would expect to approve an adjusted statement that allows for a single, 50-state label under § 1068.201(c).
Adjusting the reporting deadline for untracked replacement engines under § 1068.240(c). This change would allow manufacturers some time after the end of the calendar year to make the determinations and to take the required steps to fulfill the tracking requirements for replacement engines under § 1068.240(b). Any engines for which these steps and determinations are incomplete by the deadline for the report would need to be counted as untracked replacement engines. Further, to account for prevailing practices and typical timelines for replacement engines, we are moving back the deadline for this annual report from February 15 to March 31.
Adding language to allow manufacturers to redesignate their exempt replacement engines before submitting the annual report. The regulation already specifies that it is acceptable to qualify for a tracked exemption under § 1068.240(b), even if that wasn't the original plan, as long as all the applicable conditions and requirements are met. We are adding language to allow the converse as well. Specifically, if manufacturers plan to use a tracked exemption, but find in the end that they don't want to deal with the limitations on what can be done with the old engine (or if any of the other conditions or requirements are not met), they may count that as an untracked exemption for that reporting period.
Revising § 1068.240(c)(1) to specify that manufacturers may base sales limits for the untracked option on total U.S. production of certified and exempted engines together (including stationary engines).
Clarifying that the provisions in § 1068.240(d) related to partially complete engines also apply for “current-tier” replacement engines exempted under § 1068.240(e).
Adding a statement to § 1042.615 for marine diesel engines to clarify our pre-determination that certified Tier 4 engines do not have the appropriate physical and performance characteristics for replacing older non-Tier 4 engines in marine vessels. This policy was established in our final rule from June 30, 2008 (see 73 FR 37157).
EPA adopted Tier 4 standards for nonroad diesel engines under 40 CFR part 1039 in 2004 (69 FR 38958, June 29, 2004). To meet these standards, engine manufacturers are pursuing development of advanced technologies, including new approaches for exhaust aftertreatment. Equipment manufacturers will need to modify their equipment designs to accommodate these new engine technologies and the corresponding changes to engine operating parameters (such as operating temperatures and heat rejection rates). To provide flexibility for equipment manufacturers in their efforts to respond to these engine design changes, the Tier 4 standards included the Transition Program for Equipment Manufacturers. Flexibilities allowed under this program include delaying compliance for small-volume equipment models for several years or using allowances in the first year to manage the transition to the Tier 4 engines. While a certain number of allowances are available to all companies, the regulation provides additional relief for nonroad diesel equipment manufacturers under certain limited circumstances we refer to as “technical hardship”. EPA is amending this technical hardship program to facilitate EPA granting exemptions to address certain hardship circumstances that were not contemplated when the original 2004 final rule was published.
The Transition Program for Equipment Manufacturers is intended to allow nonroad equipment manufacturers wide discretion to manage their product development timeline. Equipment manufacturers may comply either based on a percent of their production (generally for high-volume manufacturers, as described in § 1039.625(b)(1)), or based on a maximum number of exempted pieces of equipment (generally for low-volume manufacturers, as described in § 1039.625(b)(2)). At the same time, the regulations include at § 1039.625(m) an acknowledgement that equipment manufacturers might face a wide range of circumstances, including cases where engine manufacturers might be late in providing compliant engines to nonintegrated equipment manufacturers, such that the specified allowances are insufficient to avoid a disruption in the equipment manufacturer's production schedule. The technical hardship provision at § 1039.625(m) allows EPA to make a judgment that an equipment manufacturer that buys engines from another company, through no fault of its own, needs additional allowances to manage the transition to Tier 4 products. The regulation as originally adopted specifies a maximum allowance of 150 percent of a manufacturer's annual production (relative to § 1039.625(b)(1)), or a total of 1,100 allowances (relative to § 1039.625(b)(2)). The regulation also allows for economic hardship provisions under § 1068.255; however, that eligibility depends on manufacturers showing that their solvency is in jeopardy without relief. Economic hardship therefore serves as a flexibility provision of last resort.
As the compliance dates for the Tier 4 standards approach, equipment manufacturers have described scenarios where the technical hardship provisions are too restrictive for EPA to address their circumstances. For example, engine manufacturers have in some cases delayed delivery of Tier 4 engines until six or even twelve months after the Tier 4 standards start to apply, which is forcing equipment manufacturers to use up all their allowances under § 1039.625(b) in the first year of the new standards. Some equipment manufacturers have expressed the concern that engine manufacturers in some cases have chosen to take advantage of these program allowances for their own benefit, even though they were intended to provide relief to equipment manufacturers. Not only have there been cases in which engine manufacturers did not have certain engines ready for production when required by the standards, but there have also been cases in which engine manufactures had not provided prototype engines or even dimensional drawings for certain engine models for equipment manufacturers to use to redesign their equipment. Whether or not this is the result of engine manufacturers acting in bad faith, it seems clear that this questionable planning by engine manufacturers has created the potential for significant hardship to some equipment manufacturers. Although at this point the maximum number of additional allowances available for EPA to grant under § 1039.625(m) would cover a good portion of the second year of the Tier 4 standards, we now understand that this too may be inadequate to allow equipment manufacturers to respond to the engine manufacturers' very late deliveries of compliant engines.
In these cases, the maximum allowable relief under § 1039.625(m) may be insufficient to allow equipment manufacturers to transition to meeting Tier 4 requirements without disrupting their ability to continue producing their equipment models. There have also Start Printed Page 7081been cases where a company would meet the criteria to qualify for consideration for technical hardship under § 1039.625(m) except that the regulation disallowed technical hardship relief for all engines above 560 kW and provided only limited relief for engines above 37 kW. The regulation also provided only limited relief for companies that are not small businesses. In these cases, no additional relief was available under § 1039.625(m), which again would leave equipment manufacturers unable to continue producing their equipment models. To address these circumstances, we proposed to amend the Transition Program for Equipment Manufacturers in three ways to address these concerns.
First, we proposed to remove some of the qualifying criteria so that any non-vertically integrated equipment manufacturer may apply for technical hardship relief under § 1039.625(m) for any size engine, rather than limiting the technical hardship relief to small businesses and to engines within certain power categories. We believe it is more appropriate to rely on our discretion to evaluate each hardship application on its merits rather than automatically precluding hardship relief based on certain characteristics of the engine or the company. If hardship relief is not appropriate because of an engine's power rating or a company's size or financial standing, we would not approve such a request.
Second, we initially removed the maximum number of allowances we can approve under § 1039.625(m). We also removed the deadlines for exercising those additional allowances. Specifically, we adjusted the provision for additional small-volume allowances under § 1039.625(b)(2) and (m)(4) by specifying that we may waive the annual limits on the number of allowances instead of or in addition to granting additional hardship allowances. We did this because there may be times when manufacturers only need approval to use up their regular allowances at a faster pace than the regulations originally allowed.
In response to these amendments, we received adverse comments from the California Air Resources Board and the Manufacturers of Emission Controls Association. They expressed concern about EPA allowing itself unlimited discretion in the total number of allowances we may grant to provide relief to manufacturers that qualified for technical hardship under § 1039.625(m). They also objected to the proposed approach, expressing a concern that we would be putting ourselves in a position to substantially undermine the expected emission reductions from the Tier 4 program. Therefore, in this final rule we are only increasing the maximum number of percent-of-production hardship allowances EPA may grant from 70 to 200 percent, and the maximum number of and small-volume hardship allowances from 400 to 2,000 units.
Third, we initially removed all limitations for the higher FEL caps under § 1039.104(g). However, the California Air Resources Board and the Manufacturers of Emission Controls questioned the need for the revision and argued that allowing more engines with higher FELs would cause higher emissions where engines were operating, even though the net impact would be emissions-neutral due to the use of emissions credits. Subsequent to these comments, John Deere provided supplemental comments describing their product development efforts for engines in the 19-56 kW power category. They explained why the original limit on the higher FEL cap flexibility was not sufficient for them to complete their development and implementation of Tier 4 technologies in time.
We are also revising § 1039.104(g) to specify that the Temporary Compliance Adjustment Factor is the same whether an engine is subject to NOX + NMHC standards or NOX-only standards. This revision also addresses Tier 3 carry-over engines that would need to certify to the alternate FEL caps after the Tier 4 final standards take effect.
Finally, we are republishing § 1039.625(e)(3), which was inadvertently omitted in the withdrawal notice without the last sentence, which describes the alternative standards that apply for engines below 56 kW and engines above 560 kW.
Section 553(d) of the Administrative Procedure Act (APA), 5 U.S.C. chapter 5, generally provides that rules may not take effect earlier than 30 days after they are published in the Federal Register. APA section 553(d) excepts from this provision any action that grants or recognizes an exemption or relieves a restriction. Since the provisions expanding the technical hardship relief in § 1039.625(m) increase access to an exemption from emission standards, EPA is making the revisions to § 1039.625(m) effective immediately upon publication. The expanded technical hardship provisions do not set new requirements, but rather create a streamlined path by which equipment manufacturers unable to install compliant Tier 4 engines may install previous-tier engines that they could not otherwise install without this final rule. Thus, the expanded technical hardship provisions of § 1039.625(m) promulgated in this final rule are effective on February 6, 2014.
This action is not a “significant regulatory action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011). These provisions may have minor impacts on the costs and emission reductions of the underlying regulatory programs amended in this action. Where there may be a minor impact on the costs or benefits of the amended regulatory program, any potential impacts would be small and we have not attempted to quantify the potential changes. As such, a regulatory impact evaluation or analysis is unnecessary. EPA also does not expect this rule to have substantial Congressional or public interest.
This action does not impose any new information collection burden. The regulatory changes include changes to the way we implement the emission standards or exemption provisions to reduce burden or to streamline administrative procedures. However, the Office of Management and Budget (OMB) has previously approved the information collection requirements contained in the existing regulations at Start Printed Page 708240 CFR parts 1039 and 1068 under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB Control Numbers 2060-0287 and 2060-0460. The OMB control numbers for EPA's regulations in title 40 of the Code of Federal Regulations are listed in 40 CFR part 9.
This final rule allows for greater flexibility and reduced burden for manufacturers and remanufacturers. There are no costs and therefore no regulatory burden associated with this rule. We have therefore concluded that this rule will not increase regulatory burden for affected small entities.
This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). Tribal governments would be affected only to the extent they purchase and use regulated vehicles. Thus, Executive Order 13175 does not apply to this action.
This action is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it is not economically significant as defined in Executive Order 12866, and because EPA does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. Any potential environmental health or safety impacts of this final rule would be very small.
This action does not involve application of new technical standards. Therefore, EPA did not consider the use of any voluntary consensus standards.
EPA has determined that this final rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it merely makes minor revisions to existing regulatory programs.
The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A Major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2). The changes to § 1039.625(m) are effective on February 6, 2014. All other provisions in this rule are effective on March 10, 2014.
Statutory authority for the vehicle controls is found in Clean Air Act section 213 (which authorizes standards for emissions of pollutants from new nonroad engines which emissions cause or contribute to air pollution which may reasonably be anticipated to endanger Start Printed Page 7083public health or welfare), sections 203-209, 216, and 301 (42 U.S.C. 7522, 7523, 7524, 7525, 7541, 7542, 7543, 7547, 7550, and 7601).
(g) Alternate FEL caps. You may certify engines to the FEL caps in Table 1 of this section instead of the otherwise applicable FEL caps in § 1039.101(d)(1), § 1039.102(e), or § 1039.102(g)(2) for the indicated model years, subject to the following provisions:
(2) If your engine is not certified to transient emission standards under the provisions of § 1039.102(a)(1)(iii), you must adjust your FEL upward by a temporary compliance adjustment factor (TCAF) before calculating your negative emission credits under § 1039.705, as follows:
Table 1 of § 1039.104—Alternate FEL Caps
NOX FEL cap, g/kW-hr 1
19 ≤ kW < 56 0.30 2 2012-2015
56 ≤ kW < 130 3 0.30 2012-2015 3.8 4 2012-2015
130 ≤ kW ≤ 560 0.20 2011-2014 3.8 5 2011-2014
kW > 560 6 0.10 2015-2018 3.5 2015-2018
1 The FEL cap for engines demonstrating compliance with a NOX + NMHC standard is equal to the previously applicable NOX + NMHC standard specified in 40 CFR 89.112 (generally the Tier 3 standards).
2 For manufacturers certifying engines under Option #1 of Table 3 of § 1039.102, these alternate FEL caps apply to all 19-56 kW engines for model years from 2013 through 2016 instead of the years indicated in this table. For manufacturers certifying engines under Option #2 of Table 3 of § 1039.102, these alternate FEL caps do not apply to 19-37 kW engines except in model years 2013 to 2015.
3 For engines below 75 kW, the FEL caps are 0.40 g/kW-hr for PM emissions and 4.4 g/kW-hr for NOX emissions.
4 For manufacturers certifying engines in this power category using a percentage phase-in/phase-out approach instead of the alternate NOX standards of § 1039.102(e)(1), the alternate NOX FEL cap in the table applies only in the 2014-2015 model years if certifying under § 1039.102(d)(1), and only in the 2015 model year if certifying under § 1039.102(d)(2).
5 For manufacturers certifying engines in this power category using the percentage phase-in/phase-out approach instead of the alternate NOX standard of § 1039.102(e)(2), the alternate NOX FEL cap in the table applies only for the 2014 model year.
6 For engines above 560 kW, the provision for alternate NOX FEL caps is limited to generator-set engines.
(5) You may certify engines under this paragraph (g) in any model year provided for in Table 1 of this section without regard to whether or not the engine family's FEL is at or below the otherwise applicable FEL cap. For example, a 200 kW engine certified to the NOX + NMHC standard of § 1039.102(e)(3) with an FEL equal to the FEL cap of 2.8 g/kW-hr may nevertheless be certified under this paragraph (g).
(6) For engines you produce under this paragraph (g) after the Tier 4 final standards take effect, you may certify based on a NOX + NMHC FEL as described in Table 1 of this section. Calculate emission credits for these Start Printed Page 7084engines relative to the applicable NOX standard in § 1039.101 or § 1039.102, plus 0.1 g/kW-hr.
(v) If we increase the total number of allowances, you may use these allowances only for the specific equipment models covered by your request.
§ 1042.615
Start Part Start Printed Page 7085
What are the provisions for exempting new replacement engines?
The prohibitions in § 1068.101(a)(1) do not apply to a new engine if it is exempt under this section as a replacement engine. For purposes of this section, a replacement engine is a new engine that is used to replace an engine that has already been placed into service (whether the previous engine is replaced in whole or in part with a new engine).
(ii) In the case of premature engine failure, if the old engine was subject to emission standards, you must make the new replacement engine in a configuration identical in all material respects to the old engine and meet the requirements of § 1068.265. You may alternatively make the new replacement engine in a configuration identical in all material respects to another certified engine of the same or later model year as long as the engine is not certified with a family emission limit higher than that of the old engine.
(4) If the old engine was subject to emission standards, the replacement engine must meet the appropriate emission standards as specified in § 1068.265. This generally means you must make the new replacement engine in a previously certified configuration.
(5) Except as specified in paragraph (d) of this section, you must add a permanent label, consistent with § 1068.45, with your corporate name and trademark and the following additional information:
(6) Engines exempt under this paragraph (b) may not be introduced into U.S. commerce before you make the determinations under paragraph (b)(2) of this section, except as specified in this paragraph (b)(6). We may waive this restriction for engines excluded under paragraph (c)(5) of this section that you ship to a distributor. Where we waive this restriction, you must take steps to ensure that the engine is installed consistent with the requirements of this paragraph (b). For example, at a minimum you must report to us Start Printed Page 7086annually whether engines we allowed you to ship to a distributor under this paragraph (b)(6) have been placed into service or remain in inventory. After an engine is placed into service, your report must describe how the engine was installed consistent with the requirements of this paragraph (b). Send these reports to the Designated Compliance Officer by the deadlines we specify.
(c) Previous-tier replacement engines without tracking. You may produce a limited number of new replacement engines that are not from a currently certified engine family under the provisions of this paragraph (c). If you produce new engines under this paragraph (c) to replace engines subject to emission standards, the new replacement engine must be in a configuration identical in all material respects to the old engine and meet the requirements of § 1068.265. You may make the new replacement engine in a configuration identical in all material respects to another certified engine of the same or later model year as long as the engine is not certified with a family emission limit higher than that of the old engine. The provisions of this paragraph (c) also apply for engines that were originally certified to the same standards that apply for the current model year if you no longer have a certificate of conformity to continue producing that engine configuration. This would apply, for example, for engine configurations that were certified in an earlier model year but are no longer covered by a certificate of conformity. The following provisions apply to engines exempted under this paragraph (c):
(1) Provide instructions specifying how to complete the engine assembly such that the resulting engine conforms to the applicable certificate of conformity or the specifications of § 1068.265. Where a partially complete engine can be built into multiple different configurations, you must be able to identify all the engine models and model years for which the partially complete engine may properly be used for replacement purposes. Your instructions must make clear how the final assembler can determine which configurations are appropriate for the engine they receive.
(i) If you have a reasonable basis to believe that the fully assembled engine will include the original emission control information label, you may add a removable label to the engine with your corporate name and trademark and the statement: “This replacement engine is exempt under 40 CFR 1068.240.” This would generally apply if all the engine models that are compatible with the replacement engine were covered by a certificate of conformity and they were labeled in a position on the engine or equipment that is not included as part of the partially complete engine being shipped for replacement purposes. Removable labels must meet the requirements specified in § 1068.45.
(1) Where engine-based standards apply, you may introduce into U.S. commerce short blocks or other partially complete engines from a currently certified engine family as replacement components for in-use equipment powered by engines you originally produced. You must be able to identify all the engine models and model years Start Printed Page 7087for which the partially complete engine may properly be used for replacement purposes.
Table 1 to § 1068.240—Engine Categories and Subcategories for New Replacement Engines Exempted Without Tracking
Standard-setting part 1
Highway CI 40 CFR part 86 disp. < 0.6 L/cyl. 0.6 ≤ disp. < 1.2 L/cyl. disp. ≥ 1.2 L/cyl.
Nonroad CI, Stationary CI, and Marine CI 40 CFR part 1039, or 40 CFR part 1042 disp. < 0.6 L/cyl. 0.6 ≤ disp. < 1.2 L/cyl. 1.2 ≤ disp. < 2.5 L/cyl. 2.5 ≤ disp. < 7.0 L/cyl.
Marine SI 40 CFR part 1045 outboard. personal watercraft.
Recreational vehicles 40 CFR part 1051 off-highway motorcycle. all-terrain vehicle. snowmobile.
Small SI and Stationary SI 40 CFR part 1054 handheld. Class I. Class II.
1 Include an engine as being subject to the identified standard-setting part if it will eventually be subject to emission standards under that part. For example, if you certify marine compression-ignition engines under part 94, count those as if they were already subject to part 1042.
1. Response to Comments from North American Repower Regarding Engine Core Recovery.” EPA memo to Docket EPA-HQ-OAR-2012-0102 from Alan Stout, January 10, 2014.
[FR Doc. 2014-02612 Filed 2-5-14; 8:45 am]