Control of Emissions of Air Pollution From Highway Heavy-Duty Engines

Related Material

Other Related Documents

[Federal Register: October 21, 1997 (Volume 62, Number 203)]
[Rules and Regulations]
[Page 54693-54730]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21oc97-14]

[[Page 54693]]

_______________________________________________________________________

Part II

Environmental Protection Agency

_______________________________________________________________________

40 CFR Parts 9 and 86

Control of Emissions of Air Pollution From Highway Heavy-Duty Engines;
Final Rule

[[Page 54694]]

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 9 and 86

[AMS-FRL-5908-8]
RIN 2060-AF76

Control of Emissions of Air Pollution From Highway Heavy-Duty
Engines

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The new standards and related provisions contained in this
final rule will result in significant progress throughout the country
in protecting public health and the environment. In this action, EPA is
adopting a new emission standard and related provisions for diesel
heavy-duty engines (HDEs) intended for highway operation, beginning
with the 2004 model year. The new standard represents a large reduction
(approximately 50 percent) in emission of oxides of nitrogen
(NO_X), as well as reductions in hydrocarbons (HC) from
diesel trucks and buses. The reduction in NO_X will also
result in significant reductions in secondary nitrate particulate
matter (PM) in areas where levels of nitrate PM are high. For diesel
HDEs, EPA is also finalizing changes to the existing averaging,
banking, and trading program that provide additional flexibility for
manufacturers in complying with the stringent new standards. EPA is
also adopting several provisions to increase the durability of emission
controls, help ensure proper levels of maintenance, and prevent
tampering, including during engine rebuilding. The resulting emission
reductions will translate into significant, long-term improvements in
air quality in many areas of the U.S. This will provide much-needed
assistance to states and regions facing ozone and particulate air
quality problems that are causing a range of adverse health effects for
their citizens, especially in terms of respiratory impairment and
related illnesses.
Although EPA proposed new standards and related averaging, banking,
and trading provisions for otto-cycle HDEs (e.g., gasoline-fueled
engines), EPA is not taking final action for that category of engines
at this time. EPA received several comments urging the Agency to adopt
more stringent control measures for these engines than those proposed
in the NPRM (June 27, 1996). EPA continues to evaluate the comments
received regarding otto-cycle engines and plans to issue a Supplemental
Notice of Proposed Rulemaking to address otto-cycle engines
specifically.

DATES: This regulation is effective December 22, 1997. The
incorporation by reference of a certain publication listed in the
regulations is approved by the Director of the Federal Register as of
December 22, 1997.

ADDRESSES: Materials relevant to this final rule have been placed in
Public Docket No. A-95-26. The docket is located at the Air Docket
Section, U.S. Environmental Protection Agency, 401 M Street SW,
Washington, DC 20460 (Telephone 202-260-7548; Fax 202-260-4400) in Room
M-1500, Waterside Mall, and may be inspected weekdays between 8:00 a.m.
and 5:30 p.m. A reasonable fee may be charged by EPA for copying docket
materials.

FOR FURTHER INFORMATION CONTACT: Chris Lieske, U.S. EPA, Engine
Programs and Compliance Division, 2565 Plymouth Rd., Ann Arbor,
Michigan 48105. Telephone: (313) 668-4584. Fax: (313) 741-7816.

SUPPLEMENTARY INFORMATION:

Regulated Entities

Entities potentially regulated by this action are those that sell
new motor vehicles heavy-duty engines in the United States and entities
who rebuild/remanufacture such engines. Regulated categories and
entities include:

------------------------------------------------------------------------
Category Examples of regulated entities
------------------------------------------------------------------------
Industry.............................. New motor vehicle heavy-duty
engine manufacturers.
Industry.............................. Heavy-duty engine rebuilders/
remanufacturers.
------------------------------------------------------------------------

This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities that EPA is now aware
could potentially 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 40 CFR 86.094-1 and, for engine
rebuilders/remanufacturers, Sec. 86.004-40 of the rule. If you have
questions regarding the applicability of this action to a particular
entity, consult the person listed in the preceding FOR FURTHER
INFORMATION CONTACT section.

Obtaining Electronic Copies of the Regulatory Documents

The preamble, Summary and Analysis of Comments, regulatory language
and Regulatory Impact Analysis are also available electronically from
the EPA Internet Web site. This service is free of charge, except for
any cost you already incur for internet connectivity. The electronic
Federal Register version is made available on the day of publication on
the primary Web site listed below. The EPA Office of Mobile Sources
also publishes these notices on the secondary Web site listed below.

Internet (Web)

http://www.epa.gov/fedrgstr/EPA-AIR/
(either select desired date or use Search feature)

http://www.epa.gov/OMSWWW/
(look in What's New or under the specific rulemaking topic)

Please note that due to differences between the software used to
develop the document and the software into which the document may be
downloaded, changes in format, page length, etc. may occur.

Outline and List of Acronyms

The Supplementary Information section of this final rule is
organized as follows:

I. Introduction/Summary of Proposal
II. Need for Control and Air Quality Benefits of This Rule
A. Ozone
B. Particulate Matter
III. Content of the Final Rule
A. Emission Standards
1. Standard Levels
2. 1999 Review
3. NMHC Measurement
4. Non-Conformance Penalties
B. In-Use Emissions Control Elements
1. Useful life
2. Emissions Related Maintenance
3. Emissions Defect and Performance Warranties
4. Additional Manufacturer Requirements
5. Engine Rebuilding Provisions
C. Revised Averaging, Banking, and Trading Provisions
D. Display of OMB Control Numbers
IV. Public Participation
A. EPA's Air Quality Justification for the Proposed Program
1. Modeling
2. Possible Ozone Increases from NO_X Reduction
3. Trends in Ozone Levels
B. Level of Standards
1. Diesel Engines--NO_X Plus NMHC
2. Highway Diesel Engine--PM
3. Otto-Cycle Engines
C. In-Use Emissions Control and Compliance
1. In-Use Emissions Control Regulatory Elements

[[Page 54695]]

2. State Inspection and Maintenance Programs
3. In-Use Compliance Issues
D. Averaging, Banking, and Trading
1. Applicability
2. The Modified ABT Program (1998-2003)
3. The Modified ABT Program 2004 and Later
4. Other Changes for the Modified ABT Program
V. Economic Impact and Cost-Effectiveness
A. Engine Costs
B. Aggregate Costs to Society
C. Cost-Effectiveness
VI. Administrative Requirements
A. Administrative Designation and Regulatory Analysis
B. Compliance With Regulatory Flexibility Act
C. Compliance With Paperwork Reduction Act
D. Unfunded Mandates Reform Act
E. Submission to Congress and the General Accounting Office
VII. Statutory Authority
VIII. Judicial Review
IX. Copies of Rulemaking Documents

List of Acronyms and Abbreviations

ABT Averaging, banking, and trading
ANPRM Advance Notice of Proposed Rulemaking
ARB Air Resources Board
ATA American Trucking Association
CAA or Act Clean Air Act as amended in 1990
CFR Code of Federal Regulations
DDC Detroit Diesel Corporation
EGR Exhaust gas recirculation
EPA United States Environmental Protection Agency
FRM Final Rulemaking
GVWR Gross vehicle weight rating
HC Hydrocarbons
HDDEs Heavy-duty diesel engines
HDEs Heavy-duty engines
HDVs Heavy-duty vehicles
HHDDEs Heavy heavy-duty diesel engines
HHDVs Heavy heavy-duty vehicles
ICR Information Collection Request
I/M Inspection and Maintenance
LEV Low emissions vehicle
LHDDEs Light heavy-duty diesel engines
LHDVs Light heavy-duty vehicles
MHDDEs Medium heavy-duty diesel engines
MOU Memorandum of Understanding
NAAQS National Ambient Air Quality Standard
NESCAUM Northeast States for Coordinated Air Use Management
NLEV National Low Emissions Vehicle
NMHC Nonmethane hydrocarbons
NO_X Oxides of nitrogen
NPRM Notice of Proposed Rulemaking
NRDC Natural Resources Defense Council
OBD On-bourd diagnotics
OMB Office of Management and Budget
OTAG Ozone Transport Assessment Group
PM Particulate matter
R&D Research and development
RIA Regulatory Impact Analysis
ROM Regional Oxidant Model
SAE Society of Automotive Engineers
SEA Selective Enforcement Audit
SOP Statement of Principles
UAM Urban Airshed Model
VOC Volatile organic compounds

I. Introduction/Summary of Proposal

Air pollution continues to represent a serious threat to the health
and well-being of millions of Americans and a large burden to the U.S.
economy. This threat exists despite the fact that, over the past two
decades, great progress has been made at the local, state and national
levels in controlling emissions from many sources of air pollution. As
a result of this progress, many individual emission sources, both
stationary and mobile, pollute at only a fraction of their pre-control
rates. However, continued industrial growth and expansion of motor
vehicle usage threaten to reverse these past achievements. Today, many
states are finding it difficult to meet the current ozone and PM
National Ambient Air Quality Standards (NAAQSs) by the deadlines
established in the Act.¹ Furthermore, other states which are
approaching or have reached attainment of the current ozone and PM
NAAQSs will likely see those gains lost if current trends persist.
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\1\ See 42 U.S.C. 7401 et seq.
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In recent years, significant efforts have been made on both a
national and state level to reduce air quality problems associated with
ground-level ozone, with a focus on its main precursors, oxides of
nitrogen (NO_X) and volatile organic compounds
(VOCs).² In addition, airborne particulate matter (PM) has
been a major air quality concern in many regions. As discussed below,
ozone and PM have been linked to a range of serious respiratory health
problems and a variety of adverse environmental effects.
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\2\ VOCs consist mostly of hydrocarbons (HC).
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The states have jurisdiction to implement a variety of stationary
source emission controls. In most regions of the country, states are
implementing significant stationary source NO_X controls (as
well as stationary source VOC controls) for controlling acid rain,
ozone, or both. In many areas, however, these controls will not be
sufficient to reach and maintain the current ozone standard without
significant additional NO_X reductions from mobile sources.
Generally, the Clean Air Act specifies that standards for controlling
NO_X, HC, and PM emissions from new motor vehicles must be
established at the federal level.³ Thus, the states look to
the national mobile source emission control program as a complement to
their efforts to meet air quality goals. The concept of common emission
standards for mobile sources across the nation is strongly supported by
manufacturers, which often face serious production inefficiencies when
different requirements apply to engines or vehicles sold in different
states or areas.
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\3\ The CAA limits the role states may play in regulating
emissions from new motor vehicles. California is permitted to
establish emission control standards for new motor vehicles, and
other states may adopt California's programs (Sections 209 and 177
of the Act).
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Motor vehicle emission control programs have a history of
technological success that, in the past, has largely offset the
pressure from constantly growing numbers of vehicles and miles traveled
in the U.S. The per-vehicle rate of emissions from new passenger cars
and light trucks has been reduced to very low levels. As a result,
increasing attention is now focused on heavy-duty trucks (ranging from
large pickups to tractor-trailers), buses, and nonroad equipment.
Since the 1970s, manufacturers of heavy-duty engines for highway
use have developed new technological approaches in response to periodic
increases in the stringency of emission standards.⁴ However,
the technological characteristics of heavy-duty engines, particularly
diesel engines, have thus far prevented achievement of emission levels
comparable to today's light-duty gasoline vehicles. While diesel
engines provide advantages in terms of fuel efficiency, reliability,
and durability, controlling NO_X emissions is a greater
challenge for diesel engines than for gasoline engines. Similarly,
control of PM emissions, which are very low for gasoline engines,
represents a substantial challenge for diesel engines. Part of this
challenge is that most traditional NO_X control approaches
tend to increase PM, and vice versa.
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\4\ Highway heavy-duty engines, sometimes referred to as highway
HDEs, are used in heavy-duty vehicles, which EPA defines as highway
vehicles with a gross vehicle weight rating over 8,500 pounds.
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Despite these technological challenges, there is substantial
evidence of the ability for heavy-duty highway engines to achieve
significant additional emission reductions. In their successful efforts
to reach lower NO_X and PM levels over the past 20 years,
heavy-duty highway diesel engine manufacturers have identified new
technologies and approaches that offer promise for significant new
reductions. The emerging technological potential for much cleaner
diesel heavy-duty engines is discussed elsewhere in this preamble and
in the Regulatory Impact Analysis (RIA) associated with this final
rule.
Recognizing the need for additional NO_X and PM control
measures to address air quality concerns in several

[[Page 54696]]

parts of the country and the growing contribution of the heavy-duty
engine sector to ozone and PM problems, EPA, the California Air
Resources Board, and engine manufacturers representing over 90 percent
of annual nationwide engine sales signed a Statement of Principles
(SOP) in July of 1995. The SOP established a framework for a proposed
rulemaking, setting out goals and conditions supported by the
signatories. EPA sought early comment on the general regulatory
framework laid out in the SOP in an Advance Notice of Proposed
Rulemaking (ANPRM) on August 31, 1995 (60 FR 45580) and issued a Notice
of Proposed Rulemaking (NPRM) on June 27, 1996 (61 FR 33421).
The centerpiece of EPA's proposal was a new NO_X plus
nonmethane hydrocarbon standard (NMHC) of 2.4 g/bhp-hr (or 2.5 g with a
0.5 g NMHC cap) for 2004 and later model years, which represents over a
50 percent reduction from the 1998 NO_X and HC standard of
4.0 g/bhp-hr and 1.3 g/bhp-hr, respectively. EPA proposed the standard
for both diesel and otto-cycle (primarily gasoline-fueled) engines. EPA
requested comment on options for more stringent control of emissions
from otto-cycle engine in response to comments received by the Agency
on the ANPRM. Because the standards would require the use of
technologies not yet fully developed and proven, EPA also proposed to
reopen the rulemaking in 1999 and review the appropriateness of the
standards.
In addition, EPA proposed several other provisions. To provide
critical flexibility to the manufacturers and help ease their
transition to the new standards, EPA proposed a modified averaging,
banking, and trading (ABT) program. The proposed program was viewed to
be tied directly to the stringency of the standard. In the NPRM, the
Agency stressed that the program changes would allow manufacturers to
reasonably achieve a more stringent standard earlier than without the
changes. EPA proposed a modified program for model years 1998 through
2006, with the current ABT program resuming in 2007. Under the proposed
modified program, engine manufacturers could earn undiscounted,
unlimited life NO_X and PM credits for use in meeting the
2004 standards. The current program requires a one-time 20 percent
discount on any credits traded or banked for future use and limits
credit life to 3 years. For the modified program, EPA also proposed
that manufacturers maintain at least a 5 percent compliance margin,
unless they had data to support the use of a smaller margin.
EPA also proposed several provisions to help ensure adequate
durability of emissions controls and proper maintenance and repair of
emissions controls during the life of the engine, including during
engine rebuilding. EPA viewed the proposals as necessary because the
proposed standards would likely prompt manufacturers to add emissions
control technologies, such as exhaust gas recirculation and exhaust
aftertreatment. The failure of such systems would not necessarily cause
decreased engine performance. Thus, EPA could not be certain that
failure of emissions control systems would prompt the owner to perform
repairs. Additionally, the proposed changes were intended to update
existing requirements to consider recent increases in engine life.
The primary proposals for updating existing regulations included a
proposed increase in the useful life mileage interval for heavy heavy-
duty engines from 290,000 miles to 435,000 miles, an increase in the
minimum allowable maintenance intervals for several emissions related
components, and changes in the emissions defect and performance
warranties. EPA also proposed provisions to help ensure that emission
controls are properly addressed during the process of engine rebuilding
and not removed or otherwise dismantled.
This preamble is organized as follows: Section II. describes the
need for control and air quality benefits associated with the final
rule, Section III. describes in detail the standards and all other
provisions being finalized; Section IV. describes each of the
proposals, key comments received by EPA, and any changes to the
proposals as a result of those comments; Section V. reviews the results
of EPA's economic analyses; The remaining preamble sections pertain to
administrative requirements, statutory authority, judicial review, and
more information on how to obtain copies of rulemaking documents. The
actual regulatory language follows the preamble.

II. Need for Control and Air Quality Benefits of This Rule

The new emission standards for highway HDEs that EPA is issuing
today represent a major step in reducing the human health and
environmental impacts of ground-level ozone and a significant
contribution to reducing secondary nitrate particulate matter (PM).
This section summarizes the air quality rationale for these new
standards and their anticipated impact on heavy-duty vehicle emissions.

A. Ozone

There is a large body of evidence showing that ozone (which is
caused by the photochemical reaction of NO_X and VOCs) causes
harmful respiratory effects including chest pain, coughing, and
shortness of breath, affecting people with compromised respiratory
systems and children most severely. In addition, NO_X itself
can directly harm human health. Beyond their human health effects,
other negative environmental effects are also associated with ozone and
NO_X. Ozone has been shown to injure plants and materials;
NO_X contributes to the secondary formation of PM (nitrates),
acid deposition, and the overgrowth of algae in coastal estuaries.
These environmental effects, as well as the health effects noted above,
are described in the Regulatory Impact Analysis. (Additional
information may be found in EPA's ``staff papers'' and ``air quality
criteria'' documents for ozone and nitrogen oxides ⁵
⁶ ⁷ ⁸).
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\5\ U.S. EPA, 1996, Review of National Ambient Air Quality
Standards for Ozone, Assessment of Scientific and Technical
Information, OAQPS Staff Paper, EPA-452/R-96-007.
\6\ U.S.EPA, 1996, Air Quality Criteria for Ozone and Related
Photochemical Oxidants, EPA/600/P-93/004aF.
\7\ U.S. EPA, 1995, Review of National Ambient Air Quality
Standards for Nitrogen Dioxide, Assessment of Scientific and
Technical Information, OAQPS Staff Paper, EPA-452/R-95-005.
\8\ U.S.EPA, 1993, Air Quality Criteria for Oxides of Nitrogen,
EPA/600/8-91/049aF.
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Today, many states are finding it difficult to show how they can
meet or maintain compliance with the current National Ambient Air
Quality Standard (NAAQS) for ozone by the deadlines established in the
Act. ⁹ There are 66 areas currently designated
``nonattainment'' for ozone.
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\ 9\ See 42 U.S.C. 7401 et seq.
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Local, state and federal organizations charged with delivering
cleaner air have mounted significant efforts in recent years to reduce
air quality problems associated with ground-level ozone, and there are
signs of partial success. The main precursors of ozone, oxides of
nitrogen (NO_X) and volatile organic compounds (VOCs)
¹0 appear to have been reduced, and average levels of ozone
seem to have begun gradually decreasing. However, this progress is in
jeopardy. EPA projects that reductions in ozone precursors that will
result from the full implementation of current emission control
programs will fall far short of what would be needed to offset the
normal emission increases that accompany economic expansion. By the
middle of the next decade, the Agency expects that the downward trends
will have reversed, primarily due to

[[Page 54697]]

increasing numbers of emission sources. By around 2020, EPA expects
that NO_X levels will have returned to current levels in the
absence of significant new reductions.¹1 To the extent that
some areas are seeing a gradual decrease in ozone levels in recent
years, EPA believes that the expected increase in NO_X will
likely result in an increase in ozone problems in the future.
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\10\ VOCs consist mostly of hydrocarbons (HC).
\11\ See Chapter 2 of the Regulatory Impact Analysis associated
with this rule.
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NO_X controls are an effective strategy for reducing
ozone where its levels are relatively high over a large region (as in
the Northeast and much of the Midwest, Southeast, and California). EPA
and states see control of NO_X emissions as a key to
improving regional-scale air quality in many parts of the country, in
addition to local-scale VOC and NO_X controls. Specifically,
EPA believes that regional-scale reductions in NO_X emissions
will be necessary for many areas to attain and maintain compliance with
the current ozone NAAQS. For the regions listed above, the
NO_X reductions needed are very large (greater than 50
percent from base 1990 emissions in many cases). New programs to
control emissions from both stationary and mobile sources will be
necessary in most of these areas, since it is unlikely that cost
effective controls of this magnitude can be achieved with either source
category alone. Although in some locations and circumstances moderate
reductions in local NO_X emissions may be associated with
localized increases in ozone, the Agency is convinced that the ultimate
attainment goal of all nonattainment areas necessitates continued
reduction of regional-scale NO_X emissions.
The new emission standards for highway HDEs issued in today's rule
are intended to address the effects of ozone (and also PM, as discussed
below) through substantial regional-scale reductions in NO_X
throughout the country. EPA projects that the nationwide NO_X
reduction by 2020 will be approximately 1.1 million tons per year, or
about 9.5 percent of projected 2020 mobile source NO_X
emissions and 4.5 percent of all 2020 NO_X emissions. This is
shown in Figure 1 and is discussed in detail in the RIA for this rule.
The Agency also expects that small NMHC reductions will also result
from this program. EPA has designed this program to play a significant
role in reducing ozone levels in many areas of the country in concert
with other mobile source and stationary source ozone reduction programs
at the federal, state, and local levels.

BILLING CODE 6560-50-P

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[GRAPHIC] [TIFF OMITTED] TR21OC97.000

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B. Particulate Matter

Particulate matter, like ozone, has been linked to a range of
serious respiratory health problems. Particles are deposited deep in
the lungs and result in effects including premature death, increased
hospital admissions and emergency room visits, increased respiratory
symptoms and disease, decreased lung function (particularly in children
and individuals with asthma), and alterations in lung tissue and
structure and in respiratory tract defense mechanisms. These effects
are discussed further in the RIA for this rule. (Additional information
may be found in EPA's ``staff paper'' and ``air quality criteriadocument'' for particulate matter.¹2 ¹3)
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\12\ U.S. EPA, 1996, Review of National Ambient Air Quality
Standards for Particulate Matter, Assessment of Scientific and
Technical Information, OAQPS Staff Paper, EPA-452/R-96-013.
\13\ U.S.EPA, 1996, Air Quality Criteria for Particulate Matter,
EPA/600/P-95/001aF.
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Currently, there are 80 PM-10 nonattainment areas across the U.S.
(PM-10 refers to particles smaller than 10 microns in diameter). As is
the case with NO_X, levels of PM caused by mobile sources are
also expected to rise in the future. EPA believes that this projected
increase will occur both because of the expected increase in numbers of
PM sources, including diesel engines, and because NO_X from
heavy-duty diesels and other sources is transformed in the atmosphere
into fine secondary nitrate particles.
Secondary nitrate PM accounts for a substantial fraction of the
airborne particulate in some areas of the country, especially in the
West. Measurements of ambient PM in some western U.S. urban areas that
are having difficulty meeting the current NAAQS for PM-10 have
indicated that secondary PM is a very important component of the
problem. Secondary nitrate PM (consisting mostly ammonium nitrate) is
the major constituent of this secondary PM. For example, in Denver, on
days when PM levels are high, about 25 percent of the measured PM-2.5
is ammonium nitrate. In the Provo/Salt Lake City area, secondary PM
comprises about 40 percent of the measured PM-10. Similarly, in the Los
Angeles Basin, secondary nitrate PM levels represent about 25 percent
of measured PM-10.¹4 Nitrate PM constitutes a smaller, but
often important, fraction of PM in other areas of the country.
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\14\ Summary of Local-Scale Source Characterization Studies,
EPA-230-S-95-002, July, 1994.
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Because the atmospheric chemistry of secondary PM formation has
common attributes to that of ozone, secondary PM also tends to be a
regional, rather than a strictly local phenomenon. For this reason, EPA
believes that regional-scale NO_X controls, including control
of mobile NO_X sources, are very effective in reducing
secondary PM over a significant area. For example, California's PM SIPs
for serious areas conclude that secondary formation of nitrate
particulate due to regional-scale NO_X emissions contributes
to the particulate problem in the South Coast Air Basin, Coachella
Area, and the San Joaquin Valley.¹5 EPA and the State of
California believe that reduction of this fraction of the total PM will
require additional regional-scale reductions in NO_X
emissions.
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\15\ Memorandum to the docket from Carol Bohnenkamp, EPA Region
9, regarding regional nature of secondary nitrate PM in California,
July 30, 1997. Docket A-95-27.
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The primary effect of the standards promulgated in this Notice on
ambient PM levels will occur as a result of the large anticipated
reductions in NO_X. EPA expects that the resulting reductions
in secondary PM will be significant, especially in areas of the West
where nitrate PM is a major contributor to overall PM levels. In the
proposal, EPA estimated on the basis of existing information that 100
tons of NO_X will on average result in the formation of about
4 tons of nitrate PM. EPA recently evaluated this effect in more
detail.¹6 The report's conclusions confirmed EPA's earlier
estimate, also concluding that 100 tons of NO_X reduction
will on average result in about 4 tons of secondary PM reduction. (The
conversion rate varies from region to region, and is greatest in the
West.). Based on the average conversion rate, EPA estimates that the
approximately 1.1 million tons per year of NO_X reduction
from today's rule by 2020 will result in a national average reduction
in secondary PM of about 44,000 tons per year. This estimated average
nitrate PM reduction is similar in magnitude to that which would result
from reducing the diesel PM emission standard by half.¹7
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\16\ Benefits of Mobile Source NO_X Related
Particulate Matter Reductions, October 1996, EPA Contract No. 68-C5-
0010.
\17\ Based on the following calculation: The difference between
the 1998 and 2004 HDE NO_X standards is nominally 2.0 g/
bhp-hr (4.0 vs. 2.0 g/bhp-hr). Using the above estimated average
factor of 4% of NO_X being converted to secondary PM, an
equivalent reduction in secondary PM of 0.08 g/bhp-hr can be
estimated. This reduction in secondary PM compares to the roughly
0.05 g/bhp-hr that potentially would result from a reduction in the
HDE PM standard from 0.1 to 0.05 g/bhp-hr.
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III. Content of the Final Rule

The following is a concise description of the regulations being
adopted in this final rule, with any changes from the proposal also
noted. A summary of the proposal is contained in preamble Section I.,
above. A full description of the proposals, supporting rationale for
these actions, and response to comments are contained in the Summary
and Analysis of Comments for the rule. Preamble section IV., Public
Participation, also provides additional information.

A. Emission Standards

1. Standard Levels
EPA is adopting the proposed NMHC+NO_X emission standards
for on-highway heavy-duty diesel-cycle engines fueled by diesel,
methanol, and gaseous fuels and their blends. These standards apply to
model year 2004 and later. Engine manufacturers will have the choice of
certifying heavy-duty diesel engines to either of two optional sets of
standards:

2.4 g/bhp-hr NMHC+NO^x, or
2.5 g/bhp-hr NMHC+NO_X with a limit of 0.5 g/bhp-hr on NMHC.

All emissions standards other than NMHC and NO_X applying to
1998 and later model year heavy-duty engines continue at their 1998
levels. No new standards are being finalized for on-highway heavy-duty
otto-cycle engines.
2. 1999 Review
EPA is also finalizing today a regulatory provision providing for
1999 review of the standard levels finalized in this rule. As proposed,
this review will reassess the appropriateness of the standards under
the Clean Air Act including the need for and technical and economical
feasibility of the standards based on information available in 1999. If
during the review EPA concludes that a revision is appropriate, a
rulemaking will be conducted to determine the appropriate level for the
model year 2004 and later standards. The standards finalized today will
stay in effect unless revised by this subsequent rulemaking procedure.
In addition, EPA, together with the oil and engine industries, is
engaged in assessing the potential impact of fuel changes on emissions
from 2004 and later model year diesel engine technology.
The 1999 review process has the potential of either tightening or
relaxing the standards finalized today. If due to new information in
1999 EPA finds the standards to not be technologically feasible for
model year 2004 or otherwise not in accordance with the Act, then EPA
expects to propose adjusted standards which do not exceed the
following:

[[Page 54700]]

2.9 g/bhp-hr NMHC+NO^x or
3.0 g/bhp-hr NMHC+NO^x with a limit of 0.6 g/bhp-hr NMHC

EPA believes that the 2004 model year standards being finalized
today are technologically feasible without any changes to diesel fuel.
As part of the 1999 review, EPA will evaluate in light of any new
information whether diesel fuel improvements are needed for the
standards to be appropriate for 2004. If EPA finds that diesel fuel
changes are needed to meet the standards finalized here and if EPA
believes such changes would be a cost-effective method for reducing
emissions and appropriate under section 211 of the Clean Air Act, then
EPA will address the potential for fuel improvements through a separate
rulemaking which will include a separate cost-effectiveness analysis
and opportunity for public comment. However, if EPA were to determine
in the 1999 review that the feasibility of the standards requires
diesel fuel changes and EPA does not engage in a rulemaking to require
such changes, EPA expects to propose adjusted standards which do not
exceed the following:

3.4 g/bhp-hr NMHC+NO^x or
3.5 g/bhp-hr NMHC+NO^x with a limit of 0.7 g/bhp-hr on NMHC

Based on the technical analysis in the RIA, the levels described
above represent upper limits for any potential revisions. Because EPA
does not at this point predict further breakthroughs in innovative
emission reduction technology for mass production in the 2004 time
frame which would allow for a standard lower than that being finalized,
a lower limit is not predicted at this time. However, if EPA determines
that lower standards are technologically feasible and appropriate under
the Clean Air Act, EPA expects to propose those lower standards.
3. NMHC Measurement
For heavy-duty diesel engines, EPA is allowing three options to the
measurement procedures currently in place for alternative fueled
engines. They are as follows: (1) Use a THC measurement in place of an
NMHC measurement; (2) use a measurement procedure specified by the
manufacturer with prior approval of the Administrator; or (3) subtract
two percent from the measured THC value to obtain an NMHC value. The
methodology must be specified at time of certification and will remain
the same for the engine family throughout the engines' useful life.
For natural gas vehicles, EPA is allowing the option of measuring
NMHC through direct quantification of individual species by gas
chromatography.
4. Non-Conformance Penalties
Section 206(g) of the Clean Air Act requires EPA to allow a HDE
manufacturer to receive a certificate of compliance for an engine
family which exceeds the applicable standard (but does not exceed an
upper limit) if the manufacturer pays a non-conformance penalty
established by EPA through rulemaking. The NCP program established
through rulemaking is codified in Subpart L of 40 CFR Part 86. EPA
plans to address provisions related to NCPs for the 2004 model year
standards in conjunction with the 1999 review discussed above.

B. In-Use Emissions Control Elements

EPA is finalizing provisions to enhance the control of emissions
from in-use vehicles subject to the new model year 2004 standards.
Where noted, some of the provisions below also apply to 2004 and later
model year otto-cycle engines. The in-use provisions include both: (1)
Revisions of existing regulations, including useful life, emissions-
related maintenance, and emissions defect and performance warranties,
and (2) new provisions regarding maintenance and repair of emissions
controls after the end of the useful life, including manufacturer
requirements and engine rebuild provisions. All of the following
changes to the regulations are effective beginning with the 2004 model
year.
1. Useful Life
EPA is finalizing a revised useful life for the heavy heavy-duty
diesel engine service class of 435,000 miles, 22,000 hours, or 10
years, whichever occurs first, for all pollutants beginning in model
year 2004.¹8 In response to comments, EPA has modified the
useful life for heavy heavy-duty engines from the proposal by
increasing the hours interval and removing a minimum mileage interval.
EPA proposed a useful life of 435,000 miles, 13,000 hours, or ten years
whichever occurred first, but in no case less than 290,000 miles. As
proposed, EPA is also establishing a useful life years interval of 10
years for all heavy-duty engine service classes, otto-cycle and diesel-
cycle, and all pollutants.
---------------------------------------------------------------------------

\18\ Note that for an individual engine, if the useful life
hours interval is reached before the engine reaches 10 year or
100,000 miles, the useful life shall become 10 years/100,000 miles,
whichever occurs first, as required under Clean Air Act section
202(d). EPA believes that this provision will be used only very
rarely, if ever, given the usage patterns of affected vehicles.
---------------------------------------------------------------------------

2. Emissions Related Maintenance
EPA is finalizing the changes to emission related maintenance
intervals shown in Table 1, with compliance beginning in 2004. The
intervals are in miles or hours, whichever occurs first. The term
``Add-on emissions-related component'' is being defined as a component
whose sole or primary purpose is to reduce emissions or whose failure
will significantly degrade emissions control and whose function is not
integral to the design and performance of the engine. EPA is not
changing the interval for EGR filters and coolers from its current
interval of 50,000 miles (1,500 hours). The maintenance interval
changes are being finalized as proposed.

Table 1--Changes to Minimum Emission-Related Maintenance Intervals
----------------------------------------------------------------------------------------------------------------
Intended service class Component or system Change to minimum maintenance interval
----------------------------------------------------------------------------------------------------------------
Otto-cycle engines................. EGR system (except filters Increase from 50,000 miles (1,500 hours) to
and coolers). 100,000 miles (3,000 hours).
Light HDDEs........................ EGR system (except filters Increase from 50,000 miles (1,500 hours) to
and coolers). 100,000 miles (3,000 hours).
--Add-on emission-related Establish 100,000 mile (3,000 hour) interval.
components.
--Catalytic converter
Medium and heavy HDDEs............. EGR system (except filters Increase from 50,000 miles (1,500 hours) to
and coolers). 150,000 miles (4,500 hours).

[[Page 54701]]

--Add-on emission-related Establish 150,000 mile (4,500 hour) interval.
components.
--Catalytic converter
----------------------------------------------------------------------------------------------------------------

3. Emissions Defect and Performance Warranties
Currently, the emissions defect and emissions performance warranty
periods are specified in hours and miles intervals. The regulations
also provide that the warranty periods for highway HDEs may in no case
be less than the manufacturer's basic mechanical warranty period for
the engine family.¹9 However, manufacturers often provide
extended warranties for individual engines. EPA proposed that the
warranty period be at least as long as the basic mechanical warranty of
the engine, whether it be the published warranty for the engine family
or a longer warranty provided to the engine purchaser. In response to
comments, EPA is revising the regulations regarding the warranty period
as follows. The warranty period shall not be less than the basic
mechanical warranty of the particular engine as provided to the
purchaser. Thus, the warranty shall be longer than that published for
the engine family in cases where a manufacturer provides to the
customer a longer basic mechanical warranty for a particular engine.
Extended warranties on select parts do not extend the emissions
warranty requirements for the entire engine but only for those parts.
Also, in cases where responsibility for an extended mechanical warranty
is shared between the owner and the manufacturer, the manufacturer is
responsible only for their share of the emissions warranty per the
warranty agreement. These changes to the warranty provisions apply to
both diesel and otto-cycle engines.
---------------------------------------------------------------------------

\19\ 40 CFR 86.094-2(f).
---------------------------------------------------------------------------

4. Additional Manufacturer Requirements
EPA proposed modest new manufacturer requirements which may
increase the likelihood of emissions related maintenance being
performed when needed after the end of the engine's useful life by
providing information to the vehicle owner. EPA received only
supportive comments on these proposals. Therefore, all of the following
manufacturer requirements are being finalized as proposed for both
diesel and otto-cycle engines.
Engine manufacturers provide owners with manuals specifying
maintenance needed to ensure proper engine operation. Starting in 2004,
EPA is requiring that manufacturers include in the engine service
manual, maintenance which may be needed for emissions related
components after the end of the engine's regulatory useful life,
including mileage/hours intervals and procedures for determining
whether or not maintenance or repair is needed. The recommended
practices must also include instructions for accessing and responding
to any emissions-related diagnostic codes that may be stored in on-
board monitoring systems. The recommended maintenance practices may be
based on engineering analysis or other sound technical rationale. In
the event that an emission-related component is designed not to need
maintenance during the full life of the vehicle, the manual would need
to contain, at a minimum, a description of the component, noting its
purpose, and a statement that the component is expected to last the
life of the vehicle without maintenance or repair. In addition,
manufacturers are required to include in the manual the rebuild
provisions being adopted by the Agency, as described below, to ensure
that owners and rebuilders are aware of the requirements.
Under existing regulations, manufacturers must ensure that critical
emissions-related scheduled maintenance has a reasonable likelihood of
being performed in-use. Manufacturers may elect to provide such
assurance by using some form of on-board driver notification when
maintenance is needed on a critical emission related
component.²⁰ The signal may be triggered either based on
mileage intervals or component failure. It is currently considered a
violation of the Clean Air Act's prohibition on tampering (Section
203(a)(3)) to disable or reset the signal without also performing the
indicated maintenance procedure.²¹
---------------------------------------------------------------------------

\20\ 40 CFR 86.094-25(b)(6)(ii)(C).
\21\ 40 CFR 86.094-25(b)(6)(iii).
---------------------------------------------------------------------------

EPA is finalizing a requirement that manufacturers of 2004 and
later model year engines electing to use such signal systems to ensure
that critical emissions-related maintenance has a reasonable likelihood
of being performed must design the systems so that they do not cease to
function at or beyond the end of the regulatory useful life. For
example, if the signal is designed to be actuated based on mileage
intervals, it must be designed to continue to signal the driver at the
same intervals after the end of the useful life. EPA will not, however,
hold the manufacturer responsible or liable for recall due to signal
failure in instances where the signal fails to function as designed
beyond the end of the useful life. Manufacturer recall liability is
limited to failures during the regulatory useful life under section 207
of the Clean Air Act. (The manufacturer is also not responsible for
repairs when the signal does function after the end of the useful life
unless such repairs are covered by the emission warranty.)
5. Engine Rebuilding Provisions
Clean Air Act section 203(a)(3) states that it is prohibited for
``any person to remove or render inoperative any device or element of
design installed on or in a motor vehicle or motor vehicle engine'' in
compliance with regulations, either before or after its sale and
delivery to the ultimate purchaser. 42 U.S.C. 7522 (a)(3)(A). EPA
commonly refers to violations of this provision of the Clean Air Act as
tampering. Engine rebuilding practices are currently addressed in
general terms under EPA policies established under Clean Air Act
section 203(a)(3) regarding tampering. The Agency has established a
policy that when switching heavy-duty engines the new engine must be
``identical to a certified configuration of a heavy-duty engine of the
same or newer model year''.²² EPA has also established
policies regarding the use of aftermarket parts during
rebuild.²³ EPA is codifying these policies as they apply to
engine rebuilding, and also finalizing new measures, as follows, for
both diesel and otto-cycle engines.
---------------------------------------------------------------------------

\22\ Engine Switching Fact Sheet, April 2, 1991. Docket A-95-27,
II-B-6.
\23\ ``Interim Tampering Enforcement Policy'', Mobile Source
Enforcement Memorandum No. 1A., June 25, 1974. Docket A-95-27, II-B-
5.

---------------------------------------------------------------------------

[[Page 54702]]

Under the regulatory provisions finalized today, parties involved
in the process of rebuilding or remanufacturing model year 2004 and
later engines (which may include the removal of the engine, rebuilding,
assembly, reinstallation and other acts associated with engine
rebuilding) must follow the provisions described below to avoid the
actions being characterized as tampering with the engine and its
emissions controls:
(1) During engine rebuilding, parties involved must have a
reasonable technical basis for knowing that the rebuilt engine is
equivalent, from an emissions standpoint, to a certified configuration
(i.e., tolerances, calibrations, specifications) and the model year(s)
of the engine configuration must be identified. A reasonable basis
would exist if:
(a) Parts used when rebuilding an engine, whether the part is new,
used, or rebuilt, is such that a person familiar with the design and
function of motor vehicle engines would reasonably believe that the
part performs the same function with respect to emissions control as
the original part, and
(b) Any parameter adjustment or design element change is made only
(i) in accordance with the original engine manufacturer's instructions
or (ii) where data or other reasonable technical basis exists that such
parameter adjustment or design element change, when performed on the
engine or similar engines, is not expected to adversely affect in-use
emissions.
(2) When an engine is being rebuilt and remains installed or is
reinstalled in the same vehicle, it must be rebuilt to a configuration
of the same or later model year as the original engine. When an engine
is being replaced, the replacement engine must be an engine of (or
rebuilt to) a configuration of the same or later model year as the
original engine.
(3) At the time of rebuild, emissions-related codes or signals from
on-board monitoring systems may not be erased or reset without
diagnosing and responding appropriately to the diagnostic codes,
regardless of whether the systems are installed to satisfy EPA
requirements under 40 CFR 86.094-25 or for other reasons and regardless
of form or interface. Diagnostic systems must be free of all such codes
when the rebuilt engines are returned to service. Further, such signals
may not be rendered inoperative during the rebuilding process.
(4) When conducting an in-frame rebuild or the installation of a
rebuilt engine, all emissions-related components not otherwise
addressed by the above provisions must be checked and cleaned,
repaired, or replaced where necessary, following manufacturer
recommended practices.
Any person or entity engaged in the process, in whole or in part,
of rebuilding engines who fails to comply with the above provisions
shall be liable for tampering in violation of CAA section 203(a)(3).
Parties are responsible for the activities over which they have control
and as such there may be more than one responsible party for a single
engine in cases where different parties perform different tasks during
the engine rebuilding process (e.g., engine rebuild, full engine
assembly, installation). EPA is not finalizing any certification or in-
use emissions requirements for the rebuilder or engine owner.
In response to comments, EPA has removed proposed provisions
requiring that the rebuilder or remanufacturer rebuild engines to the
same or newer model year configuration when the engine is not going to
be placed back into the original vehicle. EPA has also modified rebuild
provision (2) which, in the proposal, read ``A replacement engine must
be of (or rebuilt to) a configuration of the same or later model year
engine. Thus, in addition, under the proposed regulations a party
supplying a rebuilt engine would be prohibited from supplying a
replacement engine that is not rebuilt to a configuration of the same
or later model year as the trade-in engine.'' Provision (2) was
modified because the language regarding ``a party supplying a rebuilt
engine'' could be construed to mean an engine remanufacturer or other
party not working directly with the vehicle. EPA believes that parties
not working directly with the vehicle should not have an obligation to
ensure that the correct engine is placed in the vehicle.
EPA is adopting minor recordkeeping requirements which EPA believes
are in-line with customary business practices and which will assist EPA
in assessing compliance with the new rebuild provisions. The records
shall be kept by persons involved in the process of heavy-duty engine
rebuilding or remanufacturing and shall include the mileage and/or
hours at time of rebuild and a list of the work performed on the engine
and related emission control systems including a list of replacement
parts used, engine parameter adjustments, design element changes,
emissions related codes and signals that are responded to and reset and
the response to the signals and codes, and work performed as described
in item (4) of the rebuild provisions above. EPA is requiring such
records to be kept for two years after the engine is rebuilt.
Parties may keep the information in whatever format or system they
choose, provided that the information can be understood by an EPA
enforcement officer. Parties are not required to keep information that
they do not have access to as part of normal business practices.
If it is customary practice to keep records for engine families
rather than specific engines, where the engines within that family are
being rebuilt or remanufactured to an identical configuration, such
recordkeeping practices would satisfy these requirements. Rebuilders
can use records such as build lists, parts lists, and engineering
parameters that they keep for the engine families being rebuilt rather
than on individual engines, provided each engine is rebuilt in the same
way to those specifications. In addition, rebuilders are not required
to keep information on each individual emissions related diagnostic
code that might be reset if the codes are always addressed through a
set of uniform procedures that are followed during the rebuilding
process. For example, if an engine is equipped with a sensor that
monitors the EGR flow rate, the rebuilder may keep on record the
specifications and procedures used to rebuild the EGR system in all
instances. EPA expects that engine remanufacturers currently keep these
types of records in order to control the quality of their products.
In the NPRM, EPA explained that it was considering adopting minor
recordkeeping requirements in the final rule. In response to comments,
EPA has modified the contemplated recordkeeping requirements to: (1)
Further clarify that records may be kept on an engine family basis, (2)
allow parties to keep information in whatever format or system they
choose, provided that the information can be understood by an EPA
enforcement officer, and (3) not require parties to keep information
that they do not have access to as part of normal business practices.

C. Revised Averaging, Banking, and Trading Provisions

EPA is finalizing with revisions various modifications to the ABT
program. EPA believes this program is an important element in making
the stringent emissions standards adopted today appropriate with regard
to technological feasibility, lead time, and cost. The ABT program
provides important flexibility to manufacturers, helping them to
transition their entire product lines to the new standards. The ABT
program also encourages the early

[[Page 54703]]

introduction of cleaner engines, thus securing earlier emissions
benefits. The modified ABT program being implemented by EPA for 1998
and later model year engines applies only to diesel cycle engines. EPA
proposed but is not finalizing the modified ABT program for otto-cycle
engines. (The ABT program implemented in 1990 remains in effect for
otto-cycle engines). The provisions being finalized for the modified
ABT program are described below. As proposed, the modified program and
current program are separate and engines cannot participate in both
programs. Credits generated under the modified program may be used only
in 2004 and later model years. As was proposed, credits generated
between 1998 and 2003 are based on NO_X only, not
NMHC+NO_X, and are calculated against the 4.0 g/BHP-hr
NO_X emission standard. Diesel PM credits are based on
reductions beyond the 0.10 g/BHP-hr emission standard for truck engines
and the 0.05 g/BHP-hr emission standard for urban buses. Credits earned
under the modified program may be transferred to the current program
but would then be subject to the current program's credit life limit of
three years from model year of generation and a one-time 20 percent
discount.
For the modified program between 1998 and 2003, for engine families
certified at NO_X levels 3.5 g/BHP-hr, no discount
will be applied to any NO_X or PM credits generated for
banking or trading. For engine families certified at NO_X
levels above 3.5 g/BHP-hr, a one-time 10 percent discount will be
applied to all credits generated for banking and trading against the
model year 2004 standards, both NO_X and PM. For example, if
an engine family is certified to a NO_X level of 3.7 in the
modified program, the manufacturer will earn only 0.27 g/bhp-hr
(0.3x.9) credit for use in meeting the 2004 standard. The credit life
for credits under the modified program is unlimited.
Beginning in 2004, the form of the standard changes from separate
HC and NO_X standards to a combined NMHC+NO_X
standard. Therefore, starting in 2004, credits will be based on
combined NMHC+NO_X values. NMHC+NO_X credits will
be generated against the 2.4 g/BHP-hr standard. Diesel PM credits will
continue to be generated against the 0.10 g/BHP-hr emission standard
for truck engines and the 0.05 g/BHP-hr emission standard for urban
buses. For engine families certified with NMHC+NO_X levels at
or below 1.9 g/BHP-hr, credits will not be discounted. Credits for
banking and trading will be discounted by 10 percent for engines with
certification levels above 1.9 g/bhp-hr NMHC+NO_X with the
following exception: carry-over engine families certified prior to 2004
with NO_X+NMHC certification levels below the 2004 standards
may earn undiscounted credits through model year 2006. For model year
2007 and thereafter, the 10 percent discount applies. As with credits
generated in the modified program prior to 2004, there will be no limit
on credit life for credits generated after 2004 under the modified
program. As proposed, the upper limits for NMHC+NO_X and PM
certification will be 4.5 g/BHP-hr and 0.25 g/BHP-hr, respectively.
That is, no engine family may use credits to establish FELs above
either of these levels.
For reasons discussed later in this document, as well as in the
Summary and Analysis of Comments, the provisions regarding credit life
and discounting differ somewhat from those proposed. EPA proposed no
discounting or credit life limits for the modified program. EPA also
proposed that the modified program end in 2007 and that all credits
thereafter would be generated under the current program which includes
a one-time discount of 20 percent and a three year credit life limit.
Under the final rule, the modified program does not end in 2007, but
continues indefinitely. In addition, as noted above, credits for engine
families certified above the appropriate trigger level will have a 10
percent discount.
There are several other provisions which apply to the modified
program beginning in model year 1998. First, as proposed, EPA is
eliminating the ``buy high-sell low'' conversion factor provision of
86.094-(c)(2) and replacing it with the production-weighted average
value. Under the current buy high-sell low provision, families
generating credits use the lowest horsepower configuration factor and
those using credits use the highest horsepower configuration factor in
the formula to establish the number of credits generated or used. In
the modified program, the production-weighted average value will be
used in both cases. Second, because the 2004 standards apply in all
fifty states, beginning in 2004, the California and federal programs
will harmonize and ABT will be applicable to all federal
certifications. Third, EPA is finalizing provisions to allow
manufacturers the option to make the NO_X and PM credits
generated by their engines available to other persons for use outside
the ABT program instead of limiting credits to only manufacturers.
Based on comments received EPA is not finalizing two provisions
which had been proposed. First, EPA is not finalizing its proposal for
pre-2004 model years to allow NO_X credits to be generated
based on a useful life of 435,000 miles while retaining the actual
useful life for the engine family at 290,000 mile interval for all
other program purposes. EPA proposed to allow manufacturers to
establish an FEL based on simple extrapolation of the deterioration
factor for NO_X from 290,000 miles to 435,000 miles and earn
credits up to 435,000 miles without incurring any additional in-use
liability for the mileage between 290,000 mile and 435,000 miles.
Because EPA is not finalizing the proposed change, all credits must be
based on the useful life of the engine family, which is the current
Agency requirement. Manufacturers wanting to generate credits up to
435,000 miles will be required to establish the 435,000 mile interval
as the official useful life for the engine family. Second, EPA is not
finalizing its proposal to require a compliance margin (i.e., the
difference between the engine certification level and the FEL) of at
least 5 percent under the modified ABT program. All of the above
changes to the modified ABT program are being made for the reasons
explained in the Summary and Analysis of Comment document for this
rule.

D. Display of OMB Control Numbers

EPA is also amending the table of currently approved information
collection request (ICR) control numbers issued by OMB for various
regulations. This amendment updates the table to accurately display
those information requirements contained in this final rule. This
display of the OMB control numbers and their subsequent codification in
the Code of Federal Regulations satisfies the requirements of the
Paperwork Reduction Act (44 U.S.C. 3501 et seq.) and OMB's implementing
regulations at 5 CFR 1320.
The ICR was previously subject to public notice and comment prior
to OMB approval. As a result, EPA finds that there is ``good cause''
under section 553(b)(B) of the Administrative Procedure Act (5 U.S.C.
553(b)(B)) to amend this table without prior notice and comment. Due to
the technical nature of the table, further notice and comment would be
unnecessary.

IV. Public Participation

Following the NPRM, EPA held a public hearing on August 12, 1996,
and accepted written comments on the proposals. This preamble section
provides an overview of certain key issues raised in the NPRM, a
summary of comments on these issues, and EPA's response to the
comments, including

[[Page 54704]]

any significant changes to the rulemaking as a result of the comments.
For EPA's detailed analysis of the comments received on the NPRM, the
reader is directed to the Summary and Analysis of Comments document for
the rulemaking. For information on how to obtain copies of the public
hearing transcript, written comments, and the Summary and Analysis of
Comments document, please see the ADDRESSES section above.

A. EPA's Air Quality Justification for the Proposed Program

In the NPRM, EPA expressed its belief that improvements in air
quality in many parts of the country will continue to be necessary in
the future. Specifically, the Agency presented the results of analyses
indicating that the emissions of key pollutants can be expected to
increase without further controls and that air quality (in the case of
both ozone and particulate matter) is likely to worsen as a result. In
proposing new standards for highway HDEs, the Agency relied on these
projections in concluding that it should proceed with regulatory action
as soon as possible.
Some commenters questioned this conclusion, disputing whether the
available information in fact justifies establishing new standards for
highway HDEs. Others argued the opposite--that immediate action is
indeed justified. Those questioning EPA's analysis raised several
issues. First, some commenters argued that currently available computer
modeling is not of sufficient quality to draw conclusions about the
future need for NO_X control. Second, several commenters had
differing opinions about how much EPA national ozone reduction policy
should be affected by the fact that NO_X reductions can cause
increases in ozone under localized conditions. EPA stated its belief in
the proposal that the large expected benefits of NO_X control
over broad areas within and surrounding nonattainment areas should be
pursued even if these NO_X reductions have a neutral or
negative effect in localized portions of some nonattainment areas.
Third, one commenter presented an analysis of ozone monitors concluding
that the number of national ozone exceedances has been steadily
decreasing over time (when adjusted for ambient temperatures). These
issues are discussed below.
1. Modeling
The emissions and air quality modeling to which the commenters
refer falls into two related categories that are generally performed
sequentially. The first major step is to develop emission inventories
simulating the atmospheric loading of ozone precursors in future years.
These inventories are useful for projecting trends in emissions over
time and for understanding the relative importance of various emission
sources. The second major step is to input specially prepared
inventories into a complex grid-based air quality model which simulates
the photochemistry of ozone formation over a geographic area for the
same future years. Modelers have been able to gradually improve the
quality of both of these types of modeling over many years, and
improvements continue.
As discussed more fully in the Summary and Analysis of Comments
document, EPA believes that the available computer modeling of
emissions and air quality, while of necessity complex and continually
undergoing improvement, clearly provides a legitimate basis for today's
rule. The Agency believes that its modeling projects with reasonable
accuracy that, absent new control programs, NO_X emissions
would increase in the future and that the expected result would be
increased ozone problems for many areas.
2. Possible Ozone Increases From NO_X Reduction
In the ANPRM and NPRM, EPA discussed the well known phenomenon that
reducing NO_X emissions in a local area may in certain
circumstances result in an increase in ozone in limited parts of the
area. Some commenters suggested that, as a result of this phenomenon,
any proposed action to reduce NO_X emission would be unwise
or premature. After consideration of all comments received on this
subject, EPA believes that nothing in the comments warrants a different
course of action than that proposed by the Agency. In fact, air quality
modeling work done since the analysis presented in the NPRM shows that
the Agency's justification for pursuing the proposed program is
appropriate.
The OTAG addressed the complex issue of regional impacts due to
transport of NO_X and VOC emissions. The OTAG modeling
results indicate that urban NO_X reductions produce
widespread decreases in ozone concentrations on high ozone days. In
addition, urban NO_X reductions also produce limited
increases in ozone concentrations locally, but the magnitude, time, and
location of these increases generally do not cause or contribute to
high ozone concentrations. Most urban ozone increases modeled in OTAG
occur in areas already below the ozone standard and, thus, in most
cases, urban ozone increases resulting from NO_X reductions
do not cause exceedance of the ozone standard. There are a few days in
a few urban areas where NO_X reductions are predicted to
produce ozone increases in portions of an urban area with high ozone
concentrations. In these circumstances, additional VOC control measures
may be needed to offset associated ozone increases due to
NO_X emissions decreases in local areas.
Nonetheless, modeling analyses conducted as part of the OTAG
process indicated that, in general, NO_X reduction
disbenefits are inversely related to ozone concentration. On the low
ozone days leading up to an ozone episode (and sometimes the last day
or so) the increases are greatest, and on the high ozone days, the
increases are least (or nonexistent); the ozone increases occur on days
when ozone is low and the ozone decreases occur on days when ozone is
high. This indicates that, in most cases, urban ozone increases may not
produce detrimental effects. Overall, OTAG modeling thus demonstrates
that the ozone reduction benefits of NO_X control outweigh
the disbenefits of urban ozone increases in both magnitude of ozone
reduction and geographic scope.
The Agency has concluded that the overall benefit of large regional
reductions in NO_X, like those that would occur with the HDE
standards finalized today, warrant such controls even where localized
ozone increases may occur.²⁴ ²⁵
---------------------------------------------------------------------------

\24\ ``EPA Staff Observations from Recent Air Quality
Modeling,'' Memorandum from Norm Possiel to Tad Wysor, August, 1997.
\25\ Also see EPA's notice of denial of API petition for
reconsideration of the Phase II reformulated gasoline NO_X
standard. (62 FR 11346 (March 12 1997)).
---------------------------------------------------------------------------

3. Trends in Ozone Levels
EPA is aware of data indicating gradual improvements in ozone
levels over the past several years. The Agency attributes this apparent
trend to the success of past NO_X and VOC control programs.
Since the Agency has concluded that NO_X levels will continue
downward for several years but then level off and begin to rise, the
welcome downward trend in ozone cannot, unfortunately, be expected to
continue without new emission reductions. EPA does not agree with the
commenter that the current trends indicate that new NO_X
control programs are not necessary. Rather, these data help show that
NO_X control can be very effective in reducing ozone.
Moreover, the data reinforce EPA's belief (as discussed in Section II.
above) that there will likely be an

[[Page 54705]]

upward trend in NO_X emissions and ozone in the future if
further NO_X controls are not implemented. The Agency
believes, therefore, that further NO_X controls, including
the HDE standards issued today, must be vigorously pursued.

B. Level of Standards

1. Diesel Engines--NO_X Plus NMHC
EPA proposed a combined NMHC+NO_X standard of 2.4 g/bhp-
hr with an option to manufacturers of 2.5 g/bhp-hr with a NMHC cap of
0.5 g/bhp-hr. The emission standards proposed in the NPRM for diesel-
cycle engines were based on what EPA considered to be the greatest
achievable reductions from technology expected to be available in 2004,
giving appropriate consideration to cost, energy, and safety.
Commenters showed general support for the alternative
NMHC+NO_X standards proposed by EPA. The manufacturers
commented that the proposed NMHC+NO_X standards will be
feasible for most highway heavy-duty diesel engines in 2004, provided
that PM standards do not change. Manufacturers expressed specific
support for the standards as they were proposed, including the optional
2.5 g/bhp-hr standard with 0.5 g/bhp-hr NMHC cap. EPA did not receive
comment recommending another level for the standard for diesel engines.
Based on current information, EPA has determined that the proposed
revision of NO_X and NMHC standards is appropriate for 2004.
The assessment of feasibility in the NPRM remains unchanged. An
overview of the engine changes manufacturers are expected to make to
meet the standards can be found in the Economic Impact discussion later
in the preamble and in the Regulatory Impact Analysis.
2. Highway Diesel Engine--PM
In the NPRM, EPA proposed to leave the diesel engine PM standards
at their current levels: 0.10 g/bhp-hr for truck engines and 0.05 g/
bhp-hr (0.07 in-use) for urban buses. State, health, and environmental
groups were unanimous in their comments exhorting EPA to move forward
with additional control of diesel PM from on-highway heavy-duty diesel
engines. These commenters focused on the need for control of diesel PM
in the context of health effects from PM exposure and EPA's recent
proposal to revise the National Ambient Air Quality Standard for PM.
The groups also noted that the urban bus standard for PM was 0.05 g/
bhp-hr and argued that all diesel HDEs could meet that level. In
contrast, the manufacturers commented that even meeting the current
diesel PM standards while reducing NO_X emissions by 50
percent presents a significant technical challenge. The manufacturers
commented that further reduction in the PM standard would threaten the
overall feasibility and cost-effectiveness of the 2004 NMHC plus
NO_X standards. In the case of urban buses, manufacturers
asked for a relaxation in the level of the PM standard to be able to
meet the new levels for NMHC+NO_X emissions.
EPA understands the concerns that have been raised by the state,
environmental, and health commenters and has an interest in pursuing
further control of PM emissions if appropriate. As discussed in more
detail above and in the Regulatory Impact Analysis, PM emissions can
cause risks to public health and welfare, including a range of
respiratory illnesses and aggravation of cardiovascular disease. EPA is
reviewing and will continue to review many strategies for reducing
harmful emissions of PM, including reduction of emissions from internal
combustion engines. In fact, the reductions in NO_X emissions
resulting from this rule will significantly lower secondary formation
of nitrate PM. ²⁶
---------------------------------------------------------------------------

\26\ Benefits of Mobile Source NO_X Related
Particulate Matter Reductions, October 1996, EPA Contract No. 68-C5-
0010.
---------------------------------------------------------------------------

However, based on the information available today and the statutory
factors set forth in section 202(a)(3)(A) of the Clean Air Act, EPA has
determined that the current diesel PM standards are the lowest
appropriate levels in 2004 in the context of an approximate 50 percent
reduction in NO_X. Because of the trade-off between
NO_X and PM emissions, manufacturers will have to undertake
considerable effort to keep PM emissions below the current standard
while essentially halving NO_X emissions. EPA cannot be
certain at this time that any further reductions in PM emissions can be
realized in manner that is durable, reliable for the majority of the
fleet, and cost-effective. As discussed below and in the Summary and
Analysis of Comments, the ability of urban buses to meet a more
stringent standard for PM does not necessarily mean that such a
standard is feasible and appropriate for all heavy duty diesel engines.
Open issues regarding control technology and strategy have
contributed to EPA's decision not to lower PM standards at this time.
To date, most medium heavy-duty and all heavy heavy-duty diesel engine
families have been successful in meeting the 0.10 g/bhp-hr diesel PM
standard using in-cylinder or engine-based control strategies. However,
most of the light heavy-duty diesel engines have employed the use of
aftertreatment devices such as oxidation catalysts to reach this level.
All urban bus engines have used aftertreatment to achieve the
applicable 0.05 g/bhp-hr diesel PM standard, albeit at somewhat higher
cost and cost effectiveness values than for truck engines. While there
are clearly different emission control strategy philosophies among the
manufacturers and differences among engines technologies that lead to
these variations in technological approach, further work is needed to
identify and evaluate what set of control strategies have the greatest
potential to achieve full life emission control at diesel PM levels
less than 0.10 g/bhp-hr while also reducing NO_X to
approximately 2 g/bhp-hr. This ultimate set of strategies may involve
aftertreatment techniques similar to those currently used on light
heavy-duty diesel engines and urban buses or could be a technology
still in research and development. However, at this time, it is
uncertain whether potential methods for reduction of PM and
NO_X from heavy-duty engines are capable of reducing emission
levels for the great majority of the heavy-duty engine fleet below the
standards promulgated today in a manner that is reliable for the full
useful life of the engines. Further discussion regarding technological
feasibility can be found in the Summary and Analysis of Comments and
the Regulatory Impact Analysis.
Closely related are the issues of cost and cost effectiveness. The
purchase and operating cost implications of any additional control
technology must be considered as part of further evaluation, as should
the cost-effectiveness of further reductions in new engine emission
standards. This is best evaluated in the context of the possible
control technologies as discussed above.
There are other open scientific and technical issues that EPA plans
to consider prior to the 1999 review. One issue is related to the form
of the diesel particulate standard. Current EPA diesel particulate
standards are based on mass per unit work (g/BHP-hr), and EPA continues
to believe that this is the appropriate form for setting standards.
Recently, an issue of a potential impact of technology on particle size
distribution has arisen. Virtually all diesel particulate matter has a
diameter less than 1.0 micron and is thus fully respirable by humans. A
recent study sponsored by the Health Effects Institute on two similar
and recent engine models (one of a later technology)

[[Page 54706]]

indicated that while the total mass of PM emissions was lower in the
newer technology engine, the remaining particles from the new engine
were smaller in diameter and more numerous. ²⁷ The
implications of this information are not clear either with regard to
technology or health effects. While EPA continues to believe that mass-
based emission standards for PM are the most appropriate form, more
information on the impact of any advanced engine and emission control
technology on diesel PM size, particle count, and chemical constituents
as well as the health effects of any changes in these particle
characteristics would be helpful.
---------------------------------------------------------------------------

\27\ K.J. Baumgard, J.H. Johnson, ``The Effect of Fuel and
Engine Design on Diesel Exhaust Particle Size Distributions,''
Society of Automotive Engineers, 960131, 1996.
---------------------------------------------------------------------------

Another issue is related to the magnitude of the directly-emitted
diesel PM inventory and its relative air quality impact. Unlike nonroad
diesel engines PM emissions, highway diesel engine PM emissions have
been controlled since 1988, and current standards require an 80 to 90
percent reduction over uncontrolled levels. Nonetheless, it is clear
that control of diesel PM emissions is important, and more data on the
percentage of highway engine diesel PM in the various urban areas and
nonattainment area inventories and the in-use performance of controlled
highway diesels would be helpful in guiding the Agency's future
initiatives with regard to potential highway diesel engine PM control
strategies. In any case, tightening NO_X standards alone
results in lower levels of ambient PM due to the accompanying reduction
in secondary formation of nitrate PM, as discussed elsewhere in this
preamble.
EPA considers further control of highway diesel engine PM emissions
to be an important air quality goal and plans to further study these
issues and others over the next two years, and to reassess the diesel
PM standard in the 1999 review. In that context, EPA encourages
continued research and development on PM control technology and seeks
input in all of the areas described above.
Urban bus engines are and will continue to be a special case
because they have unique operating characteristics, are used in only a
limited range of vehicle applications, and are treated differently than
other heavy duty engines under the Clean Air Act. Urban buses
experience a typical duty cycle for which engines can relatively easily
be designed; other heavy duty engines, in contrast, can be applied to
several different types of truck applications and can experience a much
wider range of duty cycles. The duty cycle that engines will see is
important because manufacturers must design engines to meet the
standards over their full useful lives. Moreover, the particular
emphasis on PM reductions in section 219 of the Act indicates that
Congress was especially interested in such reductions from urban bus
engines and considered more stringent standards appropriate for such
engines, even if costs are higher relative to other HDEs. For these
reasons, EPA believes that the new NMHC+NO_X standard along
with the more stringent urban bus PM standard will be feasible and
appropriate for urban buses. As part of the 1999 review, EPA will
reevaluate the appropriateness of the urban bus standards.
3. Otto-Cycle Engines
In response to the ANPRM, environmental groups provided comments
highlighting manufacturers' certification data for the 1996 model year,
which included some engine families with emission levels considerably
below the standards proposed for the 2004 model year. While EPA
proposed to adopt more stringent emission standards applicable to both
diesel and otto-cycle (which are primarily gasoline-fueled) heavy-duty
engines, EPA also requested comment on the possibility of adopting more
stringent emission standards for heavy-duty gasoline engines.
Certification data for 1997 showed a larger number of engine families
emitting at or below the 2004 levels, with some engines certified at
emission levels only ten to twenty percent of the 2004 emission
standards.
At this point, EPA is not yet ready to take final action on the
issues associated with otto-cycle HDEs and is not finalizing any
revised standards for heavy-duty otto-cycle engines. EPA intends to
issue a Supplemental Notice of Proposed Rulemaking to address these
engines specifically. A variety of options are under consideration for
inclusion in the supplemental proposal. First, as described in the
initial proposal, EPA may pursue a more stringent numerical standard
using the existing test on an engine dynamometer. Second, EPA will
evaluate the appropriateness of adopting emission standards for some
otto-cycle heavy-duty vehicles based on testing with a chassis
dynamometer. Chassis testing, and associated standards, could be
patterned after the program adopted by the California Air Resources
Board for medium-duty vehicles. Alternatively, EPA could develop a test
and standard using the chassis test cycle specified in 40 CFR Part 86,
subpart M for heavy-duty gasoline vehicles.

C. In-Use Emissions Control and Compliance

1. In-Use Emissions Control Regulatory Elements
The NPRM contained several proposals which involved modifications
to existing regulations, including regulations for the useful life of
the engine, emissions performance and defect warranties, and
maintenance requirements. These proposals would update the existing
requirements, which were established several years ago, to better align
them with current industry experience of longer lasting engines. EPA
also proposed some elementary provisions regarding engine rebuilding to
help ensure that rebuilding does not result in the removal of emissions
control equipment or the reconfiguring of the engine in a way that
would result in a significant increase in emissions. EPA's final
actions on these items are described in section III.B. of this
preamble. The reader is directed to the Summary and Analysis of
Comments for a full discussion of comments received by EPA on its in-
use emissions related proposals and EPA analysis and response to those
comments.
2. State Inspection and Maintenance Programs
EPA noted in the preamble to the NPRM its intention to develop a
guidance document for states to follow in designing inspection and
maintenance programs for heavy-duty trucks and buses. Several
commenters urged EPA to issue guidance to states quickly regarding how
to conduct in-use inspection and maintenance programs. Commenters noted
that several states and regions are working on in-use emissions
programs and EPA guidance is critical to help ensure consistent
programs from state-to-state. Commenters requested that EPA evaluate
the Society of Automotive Engineers (SAE) test procedure J-1667 and
move rapidly to endorse its use in road-side smoke inspection programs.
State organizations recommended, further, that EPA move to adopt the J-
1667 procedure or other short test procedures as certification short
test procedures and develop correlations between the short tests and
the full certification tests. This would allow states and EPA to
determine vehicle compliance in the field. NESCAUM noted that research
is needed on the relationship between smoke opacity and particulate
emissions. NRDC

[[Page 54707]]

commented that the smoke test will be inadequate for verifying
compliance with the standard proposed in the rule.
EPA recognizes the importance of providing guidance to states in
these matters. EPA has been working informally with stakeholders
including representatives from States, the trucking industry, engine
manufacturers, and EPA Regions, among others, in its development of
such guidance. As a result of this effort, EPA has recently issued
guidance to states recommending the SAE J-1667 test procedure for their
I/M programs.\28\ EPA plans to continue working with stakeholders to
address other concerns related to the smoke test procedure such as the
establishment of appropriate cut-points. The correlation of test
cycles, establishment of certification short tests, and short tests for
emissions other than smoke emissions, are complex in nature and must be
studied further. For these reasons and also because I/M was not a
subject of any proposals in the NPRM, the Agency is not adopting such
programs or requirements in this rule.
---------------------------------------------------------------------------

\28\ ``Guidance to States on In-use Smoke Test Procedure For
Highway Heavy-duty Diesel Vehicles'', United States Environmental
Protection Agency, April 3, 1997. Docket A-95-27.
---------------------------------------------------------------------------

3. In-use Compliance Issues
EPA received comments in several areas related to in-use emissions
control, but not related to any specific proposals contained in the
NPRM. Several commenters expressed substantial concern over what they
believe to be EPA's lack of a practical in-use compliance program for
heavy-duty engines. They contend that EPA relies entirely on self
certification and selective enforcement audits for heavy-duty
compliance due to the impracticality and high cost of in-use engine
testing. Commenters expressed concern that a number of HDEs have failed
the SEA testing in recent years. The commenters urged EPA to develop an
effective in-use compliance testing program including a viable recall
program to ensure that engines comply with applicable standards over
their useful lives. One commenter noted that the threat of in-use
deterioration will increase as the standards are lowered. Commenters
recommended that the Agency develop a supplemental certification test,
such as a loaded chassis test, which could be used for in-use
compliance and one commenter urged the Agency commit to a schedule for
development and implementation.
EPA received comments urging the Agency to adopt requirements for
manufacturers to install on-board diagnostics (OBD) systems in heavy-
duty vehicles. Commenters believe that OBD could be a valuable tool in
improving maintenance practices and assessing the in-use performance of
heavy-duty engines. State organizations who commented are interested in
having OBD systems available as a tool for inspection and maintenance
programs.
EPA also received comment that a more representative test cycle is
a key to controlling excess emissions associated with high speeds and
loads typical of real world conditions not currently represented in the
federal test procedure (i.e., off cycle emissions). The commenter also
believes that the increasing use of onboard computers to control the
operation of engines further exacerbates the need for different and
more variable test cycles. The commenter notes that onboard computers
can be used to change the engine operating conditions to optimize fuel
economy at the expense of emissions in modes of operation that are not
well represented in the EPA test procedure. The commenter urged EPA to
evaluate its current heavy-duty engine test procedure and consider such
options as a random test cycle to minimize the impact of off-cycle
emissions.
While EPA believes that the new standards will achieve the
emissions reductions estimated in section II of this preamble, EPA also
recognizes that improvements in the understanding of in-use emissions
and the need to establish a viable in-use compliance presence are
essential. To address these concerns EPA has recently engaged in a
number of activities to address in-use emissions. EPA has signed a
Memorandum of Understanding (MOU) with the California Air Resources
Board (ARB) and the Northeast States for Coordinated Air Use Management
(NESCAUM) to develop a better understanding of in-use emissions from
heavy-duty vehicles.\29\
---------------------------------------------------------------------------

\29\ ``Developing an Understanding of In-use Emissions from
Heavy-duty Diesel Engines'', Memorandum of Understanding, United
States Environmental Protection Agency, Northeast States for
Coordinated Air Use Management, California Air Resources Board,
March 1997, Docket A-95-27.
---------------------------------------------------------------------------

Under the context of this MOU, EPA has recently implemented a
small-scale chassis-based screening program for in-use HDV's that will
establish a viable in-use compliance presence. The screening program
seeks to identify high emitting engines or technologies, and the causes
of high emissions. The screening program is initially focused on light
heavy-duty gasoline engines, although EPA plans to work with ARB and
NESCAUM to expand the program to all sectors of the on-highway heavy-
duty industry in the next several months and include on-road emissions
measurements. Such a screening program will allow EPA to identify high-
emitting engine families, potentially signaling the need for recall
action under section 207 of the Clean Air Act. In addition, the in-use
screening program will allow EPA to enforce certain provisions of
section 203 of the Act, including the prohibition against manufacturer-
designed strategies or devices that defeat the operation of the
emissions control system, and the prohibition against tampering with
the emissions control system. Lastly, the screening program will allow
EPA to assess in-use deterioration of HDE's by testing trucks at
various mileages. Although the screening program will also provide
important information regarding off-cycle emissions, EPA understands
that further work in this area may be necessary to fully address the
off-cycle concern.
In addition to the screening program and engine testing conducted
under the MOU, EPA will continue to work with state groups and others
to develop tools for states to reduce in-use HDV emissions. Many states
are implementing, or are considering implementing, inspection and
maintenance (I/M) programs for HDV's. As noted above, EPA has recently
issued guidance regarding an in-use I/M smoke test procedure, and plans
to follow-up that guidance with recommended pass/fail cut-points. In
addition, the EPA plans to study the benefits and feasibility of on-
board diagnostics (OBD) and other concepts that may prove to be useful
I/M tools.
EPA is also committed to working with states and industry to
implement a voluntary retrofit program aimed at reducing emissions from
older in-use vehicles that would be modeled after EPA's Urban Bus
Retrofit/Rebuild Program. Such a program could lead to emission
reductions from the in-use fleet beyond those required by the
applicable standards through the retrofit of advanced emission control
technologies.
In response to EPA and commenter concerns about the growing number
of engines which fail SEA testing, EPA believes that a viable long-term
in-use recall presence will provide the necessary assurances that new
production engines will comply with applicable standards. In the near-
term, EPA plans to engage the industry in constructive dialogue aimed
at better understanding production processes and variability,
manufacturer-based

[[Page 54708]]

production line testing programs, and methodologies used determine
deterioration factors. Through these discussions, EPA believes that
incremental improvements in SEA performance can be achieved. EPA is
committed to further review of its compliance programs, and revisions
to its regulatory programs if needed.
EPA believes that these near-term actions will begin to address
many of the concerns raised by commenters with respect to in-use
emissions, and that changes in the HDV compliance program could result
from these near-term actions. In addition, continued long-term study of
in-use HDV emissions will further enhance our understanding and will
provide a basis for future programmatic, regulatory, or other changes
to ensure the emissions reductions from more stringent standards are
reflected in the in-use emissions from HDV's.

D. Averaging, Banking, and Trading

As discussed above, EPA proposed a modified ABT program as part of
the transition to more stringent emissions standards for NOx and NMHC
in 2004. Many comments were received on the ABT provisions of the NPRM.
As discussed in the Summary and Analysis of Comments supporting this
final rule, EPA has considered the comments received on the proposal
and revised the provisions as appropriate. The ABT program EPA is
implementing is consistent with the goals of the ABT concept as
discussed in the NPRM. The modified ABT program being implemented in
this rule provides the manufacturers the incentive to achieve
improvements on current technology and pull ahead 2004-era technology
to generate early emission reductions. These early reductions provide a
near-term benefit to the environment and the emission credits generated
provide the manufacturers significant compliance flexibility. As stated
by the manufacturers, this compliance flexibility is a significant
factor in the manufacturers' ability to certify a full line of engines
in 2004 and helps to allow implementation of the new more stringent
standard as soon as permissible under the Clean Air Act.
1. Applicability
The NPRM proposed a modified ABT program for both diesel and otto-
cycle engines. However, as noted above, EPA received comment regarding
whether EPA's proposed otto-cycle standards and ABT provisions were
appropriate. As a result of EPA's evaluation of these comments, EPA is
not promulgating final standards for otto-cycle HDEs in this rule. EPA
is also not finalizing a modified ABT program for otto-cycle HDEs. EPA
will address such standards and ABT provisions in a Supplemental Notice
of Proposed Rulemaking in the future. The modified ABT program being
implemented by EPA for 1998 through 2003 and the modified program
finalized for 2004 and later apply only to diesel-cycle engines.
2. The Modified ABT Program Diesel-Cycle Engines (1998-2003)
As will be discussed further below, the current ABT program will be
retained for credit generation and use by production otto-cycle engines
and credit use by diesel-cycle engines during the 1998-2003 model
years. Effective for the 1998 model year, EPA is implementing a
modified certification ABT program designed to help ensure compliance
with the NMHC+NO_X and PM standards beginning in 2004. The
provisions of this program are described below.
Credits generated under the modified program may be used only in
2004 and later model years. Manufacturers may not use credits generated
in the current program on engines generating credits under the modified
program. However, credits generated under the modified program may be
used before 2004, subject to the regulatory provisions of the current
ABT program. As was proposed, credits generated between 1998 and 2003
under this modified program are based on NO_X only and are
calculated against the 4.0 g/bhp-hr NO_X emission standard.
The NMHC levels of most heavy-duty engines are well below the present
standard and would result in windfall credits if the credit calculation
included NMHC. Diesel PM credits are based on reductions beyond the
model year 0.10 g/bhp-hr emission standard for truck engines and the
0.05 g/bhp-hr emission standard for urban buses.
In the NPRM, EPA proposed that there be no discounts for credits
banked under the modified program. However, in response to comments and
further consideration by EPA on the best way to align this program with
the general goals of the ABT program and other EPA market incentive
programs, EPA is finalizing somewhat different provisions. To better
align the ABT program with the goal of pull-ahead technology, EPA has
decided to implement a trigger concept as a mechanism to distinguish
engine families eligible for no discount. For engine families certified
at NO_X levels less than 3.5 g/bhp-hr NO_X, no
discount will be applied to any NO_X or PM credits generated
for banking. The 3.5 g/bhp-hr cut-point was suggested by commenters and
EPA judges this level to be a reasonable discriminator for pull-ahead
technology. It is similar in stringency to the California LEV standard
for these engines and only three federal 1997 heavy-duty diesel
families are certified below this level. For engine families certified
at NO_X levels above 3.5 g/bhp-hr, a 10 percent discount will
be applied to all credits generated, both NO_X and PM. EPA
has decided to retain a discount for this portion of the program
because smaller incremental reductions such as this are less likely to
represent the pull-ahead technology which ABT is designed to encourage.
These smaller credits nonetheless represent early reductions and are
appropriate given the stringency of the model year 2004 standard,
consistent with the ABT concept.
As was mentioned above, the modified program includes a 10 percent
discount for engines certified above the trigger. This level of
discount was selected based on a combination of factors. Several
commenters stated that a discount should be retained, some suggesting
10 percent, some implying the current 20 percent level. Other
commenters supported the Agency's proposal to eliminate all credit
discounts. In attempting to design a program which meets all of the
goals of ABT, the Agency selected 10 percent. The manufacturers
comments indicated that a 20 percent discount was far too large and
created a significant disincentive for the introduction of new or
improved technology. Conversely, EPA believes that eliminating the
discount for all credits as was proposed would have reduced the
incentive to develop and implement significantly cleaner technology. A
10 percent discount for credits generated at FELs above 3.5 g/bhp-hr,
strikes a balance between these views, and aligns the discount in the
heavy-duty engine ABT program with others in the mobile source program
such as the National Low Emission Vehicle program.
Some commenters opposed allowing PM credits to be generated and
used in the modified program because the PM standard is not changing.
In response, EPA believes that it is appropriate to include PM in the
modified ABT program. For most in-cylinder control technologies, there
is a strong inverse relationship between NO_X and PM which
makes it difficult to control both pollutants at the same time. The
control technologies expected to be used to reduce NO_X to
model year 2004 levels are likely to increase PM. Therefore, EPA
believes that applying the ABT modifications to PM as well as
NO_X allows the manufacturer more flexibility

[[Page 54709]]

in addressing the technology issues involved with reducing
NO_X emissions to the NO_X plus NMHC standard being
finalized in this rule, while maintaining PM emissions at 0.10 g/bhp-
hr. The Agency has decided to apply the NO_X trigger to PM
emissions because engines generating PM credits at NO_X
levels below the trigger in this time frame are likely to employ new,
or at least significantly improved, PM control technology, because of
the natural trade-off between NO_X and PM emissions.
EPA proposed that the 3 year credit life restriction in the current
ABT program not apply in the modified program. After considering
comments, EPA is finalizing this provision as proposed. Even though
several commenters believed that the credit life limit should be
retained, EPA believes that an unlimited credit life is consistent with
the emission reduction goal of ABT, not only because of the increased
manufacturer flexibility in meeting the new standards but also because
it eliminates the ``use or lose'' aspect of the current program's limit
on credit life, which creates the perverse incentive for manufacturers
to use credits as quickly as possible. Unused credits are extra
emission reductions beyond what the EPA regulations require. The only
concern with unlimited credit life is that a manufacturer could
stockpile a large number of credits and delay the effectiveness of a
new standard in the future. This certainly would be a concern in a
situation where standards are less stringent and not technology-
forcing. However, 2.4 g/bhp-hr NMHC+NO_X and 0.10 g/bhp-hr PM
(0.05 g/bhp-hr for buses) are quite challenging for diesel engines; EPA
expects most pre-2004 credits will be needed in the first few years of
the new standard.
3. The Modified ABT Program 2004 and Later
EPA proposed that the current program be reinstated for 2007 and
later models years, including the 20 percent discount and 3 year credit
life. Some commenters who opposed the modified program urged the Agency
to reinstate the current program beginning in 2004. Manufacturers
argued that the current program should not be reinstated because the
current program would remove much of the incentive to pull-ahead
technology in the post 2004 time-frame.
EPA considered the comments carefully and decided to implement,
beginning in 2004, a modified program which will fully and permanently
replace the current ABT program for diesel-cycle engines, though with
significant changes from the proposal. Many of the same concepts that
appear in the 1998-2003 ABT program will be employed beginning in 2004,
but modifications have been made as appropriate. Beginning in 2004, the
form of the standard changes from separate HC and NO_X
standards to a combined NMHC+NO_X standard. Therefore in
2004, credits will be based on combined NMHC+NO_X values. For
diesel engines, NMHC+NO_X credits will be generated against
the 2.4 g/bhp-hr standard. Diesel PM credits will continue to be
generated against the 0.10 g/bhp-hr emission standard for truck engines
and the 0.05 g/bhp-hr emission standard for urban buses. For the same
basic reasons as laid out above, the trigger concept will continue to
be applied to the discount for NMHC+NO_X and PM credits. This
trigger will be set at 1.9 g/bhp-hr NMHC+NO_X. There are
currently no diesel-fueled engines certified even close to this level.
As above, there will be no limit on credit life. Removing discounts
and credit life limits for the cleaner engines will provide maximum
incentive for the development and introduction of petroleum- and
alternative-fueled diesel-cycle engines with emission levels
approaching the 1.0 g/bhp-hr NO_X and 0.05 g/bhp-hr PM
research objectives of the 1995 SOP.
Credit use in 2004 and later years will follow the same pattern as
under the current program. As proposed, the upper limits for
NMHC+NO_X and PM certification will be 4.5 g/bhp-hr and 0.25
g/bhp-hr, respectively. That is, no engine family may be certified
above either of these levels using credits. These limits provide the
manufacturers adequate compliance flexibility while protecting against
the introduction of unnecessarily high emitting engines.
4. Other Changes for the Modified ABT Program
Five other provisions were proposed or were discussed with requests
for comment which impact the modified ABT program. EPA is implementing
three of these and not finalizing two of the proposed modifications.
Of the three being finalized, first, EPA proposed to eliminate the
``buy high--sell low'' provision of Sec. 86.094-15(c)(2) and to replace
it with the production-weighted average value. Under this existing
provision, families generating credits use the lowest horsepower
configuration factor and those needing credits use the highest
horsepower configuration factor. In the modified program the
production-weighted average value will be used in both cases, as
proposed. There was no adverse comment on this change. The second area
relates to geographical applicability. The 2004 standards apply in all
fifty states. California is not included in the current ABT program
because they have a separate control program. Beginning in 2004 the
California and federal programs will harmonize and ABT will be
applicable for all federally certified HDEs without restrictions based
on geographical limitations on the certificate. Prior to 2004, the
current ABT program remains limited to HDEs certified for sale outside
California. There was no adverse comment on this issue.
The third change EPA is finalizing is related to the ownership of
credits. EPA requested comment on the concept that manufacturers be
given the option to make the NO_X and PM credits generated by
their engines available parties other than the manufacturers for use in
other programs. This provision was supported by those who commented, so
the regulatory language accompanying the rule includes provisions to
permit credits to be excluded from the ABT program by the manufacturer
in order to be used by engine purchasers or other parties, while
preventing double counting. The ability to transfer credits out of this
program does not of course imply that these credits can be used without
restriction in other programs. Credits purchased for use in other
programs must meet the use requirements of the emission programs for
which they are purchased. For example, local emission programs will
likely have limits on their geographic scope which may limit the use of
emission credits that are used to trade out of local emission
requirements.
One provision not being finalized is related to the impact of the
change in useful life for heavy heavy-duty diesel engines in 2004 on
credit generation and use. The useful life value is a factor in
determining the amount of credits earned or used by an engine family.
Beginning in 2004 for these engines, the minimum useful life increases
50 percent from 290,000 miles to 435,000 miles. If a manufacturer uses
the minimum useful life value of 290,000 miles to calculate credits
generated prior to 2004, 50 percent more credits will be needed in 2004
to cover an engine certified with a useful life of 435,000 miles. EPA
sought comments on two options to address this issue for NO_X
and PM. These included for NO_X allowing manufacturers to
base their FEL on an emission level determined from a simple
extrapolation of the deterioration factor for NO_X from
290,000 miles to 435,000 miles and to

[[Page 54710]]

earn credits up to 435,000 miles. Under such an approach, engine
families would continue to have a useful life of 290,000 miles and
manufacturers would be liable for emissions only up to the end of the
useful life. EPA also sought comment on requiring manufacturers to
apply for a longer useful life under the provisions of Sec. 86.094-
21(f) if they wanted to earn NO_X credits based on a useful
life of more than 290,000 miles. This second option is allowed under
the current regulations. For PM, EPA did not propose the use of the
former approach proposed for NO_X credits, only the latter
approach, due to concerns about the potential for deterioration of PM
emissions.
EPA received comments from manufacturers supporting the simple
extrapolation of the NO_X deterioration factor for
calculating credits and comments arguing that PM deterioration in in-
use vehicles was negligible and predictable and that the extrapolation
proposed for NO_X should be extended to PM. EPA also received
comments that the Agency should not allow credits to be generated over
a period where the manufacturer is not liable for emissions control.
As discussed in the Summary and Analysis of Comments, EPA has
decided not to finalize the simple deterioration factor extrapolation
method for either NO_X or PM. In general, it would be
inconsistent with current EPA credit program policy to allow credits
without accompanying liability, even if the program is transitional.
Furthermore, for both NO_X and PM there is some concern that
deterioration after the useful life may not be linear, especially for
engines using EGR or aftertreatment. Therefore, manufacturers desiring
credits for the longer useful life will have to certify to the longer
life for those pollutants as allowed under Sec. 86.094-21(f) of the
current regulations.
Finally, EPA is not finalizing the mandatory compliance margin
provisions proposed in the NPRM. EPA had proposed these provisions as a
means to address concerns that compliance margins (the difference
between the family emission limit and the certification level) had been
shrinking over time, and that the modified ABT program could provide an
incentive to shave margins inappropriately to gather additional
credits. One commenter provided examples where margins were reduced by
manufacturers in order to earn additional credits. Commenters
recommended margins of 10-15 percent due to concerns over margin
shaving. Other commenters believed that the best way to ensure that
manufacturers set appropriate margins would be through the use of EPA's
audit and compliance programs to target suspect engine families.
Manufacturers noted that they can improve their manufacturing processes
to allow for small margins while still complying with the FEL and
should not be penalized with a mandatory compliance margin.
Valid comments were presented on both sides of this issue, but the
Agency has concluded that the issue of the size of the compliance
margin is not solely an ABT issue. Indeed, compliance margins are
important in non-ABT families as well. Thus, the Agency has concluded
that any actions to address this issue are better implemented as part
of improvements in the overall compliance program, discussed above,
rather than as a regulatory fix in the context of a modified ABT
program. Moreover, EPA's final regulations, which implement a discount
on credits earned by engine families that are less than 0.5 g/bhp-hr
below the applicable NO_X or NMHC+NO_X standard
should reduce the concern evidenced in the comments regarding the
possibility that the modified program will further erode compliance
margins.

V. Economic Impact and Cost-effectiveness

The engine manufacturers, by signing the Statement of Principles,
have committed themselves to challenging, long-term design targets.
This provides manufacturers fully eight years to allocate resources and
conduct planning for a very thorough long-term R&D program.
Manufacturers have expressed a confidence that several years of
research will provide them opportunity to develop a complying engine
that they can market with full confidence. EPA's analysis of the costs
of complying with the new standards anticipates a significant degree of
technological development during this period.
The technologies described in the RIA together show a good deal of
promise for controlling emissions, but also make clear that much effort
remains to optimize for maximum emission-control effectiveness with
minimum negative impacts on engine performance, durability, and fuel
consumption. On the other hand, it has become clear that manufacturers
have a great potential to advance beyond the current state of
understanding by identifying aspects of the key technologies that
contribute most to hardware or operational costs or other drawbacks and
pursuing improvements, simplifications, or alternatives to limit those
burdens. To reflect this improvement and long-term cost saving
potential, the cost analysis includes an estimated $270 million (net
present value in 1995) in R&D outlays for heavy-duty engine emission
control over several years. The cost analysis accordingly presumes
extensive improvements on the current state of technology from these
future developments. The 1999 program review provides an opportunity to
reassess EPA's projected costs in light of new information. EPA will
revisit the analysis of the full life-cycle costs as part of the 1999
review. EPA and manufacturers will then confirm whether or not
technology development is progressing as needed to meet the 2004 model
year emission standards.
In assessing the economic impact of changing the emission
standards, EPA has used a current best judgement of the combination of
technologies that an engine manufacturer might use to meet the new
standards at an acceptable cost. Full details of EPA's cost and cost-
effectiveness analyses, including information not presented here, can
be found in the Regulatory Impact Analysis in the public docket. EPA
received a variety of comments on the cost analysis, either stating
generally that the estimated costs were too low or recommending changes
to specific details of the analysis. EPA made several minor changes to
the analysis in response to comments received on the proposal. The most
significant change was to include a broader use of EGR cooling. Further
investigation of the EGR and EGR cooling led to revised cost estimates
for those technologies. All the comments related to the cost
projections and the associated changes are described in the Summary and
Analysis of Comments.
Estimated cost increases are broken into purchase price and total
life-cycle operating costs. The incremental purchase price for new
engines is comprised of variable costs (for hardware and assembly time)
and fixed costs (for R&D, retooling, and certification). Total
operating costs include any expected increases in maintenance or fuel
consumption. Cost estimates based on these projected technology
packages represent an expected incremental cost of engines in the 2004
model year. Costs in subsequent years would be reduced by several
factors, as described below. Separate projected costs were derived for
engines used in three service classes of heavy-duty diesel engines. All
costs are presented in 1995 dollars. Life-cycle costs have been
discounted to the year of sale.

[[Page 54711]]

It is difficult to make a distinction between technologies that are
needed to reduce NO_X emissions for compliance with 2004
model year standards and those technologies that offer other benefits
for improved fuel economy and engine performance or for better control
of particulate emissions. This is because several NO_X
control methods such as the use of EGR can have negative impacts on
these items for which the manufacturer must then compensate. EPA
believes that manufacturers, in the absence of 2004 model year
standards, would continue research on and eventually deploy numerous
technological upgrades to improve engine performance or more cost-
effectively control emissions. EPA therefore believes that a small set
of technologies represent the primary changes manufacturers must make
to meet the 2004 model year standards. Other technologies applied to
heavy-duty engines, before or after implementation of new emission
standards, will make relatively minor positive contributions to
controlling NO_X emissions and are therefore considered
secondary improvements for this analysis. In this category are design
changes such as improved oil control, variable-geometry turbochargers,
optimized catalyst designs, and variable-valve timing. Lean
NO_X catalysts are also considered here to be secondary
technologies, not because NO_X control is an incidental
benefit, but rather because it is not clear at this time that they will
be part of 2004 model year technology packages. Modifications to fuel
injection systems will also continue independently of new standards,
though some further development with a focus on reducing NO_X
emissions would be evaluated.
Several technological improvements are projected for complying with
the 2004 model year emission standards. The fact that manufacturers
have several years before implementation of the new standards virtually
ensures that the technologies used to comply with the standards will
develop significantly before reaching production. This ongoing
development will lead to reduced costs in three ways. First, research
will lead to enhanced effectiveness for individual technologies,
allowing manufacturers to use simpler packages of emission control
technologies than we would predict given the current state of
development. Similarly, the continuing effort to improve the emission
control technologies will include innovations that allow lower-cost
production. Finally, manufacturers will focus research efforts on any
drawbacks, such as increased fuel consumption or maintenance costs, in
an effort to minimize or overcome any potential negative effects.
A combination of primary technology upgrades are anticipated for
the 2004 model year. Achieving very low NO_X emissions will
require basic research on reducing in-cylinder NO_X and HC
while at least holding PM levels below 0.10 g/bhp-hr. Modifications to
basic engine design features can be used to improve intake air
characteristics and distribution during combustion. Manufacturers are
also expected to utilize upgraded electronics and advanced fuel-
injection techniques and hardware to modify various fuel injection
parameters, including injection pressure, further rate shaping and some
split injection. EPA also expects that many engines will incorporate
cool EGR that is carefully tailored to an engine's different operating
modes.
If not developed and implemented properly, EGR has the potential to
increase operating costs, either by increasing fuel consumption or
requiring additional maintenance to avoid accelerated engine or
component wear. While it is possible to develop scenarios and estimate
the impact on operating costs of current diesel EGR concepts, this is
of minimal value due to the expected continuing development of these
technologies. Nevertheless, EPA has assessed the potential for
increased operating costs for EGR-related maintenance and for fuel
economy. EPA understands that manufacturers will make a great effort to
minimize any potential new maintenance burden for the end user,
investing in research to design an engine acceptable to users. The cost
to address the durability concern is therefore included both as a
maintenance item and as a fixed cost. An additional maintenance cost is
anticipated for EGR systems--EPA expects engine rebuilding will include
preventive maintenance to clean or replace EGR components.
With respect to fuel economy, several of the secondary technologies
described below may lead to cost savings, while EGR has the potential
to incur a fuel economy penalty. As with potential new maintenance cost
burdens, EPA believes manufacturers will focus their research efforts
on overcoming any negative impact on fuel economy caused by EGR. An EGR
cooler, which EPA expects to be commonly used, would alone mitigate
much of the potential increase in fuel consumption caused by
recirculating exhaust gases. In light of the potential fuel economy
improvements from some technologies and the anticipated use of cooled
EGR systems, it would not be appropriate to include a penalty for
increased fuel consumption as part of the cost analysis at this time.
EPA will reexamine this issue as part of the 1999 review analysis.
Meeting the new NO_X+NMHC standard will somewhat increase
the challenge to control particulate emissions from diesel engines.
Manufacturers might use a variety of technologies to maintain control
of particulate emissions; however, EPA believes that the fuel system
improvements described above will be sufficient to prevent any
potential particulate-emission increase while meeting the target levels
for NO_X and NMHC. In fact, manufacturers are attempting to
lessen the cost of meeting current particulate emission standards over
the next several years by decreasing their reliance on catalysts. This
underscores EPA's belief that 2004 model year engines will be able to
control particulate emissions without major technological innovation.
The costs of these new technologies for meeting the 2004 model year
standards are itemized in the Regulatory Impact Analysis and summarized
in Table 2. For light heavy-duty vehicles, the cost of a new 2004 model
year engine is estimated to increase by $258; operating costs over a
full life-cycle increase by about $7. For medium heavy duty vehicles
the purchase price of a new engine is estimated to increase by $397,
with life-cycle operating costs increasing $62. Similarly, for heavy
heavy-duty engines, the initial purchase price is expected to increase
by $467, while estimated additional life-cycle operating costs are
$131.
For the long term, EPA has identified various factors that would
cause cost impacts to decrease over time. First, the analysis
incorporates the expectation that manufacturers will apply ongoing
research to making emission controls more effective and less costly
over time. This expectation is similar to manufacturers' stated goal of
decreasing their reliance on catalysts to meet emission standards in
the future. Research in the costs of manufacturing has consistently
shown that as manufacturers gain experience in production, they are
able to apply innovations to simplify machining and assembly
operations, use lower cost materials, and reduce the number or

[[Page 54712]]

complexity of component parts.³⁰ The analysis incorporates
the effects of this learning curve by projecting that the variable
costs of producing the low-emitting engines decreases by 20 percent
starting with the third year of production (2006 model year) and by
reducing variable costs again by 20 percent starting with the sixth
year of production. Finally, since fixed costs are assumed to be
recovered over a five-year period, these costs are not included in the
analysis after the first five model years. Table 2 lists the projected
schedule of costs for each category of vehicle over time.
---------------------------------------------------------------------------

\30\ ``Learning Curves in Manufacturing,'' Linda Argote and
Dennis Epple, Science, February 23, 1990, Vol. 247, pp. 920-924.

Table 2--Projected Diesel Engine Cost and Price Increases
[1995 dollars discounted to year of sale]
----------------------------------------------------------------------------------------------------------------
Purchase Life-cycle
Vehicle class Model year price operating cost
----------------------------------------------------------------------------------------------------------------
Light heavy-duty.......................... 2004................................... 258 7
2009 and later......................... 109 7
Medium heavy-duty......................... 2004................................... 397 62
2009 and later......................... 136 62
Heavy heavy-duty.......................... 2004................................... 467 131
2009 and later......................... 180 131
----------------------------------------------------------------------------------------------------------------

B. Aggregate Costs to Society

The above analysis develops per-vehicle cost estimates for each
vehicle class. Using current data for the size and characteristics of
the heavy-duty vehicle fleet and making projections for the future,
these costs can be used to estimate the total cost to the nation for
the new emission standards in any year. The result of this analysis is
a projected total cost starting at $270 million in 2004. Per-vehicle
costs savings over time reduce projected costs to a minimum value of
$140 million in 2009, after which the growth in truck population leads
to an increase in costs to $205 million in 2020. Total costs for these
years are presented by vehicle class in Table 3. The calculated total
costs represent a combined estimate of fixed costs as they are
allocated over fleet sales, variable costs assessed at the point of
sale, and operating costs as they are incurred in each calendar year.

Table 3--Estimated Annual Costs for Improved Heavy-Duty Vehicles
[Millions of dollars]
------------------------------------------------------------------------
Category 2004 2009 2020
------------------------------------------------------------------------
Light heavy-duty................. 71 41 49
Medium heavy-duty................ 64 26 38
Heavy heavy-duty................. 107 56 93
--------------------------------------
Total........................ 242 123 180
------------------------------------------------------------------------

C. Cost-effectiveness

EPA has estimated the per-vehicle cost-effectiveness (i.e., the
cost per ton of emission reduction) of the NO_X plus NMHC
standard over the typical lifetime of heavy-duty diesel vehicles
covered by today's rule. The RIA contains a more detailed discussion of
the cost-effectiveness analyses. No significant comments were received
on the cost-effectiveness analysis presented in the proposal and the
methodology for estimating the cost-effectiveness remains the same as
used in the proposal.
EPA has examined the cost-effectiveness by two different
methodologies. The first methodology yields a nationwide cost-
effectiveness in which the total cost of compliance is divided by the
nationwide emission benefits. The second methodology yields a regional
ozone strategy cost-effectiveness in which the total cost of compliance
is divided by the emission benefits attributable to the regions that
impact ozone levels in ozone nonattainment areas.³¹
---------------------------------------------------------------------------

\31\ The RIA contains a detailed description of areas included
in the regional control strategy.
---------------------------------------------------------------------------

In addition to the benefits of reducing ozone within and
transported into urban ozone nonattainment areas, the NO_X
reductions from the new engine standards are expected to have
beneficial impacts with respect to crop damage, secondary particulate,
acid deposition, eutrophication, visibility, and forests.³²
Due to the difficulty in accurately quantifying the monetary value of
these societal benefits, the cost-effectiveness values presented do not
assign any numerical value to these additional benefits. However, based
on an analysis of existing studies that have estimated the value of
such benefits in the past, the Agency believes that the actual monetary
value of the multiple environmental and public health benefits produced
by the large NO_X reductions under this action will likely be
greater than the estimated compliance costs.³³
---------------------------------------------------------------------------

\32\ For further discussion of these benefits, the reader is
directed to Chapter 2 of the RIA.
\33\ ``Benefits of Reducing Mobile Source NO_X
Emissions,'' prepared by ICF Incorporated for Office of Mobile
Sources, U.S. EPA, Draft Final, September 30, 1996.
---------------------------------------------------------------------------

As described above in the cost section, the cost of complying with
the standards will vary by model year. Therefore, the cost-
effectiveness will also vary from model year to model year. For
comparison purposes, the discounted costs, emission reductions and
cost-effectiveness of the standards are shown in Table 4 for the same
model years discussed above in the cost section. The cost-effectiveness
results contained in Table 4 present the range in cost-effectiveness
resulting from the two cost-effectiveness scenarios described above.

[[Page 54713]]

Table 4--Discounted Per-Vehicle Costs, Emission Reductions and Cost-Effectiveness of theNO_XPlus NMHC Standard
----------------------------------------------------------------------------------------------------------------
Discounted lifetime
Discounted reductions (tons) Discounted cost-
Vehicle class Model year lifecycle ---------------------- effectiveness
costs NO_X NMHC ($/ton)
----------------------------------------------------------------------------------------------------------------
Light--Heavy-Duty Diesel 2004...................... $265 0.242 0.003 $1,100-$1,200
Vehicles.
2009 and later............ 117 500
Medium--Heavy-Duty Diesel 2004...................... 459 1.002 0.014 500
Vehicles.
2009 and later............ 198 200
Heavy--Heavy-Duty Diesel 2004...................... 598 3.059 0.043 200
Vehicles.
2009 and later............ 311 100
All--Heavy-Duty Diesel Vehicles 2004...................... 422 1.377 0.019 300
2009 and later............ 202 100-200
----------------------------------------------------------------------------------------------------------------

VI. Administrative Requirements

A. Administrative Designation and Regulatory Analysis

Under Executive Order 12866 (58 FR 51735 (Oct. 4, 1993)), the
Agency must determine whether this regulatory action is ``significant''
and therefore subject to OMB review and the requirements of the
Executive Order. The order defines ``significant regulatory action'' as
any regulatory action that is likely to result in a rule that may:
(1) Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
Pursuant to the terms of Executive Order 12866, EPA has determined
that this rule is a ``significant regulatory action'' because the
standards and other regulatory provisions have an annual effect on the
economy in excess of $100 million. A Regulatory Impact Analysis has
been prepared and is available in the docket associated with this
rulemaking. This action was submitted to the Office of Management and
Budget (OMB) for review as required by Executive Order 12866. Any
written comments from OMB and any EPA response to OMB comments are in
the public docket for this rule.

B. Compliance With Regulatory Flexibility Act

The Regulatory Flexibility Act of 1980 requires federal agencies to
identify potentially adverse impacts of federal regulations upon small
entities. In instances where significant impacts are possible on a
substantial number of these entities, agencies are required to perform
a Regulatory Flexibility Analysis.
The Agency has determined that it is not necessary to prepare a
regulatory flexibility analysis in connection with this final rule. The
Agency has also determined that the new emission standards and related
provisions will not have a significant impact on a substantial number
of small entities, since none of the engine manufacturers affected by
these regulations is a small business entity (see Chapter 3 of the
Final Regulatory Impact Analysis for the rule).
This action also contains provisions clarifying what would and
would not be considered a prohibited act (tampering) under CAA Section
203 during the heavy-duty engine rebuilding processes. Also, the rule
contains basic recordkeeping requirements for rebuilders which are
consistent with current customary rebuilding practices. Small
businesses are integral to the heavy-duty engine rebuilding industry as
noted in comments provided by the Automotive Engine Rebuilders
Association.³⁴ However, EPA does not believe that the
requirements related to engine rebuilding will have a significant
impact on a substantial number of these small entities for the
following reasons. EPA is defining how a broad existing requirement
(CAA Section 203) applies specifically to the process of rebuilding/
remanufacturing engines, but EPA is not creating a new program. These
requirements are consistent with current customary practices in this
industry. During the development of the proposal, EPA consulted with
the Engine Manufacturers Association, the Automotive Engine Rebuilders
Association, and the Production Engine Rebuilders Association,
associations which together represent a substantial portion of the
engine rebuilding and related businesses. These organizations did not
raise concerns that the proposal may have a significant impact on small
businesses. Furthermore, organizations representing small rebuilders
submitted only supportive comments during the public comment period for
the rulemaking. Finally, an EPA contractor conducted an industry
characterization which further supports that engine rebuilding
practices are consistent with the requirements and would not be changed
as a result of the requirements ³⁵.
---------------------------------------------------------------------------

\34\ EPA Docket A-95-27, II-D-41.
\35\ ``Industry Characterization: On-road Heavy-duty Diesel
Engine Rebuilders'', ICF Incorporated, Contract number 68-C5-0010,
Work assignment 102, January 3, 1997, Docket A-95-27.
---------------------------------------------------------------------------

C. Compliance With Paperwork Reduction Act

The Office of Management and Budget (OMB) has approved the
information collection requirements contained in this rule under the
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and
has assigned OMB control number 2060-0104.
EPA is finalizing requirements to collect certification results,
durability, maintenance, and averaging, banking and trading
information, and is formalizing recordkeeping procedures for engine
rebuilding companies which are consistent with current industry
practices. This information will be used to ensure compliance with and
enforce the provisions in this rule. Section 208 (a) of the CAA
requires that manufacturers provide information the Administrator may
reasonably require to determine compliance with the regulations,
therefore submission of the

[[Page 54714]]

information is mandatory. The confidentiality of any information
submitted to EPA will be protected to the full extent provided in 40
CFR Part 2.
EPA estimates the average first year hours burden per response to
be 4,670, the frequency of response to be annual, and the estimated
number of likely respondents to be twenty. EPA estimates the aggregate
first year hours burden to be 93,410. EPA estimates the annual first
year cost to be $5,603,280, including the annualized capital and start-
up costs. Subsequent year burdens are estimated to be one-tenth of the
first year estimates due to the practice of engine family carry-over
from model year-to-model year. Burden means the total time, effort, or
financial resources expended by persons to generate, maintain, retain,
or disclose or provide information to or for a Federal agency. This
includes the time needed to review instructions; develop, acquire,
install, and utilize technology and systems for the purposes of
collecting, validating, and verifying information, processing and
maintaining information, and disclosing and providing information;
adjust the existing ways to comply with any previously applicable
instructions and requirements; train personnel to be able to respond to
a collection of information; and transmit or otherwise disclose the
information.
An Agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15. EPA is
amending the table in 40 CFR Part 9 of currently approved ICR control
numbers issued by OMB for various regulations to list the information
requirements contained in this final rule.

D. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), P.L.
104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to state, local, and tribal governments, in
the aggregate, or to the private sector, of $100 million or more for
any one year. Before promulgating an EPA rule for which a written
statement is needed, section 205 of the UMRA generally requires EPA to
identify and consider a reasonable number of regulatory alternatives
and adopt the least costly, most cost effective, or least burdensome
alternative that achieves the objectives of the rule. The provisions of
section 205 do not apply when they are inconsistent with applicable
law. Moreover, section 205 allows EPA to adopt an alternative other
than the least costly, most cost effective, or least burdensome
alternative if the Administrator publishes with the final rule an
explanation of why that alternative was not adopted. Before EPA
establishes any regulatory requirements that may significantly or
uniquely affect small governments, including tribal governments, it
must have developed under section 203 of the UMRA a small government
agency plan. The plan must provide for notifying potentially affected
small governments, enabling officials of affected small governments to
have meaningful and timely input in the development of EPA regulatory
proposals with significant federal intergovernmental mandates, and
informing, educating, and advising small governments on compliance with
the regulatory requirements.
Today's rule contains no Federal mandates (under the regulatory
provisions of Title II of the UMRA) for State, local, or tribal
governments. The rule imposes no enforceable duties on any of these
governmental entities. Nothing in the program would significantly or
uniquely affect small governments. EPA has determined that this rule
contains federal mandates that may result in expenditures of $100
million or more in any one year for the private sector. EPA believes
that the program represents the least costly, most cost-effective
approach to achieving the air quality goals of the rule. EPA has
performed the required analyses. The reader is directed to the
Regulatory Impact Analysis for further information regarding these
analyses.

E. Submission to Congress and the General Accounting Office

Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business
Regulatory Enforcement Reform Act of 1996, EPA submitted 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
General Accounting Office prior to publication of the rule in today's
Federal Register. OMB has designated this a ``major rule'' as defined
in 5 U.S.C. 804(2).

VII. Statutory Authority

Section 202(a)(3) authorizes EPA to establish emissions standards
for new heavy-duty motor vehicle engines. See 42 U.S.C. 7521(a)(3).
These standards are to reflect the greatest reduction achievable
through the application of technology which the Administrator
determines will be available, giving appropriate consideration to cost,
energy, and safety factors associated with the application of such
technology. This provision also establishes the lead time and stability
requirements for these standards. Pursuant to Sections 202(a)(1) and
202(d), these emissions standards apply for the useful life period
established by the Agency. See 42 U.S.C. 7521(a)(1), 7521(d). Other
provisions of Title II of the Act, along with Section 301, are
additional authority for the measures finalized in this action.

VIII. Judicial Review

Under section 307(b)(1) of the Act, EPA hereby finds that these
regulations are of national applicability. Accordingly, judicial review
of this action is available only by filing of a petition for review in
the United States Court of Appeals for the District of Columbia Circuit
within 60 days of publication in the Federal Register. Under section
307(b)(2) of the Act, the requirements which are the subject of today's
Notice may not be challenged later in judicial proceedings brought by
EPA to enforce these requirements. This rulemaking and any petitions
for review are subject to the provisions of section 307(d) of the Clean
Air Act.

IX. Copies of Rulemaking Documents

Copies of documents related to this rulemaking are available in the
public docket for the rule and over the internet as described in the
ADDRESSES section above.

List of Subjects

40 CFR Part 9

Environmental protection, Reporting and recordkeeping requirements.

40 CFR Part 86

Administrative practice and procedure, Confidential business
information, Incorporation by reference, Labeling, Motor vehicle
pollution, Reporting and recordkeeping requirements.

Dated: October 6, 1997.
Carol M. Browner,
Administrator.

[[Page 54715]]

Appendix to the Preamble--Table of Changes Made to Part 9 and Subparts A and N of Part 86
----------------------------------------------------------------------------------------------------------------
Section Change Reason
----------------------------------------------------------------------------------------------------------------
1. Sec. 9.1..................... Revised to add OMB approval numbers........... New OMB approval numbers.
1. Authority..................... None..........................................
2. Sec. 86.1.................... Revised to add document reference............. Updated ASTM methodology for
significant digits.
3. Sec. 86.098-3................ Revised to include new abbreviations.......... Add abbreviations for terms
averaging, banking and
trading and heavy-duty
engines.
4. Sec. 86.098-10............... Revision of references........................ Revise references to
averaging, banking, and
trading programs.
5. Sec. 86.098-11............... Revision of references........................ Revise references to
averaging, banking, and
trading programs.
6. Sec. 86.098-15............... Add Sec. 86.098-15........................... Incorporation of revisions to
NO_Xand particulate
averaging, banking and
trading programs.
7. Sec. 86.098-23............... Revise Sec. 86.098-23........................ Incorporate changes due to
new standards and ABT
programs.
8. Sec. 86.098-30............... Revise Sec. 86.098-30........................ Incorporate changes due to
new ABT programs.
9. Sec. 86.099-11............... Revise Sec. 86.099-11........................ Revise references to
averaging, banking, and
trading programs.
10. Sec. 86.001-23.............. Revise Sec. 86.001-23........................ Incorporate references to
Sec. 98.098-23.
11. Sec. 86.001-30.............. Revise Sec. 86.001-30........................ Incorporate references to
Sec. 98.098-30.
12. Sec. 86.004-2............... Add Sec. 86.004-2............................ Incorporation of new useful
life for heavy heavy-duty
diesel engines.
13. Sec. 86.004-11.............. Add Sec. 86.004-11........................... Incorporation of newNO_Xplus
NMHC standards for diesel
heavy-duty engines.
14. Sec. 86.004-15.............. Add Sec. 86.004-15........................... Incorporation of revisions to
NO_Xand particulate
averaging, banking and
trading program.
15. Sec. 86.004-21.............. Add Sec. 86.004-21........................... Incorporate changes due to
new standards and ABT
programs.
16. Sec. 86.004-25.............. Add Sec. 86.004-25........................... Incorporation of revisions to
maintenance requirements.
17. Sec. 86.004-28.............. Revise Sec. 86.004-28........................ Incorporate changes in
deterioration factors due to
new standards and allow
options to NMHC measurement
for diesel engines.
18. Sec. 86.004-30.............. Revise Sec. 86.004-30........................ Incorporate changes due to
new standards and ABT
programs.
19. Sec. 86.004-38.............. Add Sec. 86.004-38........................... Incorporation of maintenance
instruction requirements.
20. Sec. 86.004-40.............. Add Sec. 86.004-40........................... Incorporation of engine
rebuild practices
provisions.
21. Sec. 86.1311-94............. Revise Section 86.004-40(3)................... Incorporate allowance for
direct NMHC measurement
using a GC for NGVs.
22. Sec. 86.1344-94............. Revise Section 86.1344-94(e)(22).............. Incorporation of NMHC test
data requirement.
----------------------------------------------------------------------------------------------------------------

For the reasons set out in the preamble, chapter I, title 40 is
amended as follows:

Part 9 [Amended]

1. The authority citation for part 9 continues to read as follows:

Authority: 7 U.S.C. 135 et seq., 136-136y; 15 U.S.C. 2001, 2003,
2005, 2006, 2601-2671; 21 U.S.C. 331j, 346a, 348; 31 U.S.C. 9701; 33
U.S.C. 1251 et seq., 1311, 1313d, 1314, 1318, 1321, 1326, 1330,
1342, 1344, 1345 (d) and (e), 1361; E.O. 11735, 38 FR 21243, 3 CFR,
1971-1975 Comp. p. 973; 42 U.S.C. 241, 242b, 243, 246, 300f, 300g,
300g-1, 300g-2, 300g-3, 300g-4, 300g-5, 300g-6, 300j-1, 300j-2,
300j-3, 300j-4, 300j-9, 1857 et seq., 6901-6992k, 7401-7671q, 7542,
9601-9657, 11023, 11048.

2. Section 9.1 is amended by adding the new entries in numerical
order under the indicated heading to the table to read as follows:

Sec. 9.1 OMB approvals under the Paperwork Reduction Act.

* * * * *

------------------------------------------------------------------------
40 CFR citation OMB control No.
------------------------------------------------------------------------

* * * *
* * *
------------------------------------------------------------------------

Control of Air Pollution From New and In-Use Motor Vehicles and New and
In-Use Motor Vehicle Engines: Certification and Test Procedures
86.004.38.....................................................2060-0104
86.004.40.....................................................2060-0104
* * * * *

PART 86--CONTROL OF AIR POLLUTION FROM NEW AND IN-USE MOTOR
VEHICLES AND NEW AND IN-USE MOTOR VEHICLE ENGINES: CERTIFICATION
AND TEST PROCEDURES

1. The authority citation for part 86 continues to read as follows:

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

2. In Sec. 86.1 the table in paragraph (b)(1) is amended by adding
a new entry to the end of the table to read as follows:

Sec. 86.1 Reference materials.

* * * * *
(b) * * *
(1) * * *

------------------------------------------------------------------------
Document No. and name 40 CFR part 86 reference
------------------------------------------------------------------------

* * * *
* * *
ASTM E29-93a, Standard Practice for Using
Significant Digits in Test Data to Determine
Conformance with Specifications............. 86.098-15, 86.004-15
------------------------------------------------------------------------

[[Page 54716]]

* * * * *
3. Section 86.098-3 is revised to read as follows:

Sec. 86.098-3 Abbreviations.

(a) The abbreviations in Sec. 86.096-3 continue to apply. The
abbreviations in this section apply beginning with the 1998 model year.
(b) The abbreviations of this section apply to this subpart, and
also to subparts B, E, F, G, K, M, N, and P of this part, and have the
following meanings:

TD--Dispensed fuel temperature
ABT--Averaging, banking, and trading
HDE--Heavy-duty engine

4. Section 86.098-10 is amended by revising the first sentence in
paragraphs (a)(1)(i)(C)(2), (a)(1)(i)(C)(3), (a)(1)(ii)(C)(2),
(a)(1)(ii)(C)(3), (a)(1)(iii)(C)(2), (a)(1)(iv)(C)(2), (a)(1)(v)(C)(2),
(a)(1)(vi)(C)(2) to read as follows:

Sec. 86.098-10 Emission standards for 1998 and later model year Otto-
cycle heavy-duty engines and vehicles.

* * * * *
(a)(1) * * *
(i) * * *
(C) * * *
(2) A manufacturer may elect to include any or all of its gasoline-
fueled Otto-cycle HDE families in any or all of the NO_X or
NO_X plus NMHC ABT programs for HDEs, within the restrictions
described in Sec. 86.098-15 as applicable. * * *
(3) A manufacturer may elect to include any or all of its liquified
petroleum gas-fueled Otto-cycle HDE families in any or all of the
NO_X or NO_X plus NMHC ABT programs for HDEs,
within the restrictions described in Sec. 86.098-15 as applicable. * *
*
* * * * *
(ii) * * *
(C) * * *
(2) A manufacturer may elect to include any or all of its gasoline-
fueled Otto-cycle HDE families in any or all of the NO_X or
NO_X plus NMHC ABT programs for HDEs, within the restrictions
described in Sec. 86.098-15 as applicable. * * *
(3) A manufacturer may elect to include any or all of its liquified
petroleum gas-fueled Otto-cycle HDE families in any or all of the
NO_X or NO_X plus NMHC ABT programs for HDEs,
within the restrictions described in Sec. 86.098-15 as applicable. * *
*
* * * * *
(iii) * * *
(C) * * *
(2) A manufacturer may elect to include any or all of its methanol-
fueled Otto-cycle HDE families in any or all of the NO_X or
NO_X plus NMHC ABT programs for HDEs, within the restrictions
described in Sec. 86.098-15 as applicable. * * *
* * * * *
(iv) * * *
(C) * * *
(2) A manufacturer may elect to include any or all of its methanol-
fueled Otto-cycle HDE families in any or all of the NO_X or
NO_X plus NMHC ABT programs for HDEs, within the restrictions
described in Sec. 86.098-15 as applicable. * * *
* * * * *
(v) * * *
(C) * * *
(2) A manufacturer may elect to include any or all of its natural
gas-fueled Otto-cycle HDE families in any or all of the NO_X
or NO_X plus NMHC ABT programs for HDEs, within the
restrictions described in Sec. 86.098-15 as applicable. * * *
* * * * *
(vi) * * *
(C) * * *
(2) A manufacturer may elect to include any or all of its natural
gas-fueled Otto-cycle HDE families in any or all of the NO_X
or NO_X plus NMHC ABT programs for HDEs, within the
restrictions described in Sec. 86.098-15 as applicable. * * *
* * * * *
5. Section 86.098-11 is amended by revising the first sentence in
paragraphs (a)(3)(ii) and (a)(4)(iii) introductory text to read as
follows:

Sec. 86.098-11 Emission standards for 1998 and later model year diesel
heavy-duty engines and vehicles.

(a) * * *
(3) * * *
(ii) A manufacturer may elect to include any or all of its diesel
HDE families in any or all of the NO_X or NO_X plus
NMHC ABT programs for HDEs, within the restrictions described in
Sec. 86.098-15 as applicable. * * *
* * * * *
(4) * * *
(iii) A manufacturer may elect to include any or all of its diesel
HDE families in any or all of the particulate ABT programs for HDEs,
within the restrictions described in Sec. 86.098-15 as applicable. * *
*
* * * * *
6. A new Sec. 86.098-15 is added to subpart A to read as follows:

Sec. 86.098-15 NO_X and particulate averaging, trading, and
banking for heavy-duty engines.

Section 86.098-15 includes text that specifies requirements that
differ from Sec. 86.094-15. Where a paragraph in Sec. 86.094-15 is
identical and applicable to Sec. 86.098-15, this may be indicated by
specifying the corresponding paragraph and the statement ``[Reserved].
For guidance see Sec. 86.094-15.''
(a) through (b) [Reserved] For guidance see Sec. 86.094-15.
(c)(1) For each participating engine family, NO_X and
particulate emission credits (positive or negative) are to be
calculated according to one of the following equations and rounded, in
accordance with ASTM E29-93a, to the nearest one-tenth of a Megagram
(MG). Consistent units are to be used throughout the equation.
(i) For determining credit need for all engine families and credit
availability for engine families generating credits for averaging
programs only:

Emission credits = (Std-FEL) x (CF) x (UL) x (Production) x
(10^-6)

(ii) For determining credit availability for engine families
generating credits for trading or banking programs:

Emission credits = (Std-FEL) x (CF) x (UL) x (Production) x
(10^-6) x (Discount)

(iii) For purposes of the equations in paragraphs (c)(1)(i) and
(ii) of this section:

Std = the current and applicable heavy-duty engine NO_X or
particulate emission standard in grams per brake horsepower hour or
grams per Megajoule.
FEL = the NO_X or particulate family emission limit for
the engine family in grams per brake horsepower hour or grams per
Megajoule.
CF = a transient cycle conversion factor in BHP-hr/mi or MJ/mi, as
given in paragraph (c)(2) of this section.
UL = the useful life, or alternative life as described in paragraph
(f) of Sec. 86.094-21, for the given engine family in miles.
Production = the number of engines produced for U.S. sales within
the given engine family during the model year. Quarterly production
projections are used for initial certification. Actual production is
used for end-of-year compliance determination.
Discount = a one-time discount applied to all credits to be banked
or traded within the model year generated. The discount applied here
is 0.8. Banked credits traded in a subsequent model year will not be
subject to an additional discount. Banked credits used in a
subsequent model year's averaging program will not have the discount
restored.

[[Page 54717]]

diesel heavy-duty engines, the equivalent mileage is 6.5 miles.
(ii) When more than one configuration is chosen by EPA to be tested
in the certification of an engine family (as described in Sec. 86.085-
24), the conversion factor used is to be based upon a production
weighted average value of the configurations in an engine family to
calculate the conversion factor.
(d) through (i) [Reserved] For guidance see Sec. 86.094-15.
(j) Optional program for early banking. Provisions set forth in
paragraphs (a) through (i) of this section apply except as specifically
stated otherwise in paragraph (j) of this section.
(1) To be eligible for the optional program described in paragraph
(j) of this section, the following must apply:
(i) Credits are generated from diesel cycle heavy-duty engines.
(ii) During certification, the manufacturer shall declare its
intent to include specific engine families in the program described in
this paragraph (j). Separate declarations are required for each program
and no engine families may be included in both programs in the same
model year.
(2) Credit generation and use. (i) Credits shall only be generated
by 1998 and later model year engine families.
(ii) Credits may only be used for 2004 and later model year heavy-
duty diesel engines. When used with 2004 and later model year engines,
NO_X credits may be used to meet the NO_X plus NMHC
standard, except as otherwise provided in Sec. 86.004-11(a)(1)(i)(D).
(iii) If a manufacturer chooses to use credits generated under
paragraph (j) of this section prior to model year 2004, the averaging,
trading, and banking of such credits shall be governed by the program
provided in paragraphs (a) through (i) of this section and shall be
subject to all discounting, credit life limits and all other provisions
contained therein. In the case where the manufacturer can demonstrate
that the credits were discounted under the program provided in
paragraph (j) of this section, that discount may be accounted for in
the calculation of credits described in paragraph (c) of this section.
(3) Program flexibilities. (i) NO_X and PM credits that
are banked until model year 2004 under this paragraph (j) may be used
in 2004 or any model year thereafter without being forfeited due to
credit age. This supersedes the requirement in paragraph (f)(2)(i) of
this section.
(ii) There are no regional category restraints for averaging,
trading, and banking of credits generated under the program described
in paragraph (j) of this section. This supersedes the regional category
provisions described in the opening text of paragraphs (d) and (e) of
this section.
(iii) Credit discounting. (A) For NO_X and PM credits
generated under this paragraph (j) from engine families with
NO_X certification levels greater than 3.5 grams per brake
horsepower-hour for oxides of nitrogen, a Discount value of 0.9 shall
be used in place of 0.8 in the credit availability equation in
paragraph (c)(1) of this section.
(B) For NO_X and PM credits generated under this
paragraph (j) from engine families with NOx certification levels less
than or equal to 3.5 grams per brake horsepower-hour for oxides of
nitrogen, a Discount value of 1.0 shall be used in place of 0.8 in the
credit availability equation in paragraph (c)(1) of this section.
(iv) Credit apportionment. At the manufacturers option, credits
generated under the provisions described in this section may be sold to
or otherwise provided to another party for use in programs other than
the averaging, trading and banking program described in this section.
(A) The manufacturer shall pre-identify two emission levels per
engine family for the purposes of credit apportionment. One emission
level shall be the FEL and the other shall be the level of the standard
that the engine family is required to certify to under Sec. 86.098-11.
For each engine family, the manufacturer may report engine sales in two
categories, ``ABT-only credits'' and ``nonmanufacturer-owned credits''.
(1) For engine sales reported as ``ABT-only credits'', the credits
generated must be used solely in the ABT program described in this
section.
(2) The engine manufacturer may declare a portion of engine sales
``nonmanufacturer-owned credits'' and this portion of the credits
generated between the standard and the FEL, based on the calculation in
paragraph (c)(1) of this section, would belong to another party. For
ABT, the manufacturer may not generate any credits for the engine sales
reported as ``nonmanufacturer-owned credits''. Engines reported as
``nonmanufacturer-owned credits'' shall comply with the FEL and the
requirements of the ABT program in all other respects.
(B) Only manufacturer-owned credits reported as ``ABT-only
credits'' shall be used in the averaging, trading, and banking
provisions described in this section.
(C) Credits shall not be double-counted. Credits used in the ABT
program may not be provided to an engine purchaser for use in another
program.
(D) Manufacturers shall determine and state the number of engines
sold as ``ABT-only credits'' and ``nonmanufacturer-owned credits'' in
the end-of-model year reports required under Sec. 86.098-23.
7. Section 86.098-23 is amended by revising paragraphs (a), (b)(1),
(b)(3), (b)(4)(i), (b)(4)(ii), (c) through (e)(2), (f) through (l), the
first sentence of (m)(1), paragraphs (m)(2)(i) and (m)(2)(iv) to read
as follows:

Sec. 86.098-23 Required data.

* * * * *
(a) The manufacturer shall perform the tests required by the
applicable test procedures and submit to the Administrator the
information described in paragraphs (b) through (m) of this section,
provided, however, that if requested by the manufacturer, the
Administrator may waive any requirement of this section for testing of
a vehicle (or engine) for which emission data are available or will be
made available under the provisions of Sec. 86.091-29.
(b) Durability data. (1)(i) The manufacturer shall submit exhaust
emission durability data on such light-duty vehicles tested in
accordance with applicable test procedures and in such numbers as
specified, which will show the performance of the systems installed on
or incorporated in the vehicle for extended mileage, as well as a
record of all pertinent maintenance performed on the test vehicles.
(ii) The manufacturer shall submit exhaust emission deterioration
factors for light-duty trucks and HDEs and all test data that are
derived from the testing described under Sec. 86.094-21(b)(5)(i)(A), as
well as a record of all pertinent maintenance. Such testing shall be
designed and conducted in accordance with good engineering practice to
assure that the engines covered by a certificate issued under
Sec. 86.098-30 will meet each emission standard (or family emission
limit, as appropriate) in Sec. 86.094-9, Sec. 86.098-10, Sec. 86.098-11
or superseding emissions standards sections as appropriate, in actual
use for the useful life applicable to that standard.
* * * * *
(3) For heavy-duty vehicles equipped with gasoline-fueled or
methanol-fueled engines, the manufacturer shall submit evaporative
emission deterioration factors for each evaporative emission family-
evaporative emission control system combination identified in
accordance with Sec. 86.094-21(b)(4)(ii).

[[Page 54718]]

Furthermore, a statement that the test procedure(s) used to derive the
deterioration factors includes, but need not be limited to, a
consideration of the ambient effects of ozone and temperature
fluctuations, and the service accumulation effects of vibration, time,
and vapor saturation and purge cycling. The deterioration factor test
procedure shall be designed and conducted in accordance with good
engineering practice to assure that the vehicles covered by a
certificate issued under Sec. 86.098-30 will meet the evaporative
emission standards in Secs. 86.096-10 and 86.098-11 or superseding
emissions standards sections as applicable in actual use for the useful
life of the engine. Furthermore, a statement that a description of the
test procedure, as well as all data, analyses, and evaluations, is
available to the Administrator upon request.
(4)(i) For heavy-duty vehicles with a Gross Vehicle Weight Rating
of up to 26,000 lbs and equipped with gasoline-fueled or methanol-
fueled engines, the manufacturer shall submit a written statement to
the Administrator certifying that the manufacturer's vehicles meet the
standards of Sec. 86.098-10 or Sec. 86.098-11 or superseding emissions
standards sections as applicable as determined by the provisions of
Sec. 86.098-28. Furthermore, the manufacturer shall submit a written
statement to the Administrator that all data, analyses, test
procedures, evaluations, and other documents, on which the requested
statement is based, are available to the Administrator upon request.
(ii) For heavy-duty vehicles with a Gross Vehicle Weight Rating of
greater than 26,000 lbs and equipped with gasoline-fueled or methanol-
fueled engines, the manufacturer shall submit a written statement to
the Administrator certifying that the manufacturer's evaporative
emission control systems are designed, using good engineering practice,
to meet the standards of Sec. 86.096-10 or Sec. 86.098-11 or
superseding emissions standards sections as applicable as determined by
the provisions of Sec. 86.098-28. Furthermore, the manufacturer shall
submit a written statement to the Administrator that all data,
analyses, test procedures, evaluations, and other documents, on which
the requested statement is based, are available to the Administrator
upon request.
* * * * *
(c)(1) [Reserved] For guidance see Sec. 86.095-23.
(c)(2) Certification engines. (i) The manufacturer shall submit
emission data on such engines tested in accordance with applicable
emission test procedures of this subpart and in such numbers as
specified. These data shall include zero-hour data, if generated, and
emission data generated for certification as required under
Sec. 86.098-26(c)(4). These data shall also include, where there is a
combined standard (e.g., NMHC + NO_X), emissions data for the
individual pollutants as well as for the pollutants when combined. In
lieu of providing emission data on idle CO emissions or particulate
emissions from methanol-fueled diesel-cycle certification engines, or
on CO emissions from petroleum-fueled or methanol-fueled diesel
certification engines the Administrator may, on request of the
manufacturer, allow the manufacturer to demonstrate (on the basis of
previous emission tests, development tests, or other information) that
the engine will conform with the applicable emission standards of
Sec. 86.094-11 or superseding emissions standards sections as
applicable. In lieu of providing emission data on smoke emissions from
methanol-fueled or petroleum-fueled diesel certification engines, the
Administrator may, on the request of the manufacturer, allow the
manufacturer to demonstrate (on the basis of previous emission tests,
development tests, or other information) that the engine will conform
with the applicable emissions standards of Sec. 86.098-11 or
superseding emissions standards sections as applicable, except for
engines with a particulate matter certification level exceeding 0.25
grams per brake horsepower-hour. In lieu of providing emissions data on
smoke emissions from petroleum-fueled or methanol-fueled diesel engines
when conducting Selective Enforcement Audit testing under 40 CFR part
86, subpart K, the Administrator may, on separate request of the
manufacturer, allow the manufacturer to demonstrate (on the basis of
previous emission tests, development tests, or other information) that
the engine will conform with the applicable smoke emissions standards
of Sec. 86.098-11 or superseding emissions standards sections as
applicable, except for engines with a particulate matter certification
level exceeding 0.25 grams per brake horsepower-hour.
(ii) For heavy-duty diesel engines, a manufacturer may submit hot-
start data only, in accordance with subpart N of this part, when making
application for certification. However, for confirmatory, Selective
Enforcement Audit, and recall testing by the Agency, both the cold-
start and hot-start test data, as specified in subpart N of this part,
will be included in the official results.
(d) The manufacturer shall submit a statement that the vehicles (or
engines) for which certification is requested conform to the
requirements in Sec. 86.090-5(b), and that the descriptions of tests
performed to ascertain compliance with the general standards in
Sec. 86.090-5(b), and that the data derived from such tests, are
available to the Administrator upon request.
(e)(1) The manufacturer shall submit a statement that the test
vehicles (or test engines) for which data are submitted to demonstrate
compliance with the applicable standards (or family emission limits, as
appropriate) of this subpart are in all material respects as described
in the manufacturer's application for certification, that they have
been tested in accordance with the applicable test procedures utilizing
the fuels and equipment described in the application for certification,
and that on the basis of such tests the vehicles (or engines) conform
to the requirements of this part. If such statements cannot be made
with respect to any vehicle (or engine) tested, the vehicle (or engine)
shall be identified, and all pertinent data relating thereto shall be
supplied to the Administrator. If, on the basis of the data supplied
and any additional data as required by the Administrator, the
Administrator determines that the test vehicles (or test engine) were
not as described in the application for certification or were not
tested in accordance with the applicable test procedures utilizing the
fuels and equipment as described in the application for certification,
the Administrator may make the determination that the vehicle (or
engine) does not meet the applicable standards (or family emission
limits, as appropriate). The provisions of Sec. 86.098-30(b) shall then
be followed.
(2) For evaporative and refueling emission durability, or light-
duty truck or HDE exhaust emission durability, the manufacturer shall
submit a statement of compliance with paragraph (b)(1)(ii),(b)(2),
(b)(3) or (b)(4) of this section, as applicable.
* * * * *
(f) through (g) [Reserved] For guidance see Sec. 86.095-23.
(h) Additionally, manufacturers participating in any of the
emissions ABT programs under Sec. 86.098-15 or superseding ABT sections
for HDEs shall submit for each participating family the items listed in
paragraphs (h) (1) through (3) of this section.
(1) Application for certification. (i) The application for
certification will

[[Page 54719]]

include a statement that the engines for which certification is
requested will not, to the best of the manufacturer's belief, when
included in any of the ABT programs, cause the applicable emissions
standard(s) to be exceeded.
(ii) The application for certification will also include
identification of the section of this subpart under which the family is
participating in ABT (i.e., Sec. 86.098-15 or superseding ABT
sections), the type (NOX, NO_X+NMHC, or particulate) and the
projected number of credits generated/needed for this family, the
applicable averaging set, the projected U.S. (49-state or 50 state, as
applicable) production volumes, by quarter, NCPs in use on a similar
family and the values required to calculate credits as given in the
applicable ABT section. Manufacturers shall also submit how and where
credit surpluses are to be dispersed and how and through what means
credit deficits are to be met, as explained in the applicable ABT
section. The application must project that each engine family will be
in compliance with the applicable emission standards based on the
engine mass emissions and credits from averaging, trading and banking.
(2) [Reserved]
(3) End-of-year report. The manufacturer shall submit end-of-year
reports for each engine family participating in any of the ABT
programs, as described in paragraphs (h)(3)(i) through (iv) of this
section.
(i) These reports shall be submitted within 90 days of the end of
the model year to: Director, Engine Programs and Compliance Division
(6405J), U.S. Environmental Protection Agency, 401 M Street, SW.,
Washington, DC 20460.
(ii) These reports shall indicate the engine family, the averaging
set, the actual U.S. (49-state or 50-state, as applicable) production
volume, the values required to calculate credits as given in the
applicable ABT section, the resulting type and number of credits
generated/required, and the NCPs in use on a similar NCP family.
Manufacturers shall also submit how and where credit surpluses were
dispersed (or are to be banked) and how and through what means credit
deficits were met. Copies of contracts related to credit trading must
also be included or supplied by the broker if applicable. The report
shall also include a calculation of credit balances to show that net
mass emissions balances are within those allowed by the emission
standards (equal to or greater than a zero credit balance). Any credit
discount factor described in the applicable ABT section must be
included as required.
(iii) The production counts for end-of-year reports shall be based
on the location of the first point of retail sale (e.g., customer,
dealer, secondary manufacturer) by the manufacturer.
(iv) Errors discovered by EPA or the manufacturer in the end-of-
year report, including changes in the production counts, may be
corrected up to 180 days subsequent to submission of the end-of-year
report. Errors discovered by EPA after 180 days shall be corrected if
credits are reduced. Errors in the manufacturer's favor will not be
corrected if discovered after the 180 day correction period allowed.
(i) Failure by a manufacturer participating in the ABT programs to
submit any quarterly or end-of-year report (as applicable) in the
specified time for all vehicles and engines that are part of an
averaging set is a violation of section 203(a)(1) of the Clean Air Act
(42 U.S.C. 7522(a)(1)) for each such vehicle and engine.
(j) Failure by a manufacturer generating credits for deposit only
in the HDE banking programs to submit their end-of-year reports in the
applicable specified time period (i.e., 90 days after the end of the
model year) shall result in the credits not being available for use
until such reports are received and reviewed by EPA. Use of projected
credits pending EPA review will not be permitted in these
circumstances.
(k) Engine families certified using NCPs are not required to meet
the requirements outlined in paragraphs (f) through (j) of this
section.
(l) [Reserved]. For guidance see Sec. 86.095-23.
(m) * * *
(1) In the application for certification the projected sales volume
of evaporative families certifying to the respective evaporative test
procedure and accompanying standards as set forth or otherwise
referenced in Secs. 86.090-8, 86.090-9, 86.091-10 and 86.094-11 or as
set forth or otherwise referenced in Secs. 86.096-8, 86.096-9, 86.096-
10 and 86.098-11 or as set forth or otherwise referenced in superseding
emissions standards sections. * * *
(2) * * *
(i) These end-of-year reports shall be submitted within 90 days of
the end of the model year to: For heavy-duty engines--Director, Engine
Programs and Compliance Divisions (6403J), For vehicles--Director,
Vehicle Compliance and Programs Division (6405J), U.S. Environmental
Protection Agency, 401 M Street, SW., Washington, DC 20460.
* * * * *
(iv) Failure by a manufacturer to submit the end-of-year report
within the specified time may result in certificate(s) for the
evaporative family(ies) being voided ab initio plus any applicable
civil penalties for failure to submit the required information to the
Agency.
* * * * *
8. Section 86.098-30 is amended by revising paragraphs
(a)(4)(iv)(A) through (a)(12) to read as follows:

Sec. 86.098-30 Certification.

* * * * *
(a)(4)(iv)(A) through (a)(9) [Reserved]. For guidance see
Sec. 86.094-30.
(a)(10)(i) For diesel-cycle light-duty vehicle and diesel-cycle
light-duty truck families which are included in a particulate averaging
program, the manufacturer's production-weighted average of the
particulate emission limits of all engine families in a participating
class or classes shall not exceed the applicable diesel-cycle
particulate standard, or the composite particulate standard defined in
Sec. 86.090-2 as appropriate, at the end of the model year, as
determined in accordance with this part. The certificate shall be void
ab initio for those vehicles causing the production-weighted FEL to
exceed the particulate standard.
(ii) For all heavy-duty diesel-cycle engines which are included in
the particulate ABT programs under Secs. 86.094-15, 86.098-15, or
superseding ABT sections, the provisions of paragraphs (a)(10)(ii) (A)
through (C) of this section apply.
(A) All certificates issued are conditional upon the manufacturer
complying with all applicable ABT provisions and the ABT related
provisions of other applicable sections, both during and after the
model year production.
(B) Failure to comply with all applicable ABT provisions will be
considered to be a failure to satisfy the conditions upon which the
certificate was issued, and the certificate may be deemed void ab
initio.
(C) The manufacturer shall bear the burden of establishing to the
satisfaction of the Administrator that the conditions upon which the
certificate was issued were satisfied or excused.
(11)(i) For light-duty truck families which are included in a
NO_X averaging program, the manufacturer's production-
weighted average of the NO_X emission limits of all such
engine families shall not exceed the applicable NO_X emission
standard, or the composite NO_X emission standard defined in
Sec. 86.088-2, as appropriate, at the end of the model year, as
determined in accordance with this

[[Page 54720]]

part. The certificate shall be void ab initio for those vehicles
causing the production-weighted FEL to exceed the NO_X
standard.
(ii) For all HDEs which are included in the NO_X or
NO_X plus NMHC ABT programs under Sec. 86.098-15 or
superseding ABT sections, the provisions of paragraphs (a)(11)(ii) (A)
through (C) of this section apply.
(A) All certificates issued are conditional upon the manufacturer
complying with all applicable ABT provisions and the ABT related
provisions of other applicable sections, both during and after the
model year production.
(B) Failure to comply with all applicable ABT provisions will be
considered to be a failure to satisfy the conditions upon which the
certificate was issued, and the certificate may be deemed void ab
initio.
(C) The manufacturer shall bear the burden of establishing to the
satisfaction of the Administrator that the conditions upon which the
certificate was issued were satisfied or excused.
(a)(12) [Reserved]. For guidance see Sec. 86.094-30.
* * * * *
9. Section 86.099-11 is amended by revising the first sentence of
paragraphs (a)(3)(ii) and (a)(4)(iii) introductory text to read as
follows:

Sec. 86.099-11 Emission standards for 1999 and later model year diesel
heavy-duty engines and vehicles.

(a) * * *
(3) * * *
(ii) A manufacturer may elect to include any or all of its diesel
HDE families in any or all of the NO_X or NO_X plus
NMHC ABT programs for HDEs, within the restrictions described in
Sec. 86.098-15 as applicable. * * *
* * * * *
(4)* * *
(iii) A manufacturer may elect to include any or all of its diesel
HDE families in any or all of the particulate ABT programs for HDEs,
within the restrictions described in Sec. 86.098-15 as applicable. * *
*
* * * * *
10. Section 86.001-23 is amended by revising paragraphs (a) through
(b)(1), (b)(3), (b)(4), (c), (d), (e)(1), (e)(2), and (f) through (m)
to read as follows:

Sec. 86.001-23 Required data.

* * * * *
(a) through (b)(1) [Reserved]. For guidance see Sec. 86.098-23.
* * * * *
(b)(3) and (b)(4) [Reserved]. For guidance see Sec. 86.098-23.
(c)(1) [Reserved]. For guidance see Sec. 86.095-23.
(c)(2) through (e)(1) [Reserved]. For guidance see Sec. 86.098-23.
(e)(2) For evaporative and refueling emissions durability, or
light-duty truck or HDE exhaust emissions durability, a statement of
compliance with paragraph (b)(2) of this section or Sec. 86.098-23
(b)(1)(ii), (b)(3), or (b)(4) as applicable.
* * * * *
(f) and (g) [Reserved]. For guidance see Sec. 86.095-23.
(h) through (m) [Reserved]. For guidance see Sec. 86.098-23.
11. Section 86.001-30 is amended by revising paragraphs
(a)(4)(iv)(A) through (a)(12) to read as follows:

Sec. 86.001-30 Certification.

* * * * *
(a) * * *
(4) * * *
(a)(4)(iv)(A) through (a)(9) [Reserved]. For guidance see
Sec. 86.094-30.
(a)(10) and (a)(11) [Reserved]. For guidance see Sec. 86.098-30.
(a)(12) [Reserved]. For guidance see Sec. 86.094-30.
* * * * *
12. A new Sec. 86.004-2 is added to subpart A to read as follows:

Sec. 86.004-2 Definitions.

The definitions of Sec. 86.001-2 continue to apply to 2001 and
later model year vehicles. The definitions listed in this section apply
beginning with the 2004 model year.
Useful life means:
(1) For light-duty vehicles, and for light light-duty trucks not
subject to the Tier 0 standards of Sec. 86.094-9(a), intermediate
useful life and/or full useful life. Intermediate useful life is a
period of use of 5 years or 50,000 miles, whichever occurs first. Full
useful life is a period of use of 10 years or 100,000 miles, whichever
occurs first, except as otherwise noted in Sec. 86.094-9. The useful
life of evaporative and/or refueling emission control systems on the
portion of these vehicles subject to the evaporative emission test
requirements of Sec. 86.130-96, and/or the refueling emission test
requirements of Sec. 86.151-98, is defined as a period of use of 10
years or 100,000 miles, whichever occurs first.
(2) For light light-duty trucks subject to the Tier 0 standards of
Sec. 86.094-9(a), and for heavy light-duty truck engine families,
intermediate and/or full useful life. Intermediate useful life is a
period of use of 5 years or 50,000 miles, whichever occurs first. Full
useful life is a period of use of 11 years or 120,000 miles, whichever
occurs first. The useful life of evaporative emission and/or refueling
control systems on the portion of these vehicles subject to the
evaporative emission test requirements of Sec. 86.130-96, and/or the
refueling emission test requirements of Sec. 86.151-98, is also defined
as a period of 11 years or 120,000 miles, whichever occurs first.
(3) For an Otto-cycle HDE family:
(i) For hydrocarbon and carbon monoxide standards, a period of use
of 10 years or 110,000 miles, whichever first occurs.
(ii) For the oxides of nitrogen standard, a period of use of 10
years or 110,000 miles, whichever first occurs.
(iii) For the portion of evaporative emission control systems
subject to the evaporative emission test requirements of Sec. 86.1230-
96, a period of use of 10 years or 110,000 miles, whichever first
occurs.
(4) For a diesel HDE family:
(i) For light heavy-duty diesel engines, for carbon monoxide,
particulate, and oxides of nitrogen plus non-methane hydrocarbons
emissions standards, a period of use of 10 years or 110,000 miles,
whichever first occurs.
(ii) For medium heavy-duty diesel engines, for carbon monoxide,
particulate, and oxides of nitrogen plus non-methane hydrocarbons
emission standards, a period of use of 10 years or 185,000 miles,
whichever first occurs.
(iii) For heavy heavy-duty diesel engines, for carbon monoxide,
particulate, and oxides of nitrogen plus non-methane hydrocarbon
emissions standards, a period of use of 10 years or 435,000 miles, or
22,000 hours, whichever first occurs, except as provided in paragraphs
(4)(iv) and (4)(v) of this definition.
(iv) The useful life limit of 22,000 hours in paragraph (4)(iii) of
this definition is effective as a limit to the useful life only when an
accurate hours meter is provided by the manufacturer with the engine
and only when such hours meter can reasonably be expected to operate
properly over the useful life of the engine.
(v) For an individual engine, if the useful life hours limit of
22,000 hours is reached before the engine reaches 10 years or 100,000
miles, the useful life shall become 10 years or 100,000 miles,
whichever occurs first, as required under Clean Air Act section 202(d).
(5) As an option for both light-duty trucks under certain
conditions and HDE families, an alternative useful life period may be
assigned by the Administrator under the provisions of Sec. 86.094-
21(f).
Warranty period, for purposes of HDE emissions defect warranty and
emissions performance warranty, shall

[[Page 54721]]

be a period of 5 years/50,000 miles, whichever occurs first, for Otto-
cycle HDEs and light heavy-duty diesel engines. For all other heavy-
duty diesel engines the aforementioned period shall be 5 years/100,000
miles, whichever occurs first. However, in no case may this period be
less than the basic mechanical warranty period that the manufacturer
provides (with or without additional charge) to the purchaser of the
engine. Extended warranties on select parts do not extend the emissions
warranty requirements for the entire engine but only for those parts.
In cases where responsibility for an extended warranty is shared
between the owner and the manufacturer, the emissions warranty shall
also be shared in the same manner as specified in the warranty
agreement.
13. A new Sec. 86.004-11 is added to subpart A to read as follows:

Sec. 86.004-11 Emission standards for 2004 and later model year diesel
heavy-duty engines and vehicles.

(a)(1) Exhaust emissions from new 2004 and later model year diesel
HDEs shall not exceed the following:
(i)(A) Oxides of Nitrogen plus Non-methane Hydrocarbons (NO_X
+ NMHC) for engines fueled with either petroleum fuel, natural gas, or
liquefied petroleum gas, 2.4 grams per brake horsepower-hour (0.89 gram
per megajoule), as measured under transient operating conditions.
(B) Oxides of Nitrogen plus Non-methane Hydrocarbon Equivalent
(NO_X + NMHCE) for engines fueled with methanol, 2.4 grams
per brake horsepower-hour (0.89 gram per megajoule), as measured under
transient operating conditions.
(C) Optional Standard. Manufacturers may elect to certify to an
Oxides of Nitrogen plus Non-methane Hydrocarbons (or equivalent for
methanol-fueled engines) standard of 2.5 grams per brake horsepower-
hour (0.93 gram per megajoule), as measured under transient operating
conditions, provided that Non-methane Hydrocarbons (or equivalent for
methanol-fueled engines) do not exceed 0.5 grams per brake horsepower-
hour (0.19 gram per megajoule) NMHC (or NMHCE for methanol-fueled
engines), as measured under transient operating conditions.
(D) A manufacturer may elect to include any or all of its diesel
HDE families in any or all of the emissions ABT programs for HDEs,
within the restrictions described in Sec. 86.004-15 or superseding
applicable sections. If the manufacturer elects to include engine
families in any of these programs, the NO_X plus NMHC (or
NO_X plus NMHCE for methanol-fueled engines) FELs may not
exceed 4.5 grams per brake horsepower-hour (1.7 grams per megajoule).
This ceiling value applies whether credits for the family are derived
from averaging, banking, or trading programs. Additionally, families
certified to the optional standard contained in paragraph (a)(1)(i)(C)
of this section shall not exceed 0.50 grams per brake horsepower-hour
(0.19 gram per megajoule) NMHC (or NMHCE for methanol-fueled engines)
through the use of credits.
(E) No later than December 31, 1999, the Administrator shall review
the emissions standards set forth in paragraph (a)(1)(i) of this
section and determine whether these standards continue to be
appropriate under the Act.
(ii) Carbon monoxide. (A) 15.5 grams per brake horsepower-hour
(5.77 grams per megajoule), as measured under transient operating
conditions.
(B) 0.50 percent of exhaust gas flow at curb idle (methanol-,
natural gas-, and liquefied petroleum gas-fueled diesel HDEs only).
(iii) Particulate. (A) For diesel engines to be used in urban
buses, 0.05 gram per brake horsepower-hour (0.019 gram per megajoule)
for certification testing and selective enforcement audit testing, and
0.07 gram per brake horsepower-hour (0.026 gram per megajoule) for in-
use testing, as measured under transient operating conditions.
(B) For all other diesel engines, 0.10 gram per brake horsepower-
hour (0.037 gram per megajoule), as measured under transient operating
conditions.
(C) A manufacturer may elect to include any or all of its diesel
HDE families in any or all of the particulate ABT programs for HDEs,
within the restrictions described in Sec. 86.004-15 or superseding
applicable sections. If the manufacturer elects to include engine
families in any of these programs, the particulate FEL may not exceed
0.25 gram per brake horsepower-hour (0.093 gram per megajoule).
(2) The standards set forth in paragraph (a)(1) of this section
refer to the exhaust emitted over the operating schedule set forth in
paragraph (f)(2) of appendix I to this part, and measured and
calculated in accordance with the procedures set forth in subpart N or
P of this part, except as noted in Sec. 86.098-23(c)(2) or superceding
sections.
(b)(1) The opacity of smoke emission from new 2004 and later model
year diesel HDEs shall not exceed:
(i) 20 percent during the engine acceleration mode.
(ii) 15 percent during the engine lugging mode.
(iii) 50 percent during the peaks in either mode.
(2) The standards set forth in paragraph (b)(1) of this section
refer to exhaust smoke emissions generated under the conditions set
forth in subpart I of this part and measured and calculated in
accordance with those procedures.
(3) Evaporative emissions (total of non-oxygenated hydrocarbons
plus methanol) from heavy-duty vehicles equipped with methanol-fueled
diesel engines shall not exceed the following standards. The standards
apply equally to certification and in-use vehicles. The spitback
standard also applies to newly assembled vehicles.
(i) For vehicles with a Gross Vehicle Weight Rating of up to 14,000
lbs:
(A)(1) For the full three-diurnal test sequence described in
Sec. 86.1230-96, diurnal plus hot soak measurements: 3.0 grams per
test.
(2) For the supplemental two-diurnal test sequence described in
Sec. 86.1230-96, diurnal plus hot soak measurements: 3.5 grams per
test.
(B) Running loss test: 0.05 grams per mile.
(C) Fuel dispensing spitback test: 1.0 gram per test.
(ii) For vehicles with a Gross Vehicle Weight Rating of greater
than 14,000 lbs:
(A)(1) For the full three-diurnal test sequence described in
Sec. 86.1230-96, diurnal plus hot soak measurements: 4.0 grams per
test.
(2) For the supplemental two-diurnal test sequence described in
Sec. 86.1230-96, diurnal plus hot soak measurements: 4.5 grams per
test.
(B) Running loss test: 0.05 grams per mile.
(iii)(A) For vehicles with a Gross Vehicle Weight Rating of up to
26,000 lbs, the standards set forth in paragraph (b)(3) of this section
refer to a composite sample of evaporative emissions collected under
the conditions and measured in accordance with the procedures set forth
in subpart M of this part. For certification vehicles only,
manufacturers may conduct testing to quantify a level of nonfuel
background emissions for an individual test vehicle. Such a
demonstration must include a description of the source(s) of emissions
and an estimated decay rate. The demonstrated level of nonfuel
background emissions may be subtracted from emission test results from
certification vehicles if approved in advance by the Administrator.
(B) For vehicles with a Gross Vehicle Weight Rating of greater than
26,000 lbs., the standards set forth in paragraph

[[Page 54722]]

(b)(3)(ii) of this section refer to the manufacturer's engineering
design evaluation using good engineering practice (a statement of which
is required in Sec. 86.091-23(b)(4)(ii)).
(iv) All fuel vapor generated during in-use operations shall be
routed exclusively to the evaporative control system (e.g., either
canister or engine purge). The only exception to this requirement shall
be for emergencies.
(4) Evaporative emissions from 2004 and later model year heavy-duty
vehicles equipped with natural gas-fueled or liquefied petroleum gas-
fueled HDEs shall not exceed the following standards. The standards
apply equally to certification and in-use vehicles.
(i) For vehicles with a Gross Vehicle Weight Rating of up to 14,000
pounds for the full three-diurnal test sequence described in
Sec. 86.1230-96, diurnal plus hot soak measurements: 3.0 grams per
test.
(ii) For vehicles with a Gross Vehicle Weight Rating of greater
than 14,000 pounds for the full three-diurnal test sequence described
in Sec. 86.1230-96, diurnal plus hot soak measurements: 4.0 grams per
test.
(iii)(A) For vehicles with a Gross Vehicle Weight Rating of up to
26,000 pounds, the standards set forth in paragraph (b)(4) of this
section refer to a composite sample of evaporative emissions collected
under the conditions set forth in subpart M of this part and measured
in accordance with those procedures.
(B) For vehicles with a Gross Vehicle Weight Rating greater than
26,000 pounds, the standards set forth in paragraphs (b)(3)(ii) and
(b)(4)(ii) of this section refer to the manufacturer's engineering
design evaluation using good engineering practice (a statement of which
is required in Sec. 86.091-23(b)(4)(ii)).
(c) No crankcase emissions shall be discharged into the ambient
atmosphere from any new 2004 or later model year methanol-, natural
gas-, or liquefied petroleum gas-fueled diesel, or any naturally-
aspirated diesel HDE. For petroleum-fueled engines only, this provision
does not apply to engines using turbochargers, pumps, blowers, or
superchargers for air induction.
(d) Every manufacturer of new motor vehicle engines subject to the
standards prescribed in this section shall, prior to taking any of the
actions specified in section 203(a)(1) of the Act, test or cause to be
tested motor vehicle engines in accordance with applicable procedures
in subpart I or N of this part to ascertain that such test engines meet
the requirements of paragraphs (a), (b), (c), and (d) of this section.
14. A new Sec. 86.004-15 is added to subpart A to read as follows:

Sec. 86.004-15 NO_X and particulate averaging, trading, and
banking for heavy-duty engines.

(a)(1) Heavy-duty engines eligible for NO_X,
NO_X plus NMHC, and particulate averaging, trading and
banking programs are described in the applicable emission standards
sections in this subpart. All heavy-duty engine families which include
any engines labeled for use in clean-fuel vehicles as specified in 40
CFR part 88 are not eligible for these programs. Participation in these
programs is voluntary.
(2)(i) Engine families with FELs exceeding the applicable standard
shall obtain emission credits in a mass amount sufficient to address
the shortfall. Credits may be obtained from averaging, trading, or
banking, within the averaging set restrictions described in this
section.
(ii) Engine families with FELs below the applicable standard will
have emission credits available to average, trade, bank or a
combination thereof. Credits may not be used for averaging or trading
to offset emissions that exceed an FEL. Credits may not be used to
remedy an in-use nonconformity determined by a Selective Enforcement
Audit or by recall testing. However, credits may be used to allow
subsequent production of engines for the family in question if the
manufacturer elects to recertify to a higher FEL.
(iii) Credits scheduled to expire in the earliest model year shall
be used, prior to using other available credits, to offset emissions of
engine families with FELs exceeding the applicable standard.
(b) Participation in the NO_X, NO_X plus NMHC,
and/or particulate averaging, trading, and banking programs shall be
done as follows.
(1) During certification, the manufacturer shall:
(i) Declare its intent to include specific engine families in the
averaging, trading and/or banking programs. Separate declarations are
required for each program and for each pollutant (i.e., NO_X,
NO_X plus NMHC, and particulate).
(ii) Declare an FEL for each engine family participating in one or
more of these three programs.
(A) The FEL must be to the same level of significant digits as the
emission standard (one-tenth of a gram per brake horsepower-hour for
NO_X, NO_X plus NMHC, emissions and one-hundredth
of a gram per brake horsepower-hour for particulate emissions).
(B) In no case may the FEL exceed the upper limit prescribed in the
section concerning the applicable heavy-duty engine NO_X,
NO_X plus NMHC, and particulate emission standards.
(iii) Calculate the projected emission credits (positive or
negative) based on quarterly production projections for each
participating family and for each pollutant, using the applicable
equation in paragraph (c) of this section and the applicable factors
for the specific engine family.
(iv)(A) Determine and state the source of the needed credits
according to quarterly projected production for engine families
requiring credits for certification.
(B) State where the quarterly projected credits will be applied for
engine families generating credits.
(C) Credits may be obtained from or applied to only engine families
within the same averaging set as described in paragraph (d) or (e) of
this section. Credits available for averaging, trading, or banking as
defined in Sec. 86.090-2, may be applied exclusively to a given engine
family, or reserved as defined in Sec. 86.091-2.
(2) Based on this information each manufacturer's certification
application must demonstrate:
(i) That at the end of model year production, each engine family
has a net emissions credit balance of zero or more using the
methodology in paragraph (c) of this section with any credits obtained
from averaging, trading or banking.
(ii) The source of the credits to be used to comply with the
emission standard if the FEL exceeds the standard, or where credits
will be applied if the FEL is less than the emission standard. In cases
where credits are being obtained, each engine family involved must
state specifically the source (manufacturer/engine family) of the
credits being used. In cases where credits are being generated/
supplied, each engine family involved must state specifically the
designated use (manufacturer/engine family or reserved) of the credits
involved. All such reports shall include all credits involved in
averaging, trading or banking.
(3) During the model year manufacturers must:
(i) Monitor projected versus actual production to be certain that
compliance with the emission standards is achieved at the end of the
model year.
(ii) Provide the end-of-model year reports required under
Sec. 86.001-23.
(iii) For manufacturers participating in emission credit trading,
maintain the quarterly records required under Sec. 86.091-7(c)(8).

(4) Projected credits based on information supplied in the
certification

[[Page 54723]]

application may be used to obtain a certificate of conformity. However,
any such credits may be revoked based on review of end-of-model year
reports, follow-up audits, and any other compliance measures deemed
appropriate by the Administrator.
(5) Compliance under averaging, banking, and trading will be
determined at the end of the model year. Engine families without an
adequate amount of NO_X, NO_X plus NMHC, and/or
particulate emission credits will violate the conditions of the
certificate of conformity. The certificates of conformity may be voided
ab initio for engine families exceeding the emission standard.
(6) If EPA or the manufacturer determines that a reporting error
occurred on an end-of-year report previously submitted to EPA under
this section, the manufacturer's credits and credit calculations will
be recalculated. Erroneous positive credits will be void. Erroneous
negative balances may be adjusted by EPA for retroactive use.
(i) If EPA review of a manufacturer's end-of-year report indicates
a credit shortfall, the manufacturer will be permitted to purchase the
necessary credits to bring the credit balance for that engine family to
zero, using the discount specified in paragraph (c)(1) of this section
on the ratio of credits purchased for every credit needed to bring the
balance to zero. If sufficient credits are not available to bring the
credit balance for the family in question to zero, EPA may void the
certificate for that engine family ab initio.
(ii) If within 180 days of receipt of the manufacturer's end-of-
year report, EPA review determines a reporting error in the
manufacturer's favor (i.e., resulting in a positive credit balance) or
if the manufacturer discovers such an error within 180 days of EPA
receipt of the end-of-year report, the credits will be restored for use
by the manufacturer.
(c)(1) For each participating engine family, NO_X,
NO_X plus NMHC, and particulate emission credits (positive or
negative) are to be calculated according to one of the following
equations and rounded, in accordance with ASTM E29-93a, to the nearest
one-tenth of a Megagram (Mg). Consistent units are to be used
throughout the equation.
(i) For determining credit need for all engine families and credit
availability for engine families generating credits for averaging
programs only:

Emission credits = (Std - FEL) x (CF) x (UL) x (Production) x
(10^-6)

(ii) For determining credit availability for engine families
generating credits for trading or banking programs:

Emission credits = (Std - FEL) x (CF) x (UL) x (Production) x
(10^-6) x (Discount)

(iii) For purposes of the equations in paragraphs (c)(1) (i) and
(ii) of this section:

Std = the current and applicable heavy-duty engine NO_X,
NO_X plus NMHC, or particulate emission standard in grams per
brake horsepower hour or grams per Megajoule.
FEL = the NO_X, NO_X plus NMHC, or particulate
family emission limit for the engine family in grams per brake
horsepower hour or grams per Megajoule.
CF = a transient cycle conversion factor in BHP-hr/mi or MJ/mi, as
given in paragraph (c)(2) of this section.
UL = the useful life described in Sec. 86.004-2, or alternative life as
described in paragraph (f) of Sec. 86.004-21, for the given engine
family in miles.
Production = the number of engines produced for U.S. sales within the
given engine family during the model year. Quarterly production
projections are used for initial certification. Actual production is
used for end-of-year compliance determination.
Discount = a one-time discount applied to all credits to be banked or
traded within the model year generated. Except as otherwise allowed in
paragraph (k) of this section, the discount applied here is 0.9 for
diesel-cycle engines. The discount applied here is 0.8 for all Otto-
cycle engines. Banked credits traded in a subsequent model year will
not be subject to an additional discount. Banked credits used in a
subsequent model year's averaging program will not have the discount
restored.

(2)(i) The transient cycle conversion factor is the total
(integrated) cycle brake horsepower-hour or Megajoules, divided by the
equivalent mileage of the applicable transient cycle. For Otto-cycle
heavy-duty engines, the equivalent mileage is 6.3 miles. For diesel
heavy-duty engines, the equivalent mileage is 6.5 miles.
(ii) When more than one configuration is chosen by EPA to be tested
in the certification of an engine family (as described in Sec. 86.085-
24), the conversion factor used is to be based upon a production
weighted average value of the configurations in an engine family to
calculate the conversion factor.
(d) Averaging sets for NO_X and for NO_X plus
NMHC emission credits. The averaging and trading of NO_X
emission credits for Otto-cycle engines and NO_X plus NMHC
emission credits for diesel-cycle engines will only be allowed between
heavy-duty engine families in the same averaging set. The averaging
sets for the averaging and trading of NO_X and NO_X
plus NMHC emission credits for heavy-duty engines are defined as
follows:
(1) For NO_X credits from Otto-cycle heavy-duty engines:
(i) Otto-cycle heavy-duty engines constitute an averaging set.
Averaging and trading among all Otto-cycle heavy-duty engine families
is allowed. There are no subclass restrictions.
(ii) Gasoline-fueled heavy-duty vehicles certified under the
provisions of Sec. 86.085-1(b) may not average or trade with gasoline-
fueled heavy-duty Otto-cycle engines, but may average or trade credits
with light-duty trucks.
(iii) The averaging and trading of NO_X emission credits
will only be allowed between heavy-duty engine families in the same
regional category. Otto-cycle engines produced for sale in California
constitute a separate regional category than engines produced for sale
in the other 49 states. Banking and trading are not applicable to
engines sold in California.
(2) For NO_X plus NMHC credits from diesel-cycle heavy-
duty engines:
(i) Each of the three primary intended service classes for heavy-
duty diesel engines, as defined in Sec. 86.004-2, constitute an
averaging set. Averaging and trading among all diesel-cycle engine
families within the same primary service class is allowed.
(ii) Urban buses are treated as members of the primary intended
service class where they otherwise would fall.
(e) Averaging sets for particulate emission credits. The averaging
and trading of particulate emission credits will only be allowed
between diesel cycle heavy-duty engine families in the same averaging
set. The averaging sets for the averaging and trading of particulate
emission credits for diesel cycle heavy-duty engines are defined as
follows:
(1) Engines intended for use in urban buses constitute a separate
averaging set from all other heavy-duty engines. Averaging and trading
between diesel cycle bus engine families is allowed.
(2) For heavy-duty engines, exclusive of urban bus engines, each of
the three primary intended service classes for heavy-duty diesel cycle
engines, as defined in Sec. 86.004-2, constitute an averaging set.
Averaging and trading between diesel-cycle engine families within the
same primary service class is allowed.

[[Page 54724]]

(3) Otto cycle engines may not participate in particulate
averaging, trading, or banking.
(f) Banking of NO_X, NO_X plus NMHC, and
particulate emission credits. (1) Credit deposits. (i) NO_X,
NO_X plus NMHC, and particulate emission credits may be
banked from engine families produced in any model year.
(ii) Manufacturers may bank credits only after the end of the model
year and after actual credits have been reported to EPA in the end-of-
year report. During the model year and before submittal of the end-of-
year report, credits originally designated in the certification process
for banking will be considered reserved and may be redesignated for
trading or averaging.
(2) Credit withdrawals. (i) After being generated, banked
NO_X credits shall be available for use within three model
years following the model year in which they were generated.
NO_X credits from Otto-cycle HDE families not used within the
period specified above shall be forfeited. NO_X plus NMHC and
particulate credits from diesel-cycle HDE families do not expire.
(ii) Manufacturers withdrawing banked NO_X,
NO_X plus NMHC, and/or particulate credits shall indicate so
during certification and in their credit reports, as described in
Sec. 86.091-23.
(3) Use of banked emission credits. The use of banked credits shall
be within the averaging set and other restrictions described in
paragraphs (d) and (e) of this section, and only for the following
purposes:
(i) Banked credits may be used in averaging, or in trading, or in
any combination thereof, during the certification period. Credits
declared for banking from the previous model year but not reported to
EPA may also be used. However, if EPA finds that the reported credits
can not be proven, they will be revoked and unavailable for use.
(ii) Banked credits may not be used for NO_X,
NO_X plus NMHC, or particulate averaging and trading to
offset emissions that exceed an FEL. Banked credits may not be used to
remedy an in-use nonconformity determined by a Selective Enforcement
Audit or by recall testing. However, banked credits may be used for
subsequent production of the engine family if the manufacturer elects
to recertify to a higher FEL.
(iii) Banked NO_X credits from 2003 and prior may be used
in place of NO_X plus NMHC credits after 2003 provided that
they are used in the correct averaging set and the NO_X
credits have not expired.
(g)(1) For the purposes of paragraph (g) of this section, the
following paragraphs assume NO_X, NO_X plus NMHC,
and particulate nonconformance penalties (NCPs) will be available for
the 2004 and later model year HDEs.
(2) Engine families using NO_X, NO_X plus NMHC,
and/or particulate NCPs but not involved in averaging:
(i) May not generate NO_X, NO_X plus NMHC, or
particulate credits for banking and trading.
(ii) May not use NO_X, NO_X plus NMHC, or
particulate credits from banking and trading.
(3) If a manufacturer has any engine family to which application of
NCPs and banking and trading credits is desired, that family must be
separated into two distinct families. One family, whose FEL equals the
standard, must use NCPs only while the other, whose FEL does not equal
the standard, must use credits only.
(4) If a manufacturer has any engine family in a given averaging
set which is using NO_X, NO_X plus NMHC, and/or
particulate NCPs, none of that manufacturer's engine families in that
averaging set may generate credits for banking and trading.
(h) In the event of a negative credit balance in a trading
situation, both the buyer and the seller would be liable.
(i) Certification fuel used for credit generation must be of a type
that is both available in use and expected to be used by the engine
purchaser. Therefore, upon request by the Administrator, the engine
manufacturer must provide information acceptable to the Administrator
that the designated fuel is readily available commercially and would be
used in customer service.
(j) Credit apportionment. At the manufacturers option, credits
generated from diesel-cycle heavy-duty engines under the provisions
described in this section may be sold to or otherwise provided to the
another party for use in programs other than the averaging, trading and
banking program described in this section.
(1) The manufacturer shall pre-identify two emission levels per
engine family for the purposes of credit apportionment. One emission
level shall be the FEL and the other shall be the level of the standard
that the engine family is required to certify to under Sec. 86.004-11.
For each engine family, the manufacturer may report engine sales in two
categories, ``ABT-only credits'' and ``nonmanufacturer-owned credits''.
(i) For engine sales reported as ``ABT-only credits'', the credits
generated must be used solely in the ABT program described in this
section.
(ii) The engine manufacturer may declare a portion of engine sales
``nonmanufacturer-owned credits'' and this portion of the credits
generated between the standard and the FEL, based on the calculation in
(c)(1) of this section, would belong to the engine purchaser. For ABT,
the manufacturer may not generate any credits for the engine sales
reported as ``nonmanufacturer-owned credits''. Engines reported as
``nonmanufacturer-owned credits'' shall comply with the FEL and the
requirements of the ABT program in all other respects.
(2) Only manufacturer-owned credits reported as ``ABT-only
credits'' shall be used in the averaging, trading, and banking
provisions described in this section.
(3) Credits shall not be double-counted. Credits used in the ABT
program may not be provided to an engine purchaser for use in another
program.
(4) Manufacturers shall determine and state the number of engines
sold as ``ABT-only credits'' and ``nonmanufacturer-owned credits'' in
the end-of-model year reports required under Sec. 86.001-23.
(k) Additional Flexibility. If a diesel-cycle engine family meets
the conditions of either paragraph (k)(1) or (2) of this section, a
Discount of 1.0 may be used in the trading and banking calculation, for
both NO_X plus NMHC and for particulate, described in
paragraph (c)(1) of this section.
(1) The engine family certifies with a certification level of 1.9
g/bhp-hr NO_X plus NMHC or lower for all diesel-cycle engine
families.
(2) All of the following must apply to the engine family:
(i) Diesel-cycle engines only;
(ii) 2004, 2005, and 2006 model years only;
(iii) Must be an engine family using carry-over certification data
from prior to model year 2004 where the NO_X plus the HC
certification level prior to model year 2004 is below the
NO_X plus NMHC or NO_X plus NMHCE standard set
forth in Sec. 86.004-11. Under this option, the NO_X credits
generated from this engine family prior to model year 2004 may be used
as NO_X plus NMHC credits.
15. A new Sec. 86.004-21 is added to subpart A to read as follows:

Sec. 86.004-21 Application for certification.

Section 86.004-21 includes text that specifies requirements that
differ from Sec. 86.094-21 or Sec. 86.096-21. Where a paragraph in
Sec. 86.094-21 or Sec. 86.096-21 is identical and applicable to
Sec. 86.004-21, this may be indicated by specifying the corresponding
paragraph and the statement ``[Reserved]. For guidance see Sec. 86.094-
21.'' or ``[Reserved]. For guidance see Sec. 86.096-21.''.

[[Page 54725]]

(a) through (b)(3) [Reserved]. For guidance see Sec. 86.094-21.
(b)(4)(i) For light-duty vehicles and light-duty trucks, a
description of the test procedures to be used to establish the
evaporative emission and/or refueling emission deterioration factors,
as appropriate, required to be determined and supplied in Sec. 86.001-
23(b)(2).
(b)(4)(ii) through (b)(5)(iv) [Reserved]. For guidance see
Sec. 86.094-21.
(b)(5)(v) For light-duty vehicles and applicable light-duty trucks
with non-integrated refueling emission control systems, the number of
continuous UDDS cycles, determined from the fuel economy on the UDDS
applicable to the test vehicle of that evaporative/ refueling emission
family-emission control system combination, required to use a volume of
fuel equal to 85% of fuel tank volume.
(6) Participation in averaging programs--(i) Particulate averaging.
(A) If the manufacturer elects to participate in the particulate
averaging program for diesel light-duty vehicles and/or diesel light-
duty trucks or the particulate averaging program for heavy-duty diesel
engines, the application must list the family particulate emission
limit and the projected U.S. production volume of the family for the
model year.
(B) The manufacturer shall choose the level of the family
particulate emission limits, accurate to hundredth of a gram per mile
or hundredth of a gram per brake horsepowerhour for HDEs.
(C) The manufacturer may at any time during production elect to
change the level of any family particulate emission limit(s) by
submitting the new limit(s) to the Administrator and by demonstrating
compliance with the limit(s) as described in Secs. 86.090-2 and 86.094-
28(b)(5)(i).
(ii) NO_X and NO_X plus NMHC averaging. (A) If
the manufacturer elects to participate in the NO_X averaging
program for light-duty trucks or otto-cycle HDEs or the NO_X
plus NMHC averaging program for diesel-cycle HDEs, the application must
list the family emission limit and the projected U.S. production volume
of the family for the model year.
(B) The manufacturer shall choose the level of the family emission
limits, accurate to one-tenth of a gram per mile or to one-tenth of a
gram per brake horsepower-hour for HDEs.
(C) The manufacturer may at any time during production elect to
change the level of any family emission limit(s) by submitting the new
limits to the Administrator and by demonstrating compliance with the
limit(s) as described in Secs. 86.088-2 and 86.094-28(b)(5)(ii).
(b)(7) and (b)(8) [Reserved]. For guidance see Sec. 86.094-21.
(b)(9) For each light-duty vehicle, light-duty truck, evaporative/
refueling emission family or heavy-duty vehicle evaporative emission
family, a description of any unique procedures required to perform
evaporative and/or refueling emission tests, as applicable, (including
canister working capacity, canister bed volume, and fuel temperature
profile for the running loss test) for all vehicles in that evaporative
and/or evaporative/refueling emission family, and a description of the
method used to develop those unique procedures.
(10) For each light-duty vehicle or applicable light-duty truck
evaporative/refueling emission family, or each heavy-duty vehicle
evaporative emission family:
(i) Canister working capacity, according to the procedures
specified in Sec. 86.132-96(h)(1)(iv);
(ii) Canister bed volume; and
(iii) Fuel temperature profile for the running loss test, according
to the procedures specified in Sec. 86.129-94(d).
(c) through (j) [Reserved]. For guidance see Sec. 86.094-21.
(k) and (l) [Reserved]. For guidance see Sec. 86.096-21.
16. A new Sec. 86.004-25 is added to subpart A to read as follows:

Sec. 86.004-25 Maintenance.

Section 86.004-25 includes text that specifies requirements that
differ from Sec. 86.094-25 or Sec. 86.098-25. Where a paragraph in
Sec. 86.094-25 or Sec. 86.098-25 is identical and applicable to
Sec. 86.004-25, this may be indicated by specifying the corresponding
paragraph and the statement ``[Reserved]. For guidance see Sec. 86.094-
25.'' or ``[Reserved]. For guidance see Sec. 86.098-25.''.
(a)(1) Applicability. This section applies to light-duty vehicles,
light-duty trucks, and HDEs.
(2) Maintenance performed on vehicles, engines, subsystems, or
components used to determine exhaust, evaporative or refueling emission
deterioration factors, as appropriate, is classified as either
emission-related or non-emission-related and each of these can be
classified as either scheduled or unscheduled. Further, some emission-
related maintenance is also classified as critical emission-related
maintenance.
(b) Introductory text through (b)(3)(ii) [Reserved]. For guidance
see Sec. 86.094-25.
(b)(3)(iii) For otto-cycle heavy-duty engines, the adjustment,
cleaning, repair, or replacement of the items listed in paragraphs
(b)(3)(iii) (A) through (E) of this section shall occur at 50,000 miles
(or 1,500 hours) of use and at 50,000-mile (or 1,500-hour) intervals
thereafter.
(A) Positive crankcase ventilation valve.
(B) Emission-related hoses and tubes.
(C) Ignition wires.
(D) Idle mixture.
(E) Exhaust gas recirculation system related filters and coolers.
(iv) For otto-cycle light-duty vehicles, light-duty trucks and
otto-cycle heavy-duty engines, the adjustment, cleaning, repair, or
replacement of the oxygen sensor shall occur at 80,000 miles (or 2,400
hours) of use and at 80,000-mile (or 2,400-hour) intervals thereafter.
(v) For otto-cycle heavy-duty engines, the adjustment, cleaning,
repair, or replacement of the items listed in paragraphs (b)(3)(v) (A)
through (H) of this section shall occur at 100,000 miles (or 3,000
hours) of use and at 100,000-mile (or 3,000-hour) intervals thereafter.
(A) Catalytic converter.
(B) Air injection system components.
(C) Fuel injectors.
(D) Electronic engine control unit and its associated sensors
(except oxygen sensor) and actuators.
(E) Evaporative emission canister.
(F) Turbochargers.
(G) Carburetors.
(H) Exhaust gas recirculation system (including all related control
valves and tubing) except as otherwise provided in paragraph
(b)(3)(iii)(E) of this section.
(b)(3)(vi)(A) through (b)(3)(vi)(D) [Reserved]. For guidance see
Sec. 86.094-25.
(b)(3)(vi)(E) through (b)(3)(vi)(J) [Reserved]. For guidance see
Sec. 86.098-25.
(4) For diesel-cycle light-duty vehicles, light-duty trucks, and
HDEs, emission-related maintenance in addition to or at shorter
intervals than that listed in paragraphs (b)(4) (i) through (iv) of
this section will not be accepted as technologically necessary, except
as provided in paragraph (b)(7) of this section.
(i) For diesel-cycle heavy-duty engines, the adjustment, cleaning,
repair, or replacement of the items listed in paragraphs (b)(4)(i) (A)
through (C) of this section shall occur at 50,000 miles (or 1,500
hours) of use and at 50,000-mile (or 1,500-hour) intervals thereafter.
(A) Exhaust gas recirculation system related filters and coolers.
(B) Positive crankcase ventilation valve.
(C) Fuel injector tips (cleaning only).
(ii) For diesel-cycle light-duty vehicles and light-duty trucks,
the adjustment, cleaning, repair, or

[[Page 54726]]

replacement of the positive crankcase ventilation valve shall occur at
50,000 miles of use and at 50,000-mile intervals thereafter.
(iii) The adjustment, cleaning, repair, or replacement of items
listed in paragraphs (b)(4)(iii) (A) through (G) of this section shall
occur at 100,000 miles (or 3,000 hours) of use and at 100,000-mile (or
3,000-hour) intervals thereafter for light heavy-duty diesel engines,
or, at 150,000 miles (or 4,500 hours) intervals thereafter for medium
and heavy heavy-duty diesel engines.
(A) Fuel injectors.
(B) Turbocharger.
(C) Electronic engine control unit and its associated sensors and
actuators.
(D) Particulate trap or trap-oxidizer system (including related
components).
(E) Exhaust gas recirculation system (including all related control
valves and tubing) except as otherwise provided in paragraph
(b)(4)(i)(A) of this section.
(F) Catalytic converter.
(G) Any other add-on emissions-related component (i.e., a component
whose sole or primary purpose is to reduce emissions or whose failure
will significantly degrade emissions control and whose function is not
integral to the design and performance of the engine.)
(iv) For disel-cycle light-duty vehicles and light-duty trucks, the
adjustment, cleaning, repair, or replacement shall occur at 100,000
miles of use and at 100,000-mile intervals thereafter of the items
listed in paragraphs (b)(4)(iv) (A) through (G) of this section.
(A) Fuel injectors.
(B) Turbocharger.
(C) Electronic engine control unit and its associated sensors and
actuators.
(D) Particulate trap or trap-oxidizer system (including related
components).
(E) Exhaust gas recirculation system including all related filters
and control valves.
(F) Catalytic converter.
(G) Superchargers.
(5) [Reserved]
(6)(i) The components listed in paragraphs (b)(6)(i) (A) through
(H) of this section are currently defined as critical emission-related
components.
(A) Catalytic converter.
(B) Air injection system components.
(C) Electronic engine control unit and its associated sensors
(including oxygen sensor if installed) and actuators.
(D) Exhaust gas recirculation system (including all related
filters, coolers, control valves, and tubing).
(E) Positive crankcase ventilation valve.
(F) Evaporative and refueling emission control system components
(excluding canister air filter).
(G) Particulate trap or trap-oxidizer system.
(H) Any other add-on emissions-related component (i.e., a component
whose sole or primary purpose is to reduce emissions or whose failure
will significantly degrade emissions control and whose function is not
integral to the design and performance of the engine.)
(ii) All critical emission-related scheduled maintenance must have
a reasonable likelihood of being performed in-use. The manufacturer
shall be required to show the reasonable likelihood of such maintenance
being performed in-use, and such showing shall be made prior to the
performance of the maintenance on the durability data vehicle. Critical
emission-related scheduled maintenance items which satisfy one of the
conditions defined in paragraphs (b)(6)(ii) (A) through (F) of this
section will be accepted as having a reasonable likelihood of the
maintenance item being performed in-use.
(A) Data are presented which establish for the Administrator a
connection between emissions and vehicle performance such that as
emissions increase due to lack of maintenance, vehicle performance will
simultaneously deteriorate to a point unacceptable for typical driving.
(B) Survey data are submitted which adequately demonstrate to the
Administrator that, at an 80 percent confidence level, 80 percent of
such engines already have this critical maintenance item performed in-
use at the recommended interval(s).
(C) A clearly displayed visible signal system approved by the
Administrator is installed to alert the vehicle driver that maintenance
is due. A signal bearing the message ``maintenance needed'' or ``check
engine'', or a similar message approved by the Administrator, shall be
actuated at the appropriate mileage point or by component failure. This
signal must be continuous while the engine is in operation and not be
easily eliminated without performance of the required maintenance.
Resetting the signal shall be a required step in the maintenance
operation. The method for resetting the signal system shall be approved
by the Administrator. For HDEs, the system must not be designed to
deactivate upon the end of the useful life of the engine or thereafter.
(D) A manufacturer may desire to demonstrate through a survey that
a critical maintenance item is likely to be performed without a visible
signal on a maintenance item for which there is no prior in-use
experience without the signal. To that end, the manufacturer may in a
given model year market up to 200 randomly selected vehicles per
critical emission-related maintenance item without such visible
signals, and monitor the performance of the critical maintenance item
by the owners to show compliance with paragraph (b)(6)(ii)(B) of this
section. This option is restricted to two consecutive model years and
may not be repeated until any previous survey has been completed. If
the critical maintenance involves more than one engine family, the
sample will be sales weighted to ensure that it is representative of
all the families in question.
(E) The manufacturer provides the maintenance free of charge, and
clearly informs the customer that the maintenance is free in the
instructions provided under Sec. 86.087-38.
(F) Any other method which the Administrator approves as
establishing a reasonable likelihood that the critical maintenance will
be performed in-use.
(iii) Visible signal systems used under paragraph (b)(6)(ii)(C) of
this section are considered an element of design of the emission
control system. Therefore, disabling, resetting, or otherwise rendering
such signals inoperative without also performing the indicated
maintenance procedure is a prohibited act under section 203(a)(3) of
the Clean Air Act (42 U.S.C. 7522(a)(3)).
(b)(7) through (h) [Reserved]. For guidance see Sec. 86.094-25.
17. Section 86.004-28 of Subpart A is amended by revising
paragraphs (c) and (d) to read as follows:

Sec. 86.004-28 Compliance with emission standards.

* * * * *
(c)(1) Paragraph (c) of this section applies to heavy-duty engines.
(2) The applicable exhaust emission standards (or family emission
limits, as appropriate) for Otto-cycle engines and for diesel-cycle
engines apply to the emissions of engines for their useful life.
(3) Since emission control efficiency generally decreases with the
accumulation of service on the engine, deterioration factors will be
used in combination with emission data engine test results as the basis
for determining compliance with the standards.
(4)(i) Paragraph (c)(4) of this section describes the procedure for
determining compliance of an engine with emission standards (or family
emission limits, as appropriate), based on deterioration factors
supplied by the manufacturer. Deterioration factors shall be
established using applicable emissions test procedures. NO_X
plus NMHC deterioration factors shall be established based on the sum
of the pollutants. When establishing deterioration factors for
NO_X plus NMHC, a negative deterioration (emissions decrease
from

[[Page 54727]]

the official exhaust emissions test result) for one pollutant may not
offset deterioration of the other pollutant. Where negative
deterioration occurs for NO_X and/or NMHC, the official
exhaust emission test result shall be used for purposes of determining
the NO_X plus NMHC deterioration factor.
(ii) Separate exhaust emission deterioration factors, determined
from tests of engines, subsystems, or components conducted by the
manufacturer, shall be supplied for each engine-system combination. For
Otto-cycle engines, separate factors shall be established for transient
NMHC (NMHCE), CO, NO_X, NO_X plus NMHC, and idle
CO, for those engines utilizing aftertreatment technology (e.g.,
catalytic converters). For diesel-cycle engines, separate factors shall
be established for transient NMHC (NMHCE), CO, NO_X,
NO_X plus NMHC and exhaust particulate. For diesel-cycle
smoke testing, separate factors shall also be established for the
acceleration mode (designated as ``A''), the lugging mode (designated
as ``B''), and peak opacity (designated as ``C'').
(iii)(A) Paragraphs (c)(4)(iii)(A) (1) and (2) of this section
apply to Otto-cycle HDEs.
(1) Otto-cycle HDEs not utilizing aftertreatment technology (e.g.,
catalytic converters). For transient NMHC (NMHCE), CO, NO_X,
the official exhaust emission results for each emission data engine at
the selected test point shall be adjusted by the addition of the
appropriate deterioration factor. However, if the deterioration factor
supplied by the manufacturer is less than zero, it shall be zero for
the purposes of this paragraph.
(2) Otto-cycle HDEs utilizing aftertreatment technology (e.g.,
catalytic converters). For transient NMHC (NMHCE), CO, NO_X,
and for idle CO, the official exhaust emission results for each
emission data engine at the selected test point shall be adjusted by
multiplication by the appropriate deterioration factor. However, if the
deterioration factor supplied by the manufacturer is less than one, it
shall be one for the purposes of this paragraph.
(B) Paragraph (c)(4)(iii)(B) of this section applies to diesel-
cycle HDEs.
(1) Diesel-cycle HDEs not utilizing aftertreatment technology
(e.g., particulate traps). For transient NMHC (NMHCE), CO,
NO_X, NO_X plus NMHC, and exhaust particulate, the
official exhaust emission results for each emission data engine at the
selected test point shall be adjusted by the addition of the
appropriate deterioration factor. However, if the deterioration factor
supplied by the manufacturer is less than zero, it shall be zero for
the purposes of this paragraph.
(2) Diesel-cycle HDEs utilizing aftertreatment technology (e.g.,
particulate traps). For transient NMHC (NMHCE), CO, NO_X,
NO_X plus NMHC, and exhaust particulate, the official exhaust
emission results for each emission data engine at the selected test
point shall be adjusted by multiplication by the appropriate
deterioration factor. However, if the deterioration factor supplied by
the manufacturer is less than one, it shall be one for the purposes of
this paragraph.
(3) Diesel-cycle HDEs only. For acceleration smoke (``A''), lugging
smoke (``B''), and peak smoke (``C''), the official exhaust emission
results for each emission data engine at the selected test point shall
be adjusted by the addition of the appropriate deterioration factor.
However, if the deterioration factor supplied by the manufacturer is
less than zero, it shall be zero for the purposes of this paragraph.
(iv) The emission values to compare with the standards (or family
emission limits, as appropriate) shall be the adjusted emission values
of paragraph (c)(4)(iii) of this section, rounded to the same number of
significant figures as contained in the applicable standard in
accordance with ASTM E 29-93a (as referenced in Sec. 86.094-28
(a)(4)(i)(B)(2)(ii)), for each emission data engine.
(5) and (6) [Reserved].
(7) Every test engine of an engine family must comply with all
applicable standards (or family emission limits, as appropriate), as
determined in paragraph (c)(4)(iv) of this section, before any engine
in that family will be certified.
(8) For the purposes of setting an NMHC plus NO_X
certification level or FEL for a diesel-fueled engine family, the
manufacturer may use one of the following options for the determination
of NMHC for an engine family. The manufacturer must declare which
option is used in its application for certification of that engine
family.
(i) THC may be used in lieu of NMHC for the standards set forth in
Sec. 86.004-11.
(ii) The manufacturer may choose its own method to analyze methane
with prior approval of the Administrator.
(iii) The manufacturer may assume that two percent of the measured
THC is methane (NMHC =0.98 x THC).
(d)(1) Paragraph (d) of this section applies to heavy-duty vehicles
equipped with gasoline-fueled or methanol-fueled engines.
(2) The applicable evaporative emission standards in this subpart
apply to the emissions of vehicles for their useful life.
(3)(i) For vehicles with a GVWR of up to 26,000 pounds, because it
is expected that emission control efficiency will change during the
useful life of the vehicle, an evaporative emission deterioration
factor shall be determined from the testing described in Sec. 86.098-
23(b)(3) for each evaporative emission family-evaporative emission
control system combination to indicate the evaporative emission control
system deterioration during the useful life of the vehicle (minimum
50,000 miles). The factor shall be established to a minimum of two
places to the right of the decimal.
(ii) For vehicles with a GVWR of greater than 26,000 pounds,
because it is expected that emission control efficiency will change
during the useful life of the vehicle, each manufacturer's statement as
required in Sec. 86.098-23(b)(4)(ii) shall include, in accordance with
good engineering practice, consideration of control system
deterioration.
(4) The evaporative emission test results, if any, shall be
adjusted by the addition of the appropriate deterioration factor,
provided that if the deterioration factor as computed in paragraph
(d)(3) of this section is less than zero, that deterioration factor
shall be zero for the purposes of this paragraph.
(5) The emission level to compare with the standard shall be the
adjusted emission level of paragraph (d)(4) of this section. Before any
emission value is compared with the standard, it shall be rounded, in
accordance with ASTM E 29-93a (as referenced in Sec. 86.094-28
(a)(4)(i)(B)(2)(ii)), to two significant figures. The rounded emission
values may not exceed the standard.
(6) Every test vehicle of an evaporative emission family must
comply with the evaporative emission standard, as determined in
paragraph (d)(5) of this section, before any vehicle in that family may
be certified.
* * * * *
18. Section 86.004-30 is amended by revising paragraphs (a)(3),
(a)(4)(i), (a)(4)(ii), and (a)(4)(iv)(A) through (a)(12) to read as
follows:

Sec. 86.004-30 Certification.

* * * * *
(a)(3)(i) One such certificate will be issued for each engine
family. For gasoline-fueled and methanol-fueled light-duty vehicles and
light-duty trucks, and petroleum-fueled diesel cycle light-duty
vehicles and light-duty trucks not certified under Sec. 86.098-

[[Page 54728]]

28(g), one such certificate will be issued for each engine family-
evaporative/refueling emission family combination. Each certificate
will certify compliance with no more than one set of in-use and
certification standards (or family emission limits, as appropriate).
(ii) For gasoline-fueled and methanol fueled heavy-duty vehicles,
one such certificate will be issued for each manufacturer and will
certify compliance for those vehicles previously identified in that
manufacturer's statement(s) of compliance as required in Sec. 86.098-
23(b)(4) (i) and (ii).
(iii) For diesel light-duty vehicles and light-duty trucks, or
diesel HDEs, included in the applicable particulate averaging program,
the manufacturer may at any time during production elect to change the
level of any family particulate emission limit by demonstrating
compliance with the new limit as described in Sec. 86.094-28(a)(6),
Sec. 86.094-28(b)(5)(i), or Sec. 86.004-28(c)(5)(i). New certificates
issued under this paragraph will be applicable only for vehicles (or
engines) produced subsequent to the date of issuance.
(iv) For light-duty trucks or HDEs included in the applicable
NO_X averaging program, the manufacturer may at any time
during production elect to change the level of any family
NO_X emission limit by demonstrating compliance with the new
limit as described in Sec. 86.094-28(b)(5)(ii) or Sec. 86.004-
28(c)(5)(ii). New certificates issued under this paragraph will be
applicable only for vehicles (or engines) produced subsequent to the
day of issue.
(4)(i) For exempt light-duty vehicles and light-duty trucks under
the provisions of Sec. 86.094-8(j) or Sec. 86.094-9(j), an adjustment
or modification performed in accordance with instructions provided by
the manufacturer for the altitude where the vehicle is principally used
will not be considered a violation of section 203(a)(3) of the Clean
Air Act (42 U.S.C. 7522(a)(3)).
(ii) A violation of section 203(a)(1) of the Clean Air Act (42
U.S.C. 7522(a)(1)) occurs when a manufacturer sells or delivers to an
ultimate purchaser any light-duty vehicle or light-duty truck, subject
to the regulations under the Act, under any of the conditions specified
in paragraph (a)(4)(ii) of this section.
(A) When a light-duty vehicle or light-duty truck is exempted from
meeting high-altitude requirements as provided in Sec. 86.090-8(h) or
Sec. 86.094-9(h):
(1) At a designated high-altitude location, unless such
manufacturer has reason to believe that such vehicle will not be sold
to an ultimate purchaser for principal use at a designated high-
altitude location; or
(2) At a location other than a designated high-altitude location,
when such manufacturer has reason to believe that such motor vehicle
will be sold to an ultimate purchaser for principal use at a designated
high-altitude location.
(B) When a light-duty vehicle or light-duty truck is exempted from
meeting low-altitude requirements as provided in Sec. 86.094-8(i) or
Sec. 86.094-9(i):
(1) At a designated low-altitude location, unless such manufacturer
has reason to believe that such vehicle will not be sold to an ultimate
purchaser for principal use at a designated low-altitude location; or
(2) At a location other than a designated low-altitude location,
when such manufacturer has reason to believe that such motor vehicle
will be sold to an ultimate purchaser for principal use at a designated
low-altitude location.
(a)(4)(iv)(A) through (a)(9) [Reserved]. For guidance see
Sec. 86.094-30.
(10)(i) For diesel-cycle light-duty vehicle and diesel-cycle light-
duty truck families which are included in a particulate averaging
program, the manufacturer's production-weighted average of the
particulate emission limits of all engine families in a participating
class or classes shall not exceed the applicable diesel-cycle
particulate standard, or the composite particulate standard defined in
Sec. 86.090-2 as appropriate, at the end of the model year, as
determined in accordance with this part. The certificate shall be void
ab initio for those vehicles causing the production-weighted FEL to
exceed the particulate standard.
(ii) For all heavy-duty diesel-cycle engines which are included in
the particulate ABT programs under Sec. 86.098-15 or superseding ABT
sections as applicable, the provisions of paragraphs (a)(10)(ii) (A)
through (C) of this section apply.
(A) All certificates issued are conditional upon the manufacturer
complying with the provisions of Sec. 86.098-15 or superseding ABT
sections as applicable and the ABT related provisions of other
applicable sections, both during and after the model year production.
(B) Failure to comply with all provisions of Sec. 86.098-15 or
superseding ABT sections as applicable will be considered to be a
failure to satisfy the conditions upon which the certificate was
issued, and the certificate may be deemed void ab initio.
(C) The manufacturer shall bear the burden of establishing to the
satisfaction of the Administrator that the conditions upon which the
certificate was issued were satisfied or excused.
(11)(i) For light-duty truck families which are included in a
NO_X averaging program, the manufacturer's production-
weighted average of the NO_X emission limits of all such
engine families shall not exceed the applicable NO_X emission
standard, or the composite NO_X emission standard defined in
Sec. 86.088-2, as appropriate, at the end of the model year, as
determined in accordance with this part. The certificate shall be void
ab initio for those vehicles causing the production-weighted FEL to
exceed the NO_X standard.
(ii) For all HDEs which are included in the NO_X plus
NMHC ABT programs contained in Sec. 86.098-15, or superseding ABT
sections as applicable, the provisions of paragraphs (a)(11)(ii) (A)
through (C) of this section apply.
(A) All certificates issued are conditional upon the manufacturer
complying with the provisions of Sec. 86.098-15 or superseding ABT
sections as applicable and the ABT related provisions of other
applicable sections, both during and after the model year production.
(B) Failure to comply with all provisions of Sec. 86.098-15 or
superseding ABT sections as applicable will be considered to be a
failure to satisfy the conditions upon which the certificate was
issued, and the certificate may be deemed void ab initio.
(C) The manufacturer shall bear the burden of establishing to the
satisfaction of the Administrator that the conditions upon which the
certificate was issued were satisfied or excused.
(a)(12) [Reserved]. For guidance see Sec. 86.094-30.
* * * * *
19. A new Sec. 86.004-38 is added to subpart A to read as follows:

Sec. 86.004-38 Maintenance instructions.

Section 86.004-38 includes text that specifies requirements that
differ from Sec. 86.094-38. Where a paragraph in Sec. 86.094-38 is
identical and applicable to Sec. 86.004-38 this may be indicated by
specifying the corresponding paragraph and the statement ``[Reserved].
For guidance see Sec. 86.094-38.''.
(a) The manufacturer shall furnish or cause to be furnished to the
purchaser of each new motor vehicle (or motor vehicle engine) subject
to the standards prescribed in Sec. 86.099-8, Sec. 86.004-9,
Sec. 86.004-10, or Sec. 86.004-11, as applicable, written instructions
for the proper maintenance and use of the vehicle (or engine), by the
purchaser consistent with the provisions of

[[Page 54729]]

Sec. 86.004-25, which establishes what scheduled maintenance the
Administrator approves as being reasonable and necessary.
(1) The maintenance instructions required by this section shall be
in clear, and to the extent practicable, nontechnical language.
(2) The maintenance instructions required by this section shall
contain a general description of the documentation which the
manufacturer will require from the ultimate purchaser or any subsequent
purchaser as evidence of compliance with the instructions.
(b) Instructions provided to purchasers under paragraph (a) of this
section shall specify the performance of all scheduled maintenance
performed by the manufacturer on certification durability vehicles and,
in cases where the manufacturer performs less maintenance on
certification durability vehicles than the allowed limit, may specify
the performance of any scheduled maintenance allowed under Sec. 86.004-
25.
(c) Scheduled emission-related maintenance in addition to that
performed under Sec. 86.004-25(b) may only be recommended to offset the
effects of abnormal in-use operating conditions, except as provided in
paragraph (d) of this section. The manufacturer shall be required to
demonstrate, subject to the approval of the Administrator, that such
maintenance is reasonable and technologically necessary to assure the
proper functioning of the emission control system. Such additional
recommended maintenance shall be clearly differentiated, in a form
approved by the Administrator, from that approved under Sec. 86.004-
25(b).
(d) Inspections of emission-related parts or systems with
instructions to replace, repair, clean, or adjust the parts or systems
if necessary, are not considered to be items of scheduled maintenance
which insure the proper functioning of the emission control system.
Such inspections, and any recommended maintenance beyond that approved
by the Administrator as reasonable and necessary under paragraphs (a),
(b), and (c) of this section, may be included in the written
instructions furnished to vehicle owners under paragraph (a) of this
section: Provided, That such instructions clearly state, in a form
approved by the Administrator, that the owner need not perform such
inspections or recommended maintenance in order to maintain the
emissions defect and emissions performance warranty or manufacturer
recall liability.
(e) The manufacturer may choose to include in such instructions an
explanation of any distinction between the useful life specified on the
label, and the emissions defect and emissions performance warranty
period. The explanation must clearly state that the useful life period
specified on the label represents the average period of use up to
retirement or rebuild for the engine family represented by the engine
used in the vehicle. An explanation of how the actual useful lives of
engines used in various applications are expected to differ from the
average useful life may be included. The explanation(s) shall be in
clear, non-technical language that is understandable to the ultimate
purchaser.
(f) If approved by the Administrator, the instructions provided to
purchasers under paragraph (a) of this section shall indicate what
adjustments or modifications, if any, are necessary to allow the
vehicle to meet applicable emission standards at elevations above 4,000
feet, or at elevations of 4,000 feet or less.
(g) [Reserved]. For guidance see Sec. 86.094-38.
(h) The manufacturer shall furnish or cause to be furnished to the
purchaser of each new motor engine subject to the standards prescribed
in Sec. 86.004-10 or Sec. 86.004-11, as applicable, the following:
(1) Instructions for all maintenance needed after the end of the
useful life of the engine for critical emissions-related components as
provided in Sec. 86.004-25(b), including recommended practices for
diagnosis, cleaning, adjustment, repair, and replacement of the
component (or a statement that such component is maintenance free for
the life of the engine) and instructions for accessing and responding
to any emissions-related diagnostic codes that may be stored in on-
board monitoring systems;
(2) A copy of the engine rebuild provisions contained in
Sec. 86.004-40.
20. A new Sec. 86.004-40 is added to subpart A to read as follows:

Sec. 86.004-40 Heavy-duty engine rebuilding practices.

The provisions of this section are applicable to engines subject to
the standards prescribed in Sec. 86.004-10 or Sec. 86.004-11 and are
applicable to the process of engine rebuilding (or rebuilding a portion
of an engine or engine system). The process of engine rebuilding
generally includes disassembly, replacement of multiple parts due to
wear, and reassembly, and also may include the removal of the engine
from the vehicle and other acts associated with rebuilding an engine.
Any deviation from the provisions contained in this section is a
prohibited act under section 203(a)(3) of the Clean Air Act (42 U.S.C.
7522(a)(3)).
(a) When rebuilding an engine, portions of an engine, or an engine
system, there must be a reasonable technical basis for knowing that the
resultant engine is equivalent, from an emissions standpoint, to a
certified configuration (i.e., tolerances, calibrations,
specifications) and the model year(s) of the resulting engine
configuration must be identified. A reasonable basis would exist if:
(1) Parts installed, whether the parts are new, used, or rebuilt,
are such that a person familiar with the design and function of motor
vehicle engines would reasonably believe that the parts perform the
same function with respect to emissions control as the original parts;
and
(2) Any parameter adjustment or design element change is made only:
(i) In accordance with the original engine manufacturer's
instructions; or
(ii) Where data or other reasonable technical basis exists that
such parameter adjustment or design element change, when performed on
the engine or similar engines, is not expected to adversely affect in-
use emissions.
(b) When an engine is being rebuilt and remains installed or is
reinstalled in the same vehicle, it must be rebuilt to a configuration
of the same or later model year as the original engine. When an engine
is being replaced, the replacement engine must be an engine of (or
rebuilt to) a configuration of the same or later model year as the
original engine.
(c) At time of rebuild, emissions-related codes or signals from on-
board monitoring systems may not be erased or reset without diagnosing
and responding appropriately to the diagnostic codes, regardless of
whether the systems are installed to satisfy requirements in
Sec. 86.004-25 or for other reasons and regardless of form or
interface. Diagnostic systems must be free of all such codes when the
rebuilt engine is returned to service. Such signals may not be rendered
inoperative during the rebuilding process.
(d) When conducting a rebuild without removing the engine from the
vehicle, or during the installation of a rebuilt engine, all critical
emissions-related components listed in Sec. 86.004-25(b) not otherwise
addressed by paragraphs (a) through (c) of this section must be checked
and cleaned, adjusted, repaired, or replaced as necessary, following
manufacturer recommended practices.

[[Page 54730]]

(e) Records shall be kept by parties conducting activities included
in paragraphs (a) through (d) of this section. The records shall
include at minimum the mileage and/or hours at time of rebuild, a
listing of work performed on the engine and emissions-related control
components including a listing of parts and components used, engine
parameter adjustments, emissions-related codes or signals responded to
and reset, and work performed under paragraph (d) of this section.
(1) Parties may keep records in whatever format or system they
choose as long as the records are understandable to an EPA enforcement
officer or can be otherwise provided to an EPA enforcement officer in
an understandable format when requested.
(2) Parties are not required to keep records of information that is
not reasonably available through normal business practices including
information on activities not conducted by themselves or information
that they cannot reasonably access.
(3) Parties may keep records of their rebuilding practices for an
engine family rather than on each individual engine rebuilt in cases
where those rebuild practices are followed routinely.
(4) Records must be kept for a minimum of two years after the
engine is rebuilt.
21. Section 86.1311-94 is amended by revising paragraph (b)(3) to
read as follows:

Sec. 86.1311-94 Exhaust gas analytical system; CVS bag sample.

* * * * *
(b) * * *
(3)(i) Using a methane analyzer consisting of a gas chromatograph
combined with a FID, the measurement of methane shall be done in
accordance with SAE Recommended Practice J1151, ``Methane Measurement
Using Gas Chromatography.'' (Incorporated by reference pursuant to
Sec. 86.1(b)(2).)
(ii) For natural gas vehicles, the manufacturer has the option of
using gas chromatography to measure NMHC through direct quantitation of
individual hydrocarbon species. The manufacturer shall conform to
standard industry practices and use good engineering judgement.
* * * * *
22. Section 86.1344-94 is amended by revising paragraph (e)(22) to
read as follows:

Sec. 86.1344-94 Required information.

* * * * *
(e) * * *
(22) Brake specific emissions (g/BHP-hr) for HC, CO,
NO_X, and, if applicable NMHC, NMHCE, THCE, CH3OH,
and HCHO for each test phase (cold and hot).
* * * * *
[FR Doc. 97-27494 Filed 10-20-97; 8:45 am]
BILLING CODE 6560-50-P

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Control of Emissions of Air Pollution From Highway Heavy-Duty Engines

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