Control of Emissions of Air Pollution From Nonroad Diesel Engines

Related Material

Other Related Documents

[Federal Register: October 23, 1998 (Volume 63, Number 205)]
[Rules and Regulations]
[Page 56967-57023]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23oc98-16]

[[Page 56967]]

_______________________________________________________________________

Part II

Environmental Protection Agency

_______________________________________________________________________

40 CFR Parts 9, 86, and 89

Control of Emissions of Air Pollution From Nonroad Diesel Engines;
Final Rule

[[Page 56968]]

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 9, 86, and 89

[AMS-FRL-6155-3]
RIN 2060-AF76

Control of Emissions of Air Pollution From Nonroad Diesel Engines

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: In this action, EPA is finalizing new emission standards for
nonroad diesel engines. The affected engines are used in most land-
based nonroad equipment and some marine applications. The emission
reductions resulting from the new standards will translate into
significant, long-term improvements in air quality in many areas of the
U.S. For engines in this large category of pollution sources, the
standards for oxides of nitrogen and particulate matter emissions will
be reduced by up to two-thirds from current standards. Overall, this
program will provide much-needed assistance to states facing ozone and
particulate air quality problems, which are causing a range of adverse
health effects for their citizens, especially in terms of respiratory
impairment and related illnesses.
In compliance with the Paperwork Reduction Act, this document
announces that the information collection requirements contained in
this rule were approved by the Office of Management and Budget.

DATES: The amendments to 40 CFR Parts 86 and 89 are effective December
22, 1998. The amendments to 40 CFR Part 9 are effective October 23,
1998. The incorporation by reference of certain publications listed in
the regulations is approved by the Director of the Federal Register as
of December 22, 1998.

ADDRESSES: Materials relevant to this rule, including the Final
Regulatory Impact Analysis are contained in Public Docket A-96-40,
located at room M-1500, Waterside Mall (ground floor), U.S.
Environmental Protection Agency, 401 M Street, S.W., Washington, DC
20460. The docket may be inspected from 8:00 a.m. until 5:30 p.m.,
Monday through Friday. A reasonable fee may be charged by EPA for
copying docket materials.
For further information on electronic availability of this final
rulemaking, see SUPPLEMENTARY INFORMATION below.

FOR FURTHER INFORMATION CONTACT: Alan Stout, U.S. EPA, Engine Programs
and Compliance Division, (734) 214-4805; stout.alan@epamail.epa.gov.

SUPPLEMENTARY INFORMATION:

Regulated Entities

Entities potentially regulated by this action are those that
manufacture or introduce into commerce new compression-ignition nonroad
engines, vehicles, or equipment, and entities that rebuild or
remanufacture nonroad compression-ignition engines. Regulated
categories and entities include:

------------------------------------------------------------------------
Category Examples of regulated entities
------------------------------------------------------------------------
Industry............................... Manufacturers of new nonroad
diesel engines and equipment.
Industry............................... Rebuilders and remanufacturers
of nonroad diesel engines.
------------------------------------------------------------------------

This list is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. To determine whether particular activities may be regulated by
this action, the reader should carefully examine the regulations,
especially the applicability criteria in 40 CFR 89.1, and the existing
regulatory language in 40 CFR Part 89. Questions regarding the
applicability of this action to a particular entity may be directed to
the person listed in FOR FURTHER INFORMATION CONTACT.

Obtaining Electronic Copies of the Regulatory Documents

The preamble, regulatory language and Final Regulatory Impact
Analysis (Final RIA) are also available electronically from the EPA
Internet Web site. This service is free of charge, except for any cost
already incurred for internet connectivity. An electronic version of
this final rule is made available on the day of publication on the
primary Web site listed below. The EPA Office of Mobile Sources also
publishes Federal Register actions and related documents on the
secondary Web site listed below.

1. http://www.epa.gov/fedrgstr/EPA-AIR/ (either select desired
date or use Search feature)
2. 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.

Table of Contents

I. Introduction
II. Content of the Final Rule
A. Emission Standards and Related Provisions
B. Test Procedures
C. Durability
D. Averaging, Banking, and Trading
E. Flexibility for Equipment Manufacturers
F. Flexibility for Post-Manufacture Marinizers
G. Control of Crankcase Emissions
H. Control of Smoke
I. Voluntary Low-Emitting Engine Program
J. Technical Amendments
III. 2001 Review and Ensuring Emissions Control In Use
A. 2001 Review
B. Ensuring Emissions Control In Use
IV. Technological Feasibility
V. Projected Impacts
A. Environmental Impacts
B. Economic Impacts
C. Cost-Effectiveness
VI. Public Participation
VII. Administrative Requirements
A. Administrative Designation and Regulatory Analysis
B. Regulatory Flexibility Act
C. Paperwork Reduction Act
D. Unfunded Mandates Reform Act
E. Congressional Review Act
F. National Technology Transfer and Advancement Act
G. Protection of Children
H. Enhancing Intergovernmental Partnerships
I. Consultation and Coordination With Indian Tribal Governments
VIII. Statutory Authority

I. Introduction

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. Mobile source emission control programs, however, have a
history of technological success that have made a very large
contribution to reducing exposure to ambient air pollution. On June 17,
1994, the Environmental Protection Agency (EPA) made an affirmative
determination under section 213(a)(2) of the Clean Air Act that nonroad
engines are significant contributors to ambient ozone or carbon
monoxide (CO) levels in more than one nonattainment area (59 FR 31306,
June 17, 1994). In the same notice, EPA also made a determination under
section 213(a)(4) that other emissions from compression-ignition (CI)
nonroad engines rated at or above 37 kilowatts (kW), specifically
emissions of particulate matter (PM) and smoke, cause or contribute to
air pollution that may reasonably be anticipated to endanger public
health or welfare. Also in the June 1994 final rule, EPA set a first
phase of emission standards (``Tier 1 standards'') for nonroad diesel
engines rated 37 kW and above.1, 2 In the Notice

[[Page 56969]]

of Proposed Rulemaking (NPRM) for this final rule (September 24, 1997,
62 FR 50152), EPA extended the finding under 213(a)(4) to CI nonroad
engines rated under 37 kW. A more detailed discussion of the history of
emission control programs for nonroad engines and other mobile sources
is included in the preamble to the proposal for this rule.
---------------------------------------------------------------------------

\1\ Diesel-cycle engines, referred to simply as ``diesel
engines'' in this document, may also be referred to as compression-
ignition (or CI) engines. These engines typically operate on diesel
fuel, but other fuels may also be used. This contrasts with otto-
cycle engines (also called spark-ignition or SI engines), which
typically operate on gasoline.
2 This rulemaking is based on metric units. With the
exception of engine power ratings, English units are included
parenthetically throughout the preamble. The conversion of engine
power ratings is included in Table 1, but is not repeated in the
rest of the document.
---------------------------------------------------------------------------

In the NPRM, EPA estimated the contribution of nonroad diesel
engines for comparison with other emission sources. For 1996, these
engines were estimated to represent about 27 percent of mobile source
emissions of oxides of nitrogen (NO_X) and 13 percent of
total NO_X emissions. EPA estimates that these engines
currently contribute about 48 percent of the directly emitted PM from
mobile sources and 16 percent of total controllable PM emissions. In
addition to directly emitted PM, EPA estimates that NO_X
emissions cause a significant additional amount of PM in the form of
secondary nitrate particles. On average nationwide, this indirect PM
represents an additional contribution to PM equal to about 30 percent
of the total directly emitted PM tonnage. EPA projections also indicate
that without further emission controls, the already significant
contribution of nonroad diesels to NO_X and PM will increase
in the future. Chapter 5 of the Final Regulatory Impact Analysis (Final
RIA) presents more complete estimates of emissions from all land-based
nonroad diesel engines and marine diesel engines rated under 37
kW.3
---------------------------------------------------------------------------

\3\ See also, ``Nonroad Engine and Vehicle Emission Study--
Report and Appendices,'' EPA-21A-201, November 1991 (available in
Air Docket A-96-40).
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This final rule is the result of several years of activity focused
on reducing diesel engine emissions in the U.S. In 1994 and 1995,
states and environmental groups encouraged EPA to adopt more stringent
emission standards for highway and nonroad diesel engines to address
the need for national pollution reduction measures to improve air
quality in many urban areas. In response, EPA initiated discussions
with engine manufacturers and other interested parties regarding future
emission controls for these engines. EPA subsequently finalized new
emission standards for heavy-duty highway engines starting with the
2004 model year (October 21, 1997 62 FR 54695) and proposed the
emission requirements for nonroad diesel engines that are finalized in
this document (September 24, 1997, 62 FR 50152).
This document finalizes a new set of emission standards for all
nonroad diesel engines, except for locomotive engines, engines used in
underground mining equipment, and marine engines rated at or above 37
kW. This rule includes first-ever EPA emission standards for emissions
from diesel engines rated under 37 kW. The emission reductions
resulting from these engines will be a major step in reducing the human
health and environmental impacts of ground-level ozone and particulate
matter. Emissions from other nonroad engines not covered by this final
rule are being addressed in other EPA rulemakings.
As EPA has pursued the emission reductions needed to meet air
quality goals, an important consideration has been harmonization with
standards for nonroad engines adopted or under consideration in
California, Europe, and elsewhere in the world. The goal of
harmonization has been a major impetus and an important factor in the
development of this rule. The principal goal of harmonization efforts,
avoiding widespread duplicative design configurations, has been
addressed in finalizing these emission standards. While some
differences remain between EPA's final rule and the proposal
established in Europe, EPA plans to continue its harmonization work
with governments in Europe and in other countries. One major area in
which a coordinated effort is being pursued is the development of a
more effective particulate emission control program, including the
evaluation and possible modification of the certification test cycle,
as discussed in Section III.
Based on the information presented in the preamble to the proposed
rule and in the Final RIA, EPA believes the new standards are
technologically feasible and otherwise appropriate under the Act.
Nonetheless, it is clear that a significant amount of research and
development will be needed on the part of engine manufacturers and
others to comply with the new standards. Accordingly, EPA intends to
review the feasibility of some of the standards finalized in this
document by 2001, as described in Section III.

II. Content of the Final Rule

This rulemaking includes a comprehensive program to reduce
emissions from nonroad diesel engines and equipment. The program as
finalized consists of stringent new emission standards, requirements to
ensure that engines maintain their level of emission performance as
they age, provisions providing compliance flexibility to engine and
equipment manufacturers, and a voluntary program to encourage the
introduction of low-emitting engines.

A. Emission Standards and Related Provisions

EPA is finalizing new emission standards for PM, CO, and nonmethane
hydrocarbons (NMHC) and NO_X combined, covering all nonroad
diesel engines except for locomotives, engines used in underground
mining equipment, and large (rated at or above 37 kW) engines used in
marine applications. Engines not included in this rulemaking are or
will be addressed by other federal programs. EPA is finalizing a set of
emission standards that vary in level and implementation date,
depending on the rated power of the engine and other factors. The
Agency believes that the standards finalized in this document are
consistent with the Clean Air Act requirement that standards represent
the ``greatest degree of emission reduction achievable'' given the
criteria specified by the Act (see Section IV below).
1. Emission Standards
In general, new emission standards for engines rated between 37 and
560 kW are finalized in two tiers, building on the phase-in schedule
adopted in 1994 in the Tier 1 rule. Table 1 lists the range of
standards for the different power categories, including all the tiers
of standards with the affected model years. These standards approximate
the degree of control anticipated from existing standards covering
engines used in heavy-duty diesel highway vehicles, with appropriate
consideration of differences in the sizes and operational
characteristics of the engines and in the organization of the
industries. Specifically, the first set of new standards (Tier 2)
generally parallel the emission standards that apply beginning with
1998 model year highway engines (58 FR 15781, March 24, 1993). The
second set of new standards (Tier 3) parallel standards that apply
beginning with 2004 highway engines (October 21, 1997, 62 FR 54695).
The standards for engines rated at or above 37 kW become effective in
the 2001 to 2006 time frame for Tier 2 levels and 2006 to 2008 for Tier
3 levels.

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BILLING CODE 6560-50-C

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The standards finalized in this document for engines rated under 37
kW are the first EPA emission standards for these engines. The Tier 1
standards will be phased in by power category beginning in 1999, with
Tier 2 standards phased in by power category beginning in 2004. Tier 3
standards are not being set for these engines, or for engines rated
over 560 kW, in this rule.
In power categories for which Tier 3 standards are finalized, the
Agency has chosen not to include more stringent PM standards. As
discussed in Section III below, EPA has a number of reasons for
deferring the establishment of a Tier 3 PM control program at this
time, but is actively working toward this goal. The Agency believes
that Tier 3 PM standards will be more appropriately discussed in the
context of the improved technical understanding that will exist by the
time of the 2001 feasibility review, also discussed in Section III.
EPA will maintain the current smoke standards for nonroad diesel
engines rated at or above 37 kW and will extend the applicability of
these standards to nonroad diesel engines rated under 37 kW, except 1-
cylinder engines and marine propulsion engines. In addition, constant-
speed engines are being exempted from smoke regulations. This is
discussed in detail in Section II.H.
2. Related Provisions
a. Definition of Compression-Ignition. The requirements of 40 CFR
Part 89 apply to all compression-ignition engines. Most current
compression-ignition engines burn diesel fuel and operate over the
conventional diesel cycle, which generally allows interchangeable use
of the terms ``compression-ignition,'' ``diesel-cycle,'' and
``diesel.'' Some of these engines, however, can be modified to operate
on other fuels such as natural gas or liquefied petroleum gas. Because
these engines do not clearly fall into existing engine categories, EPA
proposed a definition for nonroad compression-ignition engines that
follows from definitions established for highway engines. The proposed
definition focuses on the engine cycle, rather than the ignition
mechanism, with the presence of a throttle as an indicator to
distinguish between diesel-cycle and otto-cycle operation. Use of a
throttle to regulate power (not just to maintain smooth low-load
operation) corresponds with otto-cycle operation. Regulating power by
controlling the fuel supply in lieu of a throttle corresponds with lean
combustion and diesel-cycle operation. This language allows the
possibility that a natural gas-fueled engine equipped with a sparkplug
will be considered a compression-ignition engine, but EPA continues to
believe that the proposed definition is the best way to segregate these
engines. Nonroad engines fueled by natural gas could then fall under
emission standards for nonroad diesel engines, finalized in this
document, or for nonroad spark-ignition engines, which are currently
under development. The supporting documentation for EPA's introduction
of emission standards for methanol-fueled engines provides a more
complete consideration of the different technologies involved and lays
out a rationale for this conclusion.4 To allow adequate time
to certify engines that may be affected, this definition will take
effect beginning January 1, 2000.
---------------------------------------------------------------------------

\4\ ``Summary and Analysis of Comments on the Notice of Proposed
Rulemaking for Emission Standards and Test Procedures for Methanol-
Fueled Vehicles and Engines,'' EPA, January 1989.
---------------------------------------------------------------------------

b. Hobby Engines. Many extremely small engines used to power model
airplanes, model boats, and other such hobby equipment qualify as
nonroad compression ignition engines. EPA is not establishing an
emission standard for these small hobby engines at this time. These
engines are designed and operated very differently than larger engines
used in other applications. The Agency is not aware of information
about these engines that would allow an assessment of the feasibility
of the proposed standards, or help to establish feasible alternative
standards, taking into consideration the factors relevant under section
213(a)(3) of the Act. Also, it is not clear whether such small engines
could be appropriately and consistently tested with existing equipment,
or, if so, whether any of the test cycles described below would
adequately represent the in-use operation of these engines.
Furthermore, EPA could not realistically impose the proposed useful
life requirements or the warranty and maintenance interval provisions
on these engines given their limited durability and frequent adjustment
by the user. It should be noted that these engines have a low average
annual hours of usage and an extremely low power output, and therefore
contribute very little to the emissions inventory.
Although there are many distinguishing features of this hobby class
of engines, the comments received on the proposal indicate that per-
cylinder displacement provides an adequate and simple basis for
distinguishing this class from other types of engines. Even though the
Agency lacks the information that would allow a precise determination
of the displacement level above which the proposed standards can be
considered feasible, a displacement of 50 cubic centimeters per
cylinder is well above the displacement level that is typical of this
class of engines, and well below that of the smallest engines outside
this group. Therefore, the final rule excludes engines with a
displacement of less than 50 cubic centimeters per cylinder from the
emissions standards in Part 89.
c. NMHC Measurement. EPA in this final rule changes from a
measurement of total hydrocarbons to nonmethane hydrocarbons. There is,
however, no standardized method for measuring methane in diesel engine
exhaust. Therefore, EPA will allow manufacturers to develop and use
their own procedure to analyze nonmethane hydrocarbons, with prior
approval from EPA, or measure total hydrocarbons and subtract 2 percent
from the measured hydrocarbon mass to correct for methane.
d. Selective Enforcement Audits. In the Tier 1 rule, the Agency
adopted a program of Selective Enforcement Audits (SEAs) to ensure that
actual production engines meet the emissions standards. The Agency is
not making changes to this program. However, recognizing that engine
manufacturers will be required to undertake significant engineering
challenges in relatively short time frames in order to meet the Tier 2
and Tier 3 standards adopted in this rulemaking, including the
challenge of stabilizing initial production variability, EPA will only
impose SEAs during the first year in which a standard is in effect for
those engine families where strong evidence exists that SEA failure
would be likely.

B. Test Procedures

The standards finalized in this document are based on the use of
EPA's existing steady-state (modal) test procedures. In addition, new
steady-state test cycles are specified for constant-speed engines,
marine propulsion engines, and engines rated under 19 kW. The Agency
and the industry are working to better understand the sensitivity of
nonroad diesel engine emissions to the test cycle, as discussed in
Section III. The following sections describe EPA's selection of various
test cycles and fuel specifications.
1. Test Cycles
Compliance with emission standards is determined by measuring
emissions while operating engines over a prescribed test cycle. The
final rule, following the practice established in the

[[Page 56972]]

Tier 1 rule, specifies a cycle that is nominally the same as the
International Organization for Standards (ISO) 8178 C1 test cycle as
the principle test cycle for measuring emissions from most engines.
Additional cycles are defined for specific engine types. Engines that
are limited by design to constant-speed operation will be subject to
testing using a test cycle equivalent to the ISO 8178 D2 cycle. This
cycle, which omits idle and intermediate-speed modes from the C1 cycle,
is representative of engines such as generators, which are designed
never to run at these omitted speeds.5 Because of the more
limited range of engine operation in the D2 cycle, manufacturers must
ensure that engines certified with data generated with the D2 cycle are
used exclusively in constant-speed applications. Accordingly, these
engines must include labeling information indicating this limited
emission certification.
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\5\ For a description of the development of the D2 cycle, see
``Exhaust Emission Testing of Diesel Engines for Industrial
Applications,'' (Docket A-96-40, item II-D-26).
---------------------------------------------------------------------------

For variable-speed engines rated under 19 kW, EPA is specifying a
test cycle that is equivalent to the ISO 8178 G2 cycle. The G2 cycle
includes the same modes as the D2 cycle and adds a mode for operation
at idle. The G2 and D2 cycles also have different weighting factors for
the various modes. The G2 cycle was developed to represent the
operation of small diesel engines used primarily at rated speed, such
as in lawn and garden applications, generators, pumps, welders, and air
compressors. EPA is specifying a test cycle equivalent to the ISO 8178
E3 cycle for testing propulsion marine engines rated under 37 kW. The
E3 cycle, which consists of engine operation at four different engine
speeds and four different loads, was developed by ISO to represent the
operation of propulsion marine engines, and has been supported by an
Agency investigation. Auxiliary marine engines subject to this rule
(i.e., engines installed on a marine vessel, but not used for
propulsion) will be tested using the either G2, C1, or D2 test cycles,
consistent with the constraints described above for the counterpart
land-based nonroad engines.
Finally, EPA will generally allow manufacturers to use the C1 test
cycle to generate certification data for engines otherwise required to
use the D2 or G2 test cycle. EPA will also allow manufacturers to use
the C1 test cycle to generate certification data for propulsion marine
engines where such engines are included in a land-based engine family.
In each of these cases in which the manufacturer elects to use the C1
cycle, EPA would retain its ability to test using the respective G2,
D2, or E3 test cycle, but would also be able to test using the C1 test
cycle. Additional discussion of EPA plans for further evaluation and
development of appropriate test cycles is provided in Section III.
2. Test Fuel
Section 206(h) of the Clean Air Act requires that test fuels be
representative of in-use conditions. Therefore EPA is updating the
specifications for the sulfur content in diesel test fuels to make them
more representative of in-use fuels. EPA is finalizing test fuel
specifications with a sulfur specification of 0.03 to 0.40 weight-
percent (wt%), which covers the range of sulfur levels observed for
most in-use fuels. The final sulfur specifications are slightly
different from that proposed (0.05 to 0.5 wt%), because EPA believes
the final specification more appropriately covers the range of sulfur
levels found in the majority of in-use fuels. Manufacturers will be
free to test using any fuel within this range. Thus, they will be able
to harmonize their nonroad test fuel with either on-highway testing
(<0.05 wt%) or with European testing (0.1 to 0.2 wt%). Testing
conducted by EPA would use test fuels typical of in-use fuels.
At this time, EPA believes that the average sulfur level of diesel
fuel being used in current nonroad engines is on the order of 0.2 wt%.
In order to provide manufacturers with some certainty regarding how EPA
will implement its test fuel policy, the Agency is including a
regulatory provision specifying that it will use test fuels with sulfur
levels no greater than 0.20 wt% when it performs testing of Tier 1
engines and Tier 2 engines rated at or above 37 kW. EPA is not applying
this provision to Tier 3 engines or Tier 2 engines rated under 37 kW
because those standards do no take effect for some time, and EPA has no
basis for determining what the properties of in-use fuels for these
engines will be. Moreover, EPA has not determined that it would be an
appropriate long-term policy to specify a narrow range for the sulfur
specification. This would be especially true for engines utilizing
catalytic aftertreatment to reduce particulate emissions. Such engines
may comply with the emission standards when tested using a moderately
low sulfur fuel, but have much higher particulate emissions when using
a higher sulfur fuel with a sulfur level between 0.3 and 0.4 wt%.
Although not addressing it at this time, EPA intends to examine test
fuels for Tier 3 engines and Tier 2 engines rated under 37 kW in its
2001 feasibility review.
In the 1994 final rule, EPA allowed manufacturers to test for
certification of PM emission levels using the low-sulfur test fuel
specified by the California Air Resources Board (California ARB) for
nonroad diesel engines, with a maximum sulfur content of 0.05 wt%.
EPA's objective was to minimize any difference from the protocol
previously established for California, because EPA finalized PM
standards for engines rated over 130 kW only in response to industry's
request to adopt California's PM standard, which was not considered
technology-forcing. Under those previous regulations, testing with
federal test fuel involved an optional adjustment of measured PM levels
to account for the higher PM emissions associated with the higher fuel
sulfur content.
Effective with the Tier 2 standards (and Tier 1 standards for
engines rated under 37 kW), EPA is eliminating the particulate
adjustment factor for test fuels with different sulfur levels. Such an
adjustment, while potentially appropriate for an initial, modest
particulate emission control program for a newly regulated industry, is
not appropriate as a long-term policy. EPA is now establishing PM
standards that will require meaningful reductions from all sizes of
engines used nationwide. The Clean Air Act requires EPA to ensure that
the test procedure, including fuel specifications, adequately represent
in-use operation. Moreover, EPA has significant concerns regarding the
accuracy of the previously used adjustment factor equation, which was
based on limited data. However, even if more complete data were
available, it would not be possible for a single adjustment factor
equation to accurately predict the effect of different sulfur levels on
particulate emissions for each engine model. This is because the effect
of sulfur levels on particulate emissions can vary significantly from
engine family to engine family, especially for engines with and without
aftertreatment.
EPA recognizes that the sulfur level of test fuels has an effect on
the stringency of the standards, and that the elimination of the
particulate adjustment factor has the effect of making the particulate
standards more stringent than they otherwise would have been. Using the
calculated adjustment to PM emission levels for fuel sulfur finalized
in 1994, the difference between 0.20 and 0.05 wt% would result in an
adjustment on the order of 0.03 grams per kilowatt-hour (g/

[[Page 56973]]

kW-hr) (0.02 grams per horsepower-hour (g/hp-hr)) in PM emission
levels. (Testing for NO_X, NMHC, CO, and smoke is not
affected, since the 1994 final rule already specified that federal test
fuel was appropriate without adjustment for measuring emissions of
those pollutants.) However, EPA has considered this effect in making
its determination that the standards being adopted in this rulemaking
are feasible.

C. Durability

To achieve the full benefit of the emissions standards, programs
are necessary to encourage manufacturers to design and build engines
with durable emission controls and encourage the proper maintenance and
repair of engines throughout their lifetime. The goal is for engines to
maintain good emission performance throughout their in-use operation.
When the Tier 1 standards for engines rated at or above 37 kW were
developed, deterioration was not expected to be a problem for two
reasons. First, the Tier 1 standards were not considered by EPA to be
technology forcing. Second, the focus was on NO_X control and
NO_X emissions performance was thought not to deteriorate for
these engines. As a result, there are few requirements in the current
regulations that address deterioration concerns for nonroad diesel
engines. As tighter standards are put into place, EPA believes that it
becomes necessary to adopt measures to address concerns about possible
in-use emission performance degradation.
EPA is making some changes to the existing durability program, as
the new standards are phased in, to help ensure that engines meet
applicable standards in use. The specific areas of the durability
program that are being focused on here are useful life, warranty
period, deterioration factors, allowable maintenance intervals, and
rebuilding requirements.
1. Useful Life
Currently, nonroad diesel engines rated at or above 37 kW are
defined, for emission control purposes, to have a useful life of 8,000
hours or 10 years, whichever occurs first. The in-use testing liability
period is currently 6,000 hours or 7 years, whichever occurs first.
Based on a study performed for EPA, this is representative of the
average time until first rebuild for the majority of nonroad diesel
engines.6 EPA is making no changes to these requirements.
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\6\ ICF Incorporated, ``Industry Characterization: Nonroad Heavy
Duty Diesel Engine Rebuilders,'' prepared for U.S. Environmental
Protection Agency, Contract 68-C5-0010, WAN 102, January 3, 1997,
(Docket A-96-40, item II-A-02).
---------------------------------------------------------------------------

EPA is adopting a shorter useful life and liability period for
engines rated under 37 kW than for larger engines. Based on EPA's
current understanding, these smaller engines have a shorter life
expectancy. Also, engines rated under 37 kW that operate constantly at
high speeds (at or above 3000 revolutions per minute (rpm)) and very
small engines (those rated under 19 kW) have a shorter life expectancy
than other small engines. As a result, EPA has adjusted the useful
lives and liability periods for these engines accordingly. Table 2
presents the specified useful lives and in-use testing liability
periods being adopted.

Table. 2--Useful Life and Recall Testing Periods
----------------------------------------------------------------------------------------------------------------
Useful life Recall testing period
Power rating Rated engine speed ---------------------------------------------------
Hours Years Hours Years
----------------------------------------------------------------------------------------------------------------
<19 kW........................... All...................... 3,000 5 2,250 4
19-37 kW......................... Constant speed engines 3,000 5 2,250 4
@<gr-thn-eq>3,000 rpm.
All others............... 5,000 7 3,750 5
----------------------------------------------------------------------------------------------------------------

Liability periods were based on the ratio of useful life and
liability periods established for engines rated at or above 37 kW. The
purpose of having liability periods that are shorter than the useful
lives is to ensure that engines used in recall testing are not
statistical outliers with poor emissions durability. However, if a
recall were ordered, all engines in that family would be subject to the
recall regardless of their age.
2. Warranty Period
Tied to the useful life is the minimum warranty period imposed by
the Clean Air Act on manufacturers of nonroad engines. Currently, the
minimum warranty period for nonroad diesel engines rated at or above 37
kW is 3,000 hours or 5 years of use, whichever occurs first. EPA is
extending this minimum warranty period to most engines rated between 19
and 37 kW; however, for engines under 19 kW and for 19 to 37 kW
constant speed engines rated at 3000 rpm and above, EPA is specifying a
warranty period of 1,500 hours or 2 years, whichever occurs first. The
shorter warranty requirement for these engines is due to their shorter
useful lives.
3. Deterioration Factors
In the Tier 1 nonroad engine rule, EPA did not require
manufacturers to accumulate operating time on durability data engines
or to generate deterioration factors for engine certification because
that rule focused on modest reductions in NO_X emissions,
requiring emission control technologies that were not expected to
deteriorate. Analysis of highway engine data at that time led EPA to
conclude that heavy-duty diesel engines do not generally produce more
NO_X emissions as they get older. EPA believes that this
stability of emission control can be attributed to the fact that diesel
engine manufacturers have met emission standards through internal
improvements to the engine and fuel systems, rather than relying on
aftertreatment and other devices that would be more susceptible to in-
use degradation. In fact, engine deterioration in current technology
nonroad diesel engines could result in lower NO_X emission
levels due to a loss in cylinder compression.
As NO_X, NMHC, and PM standards are made more stringent
and nonroad diesel engine manufacturers introduce new technologies
solely for emission control purposes, such as aftertreatment,
sophisticated fuel delivery controls, and exhaust gas recirculation
(EGR), long-term emissions performance becomes a greater concern. In
addition, emission deterioration characteristics are not well known for
aftertreatment, EGR, and other more sophisticated emission control
strategies.
EPA will require the application of deterioration factors (DFs) to
all engines covered by this rule. The DF is a factor applied to the
certification emission test data to represent emissions at the end of
the useful life of the engine. Separate DFs apply to each measured
pollutant, except that a combined NMHC + NO_X DF applies to
engines that do not use aftertreatment devices, consistent with the
form of the standard. Consistent

[[Page 56974]]

with the approach taken in other EPA programs, decreasing emissions of
one pollutant over time would not be allowed to offset increasing
emissions of the other pollutant in this combined DF. Currently, DFs
are required for highway heavy-duty engines but are only required for
nonroad diesel engines rated at or above 37 kW if engines use
aftertreatment technologies. Deterioration factors for those engines
are to be determined by the engine manufacturers in accordance with
good engineering practices. EPA has not set a specified procedure. The
deterioration factors are nevertheless subject to EPA approval.
It is not EPA's intent to force a great deal of data gathering on
engines using established technology for which the manufacturers have
the experience to develop appropriate DFs. New DF testing may not be
needed where sufficient data already exists. EPA's main interest is
that technologies with unproven durability in nonroad applications,
such as EGR, are demonstrated to meet emission requirements throughout
their useful lives. However, because this rule creates a program that
will introduce new standards and new technologies over many years, the
DF requirement is being finalized for all engines so that EPA can be
sure that reasonable methods are being used to ascertain the capability
of engines to meet standards throughout their useful lives. This DF
program will allow EPA to act in the traditional role of establishing
emission performance standards, rather than putting EPA in a position
in which it would appear to be prejudging the durability of specific
technologies and designs.
Similar to the provisions for highway engines, EPA will allow the
nonroad engine manufacturers the flexibility of using durability
emission data from a similar engine that has either been certified to
the same standard or for which all of the data applicable for
certification has been submitted. In addition, EPA is extending this
flexibility to allow deterioration data from highway engines to be used
for similar nonroad engine families.
EPA is especially concerned that an unnecessarily burdensome
durability demonstration not be required for engines using established
technology for which the manufacturers have the experience to determine
appropriate deterioration factors. In these cases, EPA will allow
nonroad engine manufacturers to perform an analysis, based on good
engineering practices, in place of actual service accumulation. For
instance, in the case where no durability data exists for a certain
engine but both smaller and larger engines using similar technology
have been shown not to deteriorate for NO_X in use, it would
be possible to build a case showing no NO_X deterioration for
that engine. EPA is allowing engines to be considered as using
established technologies if they do not meet the Tier 3 emission
standards, unless they use EGR or aftertreatment devices. In addition,
manufacturers of engines that do meet the Tier 3 standards but have
technologies similar to those employed in Tier 2 designs may also rely
on engineering analysis in lieu of actual service accumulation, with
prior EPA approval.
Because there may be insufficient time for manufacturers of engines
rated below 37 kW to verify DFs before the Tier 1 compliance dates, the
Agency is allowing manufacturers to specify DFs for these engines in
model years 1999 and 2000 based on good engineering judgement using
reasonably available information. Any requests for carryover of these
models into the 2001 model year would need to include justification of
DFs under the new requirements.
4. Allowable Maintenance Intervals
Manufacturers are currently required to furnish the ultimate
purchaser of each new nonroad engine with written instructions for the
maintenance needed to ensure proper functioning of the emission control
system. Generally, manufacturers require the owners to perform this
maintenance as a condition of their emission warranties. Further, the
performance of maintenance would be considered during any in-use recall
testing conducted by the Agency.
For the engines covered in this action, EPA believes that there is
a need to limit the minimum maintenance intervals specified by the
manufacturers, to ensure that the technologies employed are practical
in use. Because the actual maintenance intervals for nonroad engines
are likely to be similar to highway engines, EPA proposed maintenance
requirements parallel those for highway engines (40 CFR 86.094-25).
There are two aspects to the implementation of allowable
maintenance interval requirements. The first relates to the maintenance
instructions specified by manufacturers in users manuals. The second
concerns how often maintenance has been or will be performed on engines
undergoing testing to verify compliance with emission standards.
Ideally these would be consistent. However, due to concerns about the
need for more frequent maintenance in the severe operating environments
that nonroad engines sometimes operate in, EPA is focusing its
allowable maintenance interval requirements on testing performed by
manufacturers to demonstrate compliance. This testing would not, of
course, occur in severe operating environments. Manufacturers have a
business incentive to avoid specifying overly frequent maintenance in
user manuals, and so EPA is not, at this time, insisting that the
intervals be reflected in user manuals. In addition, manufacturers may
adopt shorter intervals for engines rated below 19 kW and 19 to 37 kW
constant speed engines rated at 3000 rpm and above, subject to EPA
approval. Subject to these modifications, the Agency is finalizing the
proposed allowable maintenance interval requirements.
The following minimum intervals are being adopted for adjustment,
cleaning, repair, or replacement of various components:
At 1,500 hours, and 1,500-hour intervals thereafter:

1. EGR related filters and coolers
2. Positive crankcase ventilation valve
3. Fuel injector tips (cleaning only)

At 3,000 hours, and 3,000-hour intervals thereafter for engines
rated under 130 kW or 4,500-hour intervals thereafter for engines rated
over 130 kW:

1. Fuel injectors
2. Turbocharger
3. Electronic engine control unit and its associated sensors and
actuators
4. PM trap or trap-oxidizer system
5. EGR system (including all related control valves and tubing)
6. Catalytic convertor
7. Any other add-on emissions-related component

Add-on emission-related components are those whose sole or primary
purpose is to reduce emissions or whose failure will significantly
degrade emission control, yet not significantly affect the performance
of the engine.
In addition, EPA is defining the following components as critical
emission-related components:

1. Catalytic convertor
2. Electronic engine control unit and its associated sensors and
actuators
3. EGR system (including all related filters, coolers, control valves
and tubing)
4. Positive crankcase ventilation valve
5. PM trap or trap-oxidizer system
6. Any other add-on emissions-related component

If maintenance is scheduled on critical emission-related components
in-use, EPA requires that the manufacturer show the reasonable
likelihood that the maintenance will, in fact, be performed

[[Page 56975]]

in use. The regulations list options for this demonstration, including
showing that performance would degrade without maintenance, providing
survey data showing that the maintenance is performed, using a visible
signal system, offering free maintenance, and other methods approved by
the Administrator. These special provisions do not apply to critical
emission-related components for which no maintenance is specified over
the useful life of the engine.
5. Rebuilding Requirements
In this action, EPA is addressing two concerns regarding the
rebuilding of nonroad diesel engines, both related to new emission-
related components that may be added to the engine to meet the new
standards. First, EPA is concerned that during engine rebuilding, there
may not be an incentive to check and repair emission controls that do
not affect engine performance. Second, EPA is concerned that there may
be an incentive to rebuild engines to an older configuration due to
real or perceived performance penalties associated with technologies
that would be used to meet the standards finalized in this document.
Such practices would likely result in a loss in emission control.
EPA is requiring that parties involved in the process of rebuilding
or remanufacturing engines (which may include the removal of the
engine, rebuilding, assembly, reinstallation and other acts associated
with engine rebuilding) must follow the provisions listed below to
avoid tampering with the engine and emission controls. The
applicability for these provisions is based on the date the engine was
originally built. The rebuild requirements only apply to engines
subject to the new standards being established in this rule.
(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, and specifications), and must identify
the model year(s) of the resulting engine configuration. This allows
for a rebuilder who is unable to identify the original certified
configuration to rebuild the engine to any certified configuration.
(2) When an engine is being rebuilt and remains installed or is
reinstalled in the same piece of equipment, 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 certified configuration that is equivalent,
from an emissions standpoint, to the engine being replaced. This allows
for rebuilt engine configurations that, although of a different model
year than the original engine, were designed for the same tier of
emission standards. If the replacement engine is new, it must also meet
the requirements of 40 CFR 89.1003(b)(7), discussed in section II.E.3
below.
(3) At the time of rebuild, emission-related codes or signals from
on-board monitoring systems may not be erased or reset without
diagnosing and responding appropriately to the diagnostic codes.
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 emission-related components not otherwise addressed
by the above provisions must be checked and cleaned, repaired, or
replaced where necessary, following manufacturer recommended practices.
Under this final rule, any person or entity engaged in the process,
in whole or part, of rebuilding engines who fails to comply with the
above provisions may be liable for tampering. 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
has included no certification or in-use emissions requirements for the
rebuilder or engine owner in this final rule.
EPA has adopted modest recordkeeping requirements that EPA believes
are in line with customary business practices. The records must be kept
by persons involved in the process of nonroad engine rebuilding or
remanufacturing and shall include the best available information on the
total operating 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, and work performed as described in item (4) of the
rebuild provisions above. EPA now requires that such records be kept
for two years after the engine is rebuilt.
Under this final rule, parties are required to keep the information
for two years but are allowed to use whatever format or system they
choose, provided that the information can be readily understood by an
EPA enforcement officer. EPA will not require that parties keep
information that they do not have access to as part of normal business
practice. In cases where 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 should be satisfactory.
Rebuilders may use records such as build lists, parts lists, and
engineering parameters of the engine families being rebuilt rather than
keeping information on individual engines, provided that each engine is
rebuilt in the same way to those specifications.

D. Averaging, Banking, and Trading

In this final rule, EPA is replacing the existing nonroad engine
averaging, banking, and trading (ABT) program with a comprehensive new
program. EPA believes the revised program is an important element in
making the stringent emissions standards adopted in this final rule
appropriate with regard to technological feasibility, lead time, and
cost. The revised ABT program is intended to enhance the flexibility
offered to engine manufacturers that will be needed in transitioning
their entire product lines to meet the stringent NMHC + NO_X
standards and the PM standards being adopted. The ABT program also
encourages the early introduction of cleaner engines, thus securing
earlier emission benefits. It should be noted that as part of the 2001
feasibility review described earlier, the Agency plans to reassess the
appropriateness of the averaging, banking, and trading provisions
applicable to nonroad diesel engines and modify the provisions if
deemed necessary.
The revised ABT program will apply to all nonroad diesel engines
subject to Part 89. The following discussion of the revised ABT
provisions is divided into two sections. The first section describes
the provisions for engines rated at or above 37 kW. The second section
describes the provisions for those engines rated under 37 kW, including
land-based and marine engines, both of which are currently unregulated
by EPA.
1. Revised Program for Engines Rated at or Above 37 kW
The following section is divided into two subsections and describes
the revised ABT program for engines at or above 37 kW. The first
subsection describes the general provisions

[[Page 56976]]

applicable to all engines. The second subsection describes several
provisions specific to engines certified to the existing Tier 1
standards for engines at or above 37 kW.
a. General Provisions. Beginning with the Tier 2 standards, the
form of the standard changes from separate hydrocarbon and
NO_X standards to a combined NMHC + NO_X standard.
Therefore, once the Tier 2 standards take effect, credits will be based
on combined NMHC + NO_X values. In the Tier 2 time frame,
NMHC + NO_X credits will be generated against the Tier 2
standards, which vary from 6.4 to 7.5 g/kW-hr (4.8 to 5.6 g/hp-hr),
depending on the power rating of the engine. In the Tier 3 time frame,
NMHC + NO_X credits will be generated against the Tier 3
standards, which vary from 4.0 to 4.7 g/kW-hr (3.0 to 3.5 g/hp-hr),
depending on the power rating of the engine.
The existing Tier 1 ABT program for nonroad engines does not cover
PM emissions. Beginning with the introduction of Tier 2 engines, EPA is
including PM emissions in the ABT program in order to provide
manufacturers with greater flexibility in complying with the new PM
standards. (As described later, EPA is allowing the early banking of PM
credits from Tier 1 engines.) All PM credits will be generated against
the Tier 2 standards until EPA adopts subsequent PM standards. Because
EPA is including both NMHC + NO_X and PM in the ABT program
and given the tradeoff between NO_X and PM emissions,
manufacturers will not be allowed to generate credits against the
applicable standard for one pollutant while using credits against the
applicable standard for another pollutant on the same engine family.
EPA is setting upper limits to the family emission limit (FEL)
values that may be declared under the new standards. EPA is adopting an
NMHC + NO_X FEL upper limit of 10.5 g/kW-hr (7.9 g/hp-hr) for
engines at or above 130 kW certified in the Tier 2 time frame. For Tier
2 engines at or above 37 kW and less than 130 kW, EPA is adopting a
NMHC + NO_X FEL upper limit of 11.5 g/kW-hr (8.6 g/hp-hr).
For Tier 3 engine families, the NMHC + NO_X FEL upper limits
are the Tier 2 NMHC + NO_X standards for the same power
category of engines.
For PM, EPA is adopting a PM FEL upper limit of 0.54 g/kW-hr (0.40
g/hp-hr) for engines at or above 130 kW certified in the Tier 2 time
frame. Engines at or above 37 kW and less than 130 kW will have a PM
FEL upper limit of 1.2 g/kW-hr (0.9 g/hp-hr) for Tier 2 engines. (EPA
is not adopting a PM FEL upper limit beyond Tier 2 because EPA is not
adopting Tier 3 PM standards at this time.)
There are several other provisions EPA is adopting for the revised
ABT program. EPA is replacing the three year credit life provision of
the existing ABT program with no limit on credit life. In addition, EPA
is eliminating the ``buy high/sell low'' power conversion factor
provision of the existing ABT regulations and replacing it with a
sales-weighted average power value. EPA is including an adjustment in
the calculation of credits for the useful life of the engine. (The
existing ABT program does not include any adjustment for useful life to
the credit calculations.) EPA is also allowing manufacturers to include
engines certified to meet the State of California's standards in the
revised ABT program because the California ARB is expected to adopt the
same standards for their nonroad compression-ignition engine control
program.
In a similar manner to the existing ABT provisions for Tier 1
engines at or above 37 kW, EPA is not requiring any discounting of
credits from Tier 2 or Tier 3 engines with this final rulemaking. EPA
plans to monitor the emission levels of engines and the use of the ABT
program over the next few years. EPA will take this information into
account and plans to reassess the appropriateness of not having any
discounting of credits from Tier 2 and Tier 3 engines as part of the
2001 feasibility review.
Finally, EPA has decided not to finalize two ABT provisions
discussed in the proposal for this rule. First, as discussed later in
the equipment manufacturer flexibility section, EPA is not adopting the
proposed provision that would have given engine manufacturers the
option to trade the NMHC + NO_X and PM credits generated by
their engines to equipment manufacturers. This is discussed further in
Section II.E of this final rule. Second, EPA is not adopting a
restriction which would have limited the use of PM credits to the power
category in which the credits were generated. As with the existing Tier
1 ABT program, credits may be exchanged across all power categories at
or above 37 kW. (As described below, there are some restrictions on the
trading of credits for engines below 37 kW and trading credits between
land-based applications and marine applications.)
b. Special Provisions for Tier 1 Engines. As described above, EPA
is replacing the existing ABT program with a comprehensive new program.
Based on EPA's experience with Tier 1 certification and because of
implementation differences between the existing Tier 1 provisions and
the newly adopted Tier 2 and later provisions, EPA is adopting two
changes that will specifically affect engines certified to the existing
Tier 1 standards. First, EPA is adopting a methodology for calculating
NO_X credits earned from Tier 1 engines that can be used for
showing compliance with the Tier 2 NMHC + NO_X standards.
Second, EPA is allowing engine manufacturers to bank early PM credits
from Tier 1 engines that can be used once the newly adopted Tier 2
standards take effect. The changes noted in the general provisions
discussion above, including the unlimited life, use of average power
for credit calculations, and useful life adjustment, will also apply to
engines certified to the existing Tier 1 standards.
With regard to the generation of NO_X credits from
engines certified to the existing Tier 1 standards, EPA will continue
to allow manufacturers to earn NO_X credits, but not NMHC +
NO_X credits. The NO_X credits earned on engines
certified to the existing Tier 1 standards can be used to show
compliance with the current Tier 1 NO_X standard or the newly
adopted Tier 2 NMHC + NO_X standards. However, due to
concerns over the potential to delay the Tier 3 standards with credits
earned from Tier 1 engines, the NO_X credits earned on
engines certified to the existing Tier 1 standards cannot be used to
show compliance with the newly adopted Tier 3 NMHC + NO_X
standards.
With regard to the calculation of NO_X credits from Tier
1 engines that are to be banked or traded and subsequently used for
Tier 2 NMHC + NO_X compliance, EPA is requiring that the
value of the NO_X credits be discounted unless the engine on
which the credits were earned is below the applicable Tier 1 standard
by a specified amount. EPA believes this requirement is appropriate due
to concerns that manufacturers could potentially earn significant
NO_X credits from their current Tier 1 engines and delay
compliance with the Tier 2 standards, and also to encourage the pull-
ahead of newer and cleaner technologies. (Credits from Tier 1 engines
that are to be used to show compliance for other Tier 1 engines, are
not required to be discounted.) EPA is adopting a trigger mechanism to
distinguish between Tier 1 engine families which are eligible for no
adjustment and those families which must be adjusted. For engine
families certified with a NO_X FEL at or below 8.0 g/kW-hr
(6.0 g/HP-hr), no discount will be applied to any NO_X
credits. For engine families certified at a NO_X FEL above
the 8.0 g/kW-hr trigger in the Tier

[[Page 56977]]

1 time frame, the value of the NO_X credits will be
discounted by 35 percent.
With regard to PM credit generation, EPA is allowing early banking
of PM credits from Tier 1 engines as soon as this final rule becomes
effective. Under the revised program, the number of PM credits
generated will be calculated against the Tier 2 standards and may only
be used to show compliance once the Tier 2 PM standards take effect.
Neither the trigger nor the credit discounting concept described above
for Tier 1 NO_X credits, will apply to PM credits.
EPA requested comment on some additional limitations regarding the
use of credits generated from Tier 1 engines. EPA is not adopting a
provision that would apply a surcharge to NO_X credits used
by a manufacturer to certify more than 20 percent of its fleet. EPA is
also not adopting any limit on the number of years a manufacturer may
earn early PM credits from Tier 1 engines.
2. Program for Engines Rated Under 37 kW
As noted earlier, EPA is adopting standards for engines rated under
37 kW. These engines are currently unregulated by EPA. Therefore, the
existing ABT program did not apply to such engines. EPA is adopting
provisions to include both land-based and marine engines rated under 37
kW in the revised ABT program. A number of issues have been addressed
for these engines, including credit generation, credit life, credit
calculation, trading across power categories, credit exchange between
land-based and marine applications, and a special multi-year averaging
and banking program. The following section addresses each of these
issues.
With regard to credit generation, EPA is making credits available
for both NMHC + NO_X emissions and for PM emissions as soon
as the standards become effective. Because many of the engines below 19
kW use indirect injection technology, which tends to low-emitting, EPA
is requiring that all credits generated from engines rated under 19 kW
be calculated against the Tier 2 standards, even prior to the Tier 2
time frame. This requirement applies for both NMHC + NO_X
credits and PM credits. For engines rated at or above 19 kW and less
than 37 kW, where direct injection engines are more common, EPA is
requiring that all engines generate credits against the applicable
standards.
For Tier 1 engines below 37 kW, EPA is adopting FEL upper limits of
16.0 g/kW-hr (12.0 g/hp-hr) for NMHC + NO_X and 1.2 g/kW-hr
(0.9 g/hp-hr) for PM. These levels are based on existing California ARB
standards for nonroad diesel engines rated under 19 kW. The FEL upper
limits for the Tier 2 standards are the Tier 1 standards.
With regard to credit life, EPA is adopting the unlimited life
provisions for engines rated under 37 kW, as described earlier for
engines rated at or above 37 kW, with one exception. Because of
concerns over the amount of credits manufacturers could earn on
indirect injection engines under the newly adopted Tier 1 standards and
the potential for significant delay in implementation of the Tier 2
standards, EPA is requiring that all credits generated prior to the
Tier 2 time frame on engines rated under 19 kW expire at the end of
2007.
With respect to credit generation and usage calculations, EPA is
requiring that manufacturers use the sales-weighted average power for
engines rated under 37 kW, as described earlier for engines rated at or
above 37 kW. The inclusion of useful life in the calculation of
credits, as described earlier, will also apply to the revised ABT
program for engines rated under 37 kW.
With respect to trading across power categories, EPA is adopting
two restrictions on such trading because of concerns regarding
excessive credit generation by low-emitting indirect injection engines.
First, EPA will not allow manufacturers to use credits generated on
engines rated under 19 kW to demonstrate compliance for engines rated
at or above 19 kW. Second, EPA is prohibiting manufacturers from
trading credits earned on indirect injection engines rated at or above
19 kW to other manufacturers. (This restriction applies to engines at
or above 37 kW as well.) Under this second restriction, a manufacturer
would still be allowed to use such credits for averaging or banking
purposes with other engines rated at or above 19 kW that the
manufacturer produces itself. As part of the 2001 feasibility review
described earlier, the Agency plans to reassess the appropriateness of
these restrictions and modify them as appropriate.
With respect to the exchange of credits across applications, EPA is
adopting provisions that will prohibit manufacturers from using credits
generated on land-based engines to demonstrate compliance for marine
engines. EPA is concerned that manufacturers making engines used in
both marine and land-based applications could effectively trade out of
the marine portion of the program giving them a competitive advantage
over small marinizers who only sell marine engines. EPA will, however,
allow manufacturers to use credits generated on marine engines to
demonstrate compliance for land-based applications.
Finally, EPA is adopting a special four-year averaging and banking
program for engines rated under 37 kW due to the short lead time before
the Tier 1 standards begin to apply. The program would apply separately
to engines rated under 19 kW and to engines rated at or above 19 kW and
less than 37 kW. Under the special program, manufacturers will be
allowed to create a negative balance of credits for the first two years
the Tier 1 standards apply. This negative balance will have to be
eliminated by the end of the fourth year after the Tier 1 standards
become applicable along with a ten percent penalty for any negative
balance of credits carried over from one year to the next. Under this
special program, manufacturers will not be allowed to use emission
credits obtained through trading with other engine manufacturers to
offset their negative credit balances. The manufacturer must offset
their negative balances within positive credits generated from their
own engines.

E. Flexibility for Equipment Manufacturers

In implementing the new standards, EPA desires to avoid unnecessary
hardship for equipment manufacturers (sometimes referred to as original
equipment manufacturers or OEMs), who install diesel engines in their
products. There is concern that engine suppliers may not always provide
adequate lead time for the equipment redesigns needed to accommodate
engine design changes such as mounting locations and heat rejection
loads. For some OEMs, even timely information on the new engine designs
may not be sufficient because of the sheer volume of redesign work
needed to change diverse product offerings with limited engineering
staffs.
In response to these concerns, the Agency is including in this
final rule an OEM transition program to provide equipment manufacturers
with some control of the transition process to new standards. The
design of this program is based on extensive discussions with involved
parties prior to the proposal, on recommendations made in the report of
the panel convened for this rule under the Small Business Regulatory
Enforcement Fairness Act of 1996

[[Page 56978]]

(SBREFA),\7\ and on written comments received on the proposal. It
represents an effort on the part of the Agency to accommodate the
flexibility needs of an extremely diverse industry without introducing
competitive advantages, and while maintaining the environmental benefit
sought in the standard-setting program.
---------------------------------------------------------------------------

\7\ ``Final Report of the SBREFA Small Business Advocacy Review
Panel for Control of Emissions of Air Pollution from Nonroad Diesel
Engines'', May 23, 1997 (available in Air Docket A-96-40).
---------------------------------------------------------------------------

The OEM transition program consists of four major elements, each
directed at a specific need. Although they involve certain planning and
recordkeeping responsibilities if taken advantage of, all of these
elements are voluntary. An OEM has the option to continue to do
business as under the current regulations, subject to the prohibited
acts provisions of 40 CFR Part 89, Subpart K.\8\ The elements of the
program are a percent-of-production allowance, a small-volume
allowance, continuance of the Tier 1 allowance to use up existing
inventories of engines, and availability of hardship relief. Each of
these is discussed in detail below.
---------------------------------------------------------------------------

\8\ Section 89.1003(a)(6) has been revised in the final rule to
clarify that certificates of conformity will not be required for
engines and equipment manufactured in compliance with the
flexibility provisions of the rule. See ``Revision of Prohibited
Acts Regulatory Text,'' EPA memorandum from Charles Moulis to Docket
A-96-40, August 26, 1998.
---------------------------------------------------------------------------

One element of the proposed program that is not being finalized is
a provision for OEMs to obtain and use ABT program credits. The ABT
provision is not being finalized because it would likely be little used
and would greatly complicate the ABT program. It should be noted that
OEMs may achieve a similar benefit by working to have their engine
suppliers directly obtain and retire ABT credits in order to produce
more previous-tier engines for the OEM. Further explanation of this
decision is provided in the Summary and Analysis of Comments for this
final rule.
Another proposed program element that is being approached
differently concerns an expanded exemption allowance for farm and
logging equipment. EPA's rationale for limiting special treatment to
farm and logging equipment was not supported by commenters, even those
who were likely to benefit from it. Commenters identified a wide range
of other applications and special situations that involved the same or
comparable considerations as those related to farm and logging
applications. As described further in the Percent-of-Production
Allowance discussion below, EPA is therefore allowing expanded
flexibility for all applications equally, not just for farm and logging
equipment.
1. Percent-of-Production Allowance
Each equipment manufacturer may install engines not certified to
new emission standards in a limited percentage of machines produced for
the U.S. market. This percentage applies separately to each power
category and is expressed as a cumulative percentage of 80 percent over
the 7 years beginning when the Tier 2 standard first applies in the
category (Tier 1 for power categories under 37 kW). No exemptions are
allowed after the seventh year. For example, an OEM may exempt 40
percent of its 1999 production of machines that use engines rated
between 19 and 37 kW, 30 percent of its 2000 production, and 10 percent
of its 2001 production. If the same OEM were to produce machines using
engines rated between 8 and 19 kW, a separate cumulative percentage
allowance of 80 percent would apply to these machines during the seven
years beginning in 2000.
The Agency recognizes that the 80 percent exemption allowance, were
it to be used to its maximum extent by all OEMs, would bring about the
introduction of cleaner engines several months later than would have
occurred if the new standards were to be fully implemented on their
effective dates. However, the Agency notes too that the allowance is
truly that--an allowance to be tapped as needed to assist OEMs in
dealing with implementation problems that might arise. EPA is aware
that many engine designs being planned for the new standards will fit
the equipment with little change. Also, the desire of engine
manufacturers to avoid producing two engine designs that, from an
applications perspective, are redundant, will prompt them to change
over to the new designs as quickly as they can accommodate their
customers' needs. Although there is no way of knowing at this time how
many exempted engines will be produced, the Agency believes it will be
substantially less than the allowance. Moreover, the OEM flexibility
program has been integrated with the standard-setting process from the
beginning of this rulemaking, and as such it is a key factor in
enabling the initiation of new standards according to the adopted
schedule.
Machines that use engines built before the standard goes into
effect need not be included in the exemption count. Engines that
produce emissions at higher levels than the standards, but for which
the engine manufacturer uses ABT program credits to demonstrate
compliance, count as complying engines. In power categories above 37
kW, the exempted engines must comply with Tier 1 standards. In power
categories below 37 kW, the exempted engines may be uncertified.
The Agency has expanded the percent-of-production allowance from
the proposed level because numerous commenters pointed out that there
are applications other than farm and logging equipment for which the
proposed allowance is inadequate. The Agency reviewed these comments
and concluded that some additional flexibility is warranted to meet the
requirements of paragraph 213(a)(3) of the Clean Air Act calling for
the ``greatest degree of emission reduction achievable'' given certain
criteria, including ``the cost of applying such technology within the
time available to manufacturers''. The Agency is also convinced by the
comments and its own review of equipment redesign challenges that the
need for this flexibility is widespread across the regulated power
bands. For example, many smaller engines must fit into very compact
equipment packages for which cost considerations are paramount; farm
equipment predominates in the medium-size power bands; and the largest
engines are typically used in very low sales-volume equipment models,
for which aggressive redesign schedules may be costly or impossible.
This approach is superior to attempting to identify all
applications and situations deserving of special treatment and either
assigning individual allowances to them or granting exemptions on a
request basis, because it maintains the proposal's focus on giving OEMs
long-range control over how they use their assigned pool of exemptions
for their products affected by each new set of standards, rather than
on dictating category-by-category or model-by-model allowances. It also
serves the goal of avoiding unnecessary complexity by avoiding the need
for numerous equipment category definitions and exemption ``account''
calculations, a goal that was supported by several commenters.
The choice of a cumulative percent allowance of 80 percent is based
on the Agency's best estimate of the degree of flexibility needed to
meet the requirements of the Clean Air Act. EPA believes the 80 percent
allowance responds to the need for flexibility identified by commenters
while ensuring approximately the same level of emission reductions
originally proposed. EPA has examined the impact on environmental
benefits of the combination of changes being finalized

[[Page 56979]]

for this program, including this expanded allowance for all equipment
and the decision to treat agricultural equipment as part of this pool.
Although the actual impact will depend on the degree to which the
industry takes advantage of the flexibility provisions, the Agency has
determined that the net effect will be roughly equivalent to the impact
of the proposed program. The Summary and Analysis of Comments document
and the Final RIA provide additional information regarding this
decision and its net environmental impact.
2. Small Volume Allowance
The percent-of-production approach described above may provide
little benefit to small businesses focused on a small number of
equipment models. Therefore EPA is allowing equipment manufacturers to
exceed the percent-of-production allowances described above during the
same years affected by the allowance program for general applications,
provided they limit the number of exempted engines used in each power
category to 700 total over the 7 years, and to 200 in any one year. In
addition, manufacturers making use of this provision must limit
exempted engines to a single engine family (or to a single manufacturer
for engines rated under 37 kW) in each power category. These
restrictions are considered necessary to maintain the intent of this
provision--helping small businesses with limited product offerings--
rather than giving bigger exemption allowances for larger OEMs who can
effectively use the percent-of-production provisions.
3. Existing Inventory Allowance and Replacement Engines
The Tier 1 rule for engines rated at or above 37 kW included a
provision for OEMs to continue to use uncertified engines built prior
to the effective date of Tier 1 standards, until uncertified engine
inventories are depleted. It also prohibited purposeful stockpiling of
uncertified engines. EPA is extending this provision to the Tier 1-to-
Tier 2 and Tier 2-to-Tier 3 transitions, as well as to the under 37 kW
engines. The existing provision that provides an exception to the Tier
1 compliance regulations for the sale of replacement engines is also
being extended to engines covered by this action. In extending this
provision, the Agency is requiring that engines built to replace
certified engines be identical in all material respects to an engine of
a previously certified configuration that is of the same or later model
year as the engine being replaced. The term ``identical in all material
respects'' allows for minor differences that would not reasonably be
expected to affect emissions.
4. Hardship Relief Provision
EPA is providing a safety valve provision whereby an OEM that does
not make its own engines could obtain limited additional relief by
providing evidence that, despite its best efforts, it cannot meet the
implementation dates, even with the OEM transition program provisions
outlined above. Such a situation might occur if an engine supplier
without a major business interest in the OEM were to change or drop an
engine model very late in the implementation process. This concept was
put forward for consideration in this rulemaking by the Small Business
Advocacy Review Panel convened under SBREFA, as a means of addressing
small business concerns. Comments received on the proposal, however,
have convinced the Agency that these concerns are not limited to small
businesses.
Appeals for hardship relief must be made in writing, must be
submitted before the earliest date of noncompliance, must include
evidence that failure to comply was not the fault of the OEM (such as a
supply contract broken by the engine supplier), and must include
evidence that serious economic hardship to the company will result if
relief is not granted. The Agency intends work with the applicant to
ensure that all other remedies available under the flexibility
provisions are exhausted before granting additional relief, and would
limit the period of relief to no more than one year. Furthermore,
applications for hardship relief will only be accepted during the first
year after the effective date of an applicable new emission standard.
To avoid the creation of a self-fulfilling prophecy, by which the
very existence of this provision prompts engine manufacturers to delay
engine developments, the Agency wishes to make clear that it expects
this provision to be rarely used. Each granting of relief would be
treated as a separate agreement with no prior guarantee of success, and
with the inclusion of measures, agreed to in writing by the OEM, for
recovering the lost environmental benefit.
5. Enforcement and Recordkeeping Requirements
Engine manufacturers will be allowed to continue to build and sell
the engines needed to meet the market demand created by the OEM
transition program, provided they receive written assurance from the
engine purchasers that such engines are being procured for this
purpose. Engine manufacturers who participate in this program will be
required to annually provide information on the number of such engines
produced and on who they are provided to, in order to help EPA prevent
abuse of the program.
OEMs choosing to take advantage of the allowances must: (1) keep
records of the production of all pieces of equipment excepted under the
allowance provisions for at least two full years after the final year
in which allowances are available for each power category; (2) include
in such records the serial and model numbers and dates of production of
equipment and installed engines, rated power of each engine, and the
calculations used to verify that the allowances have not been exceeded
in each power category; and (3) make these records available to the
Agency upon request. The Agency intends to conduct only limited audits
of these records, and expects that scrutiny by the OEMs of their
competitors' products will help identify potential candidates for
audits.
Secondary manufacturers who modify or relabel and resell new
equipment already introduced into commerce would be subject to the
regulations in the same way as independent dealers and distributors.
These regulations primarily concern tampering. EPA's desire to limit
the number of machines using noncomplying engines is therefore
satisfied by regulation of the original equipment manufacturers who
install the engine into the machine, such that the secondary
manufacturers do not need exemption allowances. They may sell as many
machines with noncomplying engines as they are legally able to obtain.
All entities that are under the control of a common entity, and
that meet the definition of a nonroad vehicle or nonroad equipment
manufacturer, must be considered together for the purposes of applying
exemption allowances. This provides certain benefits for the purpose of
pooling exemptions but also precludes the abuse of the small volume
allowances that would exist if companies could treat each operating
unit as a separate OEM.
EPA recognizes that the OEM transition program may involve a
certain amount of complexity and administrative burden that was not
present for OEMs under the Tier 1 rule, which limited the compliance
options for OEMs. However, this program is entirely voluntary and
manufacturers wishing to implement the new standards in the same manner
as for the

[[Page 56980]]

Tier 1 regulations are free to do so. The Agency intends to develop
guidance to assist OEMs in taking advantage of these provisions, but
also intends to fully enforce the regulations in order to ensure a fair
implementation process that achieves the environmental benefit sought
in setting new standards.

F. Flexibility for Post-Manufacture Marinizers

Post-manufacture marinizers (PMMs) produce marine engines by
modifying engines purchased from other manufacturers. They are
therefore subject to both the engine manufacturer's concern about
certifying engines to the standards and the OEM's concern about timely
delivery of redesigned engines from their engine suppliers.
EPA recognizes that the potential unavailability of certified base
engines may make it difficult for PMMs to comply with the proposed
emission control program, since they may not be able to obtain base
engines in time to adjust their marinization process, especially
considering that most of the marine engines affected by this rule are
subject to standards beginning in 1999. Based on these concerns, EPA
has determined that the proposed emission standards would not be
feasible for PMMs who produce marine engines under 37 kW without some
flexibility provisions beyond those available in the ABT program. As a
result EPA is finalizing two additional flexibility provisions for
PMMs.
First, the OEM flexibility provisions discussed above are being
extended to PMMs, as proposed. Second, provided they inform EPA in
writing before the date Tier 1 standards would take effect, PMMs may
elect to delay the effective dates applicable to marine engines under
37 kW for one year, instead of using the OEM flexibility provisions.
PMMs may not take advantage of both the delayed effective date
provision and the OEM flexibility provisions.
Although it provides a substantial boost in certainty to PMMs, the
optional 1-year delay provision will have a very small environmental
impact. This is because: (1) the marine engines under 37 kW produced by
PMMs are a very small part of the total nonroad diesel engine
production, (2) these engines produce relatively low emissions due to
their small size and low usage characteristics, and (3) the total
number of engines potentially exempted under this flexibility provision
is not much greater than that possible under the exemption allowance
provisions.

G. Control of Crankcase Emissions

Crankcase gases are those exhaust gases that discharge (blowby)
into the crankcase via the clearance between the piston and the
cylinder wall. On most engines (those engines with open crankcases),
these gases eventually escape from the crankcase into the atmosphere.
Some manufacturers produce engines that route crankcase vapors to the
air intake system of the equipment; such a design is called a closed
crankcase. This method, also called positive crankcase ventilation,
recirculates blowby gases through a valve back to the intake manifold
to be burned in the combustion chamber.9
---------------------------------------------------------------------------

\9\ U.S. Environmental Protection Agency, Office of Mobile
Sources, NEVES, Appendix I, Chapter 4, November 1991 (available in
Air Docket A-96-40).
---------------------------------------------------------------------------

Since 1985, closed crankcases have been required in naturally
aspirated (non-turbocharged) highway diesel engines (45 FR 4136,
January 21, 1980). Turbocharged engines have not been required to have
crankcase emission controls due to concerns related to problems
associated with the durability and effectiveness of turbocharger and
aftercooler components which can be affected by recycling gases
containing particulate matter and corrosive gases. EPA is extending the
closed crankcase requirement to nonroad engines, including the
exemption for turbocharged diesel engines. Many naturally aspirated
nonroad engines are already equipped with this technology; for those
nonroad engine models still manufactured with open crankcases, EPA
expects that closed-crankcase technology will be readily transferable.
EPA has included the cost of closing crankcases in the analysis of the
costs of complying with the new standards. EPA had originally proposed
to apply the closed crankcase requirement to some Tier 1 engines, but
has now decided to apply it only Tier 2 and later naturally aspirated
engines because of lead-time concerns. This delay will not have a major
environmental impact because it is short, directed at a small segment
of the engine market, and confined to a minor emission source relative
to exhaust emissions.
EPA will also allow manufacturers to comply with this requirement
by routing the crankcase emissions into the exhaust. Manufacturers
choosing this option would effectively be required to reduce their
engine-out exhaust emissions further than other manufacturers that
choose to route the crankcase emissions into the engine intake. It is
important to note that this optional approach will require that the
engine (and equipment) be designed so that the routing would occur
under all in-use conditions. Manufacturers using this approach will be
required to modify their deterioration factors to account for increases
over time in crankcase emissions. EPA will also consider using this
approach in the future for controlling crankcase emissions from
turbocharged engines, which are currently uncontrolled. The advantage
of this approach is that allows manufacturers the flexibility to either
route crankcase emissions into the engine intake, thereby combusting
the crankcase emissions of hydrocarbons and CO, or to route the
emissions into the exhaust (where they would be measured as part of the
exhaust emissions) and to reduce the total exhaust emissions using
other means.

H. Control of Smoke

1. Standards and Procedures
In 1994, EPA finalized smoke standards for nonroad diesel engines
rated at or above 37 kW. The specified measurement method and
calculations are from 40 CFR Part 86, Subpart I, which was developed
for highway engines. EPA is making no major changes to the smoke
emission standards and procedures currently in place.
EPA is extending the smoke standards to diesel engines rated under
37 kW, bringing these engines under the same regulatory framework as
the larger engines. While these new standards may lead to lower smoke
levels from some engines, the principal intent of setting standards is
to prevent increased levels of smoke as engines are redesigned to
comply with Tier 2 and Tier 3 standards for gaseous and particulate
emissions. The same numerical standards apply to the small engines.
With minor exceptions, the same procedure, equipment, and calculation
methods are also specified for these engines.
In applying the smoke standards and procedures to engines rated
under 37 kW, EPA has chosen to exempt one-cylinder engines. EPA
believes that operation and testing of these engines is unique in ways
that would need to be addressed before applying smoke standards. For
example, one-cylinder engines operating on the specified test procedure
produce puffs of smoke that may make the smoke measurement erratic. EPA
is therefore postponing the regulation of smoke from these one-cylinder
engines until a later rulemaking. The Agency believes the air quality
impact of this postponement will be minimal because the large majority
of one-cylinder diesel engines are used in generator sets and other

[[Page 56981]]

steady-state applications, which rarely experience acceleration modes--
the principal focus of smoke standards. In a similar manner, because
two-cylinder engines operating on the specified test procedure may also
produce puffs of smoke that would make the smoke measurement erratic,
though to a lesser degree than single-cylinder engines, EPA will permit
manufacturers the option of testing two-cylinder engines with a
preconditioned muffler of the type used in the field. Such an engine
configuration is the same as that found in use, and thus will ensure
meaningful control of in-use smoke, even though instantaneous smoke
emissions may be flattened out somewhat, resulting in potentially
reduced levels of measured smoke. Engines with more than two cylinders
will continue to be tested without a muffler, which is a ``worst case''
condition.
EPA is also slightly modifying the exhaust pipe diameter
specifications found in 40 CFR Part 86, Subpart I. The previous
specifications called for a 2 inch (5 centimeters (cm)) inside diameter
exhaust pipe for testing any engine rated under 101 horsepower (hp)
maximum (75 kW), and a 5 inch (13 cm) inside diameter exhaust pipe for
the testing any engine with a rated power of 301 hp (225 kW) or
greater. In this action, the Agency is specifying that engines rated
between 50 and 100 hp (37 and 75 kW) be tested with a 2 inch (5 cm)
inside diameter exhaust pipe, while engines rated under 50 hp (37 kW)
should be tested with an exhaust pipe of 1.5 inches (3.8 cm). EPA is
also specifying that all engines rated over 500 hp (373 kW) should be
tested with an exhaust pipe of 6 inches (15.2 cm).
EPA is not establishing smoke requirements for propulsion marine
diesel engines rated under 37 kW. EPA has concluded that the existing
smoke test procedures are not appropriate for small propulsion marine
engines. The Agency believes that the small environmental risks
associated with smoke emissions from such engines do not justify the
creation of special smoke test procedures for them at this time. EPA
expects to reconsider this issue in the future at the same time that it
reconsiders other smoke issues. Finally, EPA is dropping smoke
requirements for constant speed engines until a smoke test becomes
available for these engines, because the current smoke test cannot
effectively be performed on them. The Agency believes the air quality
impact will be minimal because these engines do not often experience
acceleration modes, which are the principal focus of smoke standards.
2. Future Reconsideration of Smoke Issues
An International Standards Organization committee (ISO TC70/SC8/
WG1) has been developing a smoke test procedure specifically for
nonroad engines. The EPA and regulated industry recognize the value of
harmonized test procedures and standards limits. However, this ISO
procedure has not been finalized and thus is not included in this
rulemaking. EPA has analyzed the draft ISO procedure (8178-9) and
concluded that most of its elements would be appropriate for adoption.
Thus, the Agency expects that it will adopt the ISO smoke measurement
procedure after it is finalized. At that time EPA may also reconsider
the issues related to the use of mufflers, single-cylinder and two-
cylinder engines, constant speed engines, marine engines and standard
exhaust pipe diameters. It is important to note that the ISO 8178-9
smoke emissions test procedure is very different from the procedure
specified in Subpart I of Part 86. As a consequence , if EPA adopts the
ISO 8178-9 procedure, then it will also need to revise the numerical
limit values to be associated with the ISO procedure. EPA believes the
appropriate numerical standard that should be associated with ISO 8178-
9 peak measurements is likely to be within the range of 20 to 30
percent opacity. It is important to note, however, that this is only a
preliminary estimate.
EPA also expects to give future consideration to the need for an
in-use smoke test. Some state governments have expressed a desire for a
smoke regulatory program that would enable them to test in-use nonroad
engines in a manner that would permit action against gross emitters of
smoke. The main elements of such a program would be a certification
smoke requirement for new engines, EPA guidance for state in-use smoke
control programs (including an in-use smoke test procedure and
accompanying limit values), and a means by which the data from the two
programs could be related. The current smoke test procedure from Part
86, Subpart I, does not provide data comparable to the most practical
in-use smoke test procedure (a snap acceleration with measured
opacity). Based on the current draft ISO 8178-9 certification smoke
test procedure, EPA believes the future ISO test will provide the
desired linkage.

I. Voluntary Low-Emitting Engine Program

Officials representing certain cities, states, or regions in the
U.S. have expressed interest in developing incentive programs to
encourage the use of engines that go beyond federal emission standards.
EPA also would like to encourage manufacturers to initiate
demonstration projects to prove out these technologies in areas where
there is a particular need for superior emission controls. EPA is
therefore finalizing a set of voluntary standards that may be used to
earn a designation as a ``Blue Sky Series'' low-emitting engine. The
program, if successful, will lead to the introduction and more
widespread use of these low-emission technologies. Possible incentives
to encourage production of these engines are described below.
Central to the purpose of the voluntary standards is the need to
demonstrate superior control of particulate emissions. Because of the
sensitivity of particulate emissions to test cycles, as described in
Section III, testing on a transient cycle is an important element of
the program for Blue Sky Series engines. EPA has begun work toward
developing transient test cycles for nonroad equipment, but there is
not yet any established or proven nonroad transient cycle. The highway
test cycle, while not developed for nonroad engine operation, would
result in a significant degree of control for nonroad equipment. EPA
has therefore specified the highway transient test cycle to evaluate
emission levels relative to the voluntary standards. If EPA adopts a
transient test for certifying nonroad engines in the future, the Agency
will accordingly re-evaluate the test cycle and standards for Blue Sky
Series engines.
To best align with future emission standards, Tier 3 emission
levels, where applicable, were chosen as the best level for defining
Blue Sky Series engines. This represents a reduction of approximately
40 percent beyond the Tier 2 NMHC + NO_X levels. For PM
emissions and for engines with no Tier 3 standards, a calculated level
corresponding to a 40 percent reduction beyond Tier 2 levels will be
used to qualify as a Blue Sky Series engine (see Table 3).

Table 3.--Voluntary Emission Standards in g/kW-hr (g/hp-hr)
------------------------------------------------------------------------
Rated brake power (kW) NMHC+NO<INF>X PM
------------------------------------------------------------------------
kW<8............................................ 4.6 0.48
(3.4) (0.36)

[[Page 56982]]

8<ls-thn-eq>kW<19............................... 4.5 0.48
(3.4) (0.36)
19<ls-thn-eq>kW<37.............................. 4.5 0.36
(3.4) (0.27)
37<ls-thn-eq>kW<75.............................. 4.7 0.24
(3.5) (0.18)
75<ls-thn-eq>kW<130............................. 4.0 0.18
(3.0) (0.13)
130<ls-thn-eq>kW<ls-thn-eq>560.................. 4.0 0.12
(3.0) (0.09)
kW>560.......................................... 3.8 0.12
(2.8) (0.09)
------------------------------------------------------------------------

Blue Sky Series engines need to meet all the requirements that
would otherwise be applicable to Tier 2 engines. This would include
allowable maintenance, warranty, useful life, rebuild, and
deterioration factor provisions. Manufacturers must demonstrate
compliance with the CO standard by comparing the emission levels
generated on the highway test cycle with the numerical value of the CO
standard for the applicable tier of nonroad engines for that model
year. Manufacturers must also demonstrate compliance with applicable
smoke standards.
Repeating the certification process to develop and submit test data
to make a highway engine available for nonroad use adds a significant
hurdle to engines expected to sell in low volumes for nonroad
applications. Under the Blue Sky Series engine program, manufacturers
with highway-certified engines may waive the testing requirements for
obtaining nonroad certification. This includes the need to comply with
the provisions related to the durability of emission controls. EPA,
however, needs to ensure that engine designs are not tailored to the
transient cycle with much higher emissions on a steady-state cycle. To
accommodate this, EPA retains the ability to conduct in-use testing to
verify that engines are operating in steady-state modes with
substantially the same level of emission control. EPA will therefore
require that NO_X and PM emissions be no more than 20 percent
higher on the appropriate nonroad steady-state test cycle compared with
the highway test cycle. This is intended to provide relief for
development testing needed to protect against in-use liability, while
preventing any active strategies designed specifically for the
transient test cycle at the expense of controlling emissions during
steady-state operation. For evaluation of the performance of one of
these engines in steady-state operation at any point in an engine's
useful life, the Agency intends to conduct paired data generated on
both the appropriate steady-state test cycle and the highway transient
test cycle.
The Blue Sky Series program begins immediately upon promulgation
and continues through the 2004 model year. EPA will evaluate the
program to determine if it should be continued for 2005 and later
engines, and if so, what changes are needed to reflect the transition
to Tier 3 emission standards. This evaluation will be considered as
part of the 2001 feasibility review. The experience gained with these
engines and the Tier 3 resolution of certification test cycles and PM
standards will factor into this evaluation.
The Agency sees substantial potential for users and state and local
governments to establish these incentive programs. For example, the
increasing public concern about the effects of diesel engine emissions
on health raises the possibility that some construction companies will
purchase Blue Sky Series engines to protect its workers or the public
from localized emissions, especially if benefits can also be gained in
employee or public relations, such as with highly visible projects in
polluted city centers. Similarly, a mining company could select these
low-emitting engines for underground applications to minimize miners'
exposure to exhaust pollutants. A state or local government may be able
to add incentives for companies committing to rely on Blue Sky Series
engines in contract bidding on publicly funded construction projects in
nonattainment areas. Some farmers may be willing to pay more for
equipment with the cleaner engines to lower their field exposure to
engine exhaust pollutants. In some of these applications, alternative
fuels may be readily available, possibly even providing a cost savings
compared to diesel fuel.
The Agency is concerned that incentive programs not lead to a net
detriment to the environment through the double-counting of benefits.
Also, manufacturers have indicated that the potential to participate in
an averaging, banking, and trading program would not be an important
factor leading to the development of Blue Sky Series engines. EPA has
therefore concluded that manufacturers choosing to sell an engine with
the Blue Sky Series designation will not generate averaging, banking,
and trading credits for demonstrating compliance with EPA programs.
Other groups are then free to design credit programs without concern
for any double-counting or other unintended effect of overlapping
programs.

J. Technical Amendments

This final rule contains technical amendments to the certification
and emission test procedures previously adopted for nonroad diesel
engines (40 CFR Part 89). The most significant changes are highlighted
here; a complete description of the technical amendments is detailed in
a memorandum to the docket.10
---------------------------------------------------------------------------

\10\ ``Justification for Amendments to 40 CFR Part 89,'' EPA
memorandum from Greg Orehowsky to Docket A-96-40, August 21, 1997.
---------------------------------------------------------------------------

EPA is adding definitions of rated speed and intermediate speed.
Rated speed is defined as the maximum full load speed for governed
engines and speed of maximum horsepower for ungoverned engines. The
definition for intermediate speed was based on peak torque speed and
limits intermediate speed to 60 to 75 percent of rated speed. The
maximum full load speed is the highest speed with an advertised power
greater than zero. EPA is linking full load governed speed to
advertisements at this time since no adequate language has been
developed that mathematically defines full load governed speed as a
point on the torque or power curve. Power curves in manufacturer's
advertisements typically end at the governed speed. EPA believes that
manufacturers will continue to advertise the full range of power of its
engine. Manufacturers would therefore not set rated speed at less than
full load governed speed. It is unlikely that manufacturers will
advertise powers beyond the full load governed speed, since a
manufacturer cannot guarantee power beyond this point. EPA is applying
the new definitions to Tier 1, as well as Tier 2 and 3 programs.
However, to avoid unnecessarily burdensome recertification, EPA is not
requiring manufacturers to use the new definitions for Tier 1 engines
certified prior to January 1, 1999. Engine families that are certified
prior to January 1, 1999 may carry over certification under the old
definitions into subsequent Tier 1 model years. All Tier 2 engines must
meet the definitions for rated and intermediate speeds.
Engines are grouped into families that are expected to have similar
emissions characteristics throughout their useful lives. EPA's
regulations list a number of characteristics which distinguish engine
families. EPA is concerned that the phasing in of the new standards by
power categories, which is intended as an aid to implementation, may
actually increase manufacturers' costs without a

[[Page 56983]]

significant emissions benefit in the situation where an engine family
marginally straddles a power category cutpoint, and therefore must be
split. This is especially of concern for Tier 1 engines below 37 kW
because of the short lead time provided for the certification of these
engines, and because this group is comprised of 3 rather narrow power
bands. Therefore, EPA is allowing the creation of Tier 1 engine
families that straddle the power band cutpoints at 8, 19, and 37 kW,
subject to EPA approval. To avoid potential abuse of this provision by
a manufacturer attempting to take advantage of the least stringent
emission standards applicable to the engines in the family, such
grouping will be allowed only if: (1) most of the engine family's sales
in each year are from engines with rated power in the power band with
which the engine family is certified, and (2) all power ratings in the
engine family that are not within the power band with which the engine
family is certified are within 10 percent of one of the two power
levels that define this power band. The limitations would not apply if
the emission standards for the power band in which the engine family is
being certified are at least as stringent as those of the power band
that the included engines would otherwise be in. EPA may extend this
provision beyond Tier 1 in a future action, but first wishes to examine
its effectiveness over time in providing sufficient flexibility without
leading to abuse.
The amendments change the criteria for test engine selection. Test
engine selection is no longer based on maximum fuel per stroke at
maximum power, but is now based primarily on the highest fuel per
stroke at peak torque and secondarily on the highest fuel per stroke at
rated speed.
The calibration requirements for the gaseous emission measurement
analyzers are modified in various ways. The requirements for
measurement accuracy below fifteen percent of full scale are revised to
include a specific number of gas concentrations at the low end of the
calibration curve. Also, calibration requirements are simplified to
allow laboratories to calibrate only one analyzer range and still
ensure accurate measurements. Additional changes to calibration
requirements for other equipment are described in the Summary and
Analysis of Comments document.
Other modifications relate to the test sequence and calculation of
emission results. A ``mode'' is defined and the procedure for dealing
with void modes is included. The equations used to calculate emissions
during raw sampling are corrected. The amendments also correct errors
in the currently listed equations and include new equations that were
mistakenly omitted.

III. 2001 Review and Ensuring Emissions Control In Use

A. 2001 Review

Over the next several years, EPA will be actively engaged in
programs to evaluate technology developments and progress toward
meeting the new standards. This process will involve engine research
programs, coordination with the involved industries, and active
interaction with other stakeholders. This effort will culminate in a
special review, to be concluded in 2001, to reassess the
appropriateness of the Tier 2 standards for engines rated under 37 kW
and the Tier 3 standards for engines rated between 37 and 560 kW. The
review will also include proposal and adoption of appropriate Tier 3
standards for PM. In addition to reviewing whether or not the new
standards are technologically feasible and otherwise appropriate under
the Clean Air Act, the Agency will examine the need for equipment
redesign due to the new standards and will take appropriate action if
significant adverse impacts on the nonroad equipment industry are
identified.
Before making a final decision in this review, EPA intends to issue
a proposal and offer an opportunity for public comment on whether the
standards under review are technologically feasible for implementation
according to the proposed schedule, and are otherwise appropriate under
the Act. Any changes to certification test procedures or Tier 3 PM
standards would also be proposed in that document. Following the close
of the comment period, EPA intends to issue a final Agency decision
under section 307 of the Act.
If, based on the information collected for the 2001 feasibility
review, EPA finds the emission standards are not appropriate under the
Act, EPA will propose changes to the program, possibly including
adjustments to the levels of the standards. Consistent with the
Statement of Principles, the adjusted standards may be more or less
stringent than those already established or the schedule could be
adjusted. For example, progress to date in the design of low-emitting
heavy-duty highway diesel engines has been encouraging, and EPA
believes that this progress may benefit designs of large nonroad diesel
engines as well, due to the many similarities in these classes of
engines. Therefore, the Agency believes that by 2001 it may well be
appropriate to consider moving the standards for equal to or greater
than 300 horsepower engines forward in time, and so expects to consider
this issue in the 2001 feasibility review. Any change to the specified
certification test procedure, including the possible adoption of a
transient test cycle, will be factored into the evaluation of the
appropriateness of the numerical standards. The standards finalized in
this document will stay in effect unless revised by subsequent
rulemaking procedure.
The review may include other topics as well. Some topics identified
in this rulemaking that the Agency plans to review are test fuel sulfur
specifications, ABT provisions, Blue Sky Series engine standards,
established technologies for deterioration factor determinations, and
engine family designations.

B. Ensuring Emissions Control In Use

Key among EPA activities directed toward completing the 2001
feasibility review are those related to adoption of a more effective PM
control program for nonroad diesel engines.11 The
establishment of a more effective program will be informed not just by
progress in engine designs but also by studies currently being
performed by the Agency and by others on the relationship between
diesel PM emissions and various health problems.
---------------------------------------------------------------------------

\11\ The current control program for PM and all other pollutants
includes an emissions standard and related emissions test procedure.
For control of PM, as well as other regulated pollutants, an engine
may not be equipped with a defeat device, defined as a device,
system, or element of design which senses operation outside normal
emission test conditions and reduces emission control effectiveness,
including any auxiliary emission control device (AECD) that reduces
the effectiveness of the emission control system under conditions
which may reasonably be expected to be encountered in normal
operation and use unless the conditions are included in the test
procedure (40 CFR 89.107). Manufacturers must provide a detailed
description of all auxiliary emissions control devices when they
apply for certification (40 CFR 89.115(d)(2)). The defeat device
prohibition is designed to ensure that proper control of emission-
related engine parameters is maintained during engine operation that
is not substantially represented in the certification test cycle.
Electronic controls may be considered an AECD, and subject to the
defeat device provision.
---------------------------------------------------------------------------

Establishing an appropriate test cycle is critical to the success
of a more effective PM control program. Testing an engine for emissions
consists of exercising it over a duty cycle of speeds and loads using
an engine dynamometer. The test cycle used to measure emissions should
represent operation typical of actual operation in the field. A test
procedure that does not

[[Page 56984]]

adequately represent in-use operation might not lead to, on average,
the level of control in use set by the emission standards. A test
procedure that does reflect real world operating conditions will drive
engine designers to develop technologies that achieve in-use control
corresponding to the emission standards. EPA has addressed such
concerns in the past; for example, the highway heavy-duty engine test
cycles were changed to address transient operation (45 FR 4136, January
21, 1980) and, more recently, EPA has revised the test cycle for light-
duty vehicles (61 FR 54852, October 22, 1996).
EPA has concerns that the current test cycle does not adequately
reflect transient operation, and, therefore, will not lead to the level
of average in-use emission control reflected by the PM standard. PM
emissions, like NO_X emissions, depend somewhat on engine
load characteristics that can be modeled in the steady-state test, but
are most sensitive to the degree of transient engine operation. Most
nonroad engines are used in applications that are largely transient in
nature. Even equipment such as pumps and generators, that operate
mostly at constant engine speeds, may depart from steady-state
operation due to variation in engine loads over time. EPA believes that
the Tier 2 PM emission standards, with the current steady-state test,
will produce some degree of in-use emissions control from nonroad
engines, especially from engines that typically operate at a constant
speed. The level of control from the many nonroad engines that
frequently operate in more transient modes, however, is less certain,
especially in an engine design era involving stringent PM and
NO_X standards and electronic engine controls, as is likely
to be the case in Tier 3. Therefore, EPA is moving forward with
developing a transient component to the nonroad engine test cycle to
control the transient element of PM emissions generation; this
component would supplement the steady-state test.
EPA has an additional concern that goes beyond choosing an
appropriate test cycle. EPA has observed at times that manufacturers
may tailor the design of their engines to narrowly meet the
requirements of the emission test. This concern applies not just to PM
emissions but to other pollutants such as NO_X and
hydrocarbons, as well. The current nonroad test cycle, with a limited
combination of steady-state speeds and loads, does not include some of
the operating modes that are commonly experienced in the field. In
fact, any single prescribed test cycle, although advantageous for test
result repeatability and predictability, may not ensure that engine
manufacturers design robust emission controls that achieve good control
in use. This concern is increased with the advent of electronic
controls, which greatly increases the level of sophistication available
to manufacturers in controlling emissions levels over the full range of
engine operation. To address this and other concerns, in the Tier 1
rulemaking EPA adopted the prohibition on defeat devices (see footnote
11), which the Agency intends to implement for all tiers of standards.
EPA may also supplement existing regulations through changes in its
nonroad diesel engine program to better control in-use emissions, in a
manner that will ensure effective in-use emissions control without
unduly increasing manufacturers' testing burden and certification
uncertainty.
Although the Agency intends to establish its Tier 3 PM standards
and a transient test cycle in the context of the 2001 feasibility
review, other activities such as its investigation of in-use operation
emissions, including possible regulatory action, may proceed on an
earlier schedule. The concerns described above about in-use emissions
apply to the pre-Tier 3 as well as the Tier 3 standards, and the Agency
believes that prompt action in this area is appropriate. The two
efforts discussed above, development of a transient test cycle for PM
control and adoption of supplemental measures to better control in-use
emissions, have the same overall focus--achieving effective control of
emissions in the real world. As a result, the need for a separate
transient test cycle may be eliminated if the measures EPA adopts to
better control in-use emissions prove adequate for control of PM in
use.

IV. Technological Feasibility

The emission standards finalized in this document apply to a broad
range of diesel engines used in a wide variety of nonroad applications.
Section 213 (a)(3) of the Clean Air Act calls for EPA to establish
standards that provide for the ``greatest degree of emission reduction
achievable through the application of technology which the
Administrator determines will be available for the engines or vehicles
to which such standards apply, giving appropriate consideration to the
cost of applying such technology within the period of time available to
manufacturers and to noise, energy, and safety factors associated with
the application of such technology.'' EPA has concluded, as described
in the Final RIA, that the new standards will have no significant
negative effect on noise, energy, or safety.
Because the emission standards for nonroad diesel engines are based
largely on the standards for highway engines and rely on the evaluation
of technologies for complying with the standards for highway engines,
the discussion of technological feasibility in the highway engine
rulemaking is central to supporting the feasibility of the new
standards for nonroad engines. This analysis of diesel engine
technologies is contained in Chapter 4 of the Final RIA for the highway
rulemaking. 12 This analysis is considered and applied to
nonroad engines in Chapter 3 of the Final RIA for this rulemaking.
---------------------------------------------------------------------------

\12\ ``Final Regulatory Impact Analysis: Control of Emissions of
Air Pollution from Highway Heavy-Duty Engines,'' U.S. EPA, September
16, 1997 (Docket A-95-27).
---------------------------------------------------------------------------

The level and implementation timing of the standards finalized in
this document are the most challenging that can be justified. Engine
manufacturers will need to use the available lead time to develop the
necessary emission control technologies, including transfer of
technology from highway engines. This development effort will require
not only achieving the targeted emission levels, but also ensuring that
each engine will meet all performance and emission requirements over
its useful life. The emission standards clearly represent major
reductions compared with current emission levels.
Emission control technology for diesel engines is in a period of
rapid development in response to the range of emission standards
anticipated for the years ahead. This effort will need to continue to
meet the requirements of this final rule. However, the emission targets
are set in the framework of a long lead time with various flexibility
provisions, which provide manufacturers the time they will need to
apply emission control technology developments to nonroad engines.
Also, the experience gained in response to EPA's emission standards for
highway engines will be invaluable in meeting the comparable
requirements for nonroad engines. Because the technology development
for highway engines will to a large extent constitute basic research of
diesel engine combustion, this effort will also benefit manufacturers
that produce no highway engines.
On the basis of information currently available, EPA believes that
it is feasible for nonroad diesel engine manufacturers

[[Page 56985]]

to meet the standards finalized in this document within the specified
time frame, using combinations of the technological approaches
discussed in the Final RIA. In addition, EPA believes that the
flexibilities incorporated into this final rule will permit nonroad
vehicle and equipment manufacturers to respond to engine changes in an
orderly way. For both industries, EPA expects that meeting these
requirements will pose a significant challenge. As described above, EPA
plans to assess, as part of the 2001 feasibility review, the
appropriateness of the Tier 3 standards, and the Tier 2 standards for
engines rated under 37 kW.

V. Projected Impacts

A. Environmental Impacts

To assess the environmental impact of the new emission standards,
EPA has used a draft version of the new NONROAD model, developed by EPA
for predicting emissions from nonroad equipment. Chapter 5 of the Final
RIA contains a thorough discussion of the methodology used to project
the emission inventories and emission reductions from nonroad equipment
covered by the new standards. The reader is directed to the RIA for
more information on the environmental impact of this final rule.
The amount of growth experienced in the nonroad market will have a
significant impact on the emission inventories and emission reductions
expected from the new emission standards. For this environmental impact
analysis, EPA has examined the impact of the emission standards under
two different growth scenarios. (The growth rates used in the nonroad
modeling are compounded growth rates.) The first scenario uses growth
rates based on information developed by the Bureau of Economic Analysis
(BEA). The BEA growth rates, which are prospective, are based on a
variety of economic indicators and vary by nonroad segment (i.e.,
agriculture, construction, etc.). The BEA growth rates typically range
from one to two percent per year. Based on trends in historical nonroad
equipment sales, trends in nonroad fuel usage, and the continuing
strong performance of the U.S. economy, EPA believes that the BEA
growth rates may underestimate the future growth of the nonroad market.
Therefore, EPA has also modeled the impact of the new standards using
information on nonroad equipment population from a database developed
by Power Systems Research (PSR). The growth rates based on a
retrospective analysis of 1989 to 1996 PSR equipment population data
result in typically higher growth rates compared to the BEA
information. EPA believes the results from the two growth scenarios
serve to bracket the expected environmental impact of the standards.
The following discussion of environmental impacts presents the results
from both the BEA growth scenario and the PSR growth scenario.
EPA modeled the impact of the new standards for NO_X,
NMHC, and PM emissions. The modeling inputs conservatively assume that
equipment manufacturers take full advantage of the flexibility
provisions described earlier. EPA did not model the impacts of
standards on CO because CO emissions from nonroad diesel equipment are
a very small portion of the overall CO inventory and the standards are
not expected to have a significant impact on CO levels.
Because of the uncertainties about the degree to which the steady-
state test procedure will control PM emissions in use, especially from
the many nonroad engines that frequently operate in transient modes,
EPA cannot be certain that any assessment of expected PM emission
reductions made at this time will be completely accurate. Nevertheless,
EPA has attempted to make a reasonable estimate of these reductions by
assuming that engines will certify at the level of the new emission
standards, and applying EPA's best current estimates of adjustment
factors for in-use PM emission levels, as reflected in the NONROAD
model. These factors and other assumptions in the model are still under
review, and will continue to be improved in the future as new
information becomes available. The baseline levels used in this
analysis are consistent with the position taken in the Tier 1 rule that
no PM benefits are claimed from the Tier 1 PM standard. EPA believes
that this approach provides a reasonable estimate of PM benefits from
the new standards but actual benefits could vary significantly from
these levels.
Based on the results of the modeling, the expected emission
benefits from the new standards are quite substantial. Tables 4, 5, and
6 contain the nationwide NO_X, NMHC, and PM inventories,
respectively, under the baseline scenario, which assumes only the
current Tier 1 standards are in effect, and under the control scenario,
which assumes the new standards take effect. (The PM reductions
contained in Table 6 are direct PM and do not include secondary PM
benefits, which are described below.) By 2020, the emission reductions
due to the new standards exceed 50 percent for both NO_X and
NMHC, and 40 percent for PM. All percentages are calculated relative to
the baseline inventories, which assumes only the current Tier 1
standards are in effect.

Table 4.--NO<INF>2 Emissions Inventory From Nonroad Diesel Engines
[Short tons]
----------------------------------------------------------------------------------------------------------------
PSR growth rates BEA growth rates
---------------------------------------------------------------
Calendar year With current With new With current With new
standards standards standards standards
----------------------------------------------------------------------------------------------------------------
2000............................................ 2,932,000 2,916,000 2,740,000 2,727,000
2010............................................ 3,787,000 2,576,000 2,827,000 1,954,000
2020............................................ 5,445,000 2,689,000 3,005,000 1,463,000
----------------------------------------------------------------------------------------------------------------

Table 5.--NMHC Emissions Inventory From Nonroad Diesel Engines
[Short tons]
----------------------------------------------------------------------------------------------------------------
PSR growth rates BEA growth rates
---------------------------------------------------------------
Calendar year With current With new With current With new
standards standards standards standards
----------------------------------------------------------------------------------------------------------------
2000............................................ 361,000 350,000 337,000 328,000

[[Page 56986]]

2010............................................ 419,000 256,000 301,000 193,000
2020............................................ 619,000 258,000 317,000 138,000
----------------------------------------------------------------------------------------------------------------

Table 6.--PM Emissions Inventory From Nonroad Diesel Engines
[Short tons]
----------------------------------------------------------------------------------------------------------------
PSR growth rates BEA growth rates
---------------------------------------------------------------
Calendar year With current With new With current With new
standards standards standards standards
----------------------------------------------------------------------------------------------------------------
2000............................................ 294,000 292,000 271,000 269,000
2010............................................ 410,000 270,000 295,000 195,000
2020............................................ 604,000 338,000 315,000 170,000
----------------------------------------------------------------------------------------------------------------

In addition to the effect of the new emission standards on direct
PM emissions noted above, the standards are expected to reduce the
concentrations of secondary PM. Secondary PM is formed when
NO_X reacts with ammonia in the atmosphere to yield ammonium
nitrate particulate. Systems Applications International, under contract
with EPA, evaluated the effect of the NO_X reductions on the
formation of nitrate particulate.13 The report concluded
that, as a national average, each 100 tons of NO_X reduction
will result in about 4 tons of secondary PM reduction. This conversion
rate varies from region to region, and is greatest in the West. EPA
estimates that the approximately 2.8 million tons per year of
NO_X reduction projected in 2020 resulting from this final
rule (assuming PSR growth rates) will result in a national average of
about 110,000 tons per year reduction in secondary PM. This level of
secondary PM reduction is equivalent to about 40 percent of the
projected direct PM reductions determined from Table 6 (based on PSR
growth rates).
---------------------------------------------------------------------------

\13\ ``Benefits of Mobile Source NO_X Related
Particulate Matter Reductions,'' Systems Applications International,
EPA Contract No. 68-C5-0010, WAN 1-8, October 1996 (available in Air
Docket A-96-40).
---------------------------------------------------------------------------

As discussed below in section V.B, some technology upgrades
associated with this program may have been introduced absent the
changes in emission standards. Any emission reductions that would
normally have occurred with improvements in technology should not be
considered in determining the benefits and cost effectiveness of new
emission standards. However, EPA believes that as manufacturers
modernize and improve the technologies used on nonroad engines, they
are faced with many choices on how to employ the new technologies to
the greatest advantage for their customers. Many times, in the absence
of requirements to meet tighter emission standards, the manufacturer
will design the parameters of a new technology, or similarly, redesign
the existing engine, to minimize fuel consumption or some other
desirable trait, while not taking advantage of the emissions control
capability of the new technology. Because none of these technologies
leads to inherently lower emissions, EPA has not made any adjustments
to the emission reduction or cost-effectiveness calculations to account
for emission benefits that would have occurred independent of the new
standards.

B. Economic Impacts

In assessing the economic impact of changing the emission
standards, EPA has made a best estimate of the combination of
technologies that an engine manufacturer might use to meet the new
standards at an acceptable cost. EPA published detailed cost estimates
with the proposed rule, which has been extensively revised based on
information received during the public comment period. The principal
change incorporated into the analysis for the final rule is the
inclusion of estimated costs for adding or improving turbocharging and
aftercooler systems. The substantial additional costs for these
technologies are offset to a great degree by the expected savings from
reduced fuel consumption. These and other changes to the estimated
economic impact analysis are described in the Summary and Analysis of
Comments.
While equipment manufacturers bear no responsibility for meeting
emission standards, they will need to make changes in the design of
their equipment models to accommodate the new engines. EPA's treatment
of the impacts of the new emission standards therefore includes an
analysis of costs for equipment manufacturers. Full details of EPA's
cost and cost-effectiveness analyses can be found in Chapters 4 and 6
of the Final RIA.
Estimated cost increases are broken into purchase price and total
life-cycle operating costs. The incremental purchase price for new
engines and equipment is comprised of variable costs (for hardware and
assembly time) and fixed costs (for research and development (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 as they begin to comply with new emission
standards. Costs in subsequent years are projected to decrease due to
several factors, as described below. Separate projected costs were
derived for engines and equipment used in six different ranges of rated
power; costs were developed for engines near the middle of the listed
ranges. All costs are presented in 1995 dollars. Life-cycle costs have
been discounted to the year of sale using a discount rate of 7 percent.
1. Engine Technologies
The following discussion provides a brief description of those
technologies

[[Page 56987]]

EPA projects will be needed to comply with the new emission standards.
In some cases it is difficult to make a distinction between
technologies needed to reduce emissions for compliance with emission
standards and those technologies that offer other benefits for improved
fuel economy, power density, and other aspects of engine performance.
EPA believes that without new emission standards, manufacturers would
continue research on and eventually deploy many technological upgrades
to improve engine performance or more cost-effectively control
emissions. Modifications to fuel injection systems and the introduction
of electronic controls are expected to continue, regardless of any
change in emission standards, to improve engine performance. Some
further development with a focus on NO_X, HC, and PM
emissions will nevertheless play an important role in achieving
emission reduction targets.
Because several technology upgrades have benefits that go beyond
reducing emissions, a difficulty in assessing the impact of new
emission standards is establishing the appropriate technology baseline
from which to make projections. Ideally, the analysis would establish
the mix of technologies that manufacturers would have introduced absent
the changes in emission standards, then make a projection for any
additional changes in hardware or calibration required to comply with
those standards. The costs of those projected technology and
calibration changes would then most accurately quantify the impact of
setting new emission standards. While it is difficult to take into
account the effect of ongoing technology development, EPA believes that
assessing the full cost of the anticipated technologies as an impact of
the new emission standards would inappropriately exclude from
consideration the observed benefits for engine performance, fuel
consumption, and durability. Short of having sufficient data to predict
the future with a reasonable degree of confidence, EPA faces the need
to devise an alternate approach to quantifying the true impact of the
new emission standards. EPA believes the observed value of performance
improvements in the field justifies the use of a discount based on
equal weighting of emission and non-emission benefits of those
technologies which clearly have substantial non-emission benefits,
namely electronic controls, fuel injection changes, turbocharging, and
engine modifications. For some or all of these technologies, a greater
value for the non-emission benefits could likely be justified.
A variety of technological improvements are projected for complying
with the multiple tiers of new emission standards. Selecting these
technology packages requires extensive engineering analysis and
judgment. The fact that manufacturers have nearly a full decade before
implementation of the most challenging of the new standards ensures
that technologies 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 would be predicted 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 potential drawbacks, such as increased fuel consumption
or maintenance costs, attempting to minimize or overcome any negative
effects.
A combination of technology upgrades are anticipated as a result of
the new emission standards. Modifications to basic engine design
features, such as piston bowl shape and engine block and head geometry,
can improve intake air characteristics and distribution during
combustion. Manufacturers are expected to introduce electronic controls
on most engines rated at or above 37 kW. Advanced fuel-injection
techniques and hardware will allow designers to modify various fuel
injection parameters for higher pressure, further rate shaping, and
some split injection. For Tier 3 standards, EPA expects that many
engines will see further fuel injection improvements and will
incorporate a moderate degree of cooled exhaust gas recirculation.
Details of the mix of technologies included in the cost analysis can be
found in Chapter 4 of the Final RIA.
While the following analysis projects a relatively uniform emission
control strategy for designing the different categories of engines,
this should not suggest that EPA expects a single combination of
technologies will be used by all manufacturers. In fact, depending on
basic engine emission characteristics, EPA expects that control
technology packages will gradually be fine-tuned to different
applications. Furthermore, EPA expects manufacturers to use averaging,
banking, and trading programs as a means to deploy varying degrees of
emission control technologies on different engines. EPA nevertheless
believes that the projections presented here provide a cost estimate
representative of the different approaches manufacturers may ultimately
take.
2. Engine Costs
The projected costs of these new technologies for meeting the new
standards are itemized in the Final RIA and summarized in Table 7. For
the Tier 1 standards for engines rated under 37 kW, estimated costs
vary widely. Those engines that already operate with emissions low
enough to meet the Tier 1 standards will bear costs only for certifying
the engine, or about $10 per engine. For the remaining one-third of
engines expected to need reduced emissions, adding engine modifications
leads to total costs of around $90. The anticipated increase in
operating costs will similarly be focused on the minority of engines
that need design improvements, totaling about $130 in net present value
(npv) over the lifetime of those engines. The calculated sales-weighted
composite increase in both the purchase price and the operating costs
for all engines rated under 37 kW is less than $50. ..................

Table 7.--Projected Unit Costs--Engines
--------------------------------------------------------------------------------------------------------------------------------------------------------
Power (kW)
Cost category Year of production -----------------------------------------------------------------------------
0-37 37-75 75-130 130-450 450-560 560+
--------------------------------------------------------------------------------------------------------------------------------------------------------
Tier 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Incremental purchase price.............. 1............................... $34 ........... ........... ........... ........... ...........
Life-cycle Operating Costs (npv)........ All............................. 44 ........... ........... ........... ........... ...........

[[Page 56988]]

Tier 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Incremental purchase price.............. 1............................... 72 $124 $425 $464 $1,355 $683
Life-cycle Operating Costs (npv)........ All............................. 44 59 -147 -262 -1,347 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Tier 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Incremental purchase price.............. 1............................... ........... 240 511 758 1,858 ...........
6............................... ........... 120 297 435 535 ...........
Life-cycle Operating Costs (npv)........ All............................. ........... 97 -652 -826 -1,212 ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------

Tier 2 standards, which apply to the full range of power ratings,
involve higher estimated cost impacts. The set of technologies
anticipated for Tier 2 engines include varying degrees of engine
modifications, improved fuel injection, electronic controls,
turbocharging, aftercooling, and exhaust gas recirculation. A small
increase in operating costs is expected for engines rated between 37
and 75 kW, but for other engines operating costs are expected to remain
unchanged or in some cases to decrease as a result of charge air
cooling, as described in the Final RIA. The price of engines rated
under 75 kW is expected to increase by about $100. Engines rated
between 75 and 450 kW will likely see cost increases between $400 and
$500, while larger engines may see price increases approaching or
exceeding $1,000. The projected cost of compliance with Tier 3
standards entails increases from Tier 2 costs that follow a similar
pattern to the increases for Tier 2 standards, though the Tier 3
standards apply only to engines rated between 37 and 560 kW.
Characterizing these estimated costs in the context of their
fraction of the total purchase price and life-cycle operating costs is
helpful in gauging the economic impact of the new standards. ICF
conducted a study to characterize the range of current engine
costs.14 Although the incremental cost projections in Table
7 increase dramatically with increasing power rating, they in fact
represent a comparable price change relative to the total price of the
engine. The estimated cost increases for all engines are at most 13
percent of estimated engine prices (after typical discounts and
rebates). Moreover, the cost savings described below further reduce the
projected impact of the new emission standards; long-term cost
increases are expected to be 8 percent of total engine price or less.
---------------------------------------------------------------------------

\14\ ``Engine Price (On-Highway and Nonroad) & Life-cycle Cost
Methodology,'' memorandum from Thomas Uden, ICF, Inc. to Alan Stout,
U.S. EPA, March 21, 1997 (available in Air Docket A-96-40).
---------------------------------------------------------------------------

For the long term, EPA has identified two principal factors that
would cause the estimated incremental costs to decrease over time.
First, since fixed costs are assumed to be recovered over a fixed
period, these costs disappear from the analysis after they have been
fully recovered. This has a most striking effect on the projected costs
for engines rated over 450 kW, for which the much higher projected
costs are dominated by fixed costs. Second, the analysis incorporates
the expectation that manufacturers will apply ongoing research to
making emission controls more effective and less costly over time.
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 complexity of component
parts.15 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 and by reducing variable costs again by 20 percent
starting with the sixth year of production. Table 7 lists the projected
costs for each category of engine, including the set of numbers that
illustrate the projected reduction in long-term costs for Tier 3
engines.
---------------------------------------------------------------------------

\15\ ``Learning Curves in Manufacturing,'' Linda Argote and
Dennis Epple, Science, February 23, 1990, Vol. 247, pp. 920-924
(available in Air Docket A-96-40).
---------------------------------------------------------------------------

3. Equipment Costs
In addition to the costs directly associated with engines that are
redesigned to meet new standards, costs may also result from the need
to redesign the nonroad equipment in which these engines are used. Such
redesigns could occur if the engine has a different shape or heat
rejection rate, or is no longer made available in the configuration
previously used. Based on their experience with the Tier 1 standards
set in 1994, equipment manufacturers have told EPA that the main
barrier to accommodating complying engines is the late delivery of such
engines by engine manufacturers, which cuts into the lead time that
equipment manufacturers need to properly redesign their equipment.
Thus, attempts were made in developing this rulemaking to provide
compliance flexibility to help equipment manufacturers avoid business
disruptions resulting from the changes associated with new emission
standards.
In addition, the Tier 3 emission standards and implementation dates
for engines rated at or above 37 kW and Tier 2 emission standards and
implementation dates for engines rated under 37 kW are based on the
premise that no significant equipment redesign beyond that required to
accommodate engines meeting the previous tier of standards will be
required to accommodate the new engines. Equipment manufacturers may,
of course, choose to spread equipment redesigning over the time frame
for both first and second tiers of standards. This analysis accounts
for this flexibility by projecting one major redesign for each
equipment model, spreading the costs of this redesign over both tiers
of standards. For each tier of standards, EPA projects that equipment
manufacturers will have sufficient opportunity to accommodate complying
engines and to market their product. EPA will consider the potential
for multiple design changes to equipment models during the 2001
Feasibility Review.
In assessing the economic impact of the new emission standards, EPA
has made a best estimate of the modifications to equipment that relate

[[Page 56989]]

to packaging (installing engines in equipment engine compartments),
power train (torque curve), and heat rejection effects of the new
complying engines. The incremental purchase price for new engines is
comprised of fixed costs (for R&D and retooling) and variable costs
(for new or modified components). In its analysis, EPA attributes all
changes in operating costs (i.e., additional maintenance and fuel
economy benefit or penalty) to the cost estimates for engines. After a
new standard takes effect, projected equipment costs in subsequent
years would be reduced for the same reasons as described in the engine
cost section above. Separate projected costs were determined for
equipment using the same ranges of power ratings used above. Full
details of EPA's equipment cost analysis can be found in Chapter 4 of
the Final RIA.
a. Projected Equipment Changes. As described earlier, the amount of
time that an equipment manufacturer has to integrate a new engine into
a piece of equipment is of critical importance. These manufacturers
have experienced that late engine delivery may prevent them from
adequately engineering their equipment designs, resulting in the need
for various improvised changes. In this case, the costs associated with
the engine change would be for fabricated components and other hardware
changes more than for engineering time. In contrast, with adequate lead
time, an equipment manufacturer can invest enough engineering time to
design around the new engine, usually with minimal increase in hardware
costs. Depending on the degree of change required, sales volumes, and
other factors, actual costs in either of these scenarios may be
comparable. EPA's analysis follows the latter scenario, emphasizing
engineering time over hardware costs.
The biggest change anticipated for equipment redesign is in
changing the engine compartments to accommodate the physical changes to
engines, especially for those engines that add air-to-air aftercoolers.
The costs for engine development and the principal hardware components
(radiator and plumbing) associated with air-to-air aftercooling are
included as costs to the engines, as described above. What remains to
be quantified for equipment manufacturers is then the effort to make
space for the larger engine system and to integrate the engine into the
overall functioning of the equipment. Extensive engineering time is
allocated to this effort. In addition, significant costs are included
for new, added, or improved materials that may be required, such as
brackets, hoses, gaskets, or sheet metal.
b. Projected Equipment Costs. The costs of the projected equipment
changes resulting from the new standards are itemized in the Final RIA
and summarized in Table 8. For the Tier 1 emission standards that apply
to equipment with engines rated under 37 kW, the estimated composite
cost increase is $24 per piece of equipment. As described in the
section on engine costs above, this estimate is based on the
determination that many of the engines for this range of equipment
already operate with emissions low enough to meet the Tier 1 standards.

Table 8.--Projected Unit Costs
----------------------------------------------------------------------------------------------------------------
Power (kW)
Tier -----------------------------------------------------------------------------
0-37 37-75 75-130 130-450 450-560 560+
----------------------------------------------------------------------------------------------------------------
TIER 1
Equipment......................... $24 ........... ........... ........... ........... ...........
Total Engine and Equipment........ 59 ........... ........... ........... ........... ...........
TIER 2
Equipment......................... 8 $125 $441 $340 $1,315 $404
Total Engine and Equipment........ 80 250 867 804 2,670 1,087
TIER 3: Short-Term
Equipment......................... ........... 42 147 113 439 ...........
Total Engine and Equipment........ ........... 282 658 872 2,296 ...........
TIER 3: Long-Term
Equipment......................... ........... 3 4 5 7 ...........
Total Engine and Equipment........ ........... 122 301 440 543 ...........
----------------------------------------------------------------------------------------------------------------

For Tier 2 standards, the relatively low equipment costs for
equipment rated under 75 kW reflect the higher sales volume of this
range. The highest projected cost of $1315 for equipment utilizing
engines rated between 450 and 560 kW demonstrates that high unit
equipment costs are due to amortizing large fixed costs over small
sales volumes. These large fixed costs result from the effort to
accommodate air-to-air aftercooling. Equipment with engines rated over
560 kW are expected to require less redesign, and have correspondingly
lower costs, since no changes in aftercooling are anticipated for these
models as a result of Tier 2 emission standards.
The projected incremental cost of complying with Tier 3 standards
are lower than that for Tier 2 standards, because EPA expects most of
the significant changes to equipment designs will occur for Tier 2
standards. For Tier 3 standards, projected equipment costs range from
$42 to $439.
As discussed in the section on engine costs above, characterizing
both these estimated incremental equipment and engine costs in the
context of their fraction of the total equipment purchase price is
useful for evaluating the economic impact of the new standards. EPA
collected quoted retail (list) prices on several equipment pieces to
characterize the range of current equipment prices. The combined
incremental costs estimated for equipment and engines together for all
power ranges are almost all under 2 percent of list prices, while many
are well below 1 percent.
Furthermore, as described in the section on engine costs above, the
cost savings from full amortization of fixed costs and application of a
learning curve further reduce the projected cost impact of the new
standards. Table 8 shows the projected equipment costs for each
category of equipment, including the long-term cost projections for
complying with Tier 3 standards. The table also presents the combined
costs estimated

[[Page 56990]]

for equipment and engines (excluding changes to operating costs).
4. Aggregate Costs to Society
The above analysis presents unit cost estimates for each power
category. With current data for equipment sales for each category and
projections for the future, these costs can be translated into a total
projected cost to the nation for the new emission standards in any
year. Accounting for the projected favorable impact of the new
standards on operating costs, primarily from fuel savings in larger
engines, would produce negative aggregate costs (net economic gains) in
future years. However, because it is difficult to accurately assess the
fuel economy impacts of hardware changes and the degree to which these
savings would have developed in the absence of new emission standards,
EPA has conservatively chosen to present aggregate costs to society
without factoring in the expected changes in operating costs. Using
only the increased purchase prices leads to aggregate costs of about $5
million in the first year the new standards apply, increasing to a peak
of about $550 million in 2010 as increasing numbers of engines become
subject to the new standards. The following years show declining
aggregate costs as the per-unit cost of compliance decreases, resulting
in a minimum aggregate cost of about $390 million in 2017. After 2017,
stable engine costs applied to a slowly growing market lead to slowly
increasing aggregate costs.
As described earlier, EPA developed the cost and cost-effectiveness
analyses by attributing half of the cost of certain technologies to
benefits unrelated to emission control. To analyze the sensitivity of
the cost analysis to this assumption, EPA estimated unit costs by
attributing the full cost of these technologies to the new emission
standards. EPA then estimated the effect of these increased costs on
the 20-year costs to society. Assigning the full cost of technology as
an to the emission control program, the 20-year fleetwide discounted
cost is estimated to be $4.4 billion, approximately $1.2 billion higher
than calculated using the base case. Similarly, the resulting 20-year
annualized fleetwide costs are $411 million per year, approximately
$115 million higher than the base case results.
EPA also developed alternative cost figures to test the sensitivity
of distributing fixed costs over worldwide production of nonroad
engines and equipment. Because some countries are not expected to adopt
harmonized emission standards in the foreseeable future, manufacturers
could choose to distribute fixed costs over a subset of foreign sales.
Since it is very difficult to quantify sales volumes for individual
countries for all the companies that participate in the U.S. market,
EPA made the simplifying assumption that fixed costs could be
distributed over only half of engines sold into other countries.
Distributing costs over this smaller number of engines leads to a 20-
year fleetwide discounted cost of $3.6 billion, approximately $0.4
billion higher than the base case results. The corresponding 20-year
annualized fleetwide costs are $339 million per year, approximately $40
million higher than the base case results.

C. Cost-Effectiveness

EPA has estimated the cost-effectiveness (i.e., the cost per ton of
emission reduction) of the Tier 1, Tier 2 and Tier 3 standards for the
same power categories of nonroad equipment highlighted earlier in this
section. Chapter 6 of the Final RIA contains a more detailed discussion
of the cost-effectiveness analysis.
As described above in the preceding section, the projected cost of
complying with the new standards will vary by power category and model
year. Therefore, the cost-effectiveness will also vary from model year
to model year. For comparison purposes, the discounted costs (including
increased engine costs and equipment costs), emission reductions (in
short tons), and cost-effectiveness of the NMHC + NO_X
standards are shown in Table 9 for the same model years discussed in
the preceding section. EPA believes this is a conservative estimate
because EPA assumed for the sake of this analysis that all of the
increased costs presented earlier were attributable to NMHC +
NO_X control and none of the costs were attributed to PM
control. NO_X reductions represent approximately 90 percent
of the total NMHC + NO_X emission reductions expected from
the new standards. In addition, the costs presented in Table 9 do not
include the expected effect on operating costs over the lifetime of the
equipment. EPA expects the operating costs to offset much, if not all,
of the increased engine and equipment costs presented in Table 9 for
engines above 75 kW due to expected improvements in fuel economy for
engines meeting the new standards.

Table 9.--Cost-effectiveness of the New NMHC+NO<INF>X Standards
----------------------------------------------------------------------------------------------------------------
Discounted
Discounted lifetime Discounted
Standard Power (kW) Year of engine and NMHC+NO<INF>X lifetime cost-
production equipment reductions effectiveness
cost (tons) per ton
----------------------------------------------------------------------------------------------------------------
Tier 1...................................... 0-37 1 $59 0.20 $300
Tier 2...................................... 0-37 1 80 0.04 2,090
............ 6 35 ........... 910
37-75 1 249 0.49 510
75-130 1 867 1.02 850
130-450 1 804 1.82 440
450-560 1 2,670 7.68 350
>560 1 1,087 9.83 110
............ 6 1,025 ........... 100
Tier 3...................................... 37-75 1 282 0.51 560
............ 6 160 ........... 320
75-130 1 658 0.82 800
............ 6 442 ........... 540
130-450 1 872 1.46 600
............ 6 545 ........... 380
450-560 1 2,296 5.91 390
............ 6 1,991 ........... 340
----------------------------------------------------------------------------------------------------------------

[[Page 56991]]

Weighting the projected cost and emission benefit numbers presented
above by the populations of the individual power categories, EPA
calculated the cost-effectiveness of the new NMHC + NO_X
standards for the entire nonroad diesel engine fleet. Table 10 contains
the resulting fleet-wide cost-effectiveness results for the Tier 2 and
Tier 3 standards. The sensitivity analyses described in Section V.B.4.
above would affect cost-effectiveness calculations in the same way as
described for fleetwide total costs. The Appendix to the Final RIA
includes cost-effectiveness results for the sensitivity analysis in
which full costs are attributed to emissions control.

Table 10.--Fleet-wide Cost-effectiveness of the New Nonroad NMHC+NO<INF>X
Standards
------------------------------------------------------------------------
Discounted
lifetime cost-
Standard effectiveness
per ton
------------------------------------------------------------------------
Tier 2................................................... $600
Tier 3--Short term....................................... 650
Tier 3--Long term........................................ 410
------------------------------------------------------------------------

For comparison to other PM control strategies, EPA has also
analyzed the cost-effectiveness of the new standards by very
conservatively assuming that half of the increased costs were
attributable to PM control. Such a fleet-wide discounted lifetime cost-
effectiveness represents the highest figure that could be expected for
cost-effectiveness of the new standards and was calculated to provide
an indication of the upper bound of PM cost-effectiveness values. The
resulting fleet-wide discounted lifetime cost-effectiveness of the Tier
1 and Tier 2 PM standards is approximately $2,300 per ton.
In an effort to evaluate the cost-effectiveness of the NMHC +
NO_X controls for nonroad engines, EPA has summarized the
cost-effectiveness results for four other recent EPA mobile source
rulemakings that required reductions in NO_X (or NMHC +
NO_X) emissions. The heavy-duty vehicle portion of the Clean
Fuel Fleet Vehicle Program yielded a cost-effectiveness of
approximately $1,500/ton of NO_X, Phase II of the
Reformulated Gasoline Program yielded approximately $5,000/ton of
NO_X, the most recent NMHC + NO_X standards for
highway heavy-duty diesel engines yielded a cost-effectiveness of $100-
$600/ton of NMHC + NO_X, and the newly adopted standards for
locomotive engines yielded a cost-effectiveness of $160-$250/ton of
NO_X. The cost-effectiveness of the new NMHC + NO_X
standards for nonroad diesel engines presented above are more favorable
than the cost-effectiveness of both the clean fuel fleet vehicle
program and reformulated gasoline. The cost-effectiveness of the new
NMHC + NO_X standards for nonroad diesel engines is
comparable to the cost-effectiveness of the most recent NMHC +
NO_X standards for heavy-duty highway diesel engines and
slightly less favorable than the cost-effectiveness of the locomotive
standards.
EPA has also summarized the cost-effectiveness results for two
other recent EPA mobile source rulemakings that required reductions in
PM emissions. The cost-effectiveness of the most recent urban bus
engine PM standard was estimated to be $10,000-$16,000/ton and the
cost-effectiveness of the urban bus retrofit/rebuild program was
estimated to be approximately $25,000/ton. The PM cost-effectiveness of
the new emission standards presented above are more favorable than
either of the urban bus programs.
In addition to the benefits of reducing ozone within and
transported into urban ozone nonattainment areas, the NO_X
reductions from the new standards are expected to have beneficial
impacts with respect to crop damage, secondary particulate formation,
acid deposition, eutrophication, visibility, and forests, as described
earlier. Because of the difficulty of 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 large NO_X reductions similar to those projected under
this final rule will likely be greater than the estimated compliance
costs.

VI. Public Participation

A wide variety of interested parties participated in the rulemaking
process that culminates with this final rule. This process provided
several opportunities for public comment over a period of more than two
years. An Advance Notice of Proposed Rulemaking (ANPRM) (60 FR 45580,
August 31, 1995) announced EPA's intention to address emissions from
nonroad diesel engines, and a Supplemental ANPRM (62 FR 199, January 2,
1997) detailed the framework for a proposed rule. Comments received
during this period were considered in the development of the NPRM and
are discussed in that document. These comments included information
received from small businesses as a part of the multi-agency Small
Business Advocacy Review Panel process which was completed prior to the
NPRM and is described below under the discussion of the Regulatory
Flexibility Act. The formal comment period and public hearing
associated with the NPRM provided another opportunity for public input.
EPA has also met with a variety of stakeholders at various points in
the process, including environmental organizations, engine
manufacturers, equipment manufacturers, and states.
EPA has prepared a detailed Summary and Analysis of Comments
document which describes the comments received on the NPRM and presents
the Agency's response to each of these comments. The Summary and
Analysis of Comments document is available in the docket for this rule
and on the Office of Mobile Sources internet home page.

VII. Administrative Requirements

A. Administrative Designation and Regulatory Analysis

Under Executive Order 12866, the Agency must assess whether this
regulatory action is ``significant'' and therefore subject to Office of
Management and Budget (OMB) review and the requirements of the
Executive Order (58 FR 51735, Oct. 4, 1993). 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 rulemaking is a ``significant regulatory action'' because the
new standards and other regulatory provisions, if implemented, are
expected to have an annual effect on the economy in excess of $100
million. A

[[Page 56992]]

Final RIA has been prepared and is available in the docket associated
with this rulemaking. This action was submitted to 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
rulemaking.

B. Regulatory Flexibility Act

The Regulatory Flexibility Act, 5 U.S.C. 601-612, was amended by
the Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA), Pub. L. 104-121, to ensure that concerns regarding small
entities are adequately considered during the development of new
regulations that affect them. In response to the provisions of this
statute, EPA identified industries that would be subject to this
rulemaking and provided information to and received comment from small
entities and representatives of small entities in these industries
prior to the formal proposal of the program. Small entities submitted
written comments on the January, 1997 Supplemental Advance Notice of
Proposed Rulemaking and oral comments at an informal workshop in
Chicago. From these and other interactions, EPA developed a list of
potential provisions that might offer flexibility to small entities
while meeting air quality goals.
The Agency convened a Small Business Advocacy Review Panel under
section 609(b) of the Regulatory Flexibility Act. The Panel distributed
the list of potential flexibility provisions to the identified small
entity contacts for further comment and held a teleconference which led
to further improvement of the flexibility options. The Panel then
received additional written comments on potential options. Based on
suggestions from small entities before and after the convening of the
Panel, the Panel identified a set of five flexibility provisions to
address small business concerns which it recommended to the Agency for
proposal in the rule. As detailed in Chapter 4 of the Final RIA, the
five recommended provisions were the following: (1) flexibility for
equipment manufacturers to aggregate and use exemption allowances on a
schedule that best suited their needs, (2) equivalent flexibility for
manufacturers of equipment using small engines as for those using
larger engines, (3) provision for equipment manufacturers to purchase
credits in the averaging, banking, and trading program and to use those
credits to exempt more equipment, (4) dropping of the requirement that
the small volume allowance be restricted to a single equipment model,
and (5) adoption of a hardship relief provision. Subsequently, EPA
incorporated all five recommended provisions into the Notice of
Proposed Rulemaking. Subsequently, EPA incorporated all five
recommended provisions into the Notice of Proposed Rulemaking.
After evaluating additional comments received on the proposed
regulatory alternatives, EPA is adopting some of the provisions as they
were recommended by the Panel as well as alternative flexibility
provisions. The Agency is adopting the first two provisions, although
by removing a special broader exemption for farming and logging
equipment and instead increasing the allowances available to
manufacturers of all types of equipment, the benefit to most small
entities will actually be greater than under the proposed program. EPA
is also adopting the fifth provision, establishing hardship relief.
The Agency agreed with commenters who said that the third
provision, allowing equipment manufacturers to purchase ABT program
credits, would not likely provide significant relief to equipment
manufacturers while adding the complexity of credit accounting and
recordkeeping. This provision was not finalized. The fourth provision
was adopted in a revised form, expanding the small volume allowance to
multiple equipment models while establishing limitations to prevent
widespread use of this provision by larger companies for whom this
allowance is not intended.
The Agency believes that, taken as a whole, the flexibility
provisions established in this final rule provide small businesses with
at least the same and probably greater flexibility compared to the set
of provisions recommended by the Panel, while meeting the Agency's air
quality goals. These provisions represent a very significant mitigation
of the economic impacts on small equipment manufacturers compared to
the impacts that might otherwise have occurred if small businesses had
not been consulted. The final set of flexibility provisions and EPA's
rationale for adopting these provisions are discussed in detail in
Section II.E above and in the Summary and Analysis of Comments
document.
EPA prepared an Initial Regulatory Flexibility Analysis which
analyzed the economic impacts of the proposed rule on small companies
and discussed related issues. EPA has now prepared a Final Regulatory
Flexibility Analysis, which is incorporated in Chapter 4 (Economic
Impact) of the Final Regulatory Impact Analysis associated with this
final rule. The Final Regulatory Flexibility Analysis presents the
Agency's final assessments of the impacts this rule is likely to have
on small entities.
The Final Regulatory Flexibility Analysis incorporates comments
received related to the Initial Regulatory Flexibility Analysis and
reassesses the impact of the regulations on small entities. As did the
Initial document, the Final Regulatory Flexibility Analysis analyzes
the four separate but related industries that will be subject to this
proposed rule and that contain small businesses as defined by
regulations of the Small Business Administration (SBA): nonroad diesel
engine manufacturing, manufacturing of nonroad diesel equipment, post-
manufacturer marinizing of diesel engines, and the rebuilding or
remanufacturing of diesel nonroad engines. A detailed economic analysis
was conducted only for equipment manufacturers, for several reasons.
First, there is only one manufacturer of diesel engines affected by the
proposed rule that meets SBA's small business criteria, and this small
engine manufacturer would have impacts from the proposal that are
similar to those impacts experienced by large nonroad engine
manufacturers as described elsewhere in this final rule. Second,
marinizers are expected to experience impacts similar to those of
nonroad equipment manufacturers since changes made by the original
engine manufacturers might require changes in the parts and process
involved in marinization. Finally, engine rebuilders/remanufacturers
will not be significantly economically impacted, since the provisions
of this final rule for these entities does not require a substantial
change to their current practices.
As described above in Section II, this rule includes flexibility
provisions for equipment manufacturers (both large and small
manufacturers). The Final Regulatory Flexibility Analysis concludes
that the final rule, with its compliance flexibility provisions, will
result in an estimated 11 percent of small equipment manufacturers
having annual compliance costs greater than 1 percent of their sales
revenues. Also, an estimated 7 percent of small equipment manufacturers
would experience a compliance cost impact greater than 3 percent of
sales revenues. EPA believes the effects of the flexibility provisions
are conservatively estimated, in part because the hardship relief
provisions and the more generous exemption allowances finalized in this
rule were not taken into account in the analysis. EPA considers the
flexibility provisions

[[Page 56993]]

put in place by this rule to be a very effective way of minimizing
significant economic impacts on small equipment manufacturers
consistent with the Agency's air quality objectives.

C. Paperwork Reduction Act

The Paperwork Reduction Act, 44 U.S.C. 3501 et seq., requires
agencies to submit for OMB review and approval, federal requirements
and activities that result in the collection of information from ten or
more persons. Information collection requirements may include
reporting, labeling, and recordkeeping requirements. Federal agencies
may not impose penalties on persons who fail to comply with collections
of information that do not display a currently valid OMB control
number.
The information collection requirements in this final rule have
been approved by OMB without comment under the Paperwork Reduction Act,
except for the requirement that engine manufacturers' annual reports
include information on engines produced for the equipment manufacturer
flexibility program, discussed above in section II.E.5. This
requirement was not included in the Information Collection Request
(ICR) submitted to OMB because it was not formally proposed by EPA in
the NPRM. This reporting requirement was, however, put forth in the
NPRM for comment, and is being adopted in the final rule based on
further analysis and consideration of comments received. EPA plans to
submit a separate ICR for this requirement. The following ICR documents
have been prepared by EPA:

------------------------------------------------------------------------
OMB control
EPA ICR No. Title No.
------------------------------------------------------------------------
0011.09........................... Selective 2060-0604
Enforcement
Auditing and
recordkeeping
requirements for on-
highway HDE,
nonroad compression
ignition engines,
and on-highway
light-duty vehicles
and Light duty
trucks.
0095.10........................... Pre-certification 2060-0007
and testing
exemption reporting
and recordkeeping
requirements.
0282.10........................... Emission Defect 2060-0048
Information and
Voluntary Emission
recall reports.
1684.04........................... Compression Ignition 2060-0104
Non-Road Engine
Certification
Application.
1695.03........................... Amendment to the 2060-0104
Information
Collection Request
Emission Standards
for New Nonroad
Spark-Ignition
Engines.
1826.01........................... Information 2060-0369
collection for
equipment
manufacturer
flexibility.
------------------------------------------------------------------------

The Information Collection Requests (ICR) were subject to public
notice and comment prior to OMB approval and, as a result, EPA finds
that there is ``good cause'' under section 553(b) of the Administrative
Procedures Act (5 U.S.C. 553 (b)) to include these information
collection requirements in 40 CFR Part 9 without additional notice and
comment. EPA received various comments on the rulemaking provisions
covered by the ICRs, but no comments on the paperwork burden or other
information in the ICRs. All comments that were submitted to EPA are
considered in the Summary and Analysis of Comments, which can be found
in the docket (A-96-40). A copy of any of the submitted ICR documents
may be obtained from Sandy Farmer, OPPE Regulatory Information
Division, U.S. Environmental Protection Agency (2137), 401 M St., S.W.,
Washington, DC 20460, or by calling (202) 260-2740.

D. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 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.
This final 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 final program will 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 proposed program represents the least costly, most cost-
effective approach to achieve the air quality goals of the rule. The
cost-benefit analysis required by UMRA is contained in the Final RIA.
The reader is directed to Section VII.A for further information
regarding these analyses.

E. Congressional Review Act

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. This rule is a
``major rule'' as defined by 5 U.S.C. 804(2).

F. National Technology Transfer and Advancement Act

Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C.
272

[[Page 56994]]

note) directs EPA to use voluntary consensus standards in its
regulatory activities unless doing so would be inconsistent with
applicable law or otherwise impractical. Voluntary consensus standards
are technical standards (e.g., materials specifications, test methods,
sampling procedures, and business practices) that are developed or
adopted by voluntary consensus standards bodies. The NTTAA directs EPA
to provide Congress, through OMB, explanations when the Agency decides
not to use available and applicable voluntary consensus standards.
This final rule involves technical standards. While commenters
suggested the use of ISO 8178 test procedures for measuring emissions,
the Agency has decided not to rely on these ISO procedures in this
rulemaking. The Agency has determined that these procedures would be
impracticable because they rely too heavily on reference testing
conditions. Because the test procedures in these regulations need to
represent in-use operation typical of operation in the field, they must
be based on a range of ambient conditions. EPA has determined that the
ISO procedures are not broadly usable in their current form, and
therefore cannot be adopted by reference. EPA has instead chosen to
continue to rely on the procedures outlined in 40 CFR Part 89. EPA is
hopeful that future ISO test procedures will be developed that are
usable for the broad range of testing needed, and that such procedures
could then be adopted by reference. EPA also expects that any
development of revised test procedures will be done in accordance with
ISO procedures and in a balanced manner and thus include the
opportunity for involvement of a range of interested parties
(potentially including parties such as industry, EPA, state
governments, and environmental groups) so that the resulting procedures
can represent these different interests.

G. Protection of Children

Executive Order 13045, entitled ``Protection of Children from
Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23,
1997), applies to a rule that is determined to be ``economically
significant,'' as defined under Executive Order 12866, if the
environmental health or safety risk addressed by the rule has a
disproportionate effect on children. For these rules, the Agency must
evaluate the environmental health or safety effects of the planned rule
on children; and explain why the planned regulation is preferable to
other potentially effective and reasonably feasible alternatives
considered by the Agency.
This final rule is not subject to Executive Order 13045, because
this rule does not involve decisions on environmental health or safety
risks that may disproportionately affect children.

H. Enhancing Intergovernmental Partnerships

Under Executive Order 12875, EPA may not issue a regulation that is
not required by statute and that creates a mandate upon a State, local
or tribal government, unless the Federal government provides the funds
necessary to pay the direct compliance costs incurred by those
governments. If the mandate is unfunded, EPA must provide to the Office
of Management and Budget a description of the extent of EPA's prior
consultation with representatives of affected State, local and tribal
governments, the nature of their concerns, copies of any written
communications from the governments, and a statement supporting the
need to issue the regulation. In addition, Executive Order 12875
requires EPA to develop an effective process permitting elected
officials and other representatives of State, local and tribal
governments ``to provide meaningful and timely input in the development
of regulatory proposals containing significant unfunded mandates.''
This rule will be implemented at the federal level and imposes
compliance obligations only on private industry. The rule thus creates
no mandate on State, local or tribal governments, nor does it impose
any enforceable duties on these entities. Accordingly, the requirements
of Executive Order 12875 do not apply to this rule.

I. Consultation and Coordination With Indian Tribal Governments

Under Executive Order 13084, EPA may not issue a regulation that is
not required by statute, that significantly or uniquely affects the
communities of Indian tribal governments, and that imposes substantial
direct compliance costs on those communities, unless the Federal
government provides the funds necessary to pay the direct compliance
costs incurred by the tribal governments. If the mandate is unfunded,
EPA must provide to the Office of Management and Budget, in a
separately identified section of the preamble to the rule, a
description of the extent of EPA's prior consultation with
representatives of affected tribal governments, a summary of the nature
of their concerns, and a statement supporting the need to issue the
regulation. In addition, Executive Order 13084 requires EPA to develop
an effective process permitting elected and other representatives of
Indian tribal governments ``to provide meaningful and timely input in
the development of regulatory policies on matters that significantly or
uniquely affect their communities.''
This rule does not significantly or uniquely affect the communities
of Indian tribal governments. As noted above, this rule will be
implemented at the federal level and imposes compliance obligations
only on private industry. Accordingly, the requirements of Executive
Order 13084 do not apply to this rule.

VIII. Statutory Authority

In accordance with section 213(a) of the Clean Air Act, 42 U.S.C.
7547(a), EPA conducted a study of emissions from nonroad engines,
vehicles, and equipment in 1991. Based on the results of that study,
EPA determined that emissions of NO_X, volatile organic
compounds (including hydrocarbons), and CO from nonroad engines and
equipment contribute significantly to ozone and CO concentrations in
more than one nonattainment area. See 59 FR 31306, June 17, 1994. Given
this determination, section 213(a)(3) of the Act requires EPA to
promulgate (and from time to time revise) emissions standards for those
classes or categories of new nonroad engines, vehicles, and equipment
that in EPA's judgment cause or contribute to such air pollution. EPA
has determined that the engines regulated under this final rule ``cause
or contribute'' to such air pollution. See 59 FR 31306, June 17, 1994.
Where EPA determines that other emissions from new nonroad engines,
vehicles, or equipment significantly contribute to air pollution that
may reasonably be anticipated to endanger public health or welfare,
section 213(a)(4) authorizes EPA to establish (and from time to time
revise) emission standards from those classes or categories of new
nonroad engines, vehicles, and equipment that EPA determines cause or
contribute to such air pollution. In the June 1994 final rule, EPA made
this determination for emissions of PM and smoke from nonroad engines
in general and for CI nonroad engines rated at or above 37 kW. This
rule extends the same findings to nonroad diesel engines rated under 37
kW.

List of Subjects

40 CFR Part 9

Environmental protection, Reporting and recordkeeping requirements.

[[Page 56995]]

40 CFR Part 86

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

40 CFR Part 89

Environmental protection, Administrative practice and procedure,
Confidential business information, Diesel fuel, Imports, Incorporation
by reference, Motor vehicle pollution, Reporting and recordkeeping
requirements, Research, Warranties.

Dated: August 27, 1998.
Carol M. Browner,
Administrator.
For the reasons set out in the preamble, title 40, chapter I, parts
9, 86, and 89 of the Code of Federal Regulations are amended as set
forth below.

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 in the table by removing the center
heading ``Control of Emissions From New and In-Use Nonroad Engines''
and the entries under that center heading and adding a new center
heading and entries in numerical order to read as follows:

Sec. 9.1 OMB approvals under the Paperwork Reduction Act.

* * * * *

------------------------------------------------------------------------
OMB control
40 CFR citation No.
------------------------------------------------------------------------
* * * * *
Control of Emissions From New and In-Use Nonroad Compression-Ignition
Engines
------------------------------------------------------------------------
89.1.................................................... 2060-0124
89.2.................................................... 2060-0124
89.114-89.120........................................... 2060-0287
89.122-89.127........................................... 2060-0287
89.129.................................................. 2060-0287
89.203-89.207........................................... 2060-0287
89.209-89.211........................................... 2060-0287
89.304-89.331........................................... 2060-0287
89.404-89.424........................................... 2060-0287
89.505-89.512........................................... 2060-0064
89.603-89.605........................................... 2060-0095
89.607-89.610........................................... 2060-0095
89.611.................................................. 2060-0007,
2060-0095
89.612.................................................. 2060-0095
89.801-89.803........................................... 2060-0048
89.903.................................................. 2060-0124
89.905-89.911........................................... 2060-0007
* * * * *
------------------------------------------------------------------------

PART 86--CONTROL OF EMISSIONS FROM NEW AND IN-USE HIGHWAY VEHICLES
AND ENGINES

3. The heading of part 86 is revised as set forth above.
4. The authority citation for part 86 continues to read as follows:

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

5. Section 86.884-8 is amended by revising the table in paragraph
(c)(4) to read as follows:

Sec. 86.884-8 Dynamometer and engine equipment.

* * * * *
(c) * * *
(4) * * *

------------------------------------------------------------------------
Exhaust
pipe
Maximum rated horsepower diameter
(inches)
------------------------------------------------------------------------
HP>50...................................................... 1.5
50<ls-thn-eq>HP>100........................................ 2.0
100<ls-thn-eq>HP>200....................................... 3.0
200<ls-thn-eq>HP>300....................................... 4.0
300<ls-thn-eq>HP>500....................................... 5.0
HP<ls-thn-eq>5006.0........................................
------------------------------------------------------------------------

* * * * *

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

6. The heading of part 89 is revised as set forth above.
7. The authority citation for part 89 continues to read as follows:

Authority: Sections 202, 203, 204, 205, 206, 207, 208, 209, 213,
215, 216, and 301(a) of the Clean Air Act, as amended (42 U.S.C.
7521, 7522, 7523, 7524, 7525, 7541, 7542, 7543, 7547, 7549, 7550,
and 7601(a)).

8. The following sections are redesignated as set forth in the
following table:

------------------------------------------------------------------------
New
Old designation designation
------------------------------------------------------------------------
89.101-96.................................................. 89.101
89.102-96.................................................. 89.102
89.103-96.................................................. 89.103
89.104-96.................................................. 89.104
89.105-96.................................................. 89.105
89.106-96.................................................. 89.106
89.107-96.................................................. 89.107
89.108-96.................................................. 89.108
89.109-96.................................................. 89.109
89.110-96.................................................. 89.110
89.111-96.................................................. 89.111
89.112-96.................................................. 89.112
89.113-96.................................................. 89.113
89.114-96.................................................. 89.114
89.115-96.................................................. 89.115
89.116-96.................................................. 89.116
89.117-96.................................................. 89.117
89.118-96.................................................. 89.118
89.119-96.................................................. 89.119
89.120-96.................................................. 89.120
89.121-96.................................................. 89.121
89.122-96.................................................. 89.122
89.123-96.................................................. 89.123
89.124-96.................................................. 89.124
89.125-96.................................................. 89.125
89.126-96.................................................. 89.126
89.127-96.................................................. 89.127
89.128-96.................................................. 89.128
89.129-96.................................................. 89.129
89.201-96.................................................. 89.201
89.202-96.................................................. 89.202
89.203-96.................................................. 89.203
89.204-96.................................................. 89.204
89.205-96.................................................. 89.205
89.206-96.................................................. 89.206
89.207-96.................................................. 89.207
89.208-96.................................................. 89.208
89.209-96.................................................. 89.209
89.210-96.................................................. 89.210
89.211-96.................................................. 89.211
89.212-96.................................................. 89.212
89.301-96.................................................. 89.301
89.302-96.................................................. 89.302
89.303-96.................................................. 89.303
89.304-96.................................................. 89.304
89.305-96.................................................. 89.305
89.306-96.................................................. 89.306
89.307-96.................................................. 89.307
89.308-96.................................................. 89.308
89.309-96.................................................. 89.309
89.310-96.................................................. 89.310
89.311-96.................................................. 89.311
89.312-96.................................................. 89.312
89.313-96.................................................. 89.313
89.314-96.................................................. 89.314
89.315-96.................................................. 89.315
89.316-96.................................................. 89.316
89.317-96.................................................. 89.317
89.318-96.................................................. 89.318
89.319-96.................................................. 89.319
89.320-96.................................................. 89.320
89.321-96.................................................. 89.321
89.322-96.................................................. 89.322
89.323-96.................................................. 89.323
89.324-96.................................................. 89.324
89.325-96.................................................. 89.325
89.326-96.................................................. 89.326
89.327-96.................................................. 89.327
89.328-96.................................................. 89.328
89.329-96.................................................. 89.329
89.330-96.................................................. 89.330
89.331-96.................................................. 89.331
89.401-96.................................................. 89.401
89.402-96.................................................. 89.402
89.403-96.................................................. 89.403
89.404-96.................................................. 89.404
89.405-96.................................................. 89.405
89.406-96.................................................. 89.406

[[Page 56996]]

89.407-96.................................................. 89.407
89.408-96.................................................. 89.408
89.409-96.................................................. 89.409
89.410-96.................................................. 89.410
89.411-96.................................................. 89.411
89.412-96.................................................. 89.412
89.413-96.................................................. 89.413
89.414-96.................................................. 89.414
89.415-96.................................................. 89.415
89.416-96.................................................. 89.416
89.417-96.................................................. 89.417
89.418-96.................................................. 89.418
89.419-96.................................................. 89.419
89.420-96.................................................. 89.420
89.421-96.................................................. 89.421
89.422-96.................................................. 89.422
89.423-96.................................................. 89.423
89.424-96.................................................. 89.424
89.425-96.................................................. 89.425
89.501-96.................................................. 89.501
89.502-96.................................................. 89.502
89.503-96.................................................. 89.503
89.504-96.................................................. 89.504
89.505-96.................................................. 89.505
89.506-96.................................................. 89.506
89.507-96.................................................. 89.507
89.508-96.................................................. 89.508
89.509-96.................................................. 89.509
89.510-96.................................................. 89.510
89.511-96.................................................. 89.511
89.512-96.................................................. 89.512
89.513-96.................................................. 89.513
89.514-96.................................................. 89.514
89.515-96.................................................. 89.515
89.516-96.................................................. 89.516
89.601-96.................................................. 89.601
89.602-96.................................................. 89.602
89.603-96.................................................. 89.603
89.604-96.................................................. 89.604
89.605-96.................................................. 89.605
89.606-96.................................................. 89.606
89.607-96.................................................. 89.607
89.608-96.................................................. 89.608
89.609-96.................................................. 89.609
89.610-96.................................................. 89.610
89.611-96.................................................. 89.611
89.612-96.................................................. 89.612
89.613-96.................................................. 89.613
------------------------------------------------------------------------

9. In part 89, all internal section references are revised as
indicated in the above redesignation table.

Subpart A--[Amended]

10. Section 89.1 is amended by revising paragraphs (a) and (b)(4),
by removing the word ``and'' at the end of paragraph (b)(3), and adding
paragraph (b)(5), to read as follows:

Sec. 89.1 Applicability.

(a) This part applies to nonroad compression-ignition engines.
(b) * * *
(4) Engines used in marine vessels as defined in the General
Provisions of the United States Code, 1 U.S.C. 3 , if those engines
have a rated power at or above 37 kW; and
(5) Engines with a per cylinder displacement of less than 50 cubic
centimeters.
11. Section 89.2 is amended by revising the definition of Nonroad
vehicle or nonroad equipment manufacturer, removing the definition of
Nonroad compression-ignition engine and adding new definitions in
alphabetical order to read as follows:

Sec. 89.2 Definitions.

* * * * *
Auxiliary marine diesel engine means a marine diesel engine that is
not a propulsion marine diesel engine.
Blue Sky Series engine means a nonroad engine meeting the
requirements of Sec. 89.112(f).
* * * * *
Compression-ignition means relating to a type of engine with
operating characteristics significantly similar to the theoretical
Diesel combustion cycle. The non-use of a throttle to regulate intake
air flow for controlling power during normal operation is indicative of
a compression-ignition engine. This definition is applicable beginning
January 1, 2000.
Constant-speed engine means an engine that is governed to operate
only at rated speed.
Crankcase emissions means airborne substances emitted to the
atmosphere from any portion of the engine crankcase ventilation or
lubrication systems.
* * * * *
Exhaust gas recirculation means an emission control technology that
reduces emissions by routing exhaust gases that had been exhausted from
the combustion chamber(s) back into the engine to be mixed with
incoming air prior to or during combustion. The use of valve timing to
increase the amount of residual exhaust gas in the combustion
chamber(s) that is mixed with incoming air prior to or during
combustion is not considered to be exhaust gas recirculation for the
purposes of this part.
* * * * *
Full load governed speed is the maximum full load speed as
specified by the manufacturer in the sales and service literature and
certification application. This speed is the highest engine speed with
an advertised power greater than zero.
* * * * *
Intermediate speed means peak torque speed if peak torque speed
occurs from 60 to 75 percent of rated speed. If peak torque speed is
less than 60 percent of rated speed, intermediate speed means 60
percent of rated speed. If peak torque speed is greater than 75 percent
of rated speed, intermediate speed means 75 percent of rated speed.
Marine diesel engine means a compression-ignition engine that is
intended to be installed on a vessel.
* * * * *
Nonroad vehicle or nonroad equipment manufacturer means any person
engaged in the manufacturing or assembling of new nonroad vehicles or
equipment or importing such vehicles or equipment for resale, or who
acts for and is under the control of any such person in connection with
the distribution of such vehicles or equipment. A nonroad vehicle or
equipment manufacturer does not include any dealer with respect to new
nonroad vehicles or equipment received by such person in commerce. A
nonroad vehicle or equipment manufacturer does not include any person
engaged in the manufacturing or assembling of new nonroad vehicles or
equipment who does not install an engine as part of that manufacturing
or assembling process. All nonroad vehicle or equipment manufacturing
entities that are under the control of the same person are considered
to be a single nonroad vehicle or nonroad equipment manufacturer.
* * * * *
Post-manufacture marinizer means a person who produces a marine
diesel engine by substantially modifying a certified or uncertified
complete or partially complete engine, and is not controlled by the
manufacturer of the base engine or by an entity that also controls the
manufacturer of the base engine. For the purpose of this definition,
``substantially modify'' means changing an engine in a way that could
change engine emission characteristics.
* * * * *
Propulsion marine diesel engine means a marine diesel engine that
is intended to move a vessel through the water or direct the movement
of a vessel.
Rated speed is the maximum full load governed speed for governed
engines and the speed of maximum horsepower for ungoverned engines.
Specific emissions means emissions expressed on the basis of
observed brake power, using units of g/kW-hr. Observed brake power
measurement includes accessories on the engine if these accessories are
required for running an emission test (except for the cooling fan).
When it is not possible to test the engine in the gross conditions, for
example, if the engine and transmission form a single integral unit,
the engine

[[Page 56997]]

may be tested in the net condition. Power corrections from net to gross
conditions will be allowed with prior approval of the Administrator.
* * * * *
Tier 1 engine means an engine subject to the Tier 1 emission
standards listed in Sec. 89.112(a).
Tier 2 engine means an engine subject to the Tier 2 emission
standards listed in Sec. 89.112(a).
Tier 3 engine means an engine subject to the Tier 3 emission
standards listed in Sec. 89.112(a).
* * * * *
U.S.-directed production volume means the number of nonroad
equipment, vehicle, or marine diesel engine units produced by a
manufacturer for which the manufacturer has reasonable assurance that
sale was or will be made to ultimate purchasers in the United States.
* * * * *
Vessel has the meaning given to it in 1 U.S.C. 3.
12. Section 89.3 is amended by adding new acronyms in alphabetical
order to read as follows:

Sec. 89.3 Acronyms and abbreviations.

* * * * *
EGR Exhaust gas recirculation.
* * * * *
NMHC Nonmethane hydrocarbon.
* * * * *
PM Particulate matter.
* * * * *
THC Total hydrocarbon.
* * * * *

Sec. 89.4 [Removed and Reserved]

13. Remove and reserve Sec. 89.4.
14. Section 89.6 is amended by revising the last sentence in
paragraph (b)(1) introductory text and the table in paragraph (b)(1) to
read as follows:

Sec. 89.6 Reference materials.

* * * * *
(b) * * *
(1) * * * Copies of these materials may be obtained from American
Society for Testing and Materials, 100 Barr Harbor Drive, West
Conshohocken, PA 19428-2959.

----------------------------------------------------------------------------------------------------------------
Document number and name 40 CFR part 89 reference
----------------------------------------------------------------------------------------------------------------
ASTM D86-97:
``Standard Test Method for Distillation of Petroleum Appendix A to Subpart D.
Products at Atmospheric Pressure''.
ASTM D93-97:
``Standard Test Methods for Flash Point by Pensky- Appendix A to Subpart D.
Martens Closed Cup Tester''.
ASTM D129-95:
``Standard Test Method for Sulfur in Petroleum Products Appendix A to Subpart D.
(General Bomb Method)''.
ASTM D287-92:
``Standard Test Method for API Gravity of Crude Appendix A to Subpart D
Petroleum and Petroleum Products'' (Hydrometer Method).
ASTM D445-97:
``Standard Test Method for Kinematic Viscosity of Appendix A to Subpart D.
Transparent and Opaque Liquids (the Calculation of
Dynamic Viscosity)''.
ASTM D613-95:
``Standard Test Method for Cetane Number of Diesel Fuel Appendix A to Subpart D.
Oil''.
ASTM D1319-98:
``Standard Test Method for Hydrocarbon Types in Liquid Appendix A to Subpart D.
Petroleum Products by Fluorescent Indicator
Adsorption''.
ASTM D2622-98:
``Standard Test Method for Sulfur in Petroleum Products Appendix A to Subpart D.
by Wavelength Dispersive X-ray Fluorescence
Spectrometry''.
ASTM D5186-96:
``Standard Test Method for ``Determination of the Appendix A to Subpart D.
Aromatic Content and Polynuclear Aromatic Content of
Diesel Fuels and Aviation Tubine Fuels By
Supercritical Fluid Chromatography''.
ASTM E29-93a:
``Standard Practice for Using Significant Digits in 89.120; 89.207; 89.509.
Test Data to Determine Conformance with
Specifications''.
----------------------------------------------------------------------------------------------------------------

* * * * *

Subpart B--[Amended]

15. The newly designated Sec. 89.102 is amended by revising the
section heading and paragraph (a) and adding new paragraphs (c), (d),
(e), (f), (g), and (h) to read as follows:

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

(a) This subpart applies to all engines described in Sec. 89.101
with the following power rating and manufactured after the following
dates:
(1) Less than 19 kW and manufactured on or after January 1, 2000;
(2) Greater than or equal to 19 kW but less than 37 kW and
manufactured on or after January 1, 1999;
(3) Greater than or equal to 37 kW but less than 75 kW and
manufactured on or after January 1, 1998;
(4) Greater than or equal to 75 kW but less than 130 kW and
manufactured on or after January 1, 1997;
(5) Greater than or equal to 130 kW but less than or equal to 560
kW and manufactured on or after January 1, 1996;
(6) Greater than 560 kW and manufactured on or after January 1,
2000.
* * * * *
(c) Engines meeting the voluntary standards described in
Sec. 89.112(f) may be designated as Blue Sky Series engines through the
2004 model year.
(d) Implementation flexibility for equipment and vehicle
manufacturers and post-manufacture marinizers. Nonroad equipment and
vehicle manufacturers and post-manufacture marinizers may take any of
the otherwise prohibited actions identified in Sec. 89.1003(a)(1) with
respect to nonroad equipment and vehicles and marine diesel engines,
subject to the requirements of paragraph (e) of this section. The
following allowances apply separately to each engine power category
subject to standards under Sec. 89.112:
(1) Percent-of-production allowances. (i) Equipment rated at or
above 37 kW. For nonroad equipment and vehicles with engines rated at
or above 37 kW, a manufacturer may take any of the actions identified
in Sec. 89.1003(a)(1) for a portion of its U.S.-directed production
volume of such equipment and vehicles during the seven years
immediately following the date on which Tier 2 engine standards first
apply to engines

[[Page 56998]]

used in such equipment and vehicles, provided that the seven-year sum
of these portions in each year, as expressed as a percentage for each
year, does not exceed 80, and provided that all such equipment and
vehicles or equipment contain Tier 1 engines;
(ii) Equipment rated under 37 kW. For nonroad equipment and
vehicles and marine diesel engines with engines rated under 37 kW, a
manufacturer may take any of the actions identified in
Sec. 89.1003(a)(1) for a portion of its U.S.-directed production volume
of such equipment and vehicles during the seven years immediately
following the date on which Tier 1 engine standards first apply to
engines used in such equipment and vehicles, provided that the seven-
year sum of these portions in each year, as expressed as a percentage
for each year, does not exceed 80.
(2) Small volume allowances. A nonroad equipment or vehicle
manufacturer or post-manufacture marinizer may exceed the production
percentages in paragraph (d)(1) of this section, provided that in each
regulated power category the manufacturer's total of excepted nonroad
equipment and vehicles and marine diesel engines:
(i) Over the years in which the percent-of-production allowance
applies does not exceed 100 units times the number of years in which
the percent-of-production allowance applies; and
(ii) Does not exceed 200 units in any year; and
(iii) Does not use engines from more than one engine family, or,
for excepted equipment vehicles, and marine diesel engines using
engines not belonging to any engine family, from more than one engine
manufacturer.
(3) Inclusion of previous-tier engines. Nonroad equipment and
vehicles and marine diesel engines built with previous tier or
noncertified engines under the existing inventory provisions of
Sec. 89.1003(b)(4) need not be included in determining compliance with
paragraphs (d)(1) and (d)(2) of this section.
(e) Recordkeeping and calculation to verify compliance. The
following shall apply to nonroad equipment or vehicle manufacturers and
post-manufacture marinizers who produce excepted equipment or vehicles
or marine diesel engines under the provisions of paragraph (d) of this
section:
(1) For each power category in which excepted nonroad equipment or
vehicles or marine diesel engines are produced, a calculation to verify
compliance with the requirements of paragraph (d) of this section shall
be made by the nonroad equipment or vehicle manufacturer or post-
manufacture marinizer. This calculation shall be made no later than
December 31 of the year following the last year in which allowances are
used, and shall be based on actual production information from the
subject years. If both the percent-of-production and small volume
allowances have been exceeded, then the manufacturer is in violation of
section 203 of the Act and Sec. 89.1003, except as provided under
paragraphs (f) and (h) of this section.
(2) A nonroad equipment or vehicle manufacturer or post-manufacture
marinizer shall keep records of all nonroad equipment and vehicles and
marine diesel engines excepted under the provisions of paragraph (d) of
this section, for each power category in which exceptions are taken.
These records shall include equipment and engine model numbers, serial
numbers, and dates of manufacture, and engine rated power. In addition,
the manufacturer shall keep records sufficient to demonstrate the
verifications of compliance required in paragraph (e)(1) of this
section. All records shall be kept until at least two full years after
the final year in which allowances are available for each power
category, and shall be made available to EPA upon request.
(f) Hardship relief. Nonroad equipment and vehicle manufacturers
and post-manufacture marinizers may take any of the otherwise
prohibited actions identified in Sec. 89.1003(a)(1) if approved by the
Administrator, and subject to the following requirements:
(1) Application for relief must be submitted to the Engine Programs
and Compliance Division of the EPA in writing prior to the earliest
date in which the applying manufacturer would be in violation of
Sec. 89.1003. The manufacturer must submit evidence showing that the
requirements for approval have been met.
(2) The applying manufacturer must not be the manufacturer of the
engines used in the equipment for which relief is sought. This
requirement does not apply to post-manufacture marinizers.
(3) The conditions causing the impending violation must not be
substantially the fault of the applying manufacturer.
(4) The conditions causing the impending violation must be such
that the applying manufacturer will experience serious economic
hardship if relief is not granted.
(5) The applying manufacturer must demonstrate that no allowances
under paragraph (d) of this section will be available to avoid the
impending violation.
(6) Any relief granted must begin within one year after the
implementation date of the standard applying to the engines being used
in the equipment, or to the marine diesel engines, for which relief is
requested, and may not exceed one year in duration.
(7) The Administrator may impose other conditions on the granting
of relief including provisions to recover the lost environmental
benefit.
(g) Allowance for the production of engines. Engine manufacturers
may take any of the otherwise prohibited actions identified in
Sec. 89.1003(a)(1) with regard to uncertified engines or Tier 1
engines, as appropriate, if the engine manufacturer has received
written assurance from the equipment manufacturer that the engine is
required to meet the demand for engines created under paragraph (d),
(f), or (h) of this section.
(h) Alternative Flexibility for Post-Manufacture Marinizers. Post-
manufacture marinizers may elect to delay the effective date of the
Tier 1 standards in Sec. 89.112 for marine diesel engines rated under
37 kW by one year, instead of using the provisions of paragraphs (d)
and (f) of this section. Post-manufacture marinizers wishing to take
advantage of this provision must inform the Director of the Engine
Programs and Compliance Division of their intent to do so in writing
before the date that the standards would otherwise take effect.
16. The newly designated Sec. 89.104 is amended by revising
paragraphs (a), (b), and (c) to read as follows:

Sec. 89.104 Useful life, recall, and warranty periods.

(a) The useful life is based on the rated power and rated speed of
the engine.
(1) For all engines rated under 19 kW, and for constant speed
engines rated under 37 kW with rated speeds greater than or equal to
3,000 rpm, the useful life is a period of 3,000 hours or five years of
use, whichever first occurs.
(2) For all other engines rated at or above 19 kW and under 37 kW,
the useful life is a period of 5,000 hours or seven years of use,
whichever first occurs.
(3) For all engines rated at or above 37 kW, the useful life is a
period of 8,000 hours of operation or ten years of use, whichever first
occurs.
(b) Engines are subject to recall testing for a period based on the
rated power and rated speed of the engines. However, in a recall,
engines in the subject class or category would be

[[Page 56999]]

subject to recall regardless of actual years or hours of operation.
(1) For all engines rated under 19 kW, and for constant speed
engines rated under 37 kW with rated speeds greater than or equal to
3,000 rpm, the engines are subject to recall testing for a period of
2,250 hours or four years of use, whichever first occurs.
(2) For all other engines rated at or above 19 kW and under 37 kW,
the engines are subject to recall for a period of 3,750 hours or five
years of use, whichever first occurs.
(3) For all engines rated at or above 37 kW, the engines are
subject to recall for a period of 6,000 hours of operation or seven
years of use, whichever first occurs.
(c) The warranty periods for warranties imposed by the Clean Air
Act and Sec. 89.1007 for all engines rated under 19 kW, and for
constant speed engines rated under 37 kW with rated speeds greater than
or equal to 3,000 rpm, are 1,500 hours of operation or two years of
use, whichever first occurs. For all other engines, the warranty
periods for warranties imposed by the Clean Air Act and Sec. 89.1007
are 3,000 hours of operation or five years of use, whichever first
occurs.
* * * * *
17. The newly designated Sec. 89.109 is revised to read as follows:

Sec. 89.109 Maintenance instructions and minimum allowable maintenance
intervals.

(a) The manufacturer must furnish or cause to be furnished to the
ultimate purchaser of each new nonroad engine subject to standards
under this part written instructions for the maintenance needed to
ensure proper functioning of the emission control system. Paragraphs
(b) through (h) of this section do not apply to Tier 1 engines with
rated power at or above 37 kW.
(b) Maintenance performed on equipment, engines, subsystems or
components used to determine exhaust emission deterioration factors is
classified as either emission-related or nonemission-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.
(c) This paragraph (c) specifies emission-related scheduled
maintenance for purposes of obtaining durability data for nonroad
engines. The maintenance intervals specified below are minimum
intervals:
(1) All emission-related scheduled maintenance for purposes of
obtaining durability data must occur at the same or longer hours of use
intervals as those specified in the manufacturer's maintenance
instructions furnished to the ultimate purchaser of the engine under
paragraph (a) of this section. This maintenance schedule may be updated
as necessary throughout the testing of the engine, provided that no
maintenance operation is deleted from the maintenance schedule after
the operation has been performed on the test equipment or engine.
(2) Any emission-related maintenance which is performed on
equipment, engines, subsystems, or components must be technologically
necessary to ensure in-use compliance with the emission standards. The
manufacturer must submit data which demonstrate to the Administrator
that all of the emission-related scheduled maintenance which is to be
performed is technologically necessary. Scheduled maintenance must be
approved by the Administrator prior to being performed or being
included in the maintenance instructions provided to the purchasers
under paragraph (a) of this section.
(i) The Administrator may require longer maintenance intervals than
those listed in paragraphs (c)(3) and (c)(4) of this section where the
listed intervals are not technologically necessary.
(ii) The Administrator may allow manufacturers to specify shorter
maintenance intervals than those listed in paragraphs (c)(3) and (c)(4)
of this section where technologically necessary for engines rated under
19 kW, or for constant speed engines rated under 37 kW with rated
speeds greater than or equal to 3,000 rpm.
(3) The adjustment, cleaning, repair, or replacement of items
listed in paragraphs (c)(3)(i) through (c)(3)(iii) of this section
shall occur at 1,500 hours of use and at 1,500-hour intervals
thereafter.
(i) Exhaust gas recirculation system-related filters and coolers.
(ii) Positive crankcase ventilation valve.
(iii) Fuel injector tips (cleaning only).
(4) The adjustment, cleaning and repair of items in paragraphs
(c)(4)(i) through (c)(4)(vii) of this section shall occur at 3,000
hours of use and at 3,000-hour intervals thereafter for nonroad
compression-ignition engines rated under 130 kW, or at 4,500-hour
intervals thereafter for nonroad compression-ignition engines rated at
or above 130 kW.
(i) Fuel injectors.
(ii) Turbocharger.
(iii) Electronic engine control unit and its associated sensors and
actuators.
(iv) Particulate trap or trap-oxidizer system (including related
components).
(v) Exhaust gas recirculation system (including all related control
valves and tubing) except as otherwise provided in paragraph (c)(3)(i)
of this section.
(vi) Catalytic convertor.
(vii) Any other add-on emission-related component (i.e., a
component whose sole or primary purpose is to reduce emissions or whose
failure will significantly degrade emission control and whose function
is not integral to the design and performance of the engine).
(d) Scheduled maintenance not related to emissions which is
reasonable and technologically necessary (e.g., oil change, oil filter
change, fuel filter change, air filter change, cooling system
maintenance, adjustment of idle speed, governor, engine bolt torque,
valve lash, injector lash, timing, lubrication of the exhaust manifold
heat control valve, etc.) may be performed on durability vehicles at
the least frequent intervals recommended by the manufacturer to the
ultimate purchaser, (e.g., not the intervals recommended for severe
service).
(e) Adjustment of engine idle speed on emission data engines may be
performed once before the low-hour emission test point. Any other
engine, emission control system, or fuel system adjustment, repair,
removal, disassembly, cleaning, or replacement on emission data
vehicles shall be performed only with advance approval of the
Administrator.
(f) Equipment, instruments, or tools may not be used to identify
malfunctioning, maladjusted, or defective engine components unless the
same or equivalent equipment, instruments, or tools will be available
to dealerships and other service outlets and:
(1) Are used in conjunction with scheduled maintenance on such
components; or
(2) Are used subsequent to the identification of a vehicle or
engine malfunction, as provided in paragraph (e) of this section for
emission data engines; or
(3) Specifically authorized by the Administrator.
(g) All test data, maintenance reports, and required engineering
reports shall be compiled and provided to the Administrator in
accordance with Sec. 89.124.
(h)(1) The components listed in paragraphs (h)(1)(i) through
(h)(1)(vi) of this section are defined as critical emission-related
components.
(i) Catalytic converter.
(ii) Electronic engine control unit and its associated sensors and
actuators.
(iii) Exhaust gas recirculation system (including all related
filters, coolers, control valves, and tubing).

[[Page 57000]]

(iv) Positive crankcase ventilation valve.
(v) Particulate trap or trap-oxidizer system.
(vi) Any other add-on emission-related component (i.e., a component
whose sole or primary purpose is to reduce emissions or whose failure
will significantly degrade emission control and whose function is not
integral to the design and performance of the engine).
(2) All critical emission-related scheduled maintenance must have a
reasonable likelihood of being performed in use. The manufacturer must
show the reasonable likelihood of such maintenance being performed in-
use. Critical emission-related scheduled maintenance items which
satisfy one of the conditions defined in paragraphs (h)(2)(i) through
(h)(2)(vi) of this section will be accepted as having a reasonable
likelihood of being performed in use.
(i) 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
operation.
(ii) Survey data are submitted which adequately demonstrate to the
Administrator with an 80 percent confidence level that 80 percent of
such engines already have this critical maintenance item performed in-
use at the recommended interval(s).
(iii) A clearly displayed visible signal system approved by the
Administrator is installed to alert the equipment operator 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 usage 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. The system must not be designed
to deactivate upon the end of the useful life of the engine or
thereafter.
(iv) 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 (h)(2)(ii) 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.
(v) The manufacturer provides the maintenance free of charge, and
clearly informs the customer that the maintenance is free in the
instructions provided under paragraph (a) of this section.
(vi) The manufacturer uses any other method which the Administrator
approves as establishing a reasonable likelihood that the critical
maintenance will be performed in-use.
(3) Visible signal systems used under paragraph (h)(2)(iii) 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.
18. The newly designated Sec. 89.110 is amended by removing ``and''
at the end of paragraph (b)(9), by adding a semicolon at the end of
paragraph (b)(10), and by adding new paragraphs (b)(11) and (b)(12) to
read as follows:

Sec. 89.110 Emission control information label.

* * * * *
(b) * * *
(11) Engines belonging to an engine family that has been certified
as a constant-speed engine using the test cycle specified in Table 2 of
appendix B to subpart E of this part must contain the statement on the
label: ``constant-speed only''; and
(12) Engines meeting the voluntary standards described in
Sec. 89.112(f)(1) to be designated as Blue Sky Series engines must
contain the statement on the label: ``Blue Sky Series''.
* * * * *
19. The newly designated Sec. 89.112 is amended by revising
paragraphs (a), (b), and (d), and adding new paragraphs (e) and (f) to
read as follows:

Sec. 89.112 Oxides of nitrogen, carbon monoxide, hydrocarbon, and
particulate matter exhaust emission standards.

(a) Exhaust emission from nonroad engines to which this subpart is
applicable shall not exceed the applicable exhaust emission standards
contained in Table 1, as follows:

BILLING CODE 6560-50-P

[[Page 57001]]

[GRAPHIC] [TIFF OMITTED] TR23OC98.001

BILLING CODE 6560-50-C

[[Page 57002]]

(b) Exhaust emissions of oxides of nitrogen, carbon monoxide,
hydrocarbon, and nonmethane hydrocarbon are measured using the
procedures set forth in subpart E of this part.
* * * * *
(d) In lieu of the NO_X standards, NMHC + NO_X
standards, and PM standards specified in paragraph (a) of this section,
manufacturers may elect to include engine families in the averaging,
banking, and trading program, the provisions of which are specified in
subpart C of this part. The manufacturer must set a family emission
limit (FEL) not to exceed the levels contained in Table 2. The FEL
established by the manufacturer serves as the standard for that engine
family. Table 2 follows:

BILLING CODE 6560-50-P
[GRAPHIC] [TIFF OMITTED] TR23OC98.002

BILLING CODE 6560-50-C

[[Page 57003]]

(e) Naturally aspirated nonroad engines to which this subpart is
applicable shall not discharge crankcase emissions into the ambient
atmosphere, unless such crankcase emissions are permanently routed into
the exhaust and included in all exhaust emission measurements. This
provision applies to all Tier 2 engines and later models. This
provision does not apply to engines using turbochargers, pumps,
blowers, or superchargers for air induction.
(f) The following paragraphs define the requirements for low-
emitting Blue Sky Series engines:
(1) Voluntary standards. Engines may be designated ``Blue Sky
Series'' engines through the 2004 model year by meeting the voluntary
standards listed in Table 3, which apply to all certification and in-
use testing, as follows:

Table 3.--Voluntary Emission Standards (g/kW-hr)
------------------------------------------------------------------------
Rated Brake Power (kW) NMHC+NO<INF>X PM
------------------------------------------------------------------------
kW<8.............................................. 4.6 0.48
8<ls-thn-eq>kW<19................................. 4.5 0.48
19<ls-thn-eq>kW<37................................ 4.5 0.36
37<ls-thn-eq>kW<75................................ 4.7 0.24
75<ls-thn-eq>kW<130............................... 4.0 0.18
130<ls-thn-eq>kW<ls-thn-eq>560.................... 4.0 0.12
kW>560............................................ 3.8 0.12
------------------------------------------------------------------------

(2) Additional standards. Blue Sky Series engines are subject to
all provisions that would otherwise apply under this part, except as
specified in paragraph (f)(3) of this section.
(3) Test procedures. NO_X, NMHC, and PM emissions are
measured using the procedures set forth in 40 CFR part 86, subpart N,
in lieu of the procedures set forth in subpart E of this part. CO
emissions may be measured using the procedures set forth either in 40
CFR part 86, subpart N, or in Subpart E of this part. Manufacturers may
use an alternate procedure to demonstrate the desired level of emission
control if approved in advance by the Administrator. Engines meeting
the requirements to qualify as Blue Sky Series engines must be capable
of maintaining a comparable level of emission control when tested using
the procedures set forth in paragraph (c) of this section and subpart E
of this part. The numerical emission levels measured using the
procedures from subpart E of this part may be up to 20 percent higher
than those measured using the procedures from 40 CFR part 86, subpart
N, and still be considered comparable.
20. The newly designated Sec. 89.113 is amended by revising
paragraph (b) and adding new paragraph (c) to read as follows:

Sec. 89.113 Smoke emission standard.

* * * * *
(b) Opacity levels are to be measured and calculated as set forth
in 40 CFR part 86, subpart I. Notwithstanding the provisions of 40 CFR
part 86, subpart I, two-cylinder nonroad engines may be tested using an
exhaust muffler that is representative of exhaust mufflers used with
the engines in use.
(c) The following engines are exempt from the requirements of this
section:
(1) Single-cylinder engines;
(2) Propulsion marine diesel engines; and
(3) Constant-speed engines.
21. The newly designated Sec. 89.114 is amended by revising the
section heading, paragraph (a) and the heading of paragraph (b) to read
as follows:

Sec. 89.114 Special and alternate test procedures.

(a) Special test procedures. The Administrator may, on the basis of
written application by a manufacturer, establish special test
procedures other than those set forth in this part, for any nonroad
engine that the Administrator determines is not susceptible to
satisfactory testing under the specified test procedures set forth in
subpart E of this part or 40 CFR part 86, subpart I.
(b) Alternate test procedures. * * *
22. The newly designated Sec. 89.116 is amended by adding a new
paragraph (e) to read as follows:

Sec. 89.116 Engine families.

* * * * *
(e)(1) This paragraph (e) applies only to the placement of Tier 1
engines with power ratings under 37 kW into engine families. The
provisions of paragraphs (a) through (d) of this section also apply to
these engines. The power categories referred to in this paragraph (e)
are those for which separate standards or implementation dates are
described in Sec. 89.112.
(2) A manufacturer may place engines with power ratings in one
power category into an engine family comprised of engines with power
ratings in another power category, and consider all engines in the
engine family as being in the latter power category for the purpose of
determining compliance with the standards and other requirements of
this part, subject to approval in advance by the Administrator and the
following restrictions:
(i) The engines that have power ratings outside the engine family's
power category must constitute less than half of the engine family's
sales in each model year for which the engine family grouping is made;
and
(ii) The engines that have power ratings outside the engine
family's power category must have power ratings that are within ten
percent of either of the two power levels that define the engine
family's power category.
(3) The restrictions described in paragraphs (e)(2)(i) and
(e)(2)(ii) of this section do not apply if the emissions standards and
other requirements of this part are at least as stringent for the
engine family's power category as those of the other power categories
containing engines in the engine family.
23. The newly designated Sec. 89.117 is amended by revising
paragraph (a) and adding a new paragraph (d) to read as follows:

Sec. 89.117 Test fleet selection.

(a) The manufacturer must select for testing, from each engine
family, the engine with the most fuel injected per stroke of an
injector, primarily at the speed of maximum torque and secondarily at
rated speed.
* * * * *
(d) For establishing deterioration factors, the manufacturer shall
select the engines, subsystems, or components to be used to determine
exhaust emission deterioration factors for each engine-family control
system combination. Engines, subsystems, or components shall be
selected so that their emission deterioration characteristics are
expected to represent those of in-use engines, based on good
engineering judgment.
24. The newly designated Sec. 89.118 is amended by revising the
section heading and adding new introductory text and a new paragraph
(e) to read as follows:

Sec. 89.118 Deterioration factors and service accumulation.

This section applies to service accumulation used to determine
deterioration factors and service accumulation used to condition test
engines. Paragraphs (a) and (b) of this section apply only for service
accumulation used to condition test engines. Paragraph (e) of this
section applies only for service accumulation used to determine
deterioration factors. Paragraphs (c) and (d) of this section apply for
all service accumulation required by this part.
* * * * *
(e) This paragraph (e) describes service accumulation and
alternative requirements for the purpose of developing deterioration
factor.

[[Page 57004]]

(1) Service accumulation on engines, subsystems, or components
selected by the manufacturer under Sec. 89.117(d). The manufacturer
shall describe the form and extent of this service accumulation in the
application for certification.
(2) Determination of exhaust emission deterioration factors. The
manufacturer shall determine the deterioration factors in accordance
with the applicable provisions of this part based on service
accumulation and related testing, according to the manufacturer's
procedures, except as provided in paragraph (e)(3) of this section.
(3) Alternatives to service accumulation and testing for the
determination of a deterioration factor. A written explanation of the
appropriateness of using an alternative must be included in the
application for certification.
(i) Carryover and carryacross of durability emission data. In lieu
of testing an emission data or durability data engine selected under
Sec. 89.117(d), a manufacturer may, with Administrator approval, use
exhaust emission deterioration data on a similar engine for which
certification to the same standard has previously been obtained or for
which all applicable data required under Sec. 89.124 has previously
been submitted. This data must be submitted in the application for
certification.
(ii) Use of on-highway deterioration data. In the case where a
manufacturer produces a certified on-highway engine that is similar to
the nonroad engine to be certified, deterioration data from the on-
highway engine may be applied to the nonroad engine. This application
of deterioration data from an on-highway engine to a nonroad engine is
subject to Administrator approval, and the determination of whether the
engines are similar must be based on good engineering judgment.
(iii) Engineering analysis for established technologies. (A) In the
case where an engine family uses established technology, an analysis
based on good engineering practices may be used in lieu of testing to
determine a deterioration factor for that engine family, subject to
Administrator approval.
(B) Engines for which the certification levels are not at or below
the Tier 3 NMHC+NO_X standards described in Sec. 89.112 are
considered established technology, except as provided in paragraph
(e)(3)(iii)(D) of this section.
(C) Manufacturers may petition the Administrator to consider an
engine with a certification level below the Tier 3 NMHC+NO_X
standards as established technology. This petition must be based on
proof that the technology used is not significantly different than that
used on engines that have certification levels that are not below the
Tier 3 NMHC+NO_X levels.
(D) Engines using exhaust gas recirculation or aftertreatment are
excluded from the provision set forth in paragraphs (e)(3)(iii)(A)
through (e)(3)(iii)(C) of this section.
(E) The manufacturer shall provide a written statement to the
Administrator that all data, analyses, test procedures, evaluations,
and other documents, on which the deterioration factor is based, are
available to the Administrator upon request.
(iv) Interim provision for engines rated under 37 kW. For model
year 1999 and 2000 engines rated under 37 kW, manufacturers may
determine deterioration factors based on good engineering judgement and
reasonably available information. The manufacturer must maintain and
provide to the Administrator, if requested, all information used to
determine deterioration factors for these engines.
25. The newly designated Sec. 89.119 is amended by revising
paragraph (d) to read as follows:

Sec. 89.119 Emission tests.

* * * * *
(d) The provisions of this paragraph (d) apply only to Tier 1
nonroad engines without exhaust aftertreatment rated at or above 37 kW.
(1) Particulate emission measurements from Tier 1 nonroad engines
without exhaust aftertreatment rated at or above 37 kW may be adjusted
to a sulfur content of 0.05 weight percent.
(2) Adjustments to the particulate measurement shall be made using
the following equation:

PM<INF>adj</INF>=PM-[BSFC x 0.0917 x (FSF-0.0005)]

Where:

PM<INF>adj</INF>=adjusted measured PM level [g/Kw-hr].
PM=measured weighted PM level [g/Kw-hr].
BSFC=measured brake specific fuel consumption [G/Kw-hr].
FSF=fuel sulfur weight fraction.

(3) Where a manufacturer certifies using test fuel with a sulfur
content less than or equal to 0.050 weight percent, EPA shall not use
emission data collected using test fuel with a sulfur content greater
than 0.050 weight percent to determine compliance with the Tier 1 PM
standards.
(4) Where a manufacturer certifies using test fuel with a sulfur
content greater than 0.050 weight percent, EPA shall not use emission
data collected using test fuel with a sulfur content greater than 0.050
weight percent to determine compliance with the Tier 1 PM standards,
unless EPA adjusts the PM measurement using the equation specified in
paragraph (d)(2) of this section.
26. The newly designated Sec. 89.120 is amended by revising
paragraph (c) and adding paragraph (e) to read as follows:

Sec. 89.120 Compliance with emission standards.

* * * * *
(c) For each nonroad engine family, except Tier 1 engine families
with rated power at or above 37 kW that do not employ aftertreatment, a
deterioration factor must be determined and applied.
(1) The applicable exhaust emission standards (or family emission
limits, as appropriate) for nonroad compression-ignition engines apply
to the emissions of engines for their useful life.
(2) [Reserved]
(3)(i) This paragraph (c)(3) 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. The NMHC + NO_X deterioration
factors shall be established based on the sum of the pollutants, except
as provided in paragraph (c)(3)(iv) of this section. When establishing
deterioration factors for NMHC + NO_X, a negative
deterioration (emissions decrease from the official emissions test
result) for one pollutant may not offset deterioration of the other
pollutant.
(ii) Separate emission deterioration factors, determined by the
manufacturer according to the requirements of Sec. 89.118, shall be
provided in the certification application for each engine-system
combination. Separate deterioration factors shall be established for
each regulated pollutant, except that a combined NMHC + NO_X
deterioration factor shall be established for compression-ignition
nonroad engines not utilizing aftertreatment technology. For smoke
testing, separate deterioration 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) Compression-ignition nonroad engines not utilizing
aftertreatment technology (e.g., particulate traps). For CO, NMHC +
NO_X, and particulate, the official exhaust emission results
for each emission data engine at the selected test point shall be
adjusted by addition of the appropriate deterioration factor. However,
if the deterioration factor supplied by the manufacturer is

[[Page 57005]]

less than zero, it shall be zero for the purposes of this paragraph
(c)(3)(iii).
(iv) Compression-ignition nonroad engines utilizing aftertreatment
technology (e.g., particulate traps). For CO, NMHC + NO_X,
and 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. Separate NMHC
and NO_X deterioration factors shall be applied to the
results for these pollutants prior to combining the results. If the
deterioration factor supplied by the manufacturer is less than one, it
shall be one for the purposes of this paragraph (c)(3)(iv).
(v) For acceleration smoke (``A''), lugging smoke (``B''), and peak
opacity (``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 supplied by the manufacturer is less than zero, it shall
be zero for the purposes of this paragraph (c)(3)(v).
(vi) The emission values to compare with the standards (or family
emission limits, as appropriate) shall be the adjusted emission values
of paragraphs (c)(3)(iii) through (v) of this section, rounded to the
same number of significant figures as contained in the applicable
standard in accordance with ASTM E29-93a, for each emission data
engine. This procedure has been incorporated by reference at Sec. 89.6.
(4) Every test engine of an engine family must comply with all
applicable standards (or family emission limits, as appropriate), as
determined in paragraph (c)(3)(vi) of this section, before any engine
in that family will be certified.
* * * * *
(e) For the purposes of setting an NMHC + NO_X
certification level or FEL, one of the following options shall be used
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.
(1) The manufacturer may assume that up to two percent of the
measured THC is methane (NMHC = 0.98 x THC).
(2) The manufacturer may measure NMHC emissions using a method
approved by the Administrator prior to the start of testing. This
option allows the determination of NMHC emissions by subtracting
measured methane emissions from measured THC emissions.
27. The newly designated Sec. 89.124 is amended by adding paragraph
(a)(3) to read as follows:

Sec. 89.124 Record retention, maintenance, and submission.

(a) * * *
(3) Information required to be kept by the manufacturer in
Sec. 89.118(e)(3) for alternatives to service accumulation and testing
for the determination of a deterioration factor.
* * * * *
28. The newly designated Sec. 89.125 is amended by revising
paragraph (b) to read as follows:

Sec. 89.125 Production engines, annual report.

* * * * *
(b) The manufacturer must annually, within 30 days after the end of
the model year, notify the Administrator of the number of engines
produced by engine family, by gross power, by displacement, by fuel
system, and, for engines produced under the provision of
Sec. 89.102(g), by engine model and purchaser (or shipping destination
for engines used by the engine manufacturer), or by other categories as
the Administrator may require.
29. The newly designated Sec. 89.126 is amended by revising
paragraph (c) to read as follows:

Sec. 89.126 Denial, revocation of certificate of conformity.

* * * * *
(c) If a manufacturer knowingly commits an infraction specified in
paragraph (b)(1) or (b)(4) of this section, knowingly commits any other
fraudulent act which results in the issuance of a certificate of
conformity, or fails to comply with the conditions specified in
Sec. 89.203(d), Sec. 89.206(c), Sec. 89.209(c) or Sec. 89.210(g), the
Administrator may deem such certificate void ab initio.
* * * * *
30. A new Sec. 89.130 is added to subpart B to read as follows:

Sec. 89.130 Rebuild practices.

(a) The provisions of this section are applicable to engines
subject to the standards prescribed in Sec. 89.112 and are applicable
to the process of engine rebuilding (or rebuilding a portion of an
engine or engine system). This section does not apply to Tier 1 engines
rated at or above 37 kW. 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.
(b) 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 emission 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.
(c) When an engine is being rebuilt and remains installed or is
reinstalled in the same equipment, 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 certified configuration that is equivalent,
from an emissions standpoint, to the engine being replaced.
(d) At time of rebuild, emission-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. 89.109 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.
(e) When conducting a rebuild without removing the engine from the
equipment, or during the installation of a rebuilt engine, all critical
emission-related components listed in 40 CFR part 86, subpart B, not
otherwise addressed by paragraphs (b) through (d) of this section must
be checked and cleaned, adjusted, repaired, or replaced as necessary,
following manufacturer recommended practices.
(f) Records shall be kept by parties conducting activities included
in paragraphs (b) through (e) of this section. The records shall
include at

[[Page 57006]]

minimum the hours of operation at time of rebuild, a listing of work
performed on the engine, and emission-related control components
including a listing of parts and components used, engine parameter
adjustments, emission-related codes or signals responded to and reset,
and work performed under paragraph (e) 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.

Subpart C--[Amended]

31. The newly designated Sec. 89.203 is revised to read as follows:

Sec. 89.203 General provisions.

(a) The averaging, banking, and trading programs for
NO_X, NMHC+NO_X, and PM emissions from eligible
nonroad engines are described in this subpart. Participation in these
programs is voluntary.
(b) Requirements for Tier 1 engines rated at or above 37 kW. (1) A
nonroad engine family is eligible to participate in the averaging,
banking, and trading program for NO_X emissions and the
banking and trading program for PM emissions if it is subject to
regulation under subpart B of this part with certain exceptions
specified in paragraph (b)(2) of this section. No averaging, banking,
and trading program is available for meeting the Tier 1 HC, CO, or
smoke emission standards specified in subpart B of this part. No
averaging program is available for meeting the Tier 1 PM emission
standards specified in subpart B of this part.
(2) Nonroad engines may not participate in the averaging, banking,
and trading programs if they are exported or are sold as Blue Sky
Series engines as described in Sec. 89.112(f). Nonroad engines
certified on a special test procedure under Sec. 89.114(a), may not
participate in the averaging, banking and trading programs unless the
manufacturer has requested that the engines be included in the
averaging, banking, and trading programs at the time the request for
the special test procedure is made and has been granted approval by the
Administrator for inclusion in the averaging, banking, and trading
programs.
(3) A manufacturer may certify one or more nonroad engine families
at NO_X family emission limits (FELs) above or below the Tier
1 NO_X emission standard, provided the summation of the
manufacturer's projected balance of all NO_X credit
transactions in a given model year is greater than or equal to zero, as
determined under Sec. 89.207(a). A manufacturer may certify one or more
nonroad engine families at PM FELs below the Tier 2 PM emission
standard that will be applicable to those engine families.
(i) FELs for NO_X may not exceed the Tier 1 upper limit
specified in Sec. 89.112(d).
(ii) An engine family certified to an FEL is subject to all
provisions specified in this part, except that the applicable FEL
replaces the emission standard for the family participating in the
averaging, banking, and trading program.
(iii) A manufacturer of an engine family with a NO_X FEL
exceeding the Tier 1 NO_X emission standard must obtain
NO_X emission credits sufficient to address the associated
credit shortfall via averaging, banking, or trading.
(iv) An engine family with a NO_X FEL below the
applicable Tier 1 standard may generate emission credits for averaging,
banking, trading, or a combination thereof. An engine family with a PM
FEL below the Tier 2 standard that will be applicable to that engine
family may generate emission credits for banking, trading, or a
combination thereof. Emission credits may not be used to offset an
engine family's emissions that exceed its applicable FEL. Credits may
not be used to remedy nonconformity determined by a Selective
Enforcement Audit (SEA) or by recall (in-use) testing. However, in the
case of an SEA failure, 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.
(4) NO_X credits generated in a given model year may be
used to address credit shortfalls with other engines during that model
year or in any subsequent model year except as noted under paragraph
(b)(5)(ii) of this section. PM credits may be used to address credit
shortfalls with Tier 2 and later engines greater than or equal to 37 kW
and Tier 1 and later engines less than 37 kW and greater than or equal
to 19 kW. Credits generated in one model year may not be used for prior
model years.
(5) The following provisions apply to the use of Tier 1
NO_X credits for showing compliance with the Tier 2 or Tier 3
NMHC+NO_X standards.
(i) A manufacturer may use NO_X credits from engines
subject to the Tier 1 NO_X standard to address
NMHC+NO_X credit shortfalls with engines in the same
averaging set subject to Tier 1 NMHC+NO_X or Tier 2
NMHC+NO_X emission standards.
(ii) A manufacturer may not use NO_X credits from engines
subject to the Tier 1 standards to address NMHC+NO_X credit
shortfalls with engines subject to the Tier 3 NMHC+NO_X
emission standards.
(c) Requirements for Tier 2 and later engines rated at or above 37
kW and Tier 1 and later engines rated under 37 kW.
(1) A nonroad engine family is eligible to participate in the
averaging, banking, and trading programs for NMHC+NO_X
emissions and PM emissions if it is subject to regulation under subpart
B of this part with certain exceptions specified in paragraph (c)(2) of
this section. No averaging, banking, and trading program is available
for meeting the CO or smoke emission standards specified in subpart B
of this part.
(2) Nonroad engines may not participate in the averaging, banking,
and trading programs if they are exported or are sold as Blue Sky
Series engines as described in Sec. 89.112(f). Nonroad engines
certified on a special test procedure under Sec. 89.114(a), may not
participate in the averaging, banking and trading programs unless the
manufacturer has requested that the engines be included in the
averaging, banking, and trading programs at the time the request for
the special test procedure is made and has been granted approval by the
Administrator for inclusion in the averaging, banking, and trading
programs.
(3)(i) A manufacturer may certify one or more nonroad engine
families at FELs above or below the applicable NMHC+NO_X
emission standard and PM emission standard, provided the summation of
the manufacturer's projected balance of all NMHC+NO_X credit
transactions and the summation of the manufacturer's projected balance
of all PM credit transactions in a given model year in a given
averaging set is greater than or equal to zero, as determined under
Sec. 89.207(b).
(A) FELs for NMHC+NO_X and FELs for PM may not exceed the
upper limits specified in Sec. 89.112(d).

[[Page 57007]]

(B) An engine family certified to an FEL is subject to all
provisions specified in this part, except that the applicable FEL
replaces the emission standard for the family participating in the
averaging, banking, and trading program.
(C) A manufacturer of an engine family with an FEL exceeding the
applicable emission standard must obtain emission credits sufficient to
address the associated credit shortfall via averaging, banking, or
trading, within the restrictions described in Sec. 89.204(c) and
Sec. 89.206(b)(4).
(D) An engine family with an FEL below the applicable standard may
generate emission credits for averaging, banking, trading, or a
combination thereof. Emission credits may not be used to offset an
engine family's emissions that exceed its applicable FEL. Credits may
not be used to remedy nonconformity determined by a Selective
Enforcement Audit (SEA) or by recall (in-use) testing. However, in the
case of an SEA failure, 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.
(ii)(A) In lieu of generating credits under paragraph (c)(3)(i) of
this section, a manufacturer may certify one or more nonroad engine
families rated under 37 kW at family emission limits (FELs) above or
below the applicable NMHC+NO_X emission standard and PM
emission standard. The summation of the manufacturer's projected
balance of all NMHC+NO_X credit transactions and the
summation of the manufacturer's projected balance of all PM credit
transactions in a given model year, as determined under Sec. 89.207(b),
are each allowed to be less than zero. Separate calculations shall be
required for the following two categories of engines: engines rated
under 19 kW and engines rated at or above 19 kW and under 37 kW.
(B) For each calendar year a negative credit balance exists as of
December 31, a penalty equal to ten percent of the negative credit
balance as of December 31 of the calendar year shall be added to the
negative credit balance. The resulting negative credit balance shall be
carried into the next calendar year.
(C) For engines rated under 19 kW, a manufacturer will be allowed
to carry over a negative credit balance until December 31, 2003. For
engines rated at or above 19 kW and under 37 kW, a manufacturer will be
allowed to carry over a negative credit balance until December 31,
2002. As of these dates, the summation of the manufacturer's projected
balance of all NMHC+NO_X credit transactions and the
summation of the manufacturer's projected balance of all PM credit
transactions must each be greater than or equal to zero.
(D) FELs for NMHC+NO_X and FELs for PM may not exceed the
upper limits specified in Sec. 89.112(d).
(E) An engine family certified to an FEL is subject to all
provisions specified in this part, except that the applicable
NMHC+NO_X FEL or PM FEL replaces the NMHC+NO_X
emission standard or PM emission standard for the family participating
in the averaging and banking program.
(F) A manufacturer of an engine family with an FEL exceeding the
applicable emission standard must obtain emission credits sufficient to
address the associated credit shortfall via averaging or banking. The
exchange of emission credits generated under this program with other
nonroad engine manufacturers in trading is not allowed.
(G) An engine family with an FEL below the applicable standard may
generate emission credits for averaging, banking, or a combination
thereof. Emission credits may not be used to offset an engine family's
emissions that exceed its applicable FEL. Credits may not be used to
remedy nonconformity determined by a Selective Enforcement Audit (SEA)
or by recall (in-use) testing. However, in the case of an SEA failure,
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.
(4)(i) Except as noted in paragraphs (c)(4)(ii), (c)(4)(iii), and
(c)(4)(iv) of this section, credits generated in a given model year may
be used during that model year or used in any subsequent model year.
Except as allowed under paragraph (c)(3)(ii) of this section, credits
generated in one model year may not be used for prior model years.
(ii) Credits generated from engines rated under 19 kW prior to the
implementation date of the applicable Tier 2 standards, shall expire on
December 31, 2007.
(iii) Credits generated from engines rated under 19 kW under the
provisions of paragraph (c)(3)(ii) shall expire on December 31, 2003.
(iv) Credits generated from engines rated at or above 19 kW and
under 37 kW under the provisions of paragraph (c)(3)(ii) of this
section shall expire on December 31, 2002.
(5) Except as provided in paragraph (b)(3) of this section, engine
families may not generate credits for one pollutant while also using
credits for another pollutant in the same model year.
(d) Manufacturers must demonstrate compliance under the averaging,
banking, and trading programs for a particular model year within 270
days of the end of the model year. Except as allowed under paragraph
(c)(3)(ii) of this section, manufacturers that have certified engine
families to FELs above the applicable emission standards and do not
have sufficient emission credits to offset the difference between the
emission standards and the FEL for such engine families will be in
violation of the conditions of the certificate of conformity for such
engine families. The certificates of conformity may be voided ab initio
under Sec. 89.126(c) for those engine families.
32. The newly designated Sec. 89.204 is revised to read as follows:

Sec. 89.204 Averaging.

(a) Requirements for Tier 1 engines rated at or above 37 kW. A
manufacturer may use averaging to offset an emission exceedance of a
nonroad engine family caused by a NO_X FEL above the
applicable emission standard. NO_X credits used in averaging
may be obtained from credits generated by another engine family in the
same model year, credits banked in a previous model year, or credits
obtained through trading.
(b) Requirements for Tier 2 and later engines rated at or above 37
kW and Tier 1 and later engines rated under 37 kW. A manufacturer may
use averaging to offset an emission exceedance of a nonroad engine
family caused by an NMHC+NO_X FEL or a PM FEL above the
applicable emission standard. Credits used in averaging may be obtained
from credits generated by another engine family in the same model year,
credits banked in previous model years that have not expired, or
credits obtained through trading. The use of credits shall be within
the restrictions described in paragraph (c) of this section,
Sec. 89.206(b)(4) and Sec. 89.203(b)(5)(ii).
(c) Averaging sets for emission credits. The averaging and trading
of NO_X emission credits, NMHC + NO_X emission
credits, and PM emissions credits will only be allowed between engine
families in the same averaging set. The averaging sets for the
averaging and trading of NO_X emission credits, NMHC +
NO_X emission credits, and PM emission credits for nonroad
engines are defined as follows:
(1) Eligible engines rated at or above 19 kW, other than marine
diesel engines, constitute an averaging set.
(2) Eligible engines rated under 19 kW, other than marine diesel
engines, constitute an averaging set.

[[Page 57008]]

(3) Marine diesel engines rated at or above 19 kW constitute an
averaging set. Emission credits generated from marine diesel engines
rated at or above 19 kW may be used to address credit shortfalls for
eligible engines rated at or above 19 kW other than marine diesel
engines.
(4) Marine diesel engines rated under 19 kW constitute an averaging
set. Emission credits generated from marine diesel engines rated under
19 kW may be used to address credit shortfalls for eligible engines
rated under 19 kW other than marine diesel engines.
33. The newly designated Sec. 89.205 is revised to read as follows:

Sec. 89.205 Banking.

(a) Requirements for Tier 1 engines rated at or above 37 kW. (1) A
manufacturer of a nonroad engine family with a NO_X FEL below
the applicable standard for a given model year may bank credits in that
model year for use in averaging and trading in any subsequent model
year.
(2) A manufacturer of a nonroad engine family may bank
NO_X credits up to one calendar year prior to the effective
date of mandatory certification. Such engines must meet the
requirements of subparts A, B, D, E, F, G, H, I, J, and K of this part.
(3)(i) A manufacturer of a nonroad engine family may bank PM
credits from Tier 1 engines under the provisions specified in
Sec. 89.207(b) for use in averaging and trading in the Tier 2 or later
timeframe.
(ii) Such engine families are subject to all provisions specified
in subparts A, B, D, E, F, G, H, I, J, and K of this part, except that
the applicable PM FEL replaces the PM emission standard for the family
participating in the banking and trading program.
(b) Requirements for Tier 2 and later engines rated at or above 37
kW and Tier 1 and later engines rated under 37 kW. (1) A manufacturer
of a nonroad engine family with an NMHC + NO_X FEL or a PM
FEL below the applicable standard for a given model year may bank
credits in that model year for use in averaging and trading in any
following model year.
(2) For engine rated under 37 kW, a manufacturer of a nonroad
engine family may bank credits prior to the effective date of mandatory
certification. Such engines must meet the requirements of subparts A,
B, D, E, F, G, H, I, J, and K of this part.
(c) A manufacturer may bank actual credits only after the end of
the model year and after EPA has reviewed the manufacturer's end-of-
year reports. 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 in the end-of-year report and final report.
(d) Credits declared for banking from the previous model year that
have not been reviewed by EPA may be used in averaging or trading
transactions. However, such credits may be revoked at a later time
following EPA review of the end-of-year report or any subsequent audit
actions.
34. The newly designated Sec. 89.206 is revised to read as follows:

Sec. 89.206 Trading.

(a) Requirements for Tier 1 engines rated at or above 37 kW. (1) A
nonroad engine manufacturer may exchange emission credits with other
nonroad engine manufacturers within the same averaging set in trading.
(2) Credits for trading can be obtained from credits banked in a
previous model year or credits generated during the model year of the
trading transaction.
(3) Traded credits can be used for averaging, banking, or further
trading transactions within the restrictions described in
Sec. 89.204(c).
(b) Requirements for Tier 2 and later engines rated at or above 37
kW and Tier 1 and later engines rated under 37 kW. (1) A nonroad engine
manufacturer may exchange emission credits with other nonroad engine
manufacturers within the same averaging set in trading.
(2) Credits for trading can be obtained from credits banked in
previous model years that have not expired or credits generated during
the model year of the trading transaction.
(3) Traded credits can be used for averaging, banking, or further
trading transactions within the restrictions described in
Sec. 89.204(c) and paragraph (b)(4) of this section.
(4) Emission credits generated from engines rated at or above 19 kW
utilizing indirect fuel injection may not be traded to other
manufacturers.
(c) In the event of a negative credit balance resulting from a
transaction, both the buyer and the seller are liable, except in cases
deemed involving fraud. Certificates of all engine families
participating in a negative trade may be voided ab initio under
Sec. 89.126(c).
35. The newly designated Sec. 89.207 is revised to read as follows:

Sec. 89.207 Credit calculation.

(a) Requirements for calculating NO_X credits from Tier 1
engines rated at or above 37 kW. (1) For each participating engine
family, 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-hundredth of a megagram (Mg).
This ASTM procedure has been incorporated by reference (see Sec. 89.6).
Consistent units are to be used throughout the equation.
(i) For determining credit availability from all engine families
generating credits: Emission credits = (Std-FEL) x (Volume) x
(AvgPR) x (UL) x (Adjustment) x (10-6)
(ii) For determining credit usage for all engine families requiring
credits to offset emissions in excess of the standard:
Emission credits = (Std-FEL) x (Volume) x (AvgPR) x (UL) x
(10-6)

Where:

Std = the applicable Tier 1 NO_X nonroad engine emission
standard, in grams per kilowatt-hour.
FEL = the NO_X family emission limit for the engine family
in grams per kilowatt-hour.
Volume = the number of nonroad engines eligible to participate in
the averaging, banking, and trading program within the given engine
family during the model year. Engines sold to equipment or vehicle
manufacturers under the provisions of Sec. 89.102(g) shall not be
included in this number. Quarterly production projections are used
for initial certification. Actual applicable production/sales volume
is used for end-of-year compliance determination.
AvgPR = the average power rating of all of the configurations within
an engine family, calculated on a sales-weighted basis, in
kilowatts.
UL = the useful life for the engine family, in hours.
Adjustment = a one-time adjustment, as specified in paragraph (a)(2)
of this section, to be applied to Tier 1 NO_X credits to
be banked or traded for determining compliance with the Tier 1
NO_X standards or Tier 2 NO_X+NMHC standards
specified in subpart B of this part. Banked credits traded in a
subsequent model year will not be subject to an additional
adjustment. Banked credits used in a subsequent model year's
averaging program will not have the adjustment restored.

(2) If an engine family is certified to a NO_X FEL of 8.0
g/kW-hr or less, an Adjustment value of 1.0 shall be used in the credit
generation calculation described in paragraph (a)(1)(i) of this
section. If an engine family is certified to a NO_X FEL above
8.0 g/kW-hr, an Adjustment value of 0.65 shall be used in the credit
generation calculation described in paragraph (a)(1)(i) of this
section. If the credits are to be used by the credit-generating
manufacturer for averaging purposes in the same model year in which
they are generated, an Adjustment value of 1.0 shall be used for all
engines regardless of the level of

[[Page 57009]]

the NO_X FEL. If the credits are to be banked by the credit-
generating manufacturer and used in a subsequent model year for another
Tier 1 engine family, an Adjustment value of 1.0 shall be used for all
engines regardless of the level of the NO_X FEL.
(b) Requirements for calculating NMHC + NO_X Credits from
Tier 2 and later engines rated at or above 37 kW and Tier 1 and later
engines rated under 37 kW and PM credits from all engines. (1) For each
participating engine family, NO_X + NMHC emission credits and
PM 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-hundredth of a megagram (Mg).
This procedure has been incorporated by reference (see Sec. 89.6).
Consistent units are to be used throughout the equation.
(i) For determining credit availability from all engine families
generating credits:
Emission credits = (Std-FEL) x (Volume) x (AvgPR) x (UL) x
(10-6)
(ii) For determining credit usage for all engine families requiring
credits to offset emissions in excess of the standard:
Emission credits = (Std-FEL) x (Volume) x (AvgPR) x (UL) x
(10-6)

Where:

Std = the current and applicable nonroad engine emission standard, in
grams per kilowatt-hour, except for PM calculations where it is the
applicable nonroad engine Tier 2 PM emission standard, and except for
engines rated under 19 kW where it is the applicable nonroad engine
Tier 2 emission standard, in grams per kilowatt-hour. (Engines rated
under 19 kW participating in the averaging and banking program
provisions of Sec. 89.203(c)(3)(ii) shall use the Tier 1 standard for
credit calculations.)
FEL = the family emission limit for the engine family in grams per
kilowatt-hour.
Volume = the number of nonroad engines eligible to participate in the
averaging, banking, and trading program within the given engine family
during the model year. Engines sold to equipment or vehicle
manufacturers under the provisions of Sec. 89.102(g) shall not be
included in this number. Quarterly production projections are used for
initial certification. Actual applicable production/sales volume is
used for end-of-year compliance determination.
AvgPR = the average power rating of all of the configurations within an
engine family, calculated on a sales-weighted basis, in kilowatts.
UL = the useful life for the given engine family, in hours.

36. The newly designated Sec. 89.208 is revised to read as follows:

Sec. 89.208 Labeling.

For all nonroad engines included in the averaging, banking, and
trading programs, the family emission limits to which the engine is
certified must be included on the label required in Sec. 89.110.
37. The newly designated Sec. 89.209 is amended by revising
paragraph (a) to read as follows:

Sec. 89.209 Certification.

(a) In the application for certification a manufacturer must:
(1) Declare its intent to include specific engine families in the
averaging, banking, and trading programs.
(2) Submit a statement that the engines for which certification is
requested will not, to the best of the manufacturer's belief, cause the
manufacturer to have a negative credit balance when all credits are
calculated for all the manufacturer's engine families participating in
the averaging, banking, and trading programs, except as allowed under
Sec. 89.203(c)(3)(ii).
(3) Declare the applicable FELs for each engine family
participating in averaging, banking, and trading.
(i) The FELs must be to the same number of significant digits as
the emission standard for the applicable pollutant.
(ii) In no case may the FEL exceed the upper limits prescribed in
Sec. 89.112(d).
(4) Indicate the projected number of credits generated/needed for
this family; the projected applicable production/sales volume, by
quarter; and the values required to calculate credits as given in
Sec. 89.207.
(5) Submit calculations in accordance with Sec. 89.207 of projected
emission credits (positive or negative) based on quarterly production
projections for each participating family.
(6)(i) If the engine family is projected to have negative emission
credits, state specifically the source (manufacturer/engine family or
reserved) of the credits necessary to offset the credit deficit
according to quarterly projected production, or, if the engine family
is to be included in the provisions of Sec. 89.203(c)(3)(ii), state
that the engine family will be subject to those provisions.
(ii) If the engine family is projected to generate credits, state
specifically (manufacturer/engine family or reserved) where the
quarterly projected credits will be applied.
* * * * *
38. The newly designated Sec. 89.210 is amended by revising
paragraphs (b) and (c) to read as follows:

Sec. 89.210 Maintenance of records.

* * * * *
(b) The manufacturer of any nonroad engine family that is certified
under the averaging, banking, and trading programs must establish,
maintain, and retain the following adequately organized and indexed
records for each such family:
(1) EPA engine family;
(2) Family emission limits (FEL);
(3) Power rating for each configuration tested;
(4) Projected applicable production/sales volume for the model
year; and
(5) Actual applicable production/sales volume for the model year.
(c) Any manufacturer producing an engine family participating in
trading reserved credits must maintain the following records on a
quarterly basis for each engine family in the trading program:
(1) The engine family;
(2) The actual quarterly and cumulative applicable production/sales
volume;
(3) The values required to calculate credits as given in
Sec. 89.207;
(4) The resulting type and number of credits generated/required;
(5) How and where credit surpluses are dispersed; and
(6) How and through what means credit deficits are met.
* * * * *
39. The newly designated Sec. 89.211 is amended by revising
paragraphs (a) and (c) to read as follows:

Sec. 89.211 End-of-year and final reports.

(a) End-of-year and final reports must indicate the engine family,
the actual applicable production/sales volume, the values required to
calculate credits as given in Sec. 89.207, and the number of credits
generated/required. Manufacturers must also submit how and where credit
surpluses were dispersed (or are to be banked) and/or how and through
what means credit deficits were met. Copies of contracts related to
credit trading must be included or supplied by the broker, if
applicable. The report shall include a calculation of credit balances
to show that the summation of the manufacturer's use of credits results
in a credit balance equal to or greater than zero, except as allowed
under Sec. 89.203(c)(3)(ii). Manufacturers participating under the
program

[[Page 57010]]

described in Sec. 89.203(c)(3)(ii) shall include the NMHC +
NO_X credit balance and the PM credit balance as of December
31 of that calendar year.
* * * * *
(c)(1) End-of-year reports must be submitted within 90 days of the
end of the model year to: Director, Engine Programs and Compliance
Division (6405-J), U.S. Environmental Protection Agency, 401 M Street
S.W., Washington, DC 20460.
(2) Final reports must be submitted within 270 days of the end of
the model year to: Director, Engine Programs and Compliance Division
(6405-J), U.S. Environmental Protection Agency, 401 M Street S.W.,
Washington, DC 20460.
* * * * *
40. The newly designated Sec. 89.212 is revised to read as follows:

Sec. 89.212 Notice of opportunity for hearing.

Any voiding of the certificate under Secs. 89.203(d), 89.206(c),
89.209(c) or 89.210(g) will be made only after the manufacturer
concerned has been offered an opportunity for a hearing conducted in
accordance with Secs. 89.512 and 89.513 and, if a manufacturer requests
such a hearing, will be made only after an initial decision by the
Presiding Officer.

Subpart D--[Amended]

41. The newly designated Sec. 89.302 is revised to read as follows:

Sec. 89.302 Definitions.

The definitions in subpart A of this part apply to this subpart.
For terms not defined in this part, the definitions in 40 CFR part 86,
subparts A, D, I, and N, apply to this subpart.
42. The newly designated Sec. 89.304 is amended by revising
paragraph (c) to read as follows:

Sec. 89.304 Equipment required for gaseous emissions; overview.

* * * * *
(c) Analyzers used are a non-dispersive infrared (NDIR) absorption
type for carbon monoxide and carbon dioxide analysis; a heated flame
ionization (HFID) type for hydrocarbon analysis; and a chemiluminescent
detector (CLD) or heated chemiluminescent detector (HCLD) for oxides of
nitrogen analysis. Sections 89.309 through 89.324 set forth a full
description of analyzer requirements and specifications.
43. The newly designated Sec. 89.307 is amended by revising
paragraphs (b)(7) and (b)(8) to read as follows:

Sec. 89.307 Dynamometer calibration.

* * * * *
(b) * * *
(7) The measured torque must be within either 2 percent of point or
1 percent of the engine maximum torque of the calculated torque.
(8) If the measured torque is not within the above requirements,
adjust or repair the system. Repeat steps in paragraphs (b)(1) through
(b)(6) of this section with the adjusted or repaired system.
* * * * *
44. The newly designated Sec. 89.308 is amended by revising
paragraph (b) to read as follows:

Sec. 89.308 Sampling system requirements for gaseous emissions.

* * * * *
(b) If water is removed by condensation, the sample gas temperature
shall be monitored within the water trap or the sample dewpoint shall
be monitored downstream. In either case, the indicated temperature
shall not exceed 7 deg.C.
45. The newly designated Sec. 89.309 is amended by removing and
reserving paragraph (a)(3) and revising paragraphs (a)(4)(iii),
(a)(5)(i)(C), and (a)(5)(i)(D) to read as follows:

Sec. 89.309 Analyzers required for gaseous emissions.

(a) * * *
(3) [Reserved]
(4) * * *
(iii) The FID oven must be capable of maintaining temperature
within 5.5 deg.C of the set point.
* * * * *
(5) * * *
(i) * * *
(C) For raw analysis, an ice bath or other cooling device located
after the NO_X converter (optional for dilute analysis).
(D) A chemiluminescent detector (CLD or HCLD).
* * * * *
46. The newly designated Sec. 89.310 is amended by revising
paragraphs (a)(1) and (c) to read as follows:

Sec. 89.310 Analyzer accuracy and specifications.

(a) * * *
(1) Response time. As necessary, measure and account for the
response time of the analyzer.
* * * * *
(c) Emission measurement accuracy--Bag sampling. (1) Good
engineering practice dictates that exhaust emission sample analyzer
readings below 15 percent of full-scale chart deflection should
generally not be used.
(2) Some high resolution read-out systems, such as computers, data
loggers, and so forth, can provide sufficient accuracy and resolution
below 15 percent of full scale. Such systems may be used provided that
additional calibrations of at least 4 non-zero nominally equally spaced
points, using good engineering judgement, below 15 percent of full
scale are made to ensure the accuracy of the calibration curves. If a
gas divider is used, the gas divider must conform to the accuracy
requirements specified in Sec. 89.312(c). The procedure in paragraph
(c)(3) of this section may be used for calibration below 15 percent of
full scale.
(3) The following procedure shall be followed:
(i) Span the analyzer using a calibration gas meeting the accuracy
requirements of Sec. 89.312(c), within the operating range of the
analyzer, and at least 90% of full scale.
(ii) Generate a calibration over the full concentration range at a
minimum of 6, approximately equally spaced, points (e.g. 15, 30, 45,
60, 75, and 90 percent of the range of concentrations provided by the
gas divider). If a gas divider or blender is being used to calibrate
the analyzer and the requirements of paragraph (c)(2) of this section
are met, verify that a second calibration gas between 10 and 20 percent
of full scale can be named within 2 percent of its certified
concentration.
(iii) If a gas divider or blender is being used to calibrate the
analyzer, input the value of a second calibration gas (a span gas may
be used for the CO2 analyzer) having a named concentration between 10
and 20 percent of full scale. This gas shall be included on the
calibration curve. Continue adding calibration points by dividing this
gas until the requirements of paragraph (c)(2) of this section are met.
(iv) Fit a calibration curve per Sec. 89.319 through Sec. 89.322
for the full scale range of the analyzer using the calibration data
obtained with both calibration gases.
* * * * *
47. The newly designated Sec. 89.312 is amended by removing and
reserving paragraph (b)(2), revising paragraphs (c)(2), (d), and (f)
and adding a new paragraph (g) to read as follows:

Sec. 89.312 Analytical gases.

* * * * *
(b) * * *
(2) [Reserved].
(c) * * *
(2) Mixtures of gases having the following chemical compositions
shall be available:
(i) C<INF>3</INF>H<INF>8</INF> and purified synthetic air ;
(ii) C<INF>3</INF>H<INF>8</INF> and purified nitrogen (optional for
raw measurements);

[[Page 57011]]

(iii) CO and purified nitrogen;
(iv) NO_X and purified nitrogen (the amount of
NO<INF>2</INF> contained in this calibration gas must not exceed 5
percent of the NO content);
(v) CO<INF>2</INF> and purified nitrogen.
* * * * *
(d) Oxygen interference check gases shall contain propane with 350
ppmC <plus-minus>75 ppmC hydrocarbon. The three oxygen interference
gases shall contain 21% <plus-minus> 1% O<INF>2</INF>, 10% <plus-minus>
1% O<INF>2</INF>, and 5% <plus-minus> 1% O<INF>2</INF>. The
concentration value shall be determined to calibration gas tolerances
by chromatographic analysis of total hydrocarbons plus impurities or by
dynamic blending. Nitrogen shall be the predominant diluent with the
balance oxygen.
* * * * *
(f) Hydrocarbon analyzer burner air. The concentration of oxygen
for raw sampling must be within 1 mole percent of the oxygen
concentration of the burner air used in the latest oxygen interference
check (%O<INF>2</INF>I). If the difference in oxygen concentration is
greater than 1 mole percent, then the oxygen interference must be
checked and, if necessary, the analyzer adjusted to meet the
%O<INF>2</INF>I requirements. The burner air must contain less than 2
ppmC hydrocarbon.
(g) Gases for the methane analyzer shall be single blends of
methane using air as the diluent.
48. The newly designated Sec. 89.314 is amended by revising
paragraphs (a) and (b) to read as follows:

Sec. 89.314 Pre-and post-test calibration of analyzers.

* * * * *
(a) The calibration is checked by using a zero gas and a span gas
whose nominal value is between 75 percent and 100 percent of full-
scale, inclusive, of the measuring range.
(b) After the end of the final mode, a zero gas and the same span
gas will be used for rechecking. As an option, the zero and span may be
rechecked at the end of each mode or each test segment. The analysis
will be considered acceptable if the difference between the two
measuring results is less than 2 percent of full scale.

Sec. 89.316 [Amended]

49. The newly designated Sec. 89.316 is amended by removing and
reserving paragraph (b).
50. The newly designated Sec. 89.317 is amended by revising
paragraphs (g), (h), and (k) to read as follows:

Sec. 89.317 NO_X converter check.

* * * * *
(g) Turn on the NO_X generator O<INF>2</INF> (or air)
supply and adjust the O<INF>2</INF> (or air) flow rate so that the NO
indicated by the analyzer is about 10 percent less than indicated in
paragraph (f) of this section. Record the concentration of NO in this
NO+O<INF>2</INF> mixture.
(h) Switch the NO_X generator to the generation mode and
adjust the generation rate so that the NO measured on the analyzer is
20 percent of that measured in paragraph (f) of this section. There
must be at least 10 percent unreacted NO at this point. Record the
concentration of residual NO.
* * * * *
(k) Turn off the NO_X generator O<INF>2</INF> (or air)
supply. The analyzer will now indicate the NO_X in the
original NO-in-N<INF>2</INF> mixture. This value should be no more than
5 percent above the value indicated in paragraph (f) of this section.
* * * * *
51. The newly designated Sec. 89.318 is amended by revising
paragraphs (c)(2) heading, (c)(2)(i) and (c)(2)(iv) to read as follows:

Sec. 89.318 Analyzer interference checks.

* * * * *
(c) * * *
(2) NO_X analyzer water quench check. (i) This check
applies to wet measurements only. An NO span gas having a concentration
of 80 to 100 percent of full scale of a normal operating range shall be
passed through the CLD (or HCLD) and the response recorded as D. The NO
span gas shall then be bubbled through water at room temperature and
passed through the CLD (or HCLD) and the analyzer response recorded as
AR. Determine and record the bubbler absolute operating pressure and
the bubbler water temperature. (It is important that the NO span gas
contains minimal NO<INF>2</INF> concentration for this check. No
allowance for absorption of NO<INF>2</INF> in water has been made in
the following quench calculations. This test may be optionally run in
the NO mode to minimize the effect of any NO<INF>2</INF> in the NO span
gas.)
* * * * *
(iv)(A) The maximum raw or dilute exhaust water vapor concentration
expected during testing (designated as Wm) can be estimated from the
CO<INF>2</INF> span gas (or as defined in the equation in this
paragraph and designated as A) criteria in paragraph (c)(1) of this
section and the assumption of a fuel atom H/C ratio of 1.8:1 as:

Wm(%)=0.9 x A(%)

Where:

A = maximum CO2 concentration expected in the sample system during
testing.
(B) Percent water quench shall not exceed 3 percent and shall be
calculated by:
[GRAPHIC] [TIFF OMITTED] TR23OC98.003

52. The newly designated Sec. 89.319 is amended by revising
paragraphs (b)(1), (b)(2), (c), (d) heading, (d) introductory text,
(d)(2), and (d)(6) to read as follows:

Sec. 89.319 Hydrocarbon analyzer calibration.

* * * * *
(b) * * *
(1) Follow good engineering practices for initial instrument start-
up and basic operating adjustment using the appropriate fuel (see
Sec. 89.312(e)) and zero-grade air.
(2) Optimize the FID's response on the most common operating range.
The response is to be optimized with respect to fuel pressure or flow.
Efforts shall be made to minimize response variations to different
hydrocarbon species that are expected to be in the exhaust. Good
engineering judgment is to be used to trade off optimal FID response to
propane-in-air against reductions in relative responses to other
hydrocarbons. A good example of trading off response on propane for
relative responses to other hydrocarbon species is given in Society of
Automotive Engineers (SAE) Paper No. 770141, ``Optimization of Flame
Ionization Detector for Determination of Hydrocarbon in Diluted
Automotive Exhausts''; author Glenn D. Reschke. It is also required
that the response be set to optimum condition with respect to air flow
and sample flow. Heated Flame Ionization Detectors (HFIDs) must be at
their specified operating temperature. One of the following procedures
is required for FID or HFID optimization:
(i) The procedure outlined in Society of Automotive Engineers (SAE)
paper No. 770141, ``Optimization of a Flame Ionization Detector for
Determination of Hydrocarbon in Diluted Automotive Exhausts''; author,
Glenn D. Reschke. This procedure has been incorporated by reference at
Sec. 89.6.
(ii) The HFID optimization procedures outlined in 40 CFR part 86,
subpart D.
(iii) Alternative procedures may be used if approved in advance by
the Administrator.
(iv) The procedures specified by the manufacturer of the FID or
HFID.
* * * * *
(c) Initial and periodic calibration. Prior to introduction into
service, after any maintenance which could alter

[[Page 57012]]

calibration, and monthly thereafter, the FID or HFID hydrocarbon
analyzer shall be calibrated on all normally used instrument ranges
using the steps in this paragraph (c). Use the same flow rate and
pressures as when analyzing samples. Calibration gases shall be
introduced directly at the analyzer, unless the ``overflow''
calibration option of 40 CFR part 86, subpart N, for the HFID is taken.
New calibration curves need not be generated each month if the existing
curve can be verified as continuing to meet the requirements of
paragraph (c)(3) of this section.
(1) Adjust analyzer to optimize performance.
(2) Zero the hydrocarbon analyzer with zero-grade air.
(3) Calibrate on each used operating range with propane-in-air
(dilute or raw) or propane-in-nitrogen (raw) calibration gases having
nominal concentrations starting between 10-15 percent and increasing in
at least six incremental steps to 90 percent (e.g., 15, 30, 45, 60, 75,
and 90 percent of that range) of that range. The incremental steps are
to be spaced to represent good engineering practice. For each range
calibrated, if the deviation from a least-squares best-fit straight
line is 2 percent or less of the value at each data point,
concentration values may be calculated by use of a single calibration
factor for that range. If the deviation exceeds 2 percent at each non-
zero data point and within <plus-minus>0.3 percent of full scale on the
zero, the best-fit non-linear equation which represents the data to
within these limits shall be used to determine concentration.
(d) Oxygen interference optimization (required for raw). Choose a
range where the oxygen interference check gases will fall in the upper
50 percent. Conduct the test, as outlined in this paragraph, with the
oven temperature set as required by the instrument manufacturer. Oxygen
interference check gas specifications are found in Sec. 89.312(d).
* * * * *
(2) Span the analyzer with the 21% oxygen interference gas
specified in Sec. 89.312(d).
* * * * *
(6) Calculate the percent of oxygen interference (designated as
percent O<INF>2</INF>I) for each mixture in paragraph (d)(4) of this
section.

percent O<INF>2</INF>I = ((B-C) x 100)/B

Where:
A = hydrocarbon concentration (ppmC) of the span gas used in paragraph
(d)(2) of this section.
B = hydrocarbon concentration (ppmC) of the oxygen interference check
gases used in paragraph (d)(4) of this section.
C = analyzer response (ppmC) = A/D; where
D = (percent of full-scale analyzer response due to A) x (percent of
full-scale analyzer response due to B).
* * * * *
53. The newly designated Sec. 89.320 is amended by revising
paragraph (c) to read as follows:

Sec. 89.320 Carbon monoxide analyzer calibration.

* * * * *
(c) Initial and periodic calibration. Prior to its introduction
into service, after any maintenance which could alter calibration, and
every two months thereafter, the NDIR carbon monoxide analyzer shall be
calibrated. New calibration curves need not be generated every two
months if the existing curve can be verified as continuing to meet the
requirements of paragraph (c)(3) of this section.
(1) Adjust the analyzer to optimize performance.
(2) Zero the carbon monoxide analyzer with either zero-grade air or
zero-grade nitrogen.
(3) Calibrate on each used operating range with carbon monoxide-in-
N<INF>2</INF> calibration gases having nominal concentrations starting
between 10 and 15 percent and increasing in at least six incremental
steps to 90 percent (e.g., 15, 30, 45, 60, 75, and 90 percent) of that
range. The incremental steps are to be spaced to represent good
engineering practice. For each range calibrated, if the deviation from
a least-squares best-fit straight line is 2 percent or less of the
value at each non-zero data point and within <plus-minus> 0.3 percent
of full scale on the zero, concentration values may be calculated by
use of a single calibration factor for that range. If the deviation
exceeds these limits, the best-fit non-linear equation which represents
the data to within these limits shall be used to determine
concentration.
* * * * *
54. The newly designated Sec. 89.321 is amended by revising
paragraph (c) to read as follows:

Sec. 89.321 Oxides of nitrogen analyzer calibration.

* * * * *
(c) Initial and periodic calibration. Prior to its introduction
into service, after any maintenance which could alter calibration, and
monthly thereafter, the chemiluminescent oxides of nitrogen analyzer
shall be calibrated on all normally used instrument ranges. New
calibration curves need not be generated each month if the existing
curve can be verified as continuing to meet the requirements of
paragraph (c)(3) of this section. Use the same flow rate as when
analyzing samples. Proceed as follows:
(1) Adjust analyzer to optimize performance.
(2) Zero the oxides of nitrogen analyzer with zero-grade air or
zero-grade nitrogen.
(3) Calibrate on each normally used operating range with NO-in-
N<INF>2</INF> calibration gases with nominal concentrations starting at
between 10 and 15 percent and increasing in at least six incremental
steps to 90 percent (e.g., 15, 30, 45, 60, 75, and 90 percent) of that
range. The incremental steps are to be spaced to represent good
engineering practice. For each range calibrated, if the deviation from
a least-squares best-fit straight line is 2 percent or less of the
value at each non-zero data point and within <plus-minus> 0.3 percent
of full scale on the zero, concentration values may be calculated by
use of a single calibration factor for that range. If the deviation
exceeds these limits, the best-fit non-linear equation which represents
the data to within these limits shall be used to determine
concentration.
* * * * *
55. The newly designated Sec. 89.322 is amended by revising
paragraph (a) to read as follows:

Sec. 89.322 Carbon dioxide analyzer calibration.

(a) Prior to its introduction into service, after any maintenance
which could alter calibration, and bi-monthly thereafter, the NDIR
carbon dioxide analyzer shall be calibrated on all normally used
instrument ranges. New calibration curves need not be generated each
month if the existing curve can be verified as continuing to meet the
requirements of paragraph (a)(3) of this section. Proceed as follows:
(1) Follow good engineering practices for instrument start-up and
operation. Adjust the analyzer to optimize performance.
(2) Zero the carbon dioxide analyzer with either zero-grade air or
zero-grade nitrogen.
(3) Calibrate on each normally used operating range with carbon
dioxide-in-N<INF>2</INF> calibration or span gases having nominal
concentrations starting between 10 and 15 percent and increasing in at
least six incremental steps to 90 percent (e.g., 15, 30, 45, 60, 75,
and 90 percent) of that range. The incremental steps are to be spaced
to represent good engineering practice. For each range calibrated, if
the deviation from a least-squares best-fit straight line is 2 percent
or less of the value at each

[[Page 57013]]

non-zero data point and within <plus-minus> 0.3 percent of full scale
on the zero, concentration values may be calculated by use of a single
calibration factor for that range. If the deviation exceeds these
limits, the best-fit non-linear equation which represents the data to
within these limits shall be used to determine concentration.
* * * * *
56. The newly designated Sec. 89.324 is revised to read as follows:

Sec. 89.324 Calibration of other equipment.

(a) Other test equipment used for testing shall be calibrated as
often as required by the instrument manufacturer or necessary according
to good practice.
(b) If a methane analyzer is used, the methane analyzer shall be
calibrated prior to introduction into service and monthly thereafter:
(1) Follow the manufacturer's instructions for instrument startup
and operation. Adjust the analyzer to optimize performance.
(2) Zero the methane analyzer with zero-grade air.
(3) Calibrate on each normally used operating range with
CH<INF>4</INF> in air with nominal concentrations starting between 10
and 15 percent and increasing in at least six incremental steps to 90
percent (e.g., 15, 30, 45, 60, 75, and 90 percent) of that range. The
incremental steps are to be spaced to represent good engineering
practice. For each range calibrated, if the deviation from a least-
squares best-fit straight line is 2 percent or less of the value at
each non-zero data point and within <plus-minus> 0.3 percent of full
scale on the zero, concentration values may be calculated by use of a
single calibration factor for that range. If the deviation exceeds
these limits, the best-fit non-linear equation which represents the
data to within these limits shall be used to determine concentration.
57. The newly designated Sec. 89.328 is amended by revising
paragraphs (b)(1) and (b)(2) to read as follows:

Sec. 89.328 Inlet and exhaust restrictions.

* * * * *
(b) * * *
(1) Equip the test engine with an air inlet system presenting an
air inlet restriction within 5 percent of the upper limit at maximum
air flow, as specified by the engine manufacturer for a clean air
cleaner. A system representative of the installed engine may be used.
In other cases a test shop system may be used.
(2) The exhaust backpressure must be within 5 percent of the upper
limit at maximum declared power, as specified by the engine
manufacturer. A system representative of the installed engine may be
used. In other cases a test shop system may be used.
58. The newly designated Sec. 89.330 is amended by revising
paragraph (b)(2) and adding paragraph (b)(3) to read as follows:

Sec. 89.330 Lubricating oil and test fuels.

* * * * *
(b) Test fuels. * * *
(2) Use petroleum fuel meeting the specifications in Table 4 in
Appendix A of this subpart, or substantially equivalent specifications
approved by the Administrator, for exhaust emission testing. The grade
of diesel fuel used must be commercially designated as ``Type 2-D''
grade diesel fuel and recommended by the engine manufacturer.
(3) Testing of Tier 1 engines rated under 37 kW or Tier 2 engines
rated at or above 37 kW that is conducted by the Administrator shall be
performed using test fuels that meet the specifications in Table 4 in
Appendix A of this subpart and that have a sulfur content no higher
than 0.20 weight percent.
* * * * *
59-63. Tables 1 through 4 of Appendix A to subpart D are revised
and Table 5 is removed to read as follows:

Appendix A To Subpart D--Tables

Table 1.--Abbreviations Used in Subpart D
------------------------------------------------------------------------
CLD.................................... Chemiluminescent detector.
CO..................................... Carbon monoxide.
CO<INF>2.................................... Carbon dioxide.
HC..................................... Hydrocarbons.
HCLD................................... Heated chemiluminescent
detector.
HFID................................... Heated flame ionization
detector.
GC..................................... Gas chromatograph.
NDIR................................... Non-dispersive infra-red
analyzer.
NIST................................... National Institute for
Standards and Testing.
NO..................................... Nitric Oxide.
NO<INF>2.................................... Nitrogen Dioxide.
NO<INF>X.................................... Oxides of nitrogen.
O<INF>2..................................... Oxygen.
------------------------------------------------------------------------

Table 2.--Symbols Used in Subparts D and E
------------------------------------------------------------------------
Symbol Term Unit
------------------------------------------------------------------------
conc................... Concentration (ppm by ppm
volume).
f...................... Engine specific
parameter considering
atmospheric conditions
F<INF>FCB................... Fuel specific factor
for the carbon balance
calculation
F<INF>FD.................... Fuel specific factor
for exhaust flow
calculation on dry
basis
F<INF>FH.................... Fuel specific factor
representing the
hydrogen to carbon
ratio
F<INF>FW.................... Fuel specific factor
for exhaust flow
calculation on wet
basis
FR..................... Rate of fuel consumed.. g/h
G<INF>AIRW.................. Intake air mass flow kg/h
rate on wet basis.
G<INF>AIRD.................. Intake air mass flow kg/h
rate on dry basis.
G<INF>EXHW.................. Exhaust gas mass flow kg/h
rate on wet basis.
G<INF>Fuel.................. Fuel mass flow rate.... kg/h
H...................... Absolute humidity g/kg
(water content related
to dry air).
i...................... Subscript denoting an
individual mode
K<INF>H..................... Humidity correction
factor
L...................... Percent torque related %
to maximum torque for
the test mode.
mass................... Pollutant mass flow.... g/h
n<INF>d,i................... Engine speed (average 1/min
at the i'th mode
during the cycle).
P<INF>s..................... Dry atmospheric kPa
pressure.
P<INF>d..................... Test ambient saturation kPa
vapor pressure at
ambient temperature.
P...................... Observed brake power kW
output uncorrected.
P<INF>AUX................... Declared total power kW
absorbed by
auxiliaries fitted for
the test.
P<INF>M..................... Maximum power measured kW
at the test speed
under test conditions.
P<INF>i..................... P<INF>i = P<INF>M,i + P<INF>AUX,i
P<INF>B..................... Total barometric kPa
pressure (average of
the pre-test and post-
test values).
P<INF>v..................... Saturation pressure at kPa
dew point temperature.

[[Page 57014]]

R<INF>a..................... Relative humidity of %
the ambient air.
S...................... Dynamometer setting.... kW
T...................... Absolute temperature at K
air inlet.
T<INF>be.................... Air temperature after K
the charge air cooler
(if applicable)
(average).
T<INF>clout................. Coolant temperature K
outlet (average).
T<INF>Dd.................... Absolute dewpoint K
temperature.
T<INF>d,i................... Torque (average at the N-m
i'th mode during the
cycle).
T<INF>SC.................... Temperature of the K
intercooled air.
T<INF>ref................... Reference temperature.. K
V<INF>EXHD.................. Exhaust gas volume flow m3/h
rate on dry basis.
V<INF>AIRW.................. Intake air volume flow m3/h
rate on wet basis.
P<INF>B..................... Total barometric kPa
pressure.
V<INF>EXHW.................. Exhaust gas volume flow m3/h
rate on wet basis.
WF..................... Weighing factor
WF<INF>E.................... Effective weighing
factor
------------------------------------------------------------------------

Table 3.--Measurement Accuracy and Calibration Frequency
----------------------------------------------------------------------------------------------------------------
No. Item Calibration accuracy 1 Calibration frequency
----------------------------------------------------------------------------------------------------------------
1.............. Engine speed.......... <plus-minus> 2%....... 30 days.
2.............. Torque................ Larger of <plus-minus> 30 days.
2% of point or <plus-
minus> 1% of engine
maximum.
3.............. Fuel consumption (raw <plus-minus> 2% of 30 days.
measurement). engine maximum.
4.............. Air consumption (raw <plus-minus> 2% of As required.
measurement). engine maximum.
5.............. Coolant temperature... <plus-minus>2 deg.K... As required.
6.............. Lubricant temperature. <plus-minus>2 deg.K... As required.
7.............. Exhaust backpressure.. <plus-minus> 1.0% of As required.
engine maximum.
8.............. Inlet depression...... 1.0% of engine maximum As required.
9.............. Exhaust gas <plus-minus>15 deg.K.. As required.
temperature.
10............. Air inlet temperature <plus-minus>2 deg.K... As required.
(combustion air).
11............. Atmospheric pressure.. <plus-minus> 0.5%..... As required.
12............. Humidity (combustion <plus-minus> 0.5...... As required.
air) (g of H<INF>2O/Kg of
dry air).
13............. Fuel temperature...... <plus-minus>2 deg.K... As required.
14............. Temperature with <plus-minus>2 deg.K... As required.
regard to dilution
tunnel.
15............. Dilution air humidity <plus-minus> 0.5...... As required.
(g of H<INF>2O/Kg of dry
air).
16............. HC analyzer........... <plus-minus> 2%....... Monthly or as required.
17............. CO analyzer........... <plus-minus> 2%....... Once per 60 days or as required.
18............. NO<INF>X analyzer.......... <plus-minus> 2%....... Monthly or as required.
19............. Methane analyzer...... <plus-minus> 2%....... Monthly or as required.
20............. NO<INF>X converter 90%................... Monthly.
efficiency check.
21............. CO<INF>2 analyzer.......... <plus-minus> 2%....... Once per 60 days or as required.
----------------------------------------------------------------------------------------------------------------
1 All accuracy requirements pertain to the final recorded value which is inclusive of the data acquisition
system.

Table 4.--Federal Test Fuel Specifications
----------------------------------------------------------------------------------------------------------------
Item Procedure (ASTM) \1\ Value (type 2-D)
----------------------------------------------------------------------------------------------------------------
Cetane............................ D613-95................................................. 40-48
Distillation Range:
IBP, deg.C................... D86-97.................................................. 171-204
10% point, deg.C............. 86-97................................................... 204-238
50% point, deg.C............. 86-97................................................... 243-282
90% point, deg.C............. 86-97................................................... 293-332
EP, deg.C.................... 86-97................................................... 321-366
Gravity, API.................. D287-92................................................. 32-37
Total Sulfur, %mass............... D129-95 or D2622-98..................................... 0.03--0.40
Hydrocarbon composition:
Aromatics, %vol............... D1319-98 or D5186-96.................................... \2\ 10
Paraffins, Naphthenes, Olefins.... D1319-98................................................ (\3\)
Flashpoint, deg.C (minimum)...... D93-97.................................................. 54
Viscosity @ 38 deg.C, Centistokes. D445-97................................................. 2.0-3.2
----------------------------------------------------------------------------------------------------------------
\1\ All ASTM procedures in this table have been incorporated by reference. See Sec. 89.6.
\2\ Minimum.
\3\ Remainder.

[[Page 57015]]

Subpart E--[Amended]

64. The newly designated Sec. 89.401 is amended by revising
paragraph (b) to read as follows:

Sec. 89.401 Scope; applicability.

* * * * *
(b) Exhaust gases, either raw or dilute, are sampled while the test
engine is operated using the appropriate test cycle on an engine
dynamometer. The exhaust gases receive specific component analysis
determining concentration of pollutant, exhaust volume, the fuel flow
(raw analysis), and the power output during each mode. Emissions are
reported as grams per kilowatt hour (g/kW-hr).
* * * * *
65. The newly designated Sec. 89.402 is revised to read as follows:

Sec. 89.402 Definitions.

The definitions in subpart A of this part apply to this subpart.
For terms not defined in this part, the definitions in 40 CFR part 86,
subparts A, D, I, and N, apply to this subpart.
66. The newly designated Sec. 89.404 is amended by revising
paragraph (b) and removing paragraph (e) to read as follows:

Sec. 89.404 Test procedure overview.

* * * * *
(b) The test is designed to determine the brake-specific emissions
of hydrocarbons, carbon monoxide, oxides of nitrogen, and particulate
matter. For more information on particulate matter sampling see
Sec. 89.112(c). The test cycles consist of various steady-state
operating modes that include different combinations of engine speeds
and loads. These procedures require the determination of the
concentration of each pollutant, exhaust volume, the fuel flow (raw
analysis), and the power output during each mode. The measured values
are weighted and used to calculate the grams of each pollutant emitted
per kilowatt hour (g/kW-hr).
* * * * *
67. The newly designated Sec. 89.405 is amended by revising
paragraphs (d), (e), and (f) to read as follows:

Sec. 89.405 Recorded information.

* * * * *
(d) Test data; pre-test.
(1) Date and time of day.
(2) Test number.
(3) Intermediate speed and rated speed as defined in Sec. 89.2 and
maximum observed torque for these speeds.
(4) Recorder chart or equivalent. Identify the zero traces for each
range used, and span traces for each range used.
(5) Air temperature after and pressure drop across the charge air
cooler (if applicable) at maximum observed torque and rated speed.
(e) Test data; modal.
(1) Recorder chart or equivalent. Identify for each test mode the
emission concentration traces and the associated analyzer range(s).
Identify the start and finish of each test.
(2) Observed engine torque.
(3) Observed engine rpm.
(4) Record engine torque and engine rpm continuously during each
mode with a chart recorder or equivalent recording device.
(5) Intake air flow (for raw mass flow sampling method only) and
depression for each mode.
(6) Engine intake air temperature at the engine intake or
turbocharger inlet for each mode.
(7) Mass fuel flow (for raw sampling) for each mode.
(8) Engine intake humidity.
(9) Coolant temperature outlet.
(10) Engine fuel inlet temperature at the pump inlet.
(f) Test data; post-test.
(1) Recorder chart or equivalent. Identify the zero traces for each
range used and the span traces for each range used. Identify hangup
check, if performed.
(2) Total number of hours of operation accumulated on the engine.
68. The newly designated Sec. 89.406 is amended by revising
paragraphs (b) and (c)(1) to read as follows:

Sec. 89.406 Pre-test procedures.

* * * * *
(b) Replace or clean the filter elements and then vacuum leak check
the system per Sec. 89.316(a). Allow the heated sample line, filters,
and pumps to reach operating temperature.
(c) * * *
(1) Check the sample-line temperatures (see Sec. 89.309(a)(4)(ii)
and (a)(5)(i)(A)).
* * * * *
69. The newly designated Sec. 89.407 is amended by revising
paragraphs (a), (c), and (d)(2) to read as follows:

Sec. 89.407 Engine dynamometer test run.

(a) Measure and record the temperature of the air supplied to the
engine, the fuel temperature, the intake air humidity, and the observed
barometric pressure during the sampling for each mode. The fuel
temperature shall be less than or equal to 43C during the sampling for
each mode.
* * * * *
(c) The following steps are taken for each test:
(1) Install instrumentation and sample probes as required.
(2) Perform the pre-test procedure as specified in Sec. 89.406.
(3) Read and record the general test data as specified in
Sec. 89.405(c).
(4) Start cooling system.
(5) Precondition (warm up) the engine in the following manner:
(i) For variable-speed engines:
(A) Operate the engine at idle for 2 to 3 minutes;
(B) Operate the engine at approximately 50 percent power at the
peak torque speed for 5 to 7 minutes;
(C) Operate the engine at rated speed and maximum horsepower for 25
to 30 minutes;
(ii) For constant-speed engines:
(A) Operate the engine at minimum load for 2 to 3 minutes;
(B) Operate the engine at 50 percent load for 5 to 7 minutes;
(C) Operate the engine at maximum load for 25 to 30 minutes;
(iii) Optional. It is permitted to precondition the engine at rated
speed and maximum horsepower until the oil and water temperatures are
stabilized. The temperatures are defined as stabilized if they are
maintained within 2 percent of point on an absolute basis for 2
minutes. The engine must be operated a minimum of 10 minutes for this
option. This optional procedure may be substituted for the procedure in
paragraph (c)(5)(i)or (c)(5)(ii) of this section;
(iv) Optional. If the engine has been operating on service
accumulation for a minimum of 40 minutes, the service accumulation may
be substituted for the procedure in paragraphs (c)(5)(i) through (iii)
of this section.
(6) Read and record all pre-test data specified in Sec. 89.405(d).
(7) Start the test cycle (see Sec. 89.410) within 20 minutes of the
end of the warmup. (See paragraph (c)(13) of this section.) A mode
begins when the speed and load requirements are stabilized to within
the requirements of Sec. 89.410(b). A mode ends when valid emission
sampling for that mode ends. For a mode to be valid, the speed and load
requirements must be maintained continuously during the mode. Sampling
in the mode may be repeated until a valid sample is obtained as long
the speed and torque requirements are met.
(8) Calculate the torque for any mode with operation at rated
speed.
(9) During the first mode with intermediate speed operation, if
applicable, calculate the torque corresponding to 75 and 50 percent of
the maximum observed torque for the intermediate speed.

[[Page 57016]]

(10) Record all modal data specified in Sec. 89.405(e) during a
minimum of the last 60 seconds of each mode.
(11) Record the analyzer(s) response to the exhaust gas during the
a minimum of the last 60 seconds of each mode.
(12) Test modes may be repeated, as long as the engine is
preconditioned by running the previous mode. In the case of the first
mode of any cycle, precondition according to paragraph (c)(5) of this
section.
(13) If a delay of more than 20 minutes, but less than 4 hours,
occurs between the end of one mode and the beginning of another mode,
precondition the engine by running the previous mode. If the delay
exceeds 4 hours, the test shall include preconditioning (begin at
paragraph (c)(2) of this section).
(14) The speed and load points for each mode are listed in Tables 1
through 4 of Appendix B of this subpart. The engine speed and load
shall be maintained as specified in Sec. 89.410(b).
(15) If at any time during a test mode, the test equipment
malfunctions or the specifications in paragraph (c)(14) of this section
are not met, the test mode is void and may be aborted. The test mode
may be restarted by preconditioning with the previous mode.
(16) Fuel flow and air flow during the idle load condition may be
determined just prior to or immediately following the dynamometer
sequence, if longer times are required for accurate measurements.
(d) * * *
(2) Each analyzer range that may be used during a test mode must
have the zero and span responses recorded prior to the execution of the
test. Only the zero and span for the range(s) used to measure the
emissions during the test are required to be recorded after the
completion of the test .
* * * * *
70. The newly designated Sec. 89.408 is amended by revising
paragraph (e) to read as follows:

Sec. 89.408 Post-test procedures.

* * * * *
(e) For a valid test, the zero and span checks performed before and
after each test for each analyzer must meet the following requirements:
(1) The span drift (defined as the change in the difference between
the zero response and the span response) must not exceed 3 percent of
full-scale chart deflection for each range used.
(2) The zero response drift must not exceed 3 percent of full-scale
chart deflection.
71. The newly designated Sec. 89.410 is amended by revising
paragraphs (a), (b), and (c) to read as follows:

Sec. 89.410 Engine test cycle.

(a) Emissions shall be measured using one of the test cycles
specified in Tables 1 through 4 of Appendix B of this subpart, subject
to the provisions of paragraphs (a)(1) through (a)(4) of this section.
These cycles shall be used to test engines on a dynamometer.
(1) The 8-mode test cycle described in Table 1 of Appendix B of
this subpart shall be used for all engines, except constant speed
engines, engines rated under 19 kW, and propulsion marine diesel
engines.
(2) The 5-mode test cycle described in Table 2 of Appendix B of
this subpart shall be used for constant-speed engines as defined in
Sec. 89.2. Any engine certified under this test cycle must meet the
labeling requirements of Sec. 89.110(b)(11).
(3) The 6-mode test cycle described in Table 3 of Appendix B of
this subpart shall be used for variable speed engines rated under 19
kW.
(4) Notwithstanding the provisions of paragraphs (a)(1) through
(a)(3) of this section, the 4-mode test cycle described in Table 4 of
Appendix B of this subpart shall be used for propulsion marine diesel
engines.
(5) Notwithstanding the provisions of paragraphs (a)(1) through
(a)(4) of this section:
(i) Manufacturers may use the 8-mode test cycle described in Table
1 of Appendix B of this subpart for:
(A) Constant speed engines, or variable speed engines rated under
19 kW; or
(B) Propulsion marine diesel engines, provided the propulsion
marine diesel engines are certified in an engine family that includes
primarily non-marine diesel engines, and the manufacturer obtains
advance approval from the Administrator.
(ii) The Administrator may use the 8-mode test cycle specified in
Table 1 of Appendix B of this subpart during testing of any engine
which was certified based on emission data collected from that test
cycle.
(b) During each non-idle mode, hold the specified load to within 2
percent of the engine maximum value and speed to within <plus-minus>2
percent of point. During each idle mode, speed must be held within the
manufacturer's specifications for the engine, and the throttle must be
in the fully closed position and torque must not exceed 5 percent of
the peak torque value of mode 5.
(c) For any mode except those involving either idle or full-load
operation, if the operating conditions specified in paragraph (b) of
this section cannot be maintained, the Administrator may authorize
deviations from the specified load conditions. Such deviations shall
not exceed 10 percent of the maximum torque at the test speed. The
minimum deviations above and below the specified load necessary for
stable operation shall be determined by the manufacturer and approved
by the Administrator prior to the test run.
* * * * *
72. The newly designated Sec. 89.411 is amended by revising
paragraphs (d)(5) and (e)(5) to read as follows:

Sec. 89.411 Exhaust sample procedure--gaseous components.

* * * *
(d) * * *
(5) Zero and span each range to be used on each analyzer operated
prior to the beginning of the test cycle. The span gases shall have a
concentration between 75 and 100 percent of full-scale chart
deflection. The flow rates and system pressures shall be approximately
the same as those encountered during sampling. The HFID analyzer shall
be zeroed and spanned either through the overflow sampling system or
through the analyzer port.
* * * * *
(e) * * *
(5) If the difference between the readings obtained greater than or
equal to 2 percent of full scale deflection, clean the sample probe and
the sample line.
* * * * *
73. The newly designated Sec. 89.412 is amended by revising
paragraph (c)(3) and removing and reserving paragraph (g)(1) to read as
follows:

Sec. 89.412 Raw gaseous exhaust sampling and analytical system
description.

* * * * *
(c) * * *
(3) The location of optional valve V16 may not be greater than 61
cm from the sample pump.
* * * * *
(g) * * *
(1) [Reserved].
* * * * *
74. The newly designated Sec. 89.413 is amended by revising
paragraph (d) and removing paragraph (e) to read as follows:

Sec. 89.413 Raw sampling procedures.

* * * * *
(d) All gaseous heated sampling lines shall be fitted with a heated
filter to extract solid particles from the flow of gas required for
analysis. The sample

[[Page 57017]]

line for CO and CO<INF>2</INF> analysis may be heated or unheated.
75. The newly designated Sec. 89.414 is amended by revising
paragraph (a) to read as follows:

Sec. 89.414 Air flow measurement specifications.

(a) The air flow measurement method used must have a range large
enough to accurately measure the air flow over the engine operating
range during the test. Overall measurement accuracy must be
<plus-minus> 2 percent of the maximum engine value for all modes. The
Administrator must be advised of the method used prior to testing.
* * * * *
76. The newly designated Sec. 89.415 is revised to read as follows:

Sec. 89.415 Fuel flow measurement specifications.

The fuel flow rate measurement instrument must have a minimum
accuracy of 2 percent of the engine maximum fuel flow rate. The
controlling parameters are the elapsed time measurement of the event
and the weight or volume measurement.
77. The newly designated Sec. 89.418 is amended by revising
paragraphs (b), (c), (d), (f) introductory text, (f)(1), and (g) and
the table in paragraph (e) to read as follows:

Sec. 89.418 Raw emission sampling calculations.

* * * * *
(b) The exhaust gas flow rate G<INF>EXHW</INF> and V<INF>EXHW</INF>
shall be determined for each mode.
(1) For measurements using the mass flow method, see
Sec. 89.416(a).
(2) For measurements using the fuel consumption and exhaust gas
concentrations method, use the following equations:
[GRAPHIC] [TIFF OMITTED] TR23OC98.004

Where:
[GRAPHIC] [TIFF OMITTED] TR23OC98.005

[GRAPHIC] [TIFF OMITTED] TR23OC98.006

[GRAPHIC] [TIFF OMITTED] TR23OC98.007

[GRAPHIC] [TIFF OMITTED] TR23OC98.008

K = 3.5
(3) Humidity values may be calculated from either one of the
following equations:
[GRAPHIC] [TIFF OMITTED] TR23OC98.009

or
[GRAPHIC] [TIFF OMITTED] TR23OC98.010

(c) When applying G<INF>EXHW,</INF> the measured ``dry''
concentration shall be corrected to a wet basis, if not already
measured on a wet basis. This section is applicable only for
measurements made on raw exhaust gas. Correction to a wet basis shall
be according to the following formula:
Conc<INF>WET</INF> = K<INF>w</INF> x Conc<INF>DRY</INF>
Where: K<INF>W</INF> is determined according to the equations in
paragraph (c)(1) or (c)(2) of this section.
(1) For measurements using the mass flow method (see
Sec. 89.416(a)):
[GRAPHIC] [TIFF OMITTED] TR23OC98.011

Where:
[GRAPHIC] [TIFF OMITTED] TR23OC98.012

[GRAPHIC] [TIFF OMITTED] TR23OC98.013

<greek-a> = H/C mole ratio of the fuel.

(2) For measurements using the fuel consumption and exhaust gas
concentrations method (see Sec. 89.416(b)):
[GRAPHIC] [TIFF OMITTED] TR23OC98.014

[[Page 57018]]

Where:
[GRAPHIC] [TIFF OMITTED] TR23OC98.015

(d) As the NO_X emission depends on intake air
conditions, the NO_X concentration shall be corrected for
intake air temperature and humidity with the factor K<INF>h</INF> given
in the following formula. For engines operating on alternative
combustion cycles, other correction formulas may be used if they can be
justified or validated. The formula follows:
[GRAPHIC] [TIFF OMITTED] TR23OC98.016

(e) * * *

----------------------------------------------------------------------------------------------------------------
Gas u v w conc.
----------------------------------------------------------------------------------------------------------------
NO<INF>X.................................... 0.001587 0.00205 0.00205 ppm.
CO..................................... 0.000966 0.00125 0.00125 ppm.
HC..................................... 0.000478 0.000618 ppm.
CO<INF>2.................................... 15.19 19.64 19.64 percent.
----------------------------------------------------------------------------------------------------------------
Note: The given coefficients u, v, and w are calculated for 273.15 deg.K (0 deg.C) and 101.3 kPa. In cases
where the reference conditions vary from those stated, an error may occur in the calculations.

(f) The following equations may be used to calculate the
coefficients u, v, and w in paragraph (e) of this section for other
conditions of temperature and pressure:
(1) For the calculation of u, v, and w for NO_X (as
NO<INF>2</INF>), CO, HC (in paragraph (e) of this section as
CH<INF>1.80</INF>), CO<INF>2</INF>, and O<INF></INF>2:

Where:

w = 4.4615.10-5 x M if conc. in ppm
w = 4.4615.10-1 x M if conc. in percent
v = w
u = w/<greek-r><INF>Air</INF>
M = Molecular weight
<greek-r><INF>Air</INF> = Density of dry air at 273.15 deg.K (0
deg.C), 101.3 kPa = 1.293 kg/m\3\
* * * * *
(g)(1) The emission shall be calculated for all individual
components in the following way where power at idle is equal to zero:
[GRAPHIC] [TIFF OMITTED] TR23OC98.017

(2) The weighting factors and the number of modes (n) used in the
calculation in paragraph (g)(1) of this section are according to
Sec. 89.410.
78. The newly designated Sec. 89.420 is amended by revising
paragraph (a) introductory text to read as follows:

Sec. 89.420 Background sample.

(a) Background samples are produced by continuously drawing a
sample of dilution air during the exhaust collection phase of each test
cycle mode.
* * * * *
79. The newly designated Sec. 89.422 is amended by revising the
table in paragraph (d)(3) to read as follows:

Sec. 89.422 Dilute sampling procedures--CVS calibration.

* * * * *
(d) * * *
(3) * *

Calibration Data Measurements
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parameter Symbol Units Tolerances
--------------------------------------------------------------------------------------------------------------------------------------------------------
Barometric pressure (corrected)..... P<INF>B kPa (Inches Hg)........................................... 0.034 (0.01).
Air temperature, flowmeter.......... ETI deg.C (deg.F)............................................. 0.14 (0.25).
Pressure depression upstream of LFE. EPI kPa(Inches H<INF>2O)........................................... 0.012 (0.05).
Pressure drop across LFE matrix..... EDP kPa (Inches H<INF>2O).......................................... 0.001 (0.005).
Air flow............................ Q<INF>s m3/min. (Ft3/min)......................................... 0.5 pct.
CFV inlet depression................ PPI kPa (Inches Hg)........................................... 0.055 (0.016).
CFV outlet pressure................. PPO kPa (Inches Hg)........................................... 0.17 (0.05).
Temperature at venturi inlet........ T<INF>v deg.C (deg.F)............................................. 0.28 (0.5)
Specific gravity of manometer fluid. Sp.Gr .......................................................... (1.75 oil).
--------------------------------------------------------------------------------------------------------------------------------------------------------

* * * *

Sec. 89.423 [Removed and Reserved]

80. Remove and reserve the newly designated Sec. 89.423.
81. The newly designated Sec. 89.424 is amended by revising
paragraphs (a), (d)(6), and (e), and the definition for M \1\ in the
CO<INF>2e</INF> equation in paragraph (d)(3) to read as follows:

Sec. 89.424 Dilute emission sampling calculations.

(a) The final reported emission test results are computed by use of
the following formula:
[GRAPHIC] [TIFF OMITTED] TR23OC98.018

Where:
A<INF>wm</INF> = Weighted mass emission level (HC, CO, CO<INF>2</INF>,
PM, or NO_X) in g/kW-hr.
g<INF>i</INF> = Mass flow in grams per hour, = grams measured during
the mode divided by the sample time for the mode.
WF<INF>i</INF> = Effective weighing factor.
P<INF>i</INF> = Power measured during each mode (Power set = zero for
the idle mode).
* * * * *
(d) * * *
(3) * * *
M \1\ = Fuel mass consumed during the mode.
* * * * *
(6) Measured ``dry'' concentrations shall be corrected to a wet
basis, if not already measured on a wet basis. This section is
applicable only for measurements made on dilute exhaust gas. Correction
to a wet basis shall be according to the following formula:

Conc<INF>WET</INF> = K<INF>W</INF> x Conc<INF>DRY</INF>

Where: K<INF>W</INF> is determined according to the equation in
paragraph (d)(6)(i) or (d)(6)(ii), of this section.
(i) For wet CO<INF>2</INF> measurement:

[[Page 57019]]

[GRAPHIC] [TIFF OMITTED] TR23OC98.019

(ii) For dry CO<INF>2</INF> measurement:
[GRAPHIC] [TIFF OMITTED] TR23OC98.020

(iii) For the equations in paragraph (d)(6)(i) and (d)(6)(ii) of
this section, the following equation applies:
[GRAPHIC] [TIFF OMITTED] TR23OC98.021

Where: H<INF>a</INF> and H<INF>d</INF> are the grams of water per
kilogram of dry air; as illustrated in the following equations:
[GRAPHIC] [TIFF OMITTED] TR23OC98.022

[GRAPHIC] [TIFF OMITTED] TR23OC98.023

(e) The final modal reported brake-specific fuel consumption (bsfc)
shall be computed by use of the following formula:
[GRAPHIC] [TIFF OMITTED] TR23OC98.024

Where:

bsfc = brake-specific fuel consumption for a mode in grams of fuel per
kilowatt-hour (kW-hr).
M = mass of fuel in grams, used by the engine during a mode.
kW-hr = total kilowatts integrated with respect to time for a mode.
* * * * *

Sec. 89.425 [Removed and Reserved]

82. Remove and reserve the newly designated Sec. 89.425.
83-87. Appendix B to Subpart E of part 89 is revised to read as
follows:

Appendix B To Subpart E of Part 89--Tables

Table 1.--8-Mode Test Cycle for Variable-Speed Engines
----------------------------------------------------------------------------------------------------------------
Observed
torque \2\ Minimum
Test segment Mode number Engine speed \1\ (percent of time in Weighting
max. mode factors
observed) (minutes)
----------------------------------------------------------------------------------------------------------------
1............................... 1.................. Rated............. 100 5.0 0.15
1............................... 2.................. Rated............. 75 5.0 0.15
1............................... 3.................. Rated............. 50 5.0 0.15
1............................... 4.................. Rated............. 10 5.0 0.10
2............................... 5.................. Int............... 100 5.0 0.10
2............................... 6.................. Int............... 75 5.0 0.10
2............................... 7.................. Int............... 50 5.0 0.10
2............................... 8.................. Idle.............. 0 5.0 0.15
----------------------------------------------------------------------------------------------------------------
\1\ Engine speed (non-idle): <plus-minus> 2 percent of point. Engine speed (idle): Within manufacturer's
specifications. Idle speed is specified by the manufacturer.
\2\ Torque (non-idle): Throttle fully open for 100 percent points. Other non-idle points: <plus-minus> 2 percent
of engine maximum value. Torque (idle): Throttle fully closed. Load less than 5 percent of peak torque.

Table 2.--5-Mode Test Cycle for Constant-Speed Engines
----------------------------------------------------------------------------------------------------------------
Observed
torque \2\ Minimum
Mode number Engine\1\ Speed (percent of time in Weighting
max. mode factors
observed) (minutes)
----------------------------------------------------------------------------------------------------------------
1......................................... Rated........................ 100 5.0 0.05
2......................................... Rated........................ 75 5.0 0.25
3......................................... Rated........................ 50 5.0 0.30
4......................................... Rated........................ 25 5.0 0.30
5......................................... Rated........................ 10 5.0 0.10
----------------------------------------------------------------------------------------------------------------
\1\ Engine speed: <plus-minus>2 percent of point.
\2\ Torque: Throttle fully open for 100 percent point. Other points: <plus-minus> 2 percent of engine maximum
value.

[[Page 57020]]

Table 3.--6-Mode Test Cycle for Engines Rated Under 19 kW
----------------------------------------------------------------------------------------------------------------
Observed
torque \2\ Minimum
Mode number Engine speed \1\ (percent of time in Weighting
max. mode factors
observed) (minutes)
----------------------------------------------------------------------------------------------------------------
1......................................... Rated........................ 100 5.0 0.09
2......................................... Rated........................ 75 5.0 0.20
3......................................... Rated........................ 50 5.0 0.29
4......................................... Rated........................ 25 5.0 0.30
5......................................... Rated........................ 10 5.0 0.07
6......................................... Idle......................... 0 5.0 0.05
----------------------------------------------------------------------------------------------------------------
\1\ Engine speed (non-idle): <plus-minus> 2 percent of point. Engine speed (idle): Within manufacturer's
specifications. Idle speed is specified by the manufacturer.
\2\ Torque (non-idle): Throttle fully open for operation at 100 percent point. Other nonidle points: <plus-
minus> 2 percent of engine maximum value. Torque (idle): Throttle fully closed. Load less than 5 percent of
peak torque.

Table 4.--4-Mode Test Cycle for Propulsion Marine Diesel Engines
----------------------------------------------------------------------------------------------------------------
Engine speed Observed power
\1\ (percent \2\ (percent Minimum time Weighting
Mode number of max. of max. in mode factors
observed) observed) (minutes)
----------------------------------------------------------------------------------------------------------------
1............................................... 100 100 5.0 0.20
2............................................... 91 75 5.0 0.50
3............................................... 80 50 5.0 0.15
4............................................... 63 25 5.0 0.15
----------------------------------------------------------------------------------------------------------------
\1\ Engine speed: <plus-minus> 2 percent of point.
\2\ Power: Throttle fully open for operation at 100 percent point. Other points: <plus-minus> 2 percent of
engine maximum value.

Subpart F--[Amended]

88. The newly designated Sec. 89.505 is amended by revising
paragraph (e) to read as follows:

Sec. 89.505 Maintenance of records; submittal of information.

* * * * *
(e) All reports, submissions, notifications, and requests for
approvals made under this subpart are addressed to: Director, Engine
Programs and Compliance Division (6405-J), U.S. Environmental
Protection Agency, 401 M Street SW, Washington, DC 20460.
89. The newly designated Sec. 89.506 is amended by revising
paragraph (g) to read as follows:

Sec. 89.506 Right of entry and access.

* * * * *
(g) A manufacturer is responsible for locating its foreign testing
and manufacturing facilities in jurisdictions where local law does not
prohibit an EPA enforcement officer(s) or EPA authorized
representative(s) from conducting the entry and access activities
specified in this section. EPA will not attempt to make any inspections
which it has been informed that local foreign law prohibits.
90. The newly designated Sec. 89.509 is amended by revising
paragraphs (a) and (b) to read as follows.

Sec. 89.509 Calculation and reporting of test results.

(a) Initial test results are calculated following the applicable
test procedure specified in Sec. 89.508(a). The manufacturer rounds
these results, in accordance with ASTM E29-93a, to the number of
decimal places contained in the applicable emission standard expressed
to one additional significant figure. This procedure has been
incorporated by reference. See Sec. 89.6.
(b) Final test results are calculated by summing the initial test
results derived in paragraph (a) of this section for each test engine,
dividing by the number of tests conducted on the engine, and rounding
in accordance with the procedure specified in paragraph (a) of this
section to the same number of decimal places contained in the
applicable standard expressed to one additional significant figure.
* * * * *
91. The newly designated Sec. 89.512 is amended by revising
paragraph (b) to read as follows.

Sec. 89.512 Request for public hearing.

* * * * *
(b) The manufacturer's request must be filed with the Administrator
not later than 15 days after the Administrator's notification of the
decision to suspend or revoke, unless otherwise specified by the
Administrator. The manufacturer must simultaneously serve two copies of
this request upon the Director of the Engine Programs and Compliance
Division and file two copies with the Hearing Clerk of the Agency.
Failure of the manufacturer to request a hearing within the time
provided constitutes a waiver of the right to a hearing. Subsequent to
the expiration of the period for requesting a hearing as of right, the
Administrator may, at her or his discretion and for good cause shown,
grant the manufacturer a hearing to contest the suspension or
revocation.
* * * * *
92. The newly designated Sec. 89.513 is amended by revising
paragraph (e)(2) to read as follows.

Sec. 89.513 Administrative procedures for public hearing.

* * * * *
(e) Filing and service. * * *
(2) To the maximum extent possible, testimony will be presented in
written form. Copies of written testimony will be served upon all
parties as soon as practicable prior to the start of the hearing. A
certificate of service will be provided on or accompany each document
or paper filed with the Hearing Clerk. Documents to be served upon the
Director of the Engine Programs and Compliance Division must be sent by
registered mail to: Director, Engine Programs and Compliance Division
(6405-J), U.S. Environmental Protection Agency, 401

[[Page 57021]]

M Street SW., Washington, DC 20460. Service by registered mail is
complete upon mailing.
* * * * *

Subpart G--[Amended]

93. The newly designated Sec. 89.602 is amended by revising the
definition for ``Fifteen working day hold period'' to read as follows:

Sec. 89.602 Definitions.

* * * * *
Fifteen working day hold period. The period of time between a
request for final admission and the automatic granting of final
admission (unless EPA intervenes) for a nonconforming nonroad engine
conditionally imported pursuant to Sec. 89.605 or Sec. 89.609. Day one
of the hold period is the first working day (see definition for
``working day'' in this section) after the Engine Programs and
Compliance Division of EPA receives a complete and valid application
for final admission.
* * * * *
94. The newly designated Sec. 89.603 is amended by revising
paragraph (d) to read as follows:

Sec. 89.603 General requirements for importation of nonconforming
nonroad engines.

* * * * *
(d) The ICI must submit to the Engine Programs and Compliance
Division of EPA a copy of all approved applications for certification
used to obtain certificates of conformity for the purpose of importing
nonconforming nonroad engines pursuant to Sec. 89.605 or Sec. 89.609.
In addition, the ICI must submit to the Engine Programs and Compliance
Division a copy of all approved production changes implemented pursuant
to Sec. 89.605 or subpart B of this part. Documentation submitted
pursuant to this paragraph (d) must be provided to the Engine Programs
and Compliance Division within 10 working days of approval of the
certification application (or production change) by EPA.
95. The newly designated Sec. 89.604 is amended by revising
paragraphs (c)(4) and (d) to read as follows:

Sec. 89.604 Conditional admission.

* * * * *
(c) * * *
(4) A copy of the written record is to be submitted to the Engine
Programs and Compliance Division of EPA within five working days of the
transfer date.
(d) Notwithstanding any other requirement of this subpart or U.S.
Customs Service regulations, an ICI may also assume responsibility for
the modification and testing of a nonconforming nonroad engine which
was previously imported by another party. The ICI must be a holder of a
currently valid certificate of conformity for that specific nonroad
engine or authorized to import it pursuant to Sec. 89.609 at the time
of assuming such responsibility. The ICI must comply with all the
requirements of Sec. 89.603, Sec. 89.604, and either Sec. 89.605 or
Sec. 89.609, as applicable. For the purposes of this subpart, the ICI
has ``imported'' the nonroad engine as of the date the ICI assumes
responsibility for the modification and testing of the nonroad engine.
The ICI must submit written notification to the Engine Programs and
Compliance Division of EPA within 10 working days of the assumption of
that responsibility.
96. The newly designated Sec. 89.605 is amended by revising
paragraphs (a)(2)(i), (a)(3)(vi), and (c) to read as follows:

Sec. 89.605 Final admission of certified nonroad engines.

(a) * * *
(2) * * *
(i) The ICI attests that the nonroad engine has been modified in
accordance with the provisions of the ICI's certificate of conformity;
presents to EPA a statement written by the applicable Original Engine
Manufacturer that the Original Engine Manufacturer must provide to the
ICI, and to EPA, information concerning production changes to the class
of nonroad engines described in the ICI's application for
certification; delivers to the Engine Programs and Compliance Division
of EPA notification by the ICI of any production changes already
implemented by the Original Engine Manufacturer at the time of
application and their effect on emissions; and obtains from EPA written
approval to use this demonstration option; or.
* * * * *
(3) * * *
(vi) A report concerning these production changes is to be made to
the Engine Programs and Compliance Division of EPA within ten working
days of initiation of the production change. The cause of any failure
of an emission test is to be identified, if known;
* * * * *
(c) Except as provided in paragraph (b) of this section, EPA
approval for final admission of a nonroad engine under this section is
presumed to have been granted if the ICI does not receive oral or
written notice from EPA to the contrary within 15 working days of the
date that the Engine Programs and Compliance Division of EPA receives
the ICI's application under paragraph (a) of this section. EPA notice
of nonapproval may be made to any employee of the ICI. It is the
responsibility of the ICI to ensure that the Engine Programs and
Compliance Division of EPA receives the application and to confirm the
date of receipt. During this 15 working day hold period, the nonroad
engine is to be stored at a location where the Administrator has
reasonable access to the nonroad engine for the Administrator's
inspection. The storage is to be within 50 miles of the ICI's testing
facility to allow the Administrator reasonable access for inspection
and testing. A storage facility not meeting this criterion must be
approved in writing by the Administrator prior to the submittal of the
ICI's application under paragraph (a) of this section.
97. The newly designated Sec. 89.609 is amended by revising
paragraph (d) to read as follows:

Sec. 89.609 Final admission of modification nonroad engines and test
nonroad engines.

* * * * *
(d) Except as provided in paragraph (c) of this section, EPA
approval for final admission of a nonroad engine under this section is
presumed to have been granted if the ICI does not receive oral or
written notice from EPA to the contrary within 15 working days of the
date that the Engine Programs and Compliance Division of EPA receives
the ICI's application under paragraph (b) of this section. Such EPA
notice of nonapproval may be made to any employee of the ICI. It is the
responsibility of the ICI to ensure that the Engine Programs and
Compliance Division of EPA receives the application and to confirm the
date of receipt. During this 15 working day hold period, the nonroad
engine is stored at a location where the Administrator has reasonable
access to the nonroad engine for the Administrator's inspection. The
storage is to be within 50 miles of the ICI's testing facility to allow
the Administrator reasonable access for inspection and testing. A
storage facility not meeting this criterion must be approved in writing
by the Administrator prior to the submittal of the ICI's application
under paragraph (b) of this section.
* * * * *
98. The newly designated Sec. 89.610 is amended by revising
paragraph (b)(1) to read as follows:

Sec. 89.610 Maintenance instructions, warranties, emission labeling.

* * * * *

[[Page 57022]]

(b) * * * (1) ICIs must submit to the Engine Programs and
Compliance Division of EPA sample copies (including revisions) of any
warranty documents required by this section prior to importing nonroad
engines under this subpart.
* * * * *
99. The newly designated Sec. 89.611 is amended by revising
paragraph (g) to read as follows:

Sec. 89.611 Exemptions and exclusions.

* * * * *
(g) An application for exemption and exclusion provided for in
paragraphs (b), (c), and (e) of this section is to be mailed to: U.S.
Environmental Protection Agency, Office of Mobile Sources, Engine
Programs and Compliance Division (6405-J), 401 M Street, SW,
Washington, DC 20460, Attention: Imports.

Subpart J--[Amended]

100. Section 89.903 is amended by revising paragraph (b) to read as
follows:

Sec. 89.903 Application of section 216(10) of the Act.

* * * * *
(b) EPA will maintain a list of nonroad engines that have been
determined to be excluded because they are used solely for competition.
This list will be available to the public and may be obtained by
writing to the following address: Chief, Selective Enforcement Auditing
Section, Engine Programs and Compliance Division (6405-J),
Environmental Protection Agency, 401 M Street SW, Washington, DC 20460.
* * * * *
101. Section 89.905 is amended by revising paragraph (f) to read as
follows:

Sec. 89.905 Testing exemption.

* * * * *
(f) A manufacturer of new nonroad engines may request a testing
exemption to cover nonroad engines intended for use in test programs
planned or anticipated over the course of a subsequent one-year period.
Unless otherwise required by the Director, Engine Programs and
Compliance Division, a manufacturer requesting such an exemption need
only furnish the information required by paragraphs (a)(1) and (d)(2)
of this section along with a description of the record-keeping and
control procedures that will be employed to assure that the engines are
used for purposes consistent with paragraph (a) of this section.
102. Section 89.906 is amended by revising paragraphs (a)(3)
introductory text, (a)(3)(iii)(D), and (b) to read as follows:

Sec. 89.906 Manufacturer-owned exemption and precertification
exemption.

(a) * * *
(3) Unless the requirement is waived or an alternate procedure is
approved by the Director, Engine Programs and Compliance Division, the
manufacturer must permanently affix a label to each nonroad engine on
exempt status. This label should:
* * * * *
(iii) * * *
(D) The statement ``This nonroad engine is exempt from the
prohibitions of 40 CFR 89.1003.''
* * * * *
(b) Any independent commercial importer that desires a
precertification exemption pursuant to Sec. 89.611(b)(3) and is in the
business of importing, modifying, or testing uncertified nonroad
engines for resale under the provisions of subpart G of this part, must
apply to the Director, Engine Programs and Compliance Division. The
Director may require such independent commercial importer to submit
information regarding the general nature of the fleet activities, the
number of nonroad engines involved, and a demonstration that adequate
record-keeping procedures for control purposes will be employed.
103. Section 89.911 is revised to read as follows:

Sec. 89.911 Submission of exemption requests.

Requests for exemption or further information concerning exemptions
and/or the exemption request review procedure should be addressed to:
Chief, Selective Enforcement Auditing Section, Engine Programs and
Compliance Division (6405-J), Environmental Protection Agency, 401 M
Street SW, Washington, DC 20460.
104. Section 89.1003 is amended by revising paragraphs (a)(3),
(a)(5), (a)(6), (b)(4), and (b)(7) to read as follows:

Sec. 89.1003 Prohibited acts.

(a) * * *
(3)(i) For a person to remove or render inoperative a device or
element of design installed on or in a nonroad engine, vehicle or
equipment in compliance with regulations under this part prior to its
sale and delivery to the ultimate purchaser, or for a person knowingly
to remove or render inoperative such a device or element of design
after the sale and delivery to the ultimate purchaser; or
(ii) For a person to manufacture, sell or offer to sell, or
install, a part or component intended for use with, or as part of, a
nonroad engine, vehicle or equipment, where a principal effect of the
part or component is to bypass, defeat, or render inoperative a device
or element of design installed on or in a nonroad engine in compliance
with regulations issued under this part, and where the person knows or
should know that the part or component is being offered for sale or
installed for this use or put to such use; or
(iii) for a person to deviate from the provisions of Sec. 89.130
when rebuilding an engine (or rebuilding a portion of an engine or
engine system).
* * * * *
(5) For a person to circumvent or attempt to circumvent the
residence time requirements of paragraph (2)(iii) of the nonroad engine
definition in Sec. 89.2.
(6) For a manufacturer of nonroad vehicles or equipment to
distribute in commerce, sell, offer for sale, or introduce into
commerce a nonroad vehicle or piece of equipment which contains an
engine not covered by a certificate of conformity, except as otherwise
allowed by this part.
(b) * * *
(4) Certified nonroad engines shall be used in all vehicles and
equipment manufactured on or after the applicable model years in
Sec. 89.112 that are self-propelled, portable, transportable, or are
intended to be propelled while performing their function, unless the
manufacturer of the vehicle or equipment can prove that the vehicle or
equipment will be used in a manner consistent with paragraph (2) of the
definition of nonroad engine in Sec. 89.2. After the date on which a
new standard takes effect, nonroad vehicle and equipment manufacturers
may continue to use nonroad engines built prior to this date that are
not certified to the standard until inventories of those engines are
depleted; however, stockpiling of such nonroad engines will be
considered a violation of this section.
* * * * *
(7) A new nonroad engine intended solely to replace a nonroad
engine in a piece of nonroad equipment, where the engine requiring
replacement is not certified or is certified to emission standards that
are less stringent than those in effect when the replacement engine is
built, shall not be subject to the prohibitions of paragraph (a)(1) of
this section or to the requirements of Sec. 89.105 and paragraph (b)(4)
of this section, provided that:
(i) The engine manufacturer has ascertained that no engine produced
by itself or by the manufacturer of the engine that is being replaced,
if different, and certified to the

[[Page 57023]]

requirements of this subpart, is available with the appropriate
physical or performance characteristics to repower the equipment; and
(ii) The engine manufacturer or its agent takes ownership and
possession of the engine being replaced in partial exchange for the
replacement engine; and
(iii) The replacement engine is clearly labeled with the following
language, or similar alternate language approved by the Administrator:
THIS ENGINE DOES NOT COMPLY WITH FEDERAL NONROAD OR ON-HIGHWAY EMISSION
REQUIREMENTS. SALE OR INSTALLATION OF THIS ENGINE FOR ANY PURPOSE OTHER
THAN AS A REPLACEMENT ENGINE FOR AN ENGINE MANUFACTURED PRIOR TO
JANUARY 1 [INSERT APPROPRIATE YEAR] IS A VIOLATION OF FEDERAL LAW
SUBJECT TO CIVIL PENALTY; and
(iv) In cases where an engine is to be imported for replacement
purposes under the provisions of this paragraph (b)(7), the term
``engine manufacturer'' shall not apply to an individual or other
entity that does not possess a current Certificate of Conformity issued
by EPA under this part; and
(v) Where the replacement engine is intended to replace an engine
that is certified to emission standards that are less stringent than
those in effect when the replacement engine is built, the replacement
engine shall be identical in all material respects to a certified
configuration of the same or later model year as the engine being
replaced; and
(vi) Engines sold pursuant to the provisions of this paragraph
(b)(7) will neither generate nor use emission credits and will not be
part of any accounting under the averaging, banking and trading
program.
105. Section 89.1007 is amended by revising paragraph (c) to read
as follows:

Sec. 89.1007 Warranty provisions.

* * * * *
(c) For the purposes of this section, the owner of any nonroad
engine warranted under this part is responsible for the proper
maintenance of the engine. Proper maintenance includes replacement and
service, at the owner's expense at a service establishment or facility
of the owner's choosing, of all parts, items, or devices related to
emission control (but not designed for emission control) under the
terms of the last sentence of section 207(a)(3) of the Act, unless such
part, item, or device is covered by any warranty not mandated by this
Act.

[FR Doc. 98-24836 Filed 10-22-98; 8:45 am]
BILLING CODE 6560-50-P

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