
[Federal Register: April 30, 2010 (Volume 75, Number 83)]
[Rules and Regulations]               
[Page 22895-23065]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30ap10-9]                         
 

[[Page 22895]]

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Part II





Environmental Protection Agency





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40 CFR Parts 80, 85, 86, et al.



Control of Emissions From New Marine Compression-Ignition Engines at or 
Above 30 Liters per Cylinder; Final Rule


[[Page 22896]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 80, 85, 86, 94, 1027, 1033, 1039, 1042, 1043, 1045, 
1048, 1051, 1054, 1060, 1065, and 1068

[EPA-HQ-OAR-2007-0121; FRL-9097-4]
RIN 2060-AO38

 
Control of Emissions From New Marine Compression-Ignition Engines 
at or Above 30 Liters per Cylinder

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is finalizing emission standards for new marine diesel 
engines with per-cylinder displacement at or above 30 liters (called 
Category 3 marine diesel engines) installed on U.S. vessels. These 
emission standards are equivalent to those adopted in the amendments to 
Annex VI to the International Convention for the Prevention of 
Pollution from Ships (MARPOL Annex VI). The emission standards apply in 
two stages--near-term standards for newly built engines will apply 
beginning in 2011; long-term standards requiring an 80 percent 
reduction in NOX emissions will begin in 2016. We are also 
finalizing a change to our diesel fuel program that will allow for the 
production and sale of 1,000 ppm sulfur fuel for use in Category 3 
marine vessels. In addition, the new fuel requirements will generally 
forbid the production and sale of other fuels above 1,000 ppm sulfur 
for use in most U.S. waters, unless alternative devices, procedures, or 
compliance methods are used to achieve equivalent emissions reductions. 
We are adopting further provisions under the Act to Prevent Pollution 
from Ships, especially to apply the emission standards to engines 
covered by MARPOL Annex VI that are not covered by the Clean Air Act, 
and to require that these additional engines use the specified fuels 
(or equivalents).
    The final regulations also include technical amendments to our 
motor vehicle and nonroad engine regulations; many of these changes 
involve minor adjustments or corrections to our recently finalized rule 
for new nonroad spark-ignition engines, or adjustment to other 
regulatory provisions to align with this recent final rule.

DATES: This final rule is effective on June 29, 2010. The incorporation 
by reference of certain publications listed in this regulation is 
approved by the Director of the Federal Register as of June 29, 2010.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. EPA-HQ-OAR-2007-0121. All documents in the docket are listed on the 
http://www.regulations.gov Web site. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, is not placed on the Internet and will be 
publicly available only in hard copy form. Publicly available docket 
materials are available either electronically in http://
www.regulations.gov or in hard copy at the EPA-HQ-OAR-2007-0121 Docket, 
EPA/DC, EPA West, Room 3334, 1301 Constitution Ave., NW., Washington, 
DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday 
through Friday, excluding legal holidays. The telephone number for the 
Public Reading Room is (202) 566-1744, and the telephone number for the 
EPA-HQ-OAR-2007-0121 is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Amy Kopin, U.S. EPA, Office of 
Transportation and Air Quality, Assessment and Standards Division 
(ASD), Environmental Protection Agency, 2000 Traverwood Drive, Ann 
Arbor, MI 48105; telephone number: (734) 214-4417; fax number: (734) 
214-4050; e-mail address: Kopin.Amy@epa.gov, or Assessment and 
Standards Division Hotline; telephone number: (734) 214-4636.

SUPPLEMENTARY INFORMATION:

General Information

Does This Action Apply to Me?

    This action affects companies that manufacture, sell, or import 
into the United States new marine compression-ignition engines with per 
cylinder displacement at or above 30 liters for use on vessels flagged 
or registered in the United States; companies and persons that make 
vessels that will be flagged or registered in the United States and 
that use such engines; and the owners or operators of such U.S. 
vessels. Additionally, this action may affect companies and persons 
that rebuild or maintain these engines. Finally, this action may also 
affect those that manufacture, import, distribute, sell, and dispense 
fuel for use by Category 3 marine vessels. Affected categories and 
entities include the following:

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                   Category                     NAICS Code \a\      Examples of potentially affected entities
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Industry.....................................            333618  Manufacturers of new marine diesel engines.
Industry.....................................            336611  Manufacturers of marine vessels.
Industry.....................................            811310  Engine repair and maintenance.
Industry.....................................               483  Water transportation, freight and passenger.
Industry.....................................            324110  Petroleum Refineries.
Industry.....................................    424710, 424720  Petroleum Bulk Stations and Terminals;
                                                                  Petroleum and Petroleum Products Wholesalers.
Industry.....................................            483113  Coastal and Great Lakes Freight Transportation
Industry.....................................            483114  Coastal and Great Lakes Passenger
                                                                  Transportation
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Note:
\a\ North American Industry Classification System (NAICS).

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities that EPA is now aware 
will be regulated by this action. Other types of entities not listed in 
the table may also be regulated. To determine whether your company is 
regulated by this action, you should carefully examine the 
applicability criteria in 40 CFR 80.501, 94.1, 1042.1, and 1065.1, and 
the final regulations. If you have questions, consult the person listed 
in the preceding FOR FURTHER INFORMATION CONTACT section.

Table of Contents

I. Overview
    A. What Are the Elements of EPA's Coordinated Strategy for 
Ships?
    B. Why Is EPA Making This Rule?
    C. Statutory Basis for Action
II. Air Quality, Health and Welfare Impacts
    A. Public Health Impacts
    B. Environmental Impacts
    C. Air Quality Modeling Results
    D. Emissions From Ships With Category 3 Engines
III. Engine Standards
    A. What Category 3 Marine Engines Are Covered?

[[Page 22897]]

    B. What Standards Are We Finalizing for Newly Manufactured 
Engines?
    C. Are the Standards Feasible?
IV. Fuel Standards
    A. Background
    B. Diesel Fuel Standards Prior to This Final Rule
    C. Applicability
    D. Fuel Sulfur Standards
    E. Technical Amendments to the Current Diesel Fuel Sulfur 
Program Regulations
V. Emission Control Areas for U.S. Coasts
    A. What Is an ECA?
    B. U.S. Emission Control Area Designation
    C. Technological Approaches To Comply With Fuel Standards
    D. ECA Designation and Foreign-Flagged Vessels
VI. Certification and Compliance Program
    A. Compliance Provisions for Category 3 Engines
    B. Compliance Provisions To Implement Annex VI NOX 
Regulation and the NOX Technical Code
    C. Changes to the Requirements Specific to Engines Below 30 
Liters per Cylinder
    D. Other Regulatory Issues
    E. U.S. Vessels Enrolled in the Maritime Security Program
VII. Costs and Economic Impacts
    A. Estimated Fuel Costs
    B. Estimated Engine Costs
    C. Cost Effectiveness
    D. Economic Impact Analysis
VIII. Benefits
    A. Overview
    B. Quantified Human Health Impacts
    C. Monetized Benefits
    D. What Are the Limitations of the Benefits Analysis?
    E. Comparison of Costs and Benefits
IX. Public Participation
X. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer Advancement Act
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    K. Congressional Review Act
XI. Statutory Provisions and Legal Authority

I. Overview

    This final rule is part of a coordinated strategy to address 
emissions from ocean-going vessels and is an important step in EPA's 
ongoing National Clean Diesel Campaign. In recent years, we have 
adopted major new programs designed to reduce emissions from new diesel 
engines, including those used in highway (66 FR 5001, January 18, 
2001), nonroad (69 FR 38957, June 29, 2004), locomotive, and marine 
applications (73 FR 25098, May 6, 2008). When fully phased in, these 
programs will significantly reduce emissions of harmful pollutants from 
these categories of engines and vehicles. This final rule sets out the 
next step in this ambitious effort by addressing emissions from the 
largest marine diesel engines, called Category 3 marine diesel engines. 
These are engines with per-cylinder displacement at or above 30 liters 
per cylinder, which are used primarily for propulsion power on ocean-
going vessels (OGV).\1\
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    \1\ This final rule generally applies to vessels with the 
largest marine diesel engines, which are called Category 3 engines 
in our regulations. In this preamble, we often refer to vessels 
using these engines as Category 3 vessels. We also refer to them as 
ocean-going vessels although this intended to be only a descriptive 
term. While the large majority of these vessels operate in the 
oceans, some operate solely in our internal waters such as in the 
Great Lakes. Therefore, we do not use the term ocean-going vessels 
to exclude the few vessels with Category 3 engines that operate only 
in fresh-water lakes or rivers or to exclude ocean-going vessels 
with Category 2 or Category 1 engines, but rather to reflect the way 
the vessels being regulated are more commonly known to the general 
public. Note also that, pursuant to 40 CFR 1043 which implements 
APPS, the fuel requirements described in this rule, unless otherwise 
specified, generally apply also to fuel used in gas turbines and 
steam boilers on marine vessels.
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    Emissions from Category 3 engines remain at high levels. These 
engines use emission control technology that is comparable to that used 
by nonroad engines in the early 1990s, and use fuel that can have a 
sulfur content of 30,000 ppm or more. As a result, these engines emit 
high levels of pollutants that contribute to unhealthy air in many 
areas of the U.S. Nationally, in 2009, emissions from Category 3 
engines account for about 10 percent of mobile source emissions of 
nitrogen oxides (NOX), about 24 percent of mobile source 
diesel PM2.5 emissions (with PM2.5 referring to 
particles with a nominal mean aerodynamic diameter less than or equal 
to 2.5 [mu]m), and about 80 percent of mobile source emissions of 
sulfur oxides (SOX). As we look into the future, however, 
emissions from Category 3 engines are expected to become an even more 
dominant inventory source. This will be due to both emission reductions 
from other mobile sources as new emission controls go into effect and 
to the anticipated activity growth for ocean transportation. Without 
new controls, we anticipate the contribution of Category 3 engines to 
national emission inventories to increase to about 24 percent, 34 
percent, and 93 percent of mobile source NOX, 
PM2.5, and SOX emissions, respectively in 2020, 
growing to 40 percent, 48 percent, and 95 percent respectively in 2030. 
The coordinated emission control strategy will lead to significant 
reductions in these emissions and important benefits to public health.
    The evolution of EPA's strategy to control mobile source diesel 
emissions has followed a technology progression, beginning with the 
application of high-efficiency advanced aftertreatment approaches and 
lower sulfur fuel requirements first to highway vehicles, then to 
nonroad engines and equipment, followed by locomotives and smaller 
marine diesel engines. The benefits of this approach include maximizing 
air quality benefits by focusing on the largest populations of sources 
with the shortest service lives, allowing engine manufacturers to 
spread initial research and development costs over a larger population 
of engines, and allowing manufacturers to address the challenges of 
applying advanced emission controls on smaller engines first.
    This approach also allowed us and the shipping community sufficient 
lead time to resolve technical issues with the use of advanced emission 
control technology and lower-sulfur fuel on the largest of these 
engines on vessels engaged in international trade. To that end, EPA has 
been working with engine manufacturers and other industry stakeholders 
for many years to identify and resolve challenges associated with 
applying advanced diesel engine technology to Category 3 engines to 
achieve significant NOX emission reductions and using lower-
sulfur fuels to achieve significant PM and SOX emission 
reductions. This work was fundamental in developing the emission limits 
for Category 3 engines that we are finalizing in this action and 
informed the position advocated by the United States in the 
international negotiations for more stringent tiers of international 
engine emission limits.
    Our coordinated strategy to control emissions from ocean-going 
vessels consists of actions at both the national and international 
levels. It includes: (1) The engine and fuel controls we are finalizing 
in this action under our Clean Air Act authority; (2) the proposal \2\ 
submitted by the U.S. Government to the International Maritime 
Organization (IMO) to amend Annex VI of the

[[Page 22898]]

International Convention for the Prevention of Pollution from Ships 
(MARPOL Annex VI) to designate U.S. coasts as an Emission Control Area 
(ECA) \3\ in which all vessels, regardless of flag, would be required 
to meet the most stringent engine and marine fuel sulfur requirements 
in Annex VI; and (3) the new engine emission and fuel sulfur limits 
contained in the amendments to Annex VI that are applicable to all 
vessels regardless of flag through the Act to Prevent Pollution from 
Ships (APPS), as well as clarification on implementation of those 
standards, application to domestic and foreign-flagged vessels in 
internal waters, and application to nonparty foreign-flagged vessels.
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    \2\ Proposal to Designate an Emission Control Area for Nitrogen 
Oxides, Sulphur Oxides and Particulate Matter, Submitted by the 
United States and Canada. IMO Document MEPC59/6/5, 27 March, 2009. A 
copy of this document can be found at http://www.epa.gov/otaq/regs/
nonroad/marine/ci/mepc-59-eca-proposal.pdf.
    \3\ For the purpose of this final rule, the term ``ECA'' refers 
to both the ECA and internal U.S. waters. Refer to Section VI.B. for 
a discussion of the application of the fuel sulfur and engine 
emission limits to U.S. internal waters through APPS.
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    The amendments to APPS to incorporate Annex VI require compliance 
with MARPOL Annex VI by U.S. and foreign vessels that enter U.S. ports 
or operate in U.S. waters. In light of this, we are deciding not to 
revisit our existing approach with respect to foreign vessels in this 
rule. However, the MARPOL Annex VI Tier III NOX and 
stringent fuel sulfur limits are geographically based and would not 
become effective absent designation of U.S. coasts as an ECA. As noted 
above, the United States forwarded a proposal to IMO to amend Annex VI 
to designate U.S. coasts as an ECA. This proposal to amend Annex VI was 
approved in principle and circulated for adoption. We expect the 
proposed ECA amendment will be adopted at MEPC 60, in March 2010. If 
this amendment is not adopted in a timely manner by IMO, we intend to 
take supplemental action to control emissions from vessels that affect 
U.S. air quality.
    Our coordinated strategy for ocean-going vessels will significantly 
reduce emissions from foreign and domestic vessels that affect U.S. air 
quality, and the impacts on human health and welfare will be 
substantial. We project that by 2030 this program will reduce annual 
emissions of NOX, SOX, and particulate matter 
(PM) by 1.2 million, 1.3 million, and 143,000 tons, respectively, and 
the magnitude of these reductions would continue to grow well beyond 
2030.\4\ These reductions are estimated to annually prevent between 
12,000 and 30,000 PM-related premature deaths, between 210 and 920 
ozone-related premature deaths, 1,400,000 work days lost, and 9,600,000 
minor restricted-activity days. The estimated annual monetized health 
benefits of this coordinated strategy in 2030 would be between $110 and 
$270 billion, assuming a 3-percent discount rate (or between $99 and 
$240 billion assuming a 7-percent discount rate). The annual cost of 
the overall program in 2030 would be significantly less, at 
approximately $3.1 billion.
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    \4\ These emission inventory reductions include reductions from 
ships operating within the 24 nautical mile regulatory zone off the 
California Coastline, beginning with the effective date of the 
Coordinated Strategy program elements. The California regulation 
contains a provision that would sunset the requirements of the rule 
if the Federal program achieves equivalent emission reductions. See 
http://www.arb.ca.gov/regact/2008/fuelogv08/fro13.pdf at 13 CCR 
2299.2(j)(1).
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A. What Are the Elements of EPA's Coordinated Strategy for Ships?

    Our coordinated strategy for ocean-going vessels, including the 
emission standards finalized in this action under the Clean Air Act, 
continues EPA's program to progressively apply advanced aftertreatment 
emission control standards to diesel engines and reflects the evolution 
of this technology from the largest inventory source (highway engines), 
to land-based nonroad engines, to locomotives and marine diesel engines 
up to 30 liters per cylinder. The results of these forerunner programs 
are dramatic reductions in NOX and PM2.5 
emissions on the order of 80 to 90 percent, which will lead to 
significant improvements in national air quality.
    The combination of controls in the coordinated strategy for ocean-
going vessels will provide significant reductions in PM2.5, 
NOX, SOX, and toxic compounds, both in the near 
term (as early as 2011) and in the long term. These reductions will be 
achieved in a manner that: (1) Is very cost effective compared to 
additional controls on portside vehicles and equipment and other land-
based mobile sources that are already subject to stringent technology-
forcing emission standards; (2) leverages the international program 
adopted by IMO to ensure that all ships that operate in areas that 
affect U.S. air quality are required to use stringent emission control 
technology; and (3) provides the lead time needed to deal with the 
engineering design workload that is involved in applying advanced high-
efficiency aftertreatment technology to these very large engines. 
Overall, the coordinated strategy constitutes a comprehensive program 
that addresses the problems caused by ocean-going vessel emissions from 
both a near-term and long-term perspective. It does this while 
providing for an orderly and cost-effective implementation schedule for 
the vessel owners and manufacturers, and in a way that is consistent 
with the international requirements for these vessels.
    The human health and welfare impacts of emissions from Category 3 
vessels, along with estimates of their contribution to national 
emission inventories, are described in Section II. The new tiers of 
engine emission standards under the Clean Air Act for addressing these 
emissions, and our justifications for them, are discussed in Section 
III. Section IV contains changes to our existing marine diesel fuel 
program. In Section V, we describe a key component of the coordinated 
strategy: The recently-submitted proposal to amend MARPOL Annex VI to 
designate U.S. coasts as an ECA, as well as the IMO amendment process.
    In addition to the new emission limits, we are finalizing several 
revisions to our Clean Air Act testing, certification, and compliance 
provisions to better ensure emission control in use. We are also 
finalizing regulations for the purpose of implementing MARPOL Annex VI 
pursuant to the Act to Prevent Pollution from Ships (33 U.S.C. 1901 et 
seq.). These revisions are described in Section VI. Sections VII and 
VIII present the estimated costs and benefits of our coordinated 
program to address OGV emissions.
(1) What CAA Standards Is EPA Finalizing?
    We are finalizing new tiers of Category 3 marine diesel engine 
standards under our Clean Air Act authority, as well as certain 
revisions to our marine fuel program.
    Category 3 Engine Standards. Previous standards for Category 3 
engines were adopted in 2003. These Tier 1 standards are equivalent to 
the first tier of MARPOL Annex VI NOX limits and require the 
use of control technology comparable to that used by nonroad engines in 
the early 1990s. We did not adopt PM standards at that time because the 
vast majority of PM emissions from Category 3 engines are the result of 
the sulfur content of the residual fuel they use and because of 
measurement issues.\5\ The combination of the engine and fuel standards 
we are finalizing and the U.S. Government proposal for ECA designation 
will

[[Page 22899]]

require all vessels that operate in coastal areas that affect U.S. air 
quality to control emissions of NOX, SOX, and PM.
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    \5\ As explained in the proposed rule leading to the 2003 final 
rule, there were concerns about measuring PM from Category 3 marine 
engines (67 FR 37569, May 29, 2002). Specifically, established PM 
test methods showed unacceptable variability when sulfur levels 
exceed 0.8 weight percent. However, as described in Section VI, we 
now believe these measurement issues have been resolved.
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    We are revising our engine requirements under the Clean Air Act to 
include two additional tiers of NOX standards for new 
Category 3 marine diesel engines installed on vessels flagged or 
registered in the United States. The near-term Tier 2 standards will 
apply beginning in 2011 and will require more efficient use of engine 
technologies being used today, including engine timing, engine cooling, 
and advanced computer controls. The long-term Tier 3 standards will 
apply beginning in 2016 and will require the use of more advanced 
technology such as selective catalytic reduction.
    Because much of the operation of U.S. vessels occurs in areas that 
will have little, if any, impact on U.S. air quality, our Clean Air Act 
program will allow the use of alternative emission control devices 
(AECDs) that will permit a ship to meet less stringent requirements on 
the open sea. The use of these devices will be subject to certain 
restrictions, including a requirement that the AECD not disable 
emission controls while operating in areas where emissions can 
reasonably be expected to adversely affect U.S. air quality, and that 
the engine is equipped with a NOX emission monitoring 
device. In addition, the engine will be required to meet the Tier 2 
NOX limits when the AECD is implemented, and an AECD will 
not be allowed on any Tier 2 or earlier engine.
    In addition to the NOX emission limits, we are 
finalizing standards for emissions of hydrocarbons (HC) and carbon 
monoxide (CO) from new Category 3 engines. As explained in Section 
III.B.1, below, we are not setting a standard for PM emissions for 
Category 3 engines. However, significant PM emissions control will be 
achieved through the ECA fuel sulfur requirements that will apply 
through APPS to ships that operate in areas that affect U.S. air 
quality. We are also requiring engine manufacturers to measure and 
report PM emissions pursuant to our authority in section 208 of the 
Clean Air Act.
    Fuel Sulfur Limits. We are finalizing fuel sulfur limits under 
section 211(c) of the Clean Air Act that match the limits that apply 
under Annex VI in ECAs. First, we are revising our existing diesel fuel 
program to allow for the production and sale of 1,000 ppm sulfur fuel 
for use in Category 3 marine vessels. This will allow production and 
distribution of fuel consistent with the new sulfur limits that will 
become applicable, under Annex VI, in ECAs beginning in 2015. Our 
current diesel fuel program sets a sulfur limit of 15 ppm that will be 
fully phased-in by December 1, 2014 for land-based nonroad, locomotive, 
and marine (NRLM) diesel fuel produced for distribution, sale and use 
in the United States. Without this change to our existing diesel fuel 
regulations, fuel with a sulfur content of up to 1,000 ppm could be 
used in Category 3 marine vessels, but it could not be legally produced 
in the U.S. after June 1, 2014. Second, we are generally forbidding the 
production and sale of fuel oil with a sulfur content above 1,000 ppm 
for use in the waters within the proposed ECA (see Note 3, supra). The 
exception to this is if the vessel uses alternative devices, 
procedures, or compliance methods that achieve equivalent emission 
control as operating on 1,000 ppm sulfur fuel.
(2) What Is the U.S. Government Proposal for Designation of an Emission 
Control Area?
    MARPOL Annex VI contains international standards for air emissions 
from ships, including NOX, SOX, and PM emissions. 
The Annex VI NOX and SOX/PM limits are set out in 
Table I-1. Annex VI was adopted by the Parties in 1997 but did not go 
into force until 2005, after it was ratified by fifteen countries 
representing at least 50 percent of the world's merchant shipping 
tonnage. These Annex VI NOX standards currently apply to all 
engines above 130 kW installed on a ship constructed on or after 
January 1, 2000 and reduce NOX emissions by about 30 percent 
from uncontrolled levels. As originally adopted, Annex VI included two 
fuel sulfur limits: A global limit of 45,000 ppm and a more stringent 
15,000 ppm limit for SOX Emission Control Areas (SECAs). 
This approach ensures that the cleanest fuel is used in areas that 
demonstrate a need for additional SOX reductions, while 
retaining the ability of ships to use higher-sulfur residual fuel on 
the open ocean.
    Annex VI was amended in October 2008, adding two tiers of 
NOX limits (Tier II and Tier III) and two sets of fuel 
sulfur standards.\6\ These amendments will enter into force on July 1, 
2010. The most stringent NOX and fuel sulfur limits are 
regionally based and will apply only in designated ECAs.
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    \6\ Note that the MARPOL Annex VI standards are referred to as 
Tiers I, II, and III; EPA's Category 3 emission standards are 
referred to as Tiers 1, 2, and 3.

                                            Table I-1--Annex VI NOX Emission Standards and Fuel Sulfur Limits
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Less than 130    130-2,000  RPM
                                                                                                           RPM               \a\         Over 2,000  RPM
--------------------------------------------------------------------------------------------------------------------------------------------------------
NOX g/kW-hr...................................  Tier I..........................          \b\ 2004              17.0   45.0[middot]n(-               9.8
                                                                                                                                 0.20)
                                                Tier II.........................              2011              14.4   44.0[middot]n(-               7.7
                                                                                                                                 0.23)
                                                Tier III........................              2016               3.4    9.0[middot]n(-               2.0
                                                                                                                                 0.23)
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----------------------------------------------------------------------------------------------------------------
                                                        Global
                                                          ECA
----------------------------------------------------------------------------------------------------------------
Fuel Sulfur.............................              2004      c 45,000 ppm              2005      c 15,000 ppm
                                                      2012      c 35,000 ppm              2010      c 10,000 ppm
                                                      2020     c d 5,000 ppm              2015       c 1,000 ppm
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Notes:
\a\ Applicable standards are calculated from n (maximum in-use engine speed in revolutions per minute (rpm)),
  rounded to one decimal place.
\b\ Tier 1 NOX standards apply for engines originally manufactured after 2004, and proposed also to certain
  earlier engines.
\c\ Annex VI standards are in terms of percent sulfur. Global sulfur limits are 4.5%; 3.5%; 0.5%. ECA sulfur
  limits are 1.5%; 1.0%; 0.1%.
\d\ Subject to a feasibility review in 2018; may be delayed to 2025.

    To realize the benefits from the MARPOL Annex VI Tier III NOX and 
most stringent fuel sulfur controls, areas must be designated as 
Emission Control Areas. On July 17, 2009, the IMO approved in principle 
a U.S.-Canada proposal to amend MARPOL Annex VI to designate North 
American coastal waters as an ECA (referred to as the

[[Page 22900]]

``U.S./Canada ECA'' or the ``North American ECA'').\7\ In addition, 
France has joined the ECA proposal on behalf of the Saint Pierre and 
Miquelon archipelago. A description of this proposal and the IMO ECA 
designation process is set out in Section V. ECA designation would 
ensure that ships that affect U.S. air quality meet stringent 
NOX and fuel sulfur requirements while operating within 200 
nautical miles of U.S. coasts. We expect the North American proposal 
will be adopted by the Parties to MARPOL Annex VI in March 2010, 
entering into force as early as 2012. If, however, the proposed 
amendment is not adopted in a timely manner, we intend to take 
supplemental action to control harmful emissions from vessels that 
affect U.S. air quality.
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    \7\ Proposal to Designate an Emission Control Area for Nitrogen 
Oxides, Sulphur Oxides and Particulate Matter, Submitted by the 
United States and Canada. IMO Document MEPC59/6/5, 27 March 2009. A 
copy of this document can be found at http://www.epa.gov/otaq/regs/
nonroad/marine/ci/mepc-59-eca-proposal.pdf.
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(3) Regulations To Implement Annex VI
    The United States became a party to MARPOL Annex VI by depositing 
its instrument of ratification with IMO on October 8, 2008. This was 
preceded by the President signing into law the Maritime Pollution 
Prevention Act of 2008 (Pub. L. 110-280) on July 21, 2008, that 
contains amendments to the Act to Prevent Pollution from Ships (33 
U.S.C. 1901 et seq.). These APPS amendments require compliance with 
Annex VI by all persons subject to the engine and vessel requirements 
of Annex VI. The amendments also authorize the U.S. Coast Guard and EPA 
to enforce the provisions of Annex VI against domestic and foreign 
vessels and to develop implementing regulations, as necessary. In 
addition, APPS gives EPA sole authority to certify engines installed on 
U.S. vessels to the Annex VI requirements. This final rule contains 
regulations codifying the Annex VI requirements and regulations to 
implement several aspects of the Annex VI engine and fuel regulations, 
which we are finalizing under that APPS authority. Our cost and benefit 
analyses for the coordinated strategy include the costs for U.S. 
vessels to implement the requirements of this MARPOL Annex VI program, 
including requirements that will apply upon entry into force of the 
North American ECA.
(4) Technical Amendments
    The finalized regulations also include technical amendments to our 
motor vehicle and nonroad engine regulations. Many of these changes 
involve minor adjustments or corrections to our recently finalized rule 
for new nonroad spark-ignition engines, or adjustment to other 
regulatory provisions to align with this recent final rule.
(5) Summary
    The emission control requirements in our coordinated strategy are 
the MARPOL Annex VI global Tier II NOX standards included in 
the amendments to Annex VI and the ECA Tier III NOX limits 
and fuel sulfur limits that will apply when the U.S. coasts are 
designated as an ECA through an additional amendment to Annex VI. The 
Annex VI requirements, including the future ECA requirements, will be 
enforceable for U.S. and foreign vessels operating in U.S. waters 
through the Act to Prevent Pollution from Ships.
    We are also adopting the NOX emission standards for 
Category 3 engines on U.S. vessels under section 213 of the Clean Air 
Act.
    Finally, we are adopting additional requirements that are not part 
of the Annex VI program or the ECA. These are (1) limits on hydrocarbon 
and carbon monoxide emissions for Category 3 engines; (2) a PM 
measurement requirement to obtain data on PM emissions from engines 
operating on distillate fuel; and (3) changes to our diesel fuel 
program under the Clean Air Act to allow production and sale of ECA-
compliant fuel. We are also changing our emission control program for 
smaller marine diesel engines to harmonize with the Annex VI 
NOX requirements for U.S. vessels that operate 
internationally.

B. Why Is EPA Making This Rule?

(1) Category 3 Engines Contribute to Serious Air Quality Problems
    Category 3 engines generate significant emissions of 
PM2.5, SOX, and NOX that contribute to 
nonattainment of the National Ambient Air Quality Standards (NAAQS) for 
PM2.5 and ground-level ozone (smog). NOX and 
SOX are both precursors to secondary PM2.5 
formation. Both PM2.5 and NOX adversely affect 
human health. NOX is a key precursor to ozone as well. 
NOX, SOX and PM2.5 emissions from 
ocean-going vessels also cause harm to public welfare, including 
contributing to deposition of nitrogen and sulfur, visibility 
impairment and other harmful environmental impacts across the U.S.
    The health and environmental effects associated with these 
emissions are a classic example of a negative externality (an activity 
that imposes uncompensated costs on others). With a negative 
externality, an activity's social cost (the costs borne to society 
imposed as a result of the activity taking place) is not taken into 
account in the total cost of producing goods and services. In this 
case, as described in this section below and in Section II, emissions 
from ocean-going vessels impose public health and environmental costs 
on society, and these added costs to society are not reflected in the 
costs of providing the transportation services. The market system 
itself cannot correct this externality because firms in the market are 
rewarded for minimizing their production costs, including the costs of 
pollution control. In addition, firms that may take steps to use 
equipment that reduces air pollution may find themselves at a 
competitive disadvantage compared to firms that do not. To correct this 
market failure and reduce the negative externality from these 
emissions, we are setting a cap on the rate of emission production from 
these sources. EPA's coordinated strategy for ocean-going vessels will 
accomplish this since both domestic and foreign ocean-going vessels 
will be required to reduce their emissions to a technologically 
feasible limit.
    Emissions from ocean-going vessels account for substantial portions 
of the country's ambient PM2.5, SOX and 
NOX levels. We estimate that in 2009 these engines account 
for about 80 percent of mobile source sulfur dioxide (SO2) 
emissions, 10 percent of mobile source NOX emissions and 
about 24 percent of mobile source diesel PM2.5 emissions. 
Emissions from ocean-going vessels are expected to dominate the mobile 
source inventory in the future, due to both the expected emission 
reductions from other mobile sources as a result of more stringent 
emission controls and due to growth in the demand for ocean 
transportation services. By 2030, the coordinated strategy will reduce 
annual SO2 emissions from these diesel engines by 1.3 
million tons, annual NOX emissions by 1.2 million tons, and 
PM2.5 emissions by 143,000 tons, and those reductions will 
continue to grow beyond 2030 as fleet turnover to the clean engines 
continues. While a share of these emissions occur at sea, our air 
quality modeling results described in Section II show they have a 
significant impact on ambient air quality far inland.
    Both ozone and PM2.5 are associated with serious public 
health problems, including premature mortality, aggravation of 
respiratory and cardiovascular disease (as indicated by increased 
hospital admissions and emergency room visits, school absences, lost 
work days, and restricted activity days), changes in lung function and 
increased respiratory symptoms, altered

[[Page 22901]]

respiratory defense mechanisms, and chronic bronchitis. Diesel exhaust 
is of special public health concern, and since 2002 EPA has classified 
it as likely to be carcinogenic to humans by inhalation at 
environmental exposures. Recent studies are showing that populations 
living near large diesel emission sources such as major roadways, rail 
yards, and marine ports are likely to experience greater diesel exhaust 
exposure levels than the overall U.S. population, putting them at 
greater health risks.8 9 10 
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    \8\ U. S. EPA (2004). Final Regulatory Impact Analysis: Control 
of Emissions from Nonroad Diesel Engines, Chapter 3. Report No. 
EPA420-R-04-007. http://www.epa.gov/nonroad-diesel/2004fr.htm#ria.
    \9\ State of California Air Resources Board. (2004). Roseville 
Rail Yard Study. Sacramento, CA: California EPA, California Air 
Resources Board (CARB). Stationary Source Division. This document is 
available electronically at: http://www.arb.ca.gov/diesel/documents/
rrstudy.htm.
    \10\ Di, P., Servin, A., Rosenkranz, K., Schwehr, B., Tran, H., 
(2006). Diesel Particulate Matter Exposure Assessment Study for the 
Ports of Los Angeles and Long Beach. Sacramento, CA: California EPA, 
California Air Resources Board (CARB). Retrieved March 19, 2009 from 
http://www.arb.ca.gov/regact/marine2005/portstudy0406.pdf.
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    EPA recently updated its initial screening-level analysis \11\ of 
selected marine port areas to better understand the populations that 
are exposed to diesel particulate matter emissions from these 
facilities.12 13 14 15 This screening-level analysis focused 
on a representative selection of national marine ports.\16\ Of the 45 
marine ports selected, the results indicate that at least 18 million 
people, including a disproportionate number of low-income households, 
African-Americans, and Hispanics, live in the vicinity of these 
facilities and are being exposed to ambient diesel PM levels that are 
2.0 [micro]g/m\3\ and 0.2 [micro]g/m\3\ above levels found in areas 
further from these facilities. Considering only ocean-going marine 
engine diesel PM emissions, the results indicate that 6.5 million 
people are exposed to ambient diesel particulate matter (DPM) levels 
that are 2.0 [micro]g/m\3\ and 0.2 [micro]g/m\3\ above levels found in 
areas further from these facilities. Because those populations exposed 
to diesel PM emissions from marine ports are more likely to be low-
income and minority residents, these populations would benefit from the 
controls being proposed in this action. The detailed findings of this 
study are available in the public docket for this rulemaking.
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    \11\ This type of screening-level analysis is an inexact tool 
and not appropriate for regulatory decision-making; it is useful in 
beginning to understand potential impacts and for illustrative 
purposes. Additionally, the emissions inventories used as inputs for 
the analyses are not official estimates and likely underestimate 
overall emissions because they are not inclusive of all emission 
sources at the individual ports in the sample.
    \12\ ICF International. September 28, 2007. Estimation of diesel 
particulate matter concentration isopleths for marine harbor areas 
and rail yards. Memorandum to EPA under Work Assignment Number 0-3, 
Contract Number EP-C-06-094. This memo is available in Docket EPA-
HQ-OAR-2007-0121.
    \13\ ICF International. September 28, 2007. Estimation of diesel 
particulate matter population exposure near selected harbor areas 
and rail yards. Memorandum to EPA under Work Assignment Number 0-3, 
Contract Number EP-C-06-094. This memo is available in Docket EPA-
HQ-OAR-2007-0121.
    \14\ ICF International, December 10, 2008. Estimation of diesel 
particulate matter population exposure near selected harbor areas 
with revised harbor emissions. Memorandum to EPA under Work 
Assignment Number 2-9. Contract Number EP-C-06-094. This memo is 
available in Docket EPA-HQ-OAR-2007-0121.
    \15\ ICF International. December 1, 2008. Estimation of diesel 
particulate matter concentration isopleths near selected harbor 
areas with revised emissions. Memorandum to EPA under Work 
Assignment Number 1-9. Contract Number EP-C-06-094. This memo is 
available in Docket EPA-HQ-OAR-2007-0121.
    \16\ The Agency selected a representative sample from the top 
150 U.S. ports including coastal and Great Lake ports.
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    Even outside port areas, millions of Americans continue to live in 
areas that do not meet existing air quality standards today. With 
regard to PM2.5 nonattainment, in 2005 EPA designated 39 
nonattainment areas for the 1997 PM2.5 NAAQS (70 FR 943, 
January 5, 2005). These areas are composed of 208 full or partial 
counties with a total population exceeding 88 million. The 1997 
PM2.5 NAAQS was recently revised and the 2006 
PM2.5 NAAQS became effective on December 18, 2006. As of 
December 22, 2008, there are 58 2006 PM2.5 nonattainment 
areas composed of 211 full or partial counties. These numbers do not 
include individuals living in areas that may fail to maintain or 
achieve the PM2.5 NAAQS in the future. Currently, ozone 
concentrations exceeding the 8-hour ozone NAAQS occur over wide 
geographic areas, including most of the nation's major population 
centers. As of December 2008, there are approximately 132 million 
people living in 57 areas (293 full or partial counties) designated as 
not in attainment with the 8-hour ozone NAAQS. These numbers do not 
include people living in areas where there is a potential that the area 
may fail to maintain or achieve the 8-hour ozone NAAQS.
    In addition to public health impacts, there are serious public 
welfare and environmental impacts associated with PM2.5 and 
ozone emissions. Specifically, NOX and SOX 
emissions from diesel engines contribute to the acidification, 
nitrification, and eutrophication of water bodies. NOX, 
SOX and direct emissions of PM2.5 can contribute 
to the substantial impairment of visibility in many parts of the U.S. 
where people live, work, and recreate, including national parks, 
wilderness areas, and mandatory class I Federal areas.\17\ The 
deposition of airborne particles can also reduce the aesthetic appeal 
of buildings and culturally important articles through soiling, and can 
contribute directly (or in conjunction with other pollutants) to 
structural damage by means of corrosion or erosion. Finally, ozone 
causes damage to vegetation which leads to crop and forestry economic 
losses, as well as harm to national parks, wilderness areas, and other 
natural systems.
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    \17\ These areas are defined in section 162 of the Act as those 
national parks exceeding 6,000 acres, wilderness areas and memorial 
parks exceeding 5,000 acres, and all international parks which were 
in existence on August 7, 1977. Section 169 of the Clean Air Act 
provides additional authority to address existing visibility 
impairment and prevent future visibility impairment in the 156 
national parks, forests and wilderness areas categorized as 
mandatory class I Federal areas.
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    EPA has already adopted many emission control programs that are 
expected to reduce ambient PM2.5 and ozone levels, including 
the Nonroad Spark Ignition Engine rule (73 FR 59034, Oct 8, 2008), the 
Locomotive and Marine Diesel Engine Rule (73 FR 25098, May 6, 2008), 
the Clean Air Interstate Rule (CAIR) (70 FR 25162, May 12, 2005), the 
Clean Air Nonroad Diesel Rule (69 FR 38957, June 29, 2004), the Heavy 
Duty Engine and Vehicle Standards and Highway Diesel Fuel Sulfur 
Control Requirements (66 FR 5002, Jan. 18, 2001), and the Tier 2 
Vehicle and Gasoline Sulfur Program (65 FR 6698, Feb. 10, 2000). The 
additional PM2.5, SOX, and NOX 
emission reductions resulting from the coordinated approach described 
in this action will assist States in attaining and maintaining the 
PM2.5 and ozone NAAQS near term and in the decades to come.
    Our air quality modeling projects that in 2020 at least 13 counties 
with about 30 million people may violate the 1997 standards for 
PM2.5 and 50 counties with about 50 million people may 
violate the 2008 standards for ozone. These numbers likely 
underestimate the impacted population since they do not include the 
people who live in areas which do not meet the 2006 PM2.5 
NAAQS. In addition, these numbers do not include the additional 13 
million people in 12 counties who live in areas that have air quality 
measurements within 10 percent of the 1997 PM2.5 NAAQS and 
the additional 80 million people in 135 counties who live in areas

[[Page 22902]]

that have air quality measurements within 10% of the 2008 ozone NAAQS. 
The emission reductions resulting from this coordinated strategy will 
assist these and other States to both attain and maintain the 
PM2.5 and ozone NAAQS.
    State and local governments are working to protect the health of 
their citizens and comply with requirements of the Clean Air Act. As 
part of this effort, they recognize the need to secure additional major 
reductions in diesel PM2.5, SOX and 
NOX emissions by undertaking numerous State level actions, 
while also seeking Agency action, including the Category 3 engine 
standards being finalized in this final rule and the U.S. proposal to 
IMO to amend Annex VI to designate U.S. coastal areas as an ECA, and 
related certification and fuel provisions under the Clean Air Act to 
complement that ECA proposal. EPA's coordinated strategy to reduce OGV 
emissions through engine emission controls and fuel sulfur limits will 
play a critical part in State efforts to attain and maintain the NAAQS 
through the next two decades.
    In addition to regulatory programs, the Agency has a number of 
innovative programs that partner government, industry, and local 
communities together to help address challenging air quality problems. 
Under the National Clean Diesel Campaign, EPA promotes a variety of 
emission reduction strategies such as retrofitting, repairing, 
replacing and repowering engines, reducing idling and switching to 
cleaner fuels.
    In 2008, Congress appropriated funding for the Diesel Emission 
Reduction Program under the Energy Policy Act of 2005 (EPAct 2005) to 
reduce emissions from heavy-duty diesel engines in the existing fleet. 
The EPAct 2005 directs EPA to break the funding into two different 
components: a National competition and a State allocation program. The 
National Program, with 70 percent of the funding, consists of three 
separate competitions: (1) The National Clean Diesel Funding Assistance 
Program; (2) the National Clean Diesel Emerging Technologies Program; 
and (3) the SmartWay Clean Diesel Finance Program. The State Clean 
Diesel Grant and Loan Program utilizes the remaining 30 percent of the 
funding. In the first year of the program, EPA awarded 119 grants 
totaling $49.2 million for diesel emission reduction projects and 
programs across the country for cleaner fuels, verified technologies, 
and certified engine configurations.
    Through $300 million in funding provided to the Diesel Emission 
Reduction Program under the American Reinvestment and Recovery Act of 
2009, EPA will promote and preserve jobs while improving public health 
and achieving significant reductions in diesel emissions.
    Furthermore, EPA's National Clean Diesel Campaign, through its 
Clean Ports USA program, is working with port authorities, terminal 
operators, shipping, truck, and rail companies to promote cleaner 
diesel technologies and strategies through education, incentives, and 
financial assistance for diesel emission reductions at ports. Part of 
these efforts involves clean diesel programs that can further reduce 
emissions from the existing fleet of diesel engines. Finally, many of 
the companies operating in States and communities suffering from poor 
air quality have voluntarily entered into Memoranda of Understanding 
(MOUs) designed to ensure that the cleanest technologies are used first 
in regions with the most challenging air quality issues.
    Taken together, these voluntary approaches can augment the 
coordinated strategy and help States and communities achieve larger 
reductions sooner in the areas of our country that need them the most. 
The Agency remains committed to furthering these programs and others so 
that all of our citizens can breathe clean healthy air.
(2) Advanced Emission Technology Solutions Are Available
    Air pollution from marine diesel exhaust is a challenging problem. 
However, we believe manufacturers can apply a combination of existing 
and new technologies to meet the emission standards we are adopting in 
this final rule. Optimizing air intake fuel injection systems can 
substantially reduce engine-out emissions. Further NOX 
control can be achieved with advanced technology such as aftertreatment 
devices with high-efficiency catalysts. As discussed in greater detail 
in Section III.C, the development of these aftertreatment technologies 
for highway and nonroad diesel applications has advanced rapidly in 
recent years, so that very large emission reductions in NOX 
emissions can be achieved. Manufacturers might also deploy other 
advanced technologies such as water-based in-cylinder controls to 
reduce NOX emissions.
    While aftertreatment technologies can be sensitive to sulfur, their 
use will be required only in ECAs designated under MARPOL Annex VI, and 
they are expected to be able to operate on ECA fuel meeting a 1,000 ppm 
fuel sulfur. With the lead time available and the assurance of 1,000 
ppm fuel for ocean-going vessels in 2015, as would be required through 
ECA designation for U.S. coasts, we are confident the application of 
advanced NOX technology to Category 3 marine engines will 
proceed at a reasonable rate of progress and will result in systems 
capable of achieving the finalized standards on schedule. Use of this 
lower sulfur fuel will also result in substantial PM emission 
reductions, since PM emissions from Category 3 engines come mostly from 
the use of high sulfur residual fuel. Note that vessels may be equipped 
with alternative devices, procedures, or compliance methods provided 
they achieve equivalent emissions reductions.

C. Statutory Basis for Action

    Authority for the actions proposed in this documents is granted to 
the Environmental Protections Agency by sections 114, 203, 205, 206, 
207, 208, 211, 213, 216, and 301(a) of the Clean Air Act as amended in 
1990 (42 U.S.C. 7414, 7522, 7524, 7525, 7541, 7542, 7545, 7547, 7550 
and 7601(a)), and by sections 1901-1915 of the Act to Prevent Pollution 
from Ships (33 U.S.C. 1909 et seq.).
(1) Clean Air Act Basis for Action
    EPA is proposing the fuel requirements pursuant to its authority in 
section 211(c) of the Clean Air Act, which allows EPA to regulate fuels 
that contribute to air pollution that endangers public health or 
welfare (42 U.S.C. 7545(c)). As discussed previously in EPA's Clean Air 
Nonroad Diesel rule (69 FR 38958) and in Section II, the combustion of 
high sulfur diesel fuel by nonroad, locomotive, and marine diesel 
engines contributes to air quality problems that endanger public health 
and welfare. Section II also discusses the significant contribution to 
these air quality problems by Category 3 marine vessels. Additional 
support for the procedural and enforcement-related aspects of the fuel 
controls in the final rule, including the recordkeeping requirements, 
comes from Clean Air Act sections 114(a) and 301(a) (42 U.S.C. sections 
7414(a) and 7601(a)).
    EPA is finalizing emission standards for new Category 3 marine 
diesel engines pursuant to its authority under section 213(a)(3) of the 
Clean Air Act, which directs the Administrator to set standards 
regulating emissions of NOX, volatile organic compounds 
(VOCs), or CO for classes or categories of engines, such as marine 
diesel engines, that contribute to ozone or carbon monoxide 
concentrations in more than one nonattainment area. These ``standards 
shall achieve the greatest degree of

[[Page 22903]]

emission reduction achievable through the application of technology 
which the Administrator determines will be available for the engines or 
vehicles, giving appropriate consideration to cost, lead time, noise, 
energy, and safety factors associated with the application of such 
technology.''
    EPA is finalizing a PM measurement requirement for new Category 3 
marine diesel engines pursuant to its authority under section 208, 
which requires manufacturers and other persons subject to Title II 
requirements to ``provide information the Administrator may reasonably 
require * * * to otherwise carry out the provisions of this part * * 
*''
    EPA is also acting under its authority to implement and enforce the 
Category 3 marine diesel emission standards. Section 213(d) provides 
that the standards EPA adopts for marine diesel engines ``shall be 
subject to Sections 206, 207, 208, and 209'' of the Clean Air Act, with 
such modifications that the Administrator deems appropriate to the 
regulations implementing these sections.'' In addition, the marine 
standards ``shall be enforced in the same manner as [motor vehicle] 
standards prescribed under section 202'' of the Act. Section 213(d) 
also grants EPA authority to promulgate or revise regulations as 
necessary to determine compliance with and enforce standards adopted 
under section 213.
    As required under section 213(a)(3), we believe the evidence 
provided in Section III.C and in Chapter 4 of Final Regulatory Impact 
Analysis (RIA) indicates that the stringent NOX emission 
standards finalized in this final rule for newly built Category 3 
marine diesel engines are feasible and reflect the greatest degree of 
emission reduction achievable through the use of technology that will 
be available in the model years to which they apply. We have given 
appropriate consideration to costs in finalizing these standards. Our 
review of the costs and cost-effectiveness of these standards indicate 
that they are reasonable and comparable to the cost-effectiveness of 
other mobile source emission reduction strategies that have been 
required. We have also reviewed and given appropriate consideration to 
the energy factors of this rule in terms of fuel efficiency as well as 
any safety and noise factors associated with these standards.
    The information in Section II and Chapter 2 of the Final Regulatory 
Impact Analysis regarding air quality and public health impacts 
provides strong evidence that emissions from Category 3 marine diesel 
engines significantly and adversely impact public health or welfare. 
EPA has already found in previous rules that emissions from new marine 
diesel engines contribute to ozone and CO concentrations in more than 
one area which has failed to attain the ozone and carbon monoxide NAAQS 
(64 FR 73300, December 29, 1999).
    The NOX and PM emission reductions achieved through the 
coordinated strategy will be important to States' efforts to attain and 
maintain the Ozone and the PM2.5 NAAQS in the near term and 
in the decades to come, and will significantly reduce the risk of 
adverse effects to human health and welfare.
(2) APPS Basis for Action
    EPA is finalizing regulations to implement MARPOL Annex VI pursuant 
to its authority in section 1903 of the Act to Prevent Pollution from 
Ships (APPS). Section 1903 gives the Administrator the authority to 
prescribe any necessary or desired regulations to carry out the 
provisions of Regulations 12 through 19 of Annex VI.
    The Act to Prevent Pollution from Ships implements Annex VI and 
makes those requirements enforceable domestically. However, certain 
clarifications are necessary for implementing Regulation 13 and the 
requirements of the NOX Technical Code with respect to 
issuance of Engine International Air Pollution Prevention (EIAPP) 
certificates and approval of alternative compliance methods. 
Clarification is also needed with respect to the application of the 
Annex VI requirements to certain U.S. and foreign vessels that operate 
in U.S. waters.

II. Air Quality, Health and Welfare Impacts

    The coordinated strategy will significantly reduce emissions of 
NOX, PM, and SOX from ocean-going vessels. 
Emissions of these compounds contribute to PM and ozone nonattainment 
and environmental effects including deposition, visibility impairment 
and harm to ecosystems from ozone. In addition diesel particulate 
matter is associated with a host of adverse health effects, including 
cancer.
    This section summarizes the general health and welfare effects of 
these emissions and the modeled projections of changes in air quality 
due to the coordinated strategy. Interested readers are encouraged to 
refer to the RIA for more in-depth discussions.

A. Public Health Impacts

(1) Particulate Matter
    Particulate matter is a generic term for a broad class of 
chemically and physically diverse substances. It can be principally 
characterized as discrete particles that exist in the condensed (liquid 
or solid) phase spanning several orders of magnitude in size. Since 
1987, EPA has delineated that subset of inhalable particles small 
enough to penetrate to the thoracic region (including the 
tracheobronchial and alveolar regions) of the respiratory tract 
(referred to as thoracic particles). Current NAAQS use PM2.5 
as the indicator for fine particles (with PM2.5 referring to 
particles with a nominal mean aerodynamic diameter less than or equal 
to 2.5 [mu]m), and use PM10 as the indicator for purposes of 
regulating the coarse fraction of PM10 (referred to as 
thoracic coarse particles or coarse-fraction particles; generally 
including particles with a nominal mean aerodynamic diameter greater 
than 2.5 [mu]m and less than or equal to 10 [mu]m, or 
PM10-2.5). Ultrafine particles are a subset of fine 
particles, generally less than 100 nanometers (0.1 [mu]m) in 
aerodynamic diameter.
    Fine particles are produced primarily by combustion processes and 
by transformations of gaseous emissions (e.g., SOX, 
NOX and VOC) in the atmosphere. The chemical and physical 
properties of PM2.5 may vary greatly with time, region, 
meteorology, and source category. Thus, PM2.5 may include a 
complex mixture of different pollutants including sulfates, nitrates, 
organic compounds, elemental carbon and metal compounds. These 
particles can remain in the atmosphere for days to weeks and travel 
hundreds to thousands of kilometers.
(a) Health Effects of PM
    Scientific studies show ambient PM is associated with a series of 
adverse health effects. These health effects are discussed in detail in 
EPA's 2004 Particulate Matter Air Quality Criteria Document (PM AQCD) 
and the 2005 PM Staff Paper.18 19 20 Further discussion of

[[Page 22904]]

health effects associated with PM can also be found in the RIA for this 
rule.
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    \18\ U.S. EPA (2004). Air Quality Criteria for Particulate 
Matter. Volume I EPA600/P-99/002aF and Volume II EPA600/P-99/002bF. 
Retrieved on March 19, 2009 from Docket EPA-HQ-OAR-2003-0190 at 
http://www.regulations.gov/.
    \19\ U.S. EPA (2005). Review of the National Ambient Air Quality 
Standard for Particulate Matter: Policy Assessment of Scientific and 
Technical Information, OAQPS Staff Paper. EPA-452/R-05-005a. 
Retrieved March 19, 2009 from http://www.epa.gov/ttn/naaqs/
standards/pm/data/pmstaffpaper_20051221.pdf.
    \20\ The PM NAAQS is currently under review and the EPA is 
considering all available science on PM health effects, including 
information which has been published since 2004, in the development 
of the upcoming PM Integrated Science Assessment Document (ISA). A 
second draft of the PM ISA was completed in July 2009 and was 
submitted for review by the Clean Air Scientific Advisory Committee 
(CASAC) of EPA's Science Advisory Board. Comments from the general 
public have also been requested. For more information, see http://
cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=210586.
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    Health effects associated with short-term exposures (hours to days) 
to ambient PM include premature mortality, aggravation of 
cardiovascular and lung disease (as indicated by increased hospital 
admissions and emergency department visits), increased respiratory 
symptoms including cough and difficulty breathing, decrements in lung 
function, altered heart rate rhythm, and other more subtle changes in 
blood markers related to cardiovascular health.\21\ Long-term exposure 
to PM2.5 and sulfates has also been associated with 
mortality from cardiopulmonary disease and lung cancer, and effects on 
the respiratory system such as reduced lung function growth or 
development of respiratory disease. A new analysis shows an association 
between long-term PM2.5 exposure and a subclinical measure 
of atherosclerosis.22 23
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    \21\ U.S. EPA (2006). National Ambient Air Quality Standards for 
Particulate Matter. 71 FR 61144, October 17, 2006.
    \22\ K[uuml]nzli, N., Jerrett, M., Mack, W.J., et al. (2004). 
Ambient air pollution and atherosclerosis in Los Angeles. Environ 
Health Perspect.,113, 201-206
    \23\ This study is included in the 2006 Provisional Assessment 
of Recent Studies on Health Effects of Particulate Matter Exposure. 
The provisional assessment did not and could not (given a very short 
timeframe) undergo the extensive critical review by CASAC and the 
public, as did the PM AQCD. The provisional assessment found that 
the ``new'' studies expand the scientific information and provide 
important insights on the relationship between PM exposure and 
health effects of PM. The provisional assessment also found that 
``new'' studies generally strengthen the evidence that acute and 
chronic exposure to fine particles and acute exposure to thoracic 
coarse particles are associated with health effects. Further, the 
provisional science assessment found that the results reported in 
the studies did not dramatically diverge from previous findings, and 
taken in context with the findings of the AQCD, the new information 
and findings did not materially change any of the broad scientific 
conclusions regarding the health effects of PM exposure made in the 
AQCD. However, it is important to note that this assessment was 
limited to screening, surveying, and preparing a provisional 
assessment of these studies. For reasons outlined in Section I.C of 
the preamble for the final PM NAAQS rulemaking in 2006 (see 71 FR 
61148-49, October 17, 2006), EPA based its NAAQS decision on the 
science presented in the 2004 AQCD.
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    Studies examining populations exposed over the long term (one or 
more years) to different levels of air pollution, including the Harvard 
Six Cities Study and the American Cancer Society Study, show 
associations between long-term exposure to ambient PM2.5 and 
both all cause and cardiopulmonary premature 
mortality.24 25 26 In addition, an extension of the American 
Cancer Society Study shows an association between PM2.5 and 
sulfate concentrations and lung cancer mortality.\27\
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    \24\ Dockery, D.W., Pope, C.A. III, Xu, X, et al. (1993). An 
association between air pollution and mortality in six U.S. cities. 
N Engl J Med, 329, 1753-1759. Retrieved on March 19, 2009 from 
http://content.nejm.org/cgi/content/full/329/24/1753.
    \25\ Pope, C.A., III, Thun, M.J., Namboodiri, M.M., Dockery, 
D.W., Evans, J.S., Speizer, F.E., and Heath, C.W., Jr. (1995). 
Particulate air pollution as a predictor of mortality in a 
prospective study of U.S. adults. Am. J. Respir. Crit. Care Med, 
151, 669-674.
    \26\ Krewski, D., Burnett, R.T., Goldberg, M.S., et al. (2000). 
Reanalysis of the Harvard Six Cities study and the American Cancer 
Society study of particulate air pollution and mortality. A special 
report of the Institute's Particle Epidemiology Reanalysis Project. 
Cambridge, MA: Health Effects Institute. Retrieved on March 19, 2009 
from http://es.epa.gov/ncer/science/pm/hei/Rean-ExecSumm.pdf.
    \27\ Pope, C. A., III, Burnett, R.T., Thun, M.J., Calle, E.E., 
Krewski, D., Ito, K., Thurston, G.D., (2002). Lung cancer, 
cardiopulmonary mortality, and long-term exposure to fine 
particulate air pollution. J. Am. Med. Assoc., 287, 1132-1141.
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(b) Health Effects of Diesel Particulate Matter
    Marine diesel engines emit diesel exhaust (DE), a complex mixture 
composed of carbon dioxide, oxygen, nitrogen, water vapor, carbon 
monoxide, nitrogen compounds, sulfur compounds and numerous low-
molecular-weight hydrocarbons. A number of these gaseous hydrocarbon 
components are individually known to be toxic, including aldehydes, 
benzene and 1,3-butadiene. The diesel particulate matter (DPM) present 
in DE consists of fine particles (< 2.5 [mu]m), including a subgroup 
with a large number of ultrafine particles (< 0.1 [mu]m). These 
particles have a large surface area which makes them an excellent 
medium for adsorbing organics and their small size makes them highly 
respirable. Many of the organic compounds present in the gases and on 
the particles, such as polycyclic organic matter (POM), are 
individually known to have mutagenic and carcinogenic properties. 
Diesel exhaust varies significantly in chemical composition and 
particle sizes between different engine types (heavy-duty, light-duty), 
engine operating conditions (idle, accelerate, decelerate), and fuel 
formulations (high/low sulfur fuel). Also, there are emissions 
differences between on-road and nonroad engines because the nonroad 
engines are generally of older technology. This is especially true for 
marine diesel engines.\28\
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    \28\ U.S. EPA (2002). Health Assessment Document for Diesel 
Engine Exhaust. EPA/600/8-90/057F Office of Research and 
Development, Washington DC. Retrieved on March 17, 2009 from http://
cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=29060. pp. 1-1 1-2.
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    After being emitted in the engine exhaust, diesel exhaust undergoes 
dilution as well as chemical and physical changes in the atmosphere. 
The lifetime for some of the compounds present in diesel exhaust ranges 
from hours to days.\29\
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    \29\ U.S. EPA (2002). Health Assessment Document for Diesel 
Engine Exhaust. EPA/600/8-90/057F Office of Research and 
Development, Washington, DC. Retrieved on March 17, 2009 from http:/
/cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=29060.
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(i) Diesel Exhaust: Potential Cancer Effects
    In EPA's 2002 Diesel Health Assessment Document (Diesel HAD),\30\ 
exposure to diesel exhaust was classified as likely to be carcinogenic 
to humans by inhalation from environmental exposures, in accordance 
with the revised draft 1996/1999 EPA cancer guidelines. A number of 
other agencies (National Institute for Occupational Safety and Health, 
the International Agency for Research on Cancer, the World Health 
Organization, California EPA, and the U.S. Department of Health and 
Human Services) have made similar classifications. However, EPA also 
concluded in the Diesel HAD that it is not possible currently to 
calculate a cancer unit risk for diesel exhaust due to a variety of 
factors that limit the current studies, such as limited quantitative 
exposure histories in occupational groups investigated for lung cancer.
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    \30\ U.S. EPA (2002). Health Assessment Document for Diesel 
Engine Exhaust. EPA/600/8-90/057F Office of Research and 
Development, Washington DC. Retrieved on March 17, 2009 from http://
cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=29060. pp. 1-1 1-2.
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    For the Diesel HAD, EPA reviewed 22 epidemiologic studies on the 
subject of the carcinogenicity of workers exposed to diesel exhaust in 
various occupations, finding increased lung cancer risk, although not 
always statistically significant, in 8 out of 10 cohort studies and 10 
out of 12 case-control studies within several industries. Relative risk 
for lung cancer associated with exposure ranged from 1.2 to 1.5, 
although a few studies show relative risks as high as 2.6. 
Additionally, the Diesel HAD also relied on two independent meta-
analyses, which examined 23 and 30 occupational studies respectively, 
which found statistically significant increases in smoking-adjusted 
relative lung cancer risk associated with exposure to diesel exhaust of 
1.33 to 1.47. These meta-analyses demonstrate the effect of pooling 
many studies and in this case show the positive relationship between

[[Page 22905]]

diesel exhaust exposure and lung cancer across a variety of diesel 
exhaust-exposed occupations.31 32
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    \31\ Bhatia, R., Lopipero, P., Smith, A. (1998). Diesel exposure 
and lung cancer. Epidemiology, 9(1), 84-91.
    \32\ Lipsett, M. Campleman, S. (1999). Occupational exposure to 
diesel exhaust and lung cancer: a meta-analysis. Am J Public Health, 
80(7), 1009-1017.
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    In the absence of a cancer unit risk, the Diesel HAD sought to 
provide additional insight into the significance of the diesel exhaust-
cancer hazard by estimating possible ranges of risk that might be 
present in the population. An exploratory analysis was used to 
characterize a possible risk range by comparing a typical environmental 
exposure level for highway diesel sources to a selected range of 
occupational exposure levels. The occupationally observed risks were 
then proportionally scaled according to the exposure ratios to obtain 
an estimate of the possible environmental risk. A number of 
calculations are needed to accomplish this, and these can be seen in 
the EPA Diesel HAD. The outcome was that environmental risks from 
diesel exhaust exposure could range from a low of 10-4 to 
10-5 to as high as 10-3, reflecting the range of 
occupational exposures that could be associated with the relative and 
absolute risk levels observed in the occupational studies. Because of 
uncertainties, the analysis acknowledged that the risks could be lower 
than 10-4 or 10-5, and a zero risk from diesel 
exhaust exposure was not ruled out.
(ii) Diesel Exhaust: Other Health Effects
    Noncancer health effects of acute and chronic exposure to diesel 
exhaust emissions are also of concern to the EPA. EPA derived a diesel 
exhaust reference concentration (RfC) from consideration of four well-
conducted chronic rat inhalation studies showing adverse pulmonary 
effects.33 34 35 36 The RfC is 5 [mu]g/m\3\ for diesel 
exhaust as measured by DPM. This RfC does not consider allergenic 
effects such as those associated with asthma or immunologic effects. 
There is growing evidence, discussed in the Diesel HAD, that exposure 
to diesel exhaust can exacerbate these effects, but the exposure-
response data are presently lacking to derive an RfC. The EPA Diesel 
HAD states, ``With DPM [diesel particulate matter] being a ubiquitous 
component of ambient PM, there is an uncertainty about the adequacy of 
the existing DE [diesel exhaust] noncancer database to identify all of 
the pertinent DE-caused noncancer health hazards.'' (p. 9-19). The 
Diesel HAD concludes ``that acute exposure to DE [diesel exhaust] has 
been associated with irritation of the eye, nose, and throat, 
respiratory symptoms (cough and phlegm), and neurophysiological 
symptoms such as headache, lightheadedness, nausea, vomiting, and 
numbness or tingling of the extremities.'' \37\
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    \33\ Ishinishi, N. Kuwabara, N. Takaki, Y., et al. (1988). Long-
term inhalation experiments on diesel exhaust. In: Diesel exhaust 
and health risks. Results of the HERP studies. Ibaraki, Japan: 
Research Committee for HERP Studies; pp.11-84.
    \34\ Heinrich, U., Fuhst, R., Rittinghausen, S., et al. (1995). 
Chronic inhalation exposure of Wistar rats and two different strains 
of mice to diesel engine exhaust, carbon black, and titanium 
dioxide. Inhal Toxicol, 7, 553-556.
    \35\ Mauderly, J.L., Jones, R.K., Griffith, W.C., et al. (1987). 
Diesel exhaust is a pulmonary carcinogen in rats exposed chronically 
by inhalation. Fundam. Appl. Toxicol., 9, 208-221.
    \36\ Nikula, K.J., Snipes, M.B., Barr, E.B., et al. (1995). 
Comparative pulmonary toxicities and carcinogenicities of 
chronically inhaled diesel exhaust and carbon black in F344 rats. 
Fundam. Appl. Toxicol, 25, 80-94.
    \37\ U.S. EPA (2002). Health Assessment Document for Diesel 
Engine Exhaust. EPA/600/8-90/057F Office of Research and 
Development, Washington, DC. Retrieved on March 17, 2009 from http:/
/cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=29060. p. 9-9.
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(iii) Ambient PM2.5 Levels and Exposure to Diesel Exhaust PM
    The Diesel HAD also briefly summarizes health effects associated 
with ambient PM and discusses the EPA's annual PM2.5 NAAQS 
of 15 [mu]g/m\3\. There is a much more extensive body of human data 
showing a wide spectrum of adverse health effects associated with 
exposure to ambient PM, of which diesel exhaust is an important 
component. The PM2.5 NAAQS is designed to provide protection 
from the noncancer and premature mortality effects of PM2.5 
as a whole.
(iv) Diesel Exhaust PM Exposures
    Exposure of people to diesel exhaust depends on their various 
activities, the time spent in those activities, the locations where 
these activities occur, and the levels of diesel exhaust pollutants in 
those locations. The major difference between ambient levels of diesel 
particulate and exposure levels for diesel particulate is that exposure 
accounts for a person moving from location to location, proximity to 
the emission source, and whether the exposure occurs in an enclosed 
environment.
Occupational Exposures
    Occupational exposures to diesel exhaust from mobile sources, 
including marine diesel engines, can be several orders of magnitude 
greater than typical exposures in the non-occupationally exposed 
population.
    Over the years, diesel particulate exposures have been measured for 
a number of occupational groups. A wide range of exposures have been 
reported, from 2 [mu]g/m\3\ to 1,280 [mu]g/m\3\, for a variety of 
occupations. As discussed in the Diesel HAD, the National Institute of 
Occupational Safety and Health (NIOSH) has estimated a total of 
1,400,000 workers are occupationally exposed to diesel exhaust from on-
road and nonroad vehicles including marine diesel engines.
Elevated Concentrations and Ambient Exposures in Mobile Source-Impacted 
Areas
    Regions immediately downwind of marine ports may experience 
elevated ambient concentrations of directly-emitted PM2.5 
from diesel engines. Due to the unique nature of marine ports, 
emissions from a large number of diesel engines are concentrated in a 
small area.
    A 2006 study from the California Air Resources Board (CARB) 
evaluated air quality impacts of diesel engine emissions within the 
Ports of Long Beach and Los Angeles in California, one of the largest 
ports in the U.S.\38\ The port study employed the ISCST3 dispersion 
model. With local meteorological data used in the modeling, annual 
average concentrations were substantially elevated over an area 
exceeding 200,000 acres. Because the ports are located near heavily-
populated areas, the modeling indicated that over 700,000 people lived 
in areas with at least 0.3 [mu]g/m\3\ of port-related diesel PM in 
ambient air, about 360,000 people lived in areas with at least 0.6 
[mu]g/m\3\ of diesel PM, and about 50,000 people lived in areas with at 
least 1.5 [mu]g/m\3\ of ambient diesel PM directly from the port. This 
study highlights the substantial contribution ports can make to 
elevated ambient concentrations in populated areas.
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    \38\ Di, P., Servin, A., Rosenkranz, K., Schwehr, B., Tran, H., 
(2006). Diesel Particulate Matter Exposure Assessment Study for the 
Ports of Los Angeles and Long Beach. Sacramento, CA: California EPA, 
California Air Resources Board (CARB). Retrieved March 19, 2009 from 
http://www.arb.ca.gov/regact/marine2005/portstudy0406.pdf.
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    EPA recently updated its initial screening-level analysis of a 
representative selection of national marine port areas to better 
understand the populations that are exposed to DPM emissions from these 
facilities.39 40 41 42 As part of this study,

[[Page 22906]]

a computer geographic information system (GIS) was used to identify the 
locations and property boundaries of 45 marine ports.\43\ Census 
information was used to estimate the size and demographic 
characteristics of the population living in the vicinity of the ports. 
The results indicate that at least 18 million people, including a 
disproportionate number of low-income households, African-Americans, 
and Hispanics, live in the vicinity of these facilities and are being 
exposed to annual average ambient DPM levels that are 2.0 [mu]g/m\3\ 
and 0.2 [mu]g/m\3\ above levels found in areas further from these 
facilities. These populations will benefit from the coordinated 
strategy. This study is discussed in greater detail in Chapter 2 of the 
RIA and detailed findings of this study are available in the public 
docket for this rulemaking.
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    \39\ ICF International. September 28, 2007. Estimation of diesel 
particulate matter concentration isopleths for marine harbor areas 
and rail yards. Memorandum to EPA under Work Assignment Number 0-3, 
Contract Number EP-C-06-094. This memo is available in Docket EPA-
HQ-OAR-2007-0121.
    \40\ ICF International. September 28, 2007. Estimation of diesel 
particulate matter population exposure near selected harbor areas 
and rail yards. Memorandum to EPA under Work Assignment Number 0-3, 
Contract Number EP-C-06-094. This memo is available in Docket EPA-
HQ-OAR-2007-0121.
    \41\ ICF International, December 10, 2008. Estimation of diesel 
particulate matter population exposure near selected harbor areas 
with revised harbor emissions. Memorandum to EPA under Work 
Assignment Number 2-9. Contract Number EP-C-06-094. This memo is 
available in Docket EPA-HQ-OAR-2007-0121.
    \42\ ICF International. December 1, 2008. Estimation of diesel 
particulate matter concentration isopleths near selected harbor 
areas with revised emissions. Memorandum to EPA under Work 
Assignment Number 1-9. Contract Number EP-C-06-094. This memo is 
available in Docket EPA-HQ-OAR-2007-0121.
    \43\ The Agency selected a representative sample from the top 
150 U.S. ports including coastal, inland, and Great Lake ports.
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(2) Ozone
    Ground-level ozone pollution is typically formed by the reaction of 
VOC and NOX in the lower atmosphere in the presence of heat 
and sunlight. These pollutants, often referred to as ozone precursors, 
are emitted by many types of pollution sources, such as highway and 
nonroad motor vehicles and engines, power plants, chemical plants, 
refineries, makers of consumer and commercial products, industrial 
facilities, and smaller area sources.
    The science of ozone formation, transport, and accumulation is 
complex.\44\ Ground-level ozone is produced and destroyed in a cyclical 
set of chemical reactions, many of which are sensitive to temperature 
and sunlight. When ambient temperatures and sunlight levels remain high 
for several days and the air is relatively stagnant, ozone and its 
precursors can build up and result in more ozone than typically occurs 
on a single high-temperature day. Ozone can be transported hundreds of 
miles downwind from precursor emissions, resulting in elevated ozone 
levels even in areas with low local VOC or NOX emissions.
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    \44\ U.S. EPA (2006). Air Quality Criteria for Ozone and Related 
Photochemical Oxidants (Final). EPA/600/R-05/004aF-cF. Washington, 
DC: U.S. EPA. Retrieved on March 19, 2009 from Docket EPA-HQ-OAR-
2003-0190 at http://www.regulations.gov/.
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(a) Health Effects of Ozone
    The health and welfare effects of ozone are well documented and are 
assessed in EPA's 2006 Air Quality Criteria Document (ozone AQCD) and 
2007 Staff Paper.45 46 Ozone can irritate the respiratory 
system, causing coughing, throat irritation, and/or uncomfortable 
sensation in the chest. Ozone can reduce lung function and make it more 
difficult to breathe deeply; breathing may also become more rapid and 
shallow than normal, thereby limiting a person's activity. Ozone can 
also aggravate asthma, leading to more asthma attacks that require 
medical attention and/or the use of additional medication. In addition, 
there is suggestive evidence of a contribution of ozone to 
cardiovascular-related morbidity and highly suggestive evidence that 
short-term ozone exposure directly or indirectly contributes to non-
accidental and cardiopulmonary-related mortality, but additional 
research is needed to clarify the underlying mechanisms causing these 
effects. In a recent report on the estimation of ozone-related 
premature mortality published by the National Research Council (NRC), a 
panel of experts and reviewers concluded that short-term exposure to 
ambient ozone is likely to contribute to premature deaths and that 
ozone-related mortality should be included in estimates of the health 
benefits of reducing ozone exposure.\47\ Animal toxicological evidence 
indicates that with repeated exposure, ozone can inflame and damage the 
lining of the lungs, which may lead to permanent changes in lung tissue 
and irreversible reductions in lung function. People who are more 
susceptible to effects associated with exposure to ozone can include 
children, the elderly, and individuals with respiratory disease such as 
asthma. Those with greater exposures to ozone, for instance due to time 
spent outdoors (e.g., children and outdoor workers), are of particular 
concern.
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    \45\ U.S. EPA (2006). Air Quality Criteria for Ozone and Related 
Photochemical Oxidants (Final). EPA/600/R-05/004aF-cF. Washington, 
DC: U.S. EPA. Retrieved on March 19, 2009 from Docket EPA-HQ-OAR-
2003-0190 at http://www.regulations.gov/.
    \46\ U.S. EPA (2007). Review of the National Ambient Air Quality 
Standards for Ozone: Policy Assessment of Scientific and Technical 
Information, OAQPS Staff Paper. EPA-452/R-07-003. Washington, DC, 
U.S. EPA. Retrieved on March 19, 2009 from Docket EPA-HQ-OAR-2003-
0190 at http://www.regulations.gov/.
    \47\ National Research Council (NRC), 2008. Estimating Mortality 
Risk Reduction and Economic Benefits from Controlling Ozone Air 
Pollution. The National Academies Press: Washington, DC.
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    The 2006 ozone AQCD also examined relevant new scientific 
information that has emerged in the past decade, including the impact 
of ozone exposure on such health effects as changes in lung structure 
and biochemistry, inflammation of the lungs, exacerbation and causation 
of asthma, respiratory illness-related school absence, hospital 
admissions and premature mortality. Animal toxicological studies have 
suggested potential interactions between ozone and PM with increased 
responses observed to mixtures of the two pollutants compared to either 
ozone or PM alone. The respiratory morbidity observed in animal studies 
along with the evidence from epidemiologic studies supports a causal 
relationship between acute ambient ozone exposures and increased 
respiratory-related emergency room visits and hospitalizations in the 
warm season. In addition, there is suggestive evidence of a 
contribution of ozone to cardiovascular-related morbidity and non-
accidental and cardiopulmonary mortality.
(3) NOX and SOX
    Nitrogen dioxide (NO2) is a member of the NOX 
family of gases. Most NO2 is formed in the air through the 
oxidation of nitric oxide (NO) emitted when fuel is burned at a high 
temperature. SO2, a member of the sulfur oxide 
(SOX) family of gases, is formed from burning fuels 
containing sulfur (e.g., coal or oil derived), extracting gasoline from 
oil, or extracting metals from ore.
    SO2 and NO2 can dissolve in water vapor and 
further oxidize to form sulfuric and nitric acid which react with 
ammonia to form sulfates and nitrates, both of which are important 
components of ambient PM. The health effects of ambient PM are 
discussed in Section II.A.1 of this preamble. NOX along with 
non-methane hydrocarbon (NMHC) are the two major precursors of ozone. 
The health effects of ozone are covered in Section II.A.2.
(a) Health Effects of NOX
    Information on the health effects of NO2 can be found in 
the U.S. Environmental Protection Agency

[[Page 22907]]

Integrated Science Assessment (ISA) for Nitrogen Oxides.\48\ The U.S. 
EPA has concluded that the findings of epidemiologic, controlled human 
exposure, and animal toxicological studies provide evidence that is 
sufficient to infer a likely causal relationship between respiratory 
effects and short-term NO2 exposure. The ISA concludes that 
the strongest evidence for such a relationship comes from epidemiologic 
studies of respiratory effects including symptoms, emergency department 
visits, and hospital admissions. The ISA also draws two broad 
conclusions regarding airway responsiveness following NO2 
exposure. First, the ISA concludes that NO2 exposure may 
enhance the sensitivity to allergen-induced decrements in lung function 
and increase the allergen-induced airway inflammatory response at 
exposures as low as 0.26 ppm NO2 for 30 minutes. Second, 
exposure to NO2 has been found to enhance the inherent 
responsiveness of the airway to subsequent nonspecific challenges in 
controlled human exposure studies of asthmatic subjects. Enhanced 
airway responsiveness could have important clinical implications for 
asthmatics since transient increases in airway responsiveness following 
NO2 exposure have the potential to increase symptoms and 
worsen asthma control. Together, the epidemiologic and experimental 
data sets form a plausible, consistent, and coherent description of a 
relationship between NO2 exposures and an array of adverse 
health effects that range from the onset of respiratory symptoms to 
hospital admission.
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    \48\ U.S. EPA (2008). Integrated Science Assessment for Oxides 
of Nitrogen--Health Criteria (Final Report). EPA/600/R-08/071. 
Washington, DC: U.S. EPA. Retrieved on March 19, 2009 from http://
cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=194645.
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    Although the weight of evidence supporting a causal relationship is 
somewhat less certain than that associated with respiratory morbidity, 
NO2 has also been linked to other health endpoints. These 
include all-cause (nonaccidental) mortality, hospital admissions or 
emergency department visits for cardiovascular disease, and decrements 
in lung function growth associated with chronic exposure.
(b) Health Effects of SOX
    Information on the health effects of SO2 can be found in 
the U.S. Environmental Protection Agency Integrated Science Assessment 
for Sulfur Oxides.\49\ SO2 has long been known to cause 
adverse respiratory health effects, particularly among individuals with 
asthma. Other potentially sensitive groups include children and the 
elderly. During periods of elevated ventilation, asthmatics may 
experience symptomatic bronchoconstriction within minutes of exposure. 
Following an extensive evaluation of health evidence from epidemiologic 
and laboratory studies, the EPA has concluded that there is a causal 
relationship between respiratory health effects and short-term exposure 
to SO2. Separately, based on an evaluation of the 
epidemiologic evidence of associations between short-term exposure to 
SO2 and mortality, the EPA has concluded that the overall 
evidence is suggestive of a causal relationship between short-term 
exposure to SO2 and mortality.
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    \49\ U.S. EPA (2008). Integrated Science Assessment (ISA) for 
Sulfur Oxides--Health Criteria (Final Report). EPA/600/R-08/047F. 
Washington, DC: U.S. Environmental Protection Agency. Retrieved on 
March 18, 2009 from  http://cfpub.epa.gov/ncea/cfm/
recordisplay.cfm?deid=198843.
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B. Environmental Impacts

(1) Deposition of Nitrogen and Sulfur
    Emissions of NOX and SOX from ships 
contribute to atmospheric deposition of nitrogen and sulfur in the U.S. 
Atmospheric deposition of nitrogen and sulfur contributes to 
acidification, altering biogeochemistry and affecting animal and plant 
life in terrestrial and aquatic ecosystems across the U.S. The 
sensitivity of terrestrial and aquatic ecosystems to acidification from 
nitrogen and sulfur deposition is predominantly governed by geology. 
Prolonged exposure to excess nitrogen and sulfur deposition in 
sensitive areas acidifies lakes, rivers and soils. Increased acidity in 
surface waters creates inhospitable conditions for biota and affects 
the abundance and nutritional value of preferred prey species, 
threatening biodiversity and ecosystem function. Over time, acidifying 
deposition also removes essential nutrients from forest soils, 
depleting the capacity of soils to neutralize future acid loadings and 
negatively affecting forest sustainability. Major effects include a 
decline in sensitive forest tree species, such as red spruce (Picea 
rubens) and sugar maple (Acer saccharum), and a loss of biodiversity of 
fishes, zooplankton, and macro invertebrates.
    In addition to the role nitrogen deposition plays in acidification, 
nitrogen deposition also causes ecosystem nutrient enrichment leading 
to eutrophication that alters biogeochemical cycles. Excess nitrogen 
also leads to the loss of nitrogen sensitive lichen species as they are 
outcompeted by invasive grasses as well as altering the biodiversity of 
terrestrial ecosystems, such as grasslands and meadows. Nitrogen 
deposition contributes to eutrophication of estuaries and the 
associated effects including toxic algal blooms and fish kills. For a 
broader explanation of the topics treated here, refer to the 
description in Section 2.3.1 of the RIA.
    There are a number of important quantified relationships between 
nitrogen deposition levels and ecological effects. Certain lichen 
species are the most sensitive terrestrial taxa to nitrogen with 
species losses occurring at just 3 kg N/ha/yr in the Pacific Northwest, 
southern California and Alaska. A United States Forest Service study 
conducted in areas within the Tongass Forest in Southeast Alaska found 
evidence of sulfur emissions impacting lichen communities.\50\ The 
authors concluded that the main source of nitrogen and sulfur found in 
lichens from Mt. Roberts (directly north of the City of Juneau in 
southeastern Alaska) is likely the burning of fossil fuels by cruise 
ships and other vehicles and equipment in Juneau. According to the 
Alaska DEC, damage to lichen populations has widespread effects in 
Alaskan ecosystems.\51\
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    \50\ Dillman, K., Geiser, L., & Brenner, G. (2007). Air Quality 
Bio-Monitoring with Lichens. The Togass National Forest. USDA Forest 
Service. Retrieved March 18, 2009 from http://gis.nacse.org/
lichenair/?page=reports.
    \51\ Alaska Department of Environmental Conservation, 
``Statement in Support of EPA Considering Alaska as Part of a Marine 
Emission Control Area,'' October 1, 2008.
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    Across the U.S., there are many terrestrial and aquatic ecosystems 
that have been identified as particularly sensitive to nitrogen 
deposition. The most extreme effects resulting from nitrogen deposition 
on aquatic ecosystems are due to nitrogen enrichment which contributes 
to ``hypoxic'' zones devoid of life. Three hypoxia zones of special 
concern in the U.S. are the zones located in the Gulf of Mexico, the 
Chesapeake Bay in the mid-Atlantic region, and Long Island Sound in the 
northeast U.S.\52\
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    \52\ U.S. EPA (2008). Nitrogen Dioxide/Sulfur Dioxide Secondary 
NAAQS Review: Integrated Science Assessment (ISA). Washington, DC: 
U.S. Environmental Protection Agency. Retrieved on March 18, 2009 
from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=180903.
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(2) Deposition of Particulate Matter and Air Toxics
    The coordinated strategy will reduce NOX, 
SOX, and PM2.5 emissions from ships. Ship 
emissions of PM2.5 contain small amounts of metals: Nickel,

[[Page 22908]]

vanadium, cadmium, iron, lead, copper, zinc, and 
aluminum.53 54 55 Investigations of trace metals near 
roadways and industrial facilities indicate that a substantial burden 
of heavy metals can accumulate on vegetative surfaces. Copper, zinc, 
and nickel are directly toxic to vegetation under field conditions.\56\ 
While metals typically exhibit low solubility, limiting their 
bioavailability and direct toxicity, chemical transformations of metal 
compounds occur in the environment, particularly in the presence of 
acidic or other oxidizing species. These chemical changes influence the 
mobility and toxicity of metals in the environment. Once taken up into 
plant tissue, a metal compound can undergo chemical changes, accumulate 
and be passed along to herbivores, or can re-enter the soil and further 
cycle in the environment.
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    \53\ Agrawal H., Malloy Q.G.J., Welch W.A., Wayne Miller J., 
Cocker III D.R. (2008) In-use gaseous and particulate matter 
emissions from a modern ocean going container vessel. Atmospheric 
Environment, 42(21), 5504-5510.
    \54\ Miller, W., et al. (2008 June 10). Measuring Emissions from 
Ocean Going Vessels. Presentation presented at the Fuel, Engines, 
and Control Devices Workshop, San Pedro, California.
    \55\ Isakson J., Persson T.A., E. Selin Lindgren E. (2001) 
Identification and assessment of ship emissions and their effects in 
the harbour of Gteborg, Sweeden. Atmospheric Environment, 35(21), 
3659-3666.
    \56\ U.S. EPA (2004). Air Quality Criteria for Particulate 
Matter (AQCD). Washington, DC: U.S. Environmental Protection Agency. 
Retrieved on March 18, 2009 from http://cfpub.epa.gov/ncea/cfm/
recordisplay.cfm?deid=87903.
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    Although there has been no direct evidence of a physiological 
association between tree injury and heavy metal exposures, heavy metals 
have been implicated because of similarities between metal deposition 
patterns and forest decline.57 58 This correlation was 
further explored in high elevation forests in the northeast U.S. and 
the data strongly imply that metal stress causes tree injury and 
contributes to forest decline in the Northeast.\59\ Contamination of 
plant leaves by heavy metals can lead to elevated soil levels. Trace 
metals absorbed into the plant frequently bind to the leaf tissue, and 
then are lost when the leaf drops. As the fallen leaves decompose, the 
heavy metals are transferred into the soil.60 61
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    \57\ U.S. EPA (2004). Air Quality Criteria for Particulate 
Matter (AQCD). Washington, DC: U.S. Environmental Protection Agency. 
Retrieved on March 18, 2009 from http://cfpub.epa.gov/ncea/cfm/
recordisplay.cfm?deid=87903.
    \58\ Gawel, J.E.; Ahner, B.A.; Friedland, A.J.; Morel, F.M.M. 
(1996) Role for heavy metals in forest decline indicated by 
phytochelatin measurements. Nature (London), 381, 64-65.
    \59\ U.S. EPA (2004). Air Quality Criteria for Particulate 
Matter (AQCD). Washington, DC: U.S. Environmental Protection Agency. 
Retrieved on March 18, 2009 from http://cfpub.epa.gov/ncea/cfm/
recordisplay.cfm?deid=87903.
    \60\ Cotrufo M.F., De Santo A.V., Alfani A., Bartoli G., De 
Cristofaro A. (1995) Effects of urban heavy metal pollution on 
organic matter decomposition in Quercus ilex L. Woods. Environmental 
Pollution, 89(1), 81-87.
    \61\ Niklinska M., Laskowski R., Maryanski M. (1998). Effect of 
heavy metals and storage time on two types of forest litter: Basal 
respiration rate and exchangeable metals. Ecotoxicological 
Environmental Safety, 41, 8-18.
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    Ships also emit air toxics, including polycyclic aromatic 
hydrocarbons (PAHs), a class of polycyclic organic matter (POM) that 
contains compounds which are known or suspected carcinogens. Since the 
majority of PAHs are adsorbed onto particles less than 1.0 [mu]m in 
diameter, long range transport is possible. Particles of this size can 
remain airborne for days or even months and travel distances up to 
10,000 km before being deposited on terrestrial or aquatic 
surfaces.\62\ Atmospheric deposition of particles is believed to be the 
major source of PAHs to the sediments of Lake Michigan, Chesapeake Bay, 
Tampa Bay and other coastal areas of the U.S.63 64 65 66 67 
PAHs tend to accumulate in sediments and reach high enough 
concentrations in some coastal environments to pose an environmental 
health threat that includes cancer in fish populations, toxicity to 
organisms living in the sediment, and risks to those (e.g., migratory 
birds) that consume these organisms.68 69 PAHs tend to 
accumulate in sediments and bioaccumulate in fresh water, flora and 
fauna.
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    \62\ U.S. EPA (2004). Air Quality Criteria for Particulate 
Matter (AQCD). Washington, DC: U.S. Environmental Protection Agency. 
Retrieved on March 18, 2009 from http://cfpub.epa.gov/ncea/cfm/
recordisplay.cfm?deid=87903.
    \63\ Dickhut R.M., Canuel E.A., Gustafson K.E., Liu K., Arzayus 
K.M., Walker S.E., Edgecombe G., Gaylor M.O., MacDonald E.H. (2000). 
Automotive Sources of Carcinogenic Polycyclic Aromatic Hydrocarbons 
Associated with Particulate Matter in the Chesapeake Bay Region. 
Environmental Science & Technology, 34(21), 4635-4640.
    \64\ Simcik M.F., Eisenreich, S.J., Golden K.A., et al. (1996). 
Atmospheric Loading of Polycyclic Aromatic Hydrocarbons to Lake 
Michigan as Recorded in the Sediments. Environmental Science and 
Technology, 30, 3039-3046.
    \65\ Simcik M.F., Eisenreich S.J., Lioy P.J. (1999). Source 
apportionment and source/sink relationship of PAHs in the coastal 
atmosphere of Chicago and Lake Michigan. Atmospheric Environment, 
33, 5071-5079.
    \66\ Poor N., Tremblay R., Kay H., et al. (2002). Atmospheric 
concentrations and dry deposition rates of polycyclic aromatic 
hydrocarbons (PAHs) for Tampa Bay, Florida, USA. Atmospheric 
Environment, 38, 6005-6015.
    \67\ Arzavus K.M., Dickhut R.M., Canuel E.A. (2001). Fate of 
Atmospherically Deposited Polycyclic Aromatic Hydrocarbons (PAHs) in 
Chesapeake Bay. Environmental Science & Technology, 35, 2178-2183.
    \68\ Simcik M.F., Eisenreich, S.J., Golden K.A., et al. (1996). 
Atmospheric Loading of Polycyclic Aromatic Hydrocarbons to Lake 
Michigan as Recorded in the Sediments. Environmental Science and 
Technology, 30, 3039-3046.
    \69\ Simcik M.F., Eisenreich S.J., Lioy P.J. (1999). Source 
apportionment and source/sink relationship of PAHs in the coastal 
atmosphere of Chicago and Lake Michigan. Atmospheric Environment, 
33, 5071-5079.
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    Atmospheric deposition of pollutants can reduce the aesthetic 
appeal of buildings and culturally important articles through soiling, 
and can contribute directly (or in conjunction with other pollutants) 
to structural damage by means of corrosion or erosion.\70\ Atmospheric 
deposition may affect materials principally by promoting and 
accelerating the corrosion of metals, by degrading paints, and by 
deteriorating building materials such as concrete and limestone. 
Particles contribute to these effects because of their electrolytic, 
hygroscopic, and acidic properties, and their ability to adsorb 
corrosive gases (principally sulfur dioxide). The rate of metal 
corrosion depends on a number of factors, including the deposition rate 
and nature of the pollutant; the influence of the metal protective 
corrosion film; the amount of moisture present; variability in the 
electrochemical reactions; the presence and concentration of other 
surface electrolytes; and the orientation of the metal surface.
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    \70\ U.S. EPA (2005). Review of the National Ambient Air Quality 
Standards for Particulate Matter: Policy Assessment of Scientific 
and Technical Information, OAQPS Staff Paper. Retrieved on April 9, 
2009 from http://www.epa.gov/ttn/naaqs/standards/pm/data/
pmstaffpaper_20051221.pdf.
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(3) Impacts on Visibility
    Emissions from ships contribute to poor visibility in the U.S. 
through their primary PM2.5 emissions, as well as their 
NOX and SOX emissions which contribute to the 
formation of secondary PM2.5.\71\ Visibility can be defined 
as the degree to which the atmosphere is transparent to visible light. 
Airborne particles degrade visibility by scattering and absorbing 
light. Visibility is important because it has direct significance to 
people's enjoyment of daily activities in all parts of the country. 
Individuals value good visibility for the well-being it provides them 
directly, where they live and work and in places where they enjoy 
recreational opportunities. Visibility is also highly valued in 
significant natural areas such as national parks and

[[Page 22909]]

wilderness areas, and special emphasis is given to protecting 
visibility in these areas. For more information on visibility, see the 
final 2004 PM AQCD as well as the 2005 PM Staff Paper.72 73
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    \71\ U.S. EPA (2004). Air Quality Criteria for Particulate 
Matter (AQCD). Volume I Document No. EPA600/P-99/002aF and Volume II 
Document No. EPA600/P-99/002bF. Washington, DC: U.S. Environmental 
Protection Agency. Retrieved on March 18, 2009 from http://
cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=87903.
    \72\ U.S. EPA (2004). Air Quality Criteria for Particulate 
Matter (AQCD). Volume I Document No. EPA600/P-99/002aF and Volume II 
Document No. EPA600/P-99/002bF. Washington, DC: U.S. Environmental 
Protection Agency. Retrieved on March 18, 2009 from http://
cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=87903.
    \73\ U.S. EPA (2005). Review of the National Ambient Air Quality 
Standard for Particulate Matter: Policy Assessment of Scientific and 
Technical Information, OAQPS Staff Paper. EPA-452/R-05-005. 
Washington, DC: U.S. Environmental Protection Agency.
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    EPA is pursuing a two-part strategy to address visibility. First, 
EPA has set secondary PM2.5 standards which act in 
conjunction with the establishment of a regional haze program. In 
setting the secondary PM2.5 standard, EPA has concluded that 
PM2.5 causes adverse effects on visibility in various 
locations, depending on PM concentrations and factors such as chemical 
composition and average relative humidity. Second, section 169 of the 
Clean Air Act provides additional authority to address existing 
visibility impairment and prevent future visibility impairment in the 
156 national parks, forests and wilderness areas categorized as 
mandatory class I Federal areas (62 FR 38680-81, July 18, 1997).\74\ In 
July 1999, the regional haze rule (64 FR 35714) was put in place to 
protect the visibility in mandatory class I Federal areas. Visibility 
can be said to be impaired in both PM2.5 nonattainment areas 
and mandatory class I Federal areas.
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    \74\ These areas are defined in section 162 of the Act as those 
national parks exceeding 6,000 acres, wilderness areas and memorial 
parks exceeding 5,000 acres, and all international parks which were 
in existence on August 7, 1977.
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(4) Plant and Ecosystem Effects of Ozone
    Elevated ozone levels contribute to environmental effects, with 
impacts to plants and ecosystems being of most concern. Ozone can 
produce both acute and chronic injury in sensitive species depending on 
the concentration level and the duration of the exposure. Ozone effects 
also tend to accumulate over the growing season of the plant, so that 
even low concentrations experienced for a longer duration have the 
potential to create chronic stress on vegetation. Ozone damage to 
plants includes visible injury to leaves and impaired photosynthesis, 
both of which can lead to reduced plant growth and reproduction, 
resulting in reduced crop yields, forestry production, and use of 
sensitive ornamentals in landscaping. In addition, the impairment of 
photosynthesis, the process by which the plant makes carbohydrates (its 
source of energy and food), can lead to a subsequent reduction in root 
growth and carbohydrate storage below ground, resulting in other, more 
subtle plant and ecosystems impacts.
    These latter impacts include increased susceptibility of plants to 
insect attack, disease, harsh weather, interspecies competition and 
overall decreased plant vigor. The adverse effects of ozone on forest 
and other natural vegetation can potentially lead to species shifts and 
loss from the affected ecosystems, resulting in a loss or reduction in 
associated ecosystem goods and services. Lastly, visible ozone injury 
to leaves can result in a loss of aesthetic value in areas of special 
scenic significance like national parks and wilderness areas. The final 
2006 ozone AQCD presents more detailed information on ozone effects on 
vegetation and ecosystems.

C. Air Quality Modeling Results

    Air quality modeling was performed to assess the impact of the 
coordinated strategy. We looked at impacts on future ambient 
PM2.5 and ozone levels, as well as nitrogen and sulfur 
deposition levels and visibility impairment. In this section, we 
present information on current levels of pollution as well as model 
projected levels of pollution for 2020 and 2030.\75\
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    \75\ As discussed in Section 3.7 of the RIA, the inventories 
used for the air quality modeling in 2020 and 2030 differ slightly 
from each other. The difference between 2020 and 2030 is small and 
was due to an error in calculating the 200 nautical miles distance. 
In addition, as discussed in Section 3.7 of the RIA, the 2020 air 
quality control case does not include global controls for areas that 
are beyond 200 nautical miles but within the air quality modeling 
domain. The impact of this latter difference is expected to be 
minimal.
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    The air quality modeling uses EPA's Community Multiscale Air 
Quality (CMAQ) model. The CMAQ modeling domain is rectangular in shape 
and encompasses all of the lower 48 States, portions of Canada and 
Mexico, and areas extending into the ocean up to 1,000 nautical miles 
(nm), depending on the coast. The smallest area of ocean coverage is 
over the northeast U.S. In places like Maine and Cape Cod, the 
easternmost points of the contiguous U.S., the distance to the edge of 
the CMAQ modeling domain is approximately 150 nm. The rest of the U.S. 
shoreline has at least 200 nm between the shoreline and boundary of the 
air quality modeling. The CMAQ modeling domain is described in more 
detail in Section 2.4.5.2 of the RIA. The performance of the CMAQ 
modeling was evaluated using a 2002 base case simulation. More detail 
about the performance evaluation is contained within the Section 
2.4.5.4 of the RIA. The model was able to reproduce historical 
concentrations of ozone and PM2.5 at land-based monitors 
with low amounts of bias and error. While we are not able to evaluate 
the model's performance over the ocean due to the absence of surface 
monitors, there is no evidence to suggest that model performance is 
unsatisfactory over the ocean.
    The emission control scenarios used in the air quality modeling are 
slightly different than the final coordinated strategy emission control 
scenarios. For example, the 2020 air quality impacts are based on 
inventory estimates that were modeled using incorrect ECA boundary 
information off of the western coast of the U.S. A calculation error 
placed the western 200 nautical mile (nm) ECA boundary approximately 50 
nm closer to shore. Additionally, the 2020 air quality control case 
does not reflect emission reductions related to global controls for 
areas that are beyond 200 nm but within the CMAQ air quality modeling 
domain. Finally, the emission control scenarios do not consider the 
exemption of Great Lakes steamships from the final fuel sulfur 
standards. The impact of these differences is expected to be minimal.
(1) Particulate Matter
    The coordinated strategy described in this final rule will 
significantly reduce ambient PM concentrations through reductions in 
emissions of direct PM, as well as NOX and SOX 
which contribute to secondary PM.
(a) Current Levels
    PM2.5 concentrations exceeding the level of the 
PM2.5 NAAQS occur in many parts of the country. In 2005, EPA 
designated 39 nonattainment areas for the 1997 PM2.5 NAAQS 
(70 FR 943, January 5, 2005). These areas are composed of 208 full or 
partial counties with a total population exceeding 88 million. The 1997 
PM2.5 NAAQS was recently revised and the 2006 24-hour 
PM2.5 NAAQS became effective on December 18, 2006. On 
October 8, 2009, the EPA issued final nonattainment area designations 
for the 24-hour PM2.5 NAAQS (74 FR 58688, November 13, 
2009). These designations include 31 areas composed of 120 full or 
partial counties.
(b) Projected Levels
    A number of State governments have told EPA that they need the 
reductions the coordinated strategy will provide in order to meet and 
maintain the PM2.5

[[Page 22910]]

NAAQS.\76\ Most areas designated as not attaining the 1997 
PM2.5 NAAQS will need to attain the 1997 standards in the 
2010 to 2015 time frame, and then maintain them thereafter. The 2006 
24-hour PM2.5 nonattainment areas will be required to attain 
in the 2014 to 2019 time frame and then maintain thereafter. The fuel 
sulfur emission standards will become effective in 2010 and 2015, and 
the NOX engine emission standards will become effective in 
2016. Therefore, the coordinated strategy emission reductions will be 
useful to States in attaining or maintaining the PM2.5 
NAAQS.
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    \76\ See the Advanced Notice of Proposed Rule Making at Docket 
Number: EPA-HQ-OAR-2007-0121.
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    EPA has already adopted many emission control programs that are 
expected to reduce ambient PM2.5 levels and which will 
assist in reducing the number of areas that fail to achieve the 
PM2.5 NAAQS. Even so, our air quality modeling for this rule 
projects that in 2020, with all current controls but excluding the 
reductions expected to occur as a result of the coordinated strategy, 
at least 13 counties with a population of almost 30 million may not 
attain the 1997 annual PM2.5 standard of 15 [mu]g/m\3\ and 
47 counties with a population of over 53 million may not attain the 
2006 24-hour PM2.5 standard of 35 [mu]g/m\3\. These numbers 
do not account for those areas that are close to (e.g., within 10 
percent of) the PM2.5 standards. These areas, although not 
violating the standards, will also benefit from the additional 
reductions from this rule ensuring long term maintenance of the 
PM2.5 NAAQS.
    Air quality modeling of the expected impacts of the coordinated 
strategy shows that in 2020 and 2030 all of the modeled counties will 
experience decreases in their annual and 24-hour PM2.5 
design values. For areas with current annual PM2.5 design 
values greater than 15[mu]g/m\3\, the modeled future-year, population-
weighted annual PM2.5 design values are expected to decrease 
on average by 0.8 [mu]g/m\3\ in 2020 and by 1.7 [mu]g/m\3\ in 2030. For 
areas with current 24-hour PM2.5 design values greater than 
35[mu]g/m\3\, the modeled future-year, population-weighted annual 
PM2.5 design values are expected to decrease on average by 
1.3 [mu]g/m\3\ in 2020 and by 3.4 [mu]g/m\3\ in 2030. In 2030, the 
maximum projected decrease for an annual PM2.5 design value 
is 6.0 [mu]g/m\3\ in Miami, FL, and the maximum projected decrease for 
a 24-hour PM2.5 design value is 11.7 [mu]g/m \3\ in Los 
Angeles, CA. The air quality modeling methodology and the projected 
reductions are discussed in more detail in Chapter 2 of the RIA.
(2) Ozone
(a) Current Levels
    In 2008, the U.S. EPA amended the ozone NAAQS (73 FR 16436, March 
27, 2008). The final 2008 ozone NAAQS rule set forth revisions to the 
previous 1997 NAAQS for ozone to provide increased protection of public 
health and welfare. As of July 31, 2009 there are 54 areas designated 
as nonattainment for the 1997 8-hour ozone NAAQS, comprising 282 full 
or partial counties with a total population of almost 127 million 
people. These numbers do not include the people living in areas where 
there is a future risk of failing to maintain or attain the 1997 8-hour 
ozone NAAQS. The numbers above likely underestimate the number of 
counties that are not meeting the ozone NAAQS because the nonattainment 
areas associated with the more stringent 2008 8-hour ozone NAAQS have 
not yet been designated.\77\ Table II-1 provides an estimate, based on 
2005-07 air quality data, of the counties with design values greater 
than the 2008 8-hour ozone NAAQS of 0.075 ppm.
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    \77\ On September 16, 2009, the Administrator announced that the 
EPA is reconsidering the 2008 ozone standards to determine whether 
they adequately protect public health and the environment. She also 
announced that the Agency will propose to temporarily stay the 2008 
standards for the purpose of attainment and nonattainment area 
designations. Under the stay, all activities to designate areas for 
the 2008 ozone standards would be suspended for the duration of the 
reconsideration period. EPA intends to complete the reconsideration 
by August 31, 2010. If, as a result of the reconsideration, EPA 
determines that the 2008 ozone standards are not supported by the 
scientific record and promulgates different ozone standards, the new 
2010 ozone standards would replace the 2008 ozone standards and the 
requirement to designate areas for the 2008 standards would no 
longer apply. If EPA promulgates new ozone standards in 2010, EPA 
intends to accelerate the designations process to that the 
designations would be effective in August 2011.

   Table II-1--Counties With Design Values Greater Than the 2008 Ozone
                NAAQS Based on 2005-2007 Air Quality Data
------------------------------------------------------------------------
                                          Number of
                                          counties       Population \a\
------------------------------------------------------------------------
1997 Ozone Standard: counties within               282       126,831,848
 the 54 areas currently designated
 as nonattainment (as of 7/31/09)...
2008 Ozone Standard: additional                    227        41,285,262
 counties that would not meet the
 2008 NAAQS \b\.....................
                                     -----------------------------------
    Total...........................               509       168,117,110
------------------------------------------------------------------------
Notes:
\a\ Population numbers are from 2000 census data.
\b\ Attainment designations for the 2008 ozone NAAQS have not yet been
  made. Nonattainment for the 2008 Ozone NAAQS will be based on three
  years of air quality data from later years. Also, the county numbers
  in this row include only the counties with monitors violating the 2008
  Ozone NAAQS. The numbers in this table may be an underestimate of the
  number of counties and populations that will eventually be included in
  areas with multiple counties designated nonattainment.

(b) Projected Levels
    States with 8-Hour ozone nonattainment areas are required to take 
action to bring those areas into compliance in the future. Based on the 
final rule designating and classifying 8-hour ozone nonattainment areas 
for the 1997 standard (69 FR 23951, April 30, 2004), most 8-hour ozone 
nonattainment areas will be required to attain the 1997 ozone NAAQS in 
the 2007 to 2013 time frame and then maintain the NAAQS thereafter. In 
addition, there will be attainment dates associated with the 
designation of nonattainment areas as a result of the reconsideration 
of the 2008 ozone NAAQS. Many of these nonattainment areas will need to 
adopt additional emission reduction programs, and the NOX 
reductions that will result from the coordinated strategy will be 
particularly important for these States.
    EPA has already adopted many emission control programs that are 
expected to reduce ambient ozone levels and assist in reducing the 
number of areas that fail to achieve the ozone NAAQS. Even so, our air 
quality modeling projects that in 2020, with all

[[Page 22911]]

current controls but excluding the reductions achieved through the 
coordinated strategy, up to 50 counties with a population of almost 50 
million may not attain the 2008 ozone standard of 0.075 ppm. These 
numbers do not account for those areas that are close to (e.g., within 
10 percent of) the 2008 ozone standard. These areas, although not 
violating the standards, will also benefit from the additional 
reductions from this rule ensuring long-term maintenance of the ozone 
NAAQS.
    These air quality modeling results suggest that emission reductions 
achieved through the coordinated strategy will improve both the average 
and population-weighted average ozone design value concentrations for 
the U.S. in 2020 and 2030. In addition, the air quality modeling shows 
that on average the coordinated program described in this action will 
help bring counties closer to ozone attainment as well as assist 
counties whose ozone concentrations are within 10 percent below the 
standard. For example, in projected nonattainment counties, on a 
population-weighted basis, the 8-hour ozone design value will on 
average decrease by 0.5 ppb in 2020 and 1.6 ppb in 2030. The air 
quality modeling methodology and the projected reductions are discussed 
in more detail in Chapter 2 of the RIA.
    It should be noted that even though our air quality modeling 
predicts important reductions in nationwide ozone levels, three 
counties (of 661 that were part of the analysis) are expected to 
experience an increase in their ozone design values in 2030. There are 
two counties in Washington, Clallam County and Clark County, and Orange 
County, CA, which will experience 8-hour ozone design value increases 
due to the NOX disbenefits which occur in these VOC-limited 
ozone nonattainment areas. Briefly, NOX reductions at 
certain times and in some areas can lead to increased ozone levels. The 
air quality modeling methodology (Section 2.4.5), the projected 
reductions (Section 2.4), and the limited NOX disbenefits 
(Section 2.4.2.2.2), are discussed in more detail in Chapter 2 of the 
RIA.
(c) Case Study of Shipping Emissions and Ozone Impacts on Forests
    The section below attempts to estimate the impacts of the 
coordinated strategy on forests through a case study.
    Assessing the impact of ground-level ozone on forests in the United 
States involves understanding the risk/effect of tree species to ozone 
ambient concentrations and accounting for the prevalence of those 
species within the forest. As a way to quantify the risk/effect of 
particular plants to ground-level ozone, scientists have developed 
ozone-exposure/tree-response functions by exposing tree seedlings to 
different ozone levels and measuring reductions in growth as ``biomass 
loss.''\78\
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    \78\ Chappelka, AH, Samuelson, LJ. (1998). Ambient ozone effects 
on forest trees of the Eastern United States: a review. New 
Phytologist, 139, 91-108.
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    With knowledge of the distribution of sensitive species and the 
level of ozone at particular locations, it is possible to estimate a 
``biomass loss'' for each species across their range. EPA performed an 
analysis for 2020 in which we examined biomass loss with and without 
ship emissions to determine the benefit of reducing these emissions on 
sensitive tree species in the U.S.\79\ The biomass loss attributable to 
shipping appears to range from 0 to 6.5% depending on the particular 
species. The species most sensitive to ozone related biomass loss in 
the U.S. is black cherry (Prunus serotina); the area of its range with 
more than 10% total biomass loss in 2020 decreased by 8.5% in the case 
in which emissions from ships were removed. Likewise, yellow-poplar 
(Liriodendron tulipifera), eastern white pine (Pinus strobus), aspen 
(Populus spp.), and ponderosa pine (Pinus ponderosa) saw areas with 
more then 2% biomass loss reduced by 2.1% to 3.8% in 2020. This 2% 
level of biomass loss is important, because a consensus workshop on 
ozone effects reported that a 2% annual biomass loss causes harm due to 
the potential for compounding effects over multiple years as short-term 
negative effects on seedlings affect long-term forest 
health.80 81
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    \79\ Note that while the coordinated strategy does not eliminate 
ship emissions, it will be directionally helpful in reducing ship 
emissions.
    \80\ Prasad A.M, Iverson L.R. (2003). Little's range and FIA 
importance value database for 135 eastern U.S. tree species. 
Northeastern Research Station, USDA Forest Service, Delaware, Ohio. 
[online] Retrieved on March 19, 2009, from http://www.fs.fed.us/ne/
delaware/4153/global/littlefia/index.html.
    \81\ Heck W.W., Cowling E.B. (1997) The need for a Long Term 
Cumulative Secondary Ozone Standard--an Ecological Perspective. Air 
and Waste Management Association, EM, 23-33.
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(3) Nitrogen and Sulfur Deposition
(a) Current Levels
    Over the past two decades, the EPA has undertaken numerous efforts 
to reduce nitrogen and sulfur deposition across the U.S. Analyses of 
long-term monitoring data for the U.S. show that deposition of both 
nitrogen and sulfur compounds has decreased over the last 17 years 
although many areas continue to be negatively impacted by deposition. 
Deposition of inorganic nitrogen and sulfur species routinely measured 
in the U.S. between 2004 and 2006 were as high as 9.6 kg N/ha/yr and 
21.3 kg S/ha/yr. The data shows that reductions were more substantial 
for sulfur compounds than for nitrogen compounds. These numbers are 
generated by the U.S. national monitoring network and they likely 
underestimate nitrogen deposition because NH3 is not 
measured. In the eastern U.S., where data are most abundant, total 
sulfur deposition decreased by about 36% between 1990 and 2005 while 
total nitrogen deposition decreased by 19% over the same time 
frame.\82\
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    \82\ U.S. EPA. U.S. EPA's 2008 Report on the Environment (Final 
Report). U.S. Environmental Protection Agency, Washington, DC, EPA/
600/R-07/045F (NTIS PB2008-112484).
---------------------------------------------------------------------------

(b) Projected Levels
    The emissions reductions that result from the coordinated strategy 
will significantly reduce the annual total sulfur and nitrogen 
deposition occurring in sensitive U.S. ecosystems including forests, 
wetlands, lakes, streams, and estuaries. For sulfur deposition, 
adopting the coordinated strategy will result in reductions ranging 
from 5% to 20% in 2020 along the entire Atlantic and Gulf coasts with 
higher levels of reduction, exceeding 25%, occurring in the near-land 
coastal waters of the U.S. In a few land areas on the Atlantic and Gulf 
coasts, such as the southern parts of the States of Louisiana, Texas, 
and Florida, 2020 sulfur deposition reductions will be much higher, 
i.e., over 30%. Along the Pacific Coast, sulfur deposition reductions 
will exceed 25% in the entire Southern California area, and the Pacific 
Northwest. For a map of 2020 sulfur reductions and additional 
information on these impacts see Section 2.4.3 of the RIA.
    Overall, nitrogen deposition reductions in 2020 resulting from the 
coordinated strategy described in this action are less than sulfur 
deposition reductions. Nitrogen deposition reductions will range from 
3% to 7% along the entire Atlantic, Pacific and Gulf Coasts. As with 
sulfur deposition reductions, a few areas such as the southern parts of 
the States of Louisiana, Texas, and Florida will experience larger 
reductions of nitrogen up to 9%. The Pacific coastal waters will see 
higher nitrogen reductions, exceeding 20% in some instances. See 
Section 2.4.3 of the RIA for a map and additional information on 
nitrogen deposition impacts.

[[Page 22912]]

(4) Visibility
(a) Current Levels
    As mentioned in Section II.C.1, millions of people live in 
nonattainment areas for the PM2.5 NAAQS. These populations, 
as well as large numbers of individuals who travel to these areas, are 
likely to experience visibility impairment. In addition, while 
visibility trends have improved in mandatory class I Federal areas, the 
most recent data show that these areas continue to suffer from 
visibility impairment. In summary, visibility impairment is experienced 
throughout the U.S., in multi-State regions, urban areas, and remote 
mandatory class I Federal areas.
(b) Projected Levels
    The air quality modeling conducted for the coordinated strategy was 
also used to project visibility conditions in 133 mandatory class I 
Federal areas across the U.S. in 2020 and 2030. The results indicate 
that improvements in visibility due to OGV emissions reductions will 
occur in all 133 mandatory class I Federal areas in the future, 
although all areas will continue to have annual average deciview levels 
above background in 2020 and 2030.\83\ The average visibility on the 20 
percent worst days at these scenic locales is projected to improve by 
0.22 deciviews, or 1.4 percent in 2020 and by 0.43 deciviews or 2.7% in 
2030.
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    \83\ The level of visibility impairment in an area is based on 
the light-extinction coefficient and a unit less visibility index, 
called a ``deciview'', which is used in the valuation of visibility. 
The deciview metric provides a scale for perceived visual changes 
over the entire range of conditions, from clear to hazy. Under many 
scenic conditions, the average person can generally perceive a 
change of one deciview. The higher the deciview value, the worse the 
visibility. Thus, an improvement in visibility is a decrease in 
deciview value.
---------------------------------------------------------------------------

    The greatest improvements in visibilities will occur in coastal 
areas. For instance, the Agua Tibia Wilderness area (near Los Angeles) 
will see a 9% improvement (2.17 DV) in 2020 and a 17% improvement (4.6 
DV) in 2030 as a result of the emission reductions from the coordinated 
strategy. National parks and national wilderness areas in other parts 
of the country will also see improvements. For example, in 2030 the 
Swanquarter National Wildlife Refuge (North Carolina) will have a 5% 
improvement in visibility (1.11 DV) and Acadia National Park (Maine) 
will have a 6% improvement (1.27 DV) with the coordinated strategy. 
Even inland mandatory class I Federal areas are projected to see 
improvements as a result of the controls from the coordinated strategy. 
For example in 2030, the Grand Canyon National Park, located in the 
State of Arizona, will see a 54% improvement in visibility (0.42 DV) 
with the coordinated strategy. For the table which contains the full 
visibility results over the 133 analyzed areas see Section 2.2.4.2 of 
the RIA.

D. Emissions From Ships With Category 3 Engines

(1) Overview
    This section describes the contribution of Category 3 vessels to 
national emission inventories of NOX, PM2.5, and 
SO2. A Category 3 vessel has a Category 3 propulsion engine. 
Emissions from a Category 3 vessel include the emissions from both the 
propulsion and auxiliary engines on that vessel. Propulsion and 
auxiliary engine emissions were estimated separately to account for 
differences in emission factors, engine size and load, and activity.
    We estimate that in 2009, Category 3 vessels will contribute almost 
913,000 tons (10 percent) to the national mobile source NOX 
inventory, about 71,000 tons (24 percent) to the mobile source diesel 
PM2.5 inventory, and nearly 597,000 tons (80 percent) to the 
mobile source SO2 inventory. Expressed as a percentage of 
all anthropogenic emissions, Category 3 vessels contribute 6 percent to 
the national NOX inventory, 3 percent to the national 
PM2.5 inventory, and 11 percent to the total SO2 
inventory in 2009. In 2030, absent the strategy discussed in this rule, 
these vessels will contribute about 2.1 million tons (40 percent) to 
the mobile source NOX inventory, 168,000 tons (75 percent) 
to the mobile source diesel PM2.5 inventory, and about 1.4 
million tons (95 percent) to the mobile source SO2 
inventory. Expressed as a percentage of all anthropogenic emissions, 
Category 3 vessels will contribute 19 percent to the national 
NOX inventory, 5 percent to the national PM2.5 
inventory, and 15 percent to the total SO2 inventory in 
2030. Under this strategy, by 2030, annual NOX emissions 
from these vessels will be reduced by 1.2 million tons, 
PM2.5 emissions by 143,000 tons, and SO2 
emissions by 1.3 million tons.\84\
---------------------------------------------------------------------------

    \84\ These emission inventory reductions include reductions from 
ships operating within the 24 nautical mile regulatory zone off the 
California Coastline, beginning with the effective date of the 
Coordinated Strategy program elements. The California regulation 
contains a provision that would sunset the requirements of the rule 
if the Federal program achieves equivalent emission reductions. See 
http://www.arb.ca.gov/regact/2008/fuelogv08/fro13.pdf at 13 CCR 
2299.2(j)(1).
---------------------------------------------------------------------------

    Each sub-section below discusses one of the three affected 
pollutants, including expected emission reductions that will result 
from the combination of the proposed CAA NOX standards along 
with the ECA designation through amendment to MARPOL Annex VI and 
related fuel standards. Table II-2 summarizes the impacts of these 
reductions for 2020 and 2030 on a national basis. Chapter 3 of the RIA 
also presents regional emissions inventories, such as those for the 
Great Lakes. Table II-3 provides the estimated 2030 NOX 
emission reductions (and PM reductions) for the coordinated strategy 
compared to the Locomotive and Marine rule, Clean Air Nonroad Diesel 
(CAND) program, and the Heavy-Duty Highway rule. Further details on our 
inventory estimates are available in Chapter 3 of the RIA. Note that 
the inventories presented here do not consider the exemption of Great 
Lakes steamships from the final fuel sulfur standards. This change to 
the program is not expected to have a significant impact on national 
inventory estimates. We intend to follow up with a more detailed study 
of the impacts of the emission control program on Great Lakes carriers 
which may provide information that will help us refine our Great Lakes 
emission inventories.
    As described in Chapter 3 of the RIA, the Category 3 vessel 
emission inventories presented in this section are estimated by 
combining two sets of emissions inventories, one for U.S. port areas 
and one for operation on the open ocean. With regard to operation on 
the open ocean, it was necessary to specify an outer boundary of the 
modeling domain; otherwise, emissions from ships operating as far away 
as Asia or Europe would be included in the U.S. emission inventory. For 
simplicity, we set the outer boundary for inventory modeling roughly 
equivalent to the U.S. Exclusive Economic Zone (EEZ). It consists of 
the area that extends 200 nautical miles (nm) from the official U.S. 
baseline, which is recognized as the low-water line along the coast as 
marked on the official U.S. nautical charts in accordance with the 
articles of the Law of the Sea. The U.S. region was then clipped to the 
boundaries of the U.S. EEZ. While this area will exclude emissions that 
occur outside the 200 nm boundary but that are transported to the U.S. 
landmass, it has the advantage of corresponding to an area in which the 
United States has a clear environmental interest. This area also 
corresponds well to the CMAQ modeling domain for most coasts.

[[Page 22913]]



 Table II-2--Estimated National (50 State) Reductions in Emissions From
                 Category 3 Commercial Marine Vessels a
------------------------------------------------------------------------
            Pollutant [short tons]                  2020         2030
------------------------------------------------------------------------
NOX:                                            ...........  ...........
    NOX Emissions without Coordinated Strategy    1,361,000    2,059,000
    NOX Emissions with Coordinated Strategy...      952,000      878,000
    NOX Reductions Resulting from Coordinated       409,000    1,181,000
     Strategy.................................
Direct PM2.5:
    PM2.5 Emissions without Coordinated             110,000      168,000
     Strategy.................................
    PM2.5 Emissions with Coordinated Strategy.       16,000       25,000
    PM2.5 Reductions Resulting from                  94,000      143,000
     Coordinated Strategy.....................
SO2:
    SO2 Emissions without Coordinated Strategy      928,000    1,410,000
    SO2 Emissions with Coordinated Strategy...       51,000       78,000
    SO2 Reductions Resulting from Coordinated       877,000    1,332,000
     Strategy.................................
------------------------------------------------------------------------
Notes:
\a\ Emissions are included within 200 nautical miles of the U.S.
  coastline.


   Table II-3--Projected 2030 Emissions Reductions From Recent Mobile
                              Source Rules
                             [Short Tons] a
------------------------------------------------------------------------
                     Rule                           NOX         PM2.5
------------------------------------------------------------------------
Category 3 Marine.............................    1,181,000      143,000
Locomotive and Marine.........................      795,000       27,000
Clean Air Nonroad Diesel......................      738,000      129,000
Heavy-Duty Highway............................    2,600,000      109,000
------------------------------------------------------------------------
Notes:
\a\ Locomotive and Marine Rule (73 FR 25098, May 6, 2008) Clean Air
  Nonroad Diesel Rule (69 FR 38957, June 29, 2004) Heavy-Duty Highway
  Rule (66 FR 5001, January 18, 2001).

(2) NOX Emission Reductions
    In 2009, annual emissions from Category 3 marine vessels will total 
about 913,000 tons. Earlier Tier 1 NOX engine standards 
became effective in 2000, but the reductions due to the Tier 1 
standards are offset by the growth in this sector, resulting in 
increased NOX emissions of 1.4 million tons and 2.1 million 
tons in 2020 and 2030, respectively.
    As shown in Table II-2, the coordinated strategy will reduce annual 
NOX emissions from the current national inventory baseline 
by 409,000 tons in 2020 and 1,181,000 tons in 2030.
    As shown in Table II-3, the 2030 NOX reductions for the 
coordinated strategy will exceed those for the other two nonroad rules.
(3) PM2.5 Emissions Reductions
    In 2009, annual emissions from Category 3 marine vessels will total 
about 71,000 tons. By 2030, these engines, absent the coordinated 
strategy, would contribute about 168,000 tons.
    As shown in Table II-2, the coordinated strategy will reduce annual 
PM2.5 emissions by 94,000 tons in 2020 and 143,000 tons in 
2030. As seen in Table II-3, the 2030 PM2.5 emission 
reduction will be larger than any of the reductions achieved with other 
recent rules.
(4) SO2 Emissions Reductions
    In 2009, annual emissions from Category 3 marine vessels will total 
about 597,000 tons. By 2030, these engines, absent the coordinated 
strategy, will contribute about 1.4 million tons.
    As shown in Table II-2 the coordinated strategy will reduce annual 
SO2 emissions by 877,000 tons in 2020 and 1.3 million tons 
in 2030.

III. Engine Standards

    This section details the emission standards, implementation dates, 
and other major requirements being finalized under the Clean Air Act. A 
discussion of the technological feasibility of the finalized 
NOX standards follows the description of the proposed 
program.
    Other elements of our coordinated strategy to control emissions 
from ships are discussed in subsequent sections. Provisions related to 
our Clean Air Act fuel controls are described in Section IV. Section V 
summarizes the U.S. and Canada's recent proposal to amend MARPOL Annex 
VI to designate much of the U.S. and Canadian coasts as an Emission 
Control Area.\85\ Finally, provisions revising our Clean Air Act test 
procedures and related certification requirements, provisions to 
implement MARPOL Annex VI through APPS, and various changes we are 
making to our Category 1 and 2 (marine diesel engines with per cylinder 
displacement less than 30 liters per cylinder) marine diesel engine 
program are described in Section VI.
---------------------------------------------------------------------------

    \85\ The ECA proposal and associated Technical Support Document 
can be found at http://www.epa.gov/otaq/oceanvessels.htm. France has 
since joined the ECA proposal on behalf of the Saint Pierre and 
Miquelon archipelago.
---------------------------------------------------------------------------

A. What Category 3 Marine Engines Are Covered?

    Consistent with our existing marine diesel emission control 
program, the engine emission standards being finalized will apply to 
any new marine diesel engine with per-cylinder displacement at or above 
30 liters installed on a vessel flagged or registered in the United 
States.
    With regard to marine diesel engines on foreign vessels that enter 
U.S. ports, we are retaining our current approach and not applying this 
Clean Air Act program to those engines. This is appropriate because 
engines on foreign vessels are subject to the same NOX 
limits through MARPOL Annex VI, and the United States can enforce 
compliance pursuant to Annex VI and the recent amendments to the Act to 
Prevent Pollution from Ships (33 U.S.C. 1901 et seq.). At the same 
time, however, the effectiveness of this approach is contingent on the 
designation of U.S. coasts as an ECA

[[Page 22914]]

pursuant to MARPOL Annex VI, since the Annex VI Tier III NOX 
limits are geographic in scope and apply only if an ECA has been 
adopted. We anticipate that MARPOL Annex VI will be amended to include 
the North American ECA proposal. However, if the proposed amendment is 
not adopted in a timely manner by IMO, we will reconsider whether 
additional action is necessary to control harmful emissions from all 
vessels affecting U.S. air quality. Section V contains a description of 
the ECA designation process.
    The combination of this Clean Air Act program, MARPOL Annex VI, and 
APPS will apply comparable emission standards to the vast majority of 
vessels entering U.S. ports or operating in U.S. waters.\86\ Most 
significantly, these vessels will be required to meet the 
NOX limits described below. As described later in this 
Section III and in Section VI, there will be some minor differences 
between the finalized Clean Air Act program and the requirements that 
apply under MARPOL Annex VI. Nevertheless, with respect to U.S. air 
quality, these differences will have a negligible effect on emissions 
from foreign vessels.
---------------------------------------------------------------------------

    \86\ Certain public vessels such as military vessels and foreign 
vessels in innocent passage may be exempt.
---------------------------------------------------------------------------

B. What Standards Are We Finalizing for Newly Manufactured Engines?

    This subsection details the emission standards (and implementation 
dates) we are finalizing for freshly manufactured (i.e., new) Category 
3 engines on U.S. vessels. As described in Section III.C, we believe 
the standards will be challenging to manufacturers, yet ultimately 
feasible and cost-effective within the finalized lead time. These 
standards, along with other parts of our program, are the outcome of 
our work with stakeholders to resolve the challenges associated with 
applying advanced diesel engine technology to Category 3 engines to 
achieve significant NOX reductions.
(1) NOX Standards
    We are finalizing new Tier 2 and Tier 3 NOX emission 
standards for Category 3 marine diesel engines. Our existing Tier 1 
NOX standards for Category 3 engines were dependent on the 
rated speed of the engine for speeds between 130 revolutions per minute 
(rpm) and 2,000 rpm. Fixed standards applied for lower and higher 
speeds. Thus, the standards were expressed as an equation that applies 
for speeds between 130 rpm and 2,000 rpm, along with fixed values that 
were calculated from the equation for 130 rpm and 2,000 rpm that apply 
for lower and higher speeds. This was done to account for the fact that 
brake-specific NOX emissions are inherently higher for lower 
speed engines (and lower for higher speed engines). Note that this same 
approach is used by the IMO for the same technical reasons. We are 
continuing this approach for Tier 2 and Tier 3, as shown in Table III-
1.

                           Table III-1--NOX Emission Standards for Category 3 Engines
                                                    [g/kW-hr]
----------------------------------------------------------------------------------------------------------------
                                                      Less than                                       Over 2,000
                                                       130 RPM            130-2,000  RPM \a\             RPM
----------------------------------------------------------------------------------------------------------------
Tier 1................................     \b\ 2004         17.0  45.0[middot]n(-0.20)                       9.8
Tier 2................................         2011         14.4  44.0[middot]n(-0.23)                       7.7
Tier 3................................         2016          3.4  9.0[middot]n(-0.20)                        2.0
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Applicable standards are calculated from n (maximum in-use engine speed in RPM), rounded to one decimal
  place.
\b\ Tier 1 NOX standards applied for engines originally manufactured after 2004, and also to certain earlier
  engines.

    Our analysis, which is described in the RIA, shows that these 
standards will give the greatest degree of emission control achievable 
considering compliance costs, lead time, and other relevant factors. 
The technological bases are also discussed briefly below.
    Note that other important provisions related to compliance with 
these standards are described in Section VI. This includes provisions 
to ensure effective control of NOX emissions over a broad 
range of operating conditions.
(a) Tier 2 NOX Limits
    We are finalizing the proposed Tier 2 NOX emission 
standards for Category 3 marine diesel engines. In-cylinder emission 
control technology for Category 3 marine engines has progressed 
substantially in recent years. Significant reductions can be achieved 
in the near term with little or no impact on overall vessel 
performance. These technologies include traditional engine-out controls 
such as electronically-controlled high-pressure common-rail fuel 
systems, turbocharger optimization, compression-ratio changes, and 
electronically-controlled exhaust valves. We are setting a near-term 
NOX emission standard requiring a reduction of approximately 
20 percent below the current Tier 1 standard beginning 2011.
(b) Tier 3 NOX Limits
    While the Tier 2 standards will achieve modest reductions quickly, 
the finalized Tier 3 standards are intended to achieve much greater 
emission reductions through the use of more advanced emission control 
technology. These standards will achieve reductions of about 80 percent 
from the current Tier 1 standards. As explained in the RIA, we 
evaluated the possibility of requiring the Tier 3 limits on an earlier 
schedule than 2016. However, we found that a schedule requiring Tier 3 
limits prior to 2016 had significant feasibility issues, and are 
therefore finalizing the 2016 implementation date for Tier 3 standards. 
Under the finalized approach, manufacturers of Category 3 engines will 
have about the same amount of lead time allowed manufacturers for 
smaller diesel marine engines and for locomotives.
(2) PM and SOX Standards
    We are not establishing new engine standards for PM or 
SOX emissions. We intend to rely instead on the use of 
cleaner fuels as described in Section IV and V. SOX 
emissions and the majority of the direct PM emissions from Category 3 
marine engines operated on residual fuels are a direct result of fuel 
quality, most notably the sulfur in the fuel, and engine-based PM 
controls are not currently feasible for engines using these higher 
sulfur fuels. Other components of residual fuel, such as ash and heavy 
metals, also contribute directly to PM.
    Using cleaner distillate fuel is the most effective means to 
achieve significant PM and SOX reductions for

[[Page 22915]]

Category 3 engines. We are finalizing requirements to substantially 
reduce the sulfur content of fuel purchased in the U.S. for use in an 
ECA. This complements Annex VI which requires that fuels used in ECAs 
around the world have sulfur levels no higher than 1,000 ppm. This 
sulfur limit is expected to necessitate the use of distillate fuel 
which will result not only in reductions in sulfate PM emissions, but 
also reductions in organic PM and metallic ash particles in the 
exhaust.
    Even though the sulfur limit is much lower than current levels, it 
is not clear if this fuel sulfur level would be low enough to allow 
Category 3 engines to be equipped with the catalytic PM filters similar 
to those being used by trucks today. If we were to require technology 
that needs lower sulfur fuel, such as 15 ppm, ship operators would need 
to have access to this fuel around the world and at this time, it is 
not clear if 15 ppm sulfur fuel could be made available globally. 
Operating on higher sulfur fuel, such as for outside of our waters, 
could otherwise result in damage to the PM control equipment. In any 
case, the 1,000 ppm sulfur fuel requirement alone will eliminate 85 
percent of PM emissions from ships operating in ECAs.
    To further our understanding of PM emissions from ships, we are 
requiring engine manufacturers to measure and report PM emissions even 
though we are not finalizing a PM standard. The information gathered 
will help support our efforts as we continue to evaluate the 
feasibility of achieving further PM reductions. It will also help us to 
better characterize the PM emission rates associated with operating 
Category 3 engines on distillate fuel. If we determine that further PM 
reductions are feasible or that a specific PM limit is necessary to 
ensure anticipated reductions in PM emissions from ships, we may 
propose PM standards for Category 3 engines in the future.
(3) HC and CO Standards
    We are finalizing HC and CO standards of 2.0 g/kW-hr and 5.0 g/kW-
hr, respectively. Emission control technologies for Category 3 marine 
engines have been concentrated on reducing NOX and PM 
emissions, but these emission standards will prevent increases in 
emissions of HC and CO that might otherwise occur as a result of use of 
certain technologies for controlling NOX, such as those that 
significantly degrade combustion efficiency.
(4) CO2 Standards
    We are not adopting CO2 standards for marine diesel 
engines at this time. Marine diesel engines are included in other 
ongoing Agency actions, including our Advance Notice of Proposed 
Rulemaking (ANPRM) for mobile sources (73 FR 44353, July 30, 2008) and 
our Greenhouse Gas Reporting Rule (74 FR 16448, April 10, 2009). In 
addition, EPA is participating in the U.S. Government delegation to 
IMO, which is currently engaged in negotiations for an international 
program to address greenhouse emissions from ships.

C. Are the Standards Feasible?

    We have analyzed a variety of technologies available for 
NOX reduction in the Category 3 marine sector. As described 
in more detail in our RIA, we are projecting that marine diesel engine 
manufacturers will choose to use in-cylinder, or engine design-based 
emission control technologies to achieve the NOX reductions 
required to meet the final Tier 2 standard.
    The in-cylinder, or engine-out, NOX emissions of a 
diesel engine can be controlled by utilizing engine design and 
calibration parameters (e.g., fuel delivery and valve timing) to limit 
the formation of NOX. NOX formation rate has a 
strong exponential relationship to combustion temperature. Therefore, 
high temperatures result in high NOX formation 
rates.87 88 Any changes to engine design and calibration 
which can reduce the peak temperature realized during combustion will 
also reduce NOX emissions. Many of the approaches and 
technologies for reducing in-cylinder NOX emissions are 
discussed in our RIA.
---------------------------------------------------------------------------

    \87\ Flynn, P., et al., ``Minimum Engine Flame Temperature 
Impacts on Diesel and Spark-Ignition Engine NOX 
Production'', SAE 2000-01-1177, 2000.
    \88\ Heywood, John B., ``Internal Combustion Engine 
Fundamentals'', McGraw-Hill, 1988.
---------------------------------------------------------------------------

    To achieve the 80 percent NOX reductions required to 
meet the final Tier 3 standard, we believe many manufacturers will 
choose selective catalytic reduction (SCR) exhaust aftertreatment 
technology. SCR is a commonly-used technology for meeting stricter 
NOX emissions standards in diesel applications worldwide. 
Stationary power plants fueled with coal, diesel and natural gas have 
used SCR for three decades as a means of controlling NOX 
emissions, and European heavy-duty truck manufacturers are currently 
using this technology to meet Euro 5 emissions limits. To a lesser 
extent, SCR has been introduced on diesel engines in the U.S. market, 
but the applications have been limited to marine ferryboat and 
stationary electrical power generation demonstration projects in 
California and several of the Northeast States. SCR systems are 
currently being designed and developed for use on ocean-going vessels 
worldwide, and we project that SCR will continue to be a viable 
technology for control of Category 3 NOX emissions.
    When operating in the ECA, SCR units would be active, meaning that 
urea would be injected into the exhaust to facilitate catalytic 
reduction of NOX emissions. When outside of the ECA, the 
unit would likely be inactive, meaning that urea would not be injected 
into the exhaust. When the SCR unit is inactive, the exhaust flow could 
either continue to pass through the SCR unit or be diverted around the 
catalyst. Under the MARPOL NOX Technical Code, a means for 
monitoring the use of urea must be provided which must include 
``sufficient information to allow a ready means of demonstrating that 
the consumption of such additional substances is consistent with 
achieving compliance with the applicable NOX limit.'' In 
addition, where a NOX reducing device, such as SCR, is used, 
one of the options for providing verification of compliance with the 
NOX standard is through direct measurement and monitoring of 
NOX emissions. A more detailed discussion of SCR technology 
can be found in our RIA.
    SCR is not the only approach under consideration for meeting the 
Tier 3 standards. Manufacturers may choose a combination of other in-
cylinder technologies, such fuel-water emulsification, direct water 
injection, intake air humidification, or exhaust gas recirculation 
(EGR) to reduce NOX emissions and meet the final standards. 
These ``in-cylinder'' approaches could be calibrated and applied in one 
manner to achieve Tier 3 NOX levels when operating with an 
ECA, and then adjusted, or re-calibrated, in another manner to achieve 
Tier 2 NOX levels when operating outside an ECA. This is 
discussed in more detail in the RIA.
    Another technology, which is currently under investigation, is the 
use of an exhaust gas cleaning unit (EGCS) to reduce NOX 
emissions. One significant technological issue that must be addressed 
is the prevention of nitrates from being introduced into the water. In 
a typical diesel exhaust gas mixture, NOX is composed of 
roughly 5-10% NO2, with the majority of the remainder in the 
form of NO. NO2 is soluble in water, and therefore may be 
removed by the water in the scrubber. It is possible to treat the 
exhaust upstream of the scrubber to convert

[[Page 22916]]

more of the NOX to NO2, thereby facilitating the 
use of a scrubber to remove NO2. However, we are concerned 
that this would add to nitrogen loading of the water in which the ship 
is operating. As discussed in Section II.B.1, nitrogen loading can lead 
to serious water quality impacts. This issue is addressed in the IMO 
EGCS guidelines by limiting the amount of nitrates that may be removed 
by the scrubber, and washed overboard. However, a scrubber design may 
be acceptable if it removes nitrates from the wash water, which in turn 
are disposed of properly, or prevents nitrates from forming in the wash 
water. One manufacturer has stated that their unique EGCS design 
converts NOX to nitrogen (N2), rather than 
nitrates. This is discussed in more detail in the RIA.

IV. Fuel Standards

A. Background

    EPA is finalizing standards for fuel manufactured or distributed in 
the U.S. that are consistent with those recently adopted as amendments 
to MARPOL Annex VI. As amended, Annex VI includes revised fuel sulfur 
standards for use in engines onboard ships, and it also set more 
stringent fuel sulfur limits for ``any fuel oil used onboard ships * * 
* operating within an Emission Control Area'' (Annex VI, Regulation 
14).
    Under the Annex, the process by which an Emission Control Area 
(ECA) is to be designated is through amendment of the Annex. The U.S. 
and Canadian governments have submitted a proposal to amend MARPOL 
Annex VI to designate an ECA to include waters off much of the U.S. and 
Canada. Specifically, the proposed ECA includes the waters off of the 
contiguous 48 States, Southeastern Alaska, and the Main Hawaiian 
Islands, extending to a distance of 200 nautical miles from the 
coastline. This amendment was considered at the July 2009 Marine 
Environment Protection Committee (MEPC 59), and we expect that the 
amendment will be adopted in March 2010, at MEPC 60. If this amendment 
is not adopted in a timely manner by IMO, we intend to take 
supplemental action to control emissions from vessels that affect U.S. 
air quality.
    EPA is in this notice finalizing fuel sulfur limits under section 
211(c) of the Clean Air Act that match the limits that apply under 
Annex VI in ECAs. The adoption of such standards will: (1) Allow for 
the production and sale of up to 1,000 ppm sulfur fuel for use in 
Category 3 marine vessels; and (2) forbid the production and sale of 
fuel oil above 1,000 ppm sulfur for use in the waters within an ECA and 
ECA associated areas (per 40 CFR 1043.20) except as allowed under 40 
CFR Part 1043, as described below.89 90
---------------------------------------------------------------------------

    \89\ Per 40 CFR 1043.20, ``ECA associated areas'' are U.S. 
internal waters that are navigable from the ECA. This term does not 
include internal waters that are shoreward of ocean waters that are 
not part of an emission control area. Though the outer limits of the 
sulfur limitation are the same as for the proposed ECA, the sulfur 
limitation in this final rule is not dependent on adoption of the 
ECA.
    \90\ For the purpose of the discussion in this section with 
regard to the CAA fuel standards in 40 CFR 80, ``Category 3 vessel'' 
refers to a commercial vessel with a Category 3 propulsion engine; 
``Category 2 vessel'' refers to a commercial or recreational vessel 
with a Category 2 propulsion engine; and ``Category 1 vessel'' 
refers to a commercial or recreational vessel with only Category 1 
or smaller engines. The fuel provisions being finalized today apply 
to all of the engines on a given vessel.
---------------------------------------------------------------------------

    There are a few exceptions that will allow for the use of fuel 
greater than 1,000 ppm sulfur in an ECA. First, as an alternative to 
using lower sulfur fuel, Annex VI allows for the use of approaches, 
such as exhaust gas scrubbers, that can achieve equivalent emission 
reductions even when the fuel is operating on high sulfur residual 
fuel. In the event that a vessel is using an alternative device, 
procedure, or compliance method, provided they achieve equivalent 
emissions reductions, fuel oil above 1,000 ppm sulfur may be purchased 
in the U.S. for use in an ECA and ECA associated areas. This is 
discussed in more detail in Section V of this preamble. As discussed 
further in Section VI.B.5, existing steamships operating exclusively on 
the Great Lakes are not subject to the 1,000 ppm sulfur requirement, 
and vessels that have been granted temporary relief on the basis of 
serious economic hardship are also not subject to the standard. These 
three exceptions are all set out in the regulations at 40 CFR Part 
1043.
    The majority of vessels with a Category 3 propulsion engine operate 
on high-sulfur, heavy fuel oil (HFO) (also known as residual, or 
bunker, fuel). Due to their use of heavy fuel, these marine diesel 
engines have very high PM and SO2 emissions. Sulfur in the 
fuel is emitted from engines primarily as SO2; however a 
small fraction is emitted as sulfur trioxide (SO3) which 
immediately forms sulfate and is emitted as PM by the engine. In 
addition, much of the SO2 emitted from the engine reacts in 
the atmosphere to form secondary PM. Reductions in residual fuel sulfur 
levels will lead to significant sulfate PM and SO2 emission 
reductions which will provide dramatic environmental and public health 
benefits. However, in most cases, fuels that meet the long-term fuel 
sulfur standards will likely be distillate fuels, rather than HFO. In 
addition to reductions in sulfate PM, switching from HFO to distillate 
fuel may reduce black carbon emissions, fine particle counts, organic 
carbon, and metallic ash particles. Further information on these 
impacts as well as a discussion of the technological feasibility of 
fuel switching, or using alternative approaches, is discussed in 
Section V.
    HFO sold for use by these vessels is currently not subject to any 
EPA sulfur limits (as it is not regulated by our current sulfur 
program) and generally has very high levels of sulfur. The finalized 
modifications to our existing diesel fuel program prohibit the 
production and sale of this fuel for use in an ECA associated area, and 
fuel sold for use in such areas will not be allowed to exceed a sulfur 
content of 1,000 ppm, except as allowed under 40 CFR Part 1043. In a 
complementary fashion, the amendment to MARPOL Annex VI designating the 
North American ECA will ensure that fuel used in an ECA, including fuel 
purchased in another country but used within the North American ECA, 
also either meets a 1,000 ppm sulfur limit or meets required emissions 
limits through the use of alternative devices, procedures, or 
compliance methods, provided they achieve equivalent emissions 
reductions (equivalents). Under our finalized regulations, fuel sold 
for use by Category 3 vessels without equivalents in an ECA and ECA 
associated areas will be allowed to have a sulfur content as high as 
this 1,000 ppm sulfur limit (except as otherwise allowed under 40 CFR 
Part 1043), while fuel sold for use in Category 1 (marine diesel 
engines up to 7 liters per cylinder displacement) and Category 2 
(marine diesel engines from 7 to 30 liters per cylinder) vessels will 
continue to be subject to the nonroad, locomotive, and marine \91\ 
(NRLM) diesel fuel sulfur requirements. In the event that the North 
American ECA is not approved in a timely manner, we will revisit the 
standards being finalized here in that context.
---------------------------------------------------------------------------

    \91\ For the purposes of this final rule (and the final 40 CFR 
Part 80 regulations), the term ``marine'' as it is used here refers 
to Category 1 and 2 marine diesel engines unless otherwise stated.
---------------------------------------------------------------------------

B. Diesel Fuel Standards Prior to This Final Rule

    The Nonroad Diesel program (finalized on June 29, 2004 (69 FR 
38958)) reduces the sulfur content of NRLM diesel fuel from 
uncontrolled levels down to a maximum sulfur level of 15 ppm. Refiners 
and importers are

[[Page 22917]]

required to produce or import all NRLM diesel fuel at a sulfur level of 
15 ppm or less by June 1, 2014. The main compliance mechanism of the 
diesel sulfur program is the Designate and Track (D&T) provisions, 
which allows NRLM diesel fuel to be distinguished from similar products 
(e.g., heating oil) and yet provides a means for diesel fuel to be 
fungibly transported through the fuel production and distribution 
system. Under D&T, refiners and importers are required to designate the 
type and sulfur level of each batch of fuel produced or imported. As 
this fuel is transferred through the distribution system, product 
transfer documents (PTDs) must be exchanged each time the batch changes 
custody. Along with PTDs, other required elements of D&T include 
quarterly and annual reporting, fuel pump labeling, and recordkeeping.
    The Nonroad Diesel program also contains certain provisions to ease 
refiners' transition to the lower sulfur standards and to enable the 
efficient distribution of all diesel fuels. These provisions, as 
discussed more below in Section IV.B.2, include special provisions for 
qualified small refiners, transmix processors, and entities in the fuel 
distribution system.
(1) Scope of the Nonroad Diesel Fuel Program
    The sulfur standards finalized by the Nonroad Diesel rule apply to 
all the diesel fuel that is produced and sold for use in NRLM diesel 
applications (all fuel used in NRLM diesel engines, except for fuels 
heavier than a No. 2 distillate used in Category 2 and 3 marine engines 
\92\ and any fuel that is exempted for national security or other 
reasons). While the Nonroad Diesel rule did not set sulfur standards 
for other distillate fuels (such as jet fuel, heating oil, kerosene, 
and No. 4 fuel oil), it did implement provisions to prevent the 
inappropriate use of heating oil and other higher sulfur distillate 
fuels in NRLM and locomotive and marine (LM) diesel applications. Sale 
of distillate fuels for use in nonroad, locomotive, or marine diesel 
engines will generally be prohibited unless the fuel meets the diesel 
fuel sulfur standards of 40 CFR Part 80.\93\ The regulated fuels under 
our diesel fuel sulfur program include those fuels listed in the 
regulations at 40 CFR 80.2(qqq).
---------------------------------------------------------------------------

    \92\ Category 3 marine engines frequently are designed to use 
residual fuels and include special fuel handling equipment to use 
the residual fuel.
    \93\ For the purposes of the diesel sulfur program, the term 
heating oil basically refers to any No. 1 or No. 2 distillate other 
than jet fuel, kerosene, and diesel fuel used in highway or NRLM 
applications. For example, heating oil includes fuel which is 
suitable for use in furnaces and similar applications and is 
commonly or commercially known or sold as heating oil, fuel oil, or 
other similar trade names.
---------------------------------------------------------------------------

    The sulfur standards do not apply to: (1) No. 1 distillate fuel 
used to power aircraft; (2) Number 4, 5, and 6 fuels (e.g., residual 
fuels or residual fuel blends, intermediate fuel oil (IFO) Heavy Fuel 
Oil Grades 30 and higher), used for stationary source purposes; (3) any 
distillate fuel with a T-90 distillation point greater than 700 [deg]F, 
when used in Category 2 or 3 marine diesel engines (this includes 
Number 4, 5, and 6 fuels (e.g., IFO Heavy Fuel Oil Grades 30 and 
higher), including fuels meeting the American Society for Testing and 
Materials (ASTM) specifications DMB, DMC, and RMA-10 and heavier); and 
(4) any fuel for which a national security or research and development 
exemption has been approved or fuel that is exported from the U.S. The 
criterion that any distillate fuel with a T-90 greater than 700 [deg]F 
will not be subject to the sulfur standards when used in Category 2 or 
3 marine engines was intended to exclude fuels heavier than No. 2 
distillate, including blends containing residual fuel. In addition, 
residual fuel was not subject to the sulfur standards.
    While many marine diesel engines use No. 2 distillate, ASTM 
specifications for marine fuels identify four kinds of marine 
distillate fuels: DMX, DMA, DMB, and DMC. DMX is a special light 
distillate intended mainly for use in emergency engines. DMA (also 
called marine gas oil, or ``MGO'') is a general purpose marine 
distillate that contains no trace of residual fuel. These fuels can be 
used in all marine diesel engines but are primarily used by Category 1 
engines. DMX and DMA fuels intended for use in any marine diesel engine 
are subject to EPA's fuel sulfur standards.
    DMB, also called marine diesel oil, is not typically used with 
Category 1 engines, but is used for Category 2 and 3 engines. DMB is 
allowed to have a trace of residual fuel, which can be high in sulfur. 
This contamination with residual fuel usually occurs due to the 
distribution process, when distillate is brought on board a vessel via 
a barge that has previously contained residual fuel, or using the same 
supply lines as are used for residual fuel. DMB is produced when fuels 
such as DMA are brought on board the vessel in this manner. EPA's fuel 
sulfur standards do apply to the distillate that is used to produce the 
DMB, for example the DMA distillate, up to the point that it becomes 
DMB. However, DMB itself is not subject to the EPA fuel sulfur 
standards when it is used in Category 2 or 3 engines.
    DMC is a grade of marine fuel that may contain some residual fuel 
and is often a residual fuel blend. This fuel is similar to No. 4 
diesel, and can be used in Category 2 and Category 3 marine diesel 
engines. DMC is produced by blending a distillate fuel with residual 
fuel, for example at a location downstream in the distribution system. 
EPA's fuel sulfur standards apply to the distillate that is used to 
produce the DMC, up to the point that it is blended with the residual 
fuel to produce DMC. However, DMC itself is not subject to the EPA fuel 
sulfur standards when it is used in Category 2 or 3 marine engines.
    Residual fuel was not previously covered by the sulfur content 
standards as it is not a distillate fuel. Residual fuel is typically 
designated by the prefix RM (e.g., RMA, RMB, etc.). These fuels are 
also identified by their nominal viscosity (e.g., RMA10, RMG35, etc.). 
Most residual fuels require treatment by an onboard purifier-clarifier 
centrifuge system, although RMA and RMB do not require this.
    The distillation criterion adopted by EPA, T-90 greater than 700 
[deg]F, was designed to identify those fuels that are not subject to 
the sulfur standards when used in Category 2 or 3 marine diesel 
engines. It is intended to exclude DMB, DMC, and other heavy 
distillates or blends, when used in Category 2 or 3 marine diesel 
engines. We are not amending this provision in this action. However, 
under this final rule, all of these fuels, and any other diesel fuels 
or fuel oils, will be subject to a 1,000 ppm sulfur limit if they are 
produced or sold for use in an ECA, except as otherwise allowed under 
40 CFR Part 1043.
(2) Flexibilities
    Compliance flexibilities were provided in the nonroad diesel sulfur 
regulations for qualified small refiners (69 FR 39047; Section IV.B.1) 
and for transmix processors (69 FR 39045; Section IV.A.3.d). Small 
refiners were provided, among other flexibility options, additional 
time for compliance with the 15 ppm NRLM standard, until June 1, 2014. 
Transmix processors, who distill off-specification interface mixtures 
of petroleum products from pipeline systems into gasoline and 
distillate fuel, have a simple refinery configuration that does not 
make it cost-effective for them to install and operate a hydrotreater 
to reduce distillate fuel sulfur content. As a result, transmix 
processors were provided with the flexibility to continue to produce 
all of their NRLM diesel fuel to meet the 500 ppm sulfur standard until 
June 1, 2014, and all of their LM diesel fuel to meet a 500 ppm sulfur 
limit indefinitely. The

[[Page 22918]]

latter flexibility also allows for an outlet for off-spec fuel that may 
be produced in the distribution system.
    The D&T provisions, first established to distinguish highway from 
nonroad 500 ppm fuel, were thus continued beyond 2014 to ensure that 
500 ppm NRLM could be distinguished from similar fuel (e.g., heating 
oil that has a sulfur level of 500 ppm). In 2014 and beyond, D&T is 
essential to ensure that heating oil is not being inappropriately 
shifted downstream of the refiner into the NRLM and LM diesel fuel 
markets, circumventing the NRLM standards (as mentioned above in 
Section IV.B.1). Provisions in the Nonroad Diesel rule to ensure that 
heating oil is not used in NRLM applications include the use of a fuel 
marker to distinguish heating oil from NRLM and LM diesel fuel, dye 
solvent yellow 124, which is added to heating oil at the terminal 
level. The D&T provisions also provided parties in the diesel fuel 
industry with inherent flexibility. D&T maximizes the efficiency of the 
distribution system by allowing for fungible distribution of physically 
similar products, and minimizing the need for product segregation. 
Under D&T, diesel fuel with similar sulfur levels can be fungibly 
shipped up to the point of distribution from a terminal (where off-
highway diesel fuels must be dyed red, pursuant to Internal Revenue 
Service (IRS) requirements, to indicate its tax exempt status).
(3) Northeast/Mid-Atlantic Area
    In the Northeast, heating oil is distributed in significant 
quantities. Discussions with terminal operators in the Northeast (and 
other representatives of heating oil users and distributors) during the 
development of the Nonroad Diesel rule revealed concerns that the 
heating oil marker requirement would represent a significant burden on 
terminal operators and users of heating oil given the large volume of 
heating oil used in the Northeast. These parties suggested that if EPA 
prohibited the sale and use of diesel fuel produced by those utilizing 
the flexibilities described above, this area could be exempted from the 
marker requirement.
    Thus, the Northeast/Mid-Atlantic (NE/MA) area was developed (69 FR 
39063, Section IV.D.1.b.ii; see also 40 CFR 80.510(g) for the specific 
States and counties that comprise the NE/MA area). As there would be no 
way to distinguish heating oil from 500 ppm NRLM and 500 ppm LM diesel 
fuel in 2014 and beyond without the fuel marker, these fuel types are 
not allowed to be produced/imported, distributed and/or sold in the NE/
MA area during this time period (500 ppm NRLM diesel fuel may not be 
produced/imported, distributed and/or sold in the NE/MA area after 
2012).
    Similarly, high sulfur NRLM (HSNRLM) produced through the use of 
credits is not allowed in Alaska. However, EPA-approved small refiners 
in Alaska may produce HSNRLM diesel fuel. To receive this approval, a 
small refiner must provide EPA with a compliance plan showing how their 
HSNRLM diesel fuel will be segregated from all other distillate fuels 
through its distribution to end-users.
(4) Nonroad Diesel Program Transition Schedule
    The transition to lower sulfur diesel fuel for NRLM equipment is 
depicted in Figure VI-1 below. The transition for urban (areas served 
by the Federal Aid Highway System) and rural Alaska are shown below in 
Figure VI-2.
BILLING CODE 6560-50-P

[[Page 22919]]

[GRAPHIC] [TIFF OMITTED] TR30AP10.101


[[Page 22920]]


[GRAPHIC] [TIFF OMITTED] TR30AP10.102

BILLING CODE 6560-50-C

[[Page 22921]]

C. Applicability

    Assuming adoption of an amendment to MARPOL Annex VI establishing a 
U.S. ECA, pursuant to Annex VI, the fuel used in that ECA cannot exceed 
1,000 ppm sulfur beginning January 1, 2015.\94\ As mentioned above, we 
are incorporating a similar 1,000 ppm sulfur limit into our CAA 
regulations at 40 CFR Part 80 through both a prohibition on the 
production and sale of fuel oil above 1,000 ppm sulfur for use in any 
marine vessels (Categories 1, 2, and 3) in an ECA and ECA associated 
areas except as allowed under 40 CFR Part 1043, and an allowance for 
the production and use of 1,000 ppm sulfur fuel to be used in Category 
3 marine vessels. Fuel produced and sold for use in any engine on 
Category 1 and Category 2 marine vessels will continue to be subject to 
the existing diesel sulfur requirements which are more stringent than 
those being finalized in this action for Category 3 marine vessels. We 
requested comment on whether or not Category 1 and 2 engines installed 
on Category 3 marine vessels should be allowed to use 1,000 ppm sulfur 
fuel. To reduce burden that could potentially be caused by requiring 
that these engines burn 15 ppm diesel fuel (which could result in a 
vessel needing to carry three different types of fuel onboard), we are 
finalizing that Category 1 and 2 auxiliary engines installed on 
Category 3 marine vessels will be allowed to use 1,000 ppm fuel.
---------------------------------------------------------------------------

    \94\ Annex VI, Regulation 14 (located in the rulemaking docket, 
EPA-HQ-OAR-2007-0121-0107).
---------------------------------------------------------------------------

    Discussions with stakeholders in the diesel fuel production and 
distribution industry have indicated that they anticipate that most (if 
not all) fuel oil that could meet a 1,000 ppm sulfur standard would be 
considered a distillate or diesel fuel, because at a 1,000 ppm sulfur 
level it is nearly impossible for fuel to have a T-90 distillation 
point at or above 700 [deg]F (i.e., be considered residual fuel). As 
discussed in Section IV.B.1, fuel with a T-90 less than 700 [deg]F will 
be required to meet the standards of our existing diesel sulfur program 
which, in 2014 and beyond, is 15 ppm. We believe that because of the 
limits on the sulfur content of fuel used in ECAs, the existing diesel 
fuel sulfur program should be revised to allow for the production, 
distribution, purchase, and use of 1,000 ppm sulfur fuel oil for use in 
Category 3 marine vessels. Therefore, we are finalizing a new 1,000 ppm 
sulfur category for fuel oil produced and purchased for use in Category 
3 marine vessels (called ``ECA marine fuel''). This finalized fuel 
sulfur requirement will largely supplement the existing diesel fuel 
sulfur requirements and will harmonize EPA's diesel sulfur program with 
the requirements of Annex VI. Under this final action, owners of 
Category 3 marine vessels will be able to purchase and use 1,000 ppm 
sulfur ECA marine fuel, which will allow those vessels to comply with 
the sulfur limits in any ECA worldwide and in ECA associated areas.

D. Fuel Sulfur Standards

    As discussed above in Section IV.C, in addition to the prohibition 
on the sale of fuel greater than 1,000 ppm sulfur for use in marine 
vessels (except as allowed under 40 CFR Part 1043) operating within an 
ECA and ECA associated areas, we are also finalizing the allowance of 
the production, distribution, and sale of 1,000 ppm sulfur ECA marine 
fuel, which we discuss more in this section.
    Prior to this action, and pending the establishment of the North 
American ECA, the kind of fuel produced and sold for use by Category 3 
marine vessels had uncontrolled sulfur levels as it was not subject to 
the NRLM sulfur limits. This was reflected in the regulations by 
exempting these kinds of fuel from the definition of NRLM diesel fuel 
and the NRLM sulfur limits (40 CFR 80.2(nnn)). The combined effect of 
Annex VI and these regulations is to require that any fuel sold for use 
in a Category 3 marine vessel operating in an ECA be 1,000 ppm sulfur 
or lower, except as allowed under 40 CFR Part 1043. Fuel oil used or 
sold for use in Category 3 marine vessels in an ECA and ECA associated 
areas will therefore go from uncontrolled, high sulfur levels to no 
higher than 1,000 ppm sulfur (except as otherwise allowed under 40 CFR 
Part 1043). Under Annex VI, fuel with sulfur levels greater than 1,000 
ppm cannot be used in a marine vessel without sulfur abatement 
technology operating in an ECA, no matter where the fuel is purchased. 
Consistent with this, the finalized section 211(c) controls will 
prohibit the production and sale of any fuel for use in an ECA and ECA 
associated areas that is above 1,000 ppm sulfur, except as allowed 
under 40 CFR Part 1043.
    The requirements for 1,000 ppm sulfur fuel oil will apply to the 
North Sea, the Baltic Sea, and any other ECAs established around the 
world, so this fuel will be produced by refiners in other countries. 
Under EPA's NRLM program prior to this final rule, 1,000 ppm sulfur 
fuel would have been subject to the 15 ppm NRLM sulfur limit in 2014 
and later. If EPA were to require that fuel produced, distributed, and 
sold for use for Category 3 vessels in the North American ECA and ECA 
associated areas meet the 15 ppm sulfur standard after 2014, we believe 
that Category 3 vessel owners would simply purchase 1,000 ppm sulfur 
fuel elsewhere to be used here in the North American ECA. This could be 
an extremely inefficient process for ship owners. It would also mean a 
loss of sales for U.S. refiners of fuel that these Category 3 vessel 
owners purchase. These impacts would add to the costs and burdens of 
the program with no corresponding environmental benefit. Therefore, we 
believe that it is reasonable to allow U.S. refiners and importers to 
produce 1,000 ppm sulfur fuel for use by Category 3 vessels. Thus, we 
are finalizing a new fuel sulfur standard of 1,000 ppm for fuel 
produced, distributed, and sold for use in Category 3 marine vessels. 
While we expect use of this fuel to be concentrated in the area of the 
North American ECA and ECA associated areas (and any other ECA), we are 
allowing its use by Category 3 marine vessels in all locations, to 
encourage its general use. After 2014, no fuel above 15 ppm can be used 
in Category 1 or Category 2 vessels.
    We note that the combination of the Annex VI ECA provisions and the 
modifications proposed in this action for the diesel sulfur program 
will achieve very significant benefits compared to the existing 
program. The production and use of 1,000 ppm ECA marine fuel, as well 
as 15 ppm NRLM diesel fuel, will replace much higher sulfur fuel usage, 
and there is no additional benefit to be gained by requiring the sale 
of 15 ppm sulfur diesel fuel for use by Category 3 vessels as a 
practical matter because we believe Category 3 vessels would simply 
purchase 1,000 ppm sulfur fuel elsewhere. In order to incorporate these 
modifications into our existing program under the Clean Air Act, we 
needed to create a new fuel designation for allowable fuel under our 
program.
(1) Amendments to the Diesel Fuel Sulfur Program
    We are prohibiting the production, distribution, and sale or offer 
for sale of any fuel for use in any marine diesel vessels (Categories 
1, 2, and 3) operating in the North American ECA and ECA associated 
areas that is greater than 1,000 ppm sulfur, except as otherwise 
allowed under 40 CFR Part 1043. We are also finalizing a sulfur 
standard of 1,000 ppm for fuel produced, distributed, and sold or 
offered for sale for use in Category 3 marine vessels operating in

[[Page 22922]]

an ECA and ECA associated areas. To simplify the existing diesel fuel 
sulfur program, we are also eliminating the 500 ppm LM diesel fuel 
standard once the 1,000 ppm ECA marine fuel standard becomes effective. 
Under the diesel sulfur program prior to this final rule, 500 ppm LM 
diesel fuel could be produced by transmix processors indefinitely, and 
could be used by locomotives and marine vessels that do not require 15 
ppm. The original intent of allowing for this fuel was to serve as an 
outlet for interface and downgraded diesel fuel post-2014 that would 
otherwise not meet the 15 ppm sulfur standard. However, we believe that 
the 1,000 ppm sulfur ECA marine fuel can now serve as this outlet. We 
believe that transmix generated near the coasts would have ready access 
to marine applications, and transmix generated in the mid-continent 
could be shipped via rail or fuel barge to markets on the coasts.
    Elimination of the 500 ppm LM diesel fuel standard will simplify 
the diesel sulfur program such that sulfur can serve as the 
distinguishing factor for fuels available for use after 2014 (the 
designated products under the diesel fuel program will thus be: 15 ppm 
motor vehicle, nonroad, locomotive, and marine (MVNRLM) diesel fuel, 
heating oil, and 1,000 ppm ECA marine fuel). With this approach, 
beginning in 2014, only 15 ppm NRLM diesel fuel can be used in 
locomotive and Category 1/Category 2 marine diesel applications (and 
1,000 ppm ECA marine fuel could be used in Category 3 marine vessels). 
Further, this will help to streamline the D&T program as there will no 
longer be a need for a fuel marker to distinguish 500 ppm LM diesel 
fuel from heating oil. Below, we discuss the aspects of D&T that we are 
changing, which we believe will greatly simplify the diesel sulfur 
program.
(a) Compliance and Implementation
(i) Northeast/Mid-Atlantic Area and the Fuel Marker
    With the elimination of the 500 ppm LM designation in 2014, parties 
in the fuel production and distribution industry will still be required 
to register and designate their products and adhere to PTD, fuel pump 
labeling, and recordkeeping requirements. But we believe that the 
tracking portion of D&T can be simplified. Annual reporting was 
required under Sec.  80.601 for D&T through June 30, 2015 (the final 
annual report is due August 31, 2015). The final reporting period was 
set to ensure that heating oil was not being inappropriately shifted 
into the 500 ppm LM diesel fuel pool. However, with the elimination of 
this fuel designation, the final annual reporting period will instead 
be July 1, 2013 through May 31, 2014, with the report due to EPA on 
August 31, 2014.
    As stated in the preamble to the proposed rule, we believe that the 
elimination of the 500 ppm LM diesel fuel designation will also, 
beginning June 1, 2014, negate the need for the heating oil marker and 
the NE/MA area. After 2014, the heating oil marker requirement in the 
diesel sulfur program prior to this final rule was for the sole purpose 
of distinguishing heating oil from 500 ppm LM diesel fuel, to prevent 
heating oil from swelling the 500 ppm LM diesel fuel pool. Also, as 
there is no marker requirement for heating oil in the NE/MA area, the 
diesel sulfur program did not allow for 500 ppm LM diesel fuel to be 
produced, distributed, or purchased for use in the NE/MA area after 
2012. As also noted in the proposed rule, without 500 ppm LM diesel 
fuel there is no need for the heating oil marker; fuel designations and 
sulfur level could serve as the distinguishing factor between the 
available fuels (15 ppm MVNRLM diesel fuel, 1,000 ppm ECA marine fuel, 
and heating oil). Further, there is no need for the NE/MA area without 
the heating oil marker. Thus, we are finalizing to remove the NE/MA 
area designation and the heating oil marker requirement.
(ii) PTDs and Labeling
    We are finalizing new PTD language for the 1,000 ppm ECA marine 
fuel designation at regulation Sec.  80.590. As stated in regulation 
Sec.  80.590(a)(7)(vii), we are adding the following statement to PTDs 
accompanying 1,000 ppm sulfur ECA marine fuel: ``1,000 ppm sulfur 
(maximum) ECA Marine Fuel. For use in Category 3 marine vessels only. 
Not for use in engines not installed on Category 3 marine vessels.''
    Appendix V of Annex VI also includes language that is required on 
bunker delivery notes. Compliance requirements of this action, such as 
PTDs, are not intended to supplant or replace requirements of Annex VI 
(and we encourage regulated entities to consult Annex VI to ensure that 
they are fully aware of all requirements that must be met in addition 
to EPA's requirements). However, if a party's bunker delivery note also 
contains the information required under our regulations for PTDs, we 
will consider the bunker delivery note to also suffice as a PTD.
    We are also finalizing new pump labeling language for the 1,000 ppm 
sulfur ECA marine fuel designation at regulation Sec.  80.574. Diesel 
fuel pump labels required under the existing diesel sulfur regulations 
must be prominently displayed in the immediate area of each pump stand 
from which diesel fuel is offered for sale or dispensing. However, we 
understand that there may be cases where it is not feasible to affix a 
label to a fuel pump stand due to space constraints (such as diesel 
fuel pumps at marinas) or where there is no pump stand, thus the 
current regulations allow for alternative labeling with EPA approval. 
Previously approved alternative labeling has included the use of 
permanent placards in the immediate vicinity of the fuel pump; and we 
will also allow other reasonable alternatives to labeling for 
situations where pump labeling may not be feasible. As stated in 
regulation Sec.  80.574, we are replacing the 500 ppm LM diesel fuel 
pump label language with the following fuel pump label language for 
1,000 ppm sulfur ECA marine fuel: ``1,000 ppm SULFUR ECA MARINE FUEL 
(1,000 ppm Sulfur Maximum). For use in Category 3 marine vessels only. 
Warning--Federal law prohibits use in any engine that is not installed 
on a Category 3 marine vessel; use of fuel oil with a sulfur content 
greater than 1,000 ppm in an ECA is prohibited, except as allowed by 40 
CFR Part 1043.''
    Under this program, we are also eliminating MVNRLM diesel fuel 
labeling requirements from EPA's regulations. In 2014 and beyond, EPA 
will not require ``visible evidence'' of red dye in off-road fuels; 
however this requirement still exists in IRS's taxation regulations to 
denote that off-road fuels are untaxed. EPA's required label for 15 ppm 
NRLM diesel fuel (instead of one 15 ppm MVNRLM diesel fuel label) is 
mainly to denote that 15 ppm NRLM will be dyed red, while 15 ppm MV 
diesel fuel will not. Further, after October 1, 2014, all MVNRLM diesel 
fuel available for purchase and/or distribution will be 15 ppm. We 
believe that it is not appropriate for EPA to retain a labeling 
requirement for MVNRLM diesel fuel given the fact that the red dye 
provision is no longer EPA's requirement. Please note, however, that 
marketers and wholesale purchaser-consumers are still free to continue 
to label their pump stands to help with consumer awareness. Labeling 
will continue to be required for heating oil and, as proposed above, 
for 1,000 ppm sulfur ECA marine fuel.
    Additionally, EPA will consult with IRS regarding handling labels 
in IRS's regulations at Title 26 of the Code of Federal Regulations.

[[Page 22923]]

(b) Timing of the Standard
    Currently, all refiners and importers are required to produce all 
of their NRLM diesel fuel to meet the 15 ppm standard beginning June 1, 
2014. To allow transition time for the distribution system, terminals 
are allowed until August 1, 2014 to begin dispensing 15 ppm NRLM diesel 
fuel, retailers and wholesale purchaser-consumers are allowed until 
October 1, 2014, and end-users are allowed until December 1, 2014. To 
be consistent with the existing diesel program, we are allowing 
refiners to begin producing 1,000 ppm sulfur ECA marine fuel beginning 
June 1, 2014, and downstream parties will follow the current NRLM 
transition schedule (August, October, and December). We believe that 
following the same transition schedule as the existing diesel sulfur 
program would best facilitate the availability of 1,000 ppm ECA marine 
fuel for purchase and use by the Annex VI January 1, 2015 date.
(2) Proposed Alternative Options
    We identified two potential alternatives in the proposed rule to 
the changes to the existing diesel fuel sulfur program discussed above: 
The creation of an expanded NE/MA area and the retention of the 500 ppm 
LM diesel fuel designation. We requested comment on these alternative 
options, as well as any additional alternative options. We received a 
comment stating that the 500 ppm sulfur designation should be retained 
because, the commenter stated, Category 3 engines can use both 500 ppm 
and 1,000 ppm sulfur fuel. Another commenter who supported the 
elimination of this fuel category noted that if it is determined that 
the 500 ppm LM designation is necessary for the locomotive industry, it 
would support the concept of an expanded NE/MA area as a secondary 
option.

E. Technical Amendments to the Current Diesel Fuel Sulfur Program 
Regulations

    Following publication of the technical amendments to the Highway 
and Nonroad Diesel Regulations (71 FR 25706, May 1, 2006), we 
discovered additional errors and clarifications within the diesel 
regulations at 40 CFR Part 80, Subpart I that we are addressing in this 
action. These items are merely typographical/printing error and grammar 
corrections. A list of the changes that we are making to Subpart I is 
below in Table IV-1.

 Table IV-1--Technical Amendments to the Diesel Fuel Sulfur Regulations
------------------------------------------------------------------------
                  Section                       Description of change
------------------------------------------------------------------------
80.525(a)-(d).............................  Removal of the term ``motor
                                             vehicle'' from this
                                             section.
80.551(f).................................  Correction of printing
                                             error.
80.561....................................  Correction of typographical
                                             error in title.
80.570(a) and (b).........................  Amended to correct date
                                             (``November 30, 2010''
                                             instead of ``September 30,
                                             2010''.
80.593....................................  Correction of typographical
                                             error in introductory text.
80.599(e)(4)..............................  Correction of printing error
                                             in definition of terms
                                             ``1MV15I'' and
                                             ``NPMV15I''.
80.600(a)(12).............................  Amended to correct date
                                             (``May 31, 2014'' instead
                                             of ``June 1, 2014'').
80.600(i).................................  Amended to remove duplicate
                                             sentence.
80.601(b)(3)(x)...........................  Amended to correct dates
                                             (``August 31'' instead of
                                             ``August 1'').
80.612(b).................................  Amended to fix typographical
                                             error in paragraph.
------------------------------------------------------------------------

V. Emission Control Areas for U.S. Coasts

    The finalized Clean Air Act standards described above are part of a 
coordinated strategy for ensuring that all ships that affect U.S. air 
quality will be required to meet stringent NOX and fuel 
sulfur requirements. Another component of this strategy consists of 
pursuing ECA designation for U.S. and Canadian coasts in accordance 
with Annex VI of MARPOL. ECA designation will ensure that all ships, 
foreign-flagged and domestic, are required to meet stringent 
NOX and fuel sulfur requirements while operating within 200 
nautical miles of most U.S. coasts. This section describes what an ECA 
is, the process for obtaining ECA designation at the International 
Maritime Organization, and summarizes the U.S. and Canadian proposal 
for an amendment to MARPOL Annex VI designating most U.S. and Canadian 
coasts as an ECA (referred to as the ``North American ECA''), submitted 
to IMO on March 27, 2009.\95\
---------------------------------------------------------------------------

    \95\ Proposal to Designate an Emission Control Area for Nitrogen 
Oxides, Sulphur Oxides and Particulate Matter, Submitted by the 
United States and Canada. IMO Document MEPC59/6/5, 27 March 2009. A 
copy of this document can be found at http://www.epa.gov/otaq/regs/
nonroad/marine/ci/mepc-59-eca-proposal.pdf.
---------------------------------------------------------------------------

    This section also discusses technological approaches to comply with 
the fuel standards. These approaches include switching to lower sulfur 
fuel and equivalents, such as exhaust gas cleaning units. We also 
discuss how emissions from foreign-flagged ships may be covered should 
approval of the U.S. ECA be delayed.

A. What Is an ECA?

(1) What Emissions Standards Apply in an ECA?
    MARPOL Annex VI contains international standards to control air 
emissions from ships. The NOX and SOX/PM programs 
each contain two sets of standards. The global standards for the sulfur 
content of fuel and NOX emissions from engines apply to 
ships at all times. In recognition that some areas may require further 
control, Annex VI also contains more stringent NOX and 
SOX/PM geographic-based standards that apply to ships 
operating in designated Emission Control Areas. Once a North American 
ECA is designated through amendment to MARPOL Annex VI, the 
requirements will be enforceable for most vessels through the Act to 
Prevent Pollution from Ships (see Section VI.B).
    The current global fuel sulfur (S) limit is 45,000 ppm \96\ S and 
will tighten to 35,000 ppm S in 2012. Depending on a 2018 fuel 
availability review, the MARPOL Annex VI global fuel sulfur limit will 
be further reduced to 5,000 ppm S as early as 2020. In contrast, ships 
operating in designated ECAs are subject to a fuel sulfur limit of 
15,000 ppm S. The ECA limit is reduced to 10,000 ppm S in July 2010 and 
1,000 ppm S in 2015. In addition, Tier 3 NOX standards will 
apply to new engines operating in ECAs beginning in 2016. These Tier 3 
NOX standards represent an 80 percent reduction in 
NOX beyond current Tier 1 standards and are anticipated to 
require the use of aftertreatment technology such as SCR. We are 
adopting similar Tier 3 standards as part of our Clean Air Act program 
(see Section III).
---------------------------------------------------------------------------

    \96\ Note that MARPOL Annex VI expresses these standards in 
units of % (m/m) sulfur. 10,000 ppm S equals 1 percent S.
---------------------------------------------------------------------------

    There are currently two ECAs in effect today, exclusively 
controlling SOX; thus they are called Sulfur Emission 
Control Areas, or SECAs. The first SECA was designated to control the 
emissions of SOX in the Baltic Sea area and entered into 
force in May 2005. The second SECA was designated to control the 
emissions of SOX in the North Sea area and entered into 
force in November 2006.

[[Page 22924]]

(2) What Is the Process for Obtaining ECA Designation?
    A proposal to amend Annex VI to designate an ECA can be submitted 
by a party to Annex VI. A party is a country that ratified Annex VI. 
The proposal for amendment must be approved by the Parties to MARPOL 
Annex VI; this would take place at a meeting of the Marine Environment 
Protection Committee (MEPC). The U.S. deposited its Instrument of 
Ratification with the IMO on October 8, 2008. Annex VI entered into 
force for the U.S. on January 8, 2009, making the U.S. eligible to 
apply for an ECA.
    The criteria and procedures for ECA designation are set out in 
Appendix III to MARPOL Annex VI. A proposal to designate an ECA must 
demonstrate a need to prevent, reduce, and control emissions of 
SOX, PM, and/or NOX from ships operating in that 
area. The specific criteria are summarized below:
     A delineation of the proposed area of application;
     A description of the areas at risk on land and at sea, 
from the impacts of ship emissions;
     An assessment of the contribution of ships to ambient 
concentrations of air pollution or to
     Adverse environmental impacts;
     Relevant information pertaining to the meteorological 
conditions in the proposed area of
     Application to the human populations and environmental 
areas at risk;
     Description of ship traffic in the proposed ECA;
     Description of the control measures taken by the proposing 
Party or Parties;
     Relative costs of reducing emissions from ships compared 
with land-based controls; and
     An assessment of the economic impacts on shipping engaged 
in international trade.
    An amendment to designate an ECA must be adopted by the Parties to 
Annex VI, as an amendment to Annex VI. The proposal to amend Annex VI 
was approved at MEPC 59, and circulated for adoption. The earliest 
possible adoption date is at MEPC 60, which will take place in March 
2010 entering into force as early as August 2012.

B. U.S. Emission Control Area Designation

    EPA worked with the U.S. Coast Guard, State Department, the 
National Oceanic and Atmospheric Administration and other agencies to 
develop the analysis supporting ECA designation for U.S. coasts 
contained in the U.S. and Canadian submittal to IMO. In addition, we 
collaborated with Environment Canada and the California Air Resources 
Board. In developing the ECA proposal, EPA consulted with stakeholders 
including representatives from the shipping industry, ports, master 
mariners, environmental interests and representatives from State and 
local governments. EPA began conducting outreach in advance of this 
year's ECA proposal; in fact we have been engaged with this industry 
for many years with regards to the development of an Emission Control 
Area for the United States. Stakeholders also had the opportunity to 
comment on the strategy we announced in the Advance Notice of Proposed 
Rulemaking (ANPRM) for the Category 3 Marine Diesel Engine Rule, 
published on December 7, 2007. In the ANPRM, EPA outlined an approach 
to regulating emissions from both new and existing vessels using a 
framework that aligns with MARPOL Annex VI, including applying the 
standards for Emission Control Areas along U.S. coasts.
    The proposal for ECA designation that the USG submitted to IMO 
earlier this year is for a combined U.S./Canada ECA submission. This 
approach has several advantages. First, the emission reductions within 
a Canadian ECA will lead to air quality improvements in the U.S. 
Second, a joint ECA helps minimize any competitive issues between U.S. 
and Canadian ports, such as in the Puget Sound area, which could arise 
from ECA standards. Third, IMO encourages a joint submittal where there 
is a common interest in emission reductions on neighboring waters. In 
addition, France has since joined the ECA proposal on behalf of the 
Saint Pierre and Miquelon archipelago.
(1) What Areas Would Be Covered in a North American ECA?
    The area included in the North American ECA submittal to IMO for 
ECA designation generally extends 200 nautical miles from the coastal 
baseline, except where this distance would enter the Exclusive Economic 
Zones (EEZ) of a neighboring country. This area would include the 
Pacific Coast, the Atlantic/Gulf Coast and the Southeastern Hawaiian 
Islands. On the Pacific Coast, the ECA would be bounded in the north 
such that it includes the approaches into Anchorage, Alaska, but not 
the Aleutian Islands or points north. It would continue contiguously to 
the south including the Pacific coasts of Canada and the U.S., with its 
southernmost boundary at the point where California meets the border 
with Mexico. In the Atlantic/Gulf Coast, the ECA would be bounded in 
the west by the border of Texas with Mexico and continue contiguously 
to the east around the peninsula of Florida and north up the Atlantic 
coasts of the U.S. and Canada and would be bounded in the north by the 
60th North parallel. The Southeastern Hawaiian Islands that were 
included in the ECA submittal are Hawaii, Maui, Oahu, Molokai, Niihau, 
Kauai, Lanai, and Kahoolawe.
    Not included in the ECA submittal were the Pacific U.S. 
territories, smaller Hawaiian Islands, the U.S. territories of Puerto 
Rico and the U.S. Virgin Islands, Western Alaska including the Aleutian 
Islands, and the U.S. and Canadian Arctic. The U.S. and Canada did not 
make a determination or imply that these areas suffer no adverse impact 
from shipping. Rather, we concluded that information must be gathered 
to properly assess these areas. If further information supports the 
need for an ECA designation in any of these areas, we would submit a 
future, proposal for ECA designation of these areas.
BILLING CODE 6560-50-P

[[Page 22925]]

[GRAPHIC] [TIFF OMITTED] TR30AP10.103

BILLING CODE 6560-50-C
    We are currently performing the analyses necessary to support an 
ECA designation for Puerto Rico and the U.S. Virgin Islands and will be 
engaging stakeholders as part of that effort. That outreach will 
include neighboring countries, shipping companies, environmental 
organizations, and other stakeholders. Puerto Rico has a population of 
4 million people, sees significant shipping traffic and experiences the 
highest asthma rate in the United States. Addressing the impact of ship 
emissions on Puerto Rico

[[Page 22926]]

and U.S. Virgin Islands is a top priority for the Agency. We plan to 
complete the appropriate analysis and stakeholder outreach regarding an 
ECA designation for these U.S. territories such that the U.S. with any 
interested Caribbean neighbors could make a proposal to the IMO in 
advance of MEPC 61 with the intent to see the ECA adopted at MEPC 62 
(July 2011) and enter into force 28 months later (December 2013). In 
this way, we can be confident that there will be ample time for 
consideration and adoption of such an ECA well in advance of January 1, 
2015 when the 1,000 ppm fuel sulfur standard enters into effect.
    Establishing the ECA boundary for Puerto Rico and the U.S. Virgin 
Islands would require vessels operating in this area to meet Tier 3 
NOX requirements that become effective in 2016. EPA will 
remove the Tier 3 NOX exemption from applying to Puerto Rico 
and the U.S. Virgin Islands through an appropriate rule amendment once 
the Caribbean ECA boundary is established.
(2) What Analyses Were Performed in Support of a North American ECA?
    We performed a comprehensive analysis to estimate the degree of 
human health risk and environmental degradation that is posed by air 
emissions from ships operating in their ports and along our coasts. To 
evaluate the risk to human populations, state-of-the-art assessment 
tools were used to apply widely accepted methods with advanced computer 
modeling techniques. The analyses incorporated detailed ship traffic 
data, the most recent emissions estimates, detailed observed 
meteorological data, current scientific understanding of exhaust plume 
behavior (both physical dispersion and photochemical reaction) and the 
latest epidemiologic databases of health effects attributable to 
pollutant exposure levels to estimate the current impacts of shipping 
on human health and the environment. In addition, sulfate and nitrate 
deposition modeling was performed to assess the impacts of nitrogen 
nutrient loading and acidification on U.S. ecosystems.
    Two contrasting future scenarios were evaluated: One in which ships 
continue to operate with current emissions performance while operating 
in the specified area, and one in which ships comply with ECA 
standards. The analysis demonstrated that ECA designation for U.S. 
coasts could save thousands of lives each year, relieve millions of 
acute respiratory symptoms, and benefit many of the most sensitive 
ecosystems. This analysis is consistent with, and incorporated in, the 
benefits estimates presented in Section VIII.

C. Technological Approaches To Comply With Fuel Standards

    When operating within the ECA, all ships would have to comply with 
the 0.1 percent fuel sulfur limit beginning in 2015 and vessels built 
after December 31, 2015 would have to comply with the Tier 3 
NOX limits described above. This section describes how ships 
would comply with the fuel standards. Approaches for compliance with 
the NOX standards are discussed in Section 3 above.
(1) Fuel Switching
    As discussed above, the MARPOL Annex VI fuel sulfur limit for ships 
operating in an ECA is 15,000 ppm today and reduces to 10,000 ppm in 
July 2010 and further to 1,000 ppm in 2015. We anticipate that the 
1,000 ppm fuel sulfur limit, beginning in 2015, will likely result in 
the use of distillate fuel for operation in ECAs. This would require 
the vessel to switch from a higher sulfur fuel to 1,000 ppm S fuel 
before entering the ECA. The practical implications of fuel switching 
are discussed below.
    Currently, the majority of ocean-going vessels use residual fuel 
(also called HFO or IFO) in their main propulsion engines, as this fuel 
is relatively inexpensive and has a good energy density. This fuel is 
relatively dense (``heavy'') and is created as a refining by-product 
from typical petroleum distillation. Residual fuels typically are 
composed of heavy, residuum hydrocarbons and can contain various 
contaminants such as heavy metals, water and sulfur compounds. It is 
these sulfur compounds that cause the SOX emissions when the 
fuel is combusted. If the vessel does not employ the use of a sulfur 
scrubber or other technology, it will most likely operate on a marine 
distillate fuel while in an ECA in order to meet the sulfur emission 
requirements.
    The sulfur in marine fuel is primarily emitted as SO2; 
however, a small fraction (about 2 percent) is converted to 
SO3. SO3 almost immediately forms sulfate and is 
emitted as direct PM by the engine. Consequently, emissions of 
SO2 and sulfate PM are very high for engines operating on 
residual fuel. Switching from high sulfur residual fuel to lower sulfur 
distillate fuel results in large reductions in SO2 and 
sulfate PM emissions. In addition to high sulfur levels, residual fuel 
contains relatively high concentrations of low volatility, high 
molecular weight organic compounds and metals. Organic compounds that 
contribute to PM can be present either as a nucleation aerosol or as a 
material adsorbed on the surfaces of agglomerated elemental carbon soot 
particles and metallic ash particles. The sulfuric acid aerosol in the 
exhaust provides a nucleus for agglomeration of organic compounds. 
Operation on higher volatility distillate fuel reduces both nucleation 
and adsorption of organic compounds into particulate matter. Therefore, 
in addition to direct sulfate PM reductions, switching from residual 
fuel to distillate fuel reduces organic PM and metallic ash particles 
in the exhaust.
    In the majority of vessels which operate on residual fuel, marine 
distillate fuel is still used for operation during routine maintenance, 
prior to and immediately after engine shut-down, or in emergencies. 
Standard procedures today have been established to ensure that this 
operational fuel switchover is performed safely and efficiently. 
Mainly, in order for the vessel to completely switch between residual 
and distillate fuel, the fuel pumps and wetted lines will need to be 
completely purged by the new fuel to ensure that the ship is burning 
the correct fuel for the area. This purging will vary from ship to ship 
due to engine capacity, design, operation, and efficiency. Provided the 
ship has separate service tanks for distillate and residual fuel (most, 
if not all, vessels do), fuel switching time should be limited only by 
maximum allowable rate of fuel temperature change. Additionally, for a 
longer operation period such as would occur while in an ECA, we 
investigated several other fuel switching topics to ensure that vessels 
would not have long-term issues from operating on the marine distillate 
fuels.
    Marine distillate fuels are similar in composition and structure to 
other petroleum-based middle distillate fuels such as diesel and No. 2 
heating oil, but they have a much lower allowable sulfur content than 
residual fuels. This lower sulfur content means that by combusting 
marine distillate fuel in their propulsion engines, vessels operating 
within the ECA would meet the stricter SOX requirements. 
However, sulfur content is not the only difference between the marine 
residual and distillate fuels; they also have different densities, 
viscosities, and other specification limits.
    The maritime industry has analyzed the differences between residual 
and distillate fuel compositions to address any potential issues that 
could arise from switching operation of a Category 3 engine from 
residual fuel to distillate fuel. The results from this research has

[[Page 22927]]

evolved into routine operational switching procedures that ensure a 
safe and efficient way for the Category 3 engines to switch operation 
between the residual and distillate fuels. Engine manufacturers, fuel 
suppliers, the American Bureau of Shipping, and the U.S. Coast Guard 
have provided guidance on fuel switching 
procedures.97 98 99 100 101 A brief summary of the fuel 
differences, as well as any potential issues and their usual solutions, 
is presented below.
---------------------------------------------------------------------------

    \97\ MAN B&W Diesel, ``Operation on Low-Sulphur Fuels; Two-
Stroke Engines,'' 2004.
    \98\ Wartsila, ``Low Sulphur Guidelines,'' January 9, 2006.
    \99\ American Petroleum Institute, ``Technical Considerations of 
Fuel Switching Practices,'' API Technical Issues Workgroup, June 3, 
2009.
    \100\ American Bureau of Shipping, ``ABS Notes: Use of Low-
Sulphur Marine Fuel for Main and Auxiliary Diesel Engines,'' Fuel 
Oil Piping, EWZ-001-02-P04-W007, Attachment G--Revision 1.
    \101\ United States Coast Guard, ``Avoiding Propulsion Loss from 
Fuel Switching: American Petroleum Institute, Technical 
Considerations,'' Marine Safety Alert 03-09, June 16, 2009.
---------------------------------------------------------------------------

(a) Fuel Density
    Due to its chemical composition, residual fuel has a slightly 
higher density than marine distillates. Using a less dense fuel could 
affect the ballast of a ship at sea and would have to require 
compensation. Therefore, when beginning to operate on the distillate 
fuel, the vessel operator would have to pay attention to the vessel's 
ballast and may have to compensate for any changes that may occur. We 
anticipate that these procedures would be similar to operating the 
vessel with partially-full fuel tanks.
    Another consideration when switching to a lower density fuel is the 
change in volumetric energy content. Distillate fuel has a lower energy 
density content on a per gallon basis when compared to the residual 
fuel; however, per ton, distillate fuel's energy density is larger than 
the residual fuel. This means that when switching from residual fuel to 
distillate fuel, if the vessel's tanks are volumetrically limited 
(i.e., the tanks can only hold a set quantity of fuel gallons), the 
distance a vessel can travel on the distillate fuel may be slightly 
shorter than the distance the vessel could travel on the residual fuel 
due to the lower volumetric energy content of distillate fuel, which 
could require compensation. This distance reduction would be 
approximately 5 percent and would only be of concern while the vessel 
was operating on the distillate fuel (i.e., while in the U.S. ECA) as 
the majority of the time the vessel will be operating on the residual 
fuel. However, if the vessel is limited by weight (draft), the higher 
energy content per ton of fuel would provide an operational advantage.
(b) Kinematic Viscosity
    Residual fuel's kinematic viscosity is much higher than marine 
distillate fuel's viscosity. Viscosity is the ``thickness'' of the 
fuel. If this parameter is lowered from the typical value used within a 
pump, some issues could arise. If a distillate fuel is used in a system 
that typically operates on residual fuel, the decrease in viscosity 
could cause problems with high-pressure fuel injection pumps due to the 
increased potential for internal leakage of the thinner fuel through 
the clearances in the pumping elements. Internal leakage is part of the 
design of a fuel pump and is used in part to lubricate the pumping 
elements. However, if this leakage rate is too high, the fuel pump 
could produce less than optimal fuel injection pressures. If the 
distillate fuel's lower viscosity becomes an issue, it is possible to 
cool the fuel and increase the viscosity above 2 centistokes, which is 
how most vessels operate today during routine fuel switchovers.
(c) Flash Point
    Flash point is the temperature at which the vapors off the fuel 
ignite with an outside ignition source. This can be a safety concern if 
the owner/operator uses an onroad diesel fuel rather than a designated 
``marine distillate'' fuel for operation because marine fuels have a 
specified minimum flash point of 60 [deg]C (140 [deg]F) to ensure 
onboard safety, whereas onroad diesel has a minimum specified flash 
point of 52 [deg]C (125.6 [deg]F). However, since most distillate fuels 
are created in the same fashion, typical flash points of onroad diesel 
are above 60 [deg]C (140 [deg]F), and would meet the marine fuel 
specification for this property. Bunker suppliers ensure that marine 
fuels meet a minimum flash point of 60 [deg]C (140 [deg]F) through fuel 
testing as designated on the bunker delivery note.
(d) Lubricity
    Lubricity is the ability of the fuel to lubricate the engine/pump 
during operation. Fuels with higher viscosity and high sulfur content 
tend to have very good lubricity without the use of specific lubricity-
improving additives. Refining processes that lower fuel sulfur levels 
and their viscosities can also remove some of the naturally-occurring 
lubricating compounds. Severe hydrotreating of fuel to obtain ultra-low 
sulfur levels can result in poor fuel lubricity. Therefore, refineries 
commonly add lubricity improvers to ultra-low sulfur diesel. This will 
most likely become a concern when very low levels of sulfur are present 
in the fuel and/or the fuel has been hydrotreated to reduce sulfur, 
e.g., if ultra-low sulfur highway diesel (ULSD) is used in the engine. 
Several groups have conducted studies on this subject, and for some 
systems where fuel lubricity has become an issue, lubricity additives 
can be utilized or the owner/operator can install a lubricating system 
for the fuel pump.
(e) Lube Oil
    Lube oils are used to neutralize acids formed in combustion, most 
commonly sulfuric acids created from sulfur in the fuel. The quantity 
of acid-neutralizing additives in lube oil should match the total 
sulfur content of the fuel. If excessive amounts of these additives are 
used, they may create deposits on engine components. Marine engine 
manufacturers have recommended that lube oil only needs to be adjusted 
if the fuel is switched for more than one week, but the oil feed rate 
may need to be reduced as well as engine operating power. Additional 
research has been conducted in this area and several oil companies have 
been working to create a lubricating oil that would be compatible with 
several different types of fuel.
(f) Asphaltenes
    Asphaltenes are heavy, non-volatile, aromatic compounds which are 
contained naturally in some types of crude oil. Asphaltenes may 
precipitate out of the fuel solution when a fuel rich in carbon 
disulfide, such as residual fuel, is mixed with a lighter hydrocarbon 
fuel, such as n-pentane or n-heptane found in some distillate fuels. 
When these heavy aromatic compounds fall out of the fuel solution, they 
can clog filters, create deposition along the fuel lines/combustion 
chamber, seize the fuel injection pump, or cause other system troubles. 
This risk can be minimized through onboard test kits and by purchasing 
distillate and residual fuel from the same refiner. However, according 
to the California Air Resources Board, the formation of asphaltenes is 
not seen as an issue based on data from previous maritime rules.
    As can be seen, if vessel operators choose to operate on marine 
distillate fuel while in the ECA, some prudence is required. However, 
as described above, issues that could arise with switching between 
residual and distillate fuel are addressed through changes to operating 
procedures. To conduct a successful switchover between the residual and 
marine

[[Page 22928]]

distillate fuels, vessel operators will need to keep the above issues 
in mind and follow the engine manufacturer's standard fuel switching 
procedure.
(g) Boilers
    Steamships operate through the use of steam produced by boilers. In 
addition, boilers are often used on diesel-propelled ships for 
auxiliary power. Many of these boilers are designed to operate on heavy 
fuel oil. As such, the fuel must be heated and the system optimized to 
atomize heavy fuel oil and then mix it with air for combustion. To 
operate these systems on distillate fuel, certain modifications to the 
boiler may be necessary to the burner and fuel systems. These 
modifications are more likely to be necessary for older boilers. First, 
as with diesel engines, residual fuel needs to be heated to flow 
through the pumps. Distillate fuel does not. In addition, the fuel 
pumps and injection nozzles must be matched to the viscosity and 
lubricity of the fuel. Second, the fuel burners and air mixing system 
must be matched to the fuel. In modern boilers, burners generally are 
able to operate on distillate fuel and heavy fuel oil. The air mixing 
generally needs to be reduced when using distillate fuel which 
evaporates easier. The control system must be adjusted so that the main 
burner does not accidently re-ignite after a flame-out. If the boiler 
loses its ignition source (flame) too high of a mass of fuel may be 
vaporized for the boiler to be safely re-lighted. In this case, the 
boiler should be purged before relighting the flame. Third, proper 
monitoring of the boiler operation will optimize flame supervision and 
minimize the risk of problems when operating on distillate fuel.
(2) Equivalents
    Regulation 4 of Annex VI allows for alternative devices, 
procedures, or compliance methods if they are ``at least as effective 
in terms of emissions reductions as that required by this Annex.'' As 
an alternative to operating on lower sulfur fuel, an exhaust gas 
cleaning device may be used to remove SOX and PM emissions 
from the exhaust. These devices are colloquially known as 
SOX scrubbers. This section describes the technological 
feasibility of SOX scrubbers and how they may be used to 
achieve equivalent emission reductions as fuel switching.
    SOX scrubbers are capable of removing up to 95 percent 
of SOX from ship exhaust using the ability of seawater to 
absorb SOX. SOX scrubbers have been widely used 
in stationary source applications, where they are a well-established 
SOX reduction technology. In these applications, lime or 
caustic soda are typically used to neutralize the sulfuric acid in the 
washwater. While SOX scrubbers are not widely used on ocean-
going vessels, there have been prototype installations to demonstrate 
their viability in this application such as the Krystallon systems 
installed on the P&O ferry Pride of Kent and the Holland America Line 
cruise ship the ms Zaandam. These demonstrations have shown scrubbers 
can replace and fit into the space occupied by the exhaust silencer 
units and can work well in marine applications.
    There are two main scrubber technologies. The first is an open-loop 
design which uses seawater as exhaust washwater and discharges the 
treated washwater back to the sea. Such open-loop designs are also 
referred to as seawater scrubbers. In a seawater scrubber, the exhaust 
gases are brought into contact with seawater, either through spraying 
seawater into the exhaust stream or routing the exhaust gases through a 
water bath. The SO2 in the exhaust reacts with oxygen to 
produce sulfur trioxide which then reacts with water to form sulfuric 
acid. The sulfuric acid in the water then reacts with carbonate and 
other salts in the seawater to form sulfates which may be removed from 
the exhaust. The washwater is then treated to remove solids and raise 
the pH prior to discharge back to the sea. The solids are collected as 
sludge and held for proper disposal ashore.
    A second type of SOX scrubber which uses a closed-loop 
design is also feasible for use on marine vessels. In a closed loop 
system, fresh water is used as washwater, and caustic soda is injected 
into the washwater to neutralize the sulfur in the exhaust. A small 
portion of the washwater is bled off and treated to remove sludge, 
which is held and disposed of at port, as with the open-loop design. 
The treated effluent is held onboard or discharged at open sea. 
Additional fresh water is added to the system as needed. While this 
design is not completely closed-loop, it can be operated in zero 
discharge mode for periods of time.
    Exhaust gas scrubbers can achieve reductions in particulate matter 
as well. By removing sulfur from the exhaust, the scrubber removes most 
of the direct sulfate PM. Sulfates are a large portion of the PM from 
ships operating on high sulfur fuels. By reducing the SOX 
emissions, the scrubber will also control much of the secondary PM 
formed in the atmosphere from SOX emissions. However, simply 
mixing alkaline water in the exhaust does not necessarily remove much 
of the carbonaceous PM, ash, or metals in the exhaust. While 
SO2 associates with the washwater, particles can only be 
washed out of the exhaust through direct contact with the water. In 
simple scrubber designs, much of the mass of particles can reside in 
gas bubbles and escape out the exhaust.
    Manufacturers have been improving their scrubber designs to address 
carbonaceous soot and other fine particles. Finer water sprays, longer 
mixing times, and turbulent action would be expected to directionally 
reduce PM emissions through contact impactions. One scrubber design 
uses an electric charge on the water to attract particles in the 
exhaust to the water. In another design, demisters are used that help 
effectively wash out PM from the exhaust stream. In either of these 
designs, however, the systems would be effective at removing 
SO2 from the exhaust even if the additional hardware needed 
for non-sulfate PM reduction were not used.
    Annex VI does not present specific exhaust gas limits that are 
deemed to be equivalent to the primary standard of operating on lower 
sulfur fuel. Prior to the recent amendments to Annex VI, Regulation 14 
included a limit of 6 g/kW-hr SO2 as an alternative to the 
15,000 ppm sulfur limit for sulfur emission control areas. Under the 
amended requirements, the specific SO2 limit was removed and 
more general language on equivalents was included.
    IMO has developed guidelines for the use of exhaust gas cleaning 
systems (EGCS) such as SOX scrubbers as an alternative to 
operating on lower sulfur fuel.\102\ These guidelines include a table 
of SO2 limits intended to correspond with various fuel 
sulfur levels. Based on the methodology that was used to determine the 
SO2 limit of 6.0 g/kW-hr for existing ECAs, the 
corresponding limit is 0.4 g/kW-hr SO2 for a 1,000 ppm fuel 
sulfur limit. This limit is based on an assumed fuel consumption rate 
of 200 g/kW-hr and the assumption that all sulfur in the fuel is 
converted to SO2 in the exhaust. The IMO guidelines also 
allow for an alternative approach of basing the limit on a ratio of 
SO2 to CO2. This has the advantage of being 
easier to measure during in-use monitoring. In addition, this ratio 
holds more constant at lower loads than a brake-specific limit, which 
would approach infinity as power approaches zero. For the existing 
15,000 ppm fuel sulfur limit in ECAs, a SO2 (ppm)/
CO2 (%) limit of 65 was

[[Page 22929]]

developed. The equivalent limit for a 1,000 ppm fuel sulfur level is 
4.0 SO2 (ppm)/CO2 (%).
---------------------------------------------------------------------------

    \102\ International Maritime Organization, ``2009 Guidelines for 
Exhaust Gas Cleaning Systems,'' Resolution MEPC.184(59), Adopted on 
17 July 2009, MEPC 59/24/Add.1/Annex 9.
---------------------------------------------------------------------------

    It is our intent that the IMO guidelines will be used by the U.S. 
Government in making the determination whether an EGCS meets the 
requirements of MARPOL Annex VI, Regulation 4. We are currently working 
with the U.S. Coast Guard on developing the U.S. Government process for 
approving equivalents. It is not yet clear if a request for an 
equivalent determination will be made to EPA or the U.S. Coast Guard. 
To prevent multiple requests from having to be made, today's 
regulations require such a request to be made to EPA only. This could 
change as a result of the discussions between EPA and the U.S. Coast 
Guard. If so, we will update the regulatory text accordingly.
    Scrubbers are effective at reducing SO2 emissions and 
sulfate PM emissions from the exhaust. However, as discussed above, the 
effectiveness of the scrubber at removing PM emissions other than 
sulfates is dependent on the scrubber design. In addition to sulfate PM 
reductions, switching from residual fuel to distillate fuel results in 
reductions in organic PM and metallic ash particles in the exhaust. We 
expect that ECGS designs will achieve similar PM reductions as fuel 
switching; however, if this turns out to not be the case, we will 
address this issue, as appropriate, through further action.
    Water-soluble components of the exhaust gas such as SO2, 
SO3, and NO2 form sulfates and nitrates that are 
dissolved into the discharge water. Scrubber washwater also includes 
suspended solids, heavy metals, hydrocarbons and polycyclic aromatic 
hydrocarbons (PAH). Before the scrubber water is discharged, there are 
several approaches that may be used to process the scrubber water to 
remove solid particles. Heavier particles may be trapped in a settling 
or sludge tank for disposal. The removal process may include cyclone 
technology similar to that used to separate water from residual fuel 
prior to delivery to the engine. However, depending on particle size 
distribution and particle density, settling tanks and hydrodynamic 
separation may not effectively remove all suspended solids. Other 
approaches include filtration and flocculation techniques. 
Flocculation, which is used in many waste water treatment plants, 
refers to adding a chemical agent to the water that will cause the fine 
particles to aggregate so that they may be filtered out. Sludge 
separated from the scrubber water would be stored on board until it is 
disposed of at proper facilities.
    The IMO guidelines for the use of exhaust gas cleaning devices such 
as SOX scrubbers include recommended monitoring and water 
discharge practices. The washwater should be continuously monitored for 
pH, PAHs and turbidity. Further, the IMO guidance include 
specifications for these same items, as well as nitrate content when 
washwater is discharged in ports, harbors or estuaries. Finally, the 
IMO guidance recommends that washwater residue (sludge) be delivered 
ashore to adequate reception facilities and not discharged to the sea 
or burned on board.
    Any discharges directly into waters of the United States may be 
subject to Clean Water Act or other U.S. regulation. To the extent that 
the air pollution control technology results in a wastewater discharge, 
such discharge will require a permit under the Clean Water Act's 
National Pollutant Discharge Elimination System (NPDES) permit program. 
For example, the NPDES Vessel General Permit in Section 2.2.26 contains 
conditions for Exhaust Gas Scrubber Washwater Discharge. Also, the Act 
to Prevent Pollution for Ships may apply to such discharge.

D. ECA Designation and Foreign-Flagged Vessels

    In our previous marine diesel engine rulemakings, EPA did not 
extend our Clean Air Act standards to engines on vessels flagged by 
other countries. In our 2003 rule, many States and localities expressed 
concern about the high levels of emissions from ocean-going vessels. We 
examined our position and concluded that no change was necessary at 
that time because the Tier 1 standards we adopted for Category 3 
engines on U.S. vessels were the same as those contained in MARPOL 
Annex VI. We indicated we would re-examine this issue in our current 
rulemaking and would also review the progress made by the international 
community toward the adoption of new more stringent international 
standards that reflect the application of advanced emission control 
technologies.
    We received comments from a broad range of interested parties on 
the Advanced Notice of Proposed Rulemaking (ANPRM) for this rulemaking. 
Generally, those commenters remained concerned about the contribution 
of ocean-going vessels to air quality problems. Many took the position 
that EPA should cover engines on foreign-flagged OGV under Clean Air 
Act section 213 since they account for the vast majority of OGV 
emissions in the United States and because of their perception, at the 
time these comments were submitted, that the international process to 
set stringent standards was stalled.
    In the Notice of Proposed Rulemaking (NPRM) for this rulemaking, we 
provided background on EPA's past statements with regard to the 
application of our Clean Air Act section 213 standards to engines on 
foreign-flagged vessels, and summarized comments we received on this 
issue in response to our ANPRM. Because the NOX standards 
adopted in the amendments to Annex VI are comparable in stringency and 
timing to our final CAA NOX standards, we did not believe it 
necessary to extend our Clean Air Act Tier 2 and 3 standards to engines 
on foreign-flagged vessels. Therefore, we did not seek to resolve the 
issue of whether section 213 of the Act allows us to set standards for 
engines on foreign-flagged vessels. However, we stated that our 
proposed decision rested on the timely adoption of an amendment to 
Annex VI designating the U.S. coastal waters as an ECA, since the most 
stringent of the NOX standards will be applicable in such 
areas. We maintain the position we expressed in the NPRM, particularly 
in light of the recent approval, and circulation for adoption, of the 
North American ECA. If the amendment designating a U.S. ECA is not 
timely adopted by the Parties to IMO, we will revisit this issue.
    EPA received a number of comments in response to the NPRM on the 
issue of whether EPA should or could address emissions from engines on 
foreign-flagged vessels. Most commenters reiterate their positions as 
stated in comments received on the ANPRM.\103\ Environmental group 
commenters who previously expressed their position that EPA has 
authority--and even obligation--within the Clean Air Act to regulate 
foreign-flagged vessels, maintain that position and recognize that 
application of the new standards to all vessels, including those that 
are foreign-flagged, is necessary to achieve the new standards' public 
health and environmental benefits. While some commenters accept EPA's 
position that it will revisit this issue without delay in

[[Page 22930]]

the event that a U.S. ECA designation is not timely adopted by the 
Parties to the IMO,\104\ others are concerned about the potential for 
delay within the IMO and, thus, urge EPA to commence a parallel 
rulemaking as a backstop to that potential delay.\105\ Still others 
find EPA's reliance on an ECA designation to be insufficient and 
suggest that EPA should presently assert authority and extend this 
rule's application to foreign-flagged vessels.\106\ That suggestion 
also includes a concern that too much reliance on the IMO for authority 
to regulate foreign-flagged vessels could expose a gap wherein ships 
that are flagged in nations that are not parties to Annex VI would go 
unregulated in U.S. waters.\107\ To close that gap, the commenter 
recommends direct application of CAA standards to all foreign-flagged 
vessels. That concern echoes industry commenters' calls for equal 
application of the standards to all vessels in U.S. waters to ensure a 
``level playing field'' and ``uniform treatment of the entire merchant 
fleet.'' \108\
---------------------------------------------------------------------------

    \103\ Ohio Environmental Council, Earth Day Coalition, Marsh 
Area Regional Council, Ohio League of Conservation Voters, OAR-2007-
0121-0314; Northeast States for Coordinated Air Use Management, OAR-
2007-0121-0227; American Lung Association with Environmental Defense 
Fund, OAR-2007-0121-0366 and OAR-2007-0121-0227; Santa Barbara Air 
Pollution Control District, OAR-2007-0121-0231; Clean Air Task 
Force, OAR-2007-0121-0264 and OAR-2007-0121-0227; South Coast Air 
Quality Management District, OAR-2007-0121-0309 and OAR-2007-0121-
0232.
    \104\ Ohio Environmental Council, Earth Day Coalition, Marsh 
Area Regional Council, Ohio League of Conservation Voters, OAR-2007-
0121-0314; Northeast States for Coordinated Air Use Management, OAR-
2007-0121-0227; American Lung Association with Environmental Defense 
Fund, OAR-2007-0121-0366 and OAR-2007-0121-0227.
    \105\ Santa Barbara Air Pollution Control District, OAR-2007-
0121-0231.
    \106\ Clean Air Task Force, OAR-2007-0121-0264 and OAR-2007-
0121-0227; South Coast Air Quality Management District, OAR-2007-
0121-0309 and OAR-2007-0121-0232; Earthjustice, Friends of the 
Earth, and Center for Biological Diversity, OAR-2007-0121-0320.
    \107\ Earthjustice, Friends of the Earth, and Center for 
Biological Diversity, OAR-2007-0121-0320.
    \108\ World Shipping Council, OAR-2007-0121-0227 and OAR-2007-
0121-0325; Marine Engineers Beneficial Association, OAR-2007-0121-
0259.
---------------------------------------------------------------------------

    We appreciate the comments we received and are committed to 
revisiting the issue if the U.S. ECA proposal is not timely adopted. 
However, we continue to believe we need not revisit this issue at this 
time given that foreign-flagged vessels will be subject to standards 
under APPS that are comparable to those for U.S.-flagged vessels under 
section 213 of the CAA. The issue of whether EPA is compelled to cover 
foreign-flagged vessels under section 213 of the CAA was raised in 
Bluewater v. EPA, 372 F.3d 404 (DC Cir. 2004), a challenge to EPA's 
decision in 2003 not to revisit the issue of whether foreign-flagged 
vessels may and should be covered by nonroad emissions standards issued 
under section 213 of the CAA. In finding Bluewater's claim to be 
premature, the Bluewater court referred back to its determination in 
Engine Mfrs. Ass'n v. EPA, 88 F.3d at 1086-87, that ``new nonroad 
engine'' as used in 213(a)(3) is ambiguous and reiterated EPA's 
undisputed finding that there would be no significant loss of emission 
reductions by not revisiting the issue. We do not believe circumstances 
have changed to call into question the Bluewater court's finding as 
applied to today's setting. In fact, the only changed circumstances 
further support EPA's decision not to revisit the issue. Since issuance 
of the 2003 final rule and the court's decision in Bluewater, Annex VI 
has entered into force, and the United States has become a Party to 
Annex VI and has successfully negotiated significant new emission and 
fuel standards. In addition, Congress has adopted amendments to the Act 
to Prevent Pollution from Ships to implement both the original and 
amended Annex VI requirements. Therefore, given that foreign-flagged 
vessels are subject to the original and new Annex VI NOX and 
fuel requirements under the operation of APPS, we do not believe it is 
currently necessary to address whether EPA may or should cover foreign-
flagged vessels under section 213 of the CAA. See South Coast v. EPA, 
554 F.3d 1076, 1081 (DC Cir. 2009) (``Deferring resolution of the issue 
until it will have an effect remains reasonable and the petitioners' 
objection therefore remains premature.'').
    However, as noted above, we are committed to revisiting this issue 
if the proposed ECA, within which the most stringent NOX and 
fuel requirements are applicable, is not timely adopted. Meetings to 
discuss adoption of the U.S.-proposed ECA are scheduled shortly after 
this rule is finalized, and thus, taking into consideration the lead 
times adopted, little time is lost in not revisiting this issue in this 
rulemaking. We also note that ships that are flagged in nations that 
are not a Party to Annex VI are subject to Annex VI requirements in 
U.S. waters under the Act to Prevent Pollution from Ships. Our 
regulations to implement the requirements of Annex VI with respect to 
such vessels make clear the applicability of those provisions to such 
vessels.

VI. Certification and Compliance Program

    This section describes the regulatory changes being finalized for 
the CAA Category 3 engine compliance program. In general, these changes 
are being finalized to ensure that the benefits of the standards are 
realized in-use and throughout the useful life of these engines, and to 
incorporate lessons learned over the last few years from the existing 
test and compliance program.
    The most obvious change is that we are applying the plain language 
regulations of 40 CFR part 1042 to Category 3 engines. These part 1042 
regulations were adopted in 2008 for Category 1 and Category 2 engines 
(73 FR 25098, May 6, 2008). They were structured to contain the 
provisions that are specific to marine engines and vessels in part 
1042, and apply the parts 1065 and 1068 for other provisions not 
specific to marine engines. This approach is not intended to 
significantly change the compliance program from the program currently 
applicable to Category 3 engines under 40 CFR part 94, except as 
specifically noted in this notice. These plain language regulations 
supersede the regulations in part 94 for Category 3 engines beginning 
with the 2011 model year. See Section VI.E for additional discussion of 
the transition from part 94 to part 1042.
    The changes from the existing programs are described below along 
with other notable aspects of the compliance program. These changes are 
necessary to implement the new standards as well as to implement the 
Annex VI program as required under the amendments to the Act to Prevent 
Pollution from Ships.
    Finally, we are also including several changes and clarifications 
to the compliance program that are not specific to Category 3 engines. 
Some of these apply only for marine diesel engines below 30 liters per 
cylinder displacement.

A. Compliance Provisions for Category 3 Engines

    In general, we are retaining the certification and compliance 
provisions adopted with the Tier 1 standards for Category 3 engines. 
These include testing, durability, labeling, maintenance, prohibited 
acts, etc. However, we believe additional testing and compliance 
provisions will be necessary for new standards requiring more advanced 
technology and more sophisticated emission control systems. These 
changes, as well as other modifications to our certification and 
compliance provisions for Category 3 engines, are discussed below.
    Our certification process is similar to the process specified in 
the Annex VI NOX Technical Code (NTC) for pre-certification. 
However, the Clean Air Act specifies certain requirements for our 
certification program that are different from the NTC requirements. The 
EPA approach differs most significantly from the NTC in three areas. 
First, the NTC allows but does not require certification of engines 
before installation (known as pre-certification

[[Page 22931]]

under the NTC), while EPA does require it. Second, we include various 
provisions to hold the engine manufacturer responsible for the 
durability of emission controls, while the NTC holds the engine 
manufacturer liable only before the engine is placed into service. 
Finally, we specify broader temperature ranges and allow manufacturers 
less discretion in setting engine parameters for testing, with the goal 
of adopting test procedures that represent a wide range of normal in-
use operation. We believe the regulations in this final rule are 
sufficiently consistent with NTC that manufacturers can continue to use 
a single harmonized compliance strategy to certify under both systems.
(1) Testing
    We are largely continuing the testing requirements that currently 
apply for Category 3 engines with a few exceptions.
(a) General Test Procedures
    We are applying the general engine testing procedures of 40 CFR 
part 1065 to Category 3 engines. This is part of our ongoing initiative 
to update the content, organization and writing style of our 
regulations. For each engine sector for which we have recently 
promulgated standards (such as smaller marine diesel engines), we refer 
to one common set of test procedures in part 1065. This is because we 
recognized that a single set of test procedures would allow for 
improvements to occur simultaneously across engine sectors. A single 
set of test procedures is easier to understand than trying to 
understand many different sets of procedures, and it is easier to move 
toward international test procedure harmonization if we only have one 
set of test procedures.
    These procedures replace those currently published in parts 92 and 
94 and are fundamentally similar to those procedures. The primary 
differences are related to tighter tolerances to reduce test-to-test 
variability. In most cases, a manufacturer should be able to comply 
with 1065 using its current test equipment. Nevertheless, full 
compliance with part 1065 would take some effort on the part of 
manufacturers. As such, we are including some flexibility to make a 
gradual transition from the part 92 and 94 procedures. For several 
years, manufacturers will be able to optionally use the part 1065 
procedures. Part 1065 procedures will generally be required for any new 
testing by 2016 (except as noted below). This is very similar to the 
allowance already provided with respect to Category 1 and Category 2 
engines.
    Several manufacturers raised in their comments general objections 
to applying the 1065 test procedures. However, since we proposed to 
allow Category 3 manufacturers to submit data collected using the test 
equipment, test fuels, and procedures specified in the NOX 
Technical Code, we believe that the requirement should be finalized as 
proposed. The procedures in 1065 will still be the official test 
procedures, however, and manufacturers will be liable with respect to 
any test results from 1065 testing. We do not believe this allowance 
will have any effect on the stringency of the standards, or how 
manufacturers design and produce their engines.
(b) Test Fuel
    Appropriate test procedures need to represent in-use operating 
conditions as much as possible, including specification of test fuels 
consistent with the fuels that compliant engines will use over their 
lifetimes. Our Part 94 regulations allow Category 3 engine testing 
using distillate fuel, even though many vessels with these engines 
currently use less expensive residual fuel. This provision is 
consistent with the specifications of the NOX Technical 
Code. We are continuing this approach for Tier 2 and Tier 3. Our 
primary reason for continuing this approach is that we expect these 
Category 3 engines will generally be required to use distillate fuels 
in areas that will affect U.S. air quality for most of their 
operational lives. (We expect this because we expect IMO to approve our 
proposal to amend Annex VI to designate the U.S. coastal waters as an 
ECA.) However, since these engines will not be required to use low-
sulfur or ultra low-sulfur fuel, we are also adding an explicit 
requirement that a high-sulfur distillate test fuel be used for both 
Tier 2 and Tier 3 testing. Our testing regulations (40 CFR 1065.703) 
are being revised to specify that high-sulfur diesel test fuels contain 
800 to 2,500 ppm sulfur. This will be lower than the prior 
specification of 2,000 to 4,000 ppm. This will allow manufacturers to 
test with fuels near the ultimate in-use limit of 1,000 ppm.
(c) Testing Catalyst-Equipped Engines
    In our existing programs that require compliance with catalyst-
based engines (such as the Category 1 & 2 engine program), we have 
required manufacturers to test prototype engines equipped with 
prototype catalyst systems. However, it is not clear that this approach 
would be practical for Category 3 engines. These are problematic 
because of their size and because they tend to be a least partially 
custom built on a vessel by vessel basis. Requiring a manufacturer to 
construct a full-scale catalyst system for each certification test 
would be extremely expensive.
    We are finalizing an optional special certification procedure to 
address this concern. The provisions are in Sec.  1042.655 of the 
finalized regulations. The emission-data engine must be tested in the 
specified manner to verify that the engine-out emissions comply with 
the Tier 2 standards. The catalyst material must be tested under 
conditions that accurately represent actual engine conditions for the 
test points. This catalyst testing may be performed on a benchscale. 
Manufacturers must include a detailed engineering analysis describing 
how the test data collected for the engine and catalyst material 
demonstrate that all engines in the family will meet all applicable 
emission standards. Manufacturers must verify their design by testing a 
complete production engine and catalysts in its final assembled 
configuration. It is important to note that this allowance does not 
limit in any way the manufacturers' or operators' obligations with 
respect to safety for catalyst systems, such as those specified by 
Coast Guard.
(d) Testing Production Engines
    Under the current regulations, manufacturers must test a sample of 
their Category 1 and Category 2 engines during production. We are now 
finalizing similar provisions for Category 3 engines. While in the past 
we did not believe that such testing was necessary, circumstances have 
changed in two important ways. First, relatively inexpensive portable 
test systems have recently become available. This greatly reduces the 
cost of testing an engine in a ship. Second, the need to verify that 
production engines actually comply with the emission standards 
increases as standards become more stringent and emission control 
technologies become more complicated.
    Specifically, every new Tier 2 or later Category 3 engine must be 
tested during the vessel's sea trial to show compliance with the 
applicable NOX standard. Any engine that fails to comply 
with the standard will need to be repaired and retested. Since we are 
not finalizing PM standards for Category 3 engines, and because PM 
measurement is more difficult than measuring only gaseous emission, we 
will not require PM measurement during testing after

[[Page 22932]]

installation, provided PM emissions were measured during certification.
    One concern that manufacturers have raised in the past is that it 
can be difficult to achieve the exact test points in use. Therefore, we 
are allowing manufacturers flexibility with respect to test points when 
testing production engines, consistent with the equivalent allowance 
under the NOX Technical Code. Where manufacturers are unable 
to duplicate the certification test points during production testing, 
we are allowing them to comply with an alternate ``at-sea standard'' 
that is 10 percent higher than the otherwise applicable standard. This 
is specified in Sec.  1042.104(g).
    Since we are requiring testing of every production engine, we are 
also excluding Category 3 engines from selective enforcement audits 
under 40 CFR part 1068.
(e) PM Measurement
    We are requiring manufacturers to measure PM emissions along with 
NOX, HC, and CO during certification testing to report these 
results along with the other test data. This is similar to our recently 
proposed requirement for manufacturers to measure and report certain 
greenhouse gas emissions for a variety of nonroad engine sectors.\109\ 
Manufacturers should be able to collect these data using stand-alone 
partial flow PM measurement systems. In recent years, several vendors 
have developed such systems to be compliant with the requirements of 
1065.
---------------------------------------------------------------------------

    \109\ 74 FR 16448, April 10, 2009.
---------------------------------------------------------------------------

    It is worth noting that in the past, there has been some concern 
regarding the use of older PM measurement procedures with high sulfur 
fuels. The primary issue of concern was variability of the PM 
measurement, which was strongly influenced by the amount of water bound 
to sulfur. However, we believe improvements in PM measurement 
procedures, such as those specified in 40 CFR 1065, have addressed 
these issues of measurement variability. The U.S. Government recently 
submitted proposed procedures for PM measurement to IMO.\110\
---------------------------------------------------------------------------

    \110\ ``Measurement Method For Particulate Matter Emitted From 
Marine Engines,'' Submitted by the United States to the 
International Maritime Organization Intersessional [sic] Meeting Of 
the BLG Working Group On Air Pollution, 5 October 2007.
---------------------------------------------------------------------------

(2) Low Power Operation and Mode Caps
    Emission control performance can vary with the power at which the 
engine operates. This is potentially important because Category 3 
engines can operate at relatively low power levels when they are 
operating in port areas. Ship pilots generally operate engines at 
reduced power for several miles to approach a port, with even lower 
power levels very close to shore. The International Organization for 
Standardization (ISO) E3 and E2 test cycles, which are used for 
emission testing of propulsion marine engines, are heavily weighted 
towards high power. In the absence of other requirements, it would be 
possible for manufacturers to meet the cycle-weighted average emission 
standards without significantly reducing emissions at low-power modes. 
This could be especially problematic for Tier 3 engines relying on 
urea-SCR for NOX control, since the effectiveness of the 
control is directly affected by the amount of urea that is injected and 
there would be an obvious economic incentive for manufacturers and 
operators to minimize the amount of urea injected.
    We are addressing these concerns in two ways. First, we are 
applying mode caps for NOX emissions that will ensure that 
manufacturers design their emission controls to be fully effective at 
25 percent power. This will require that manufacturers meet the 
applicable NOX standard at each individual test point, and 
not merely as a weighted average of the test points. The caps will only 
apply for NOX emissions, and manufacturers will not be 
required to meet the HC and CO standards at each test point. For HC and 
CO, manufacturers will only be required to meet the applicable 
standards as a weighted average of the test points.
    The other concern is related to power levels other than the test 
points. To address this, we will continue to rely on our prohibition of 
defeat devices to ensure effective control for lower powers. Most 
significantly, this will prohibit manufacturers from turning off the 
urea supply to SCR systems at these points, unless the exhaust gas 
temperature was too cool for the SCR catalyst to function properly. 
(Urea at these low temperatures does not react with NOX 
molecules and can lead to high emissions of ammonia.)
(3) On-Off Technologies
    Many of the technologies that are projected to be used to meet the 
Tier 3 NOX standards (such as SCR, water injection, and EGR) 
are not integral to operation of the engine, allowing the engine to be 
operated without them. They will also require the operator to supply 
the proper reductant. Thus, these technologies are potentially ``on-
off'' technologies. Switching to distillate fuel instead of residual 
fuel to reduce SOX and PM emissions can be thought of in the 
same way.
    The increased operating costs of such controls associated with urea 
(or other reductants) or with distillate usage suggest that it may be 
reasonable to allow these systems to be turned off while a ship is 
operated on the open ocean, far away from sensitive areas that are 
affected by ship emissions. This is the basis of the MARPOL Annex VI 
ECA approach, with one set of limits that would apply when ships are 
operated in sensitive areas and another that would apply when ships are 
operated outside those designated areas.
    We are finalizing the proposed regulatory provision in Sec.  
1042.115(g) to address the use of on-off technologies on Category 3 
engines subject to the Tier 3 standards. This provision will require 
the manufacturer to obtain EPA approval to design the engines to have 
on-off features. It will also require the engine's onboard computer to 
record the on-off operation (including geographic position and time) 
and require that the engine comply fully with the Tier 2 standards when 
the Tier 3 controls are turned off.
    In response to comments, we are expanding this option slightly to 
address other possible technological solutions. In particular, we will 
allow a manufacturer to design the system to have a Tier 3 mode and a 
Tier 2 mode that correspond to ``on'' and ``off,'' without regard to 
whether any given controls are turned on or off. For example, under 
this allowance, a manufacturer could design the system to have a Tier 2 
(off) mode in which the SCR system continues to function, while engine-
out emissions are increased. Such a design would be allowed as long as 
the emission downstream of the aftertreatment met the Tier 2 standards.
    Our goal is to require manufacturers to comply with the Tier 3 
standards in all areas where the emissions significantly affect U.S. 
air quality. We expect that all such areas will also ultimately be 
included in one or more Emission Control Areas. We describe a North 
American ECA in Section V.A, which is intended to include most areas 
where the emissions significantly affect U.S. air quality. However, we 
have not yet determined the extent to which Category 3 engines affect 
air quality in other areas--specifically, the U.S. territories, areas 
of Alaska west of Kodiak, the smallest Hawaiian islands, or Puerto Rico 
and the U.S. Virgin Islands. Therefore, we are including an interim 
provision to exclude those areas with respect to the Tier 3 standards 
at this time. We will revisit this should our review of available 
modeling results or

[[Page 22933]]

other information indicate that compliance with the Tier 3 standards 
should be required for some or all of these areas.
(4) NOX Monitoring
    Category 3 engines equipped with on-off controls must be equipped 
to continuously monitor NOX concentrations in the exhaust. 
Engine manufacturers will be required to include systems to 
automatically alert operators of any operation with the emission 
controls on where NOX concentrations indicate malfunctioning 
emission controls. We are also requiring the engine to record in 
nonvolatile computer memory any such operation. However, we are not 
requiring monitoring NOX concentrations during operation for 
which the emission controls are allowed to be turned off, provided the 
record indicated that the controls were turned off. Where the 
NOX monitor system indicates a malfunction, operators will 
be required to investigate the cause and make any necessary adjustments 
or repairs.
    We are defining as a malfunction of the emission controls any 
condition that would cause an engine to fail to comply with the 
applicable NOX standard (See Section VI.A.1.d for a 
discussion of standards that will apply for installed engines at sea). 
Such malfunctions could include maladjustment of the engine or 
controls, inadequate reductant, or emission controls turned off 
completely. We recognize that it is not possible to perfectly correlate 
a measured NOX concentration with an equivalent cycle-
weighted emission result. Therefore, the requirement will allow engine 
manufacturers to exercise good engineering judgment in using measured 
NOX concentrations to monitor the emission performance of 
the engine. Should manufacturers decide that it would be helpful to 
have a less subjective (and less flexible) requirement, we will be 
willing to work with them to make such improvements to this provision 
through a future rulemaking.
(5) Parameter Adjustment
    Given the broad range of ignition properties for in-use residual 
fuels, we expect that our in-use adjustment allowance for Category 3 
engines will result in a broad range of adjustment. We requested 
comment on a requirement for operators of ships equipped with 
NOX monitors to perform a simple NOX check test 
to confirm emissions after parameter adjustments or maintenance 
operations, using onboard emission measurement systems with electronic-
logging equipment. While we are not adopting such a requirement at this 
time, we may do so in the future should we determine that these engines 
are being improperly adjusted in use.
(6) In-Use Liability
    Under the Tier 1 program for Category 3 engines, owners and 
operators are required to maintain, adjust, and operate the engines in 
such a way as to ensure proper function of the emission controls. These 
requirements, which are described in 40 CFR 94.1004, are being 
continued in the regulations in part 1042 (See Sec.  1042.660 of the 
finalized regulations for these requirements). Owners will also 
continue to be required to keep certain records onboard the vessel and 
report annually to EPA whether or not the vessel has complied with 
these and other requirements.
    Specifically, these provisions require that all maintenance, 
repair, adjustment, and alteration of the engine be performed using 
good engineering judgment so that the engine continues to meet the 
emission standards. Each two-hour period of operation of an engine in a 
condition not complying with this requirement will be considered a 
separate violation. Some commenters expressed concern that treating 
each two-hour period of operation as a separate violation would be 
inappropriate for events that occur while the vessel is out at sea. 
These commenters correctly noted that where a repair cannot be made at 
sea, the operator has no choice but to continue operating the vessel in 
its noncompliant condition. Therefore, we are revising the regulations 
to clarify that we would not consider operating a vessel in need of 
repair to be a violation, if such a repair was not possible.
(7) Replacement Engines
    The existing provisions of Sec.  1042.615 provide an exemption that 
allows manufacturers to produce new uncertified engines when they are 
needed to replace equivalent existing engines that fail prematurely. 
For many engine sectors, this practice is common, but represents a very 
small faction of a manufacturer's total engine production. We do not 
believe this practice is either common or necessary for Category 3 
engines, and therefore we proposed to not allow this exemption for 
Category 3 engines. However, engine manufacturers commented that there 
have been infrequent but real occurrences where they have needed to 
provide a Category 3 replacement engine in response to premature engine 
failure. To address this concern, we are finalizing a provision that 
would allow us to make an exception in very unusual circumstances and 
allow a manufacturer to make a new Category 3 engine that is exempt 
from current emission standards. Even for the rare case where 
manufacturers would need to supply a replacement Category 3 engine, we 
would expect them generally to be able to provide a certified engine. 
It is clear that removing a failed engine and installing a replacement 
will involve a very significant effort; we would expect this effort to 
include reasonable modifications to accommodate a certified engine even 
if it was somewhat different than the engine being replaced. However, 
if manufacturers can demonstrate under Sec.  1042.615 that no certified 
engine has the physical and performance characteristics to properly 
power the vessel, they may produce a new engine that is exempt from 
emission standards. This may be most likely for vessels that have 
paired Category 3 engines where one of the engines fails prematurely 
and cannot be repaired without being removed from the vessel.
    It is also important to note that the provisions of Annex VI 
related to replacement engines also apply. This generally limits 
replacement engines to those that are identical to the engines being 
replaced.

B. Compliance Provisions To Implement Annex VI NOX Regulation and the 
NOX Technical Code

    In addition to the Clean Air Act provisions being finalized in this 
action, we are also establishing new regulations to implement certain 
provisions of the Act to Prevent Pollution from Ships. These 
regulations are a new part 1043 of title 40.
    The Act to Prevent Pollution from Ships establishes a general 
requirement for vessels operating in the exclusive economic zone and 
navigable waters of the United States to comply with MARPOL Annex VI. 
It also gives EPA and the Administrator the authority to further 
implement MARPOL Annex VI. Many of the requirements relating to 
NOX emissions and fuel sulfur limits can be implemented 
without the need for further elaboration because the Annex, along with 
the NOX Technical Code, provides instructions on how to 
demonstrate compliance with those requirements. However, APPS 
authorizes the Administrator to prescribe any necessary or desired 
additional regulations to assist in carrying out the provisions of 
Regulations 12 through 19 of Annex VI (see 33 U.S.C. 1903(c)(2)). 
Specifically, the regulations being finalized in this FRM in part 1043 
of title 40 are

[[Page 22934]]

intended to assist in the implementation of the engine and fuel 
requirements contained in Regulation 13, 14, and 18 of MARPOL Annex VI. 
They address such issues as how to obtain an Engine International Air 
Pollution Prevention (EIAPP) certificate (which is equivalent in many 
ways to a Clean Air Act certificate of conformity), exemptions for 
vessels used exclusively in domestic service, and requirements for 
vessels not registered by a country that is a Party to Annex VI.
    The requirements being finalized in part 1043 will generally begin 
July 1, 2010. However, the ECA NOX requirements will not 
begin until the Tier 3 NOX standards begin (or when the ECA 
enters into force for the U.S., whichever is later), and the ECA fuel 
requirements will not begin until 12 months after the ECA enters into 
force for the U.S., as provided by Annex VI. It is also important to 
clarify that Annex VI itself was effective for the United States as of 
January 8, 2009. The requirement of the Annex for ships to have a valid 
International Air Pollution Prevention (IAPP) certificate applies for 
U.S. vessels based on when the keel is laid and when it is dry-docking. 
Vessels for which keels were laid (or which were at a similar stage of 
construction) before January 8, 2009 must have on board a valid IAPP 
certificate no later than the first scheduled dry-docking, but in no 
case later than January 8, 2012. Vessels for which keels are laid (or 
which are at a similar stage of construction) after January 8, 2009 
must have on board a valid IAPP certificate upon completion of its 
initial survey before the ship is placed into service.
    The MARPOL Annex VI NOX requirements apply to all marine 
diesel engines above 130 kW. Similarly, the MARPOL Annex VI fuel 
requirements apply to all fuel oil used onboard a vessel, defined as 
any fuel delivered to and intended for combustion purpose for 
propulsion or operation on board any ship, including distillate and 
residual fuels. Thus the part 1043 compliance program described here 
applies somewhat more broadly than the Clean Air Act compliance program 
described earlier for Category 3 engines.
    It is worth noting that while APPS generally requires compliance 
with Annex VI and future amendments to Annex VI, we have incorporated 
by reference the existing 2008 version of the Annex for certain 
purposes. Specifically, we require compliance with the 2008 Annex VI 
NOX and fuel requirements by non-Party vessels and require 
compliance with the ECA requirements by all vessels in our internal 
waters; both of these issues are discussed later. We fully expect to 
update this incorporation by reference whenever aspects of the Annex 
relating to these provisions are amended. However, we recognize that it 
is possible that there will be a brief period during which the 
incorporated version differs slightly from any amended provisions. To 
the extent that occurs, vessels in our internal waters and non-Party 
vessels would be subject to the requirements in the 2008 version (or 
the latest version that has been incorporated by reference).
    In Sec.  1043.1(d), we clarify that these regulations do not limit 
requirements that would otherwise apply pursuant to APPS, except for 
excluding domestic vessels from the Annex VI NOX standard 
(consistent with the allowance in Regulation 13.1.2.2 of the Annex).
(1) EIAPP Certificates
    In general, an engine can be dual-certified under EPA's Clean Air 
Act marine diesel engine program and the MARPOL Annex VI/APPS program. 
However, we require that engine manufacturers submit separate 
applications for the 1042 and EIAPP certificates. The regulations in 
part 1043 specify the process that would apply. The process for 
obtaining the EIAPP is very similar to the process for obtaining a 
certificate of conformity under part 1042, and although there are 
differences between the programs, manufacturers should be able to 
comply with both programs with very little additional work. The primary 
differences are that, to certify to the MARPOL Annex VI standards, the 
manufacturer must include a copy of the Technical File and onboard 
NOX verification procedures (as specified in Section 2.4 of 
the NOX Technical Code) and is not required to provide 
information about useful life, emission labels, deterioration factors, 
or PM emissions.\111\ Engine manufacturers will be able to apply for 
both certifications using the same certification templates and test 
data.
---------------------------------------------------------------------------

    \111\ See 68 FR 9746, February 28, 2003, at 9774-5 for a 
discussion of these differences as they relate to Category 3 marine 
diesel engines.
---------------------------------------------------------------------------

    Consistent with our 1042 program, our 1043 program will require 
that each engine installed or intended to be installed on a U.S.-
flagged vessel have an EIAPP before it is introduced into U.S. 
commerce. The finalized regulations will create a presumption that all 
marine engines manufactured, sold, or distributed in U.S. commerce will 
be considered to be intended to be installed on a U.S.-flagged vessel, 
although this presumption could be rebutted by clear and convincing 
evidence to the contrary (evidence that the engine is intended for 
export, for example). We will also require that all engines that are 
intended only for domestic use be labeled as such. Thus, all engines 
not labeled for domestic use will be presumed to be intended for use on 
vessels subject to part 1043.
(2) Approved Methods
    The 2008 amendments to MARPOL Annex VI added a new provision to the 
engine standards in Regulation 13 that extends the Tier I 
NOX limits to certain engines installed on ships constructed 
on or after January 1, 1990 through December 31, 1999. Specifically, 
engines with power output greater than 5,000 kW and with per cylinder 
displacement at or above 90 liters installed on such ships would be 
required to meet the Tier I NOX limits if a certified 
Approved Method is available. An Approved Method may be certified by 
the Administration of any flag state, but once one is registered with 
the IMO the owner of such an engine must either install the Approved 
Method or demonstrate compliance with the Annex VI Tier I limits 
through some other method. We are including a regulatory section 
codifying this requirement. These regulations are contained in Sec.  
1043.50.
(3) Other Annex VI Compliance Requirements
    Engine manufacturers, vessel manufacturers, vessel owners, and fuel 
providers, fuel distributors, and other directly regulated stakeholders 
are required to comply with all aspects of Regulations 13, 14, and 18 
of Annex VI as well as the NOX Technical Code. These include 
requirements for engine operation, fuel use, fuel oil quality, and 
various recordkeeping requirements (e.g., record book of engine 
parameters, engine technical file, fuel switching procedures, bunker 
delivery notes and associated fuel samples, and fuel sampling 
procedures).
    Regulation 18 of both the original and the revised Annex VI sets 
out the requirements for bunker delivery notes and associated fuel 
samples. All vessels 400 gross tons and above, and each fixed and 
floating drilling rig and other platforms (i.e., those vessels subject 
to Regulations 5 and 6 of both the original and the revised Annex VI) 
are required to keep onboard the vessel bunker delivery notes that 
specify the details of fuel oil brought onboard for combustion 
purposes. These bunker delivery notes may be inspected by the competent 
authority of a Party while the ship is in its port or offshore 
terminals. The competent authority may also verify the

[[Page 22935]]

contents of bunker delivery notes. A fuel sample is required to 
accompany each bunker delivery note, sealed and signed by the 
supplier's representative and the master or officer in charge of fuel 
operations. The sample should be taken pursuant to IMO guidelines and 
is to be retained for at least 12 months from the date of delivery. 
While the IMO guidelines were not in place at the time the original 
Annex was adopted, they were subsequently developed and Regulation 18 
of amended Annex VI refers specifically to these guidelines: 
MEPC.96(47).
    Although these are Annex VI requirements, we are not creating a 
regulatory requirement for the certification of bunker delivery notes 
or fuel samples. Such a requirement would be infeasible with respect to 
the time and resources that would be necessary to certify every batch 
of fuel sold to a vessel above 400 GT in the United States. In 
addition, the requirements in Annex VI clearly call for the sulfur 
content of gas fuels delivered to a ship for combustion purposes be 
documented by the fuel supplier, and that the required fuel sample be 
sealed and signed by the fuel provider and the representative of the 
ship owner.
    It has been brought to the attention of EPA and the Coast Guard 
that some fuel providers in the United States and elsewhere have not 
been issuing bunker delivery notes and/or fuel samples at the time of 
fuel delivery. Ship owners and operators, and fuel providers, are 
reminded that the bunker delivery notes and fuel samples are 
requirements under Annex VI; a vessel can be found in noncompliance 
with the Annex VI fuel requirements if the vessel is inspected at a 
domestic or foreign port. Therefore, ship owners and operators should 
exercise care and diligence in obtaining the necessary bunker delivery 
notes and fuel samples at the time fuel is brought onboard, through the 
fuel contractual arrangement or through other agreement at the time of 
sale, and fuel providers should be certain that they have procedures 
and processes in place to provide the bunker delivery note and fuel 
sample for each batch of fuel delivered.
(4) Non-Party Vessels
    The finalized regulations specify that vessels flagged by a country 
that is not a party to MARPOL (known as non-Party vessels) must comply 
with Regulations 13, 14, and 18 of Annex VI when operating in U.S. 
waters. This requirement fulfills the requirement of 33 U.S.C. 1902(e), 
which requires the adoption of regulations for non-Party vessels such 
that they are not treated more favorably than vessels of countries that 
are party to the MARPOL Protocol. However, since such vessels cannot 
get EIAPP certificates, this provision requires non-party vessels to 
obtain equivalent documentation of compliance with the NOX 
standards of Annex VI.
(5) Internal Waters
    APPS applies Annex VI requirements, including amendments to Annex 
VI that have entered into force for the United States, to ships that 
are in the internal waters of the U.S. Among the requirements added in 
the 2008 amendments to Annex VI are more stringent standards for fuel 
quality and NOX emissions. Many of these standards apply in 
``Emission Control Areas'' (ECAs) to be designated by the Parties to 
Annex VI. As described earlier, the U.S. and Canada submitted an 
application for a North American ECA, adoption of which is anticipated 
in March 2010.
    As some commenters have noted, the ECA proposal does not include 
U.S. or Canadian internal waters. While the two governments did not 
specifically seek designation for internal waters in their ECA 
proposal, it is evident that emissions in internal waters are of 
greater concern than emissions occurring from the baseline seaward to 
200 nautical miles. Vessel emissions in internal waters are often even 
closer to U.S. population centers than emissions in coastal waters. 
Emissions in internal waters affect U.S. air quality to an equal, if 
not greater, degree to emissions in coastal waters. Given these 
considerations, EPA believes that Congress' direction to apply Annex VI 
requirements to ships in the internal waters of the United States, as 
well as its grant of authority to EPA to administer the relevant 
regulations of Annex VI, confers the authority to apply the fuel 
quality and emissions requirements that apply to ECAs to ships in 
internal waters.
    We also note the application of these standards to internal waters 
should not disturb reasonable expectations or impose a significant 
burden on industry. It has always been presumed in our analyses 
supporting the ECA proposal and this rule, and is the customary 
practice in the North Sea and Baltic Sea SECAs, that vessels will 
continue to comply with the emissions standards anytime they operate on 
the landward side of the ECA boundary, including in a country's 
internal waters. We are not aware of anyone ever suggesting that a 
vessel complying with ECA standards would increase its emissions while 
it remains in port or other body of water that is part of or connected 
to an ECA. We do not believe that vessels would generally choose to 
switch to higher sulfur fuels or choose to turn off Tier III control 
strategies in internal waters. In most cases, ocean-going vessels only 
operate in internal waters for short periods of time while entering and 
leaving ports. Switching to high sulfur fuel or turning off and on 
NOX control strategies could be time consuming and may not 
be justified by the limited operational cost savings.
    We are finalizing regulatory text to codify Annex VI global 
requirements and clarify application of Annex VI ECA requirements to 
ships in U.S. internal waters. Specifically, the regulatory text 
includes the APPS requirements for vessels to comply with Annex VI 
global requirements in our internal waters. The regulatory text also 
clarifies that vessels operating in U.S. internal waters, shoreward of 
an ECA, that can be accessed by ocean-going vessels must meet Annex VI 
ECA requirements. This includes ports and internal waters such as the 
Great Lakes. In the regulatory text we refer to the internal waters in 
which we are applying the ECA requirements as the ``ECA associated 
area.'' The regulatory text will apply the ECA requirements for these 
internal waters beginning the same time the ECA takes effect under 
Annex VI.
    Application of the ECA requirements under APPS to our internal 
waters does not replace but rather augments our Clean Air Act 
standards. The Clean Air Act exhaust emission and fuel standards apply 
regardless of the APPS provisions, except to the extent that any of the 
new CAA provisions refer to the ECA boundaries.
    We received extensive comments on the economic and safety impacts 
of applying the ECA engine and fuel requirements to vessels that 
operate on the Great Lakes. The Summary and Analysis of Comments for 
this rule includes a discussion of the economic impacts of applying the 
ECA engine and fuel requirements to vessels that operate on the Great 
Lakes. In addition, EPA will perform a study and issue a report 
evaluating the economic impact of the final rule on Great Lakes 
carriers. We will work with Great Lakes stakeholders in conducting the 
study and expect to complete the report in summer 2010.
    In addition to recommending the above-mentioned study, Conference 
Report 111-316 accompanying HR 2996, the Department of Interior, 
Environment, and Related Agencies Appropriations Act, 2010, suggests 
that EPA should include two waiver provisions for Great Lakes carriers 
in this final rule. Based on this statement

[[Page 22936]]

and concerns that have been raised by the Great Lakes shipping 
industry, we are finalizing a new provision to address certain vessels 
operating exclusively on the Great Lakes (hereinafter, ``Great Lakes 
vessels''). Specifically, we are finalizing a provision that provides 
for relief in the event of serious economic hardship. This economic 
hardship provision allows Great Lakes shippers to petition EPA for a 
temporary exemption from the 2015 fuel sulfur standards. The shipper 
must show that despite taking all reasonable business, technical, and 
economic steps to comply with the fuel sulfur requirements, the burden 
of compliance costs would create a serious economic hardship for the 
company. The Agency will evaluate each application on a case-by-case 
basis. Our experience to date shows that detailed technical and 
financial information from the companies seeking relief has been 
necessary to fully evaluate whether a hardship situation exists. As 
such, we may request additional information as needed. Typically, 
because of EPA's comprehensive evaluation of both financial and 
technical information, action on hardship applications can take 
approximately six months. Because of this, applications for an economic 
hardship waiver must be submitted to EPA by January 1, 2014. As is our 
historic practice with fuel waivers, if we approve a delay in meeting 
the fuel sulfur requirements, we expect to impose appropriate 
conditions to: (1) Ensure the shipper is making its best effort; and 
(2) minimize any loss of emissions benefits from the program.
    In the Conference Report, Congress also indicated that EPA should 
provide a waiver for the requirement for the use of 1.0 percent fuel 
sulfur (10,000 ppm) standard if residual fuel meeting that standard is 
not available on the Great Lakes. In response to this statement and 
comments from the Lake Carriers Association, we are creating a 
provision that will ensure that operators on the Great Lakes will be 
able to buy marine residual fuels if compliant 10,000 ppm S fuel is not 
available. Under this provision, if marine residual fuel meeting the 
10,000 ppm S standard is not available, it will not be a violation of 
our standards for vessel operators to bunker and use marine residual 
fuel with sulfur content above 10,000 ppm S provided the fuel they do 
purchase is the lowest sulfur marine residual fuel available at the 
port. We believe this market based approach will provide a significant 
incentive to fuel suppliers to provide 10,000 ppm S fuel, while giving 
Great Lakes shippers confidence that marine residual fuel will be 
available for their use during the 10,000 ppm S fuel program.
    Finally, some commenters raised technical and safety issues 
associated with operating Great Lakes steamships on distillate fuel. 
Great Lakes steamships operate in fresh water and therefore have very 
long lives. Many of the boilers used on these vessels were manufactured 
and constructed in the 1940s and 1950s and were designed specifically 
to operate on heavy fuel oils. Due to these technical issues, we 
considered a number of options for how to address these vessels. 
However, Congress placed a prohibition on EPA's use of funds in this 
fiscal year to issue a final rule that includes fuel sulfur standards 
applicable to existing steamships that operate exclusively within the 
Great Lakes. Therefore, we are excluding Great Lakes steamships from 
the fuel sulfur requirements. For the purpose of this exclusion, Great 
Lakes steamships means vessels, operating exclusively on the Great 
Lakes and Saint Lawrence Seaway, whose primary propulsion is a steam 
turbine or steam reciprocating engine. In addition, these steamships 
must have been in service on the Great Lakes prior to October 30, 2009. 
This does not include diesel propulsion Category 3 vessels with 
auxiliary boilers.
    Totem Ocean Trailer Express (TOTE) raised similar concerns for the 
small number of steamships operating along the U.S. coasts. As these 
vessels do not operate exclusively within U.S. internal waters, they 
fall under the U.S. Government's (primarily EPA and Coast Guard's) 
implementation of the ECA provisions of Annex VI. The requirements of 
the Annex VI ECA fuel sulfur limits apply to all vessels and have no 
exemptions for steamships. It is not within the scope of this 
rulemaking to amend the requirements of the MARPOL Annex VI treaty. 
However, through TOTE's comments and follow-up conversations with ship 
owners, we agree that special challenges exist for the use of lower 
sulfur fuel in steamships. Therefore, we will continue to work on this 
issue with the United States Coast Guard and other members of the U.S. 
Delegation to IMO as well as other interested stakeholders including 
the affected steamship operators. We are committed to resolving this 
issue before the end of 2011, well in advance of January 2015 when the 
0.1 percent fuel sulfur standard will enter into force.
(6) Exemptions and Exclusions
    Under MARPOL Annex VI and APPS, certain vessels are excluded from 
some or all of the requirements. Consistent with Annex VI and APPS, the 
regulations in 1043 will exclude public vessels and engines intended to 
be used solely for emergencies. For the purpose of this provision, the 
term ``public vessels'' includes all warships and naval auxiliary 
vessels, as well as any other vessels owned or operated by a sovereign 
country engaged in noncommercial service. Consistent with the 
provisions in APPS, we are not applying the Annex VI requirements to 
U.S.-flagged public vessels (or foreign public vessels excluded by 
their flag states). It should be noted, however, that not all public 
vessels are exempt from our Clean Air Act engine and fuel requirements. 
Only public vessels covered by a national security exemption under 
Sec.  94.908 or Sec.  1042.635 are exempt from the Clean Air Act 
program.
    The category of emergency engines includes engines that power 
equipment such as pumps that are intended to be used solely for 
emergencies and engines installed in lifeboats intended to be used 
solely in emergencies. It should be noted that the emergency engine 
provisions in the Annex and part 1043 are similar but not identical to 
the emergency engine provisions in our Clean Air Act program or the 
process of obtaining our CAA exemptions. In particular, the emergency 
engine exemption from the CAA requirements applies only with respect to 
the catalyst-based Tier 4 standards.
    We are exempting from the MARPOL Annex VI NOX standards 
engines installed on vessels registered or flagged in the United States 
provided the vessel remains within the EEZ of the United States. These 
engines will still be required to meet stringent emission standards 
since they are covered by our Clean Air Act program. In addition, the 
fuels used by these vessels are also covered by our Clean Air Act 
program, which has more stringent fuel requirements than Annex VI. 
Therefore, as long as the operators of these domestic vessels comply 
with these more stringent Clean Air Act fuel requirements, they will be 
deemed to be in compliance with the Annex VI requirements. The 
combination of these proposed provisions will mean that a fishing 
vessel that operates out of a U.S. port and that never leaves U.S. 
waters will not be required to have an EIAPP for all engines above 130 
kW, a record book of engine parameters and a technical file for each 
engines, and vessels over 400 gross tons will not be required to 
maintain bunker delivery notes (vessels under 400 gross tons are not 
required by Regulation 18 of MARPOL Annex VI to have bunker delivery 
notes). Instead, the engines on

[[Page 22937]]

that vessel will be required to be in compliance with our marine diesel 
engine standards and be required to comply with the manufacturer's 
requirements with regard to the proper fueling of those engines. We are 
also explicitly precluding these engines from being certified to use 
residual fuel if they are exempt from the part 1043 requirements. Thus, 
these engines will be required to always use cleaner fuels than are 
required by Annex VI. U.S. vessels that operate or may operate in 
waters that are under the jurisdiction of another country are not 
exempt from these provisions, and the owner of any such vessel may be 
required by that country to show compliance with Annex VI. Therefore, 
the owner should be sure to maintain the appropriate paperwork for that 
engine and have the appropriate engine certification. It should be 
noted that engines that must show compliance with the Annex VI 
standards are not exempt from EPA's standards for Category 1 or 
Category 2 engines.
    Finally, spark-ignition, non-reciprocating engines, and engines 
that do not use liquid fuel are not included in Regulation 13 of the 
Annex VI program and therefore they will not be covered by the proposed 
APPS regulations with respect to NOX emissions. However, the 
MARPOL Annex VI fuel requirements do apply for these vessels. These 
engines are generally subject to separate Clean Air Act fuel 
requirements and/or emission standards that effectively require the use 
of low sulfur fuels, either directly or indirectly.

C. Changes to the Requirements Specific to Engines Below 30 Liters per 
Cylinder

    The amendments to MARPOL Annex VI were adopted in October of 2008, 
after we finalized our Clean Air Act Tier 3 and Tier 4 standards for 
Category 1 and Category 2 engines (May 6, 2008, 73 FR 25097). While 
these two programs are very similar, there are a few differences 
between them with regard to their engine requirements. We are adopting 
some changes to our CAA program to facilitate compliance with both 
programs. In addition, some of the provisions described in Section VI.D 
may also apply to Category 1 and Category 2 marine diesel engines, 
regarding non-diesel engines and technical amendments to our current 
program.
(1) MARPOL Annex VI and EPA's Standards for Category 1 and Category 2 
Engines
    Our existing regulations include an exemption for Category 1 and 
Category 2 engines on certain migratory vessels. This allowance is 
limited to vessels that are operated primarily outside of the United 
States, and that obtain and maintain SOLAS certification and 
appropriate EIAPP certification demonstrating compliance with Annex VI. 
We are making some minor modifications to this allowance to reflect the 
new Annex VI standards.
    We are also revising Sec.  1042.650 to add exemption provisions for 
Category 1 and Category 2 auxiliary engines on vessels with Category 3 
propulsion engines. These auxiliary engines would be exempt from the 
part 1042 standards, but would still be required to comply with the 
Annex VI standards. In addition, engines that would have been subject 
to the Tier 4 standards of part 1042 would be required to conform to 
the Tier III NOX requirements, irrespective of whether they 
would be required to comply under Annex VI. For example, this would 
affect 2015 Category 2 engines with a maximum engine power of 3000 kW 
installed on a 2015 vessel since such an engine would be subject to the 
Tier 4 standards under Sec.  1042.101, but would have only been subject 
to the Tier II standards under Annex VI.
    Given the MARPOL Annex VI and CAA NOX requirements are 
comparable, with slightly different phase-in dates and cut-offs, we 
believe this approach will be a less burdensome implementation approach 
over transitioning years, and will not have a meaningful impact on 
emission reductions. In the absence of this exemption, manufacturers 
would have been required to certify special auxiliary engines that met 
both Annex VI and 1042 requirements for a U.S. market that could be as 
small as one engine per year. By allowing manufacturers to meet only 
the Annex VI requirements, they would be able to produce a single 
international engine and spread the administrative costs over many more 
engines. It is important to note that we are not extending this 
exemption to vessels powered by smaller engines because these factors 
cannot be presumed for such vessels.
(2) On/Off Technology for Category 1 and 2 Engines
    As described in Section VI.A.3 above, we proposed to allow the use 
of auxiliary emission control devices (AECDs) that would allow 
modulation of emission control equipment on Category 3 engines outside 
of specific geographic areas. These AECDs would be subject to certain 
restrictions: (1) The AECD would be available for the Tier 3 standards 
only; (2) the AECD would modulate emission controls only while 
operating in areas where emissions could reasonably be expected to not 
adversely affect U.S. air quality; and (3) an engine equipped with an 
AECD must also be equipped with a NOX emission monitoring 
device.
    We are expanding our proposed allowance for ocean-going vessels 
with Category 3 propulsion engines to also include Category 1 and 
Category 2 engines to provide auxiliary power. We are not allowing this 
option for U.S. vessels with Category 1 or Category 2 propulsion 
engines.

D. Other Regulatory Issues

    In addition to the changes described in Sections VI.A and VI.C, we 
are also finalizing changes that apply to marine engines in general, 
and/or to other types of engines.
(1) Non-Diesel Engines
    Most of the preceding discussions have focused on conventional 
diesel engines using either diesel fuel or residual fuels. It is 
important to highlight two other types of engines being affected by 
this proposal: engines using other fuels and gas turbine engines.
(a) Engines Not Using Diesel Fuel
    For all categories of marine engines, our existing standards apply 
to all engines meeting the definition of compression-ignition, 
regardless of the fuel type. For example, compression-ignition Category 
3 engines that burn natural gas are subject to our Tier 1 standards and 
will be subject to our finalized Tier 2 and Tier 3 standards. We are 
continuing to apply this approach for all marine engines subject to our 
standards.
    The testing regulations in part 1065 include test fuel 
specifications for diesel fuel, residual fuel, and natural gas (as well 
as for gasoline and liquefied petroleum gas, which would not typically 
be used in a compression-ignition engine). To certify an engine for a 
different fuel type, a manufacturer will need to obtain EPA approval to 
use an alternate fuel which it recommends for testing. All other 
aspects of certification will be the same.
(b) Gas Turbine Engines
    Gas turbine engines are internal combustion engines that can 
operate using a variety of fuels (such as diesel fuel or natural gas) 
but do not operate on a compression-ignition or other reciprocating 
engine cycle. Power is extracted from the combustion gas using a 
rotating turbine rather than reciprocating pistons. The primary type

[[Page 22938]]

of U.S.-flagged vessels that use gas turbine engines are naval combat 
ships. While a small number have been used in commercial ships, we are 
not aware of any current sales for commercial applications. They can 
range in size from those equivalent in power to mid-size Category 1 
engines to those that produce the same power as Category 3 engines. 
None of these engines have been subject to our current standards 
because they do not meet the definition of compression-ignition engines 
in our existing regulations.
    To date, this omission has not been a concern because only a small 
number of turbine-powered vessels have been produced and nearly all of 
them would have been eligible for a national security exemption. 
However, we were concerned that this exclusion may become a loophole in 
the future for operators hoping to avoid using engines with advanced 
catalytic emission controls. To a lesser degree, we also had concerns 
about the possibility of other non-reciprocating engines being 
excluded. We are closing this potential loophole by revising the 
regulations to treat new gas turbine engines (as well as other non-
reciprocating engines) the same as compression-ignition engines and to 
apply our standards for new Category 1 and Category 2 engines 
(including NOX, HC, CO, and PM standards) to gas turbine 
engines.
    Several commenters objected to finalizing this requirement. They 
argued primarily that this would not align with MARPOL. They also 
asserted that the proposed requirements would not pass a cost/benefit 
analysis and that turbines cannot be tested under the procedures of 40 
CFR part 1065. However, they did not provide any information about 
costs, benefits, or test procedures. As described in the RIA and the 
Summary and Analysis of Comments Document, we continue to believe the 
requirements are feasible and appropriate. As described below, we are 
finalizing these requirements largely as proposed. The primary revision 
being made is to delay them until the Tier 4 timeframe to provide 
turbine manufacturers additional lead time.
    To incorporate this approach in our marine emission control 
program, we are changing our definitions of Category 1 and Category 2 
to include gas turbine engines. Since turbine engines have no 
cylinders, we are adopting a conversion convention to apply the 
regulatory provisions that depend on a specified value for per-cylinder 
displacement. This convention is intended to apply the standards based 
on equivalent power ratings, to the extent possible. Specifically, we 
are redefining ``Category 1'' to include gas turbines with rated power 
up to 2250 kW and redefining ``Category 2'' to include all gas turbines 
with higher power ratings. This means we will not consider any gas 
turbines as ``Category 3'' engines. The largest gas turbine engines 
will be considered to be Category 2 engines, even those that had rated 
power more typical of Category 3 diesel engines. We are adopting this 
approach primarily because our Category 3 standards vary with engine 
speed, and are specified based on a speed range typical of diesel 
engines. These formulas do not make sense for gas turbine engines since 
they have much higher engine speeds.
    We are aware that some companies are manufacturing new high-
performance recreational vessels using gas turbine engines. In at least 
some cases, the engines are modified from surplus military aircraft 
engines. We have not yet determined whether such recreational engines 
should be held to the same standards as conventional diesel engines. It 
is also important to note that under our current regulations, diesel 
engines meeting the definition of ``recreational marine engine'' in 
Sec.  1042.901 are not subject to catalyst forcing standards. This 
approach was applied because of factors such as the usage patterns for 
recreational diesel engines. We believe these same factors to apply for 
recreational gas turbine engines. Thus, we are not as concerned about a 
potential gas turbine loophole for recreational engines as for 
commercial engines. We also do not have enough information at this time 
to know how feasible it would be for small gas turbine engine 
manufacturers to comply with the standards for recreational diesel 
engines, or to accurately assess the environmental impact of these 
vessels. Nevertheless, it is clear that the environmental impact of 
such small numbers of these engines cannot be large. Thus, at this 
time, we are not applying this regulatory change to recreational gas 
turbine engines (i.e., that is gas turbine engines installed on 
recreational vessels). We will continue to investigate these engines 
and may subject them to standards in the future.
    Our diesel engine program contains a national security exemption 
that automatically exempts vessels ``used or owned by an agency of the 
Federal government responsible for national defense, where the vessel 
has armor, permanently attached weaponry, specialized electronic 
warfare systems, unique stealth performance requirements, and/or unique 
combat maneuverability requirements.'' Since it is not our intent to 
prohibit naval vessels from using turbine engines, we are revising this 
provision to automatically exempt military vessels owned by an agency 
of the Federal government responsible for national defense powered by 
gas turbine engines.
    We are confident that gas turbine engines could use the same type 
of aftertreatment as is projected for diesel engines. The basic 
reactions through which SCR reduces NOX emissions can occur 
under a wide range of conditions, and exhaust from gas turbine engines 
is fundamentally similar to exhaust from diesel engines. Viewed another 
way, however, this requirement can be considered to be feasible based 
on the fact that the only circumstance in which a vessel would actually 
need a gas turbine engine would be for military purposes where our 
national security exemption provisions will apply. For all other 
vessels, it is entirely feasible for the vessel to be powered by a 
diesel engine. In fact, that is what is being done today.
    This program for gas turbine engines will apply to freshly 
manufactured engines only. We are not applying our marine remanufacture 
program to gas turbine engines. Because there are so few engines in the 
fleet, it is not possible to know what common rebuilding process are or 
whether and how those practices would return an existing engine to as-
new condition. We may review this approach in the future if there is an 
increase in the number of gas turbines in the fleet.
    Finally, it is important to address some confusion expressed by the 
commenters about our definitions. We agree that it would be incorrect 
to actually define turbine engines as reciprocating or compression 
ignition, which is what the commenters thought we had proposed. 
However, we did not propose to define turbines to be reciprocating or 
compression-ignition engines. The commenters misread Sec.  1042.1(f), 
which states that certain marine engines ``are subject to all the 
requirements of this part even if they do not meet the definition of 
`compression-ignition' in Sec.  1042.901.'' This provision subjects 
marine gas turbine engines to the requirements of part 1042, but it 
explicitly recognizes that they do not meet the definition of 
compression-ignition in Sec.  1042.901. The confusion seems to arise 
from the statement that these engines ``are deemed to be compression-
ignition engines for the purposes of this subchapter.'' This statement 
is merely a regulatory convention that means the part applies to 
turbines as if they did meet the definition.

[[Page 22939]]

(2) Technical Amendments
    The finalized regulations include technical amendments to our motor 
vehicle and nonroad engine regulations. These changes are generally 
corrections and clarifications. A large number of these changes are the 
removal of obsolete highway engine text that applied only for past 
model years. Many others are changes to the text of part 1042 to make 
it more consistent with the language of our other recently corrected 
nonroad parts. The last large category of changes includes those 
related to the test procedures in part 1065. See the memorandum in the 
docket entitled ``Technical Amendments to EPA Regulations'' for a full 
description of these changes.\112\
---------------------------------------------------------------------------

    \112\ See ``Technical Amendments to EPA Regulations,'' EPA 
memorandum from Alan Stout, in the docket for this rule, Docket No.: 
EPA-HQ-OAR-2007-0121.
---------------------------------------------------------------------------

E. U.S. Vessels Enrolled in the Maritime Security Program

    The U.S. Department of Transportation Maritime Administration 
(MARAD) oversees the Maritime Security Program (MSP) established by the 
Maritime Security Act of 1996 and reauthorized by the Maritime Security 
Act of 2003 (MSA). The MSA requires that the Secretary of 
Transportation, in consultation with the Secretary of Defense, 
establish a fleet of active, commercially viable and militarily useful 
vessels to meet national defense and other security requirements and 
maintain a U.S. presence in international commercial shipping. The 
fleet consists of privately-owned, U.S.-flagged vessels known as the 
Maritime Security Fleet (MSF). 46 U.S.C. 53102 outlines that vessels 
complying with applicable international agreements and associated 
guidelines are eligible for a certificate of inspection from Coast 
Guard, and thus inclusion in the MSF.
    The requirements of the MSP may have created confusion for owners 
of non-U.S.-flagged vessels regarding their obligation to also comply 
with EPA's domestic marine diesel engine emission standards at the time 
they re-flag for inclusion in the MSF. We want to remind vessel owners 
that the MSA does not preempt the Clean Air Act or alleviate their 
obligation to comply with EPA's marine diesel engine program, or any 
other EPA requirements that apply to marine vessels. As is clear from 
our past rulemakings, it has always been our intent that each U.S.-
flagged vessel must comply with all of EPA's domestic standards, 
regardless of whether the vessel was flagged in the U.S. upon original 
delivery into service.
    We are revising the regulations to clarify these requirements and, 
as noted earlier, to provide exemptions for auxiliary engines on 
Category 3. First, we are revising Sec.  1042.1 to clarify that our 
regulations apply for all U.S.-flagged vessels. In conjunction with 
this, we are revising the definitions of ``model year'' and ``new 
marine engine'' to clarify that our marine engine program applies to 
all U.S.-flagged vessels regardless of where that vessels is built or 
operated, and how the regulations apply for vessels that are re-flagged 
to be U.S. vessels.
    We are clarifying that engines on foreign vessels that vessels 
become ``new marine engines'' under part 1042 at the point at which 
they are reflagged. As new marine engines, we would expect them to be 
covered by valid certificates and/or exemptions prior to being placed 
into service. If engines on U.S.-flagged vessels are not covered by 
valid certificates and/or exemptions when they first enter U.S. waters, 
they would be subject to all of the prohibitions of part 1068.101. The 
operator would be in violation of the prohibition against introduction 
of an uncertified new engine into U.S. commerce.
    Some of the revisions being finalized are intended to simplify the 
transition from part 94 to part 1042. Under the revised regulations, 
part 1042 becomes the default regulatory part for compression-ignition 
marine engines. Section 1043.1 specifies that such marine engines are 
subject to part 1042 unless they are certified under part 94. In 
addition, Sec.  1042.1(c) specifies that the definition of ``new marine 
engine'' in Sec.  1042.901 applies for engines certified under part 94. 
This is important because our standards and prohibitions apply for 
engines meeting the definition of ``new marine engine''. Thus, to 
determine whether an uncertified marine engine is subject to our 
standards and prohibitions, you must determine whether it meets any of 
the criteria of the definition of ``new marine engine'' in Sec.  
1042.901.
    Each ``new marine engine'', is subject to standards based on its 
model year. The revised definition of ``model year'' specifies that 
engines on re-flagged vessels would generally be subject to the 
standards that would have applied in the year they were originally 
manufactured. If the engine has a model year before the years the part 
94 standards first applied, it would not be subject to any standards. 
If the engine has a later model year but one that is before the years 
the part 1042 standards apply, it would be subject to the standards of 
part 94. According to Sec.  1042.1(c), if the engine is certified to 
these part 94 standards, it is not required to comply with the 
requirements of part 1042.
    To further smooth this transition, we are finalizing a new interim 
provision in Sec.  1042.145(i). This provision is intended to apply for 
vessel operators that were not aware that their vessels were required 
to comply with our regulations. Once this amendment takes effect, it 
will allow them to operate in U.S. waters until July 1, 2010 without 
certificates or exemptions for their engines. After that, it will be a 
violation of 40 CFR 1068.101 to operate in U.S. waters with uncertified 
engines if those engines are subject to our standards. Operation of 
such vessels in U.S. waters on or after July 1, 2010 is deemed to be 
introduction into U.S. commerce of a new marine engine.

VII. Costs and Economic Impacts

    In this section, we present the projected cost impacts and cost 
effectiveness of the coordinated emission control strategy for large 
marine vessels with a per cylinder displacement greater than 30 Liters 
per cylinder. We also present our analysis of the economic impacts of 
the coordinated strategy, which consists of the estimated social costs 
of the program and how those costs will likely be shared across 
stakeholders. The projected benefits and benefit-cost analysis of the 
coordinated strategy are presented in Section VIII.
    We estimate the costs of the coordinated strategy to be about $1.85 
billion in 2020, increasing to $3.11 billion in 2030.\113\ Of the 2020 
costs, nearly 89 percent or $1.64 billion are attributable to the fuel 
sulfur provisions. The total operational costs are estimated to be 
$1.82 billion in 2020. The costs to apply engine controls to U.S.-
flagged vessels are expected to be $31.9 million in 2020, increasing to 
$47.4 million in 2030 as more ships are built to comply with Clean Air 
Act (CAA) Tier 3 NOX limits. All costs are presented in 2006 
U.S. dollars.
---------------------------------------------------------------------------

    \113\ These total estimated costs are slightly different than 
those reported in the ECA proposal, because the ECA proposal did not 
include costs associated with the Annex VI existing engine program, 
Tier II, or the costs associated with existing vessel modifications 
that may be required to accommodate the use of lower sulfur fuel. 
Further, the cost totals presented in the ECA package included 
Canadian cost estimates.
---------------------------------------------------------------------------

    When attributed by pollutant, at a net present value of 3 percent 
from 2010 through 2040, the NOX controls are expected to 
cost about $510 per ton of NOX reduced, SOX 
controls are expected to cost about $930 per ton of SOX 
reduced, and the PM controls are

[[Page 22940]]

expected to cost about $7,950 per ton of PM reduced ($500, $920, and 
$7,850 per ton of NOX, SOX, and PM respectively, 
at a net present value of 7 percent over the same period). These costs 
are comparable to our other recently adopted mobile source programs, 
and are one of the most cost-effective programs in terms of 
NOX and PM when compared to recent mobile and stationary 
programs. The coordinated strategy also provides very cost-effective 
SOX reductions comparable to the Heavy-Duty Nonroad diesel 
rulemaking.
    The social costs of the program are estimated to be approximately 
$3.1 billion in 2030. The impact of these costs on society is estimated 
to be minimal. For example, we estimate the cost of shipping a 20-foot 
container on the Pacific route, with 1,700 nm of operation in the ECA, 
would increase by about $18, or less than 3 percent. Similarly, the 
price of a seven-day Alaska cruise that operates mainly in the ECA is 
expected to increase by about $7 per day.
    The estimated costs presented in this section are for the entire 
coordinated strategy, including those requirements that are the subject 
of this action and those that are associated with the proposed ECA 
designation. Table VII-1 sets out the different components of the 
coordinated strategy for 2020. The costs of the coordinated strategy 
consist of the costs associated with the MARPOL Annex VI global 
standards that are operational through APPS, some of which we are also 
adding to our CAA emission control program for U.S. vessels (Tier 2 and 
Tier 3 NOX emission control hardware for U.S. vessels; 
operating costs for the Tier 2 NOX requirements; controls 
for existing vessels; certain compliance requirements). Also included 
are the costs associated with complying with the engine standards and 
low sulfur fuel limits in U.S. internal waters (Tier 3 operating costs; 
fuel sulfur hardware and operating costs).
    Note that, with regard to hardware costs, the coordinated strategy 
includes the entire cost for new U.S. vessels to comply with the Tier 3 
NOX standards and fuel limits, even though some of the 
benefits from using these emission control systems will occur outside 
the United States. Conversely, we do not include any new vessel Tier 3 
or fuel hardware costs for foreign vessels that operate in U.S. waters 
even though a significant share of the benefits of the coordinated 
strategy will arise from foreign vessels that comply with the engine 
and fuel sulfur limits while operating within the U.S., ECA and 
internal waters.
    The regulatory changes finalized for Category 1 and 2 engines are 
not included in this cost analysis as they are intended to be 
compliance flexibilities and not result in increased compliance costs. 
Similarly, the technical amendments finalized for other engines will 
not have significant economic impacts and are therefore not addressed 
here. Finally, to provide for a representative comparison between costs 
and benefits of the program, the cost analysis presented here assumes 
that all vessels currently using residual fuel will operate on 
distillate fuel in an ECA, including Great Lakes steamships. As noted 
in earlier chapters, Great Lakes steamships have been excluded from the 
final fuel sulfur standards. This change is not expected to have a 
significant impact on the estimated costs or benefits of the rule as 
those vessels are not a large part of the national inventory.

                Table VII-1--Costs Associated With the U.S. Coordinated Strategy and Canadian ECA
                                        [Estimated Costs for 2020, $2006]
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
                Program element                     U.S. coordinated strategy              Canadian ECA
----------------------------------------------------------------------------------------------------------------
Hardware--T2 (variable costs;  U.S. vessels....  $3,310,000.....................  NA--not part of ECA.
 fixed costs applied in 2010).
                               Foreign Vessels.  N/A--global std................  NA--not part of ECA.
Hardware--T3 (variable costs;  U.S. vessels      $28,700,000....................  $100,000,000.
 fixed costs recovered in the   (variable
 year in which they occur:      costs; fixed
 2011-15).                      costs recovered
                                in the year in
                                which they
                                occur: 2011-15).
                               Foreign vessels:  $296,700,000...................
                                30% of vessels
                                making 75% of
                                entrances to
                                U.S. ports \a\.
                               Foreign vessels:  $692,200,000...................
                                70% of vessels
                                making 25% of
                                entrances to
                                U.S. ports \a\.
Hardware--Fuel...............  U.S. vessels      $804,000.......................  $10,000,000.
                                (new vessel
                                costs).
                               Foreign vessels   $23,600,000....................
                                (new vessel
                                costs).
Operating--T2 (inside full     U.S. vessels....  $5,630,000.....................  NA--not part of ECA.
 inventory modeling domain).
                               Foreign vessels.  $32,900,000....................  NA--not part of ECA.
Operating--T3 (inside          U.S. vessels....  $15,800,000....................  $30,000,000.
 relevant part of affected
 waterways).
                               Foreign vessels.  $127,000,000...................
Operating--Fuel (inside        U.S. vessels....  $210,000,000...................  $260,000,000.
 relevant part of affected
 waterways).
                               Foreign vessels.  $1,430,000,000.................
Existing vessels--engine       U.S. vessels....  $0.............................  NA--not part of ECA.
 costs (all U.S. vessels 1990-
 99 retrofit during first 5
 years of program, 2011-15).
                               Foreign vessels.  N/A--global std................  NA--not part of ECA.
Existing vessels--vessel fuel  U.S. vessels....  $0.............................  Canada did not provide.
 switching costs (all U.S.
 vessels 1999-90 retrofit
 during first 5 years of
 program, 2011-15).
                               Foreign vessels.  $0.............................  Canada did not provide.
----------------------------------------------------------------------------------------------------------------

    The estimated costs presented in this section are for the Federal 
program as a whole. We do not estimate costs on a regional or owner-
specific basis. We received several comments from owners of vessels 
operating on the Great Lakes

[[Page 22941]]

contending that the impact of the proposed control program on their 
operations is unique, and that the economic impacts of the program on 
these operators should be estimated separately. As explained in Section 
VI of this preamble and in more detail in the Summary and Analysis of 
Comments prepared for this final rule, we are providing various 
regulatory flexibilities for operators that may have difficulty 
complying with the requirements of this rule. In addition, as part of 
EPA's appropriation bill (Pub. L. 111-88), Congress recommended that 
EPA perform a study to evaluate the economic impact of the final rule 
on Great Lakes carriers, with a final report due in the summer of 2010. 
We will be soliciting input from affected entities as we prepare that 
report.

A. Estimated Fuel Costs

    The coordinated strategy includes fuel sulfur limits which are 
included in this cost analysis. Prior to this final rule, all 
distillate fuels produced at refineries in the U.S. had a sulfur 
limitation of 15 ppm. The coordinated strategy does not impose 
additional costs for refiners in the U.S. and actually allows 
additional flexibility. Specifically, we are allowing distillate fuel 
to have up to 1,000 ppm sulfur for use in Category 3 vessels. The fuel 
requirements will impose a cost to the ship owners. This section 
presents estimates of the cost of compliance with the 1,000 ppm sulfur 
limit in the U.S. waterways.
    Distillate fuel will likely be used to meet the 1,000 ppm fuel 
sulfur limit, beginning in 2015. As such, the primary cost of the fuel 
sulfur limit for ship owners will be that associated with switching 
from heavy fuel oil to higher-cost distillate fuel. Some engines 
already operate on distillate fuel and will not be affected by fuel 
switching costs. However, distillate fuel costs may be affected by the 
need to further refine the distillate fuel to meet the 1,000 ppm sulfur 
limit.
    To investigate these effects, studies were performed on the impact 
of a North American ECA on global fuel production and costs, to inform 
the application for such ECA.\114\ These studies were performed prior 
to the ECA being defined; thus, we picked a maximum distance boundary 
to ensure the fuel volumes used for the cost analysis would be larger 
than required by the program. Specifically, we used the total fuel 
consumption in the U.S. and Canada exclusive economic zones.\115\ The 
studies are relevant to this regulation as well, since they estimate 
the cost of 1,000 ppm sulfur fuel for Category 3 vessels operating in 
U.S. waterways.
---------------------------------------------------------------------------

    \114\ Research Triangle Institute, 2009. ``Global Trade and 
Fuels Assessment--Future Trends and Effects of Designating Requiring 
Clean Fuels in the Marine Sector''. Prepared for U.S. Environmental 
Protection Agency. Research Triangle Park, NC.
    \115\ In this analysis, the U.S. included the lower 48 
contiguous States and southeastern Alaska.
---------------------------------------------------------------------------

    To assess the effect on the refining industry of the imposition of 
a 1,000 ppm sulfur limit on fuels, we needed to first understand and 
characterize the fuels market. Research Triangle Institute (RTI) was 
contracted to conduct a fuels study using an activity-based economic 
approach. The study established baseline bunker fuel demand, projected 
a growth rate for bunker fuel demand, and established future bunker 
fuel demand volumes.\116\ These volumes then became the input to the 
World Oil Refining Logistics and Demand (WORLD) model to evaluate the 
effect of the coordinated strategy on fuel cost.
---------------------------------------------------------------------------

    \116\ Research Triangle Institute, 2009. ``Global Trade and 
Fuels Assessment--Future Trends and Effects of Designating Requiring 
Clean Fuels in the Marine Sector''. Prepared for U.S. Environmental 
Protection Agency. Research Triangle Park, NC.
---------------------------------------------------------------------------

    The WORLD model was run by Ensys Energy & Systems, the owner and 
developer of the refinery model. The WORLD model is the only such model 
currently developed for this purpose and was developed by a team of 
international petroleum consultants. It has been widely used by 
industries, government agencies, and Organization of the Petroleum 
Exporting Countries (OPEC) over the past 13 years, including the Cross 
Government/Industry Scientific Group of Experts, established to 
evaluate the effects of the different fuel options proposed under the 
revision of MARPOL Annex VI. The model incorporates crude sources, 
global regions, refinery operations, and world economics. The results 
of the WORLD model have been comparable to other independent 
predictions of global fuel, air pollutant emissions and economic 
predictions.
    The WORLD model was run for 2020, in which the control case 
included a fuel sulfur level of 1,000 ppm in the U.S. The baseline case 
was modeled as ``business as usual'' in which ships continue to use the 
same fuel as today. Because of the recent increases and fluctuations in 
oil prices, we had additional WORLD model runs conducted. For these 
runs, we used new reference case and high oil price estimates that were 
recently released by the U.S. Energy Information Administration (EIA). 
In addition to increased oil price estimates, the updated model 
accounts for increases in natural gas costs, capital costs for refinery 
upgrades, and product distribution costs.
    Because only a small portion of global marine fuel is consumed in 
the ECA, the overall impact on global fuel production is small. Global 
fuel use in 2020 by ships is projected to be 500 million metric tonnes/
yr. Of this amount, 90 million metric tonnes of fuel is used for U.S./
Canadian trade, or about 18 percent of total global fuel use. In the 
proposed ECA, less than 20 million metric tonnes of fuel will be 
consumed in 2020, which is less than 4 percent of total global marine 
fuel use. Of the amount of fuel to be consumed in the proposed ECA in 
2020, about 4 million metric tonnes of distillate will be consumed in 
the Business as Usual (BAU) case, which is about 20 percent of the 
amount of total fuel to be consumed in the proposed ECA.
    There are two main components to projected increased marine fuel 
cost associated with the ECA. The first component results from shifting 
from operation on residual fuel to operation on higher cost distillate 
fuel. This is the dominant cost component. However, there is also a 
small cost associated with desulfurizing the distillate to meet the 
1,000 ppm sulfur standard. Based on the WORLD modeling, the average 
increase in costs associated with switching from marine residual to 
distillate will be $145 per metric tonne of fuel consumed. Due to the 
differences in energy density between the two fuels, this translates to 
a cost increase of $123 for each metric tonne of residual fuel replaced 
by distillate fuel.\117\ This is the cost increase that will be borne 
by the shipping companies purchasing the fuel. Of this amount, $6 per 
metric tonne is the increase in costs associated with distillate 
desulfurization.
---------------------------------------------------------------------------

    \117\ Note that distillate fuel has a higher energy content, on 
a per ton basis, than residual fuel. As such, there is an offsetting 
cost savings, on a per metric ton basis, for switching to distillate 
fuel. Based on a 5 percent higher energy content for distillate, the 
net equivalent cost increase is estimated as $123 for each metric 
ton of residual fuel that is being replaced by distillate fuel.
---------------------------------------------------------------------------

    Table VII-2 summarizes the fuel cost estimates with and without an 
ECA. In the baseline case, fuel volumes for operation are 18% marine 
gas oil (MGO), 7% marine diesel oil (MDO), and 75% IFO. Weighted 
average baseline distillate fuel cost is $462/tonne. In the ECA, all 
fuel volumes are modeled as MGO, at $468/tonne.

[[Page 22942]]



                 Table VII-2--Estimate Marine Fuel Costs
------------------------------------------------------------------------
          Fuel                    Units            Baseline       ECA
------------------------------------------------------------------------
MGO....................  $/bbl..................     $ 61.75     $ 62.23
                         $/tonne................      464         468
MDO....................  $/bbl..................       61.89       62.95
                         $/tonne................      458         466
IFO....................  $/bbl..................       49.87       49.63
                         $/tonne................      322         321
------------------------------------------------------------------------

    The increased cost of distillate desulfurization is due both to 
additional coking and hydrotreating capacities at refineries. Cokers 
crack residual blends in IFO bunker fuel into distillates, using heat 
and residence time to make the conversion. The process also produces 
useful byproducts such as petroleum coke and off gas. The WORLD model 
did not use hydrocracking technology to convert residual fuels into 
distillates for either the reference or high price crude cases. Because 
of the higher capital and operating costs of hydrocrackers, the WORLD 
model favored the use of coking units. As such, the WORLD model assumed 
that cokers would convert the residual blendstocks in Intermediate Fuel 
Oil grades to distillates. The model added coking processes to 
refineries located in the U.S. and, to a lesser extent, to refiner 
regions outside of the U.S. Specifically, the model added one 
additional coking unit with a capacity of 30 thousand barrels per 
stream day (KBPSD), and one to two hydrocracking units representing 50 
and 80 KBPSD additional capacity.
    The WORLD model also added new conventional distillate 
hydrotreating capacity to lower the sulfur levels for the marine 
distillate fuel, in addition to the existing slack distillate 
hydrotreating capacity that existed in refiner regions for these fuels. 
In addition, the model used lighter crudes and adjusted operating 
parameters in refineries. This had the effect of increasing the 
projected production of lower sulfur distillate fuels in lieu of adding 
distillate hydrotreating capacity. The model elected to use lower 
sulfur crudes and used operational adjustments. Higher capital and 
operating costs of new units under the high-priced crude scenario 
favored use of existing refinery capacity made available from lower 
global refiner utilizations.

B. Estimated Engine Costs

    To quantify the cost impacts associated with the coordinated 
strategy, we estimated the hardware and operational costs to U.S.-
flagged ships, as well as affected foreign-flagged ships. The hardware 
costs included in the total cost of the coordinated strategy are only 
applied to U.S.-flagged vessels, and include those associated with the 
CAA Tier 2 and Tier 3 NOX standards, the Annex VI existing 
engine program, and the use of lower sulfur fuel. Tier 2 hardware costs 
consist of changes to the engine block and the migration from 
mechanical fuel injection to common rail fuel injection systems. Tier 3 
hardware costs include engine modifications, the migration from 
mechanical fuel injection to common rail fuel injection systems, and 
the installation of Selective Catalytic Reduction (SCR). Hardware costs 
associated with the use of lower sulfur fuel are from applying 
additional tanks and equipment to enable a vessel to switch from 
residual fuel to lower sulfur fuel. These equipment costs were applied 
to those new vessels that may need additional hardware, and also 
include the estimated cost of retrofitting the portion of the fleet 
that may require additional hardware to accommodate the use of lower 
sulfur fuel in 2015. The hardware costs also include a per engine cost 
of $10,000 associated with the requirement to test each production 
engine (Sec.  1042.302). These are the sole engine hardware costs 
specifically attributable to our CAA rule.
    The operational costs were applied to both U.S.- and foreign-
flagged vessels and include additional operational costs associated 
with the applicable NOX limits and the use of lower sulfur 
fuel. The operational costs for NOX controls consist of the 
additional fuel required due to an estimated two percent fuel penalty 
associated with the use of technologies to meet CAA Tier 2 and global 
Tier II NOX standards, and the use of urea for ships 
equipped with an SCR unit to meet CAA Tier 3 and global Tier III 
NOX standards. The operational costs associated with the use 
of lower sulfur fuel include both the differential cost of using lower 
sulfur fuel that meets ECA standards instead of using marine distillate 
fuel, and the differential cost of using lower sulfur fuel that meets 
ECA standards instead of using residual fuel.
    To assess the potential cost impacts, we must understand (1) the 
makeup of the fleet of ships expected to visit the U.S. when these 
requirements go into effect, (2) the emission reduction technologies 
expected to be used, and (3) the cost of these technologies. Chapter 5 
of the RIA presents this analysis in greater detail. The total engine 
and vessel costs associated with the coordinated strategy are based on 
a cost per unit value applied to the number of affected vessels. 
Operational costs are based on fuel consumption values determined in 
the inventory analysis (Section 5.2). This section discusses a brief 
overview of the methodology used to develop the hardware and 
operational costs, and the methodology used to develop a fleet of 
future vessels to which these hardware and engineering costs were 
applied.
(1) Methodology
    To estimate the hardware costs to ships that may be affected by the 
coordinated strategy, we used an approach similar to that used to 
estimate the emissions inventory. Specifically, the same inputs were 
used to develop a fleet of ships by ship type and engine type that may 
be expected to visit U.S. ports through the year 2040. In order to 
determine the cost of applying emission reduction technology on a per 
vessel basis, ICF International was contracted by the U.S. EPA to 
conduct a cost study of the various compliance strategies expected to 
be used to meet the new NOX standards and fuel sulfur 
requirements.\118\ ICF was instructed to develop cost estimates 
covering a range of vessel types and sizes, which could be scaled 
according to engine speed and power to arrive at an estimated cost per 
vessel. The costs developed for these engine configurations were used 
to develop a $/kW value that could be applied to any slow or medium 
speed engine. Using the average propulsion power by ship type presented 
in the inventory analysis, the per-vessel hardware costs were then 
applied to the estimated number of applicable vessels built after the 
standards take effect.
---------------------------------------------------------------------------

    \118\ ICF International, ``Costs of Emission Reduction 
Technologies for Category 3 Marine Engines,'' prepared for the U.S. 
Environmental Protection Agency, December 2008. EPA Report Number: 
EPA-420-R-09-008.
---------------------------------------------------------------------------

(a) Hardware Costs
    The hardware cost estimates include variable costs (components, 
assembly, and the associated markup) and fixed costs (tooling, research 
and development, redesign efforts, and certification). Hardware costs 
associated with the Annex VI existing engine standards were applied to 
the portion of existing U.S.-flagged vessels built between 1990 and 
1999 expected to be subject to these standards in 2011 when the 
standards go into effect (engines with a per-cylinder displacement of 
at least 90 liters and a power output of over 5,000 kW. These costs 
were applied over a five-year period beginning in 2011 where 20 percent 
of the total subject fleet was estimated to undergo service each year. 
The existing engine program fixed costs were phased

[[Page 22943]]

in over a five-year period beginning in 2010 and applied on a per-
vessel basis.
    Hardware costs associated with the CAA Tier 2 program were applied 
to all new U.S.-flagged vessels beginning in the year 2011 when the 
standards take effect. The fixed costs associated with Tier 2 standards 
are expected to be incurred over a five-year period; however, as the 
Tier 2 standards take effect in 2011, it was assumed that manufacturers 
are nearing the end of their research and development. In order to 
capture all of these costs, all fixed costs that would have been 
incurred during that five-year phase-in period were applied in the year 
2010. Hardware costs associated with Tier 3 were estimated for U.S. 
vessels and were applied as of 2016. The fixed costs associated with 
Tier 3 were phased in over a five-year period beginning in 2011.
    Hardware costs associated with the use of lower sulfur fuel are 
estimated separately for both new and existing vessels that may require 
additional hardware to accommodate the use of lower sulfur fuel. The 
fuel sulfur control related hardware costs for new vessels begin to 
apply in 2015, while all retrofit costs are expected to be incurred by 
2015 and as such are applied in this year. The fixed costs for both new 
and existing vessels that may require additional hardware to 
accommodate the use of lower sulfur fuel are applied on a per-vessel 
basis and are phased in over a five year period beginning as of 2010.
(b) Operational Costs
    The operational costs estimated here are composed of three parts: 
(1) The estimated increase in fuel consumption expected to occur with 
the use of Tier II technologies on U.S.- and foreign-flagged vessels, 
(2) the differential cost of using lower sulfur fuel applicable for 
both U.S.- and foreign-flagged vessels, and (3) the use of urea with 
SCR as a Tier III NOX emission reduction technology on both 
U.S.- and foreign-flagged vessels. The fuel consumption values 
associated with Tier II and Tier III standards were determined in the 
inventory analysis (see Chapter 3 of the RIA), with an estimated Tier 
II fuel consumption penalty of 2 percent (see Chapter 4 of the RIA). 
The two percent fuel penalty estimate is based on the use of 
modifications to the fuel delivery system to achieve Tier II 
NOX reductions, and does not reflect the possibility that 
there may be other technologies available to manufacturers that could 
offset this fuel penalty. Additionally, Tier III will provide the 
opportunity to re-optimize engines for fuel economy when using 
aftertreatment, such as SCR, to provide NOX reductions 
similar to the compliance strategy for some heavy-duty truck 
manufacturers using urea SCR to meet our 2010 truck standard. The 
differential cost of using lower sulfur fuel is discussed above in 
Section VII.A of this preamble. The estimated urea cost associated with 
the use of Tier III SCR is derived from a urea dosage rate that is 7.5 
percent of the fuel consumption rate.
    Operating costs per vessel vary depending on what year the vessel 
was built, e.g., vessels built as of 2016 will incur operating costs 
associated with the use of urea necessary when using SCR as a Tier III 
NOX emission control technology, while vessels built prior 
to 2016 do not use urea but will incur operating costs associated with 
the differential cost of using lower sulfur fuel. Further, we have 
assumed vessels built as of 2011 that meet Tier II standards will incur 
a 2 percent fuel consumption penalty; see Table 5-31 of the RIA for 
further details on fuel costs and fuel volumes. In addition, vessels 
built as of 2016 that meet Tier III NOX standards while 
traveling in the regulated U.S. waterways are still required to at 
least meet Tier II NOX standards outside of an ECA and will 
continue to incur the associated fuel penalty. Therefore, an estimated 
fleet had to be developed over a range of years, and provide a breakout 
of ships by age in each year.
(2) Fleet Development
    There are currently no available estimates of the number of ships 
that may visit U.S. ports in the future or comprehensive engine sales 
predictions. Therefore, to develop the costs associated with the 
coordinated strategy, an approximation of the number of ships by age 
and engine type that may visit U.S. ports in the future was 
constructed. To characterize the fleet of ships visiting U.S. ports, we 
used U.S. port call data collected in 2002 for the inventory port 
analysis (see Chapter 3 of the RIA) which included only vessels with C3 
engines where the engine size and type was identified.\119\ We used 
this data with the growth rates developed in the inventory analysis to 
estimate how many ships, by ship type and engine type, would visit U.S. 
ports in future years. Due to the long life of these vessels, and the 
fact that there has been no significant event that would have changed 
the composition of the world fleet since this baseline data was taken, 
it is reasonable to use 2002 data as the basis for modeling the future 
fleet upon which to base hardware cost estimates. An analysis is 
presented in Section 5.1.2.2 of Chapter 5 of the RIA which confirms the 
reasonableness of this assumption using 2007 MARAD data.
---------------------------------------------------------------------------

    \119\ In order to separate slow speed engines from medium speed 
engines where that information was not explicitly available, 2-
stroke engines were assumed to be slow speed, where 4-stroke engines 
were assumed to be medium speed.
---------------------------------------------------------------------------

    The ship type information gathered from this baseline data, for the 
purposes of both this analysis and the inventory, was categorized into 
one of the following ship types: Auto Carrier, Bulk Carrier, Container, 
General Cargo, Miscellaneous, Passenger, Refrigerated Cargo (Reefer), 
Roll-On Roll-Off (RoRo), and Tankers. Average engine and vessel 
characteristics were developed from the baseline data, and these values 
were used to represent the characteristics of new vessels used in this 
cost analysis (see Chapter 3 of the RIA). Estimated future fleets were 
developed by ship type and engine type through the year 2040 for both 
new and existing vessels and both U.S.- and foreign-flagged vessels. 
Hardware costs were applied on a per-vessel basis.
    Although most ships primarily operate on residual fuel, they 
typically carry some amount of distillate fuel as well. Switching to 
the use of lower sulfur distillate fuel is the compliance strategy 
assumed here to be used by both new and existing ships in 2015 when the 
new lower sulfur fuel standards go into effect. To estimate the 
potential cost of this compliance strategy, we evaluated the distillate 
storage capacity of the current existing fleet to estimate how many 
ships may require additional hardware to accommodate the use of lower 
sulfur fuel. We performed this analysis on the entire global fleet 
listed in Lloyd's database as of 2008.\120\ Of the nearly 43,000 
vessels listed, approximately 20,000 vessels had provided Lloyds with 
fuel tankage information, cruise speed, and propulsion engine power 
data. Using this information, we were able to estimate how far each 
vessel could travel on its existing distillate carrying capacity.
---------------------------------------------------------------------------

    \120\ http://www.sea-web.com.
---------------------------------------------------------------------------

    In order to determine if the current distillate capacity of a 
particular ship was sufficient to call on a U.S. coordinated strategy 
without requiring additional hardware, we evaluated whether or not each 
ship could travel 1,140 nm, or the distance between the Port of Los 
Angeles and the Port of Tacoma. This distance was selected because it 
represents one of the longer trips a ship could travel without

[[Page 22944]]

stopping at another port, and should overestimate the number of vessels 
that would require such a modification. The resulting percentages of 
ships estimated to require a retrofit were then applied to the number 
of existing ships in the 2015 fleet to estimate the total cost of this 
compliance strategy for existing ships built prior to 2015. The same 
percentages were also applied to all new ships built as of 2015 to 
determine the number of ships that may require additional hardware and 
estimate the cost of this compliance strategy for new vessels.
(3) NOX Reduction Technologies
(a) Tier 2
    Most engine manufacturers are expected to be able to meet Tier 2 
NOX standards using engine modifications. This cost estimate 
includes the hardware costs associated with the use of retarded fuel 
injection timing, higher compression ratios, and better fuel 
distribution. There are no variable costs associated with the engine 
modifications as the changes are not expected to require any additional 
hardware. Some engines may also be equipped with common-rail fuel 
systems instead of mechanical fuel injection to meet Tier 2 
NOX standards. It is expected that approximately 75 percent 
of SSD and 30 percent of MSD engines will get this modification for 
Tier 2. The Tier 2 hardware costs developed here include the costs of 
the migration of some engines to common-rail fuel systems. It was also 
estimated that these technologies may increase fuel consumption by up 
to 2 percent; this fuel penalty is included in the Tier 2 operational 
costs. Tier 2 hardware costs included in the total estimated cost of 
the coordinated strategy are only associated with U.S.-flagged vessels; 
operational costs are applied to both U.S.- and foreign-flagged 
vessels.
(b) Tier 3
    Tier 3 NOX standards are approximately 80 percent below 
Tier 1 NOX standards, and are likely to require exhaust 
aftertreatment such as SCR. ICF performed a detailed cost analysis for 
the U.S. EPA that included surveying engine and emission control 
technology manufacturers regarding these advanced technology strategies 
and their potential costs. Tier 3 NOX standards are 
projected to be met through the use of SCR systems. While other 
technologies such as EGR or those that include introduction of water 
into the combustion chamber either through fumigation, fuel emulsions, 
or direct water injection may also enable Tier 3 compliance, we assume 
they will only be selected if they are less costly than SCR. Therefore, 
we have based this analysis on the exclusive use of SCR.
(c) Engine Modifications
    In addition to SCR, it is expected that manufacturers will also use 
compound or two-stage turbocharging as well as electronic valving to 
enhance performance and emission reductions to meet Tier 3 
NOX standards. Engine modifications to meet Tier 3 emission 
levels will include a higher percentage of common-rail fuel injection 
coupled with two-stage turbocharging and electronic valving. Engine 
manufacturers estimate that nearly all SSD and 80 percent of MSD 
engines will use common-rail fuel injection. Two stage turbocharging 
will most likely be used on least 70 percent of all engines required to 
meet Tier 3 emission levels. Electronically (hydraulically) actuated 
intake and exhaust valves for MSD and electronically actuated exhaust 
valves for SSD are necessary to accommodate two-stage turbocharging. 
Additionally, the remaining SSD engines still using mechanical 
injection (approximately 25 percent mechanically controlled, and 75 
percent electronically controlled) are expected to migrate to common 
rail for Tier 3, while an additional 40 percent of MSD engines are 
expected to receive common rail totaling approximately 80 percent of 
all MSD engines. The engine modification variable costs were applied to 
all new U.S.-flagged vessels equipped with either SSD or MSD engines. 
Costs to foreign-flagged vessel expected to visit U.S. ports are 
presented as a separate analysis in Chapter 5 of the RIA, and are not 
included in the total estimated cost of the coordinated strategy.
(4) SOX/PM Emission Reduction Technology
    In addition to Tier 3 NOX standards, the IMO ECA 
requirements also include lower fuel sulfur limits that will result in 
reductions in SOX and PM. Category 3 marine engines 
typically operate on heavy fuel oil with a sulfur content of 2.7 
percent, therefore significant SOX and PM reductions will be 
achieved using distillate fuels with a sulfur content of 0.1 percent. 
This cost analysis is based on the assumption that vessel operators 
will operate their engines using lower sulfur fuel in the U.S. 
coordinated strategy waterways. We believe fuel switching will be the 
primary compliance approach; fuel scrubbers would be used in the event 
that the operator expected to realize a cost savings and are not 
considered in this analysis. In some cases, additional capacity and 
equipment to accommodate the use of lower sulfur fuel may need to be 
installed on a vessel. The potential costs due to these additional 
modifications applied to new ships as well as retrofits to any existing 
ships are discussed here, and these hardware costs are included as part 
of the total cost of this coordinated program.
    Although most ships operate on heavy fuel oil, they typically carry 
small amounts of distillate fuel. Some vessel modifications and new 
operating practices may be necessary to use lower sulfur distillate 
fuels on vessels designed to operate primarily on residual fuel. 
Installation and use of a fuel cooler, associated piping, and viscosity 
meters to the fuel treatment system may be required to ensure viscosity 
matches between the fuel and injection system design. While there are 
many existing ships that already have the capacity to operate on both 
heavy fuel oil and distillate fuel and have separate fuel tank systems 
to support each type of fuel, some ships may not have sufficient 
onboard storage capacity. If a new or segregated tank is desired, 
additional equipment for fuel delivery and control of these systems may 
be required.
(5) NOX and SOX Emission Reduction Technology 
Costs
(a) NOX Emission Reduction Technology
    The costs associated with SCR include variable and fixed costs. SCR 
hardware costs include the reactor, dosage pump, urea injectors, 
piping, bypass valve, an acoustic horn or a cleaning probe, the control 
unit and wiring, and the urea tank (the size of the tank is based on 
250 hours of normal operation when the ship is operating in the 
regulated U.S. waterways and the SCR system is activated.) The size of 
the tank is dependent on the frequency with which the individual ship 
owner prefers to fill the urea tank. The methodology used here to 
estimate the capacity of the SCR systems is based on the power rating 
of the propulsion engines only. Auxiliary engine power represents about 
20 percent of total installed power on a vessel; however, it would be 
unusual to operate both propulsion and auxiliary engines at 100 percent 
load. Typically, ships operate under full propulsion power only while 
at sea when the SCR is not operating; when nearing ports, the auxiliary 
engine is operating at high loads while the propulsion engine is 
operating at very low loads.

[[Page 22945]]

    In this analysis, we determined the average number of hours a ship 
would spend calling on a U.S. port: If the call was straight in and 
straight out at 200 nm, the average time spent was slightly over 35 
hours. If the distance travelled was substantial, such as from the Port 
of Los Angeles to the Port of Tacoma, or 1140 nm, the average time 
spent travelling was approximately 75 hours. Therefore, the size of the 
tanks and corresponding $/kW values estimated here to carry enough urea 
for 250 hours of continuous operation may be an overestimate. Based on 
250 hours of operation, a range of urea tank sizes from 20 m\3\ to 
approximately 256 m\3\ was determined for the six different engine 
configurations used in this analysis.
    To understand what impacts this may have on the cargo hauling 
capacity of the ship, we looked at the ISO standard containers used 
today. Currently, over two-thirds of the containers in use today are 40 
feet long, total slightly over 77 m\3\ and are the equivalent of two 
TEU.\121\ The urea tank sizes estimated here reflect a cargo 
equivalence of 0.5-2 TEUs, based on a capacity sufficient for 250 hours 
of operation. The TEU capacity of container ships, for example, 
continues to increase and can be as high as 13,000 TEUs.\122\ Based on 
a rate of approximately $1,300 per TEU to ship a container from Asia to 
the U.S., a net profit margin of 10%, and an average of 16 trips per 
year, the estimated cost due to displaced cargo to call on a U.S./
Canada ECA may be $2,100.123 124 125 The cost analysis 
presented here does not include displaced cargo due to the variability 
of tank sizes owners choose to install.
---------------------------------------------------------------------------

    \121\ http://www.iicl.org, Institute of International Container 
Lessors.
    \122\ Kristensen, Hans Otto Holmegaard, ``Preliminary Ship 
Design of Container Ships, Bulk Carriers, Tankers, and Ro-Ro Ships. 
Assessment of Environmental Impact from Sea-Borne Transport Compared 
with Landbased Transport,'' March, 2008.
    \123\ http://people.hofstra.edu/geotrans/eng/ch2en/conc2en/
maritimefreightrates.html.
    \124\ http://moneycentral.msn.com/investor/invsub/results/
hilite.asp?Symbol=SSW.
    \125\ Based on a container ship carrying nearly 9,000 TEUs 
traveling from Hong Kong to the Port of Los Angeles (approximately 
6,400 nm) with a cruise speed of 25 nm/hr, the round trip time is 
nearly 21 days and this trip could be made roughly 16 times per 
year.
---------------------------------------------------------------------------

    To estimate the SCR hardware costs associated with newly built 
ships, we needed to generate an equation in terms of $/kW that could be 
applied to other engine sizes. Therefore, the $/kW values representing 
the hardware costs estimated for the six different engine types and 
sizes used in this analysis was developed using a curve fit for both 
SSD and MSD engines. The resulting $/kW values range from $40-$80 per 
kW for MSD, and $40-$70 for SSD. These costs were then applied based on 
the characteristics of the average ship types described in the 
inventory section of the RIA (see Chapter 3) to the representative 
portion of the future fleet in order to estimate the total costs 
associated with this program. Table VII-3 presents the estimated costs 
of this technology as applied to different ship and engine types 
representing the average ship characteristics discussed in Section 
VII.A.2.
(b) Lower Sulfur Fuel Hardware Costs
    This cost analysis is based on the use of switching to lower sulfur 
fuel to meet the fuel sulfur standards. The costs presented here may be 
incurred by some existing and some newly built ships if additional fuel 
tank equipment is required to facilitate the use of lower sulfur fuel. 
Based on existing vessel fleet data, we estimate that approximately 
one-third of existing vessels may need additional equipment installed 
to accommodate additional lower sulfur fuel storage capacity beyond 
that installed on comparable new ships. In order to include any costs 
that may be incurred on new vessels that choose to add additional lower 
sulfur fuel capacity, we also estimated that one-third of new vessels 
may require additional hardware. Separate $/kW values were developed 
for new and existing vessels as the existing vessel retrofit would 
likely require more labor to complete installation.
    The size of the tank is dependent on the frequency with which the 
individual ship owner prefers to fill the lower sulfur fuel tank. The 
size of the tanks and corresponding $/kW value estimated here will 
carry capacity sufficient for 250 hours of propulsion and auxiliary 
engine operation. This is most likely an overestimate of the amount of 
lower sulfur fuel a ship owner would need to carry, resulting in an 
overestimate of the total cost to existing and new vessels. The tank 
sizes based on 250 hours of operation and based on the six different 
engine configuration used in this analysis range from 240 m\3\ to 
nearly 2,000 m\3\. This would be the equivalent of 6-50 TEUs. This cost 
analysis does not reflect other design options such as partitioning of 
a residual fuel tank to allow for lower sulfur fuel capacity which 
would reduce the amount of additional space required, nor does this 
analysis reflect the possibility that some ships may have already been 
designed to carry smaller amounts of distillate fuel in separate tanks 
for purposes other than continuous propulsion. The $/kW value hardware 
cost values for the six data points corresponding to the six different 
engine types and sizes used in this analysis are $2-7 for SSD and $3-8 
for MSD. A curve fit was determined for the slow-speed engine as well 
as for the medium speed engines to determine a $/kW value for each 
engine type. Table VII-3 presents the estimated costs of the 
technologies used to meet the different standards as applied to 
different ship and engine types representing the average ship 
characteristics discussed in Section VII.A.2. The estimated hardware 
costs of retrofitting existing U.S.-flagged vessels that may require 
additional hardware to accommodate the use of lower sulfur fuel is 
estimated to be $10.4 million in 2015.

                                   Table VII-3--Estimated Variable Costs of Emission Control Technology on a per-Ship Basis--by Ship Type and Engine Type \a\
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                               Lower sulfur
                                                                                             Average       MFI to  common   EFI to  common  Tier 3 (SCR and  fuel hardware--   Lower sulfur fuel
                    Ship type                                  Engine speed                 propulsion          rail             rail            engine        new vessels    hardware--existing
                                                                                            power (kW)                                       modifications)                         vessels
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Auto Carrier....................................  MSD..................................             9640          $80,500          $30,400         $566,000          $42,300            $56,400
Bulk Carrier....................................  MSD..................................             6360           67,200           24,600          479,000           36,900             48,500
Container.......................................  MSD..................................            13878           92,300           35,400          678,000           49,200             66,600
General Cargo...................................  MSD..................................             5159           60,400           21,700          448,000           34,900             45,600
Passenger.......................................  MSD..................................            23762          109,600           42,800          939,000           65,400             90,400
Reefer..........................................  MSD..................................             7360           71,900           26,600          506,000           38,500             50,900
RoRo............................................  MSD..................................             8561           76,700           28,700          538,000           40,500             53,800
Tanker..........................................  MSD..................................             6697           68,800           25,300          488,000           37,400             49,300

[[Page 22946]]


Misc............................................  MSD..................................             9405           79,800           30,000          560,000           41,900             55,800
Auto Carrier....................................  SSD..................................            11298          152,400           55,500          819,000           48,000             64,800
Bulk Carrier....................................  SSD..................................             8434          132,900           48,400          669,000           42,700             57,700
Container.......................................  SSD..................................            27454          211,600           77,200        1,521,000           63,900             86,700
General Cargo...................................  SSD..................................             7718          127,000           46,200          630,000           41,100             55,500
Passenger.......................................  SSD..................................            23595          201,500           73,500        1,374,000           61,200             83,000
Reefer..........................................  SSD..................................            10449          147,200           53,600          776,000           46,500             62,900
RoRo............................................  SSD..................................            15702          174,300           63,500        1,034,000           53,900             72,900
Tanker..........................................  SSD..................................             9755          142,600           51,900          739,000           45,300             61,200
Misc............................................  SSD..................................             4659           93,300           33,900           50,000           32,000             43,100
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ The values presented in Table VII-3 are provided only to show what the estimated costs would be for a range of vessel types given average characteristics (such as DWT, total main, and
  total auxiliary power) for both SSD and MSD engine types. Not all vessels will require all of these technologies; for example, it is estimated that only 30 percent of MSD will get common-
  rail fuel injection systems for Tier II.

(6) Total Costs Associated With the Coordinated Strategy
    The total hardware costs associated with the coordinated strategy 
were estimated using the number of new ships by ship type and engine 
type entering the fleet each year. Table VII-4 presents the total 
hardware costs to U.S.-flagged vessels associated with the coordinated 
strategy. These costs consist of the variable and fixed hardware costs 
associated with the Annex VI existing engine program, Tier 2 and Tier 3 
standards, and additional components that may be required to 
accommodate the use of lower sulfur fuel on both new and existing 
vessels. This table also presents the total estimated operational costs 
associated with the coordinated strategy. These costs consist of the 2 
percent fuel consumption penalty associated with Tier 2 (Annex VI Tier 
II), the use of urea on vessels equipped with SCR systems, and the 
differential cost of using lower sulfur fuel; these costs are incurred 
by both U.S.- and foreign-flagged vessels. The total estimated cost of 
the coordinated strategy is $3.41 billion in 2030. The total costs from 
2010 through 2040 are estimated to be $42.9 billion at a 3 percent 
discount rate or $22.1 at a 7 percent discount rate.

                               Table VII-4--Total Hardware and Operational Costs Associated With the Coordinated Strategy
                                                                    [Thousands of $]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Total hardware                                          Total operating costs         Total costs
                                                       costs for        Total new       Total vessel  ---------------------------------- associated with
                       Year                             existing     engine hardware   hardware costs                                    the coordinated
                                                        engines           costs                           U.S. flag       Foreign flag       strategy
--------------------------------------------------------------------------------------------------------------------------------------------------------
2010..............................................           $9,400             $319             $166               $0               $0             $485
2011..............................................          161,000            3,580              173              173            1,130            5,060
2012..............................................          153,000            3,700              179              841            5,590           10,300
2013..............................................          145,000            3,830              186           32,400          213,000          249,000
2014..............................................          137,000            3,960              192           34,400          226,000          265,000
2015..............................................          131,000            4,100           11,100          180,000        1,190,000        1,390,000
2016..............................................                0           27,300              691          189,000        1,250,000        1,470,000
2017..............................................                0           28,500              717          199,000        1,330,000        1,560,000
2018..............................................                0           29,600              745          210,000        1,410,000        1,650,000
2019..............................................                0           30,700              773          221,000        1,500,000        1,750,000
2020..............................................                0           31,900              803          233,000        1,590,000        1,860,000
2021..............................................                0           33,200              834          246,000        1,680,000        1,960,000
2022..............................................                0           34,600              866          258,000        1,770,000        2,060,000
2023..............................................                0           35,900              899          272,000        1,880,000        2,190,000
2024..............................................                0           37,400              934          286,000        1,980,000        2,300,000
2025..............................................                0           38,800              970          300,000        2,090,000        2,430,000
2026..............................................                0           40,400            1,010          315,000        2,200,000        2,560,000
2027..............................................                0           42,100            1,050          330,000        2,310,000        2,680,000
2028..............................................                0           43,700            1,090          345,000        2,430,000        2,820,000
2029..............................................                0           45,500            1,130          362,000        2,550,000        2,960,000
2030..............................................                0           47,400            1,180          378,000        2,680,000        3,110,000
2031..............................................                0           49,300            1,220          395,000        2,810,000        3,260,000
2032..............................................                0           51,300            1,270          413,000        2,950,000        3,420,000
2033..............................................                0           53,400            1,320          431,000        3,080,000        3,570,000
2034..............................................                0           55,500            1,370          451,000        3,240,000        3,750,000
2035..............................................                0           57,900            1,430          471,000        3,390,000        3,920,000
2036..............................................                0           60,200            1,490          494,000        3,560,000        4,120,000
2037..............................................                0           62,800            1,540          517,000        3,740,000        4,320,000
2038..............................................                0           65,300            1,610          541,000        3,930,000        4,540,000
2039..............................................                0           68,000            1,670          566,000        4,110,000        4,750,000
2040..............................................                0           70,800            1,740          591,000        4,310,000        4,970,000
NPV @ 3%..........................................          677,000          663,000           26,500        5,260,000       36,900,000       42,900,000

[[Page 22947]]


NPV @ 7%..........................................          610,000          346,000           16,900        2,730,000       19,000,000       22,100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

C. Cost Effectiveness

    One tool that can be used to assess the value of the coordinated 
strategy is the engineering costs incurred per ton of emissions 
reduced. This analysis involves a comparison of our program to other 
measures that have been or could be implemented. As summarized in this 
section, the coordinated strategy represents a highly cost effective 
mobile source control program for reducing NOX, PM and 
SOX emissions.
    We have estimated the cost per ton based on the net present value 
of 3 percent and 7 percent of all hardware costs incurred by U.S.-
flagged vessels, all operational costs incurred by both U.S. and 
foreign-flagged vessels, and all emission reductions generated from the 
year 2010 through the year 2040. The baseline case for these estimated 
reductions is the existing set of engine standards for C3 marine diesel 
engines and fuel sulfur limits. Table VII-5 shows the annual emissions 
reductions associated with the coordinated strategy; these annual tons 
are undiscounted. A description of the methodology used to estimate 
these annual reductions can be found in Section II of this preamble and 
Chapter 3 of the RIA.

              Table VII-5--Estimated Emissions Reductions Associated With the Coordinated Strategy
                                                  [Short tons]
----------------------------------------------------------------------------------------------------------------
                                                                            Reductions (tons)
                     Calendar year                      --------------------------------------------------------
                                                                NOX                SOX                 PM
----------------------------------------------------------------------------------------------------------------
2010...................................................             47,000                  0                  0
2011...................................................             54,000                  0                  0
2012...................................................             70,000                  0                  0
2013...................................................             88,000            390,000             48,400
2014...................................................            105,000            406,000             50,400
2015...................................................            123,000            641,000             68,000
2016...................................................            150,000            668,000             70,800
2017...................................................            209,000            695,000             73,700
2018...................................................            279,000            724,000             76,800
2019...................................................            349,000            755,000             80,000
2020...................................................            409,000            877,000             94,100
2021...................................................            488,000            916,000             98,200
2022...................................................            547,000            954,000            102,000
2023...................................................            634,000            995,000            107,000
2024...................................................            714,000          1,040,000            111,000
2025...................................................            790,000          1,080,000            116,000
2026...................................................            866,000          1,130,000            121,000
2027...................................................            938,000          1,170,000            126,000
2028...................................................          1,020,000          1,220,000            131,000
2029...................................................          1,100,000          1,280,000            137,000
2030...................................................          1,180,000          1,330,000            143,000
2031...................................................          1,260,000          1,390,000            149,000
2032...................................................          1,330,000          1,450,000            155,000
2033...................................................          1,410,000          1,510,000            162,000
2034...................................................          1,500,000          1,580,000            169,000
2035...................................................          1,590,000          1,650,000            177,000
2036...................................................          1,690,000          1,720,000            184,000
2037...................................................          1,810,000          1,800,000            193,000
2038...................................................          1,920,000          1,880,000            201,000
2039...................................................          2,020,000          1,970,000            210,000
2040...................................................          2,130,000          2,050,000            220,000
NPV at 3%..............................................         14,400,000         19,100,000          2,100,000
NPV at 7%..............................................          6,920,000         10,100,000          1,090,000
----------------------------------------------------------------------------------------------------------------

    The net estimated reductions by pollutant, using a net present 
value of 3 percent from 2010 through 2040 are 14.4 million tons of 
NOX, 19.1 million tons of SOX, and 2.1 million 
tons of PM (6.9 million, 10.1 million, and 1.1 million tons of 
NOX, SOX, and PM, respectively, at a net present 
value of 7 percent over the same period.)
    Using the above cost and emission reduction estimates, we estimated 
the lifetime (2010 through 2040) cost per ton of pollutant reduced. For 
this analysis, all of the hardware costs associated with the Annex VI 
existing engine program and Tier 2 and Tier 3 NOX standards 
as well as the operational costs associated with the

[[Page 22948]]

global Tier II and Tier III standards were attributed to NOX 
reductions. The costs associated with lower sulfur fuel operational 
costs as applied to all vessels visiting U.S. ports and the hardware 
costs associated with accommodating the use of lower sulfur fuel on 
U.S.-flagged vessels were associated with SOX and PM 
reductions. In this analysis, half of the costs associated with the use 
of lower sulfur fuel were allocated to PM reductions and half to 
SOX, reductions, because the costs incurred to reduce 
SOX emissions directly reduce emissions of PM as well. Using 
this allocation of costs and the emission reductions shown in Table 
VII-5 we can estimate the lifetime cost per ton reduced associated with 
each pollutant. These results are shown in Table VII-6. Using a net 
present value of 3 percent, the discounted lifetime cost per ton of 
pollutant reduced is $510 for NOX, $930 for SOX, 
and $7,950 for PM ($500, $920, and $7,850 per ton of NOX, 
SOX, and PM, respectively, at a net present value of 7 
percent.) As shown in Table VII-6, these estimated discounted lifetime 
costs are similar to the annual long-term (2030) cost per ton of 
pollutant reduced.

Table VII-6--Coordinated Strategy Estimated Aggregate Discounted Lifetime Cost per Ton (2010-2040) and Long-Term
                                         Annual Cost per Ton (2030) \a\
----------------------------------------------------------------------------------------------------------------
                                            2010 thru 2040           2010 thru 2040
              Pollutant                  discounted lifetime      discounted lifetime     Long-term cost per ton
                                          cost per ton at 3%       cost per ton at 7%           (for 2030)
----------------------------------------------------------------------------------------------------------------
NOX..................................                     $510                     $500                     $520
SOX..................................                      930                      920                      940
PM...................................                    7,950                    7,850                    8,760
----------------------------------------------------------------------------------------------------------------
\a\ The $/ton numbers presented here vary from those presented in the ECA proposal due to the net present value
  of the annualized reductions being applied from 2015-2020, and the use of metric tonnes rather than of short
  tons. Note that these costs are in 2006 U.S. dollars.

    These results for the coordinated strategy compare favorably to 
other air emissions control programs. Table VII-7 compares the 
coordinated strategy to other air programs. This comparison shows that 
the coordinated strategy will provide a cost-effective strategy for 
generating substantial NOX, SOX, and PM 
reductions from Category 3 vessels. The results presented in Table VII-
7 are lifetime costs per ton discounted at a net present value of 3 
percent, with the exception of the stationary source program and 
locomotive/marine retrofits, for which annualized costs are presented. 
While results at a net present value of 7 percent are not presented, 
the results would be similar. Specifically, the coordinated strategy 
falls within the range of values for other recent programs.

 Table VII-7--Estimated $/Ton for the Coordinated Strategy Compared to Previous Mobile Source Programs for NOX,
                                                  SOX, and PM10
----------------------------------------------------------------------------------------------------------------
                                Implementation
     Source category \a,\            date          NOX cost/ton      SOX cost/ton           PM10 cost/ton
----------------------------------------------------------------------------------------------------------------
Category 3 Marine Compression              2011               510               930  7,950.
 Ignition Engine Coordinated
 Strategy FRM, 2009.
Nonroad Small Spark-Ignition               2010      \b\,\c\ 330-
 Engines.                                                   1,200
73 FR 59034, October 8, 2008.
Stationary Diesel (CI)                     2006        580-20,000  ................  3,500-42,000.
 Engines.
71 FR 39154, July 11, 2006...
Locomotives and C1/C2 Marine               2015           \b\ 730  ................  8,400 (New).
 (Both New and Retrofits).                                                           45,000 (Retrofit).
73 FR 25097, May 6, 2008.....
Heavy Duty Nonroad Diesel                  2015         \b\ 1,100               780  13,000.
 Engines.
69 FR 38957, June 29, 2004...
Heavy Duty Onroad Diesel                   2010         \b\ 2,200             5,800  14,000.
 Engines.
66 FR 5001, January 18, 2001.
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Table presents aggregate program-wide cost/ton over 30 years, discounted at a 3 percent NPV, except for
  Stationary CI Engines and Locomotive/Marine retrofits, for which annualized costs of control for individual
  sources are presented. All figures are in 2006 U.S. dollars per short ton.
\b\ Includes NOX plus non-methane hydrocarbons (NMHC). NMHC are also ozone precursors, thus some rules set
  combined NOX+NMHC emissions standards. NMHC are a small fraction of NOX so aggregate cost/ton comparisons are
  still reasonable.
\c\ Low end of range represents costs for marine engines with credit for fuel savings, high end of range
  represents costs for other nonroad SI engines without credit for fuel savings.

D. Economic Impact Analysis

    This section contains our analysis of the expected economic impacts 
of our coordinated strategy on the markets for Category 3 marine diesel 
engines, vessels using these engines, and the U.S. marine 
transportation service sector. We briefly describe our methodology and 
present our estimated expected economic impacts.
    The total estimated social costs of the coordinated strategy in 
2030 are equivalent to the estimated engineering compliance costs of 
the program, at approximately $3.1 billion.\126\ As explained below, 
these costs are expected to accrue initially to the owners and 
operators of affected vessels when they purchase engines, vessels, and 
fuel. These owners and operators are expected to pass their increased

[[Page 22949]]

costs on to the entities that purchase international marine 
transportation services, in the form of higher freight rates. 
Ultimately, these social costs are expected to be borne by the final 
consumers of goods transported by affected vessels in the form of 
slightly higher prices for those goods.
---------------------------------------------------------------------------

    \126\ The costs totals reported in this FRM are slightly 
different than those reported in the ECA proposal. This is because 
the ECA proposal did not include costs associated with the Annex VI 
existing engine program, Tier II, or the costs associated with 
existing vessel modifications that may be required to accommodate 
the use of lower sulfur fuel. Further, the cost totals presented in 
the ECA package included Canadian cost estimates.
---------------------------------------------------------------------------

    We estimate that compliance with the coordinated strategy would 
increase the price of a new vessel by 0.5 to 2 percent, depending on 
the vessel type. The price impact of the coordinated strategy on the 
marine transportation services sector would vary, depending on the 
route and the amount of time spent in waterways covered by the engine 
and fuel controls (the U.S. ECA and U.S. internal waters covered by the 
coordinated strategy). For example, we estimate that the cost of 
operating a ship in liner service between Singapore, Seattle, and Los 
Angeles/Long Beach, which includes about 1,700 nm of operation in 
waterways covered by the coordinated strategy, would increase by about 
3 percent. For a container ship, this represents a price increase of 
about $18 per container (3 percent price increase), assuming the total 
increase in operating costs is passed on to the purchaser of the marine 
transportation services. The per passenger price of a seven-day Alaska 
cruise on a vessel operating entirely within waterways covered by the 
coordinated strategy is expected to increase by about $7 per day, again 
assuming that the total increase in operating costs is passed on to the 
passengers of the vessel. Ships that spend less time in covered areas 
would experience relatively smaller increases in their operating costs, 
and the impacts on their freight prices is expected to be smaller.
    It should be noted that this economic analysis holds all other 
aspects of the market constant except for the elements of the 
coordinated strategy. It does not attempt to predict future market 
equilibrium conditions, particularly with respect to how excess 
capacity in today's market due to the current economic downturn will be 
absorbed. This approach is appropriate because the goal of an economic 
impact analysis is to explore the impacts of a specific program; 
allowing changes in other market conditions would confuse the impacts 
due to the regulatory program.
    The remainder of this section provides information on the 
methodology we used to estimate these economic impacts and the results 
of our analysis. A more detailed discussion can be found in Chapter 7 
of the RIA prepared for this rule.
(1) What Is the Purpose of an Economic Impact Analysis?
    In general, the purpose of an Economic Impact Analysis (EIA) is to 
provide information about the potential economic consequences of a 
regulatory action, such as the coordinated strategy to reduce emissions 
from Category 3 vessels. Such an analysis consists of estimating the 
social costs of a regulatory program and the distribution of these 
costs across stakeholders. The estimated social costs can then be 
compared with the estimated social benefits as presented elsewhere in 
this preamble.
    In an economic impact analysis, social costs are the value of the 
goods and services lost by society resulting from (a) the use of 
resources to comply with and implement a regulation and (b) reductions 
in output. There are two parts to the analysis. In the market analysis, 
we estimate how prices and quantities of goods directly affected by the 
emission control program can be expected to change once the program 
goes into effect. In the economic welfare analysis, we look at the 
total social costs associated with the program and their distribution 
across key stakeholders.
(2) How Did We Estimate the Economic Impacts of the Coordinated 
Strategy?
    Our analysis of the economic impacts of the coordinated strategy is 
based on the application of basic microeconomic theory. In this 
analysis, we use a competitive market model approach in which the 
interaction between supply and demand determines equilibrium market 
prices and quantities. The competitive model approach is appropriate 
for the vessel building and transportation service markets because in 
each of those markets there are many producers and consumers are not 
constrained to use one producer over the others.\127\
---------------------------------------------------------------------------

    \127\ Stopford describes these markets as competitive. See 
Stopford, Martin. Maritime Economics, 3rd Edition (Routledge, 2009), 
Chapter 4.
---------------------------------------------------------------------------

    We also use a competitive market structure for the Category 3 
engine market. This market is characterized by a small number of 
manufacturers (2 companies comprising about 60 percent of the market, 
with two others having a notable share), which suggests that this 
limited number of manufacturers may have certain market power. However, 
an important characteristic of the market suggests this market may 
nevertheless be competitive. Specifically while the primary engine 
companies design and patent Category 3 marine diesel engines, they 
manufacture only key components and not the actual engine itself. 
Engines are manufactured through licensing agreements with shipyards or 
other companies. Licensees pay a fixed cost to the primary engine 
manufacturers for using their designs and brands. Engine prices are 
then set by the licensees, sometimes as part of the price of a 
completed vessel, and there is competition among these firms to 
manufacturer engines and vessels.
    Nevertheless, to estimate the maximum economic impact of the 
program, we can examine how the results of this economic impact 
analysis would change if we assumed an imperfectly competitive market 
structure. In markets with a small number of producers, it is not 
uncommon for manufacturers to exercise market power to obtain prices 
above their costs, thereby securing greater profits. In this case, 
market prices would be expected to increase by more than the compliance 
costs of the regulatory program, although the magnitude of the increase 
would be limited by the existing dynamics of the market (i.e., the 
current difference between the actual market price and the competitive 
market price). This impact is discussed in more detail in Section 
VII.D.5, below. The higher price impact from imperfect competition 
would be transmitted to the vessel and marine transportation markets. 
However, even in this case, the price impacts of this rule on the 
Category 3 engine market are not expected to be large given the price 
increases estimated for the competitive case, described below. This is 
because the compliance costs for engine program are relatively small 
compared to the price of a vessel.
    Finally, the existence of only a small number of firms in a market 
does not mean that the market necessarily behaves noncompetitively. In 
the Bertrand competition model, firms compete with each other by 
choosing a lower price.\128\ When they compete repeatedly, the market 
price is expected to approximate the price that would occur in a 
perfectly competitive market. In this case, the two primarily engine 
producers compete against each other and against the smaller producers 
in the market. They also compete to sell the same or similar engines in 
the land-based electrical power generating market, where they face many 
more competitors.
---------------------------------------------------------------------------

    \128\ Tirole, Jean. The Theory of Industrial Organization 
(1989). MIT Press. See pages 223-224.
---------------------------------------------------------------------------

    In a competitive structure model, we use the relationships between 
supply and demand to simulate how markets can be expected to respond to 
increases

[[Page 22950]]

in production costs that occur as a result of the new emission control 
program. We use the laws of supply and demand to construct a model to 
estimate the social costs of the program and identify how those costs 
will be shared across the markets and, thus, across stakeholders. The 
relevant concepts are summarized below and are presented in greater 
detail in Chapter 7 of the RIA.
    Before the implementation of a control program, a competitive 
market is assumed to be in equilibrium, with producers producing the 
amount of a good that consumers desire to purchase at the market price. 
The implementation of a control program results in an increase in 
production costs by the amount of the compliance costs. This generates 
a ``shock'' to the initial equilibrium market conditions (a change in 
supply). Producers of affected products will try to pass some or all of 
the increased production costs on to the consumers of these goods 
through price increases, without changing the quantity produced. In 
response to the price increases, consumers will decrease the quantity 
they buy of the affected good (a change in the quantity demanded). This 
creates surplus production at the new price. Producers will react to 
the decrease in quantity demanded by reducing the quantity they 
produce, and they will be willing to sell the remaining production at a 
lower price that does not cover the full amount of the compliance 
costs. Consumers will then react to this new price. These interactions 
continue until the surplus production is removed and a new market 
equilibrium price and quantity combination is achieved.
    The amount of the compliance costs that will be borne by 
stakeholders is ultimately limited by the price sensitivity of 
consumers and producers in the relevant markets, represented by the 
price elasticities of demand and supply for each market. An 
``inelastic'' price elasticity (less than one) means that supply or 
demand is not very responsive to price changes (a one percent change in 
price leads to less than one percent change in quantity). An 
``elastic'' price elasticity (more than one) means that supply or 
demand is sensitive to price changes (a one percent change in price 
leads to more than one percent change in quantity). A price elasticity 
of one is unit elastic, meaning there is a one-to-one correspondence 
between a percent change in price and percent change in quantity.
    On the production side, price elasticity of supply depends on the 
time available to adjust production in response to a change in price, 
how easy it is to store goods, and the cost of increasing (or 
decreasing) output. In this analysis, we assume the supply for engines, 
vessels, and marine transportation services is elastic: an increase in 
the market price of an engine, vessel or freight rates will lead 
producers to want to produce more, while a decrease will lead them to 
produce less (this is the classic upward-sloping supply curve). It 
would be difficult to estimate the slope of the supply curve for each 
of these markets given the global nature of the sector and, as 
explained in Chapter 7 of the RIA it is not necessary to have estimated 
supply elasticities for this analysis due to the assumption of nearly 
perfectly inelastic demand for the marine transportation sector. 
However, we can make some observations about the supply elasticities 
based on the nature of each sector. For the marine transportation 
sector, it is reasonable to assume a supply elasticity equal to or 
greater than one because the amount of transportation services provided 
can easily be adjusted due to a change in price in most cases (e.g., 
move more or fewer containers or passengers) especially if the market 
can carry a certain amount of excess capacity. For the new Category 3 
engine market the supply elasticity is also likely to be greater than 
one. These engines are often used in other land-based industries, 
notably in power plants, which provide a market to accommodate 
production fluctuations as manufacturers adjust their output for the 
marine market. The supply elasticity for the vessel construction 
market, on the other hand, is upward sloping but the slope (supply 
elasticity) may be less than or equal to one depending on the vessel 
type. This would be expected since it may be harder to adjust 
production and/or store output if the price drops, or rapidly increase 
production if the price increases. Because of the nature of this 
industry, it may not be possible to easily switch production to other 
goods, or to stop or start production of new vessels.
    On the consumption side, we assume that the demand for engines is a 
function of the demand for vessels, which is a function of the demand 
for international shipping (demand for engines and vessels is derived 
from the demand for marine transportation services). This makes 
intuitive sense: Category 3 engine and vessel manufacturers would not 
be expected to build an engine or vessel unless there is a purchaser, 
and purchasers will want a new vessel/engine only if there is a need 
for one to supply marine transportation services. Deriving the price 
elasticity of demand for the vessel and engine markets from the 
international shipping market is an important feature of this analysis 
because it provides a link between the product markets.
    In this analysis, the price elasticity of demand for marine 
transportation services, and therefore for vessels and Category 3 
engines, is assumed to be nearly perfectly inelastic (the demand for 
marine transportation services will remain the same for all price 
changes). This stems from the fact that for most goods, there are no 
reasonable alternative shipping modes. In most cases, transportation by 
rail or truck is not feasible, and transportation by aircraft is too 
expensive. Approximately 90 percent of world trade by tonnage is moved 
by ship, and ships provide the most efficient method to transport these 
goods on a tonne-mile basis.\129\ Stopford notes that ``shippers need 
the cargo and, until they have time to make alternative arrangements, 
must ship it regardless of cost * * *. The fact that freight generally 
accounts for only a small portion of material costs reinforces this 
argument.'' \130\ A nearly perfectly inelastic price elasticity of 
demand for marine transportation services means that virtually all of 
the compliance costs can be expected to be passed on to the consumers 
of marine transportation services, with no change in output for engine 
producers, ship builders, or owners and operators of ships engaged in 
international trade. Section VII.D.5, below, provides a discussion of 
the impact of relaxing of the nearly perfect demand elasticity for 
marine transportation services in general, and for the cruise industry 
specifically. Relaxing this assumption is not expected to change the 
estimated total social costs of the program, which are limited by the 
engineering compliance costs. However, it would change the way those 
costs are shared among stakeholders.
---------------------------------------------------------------------------

    \129\ Harrould-Koleib, Ellycia. Shipping Impacts on Climate: A 
Source with Solutions. Oceana, July 2008. A copy of this report can 
be found at http://www.oceana.org/fileadmin/oceana/uploads/Climate_
Change/Oceana_Shipping_Report.pdf.
    \130\ Stopford, Martin. Maritime Economics, 3rd Edition. 
Routledge, 2009. p. 163.
---------------------------------------------------------------------------

    Finally, with regard to the fuel markets, the impacts of the 
coordinated strategy on fuel costs were assessed using the World Oil 
Refining Logistics and Demand (WORLD) model, as run by Ensys Energy & 
Systems, the owner and developer of the refinery model. As described in 
Chapter 5 of the RIA, the WORLD model is the only such model currently 
developed for this purpose, and was developed by a team of 
international petroleum consultants. It

[[Page 22951]]

has been widely used by industries, government agencies, and OPEC over 
the past 13 years, including the Cross Government/Industry Scientific 
Group of Experts, established to evaluate the effects of the different 
fuel options proposed under the revision of MARPOL Annex VI. The model 
incorporates crude sources, global regions, refinery operations, and 
world economics, as well as assumptions about how these markets respond 
to regulatory programs. The results of the WORLD model have been shown 
to be comparable to other independent predictions of global fuel, air 
pollutant emissions and economic predictions.
    WORLD is a comprehensive, bottom-up model of the global oil 
downstream that includes crude and noncrude supplies; refining 
operations and investments; crude, products, and intermediates trading 
and transport; and product blending/quality and demand. Its detailed 
simulations are capable of estimating how the global system can be 
expected to operate under a wide range of different circumstances, 
generating model outputs such as price effects and projections of 
refinery operations and investments.
    This analysis of the economic impacts of the coordinated strategy 
relies on the estimated engineering compliance costs for engines and 
fuels described in Sections VII.A (fuels) and VII.B (engines) above. 
These costs include hardware costs for new U.S. vessels to comply with 
the Tier 2 and Tier 3 engine standards, and for existing U.S. vessels 
to comply with the MARPOL Annex VI requirements for existing engines. 
There are also hardware costs for fuel switching equipment on new and 
existing U.S. vessels to comply with the 1,000 ppm fuel sulfur limit; 
the cost analysis assumes that 32 percent of all vessels require fuel 
switching equipment to be added (new vessels) or retrofit (existing 
vessels). Also included are expected increases in operating costs for 
U.S. and foreign vessels operating in the inventory modeling domain 
(the waterways covered by the engine and fuel controls, i.e., the U.S. 
ECA and U.S. internal waters covered by the coordinated strategy.\131\ 
These increased operating costs include changes in fuel consumption 
rates, increases in fuel costs, and the use of urea for engines 
equipped with SCR, as well as a small increase in operating costs for 
operation outside the waterways affected by the coordinated strategy 
due to the fuel price impacts of the program.
---------------------------------------------------------------------------

    \131\ The MARPOL amendments include Tier II and Tier III 
NOX standards that apply to all vessels, including 
foreign vessels. While the analysis does not include hardware costs 
for the MARPOL Tier II and Tier III standards for foreign vessels 
because foreign vessels operate anywhere in the world, it is 
appropriate to include the operating costs for these foreign vessels 
while they are operating in our inventory modeling domain. This is 
because foreign vessels complying with the Tier II and Tier III 
standards will have a direct beneficial impact on U.S. air quality, 
and if we consider the benefits of these standards we should also 
consider their costs.
---------------------------------------------------------------------------

(3) What Are the Estimated Market Impacts of the Coordinated Strategy?
(a) What Are the Estimated Engine and Vessel Market Impacts of the 
Coordinated Strategy?
    The estimated market impacts for engines and vessels are based on 
the variable costs associated with the engine and vessel compliance 
programs; fixed costs are not included in the market analysis. This is 
appropriate because in a competitive market the industry supply curve 
is generally based on the market's marginal cost curve; fixed costs do 
not influence production decisions at the margin. Therefore, the market 
analysis for a competitive market is based on variable costs only.
    The assumption of nearly perfectly inelastic demand for marine 
transportation services means that the quantity of these services 
purchased is not expected to change as a result of costs of complying 
with the requirements of the coordinated strategy. As a result, the 
demand for vessels and engines would also not change compared to the 
no-control scenario, and the quantities produced would remain the same.
    The assumption of nearly perfectly inelastic demand for marine 
transportation services also means the price impacts of the coordinated 
strategy on new engines and vessels would be equivalent to the variable 
engineering compliance costs. Estimated price impacts for a sample of 
engine-vessel combinations are set out in Table VII-8 for medium speed 
engines, and Table VII-9 for slow speed engines. These are the 
estimated price impacts associated with the Tier 3 engine standards on 
a vessel that will switch fuels to comply with the fuel sulfur 
requirements while operating in the waterways covered by the engine and 
fuel controls. Because there is no phase-in for the standards, the 
estimated price impacts are the same for all years, beginning in 2016.

            Table VII-8--Summary of Estimated Market Impacts--Medium Speed Tier 3 Engines and Vessels
                                                    [$2006] a
----------------------------------------------------------------------------------------------------------------
                                                               New vessel
                                                 Average      engine price     New vessel fuel
                  Ship type                     propulsion  impact (new tier      switching     New vessel total
                                                  power      3 engine price    equipment price    price impact
                                                                impact) b         impact c
----------------------------------------------------------------------------------------------------------------
Auto Carrier.................................        9,600          $573,200           $42,300          $615,500
Bulk Carrier.................................        6,400           483,500            36,900           520,400
Container....................................       13,900           687,800            49,200           736,000
General Cargo................................        5,200           450,300            34,900           475,200
Passenger....................................       23,800           952,500            65,400         1,107,900
Reefer.......................................        7,400           511,000            38,500           549,500
RoRo.........................................        8,600           543,800            40,500           584,300
Tanker.......................................        6,700           492,800            37,400           530,200
Misc.........................................        9,400           566,800            41,900          608,700
----------------------------------------------------------------------------------------------------------------
Notes:
a The new vessel engine price impacts listed here do not include a per engine cost of $10,000 for engines
  installed on U.S. vessels to comply with the proposed production testing requirement (Sec.   1042.302).
b Medium speed engine price impacts are estimated from the cost information presented in Chapter 5 of the RIA
  using the following formula: (10%*($/SHIP--MECH[rarr]CR)) + (30%*($/SHIP--ELEC[rarr]CR)) + (T3 ENGINE MODS) +
  (T3SCR)).
c Assumes 32 percent of new vessels would require the fuel switching equipment.


[[Page 22952]]


        Table VII-9--Summary of Estimated Market Impacts--Slow Speed Tier 3 Engines and Vessels ($2006) a
----------------------------------------------------------------------------------------------------------------
                                                               New vessel
                                                 Average      engine price     New vessel fuel
                  Ship type                     propulsion  impact (new tier      switching     New vessel total
                                                  power      3 engine price    equipment price    price impact
                                                                impact) b         impact c
----------------------------------------------------------------------------------------------------------------
Auto Carrier.................................       11,300          $825,000           $48,000          $873,000
Bulk Carrier.................................        8,400           672,600            42,700           715,300
Container....................................       27,500         1,533,100            63,900         1,597,000
General Cargo................................        7,700           632,900            41,000           673,900
Passenger....................................       23,600         1,385,300            61,200         1,446,500
Reefer.......................................       10,400           781,000            46,500           827,500
RoRo.........................................       15,700         1,042,100            53,900         1,096,000
Tanker.......................................        9,800           744,200            45,300           789,500
Misc.........................................        4,700           453,600            32,000          485,600
----------------------------------------------------------------------------------------------------------------
Notes:
a The new vessel engine price impacts listed here do not include a per engine cost of $10,000 for engines
  installed on U.S. vessels to comply with the proposed production testing requirement (Sec.   1042.302).
b Slow speed engine price impacts are estimated from the cost information presented in Chapter 5 using the
  following formula: (5%*($/SHIP--MECH[rarr]CR)) + (15%*($/SHIP--ELEC[rarr]CR)) + (T3 ENGINE MODS) + (T3 SCR)).
c Assumes 32 percent of new vessels would require the fuel switching equipment.

    The estimated price impacts for Tier 2 vessels would be 
substantially lower, given the technology that will be used to meet the 
Tier 2 standards is much less expensive. The cost of complying with the 
Tier 2 standards ranges from about $56,000 to $100,000 for a medium 
speed engine, and from about $130,000 to $250,000 for a slow speed 
engine (see discussion in Chapter 7 of the RIA). Again, because the 
standards do not phase in, the estimated price impacts are the same for 
all years the Tier 2 standards are required, 2011 through 2015.
    These estimated price impacts for Tier 2 and Tier 3 vessels are 
small when compared to the price of a new vessel. A selection of new 
vessel prices is provided in Table VII-10; these range from about $40 
million to $480 million. The program price increases range from about 
$600,000 to $1.5 million. A price increase of $600,000 to comply with 
the Tier 3 standards and fuel switching requirements would be an 
increase of approximately 2 percent for a $40 million vessel. The 
largest vessel price increase noted above for a Tier 3 passenger vessel 
is about $1.5 million; this is a price increase of less than 1 percent 
for a $478 million passenger vessel. Independent of the nearly-perfect 
inelasticity of demand, price increases of this magnitude would be 
expected to have little, if any, effect on the sales of new vessels, 
all other economic conditions held constant.

                   Table VII-10--Newbuild Vessel Price by Ship Type and Size, Selected Vessels
                                                [Millions, $2008]
----------------------------------------------------------------------------------------------------------------
               Vessel type                    Vessel size category        Size range (mean) (DWT)      Newbuild
----------------------------------------------------------------------------------------------------------------
Bulk Carrier............................  Handy......................        10,095-39,990 (27,593)       $56.00
                                          Handymax...................        40,009-54,881 (47,616)        79.00
                                          Panamax....................        55,000-78,932 (69,691)        97.00
                                          Capesize...................      80,000-364,767 (157,804)       175.00
----------------------------------------------------------------------------------------------------------------
Container...............................  Feeder.....................          1,000-13,966 (9,053)        38.00
                                          Intermediate...............        14,003-36,937 (24,775)        70.00
                                          Panamax....................        37,042-54,700 (45,104)       130.00
                                          Post Panamax...............        55,238-84,900 (67,216)       165.00
----------------------------------------------------------------------------------------------------------------
Gas carrier.............................  Midsize....................          1,001-34,800 (7,048)        79.70
                                          LGC........................        35,760-59,421 (50,796)        37.50
                                          VLGC.......................       62,510-122,079 (77,898)       207.70
----------------------------------------------------------------------------------------------------------------
General cargo...........................  Coastal Small..............           1,000-9,999 (3,789)        33.00
                                          Coastal Large..............        10,000-24,912 (15,673)        43.00
                                          Handy......................        25,082-37,865 (29,869)        52.00
                                          Panamax....................        41,600-49,370 (44,511)        58.00
----------------------------------------------------------------------------------------------------------------
Passenger...............................  All........................          1,000-19,189 (6,010)       478.40
----------------------------------------------------------------------------------------------------------------
Reefer..................................  All........................          1,000-19,126 (6,561)        17.30
----------------------------------------------------------------------------------------------------------------
Ro-Ro...................................  All........................          1,000-19,126 (7,819)        41.20
----------------------------------------------------------------------------------------------------------------
Tanker..................................  Coastal....................          1,000-23,853 (7,118)        20.80
                                          Handymax...................        25,000-39,999 (34,422)        59.00
                                          Panamax....................        40,000-75,992 (52,300)        63.00
                                          AFRAmax....................      76,000-117,153 (103,112)        77.00
                                          Suezmax....................     121,109-167,294 (153,445)        95.00

[[Page 22953]]


                                          VLCC.......................     180,377-319,994 (294,475)       154.00
----------------------------------------------------------------------------------------------------------------
Sources: Lloyd's Shipping Economist (2008), Informa (2008), Lloyd's Sea-Web (2008).

(b) What Are the Estimated Fuel Market Impacts of the Coordinated 
Strategy?
    The market impacts for the fuel markets were estimated through the 
modeling performed to estimate the fuel compliance costs for the 
coordinated strategy. In the WORLD model, the total quantity of fuel 
used is held constant, which is consistent with the assumption that the 
demand for international shipping transportation would not be expected 
to change due to the lack of transportation alternatives.
    The expected price impacts of the coordinated strategy are set out 
in Table VII-11. Note that on a mass basis, less distillate than 
residual fuel is needed to go the same distance (5 percent less). The 
prices in Table VII-11 are adjusted for this impact.
    Table VII-11 shows that the coordinated strategy is expected to 
result in a small increase in the price of marine distillate fuel, 
about 1.3 percent. The price of residual fuel is expected to decrease 
slightly, by less than one percent, due to a reduction in demand for 
that fuel.

                         Table VII-11--Summary of Estimated Market Impacts--Fuel Markets
----------------------------------------------------------------------------------------------------------------
                                                             Baseline     Control     Adjusted for
                     Fuel                         Units       price        price     energy density    % change
----------------------------------------------------------------------------------------------------------------
Distillate....................................    $/tonne         $462         $468             N/A        +1.3%
Residual......................................    $/tonne         $322         $321             N/A        -0.3%
Fuel Switching................................    $/tonne         $322         $468            $444    +38.9%\a\
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Energy adjusted value.

    Because of the need to shift from residual fuel to distillate fuel 
for ships while operating in the waterways covered by the engine and 
fuel controls (the U.S. ECA and U.S. internal waters covered by the 
coordinated strategy), ship owners are expected to see an increase in 
their total cost of fuel. This increase is because distillate fuel is 
more expensive than residual fuel. Factoring in the higher energy 
content of distillate fuel relative to residual fuel, the fuel cost 
increase would be about 39 percent.
(c) What Are the Estimated Marine Transportation Market Impacts of the 
Coordinated Strategy?
    We used the above information to estimate the impacts on the prices 
of marine transportation services. This analysis, which is presented in 
Chapter 7 of the RIA, is limited to the impacts of increases in 
operating costs due to the fuel and emission requirements of the 
coordinated strategy. Operating costs would increase due to the 
increase in the price of fuel, the need to switch to fuel with a sulfur 
content not to exceed 1,000 ppm while operating in the waterways 
covered by the engine and fuel controls, and due to the need to dose 
the aftertreatment system with urea to meet the Tier 3 standards. Table 
VII-12 summarizes these price impacts for selected transportation 
markets. Table VII-12 also lists the vessel and engine parameters that 
were used in the calculations.

Table VII-12--Summary of Impacts of Operational Fuel/Urea Cost Increases
------------------------------------------------------------------------
                                Vessel and engine    Operational price
          Vessel type               parameters           increases
------------------------------------------------------------------------
Container.....................  36,540 kW........  $17.53/TEU.
North Pacific Circle Route....  50,814 DWT.......
Bulk Carrier..................  3,825 kW.........  $0.56/tonne.
North Pacific Circle Route....  16,600 DWT.......
Cruise Liner..................  31,500 kW........  $6.60/per passenger
(Alaska)......................  226,000 DWT......   per day.
                                1,886 passengers.
------------------------------------------------------------------------

    This information suggests that the increase in marine 
transportation service prices would be small, both absolutely and when 
compared to the price charged by the ship owner per unit transported 
and are estimated to be about $18 per TEU on the North Pacific Circle 
Route and $0.56 per tonne for bulk cargo on the North Pacific Circle 
Route. Stopford notes that the price of transporting a 20 foot 
container between the UK and Canada is estimated to be about $1,500; of 
that, $700 is the cost of the ocean freight; the rest is for port, 
terminal, and other charges.\132\ Thus, a price increase of about $18 
represents an increase of less than 3 percent of ocean freight cost, 
and about one percent of transportation cost. Similarly, the price of a 
7-day Alaska cruise varies

[[Page 22954]]

from $100 to $400 per night or more. In that case, a price increase of 
about $7 per night would be a 1.5 percent to about 6 percent increase.
---------------------------------------------------------------------------

    \132\ Stopford, Martin, Maritime Economics, 3rd Edition. 
Routledge, 2009. Page 519.
---------------------------------------------------------------------------

(4) What Are the Estimated Social Costs of the Coordinated Strategy and 
How Are They Expected To Be Distributed Across Stakeholders?
    The total social costs of the coordinated strategy are based on 
both fixed and variable costs. Fixed costs are a cost to society: They 
displace other product development activities that may improve the 
quality or performance of engines and vessels. In this economic impact 
analysis, fixed costs are accounted for in the year in which they 
occur, with the fixed costs associated with the Tier 2 engine standards 
accounted for in 2010 and the fixed costs associated with the Tier 3 
engine standards and the fuel sulfur controls for vessels operating on 
the waterways covered by the coordinated strategy are accounted for in 
the five-year period beginning prior to their effective dates.
    The estimated social costs of the coordinated strategy for all 
years are presented in Table VII-4. For 2030, the social costs are 
estimated to be about $3.1 billion.\133\ For the reasons described 
above and explained more fully in the RIA, these costs are expected to 
be borne fully by consumers of marine transportation services.
---------------------------------------------------------------------------

    \133\ The costs totals reported in this FRM are slightly 
different than those reported in the ECA proposal. This is because 
the ECA proposal did not include costs associated with the Annex VI 
existing engine program, Tier II, or the costs associated with 
existing vessel modifications that may be required to accommodate 
the use of lower sulfur fuel. Further, the cost totals presented in 
the ECA package included Canadian cost estimates.
---------------------------------------------------------------------------

    These social costs are small when compared to the total value of 
U.S. waterborne foreign trade. In 2007, waterborne trade for government 
and non-government shipments by vessel into and out of U.S. foreign 
trade zones, the 50 States, the District of Columbia, and Puerto Rico 
was about $1.4 trillion. Of that, about $1 trillion was for 
imports.\134\
---------------------------------------------------------------------------

    \134\ Census Bureau's Foreign Trade Division, U.S. Waterborne 
Foreign Trade by U.S. Custom Districts, as reported by the Maritime 
Administration at http://www.marad.dot.gov/library_landing_page/
data_and_statistics/Data_and_Statistics.htm, accessed April 9, 
2009.
---------------------------------------------------------------------------

    If only U.S. vessels are considered, the social costs of the 
coordinated strategy in 2030 would be about $427.5 million. Again, 
these social costs are small when compared to the annual revenue for 
this sector. In 2002, the annual revenue for this sector was about 
$19.8 billion.\135\
---------------------------------------------------------------------------

    \135\ U.S. Census Bureau, Industry Statistics Sampler, NAICS 
48311, Deep sea, coastal, and Great Lakes transportation, at http://
www.census.gov/econ/census02/data/industry/E48311.HTM, assessed on 
April 9, 2009.
---------------------------------------------------------------------------

(5) Sensitivity Analyses
    In this section we briefly discuss the impact of relaxing several 
of the assumptions used in our economic impact analysis for the 
coordinated strategy, including the assumption of nearly perfectly 
inelastic demand for marine transportation services, nearly perfectly 
inelastic demand for cruise services, and a competitive market 
structure for the Category 3 marine diesel engine market. Each of these 
cases is examined more fully in Chapter 7 of the RIA for this rule.
    To examine the impact of the assumption of nearly perfectly 
inelastic demand elasticity for marine transportation services, we 
would determine a discrete value for that elasticity and then create a 
computer model to model the effects of the coordinated strategy. It 
would be difficult to develop such an elasticity using available 
industry information. Therefore, this alternative analysis relies on 
the price elasticities we developed for our 2008 rulemaking that set 
technology-forcing standards for Category 1 and Category 2 engines (73 
FR 25098, May 6, 2008). Although these price elasticities of demand and 
supply were developed using data for United States markets only, they 
reflect behavioral reactions to price changes if alternative modes of 
transportation were available. While they are not specific to the 
global marine transportation market, they are useful to provide an idea 
of the change in results that could be expected if the demand 
elasticity for marine transportation is not nearly perfectly inelastic.
    The values used for the behavioral parameters for the Category 1 
and 2 markets are provided in Table VII-13. In this case, the demand 
for marine transportation services is estimated to be somewhat 
inelastic: A one percent increase in price will result in a 0.5 percent 
decrease in demand.

                                   Table VII-13--Behavioral Parameters Used in Locomotive/Marine Economic Impact Model
--------------------------------------------------------------------------------------------------------------------------------------------------------
         Sector                Market              Demand elasticity                  Source                   Supply elasticity             Source
--------------------------------------------------------------------------------------------------------------------------------------------------------
Marine.................  Marine              -0.5 (inelastic)............  Literature estimate.........  0.6 (inelastic).............  Literature
                          Transportation                                                                                                estimate.
                          Services.
                         Commercial Vessels  Derived.....................  N/A.........................  2.3 (elastic)...............  Econometric
                          \a\.                                                                                                          estimate.
                         Engines...........  Derived.....................  N/A.........................  3.8 (elastic)...............  Econometric
                                                                                                                                        estimate.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ Commercial vessels include tug/tow/pushboats, ferries, cargo vessels, crew/supply boats, and other commercial vessels.

    In general, relaxing the condition of nearly perfectly inelastic 
demand elasticity would result in the compliance costs of the 
coordinated strategy being shared by consumers and suppliers. The 
distribution of compliance costs from our earlier rule are presented in 
Table VII-14. While the emission control requirements and the 
compliance cost structure of the coordinated strategy are somewhat 
different, these results give an idea of how costs would be shared if 
the assumption of nearly perfectly inelastic price elasticity of demand 
for the transportation services market in the ocean-going marine sector 
were relaxed.


[[Page 22955]]



  Table VII-14--Distribution of Social Costs Among Stakeholder Groups--
                Category 1 and Category 2 Engine Program
------------------------------------------------------------------------
          Stakeholder group            2020 (percent)    2030 (percent)
------------------------------------------------------------------------
Marine engine producers.............               0.8               0.5
Marine vessel producers.............              10.7               3.8
Recreational and fishing vessel                    8.4               4.1
 consumers..........................
Marine transportation service                     36.4              41.5
 providers..........................
Marine transportation service                     43.8              50.0
 consumers..........................
                                     -----------------------------------
    Total...........................             100.0             100.0
------------------------------------------------------------------------

    With regard to cruise transportation, commenters remarked that 
demand is not nearly perfectly inelastic. Cruises are a recreational 
good, and if the price of a cruise increases, consumers will choose to 
spend their recreational budgets on other activities.
    The same analysis described above would also apply in this 
particular sector of the marine transportation market. In this case, 
the share of the compliance costs that will be borne by the cruise 
industry suppliers will depend on the magnitude of the demand 
elasticity. If the price elasticity of demand is larger (in absolute 
value) than the price elasticity of supply, ship owners will bear a 
larger share of the costs of the program; if the price elasticity of 
demand is smaller (in absolute value) than the price elasticity of 
supply, consumers will bear a larger share of the program.
    In our 2002 recreational vehicle rule, we estimated the demand 
elasticity for inboard cruisers to be about -1.4 and the supply 
elasticity to be about 1.6.\136\ Using these values as a proxy for 
cruise ship demand and supply, this suggests that the compliance costs 
will be shared among passengers and operators roughly evenly.
---------------------------------------------------------------------------

    \136\ EPA420-02-022, Final Regulatory Support Document: Control 
of Emissions from Unregulated Nonroad Engines, Chapter 9. A copy of 
this document is available at http://www.epa.gov/otaq/regs/nonroad/
2002/r02022j.pdf.
---------------------------------------------------------------------------

    As described in Section 7.3 of the RIA, the compliance costs 
associated with the coordinated strategy are expected to be small 
compared to the daily costs of a cruise, at about $7 per night. 
Overall, total engine and vessel costs are expected to increase about 
one percent and operating costs increasing between 1.5 and 6 percent. 
These increases are within the range of historic variations in bunker 
fuel prices. So, although relaxing the assumption of nearly perfectly 
elastic demand elasticity for cruises means the burden of the 
coordinated strategy would be shared between cruise ship operators and 
cruise ship passengers, those costs, and therefore the expected price 
increases, are expected to be small compared to the price of a cruise.
    Finally, this Economic Impact Analysis assumes that the market 
structure for the Category 3 marine diesel engine market is 
competitive. As explained above, this assumption is reasonable even 
though there are few producers in this market. If, in fact, this market 
is noncompetitive and behaves more like an oligopoly, then the results 
of the analysis would be somewhat different. Specifically, 
oligopolistic producers can set the market price at a level higher than 
the competitive market price, capturing larger profits than would 
otherwise be the case. However, this price premium would already be 
reflected in the prices of Category 3 marine diesel engines. What would 
change in the analysis is the magnitude of the compliance costs passed 
on to consumers of these engines (vessel builders and the 
transportation services market), which would be higher than the 
compliance costs. This effect is discussed in Chapter 7 of the RIA.

VIII. Benefits

    This section presents our analysis of the health and environmental 
benefits that will occur as a result of EPA's coordinated strategy to 
address emissions from Category 3 engines and ocean-going vessels 
throughout the period from initial implementation through 2030. We 
provide estimated benefits for the entire coordinated strategy, 
including the Annex VI Tier 2 NOX requirements and the ECA 
controls that will be mandatory for U.S. and foreign vessels through 
the Act to Prevent Pollution from Ships. However, unlike the cost 
analysis, this benefits analysis does not allocate benefits between the 
components of the program (the requirements in this rule and the 
requirements that would apply through MARPOL Annex VI and ECA 
implementation). This is because the benefits of the coordinated 
strategy will be fully realized only when the U.S. ECA is in place and 
both U.S. and foreign vessel are required to use lower sulfur fuel and 
operate their Tier 3 NOX controls while in the designated 
area, and therefore it makes more sense to consider the benefits of the 
coordinated strategy as a whole.
    The components of the coordinated strategy will apply stringent 
NOX and SOX standards to virtually all vessels 
that affect U.S. air quality, and impacts on human health and welfare 
will be substantial. As presented in Section II, the coordinated 
strategy is expected to provide very large reductions in direct PM, 
NOX, SOX, and toxic compounds, both in the near 
term and in the long term. Emissions of NOX (a precursor to 
ozone formation and secondarily-formed PM2.5), 
SOX (a precursor to secondarily-formed PM2.5) and 
directly-emitted PM2.5 contribute to ambient concentrations 
of PM2.5 and ozone. Exposure to ozone and PM2.5 
is linked to adverse human health impacts such as premature deaths as 
well as other important public health and environmental effects.
    Using the most conservative premature mortality estimates (Pope et 
al., 2002 for PM2.5 and Bell et al., 2004 for 
ozone),137 138 we estimate that implementation of the 
coordinated strategy will reduce approximately 12,000 premature 
mortalities in 2030 and yield approximately $110 billion in total 
benefits. The upper end of the premature mortality estimates (Laden et 
al., 2006 for PM2.5 and Levy et al., 2005 for ozone) 
139 140 increases avoided

[[Page 22956]]

premature mortalities to approximately 31,000 in 2030 and yields 
approximately $270 billion in total benefits. Thus, even taking the 
most conservative premature mortality assumptions, the health impacts 
of the coordinated strategy presented in this rule are clearly 
substantial.
---------------------------------------------------------------------------

    \137\ Pope, C.A., III, R.T. Burnett, M.J. Thun, E.E. Calle, D. 
Krewski, K. Ito, and G.D. Thurston (2002). Lung Cancer, 
Cardiopulmonary Mortality, and Long-term Exposure to Fine 
Particulate Air Pollution. Journal of the American Medical 
Association, 287, 1132-1141.
    \138\ Bell, M.L., et al. (2004). Ozone and short-term mortality 
in 95 U.S. urban communities, 1987-2000. Journal of the American 
Medical Association, 292(19), 2372-2378.
    \139\ Laden, F., J. Schwartz, F.E. Speizer, and D.W. Dockery 
(2006). Reduction in Fine Particulate Air Pollution and Mortality. 
American Journal of Respiratory and Critical Care Medicine. 173, 
667-672.
    \140\ Levy, J.I., S.M. Chemerynski, and J.A. Sarnat (2005). 
Ozone exposure and mortality: an empiric bayes metaregression 
analysis. Epidemiology. 16(4), 458-68.
---------------------------------------------------------------------------

A. Overview

    We base our analysis on peer-reviewed studies of air quality and 
human health effects (see U.S. EPA, 2006 and U.S. EPA, 
2008).141 142 These methods are described in more detail in 
the RIA that accompanies this action. To model the ozone and PM air 
quality impacts of the CAA standards and requirements and the ECA 
designation, we used the Community Multiscale Air Quality (CMAQ) model 
(see Section II). The modeled ambient air quality data serves as an 
input to the Environmental Benefits Mapping and Analysis Program 
(BenMAP).\143\ BenMAP is a computer program developed by the U.S. EPA 
that integrates a number of the modeling elements used in previous 
analyses (e.g., interpolation functions, population projections, health 
impact functions, valuation functions, analysis and pooling methods) to 
translate modeled air concentration estimates into health effects 
incidence estimates and monetized benefits estimates.
---------------------------------------------------------------------------

    \141\ U.S. Environmental Protection Agency (2006). Final 
Regulatory Impact Analysis (RIA) for the Proposed National Ambient 
Air Quality Standards for Particulate Matter. Prepared by: Office of 
Air and Radiation. Retrieved March 26, 2009 at http://www.epa.gov/
ttn/ecas/ria.html.
    \142\ U.S. Environmental Protection Agency (2008). Final Ozone 
NAAQS Regulatory Impact Analysis. Prepared by: Office of Air and 
Radiation, Office of Air Quality Planning and Standards. Retrieved 
March 26, 2009 at http://www.epa.gov/ttn/ecas/ria.html.
    \143\ Information on BenMAP, including downloads of the 
software, can be found at http://www.epa.gov/ttn/ecas/
benmodels.html.
---------------------------------------------------------------------------

    The range of total ozone- and PM-related benefits associated with 
the coordinated strategy to control ship emissions is presented in 
Table VIII-1. We present total benefits based on the PM- and ozone-
related premature mortality function used. The benefits ranges 
therefore reflect the addition of each estimate of ozone-related 
premature mortality (each with its own row in Table VIII-1) to 
estimates of PM-related premature mortality. These estimates represent 
EPA's preferred approach to characterizing the best estimate of 
benefits associated with the coordinated strategy. As is the nature of 
Regulatory Impact Analyses (RIAs), the assumptions and methods used to 
estimate air quality benefits evolve to reflect the Agency's most 
current interpretation of the scientific and economic literature. This 
analysis, therefore, incorporates a number of important changes from 
recent RIAs released by the Office of Transportation and Air Quality 
(OTAQ):
     The 2030 air quality modeling of the final coordinated 
strategy reflects air quality impacts associated with an ECA boundary 
distance of 200 nm with global controls (set through IMO) beyond the 
ECA boundary. For the proposal, however, the air quality modeling 
reflected impacts associated with an ECA boundary distance of 100 nm 
with global controls beyond. To estimate the 2030 benefits associated 
with a 200 nm ECA boundary in the proposal, we transferred the 
relationship between modeled impacts between 100 nm and 200 nm ECA 
boundaries observed in 2020. For each health endpoint and associated 
valuation, we calculated a ratio based on the national-level estimate 
for the 200 nm and 100 nm scenario and applied that to the related 2030 
100 nm estimate. For the final RIA, we estimated benefits based on the 
actual 2030 200 nm air quality modeling results. The net effect of this 
change results in a small decrease in 2030 benefits compared to the 
proposal.
     For a period of time (2004-2008), the Office of Air and 
Radiation (OAR) valued mortality risk reductions using a value of 
statistical life (VSL) estimate derived from a limited analysis of some 
of the available studies. OAR arrived at a VSL using a range of $1 
million to $10 million (2000$) consistent with two meta-analyses of the 
wage-risk literature. The $1 million value represented the lower end of 
the interquartile range from the Mrozek and Taylor (2002) \144\ meta-
analysis of 33 studies and $10 million represented the upper end of the 
interquartile range from the Viscusi and Aldy (2003) \145\ meta-
analysis of 46 studies. The mean estimate of $5.5 million (2000$) \146\ 
was also consistent with the mean VSL of $5.4 million estimated in the 
Kochi et al. (2006) \147\ meta-analysis. However, the Agency neither 
changed its official guidance on the use of VSL in rule-makings nor 
subjected the interim estimate to a scientific peer-review process 
through the Science Advisory Board (SAB) or other peer-review group.
---------------------------------------------------------------------------

    \144\ Mrozek, J.R., and L.O. Taylor (2002). What Determines the 
Value of Life? A Meta-Analysis. Journal of Policy Analysis and 
Management 21(2):253-270.
    \145\ Viscusi, V.K., and J.E. Aldy (2003). The Value of a 
Statistical Life: A Critical Review of Market Estimates Throughout 
the World. Journal of Risk and Uncertainty 27(1):5-76.
    \146\ In this analysis, we adjust the VSL to account for a 
different currency year (2006$) and to account for income growth to 
2020 and 2030. After applying these adjustments to the $5.5 million 
value, the VSL is $7.7m in 2020 and $7.9 in 2030.
    \147\ Kochi, I., B. Hubbell, and R. Kramer 2006. An Empirical 
Bayes Approach to Combining Estimates of the Value of Statistical 
Life for Environmental Policy Analysis. Environmental and Resource 
Economics. 34: 385-406.
---------------------------------------------------------------------------

    During this time, the Agency continued work to update its guidance 
on valuing mortality risk reductions, including commissioning a report 
from meta-analytic experts to evaluate methodological questions raised 
by EPA and the SAB on combining estimates from the various data 
sources. In addition, the Agency consulted several times with the 
Science Advisory Board Environmental Economics Advisory Committee (SAB-
EEAC) on the issue. With input from the meta-analytic experts, the SAB-
EEAC advised the Agency to update its guidance using specific, 
appropriate meta-analytic techniques to combine estimates from unique 
data sources and different studies, including those using different 
methodologies (i.e., wage-risk and stated preference) (U.S. EPA-SAB, 
2007).\148\
---------------------------------------------------------------------------

    \148\ U.S. Environmental Protection Agency (U.S. EPA). 2007. SAB 
Advisory on EPA's Issues in Valuing Mortality Risk Reduction. http:/
/yosemite.epa.gov/sab/sabproduct.nsf/
4128007E7876B8F0852573760058A978/$File/sab-08-001.pdf.
---------------------------------------------------------------------------

    Until updated guidance is available, the Agency determined that a 
single, peer-reviewed estimate applied consistently best reflects the 
SAB-EEAC advice it has received. Therefore, the Agency has decided to 
apply the VSL that was vetted and endorsed by the SAB in the Guidelines 
for Preparing Economic Analyses (U.S. EPA, 2000) while the Agency 
continues its efforts to update its guidance on this issue.\149\ This 
approach calculates a mean value across VSL estimates derived from 26 
labor market and contingent valuation studies published between 1974 
and 1991. The mean VSL across these studies is $6.3 million 
(2000$).\150\
---------------------------------------------------------------------------

    \149\ In the (draft) update of the Economic Guidelines, EPA 
retained the VSL endorsed by the SAB with the understanding that 
further updates to the mortality risk valuation guidance would be 
forthcoming in the near future. Therefore, this report does not 
represent final agency policy. The 2000 guidelines can be downloaded 
here: http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/
Guidelines.html, and the draft updated version (2008) of the 
guidelines can be downloaded here: http://yosemite.epa.gov/ee/epa/
eerm.nsf/vwRepNumLookup/EE-0516?OpenDocument.
    \150\ In this analysis, we adjust the VSL to account for a 
different currency year (2006$) and to account for income growth to 
2020 and 2030. After applying these adjustments to the $6.3 million 
value, the VSL is $8.9m in 2020 and $9.1m in 2030.
---------------------------------------------------------------------------

    The Agency is committed to using scientifically sound, 
appropriately

[[Page 22957]]

reviewed evidence in valuing mortality risk reductions and has made 
significant progress in responding to the SAB-EEAC's specific 
recommendations. The Agency anticipates presenting results from this 
effort to the SAB-EEAC in Winter 2009/2010 and that draft guidance will 
be available shortly thereafter.
     In recent analyses, OTAQ has estimated PM2.5-
related benefits assuming that a threshold exists in the PM-related 
concentration-response functions (at 10 [micro]g/m\3\) below which 
there are no associations between exposure to PM2.5 and 
health impacts. EPA strives to use the best available science to 
support our benefits analyses, and we recognize that interpretation of 
the science regarding air pollution and health is dynamic and evolving. 
Based on our review of the body of scientific literature, EPA applied 
the no-threshold model in this analysis. EPA's draft Integrated Science 
Assessment,151 152 which was recently reviewed by EPA's 
Clean Air Scientific Advisory Committee,153 154 concluded 
that the scientific literature consistently finds that a no-threshold 
log-linear model most adequately portrays the PM-mortality 
concentration-response relationship while recognizing potential 
uncertainty about the exact shape of the concentration-response 
function.\155\ Although this document does not represent final agency 
policy that has undergone the full agency scientific review process, it 
provides a basis for reconsidering the application of thresholds in 
PM2.5 concentration-response functions used in EPA's 
RIAs.\156\ It is important to note that while CASAC provides advice 
regarding the science associated with setting the National Ambient Air 
Quality Standards, typically other scientific advisory bodies provide 
specific advice regarding benefits analysis.\157\ Please see Section 
6.4.1.3 of the RIA that accompanies this preamble for more discussion 
of the treatment of thresholds in this analysis.
---------------------------------------------------------------------------

    \151\ U.S. Environmental Protection Agency (U.S. EPA). 
Integrated Science Assessment for Particulate Matter (External 
Review Draft). National Center for Environmental Assessment, 
Research Triangle Park, NC. EPA/600/R-08/139. December. Available on 
the Internet at http://cfpub.epa.gov/ncea/cfm/
recordisplay.cfm?deid=201805.
    \152\ U.S. Environmental Protection Agency (U.S. EPA). 
Integrated Science Assessment for Particulate Matter (Second 
External Review Draft). National Center for Environmental 
Assessment, Research Triangle Park, NC. EPA/600/R-08/139B. July. 
Available on the Internet at http://cfint.rtpnc.epa.gov/ncea/prod/
recordisplay.cfm?deid=210586.
    \153\ U.S. Environmental Protection Agency--Science Advisory 
Board (U.S. EPA-SAB). Review of EPA's Integrated Science Assessment 
for Particulate Matter (First External Review Draft, December 2008). 
EPA-COUNCIL-09-008. May. Available on the Internet at http://
yosemite.epa.gov/sab/SABPRODUCT.NSF/
81e39f4c09954fcb85256ead006be86e/73ACCA834AB44A10852575BD0064346B/
$File/EPA-CASAC-09-008-unsigned.pdf.
    \154\ U.S. Environmental Protection Agency--Science Advisory 
Board (U.S. EPA-SAB). Consultation on EPA's Particulate Matter 
National Ambient Air Quality Standards: Scope and Methods Plan for 
Health Risk and Exposure Assessment. EPA-COUNCIL-09-009. May. 
Available on the Internet at http://yosemite.epa.gov/sab/
SABPRODUCT.NSF/81e39f4c09954fcb85256ead006be86e/
723FE644C5D758DF852575BD00763A32/$File/EPA-CASAC-09-009-
unsigned.pdf.
    \155\ It is important to note that uncertainty regarding the 
shape of the concentration-response function is conceptually 
distinct from an assumed threshold. An assumed threshold (below 
which there are no health effects) is a discontinuity, which is a 
specific example of non-linearity.
    \156\ The final PM ISA, which will have undergone the full 
agency scientific review process, is scheduled to be completed in 
late December 2009.
    \157\ In the proposed Portland Cement RIA, EPA solicited comment 
on the use of the no-threshold model for benefits analysis within 
the preamble of that proposed rule. The comment period for the 
Portland Cement proposed NESHAP closed on September 4, 2009 (Docket 
ID No. EPA-HQ-OAR-2002-0051 available at http://
www.regulations.gov). EPA is currently reviewing those comments. 
U.S. Environmental Protection Agency. (2009). Regulatory Impact 
Analysis: National Emission Standards for Hazardous Air Pollutants 
from the Portland Cement Manufacturing Industry. Office of Air and 
Radiation. Retrieved on May 4, 2009, from http://www.epa.gov/ttn/
ecas/regdata/RIAs/portlandcementria_4-20-09.pdf.
---------------------------------------------------------------------------

     For the coordinated strategy, we rely on two empirical 
(epidemiological) studies of the relationship between ambient 
PM2.5 and premature mortality (the extended analyses of the 
Harvard Six Cities study by Laden et al (2006) and the American Cancer 
Society (ACS) cohort by Pope et al (2002)) to anchor our benefits 
analysis, though we also present the PM2.5-related premature 
mortality benefits associated with the estimates supplied by the expert 
elicitation as a sensitivity analysis. This approach was recently 
adopted in the proposed Portland Cement MACT RIA. Since 2006, EPA has 
calculated benefits based on these two empirical studies and derived 
the range of benefits, including the minimum and maximum results, from 
an expert elicitation of the relationship between exposure to 
PM2.5 and premature mortality (Roman et al., 2008).\158\ 
Using alternate relationships between PM2.5 and premature 
mortality supplied by experts, higher and lower benefits estimates are 
plausible, but most of the expert-based estimates have fallen between 
the two epidemiology-based estimates (Roman et al., 2008). Assuming no 
threshold in the empirically-derived premature mortality concentration 
response functions used in the analysis of the coordinated strategy, 
only one expert falls below the empirically-derived range while two of 
the experts are above this range (see Tables 6-5 and 6-6 in the RIA 
that accompanies this preamble). Please refer to the proposed Portland 
Cement MACT RIA for more information about the preferred approach and 
the evolution of the treatment of threshold assumptions within EPA's 
regulatory analyses.
---------------------------------------------------------------------------

    \158\ Roman, Henry A., Walker, Katherine D., Walsh, Tyra L., 
Conner, Lisa, Richmond, Harvey M., Hubbell, Bryan J., and Kinney, 
Patrick L.. (2008). Expert Judgment Assessment of the Mortality 
Impact of Changes in Ambient Fine Particulate Matter in the U.S. 
Environ. Sci. Technol., 42, 7, 2268-2274.
---------------------------------------------------------------------------

     The range of ozone benefits associated with the 
coordinated strategy is estimated based on risk reductions derived from 
several sources of ozone-related mortality effect estimates. This 
analysis presents six alternative estimates for the association based 
upon different functions reported in the scientific literature. We use 
three multi-city studies,159 160 161 including the Bell, 
2004 National Morbidity, Mortality, and Air Pollution Study (NMMAPS) 
that was used as the primary basis for the risk analysis in the ozone 
Staff Paper \162\ and reviewed by the Clean Air Science Advisory 
Committee (CASAC).\163\ We also use three studies that synthesize ozone 
mortality data across a large number of individual 
studies.164 165 166 This approach is consistent with 
recommendations provided by the NRC in their ozone mortality report 
(NRC, 2008),\167\ ``The committee recommends

[[Page 22958]]

that the greatest emphasis be placed on estimates from new systematic 
multicity analyses that use national databases of air pollution and 
mortality, such as in the NMMAPS, without excluding consideration of 
meta-analyses of previously published studies.'' The NRC goes on to 
note that there are uncertainties within each study that are not fully 
captured by this range of estimates.
---------------------------------------------------------------------------

    \159\ Bell, M.L., et al. (2004). Ozone and short-term mortality 
in 95 U.S. urban communities, 1987-2000. Jama, 2004. 292(19): p. 
2372-8.
    \160\ Huang, Y.; Dominici, F.; Bell, M.L. (2005). Bayesian 
hierarchical distributed lag models for summer ozone exposure and 
cardio-respiratory mortality. Environmetrics 16: 547-562.
    \161\ Schwartz, J. (2005). How sensitive is the association 
between ozone and daily deaths to control for temperature? Am. J. 
Respir. Crit. Care Med. 171: 627-631.
    \162\ U.S. EPA (2007). Review of the National Ambient Air 
Quality Standards for Ozone, Policy Assessment of Scientific and 
Technical Information. OAQPS Staff Paper. EPA-452/R-07-003. This 
document is available in Docket EPA-HQ-OAR-2003-0190. Retrieved on 
April 10, 2009, from http:www.epa.gov/ttn/naaqs/standards/ozone/s_
o3_cr_sp.html.
    \163\ CASAC (2007). Clean Air Scientific Advisory Committee's 
(CASAC) Review of the Agency's Final Ozone Staff Paper. EPA-CASAC-
07-002. March 26.
    \164\ Bell, M.L., F. Dominici, and J.M. Samet (2005). A meta-
analysis of time-series studies of ozone and mortality with 
comparison to the national morbidity, mortality, and air pollution 
study. Epidemiology, 16(4): p. 436-45.
    \165\ Ito, K., S.F. De Leon, and M. Lippmann (2005). 
Associations between ozone and daily mortality: analysis and meta-
analysis. Epidemiology. 16(4): p. 446-57.
    \166\ Levy, J.I., S.M. Chemerynski, and J.A. Sarnat (2005). 
Ozone exposure and mortality: an empiric bayes metaregression 
analysis. Epidemiology. 16(4): p. 458-68.
    \167\ National Research Council (NRC), 2008. Estimating 
Mortality Risk Reduction and Economic Benefits from Controlling 
Ozone Air Pollution. The National Academies Press: Washington, DC.

 Table VIII-1--Estimated 2030 Monetized PM- and Ozone-Related Health Benefits of a Coordinated U.S. Strategy To
                                           Control Ship Emissions \a\
----------------------------------------------------------------------------------------------------------------
   2030 Total Ozone and PM Benefits--PM Mortality Derived from American Cancer Society Analysis and Six-Cities
                                                  Analysis \a\
-----------------------------------------------------------------------------------------------------------------
                                                                               Total benefits    Total benefits
                                                                                 (billions,        (billions,
     Premature ozone mortality function                  Reference                2006$, 3%         2006$, 7%
                                                                               discount rate)    discount rate)
                                                                                   \c\ \d\           \c\ \d\
----------------------------------------------------------------------------------------------------------------
Multi-city analyses.........................  Bell et al., 2004.............           110-260            99-240
                                              Huang et al., 2005............           110-260           100-240
                                              Schwartz, 2005................           110-260           100-240
Meta-analyses...............................  Bell et al., 2005.............           110-260           100-240
                                              Ito et al., 2005..............           110-270           110-240
                                              Levy et al., 2005.............           110-270           110-240
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Total includes premature mortality-related and morbidity-related ozone and PM2.5 benefits. Range was
  developed by adding the estimate from the ozone premature mortality function to the estimate of PM2.5-related
  premature mortality derived from either the ACS study (Pope et al., 2002) or the Six-Cities study (Laden et
  al., 2006).
\b\ Note that total benefits presented here do not include a number of unquantified benefits categories. A
  detailed listing of unquantified health and welfare effects is provided in Table VIII-2.
\c\ Results reflect the use of both a 3 and 7 percent discount rate, as recommended by EPA's Guidelines for
  Preparing Economic Analyses and OMB Circular A-4. Results are rounded to two significant digits for ease of
  presentation and computation.

    The benefits in Table VIII-1 include all of the human health 
impacts we are able to quantify and monetize at this time. However, the 
full complement of human health and welfare effects associated with PM 
and ozone remain unquantified because of current limitations in methods 
or available data. We have not quantified a number of known or 
suspected health effects linked with ozone and PM for which appropriate 
health impact functions are not available or which do not provide 
easily interpretable outcomes (i.e., changes in heart rate 
variability). Additionally, we are unable to quantify a number of known 
welfare effects, including reduced acid and particulate deposition 
damage to cultural monuments and other materials, and environmental 
benefits due to reductions of impacts of eutrophication in coastal 
areas. These are listed in Table VIII-2. As a result, the health 
benefits quantified in this section are likely underestimates of the 
total benefits attributable to the implementation of the coordinated 
strategy to control ship emissions.

                 Table VIII-2--Unquantified and Non-Monetized Potential Effects of a Coordinated U.S. Strategy To Control Ship Emissions
--------------------------------------------------------------------------------------------------------------------------------------------------------
              Pollutant/effects                                               Effects not included in analysis--Changes in
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ozone Health \a\.............................  Chronic respiratory damage.\b\
                                               Premature aging of the lungs.\b\
                                               Non-asthma respiratory emergency room visits.
                                               Exposure to UVb (+/-).\e\
Ozone Welfare................................  Yields for
                                               -- commercial forests.
                                               -- some fruits and vegetables.
                                               -- non-commercial crops.
                                               Damage to urban ornamental plants.
                                               Impacts on recreational demand from damaged forest aesthetics.
                                               Ecosystem functions.
                                               Exposure to UVb (+/-).\e\
PM Health \c\................................  Premature mortality--short term exposures.\d\
                                               Low birth weight.
                                               Pulmonary function.
                                               Chronic respiratory diseases other than chronic bronchitis.
                                               Non-asthma respiratory emergency room visits.
                                               Exposure to UVb (+/-).\e\
PM Welfare...................................  Residential and recreational visibility in non-Class I areas.
                                               Soiling and materials damage.
                                               Damage to ecosystem functions.
                                               Exposure to UVb (+/-).\e\
Nitrogen and Sulfate Deposition Welfare......  Commercial forests due to acidic sulfate and nitrate deposition.
                                               Commercial freshwater fishing due to acidic deposition.
                                               Recreation in terrestrial ecosystems due to acidic deposition.

[[Page 22959]]


                                               Existence values for currently healthy ecosystems.
                                               Commercial fishing, agriculture, and forests due to nitrogen. deposition.
                                               Recreation in estuarine ecosystems due to nitrogen. deposition.
                                               Ecosystem functions.
                                               Passive fertilization.
CO Health....................................  Behavioral effects.
HC/Toxics Health \f\.........................  Cancer (benzene, 1,3-butadiene, formaldehyde, acetaldehyde).
                                               Anemia (benzene).
                                               Disruption of production of blood components (benzene).
                                               Reduction in the number of blood platelets (benzene).
                                               Excessive bone marrow formation (benzene).
                                               Depression of lymphocyte counts (benzene).
                                               Reproductive and developmental effects (1,3-butadiene).
                                               Irritation of eyes and mucus membranes (formaldehyde).
                                               Respiratory irritation (formaldehyde).
                                               Asthma attacks in asthmatics (formaldehyde).
                                               Asthma-like symptoms in non-asthmatics (formaldehyde).
                                               Irritation of the eyes, skin, and respiratory tract (acetaldehyde).
                                               Upper respiratory tract irritation and congestion (acrolein).
HC/Toxics Welfare............................  Direct toxic effects to animals.
                                               Bioaccumulation in the food chain.
                                               Damage to ecosystem function.
                                               Odor.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ The public health impact of biological responses such as increased airway responsiveness to stimuli, inflammation in the lung, acute inflammation
  and respiratory cell damage, and increased susceptibility to respiratory infection are likely partially represented by our quantified endpoints.
\b\ The public health impact of effects such as chronic respiratory damage and premature aging of the lungs may be partially represented by quantified
  endpoints such as hospital admissions or premature mortality, but a number of other related health impacts, such as doctor visits and decreased
  athletic performance, remain unquantified.
\c\ In addition to primary economic endpoints, there are a number of biological responses that have been associated with PM health effects including
  morphological changes and altered host defense mechanisms. The public health impact of these biological responses may be partly represented by our
  quantified endpoints.
\d\ While some of the effects of short-term exposures are likely to be captured in the estimates, there may be premature mortality due to short-term
  exposure to PM not captured in the cohort studies used in this analysis. However, the PM mortality results derived from the expert elicitation do take
  into account premature mortality effects of short term exposures.
\e\ May result in benefits or disbenefits.
\f\ Many of the key hydrocarbons related to this rule are also hazardous air pollutants listed in the CAA.

B. Quantified Human Health Impacts

    Tables VIII-3 and VIII-4 present the annual PM2.5 and 
ozone health impacts in the 48 contiguous U.S. States associated with 
the coordinated strategy for both 2020 and 2030. For each endpoint 
presented in Tables VIII-3 and VIII-4, we provide both the mean 
estimate and the 90% confidence interval.
    Using EPA's preferred estimates, based on the ACS and Six-Cities 
studies and no threshold assumption in the model of mortality, we 
estimate that the coordinated strategy will result in between 5,300 and 
14,000 cases of avoided PM2.5-related premature deaths 
annually in 2020 and between 12,000 and 30,000 avoided premature deaths 
annually in 2030. As a sensitivity analysis, when the range of expert 
opinion is used, we estimate between 1,900 and 18,000 fewer premature 
mortalities in 2020 and between 4,300 and 40,000 fewer premature 
mortalities in 2030 (see Tables 6-5 and 6-6 in the RIA that accompanies 
this rule).
    For ozone-related premature mortality, we estimate a range of 
between 61 to 280 fewer premature mortalities as a result of the 
coordinated strategy in 2020 and between 210 to 920 in 2030. The 
increase in annual benefits from 2020 to 2030 reflects additional 
emission reductions from coordinated strategy, as well as increases in 
total population and the average age (and thus baseline mortality risk) 
of the population.

Table VIII-3--Estimated PM2.5-Related Health Impacts Associated With a Coordinated U.S. Strategy To Control Ship
                                                  Emissions \a\
----------------------------------------------------------------------------------------------------------------
                                    2020 Annual reduction in ship-related  2030 Annual reduction in ship-related
           Health effect               incidence (5th-95th percentile)        incidence (5th-95th percentile)
----------------------------------------------------------------------------------------------------------------
Premature Mortality--Derived from
 epidemiology literature \b\
    Adult, age 30+, ACS Cohort      5,300................................  12,000
     Study (Pope et al., 2002).     (2,100-8,500)........................  (4,700-19,000)
    Adult, age 25+, Six-Cities      14,000...............................  30,000
     Study (Laden et al., 2006).    (7,400-20,000).......................  (17,000-44,000)

[[Page 22960]]


    Infant, age <1 year (Woodruff   20...................................  34
     et al., 1997).                 (0-55)...............................  (0-93)
Chronic bronchitis (adult, age 26   3,800................................  8,100
 and over).                         (700-6,900)..........................  (1,500-14,000)
Non-fatal myocardial infarction     8,800................................  20,000
 (adult, age 18 and over).          (3,200-14,000).......................  (7,600-33,000)
Hospital admissions--respiratory    1,200................................  2,700
 (all ages) \c\.                    (590-1,800)..........................  (1,300-4,000)
Hospital admissions--               2,700................................  6,600
 cardiovascular (adults, age >18)   (2,000-3,200)........................  (4,700-7,700)
 \d\.
Emergency room visits for asthma    3,500................................  7,300
 (age 18 years and younger).        (2,000-4,900)........................  (4,300-10,000)
Acute bronchitis (children, age 8-  8,500................................  17,000
 12).                               (0-17,000)...........................  (0-35,000)
Lower respiratory symptoms          100,000..............................  210,000
 (children, age 7-14).              (49,000-150,000).....................  (100,000-310,000)
Upper respiratory symptoms          77,000...............................  160,000
 (asthmatic children, age 9-18).    (24,000-130,000).....................  (50,000-270,000)
Asthma exacerbation (asthmatic      95,000...............................  200,000
 children, age 6-18).               (10,000-260,000).....................  (22,000-550,000)
Work loss days....................  720,000..............................  1,400,000
                                    (630,000-810,000)....................  (1,300,000-1,600,000)
Minor restricted activity days      4,300,000............................  8,500,000
 (adults, age 18-65).               (3,600,000-4,900,000)................  (7,200,000-9,800,000)
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Incidence is rounded to two significant digits. Estimates represent incidence within the 48 contiguous
  United States.
\b\ PM-related adult mortality based upon the American Cancer Society (ACS) Cohort Study (Pope et al., 2002) and
  the Six-Cities Study (Laden et al., 2006). Note that these are two alternative estimates of adult mortality
  and should not be summed. PM-related infant mortality based upon a study by Woodruff, Grillo, and Schoendorf,
  (1997). [Woodruff, T.J., J. Grillo, and K.C. Schoendorf. 1997. ``The Relationship Between Selected Causes of
  Postneonatal Infant Mortality and Particulate Air Pollution in the United States.'' Environmental Health
  Perspectives 105(6):608-612.]
\c\ Respiratory hospital admissions for PM include admissions for chronic obstructive pulmonary disease (COPD),
  pneumonia and asthma.
\d\ Cardiovascular hospital admissions for PM include total cardiovascular and subcategories for ischemic heart
  disease, dysrhythmias, and heart failure.


Table VIII-4--Estimated Ozone-Related Health Impacts Associated With a Coordinated U.S. Strategy To Control Ship
                                                  Emissions \a\
----------------------------------------------------------------------------------------------------------------
                                    2020 Annual reduction in ship-related  2030 Annual reduction in ship-related
           Health effect               incidence (5th-95th percentile)        incidence (5th-95th percentile)
----------------------------------------------------------------------------------------------------------------
Premature Mortality, All ages \b\
Multi-City Analyses
    Bell et al. (2004)--Non-        61...................................  210
     accidental.                    (23-98)..............................  (70-340)
    Huang et al. (2005)--           100..................................  350
     Cardiopulmonary.               (43-160).............................  (130-570)
    Schwartz (2005)--Non-           93...................................  320
     accidental.                    (34-150).............................  (100-530)
Meta-analyses:
    Bell et al. (2005)--All cause.  200..................................  660
                                    (100-290)............................  (320-1,000)
    Ito et al. (2005)--Non-         270..................................  920
     accidental.                    (170-370)............................  (560-1,300)
    Levy et al. (2005)--All cause.  280..................................  920
                                    (200-360)............................  (640-1,200)
Hospital admissions--respiratory    470..................................  1,900
 causes (adult, 65 and older) \c\.  (46-830).............................  (120-3,300)
Hospital admissions--respiratory    380..................................  1,200
 causes (children, under 2).        (180-590)............................  (490-1,900)
Emergency room visit for asthma     210..................................  690
 (all ages).                        (0-550)..............................  (0-1,800)
Minor restricted activity days      360,000..............................  1,100,000
 (adults, age 18-65).               (160,000-570,000)....................  (430,000-1,700,000)

[[Page 22961]]


School absence days...............  130,000..............................  420,000
                                    (51,000-190,000).....................  (150,000-630,000)
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Incidence is rounded to two significant digits. Estimates represent incidence within the 48 contiguous U.S.
\b\ Estimates of ozone-related premature mortality are based upon incidence estimates derived from several
  alternative studies: Bell et al. (2004); Huang et al. (2005); Schwartz (2005); Bell et al. (2005); Ito et al.
  (2005); Levy et al. (2005). The estimates of ozone-related premature mortality should therefore not be summed.
\c\ Respiratory hospital admissions for ozone include admissions for all respiratory causes and subcategories
  for COPD and pneumonia.

C. Monetized Benefits

    Table VIII-5 presents the estimated monetary value of reductions in 
the incidence of ozone and PM2.5-related health effects. All 
monetized estimates are stated in 2006$. These estimates account for 
growth in real gross domestic product (GDP) per capita between the 
present and the years 2020 and 2030. As the tables indicate, total 
benefits are driven primarily by the reduction in premature fatalities 
each year.
    Our estimate of total monetized benefits in 2020 for the 
coordinated strategy, using the ACS and Six-Cities PM mortality studies 
and the range of ozone mortality assumptions, is between $47 billion 
and $110 billion, assuming a 3 percent discount rate, or between $42 
billion and $100 billion, assuming a 7 percent discount rate. In 2030, 
we estimate the monetized benefits to be between $110 billion and $270 
billion, assuming a 3 percent discount rate, or between $99 billion and 
$240 billion, assuming a 7 percent discount rate. The monetized benefit 
associated with reductions in the risk of both ozone- and 
PM2.5-related premature mortality ranges between 90 to 98 
percent of total monetized health benefits, in part because we are 
unable to quantify a number of benefits categories (see Table VIII-2). 
These unquantified benefits may be substantial, although their 
magnitude is highly uncertain.

                             Table VIII-5--Estimated Monetary Value in Reductions in Incidence of Health and Welfare Effects
                                                             [in millions of 2006$] \a\ \b\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                2020                                            2030
--------------------------------------------------------------------------------------------------------------------------------------------------------
               PM2.5-related health effect            Estimated mean value of reductions
                                                          (5th and 95th percentile)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Premature Mortality--Derived from   Adult, age 30+ --ACS
 Epidemiology Studies c d.           study (Pope et al.,
                                     2002).
                                    3% discount rate.....  $43,000 ($5,000-$110,000).....................  $99,000 ($12,000-$260,000)
                                    7% discount rate.....  $38,000 ($4,500-$100,000).....................  $89,000 ($11,000-$230,000)
                                   ---------------------------------------------------------------------------------------------------------------------
                                    Adult, age 25+ --six-
                                     cities study (Laden
                                     et al., 2006).
                                    3% discount rate.....  $110,000 ($14,000-$270,000)...................  $250,000 ($33,000-$630,000)
                                    7% discount rate.....  $98,000 ($13,000-$250,000)....................  $230,000 ($30,000-$570,000)
                                   ---------------------------------------------------------------------------------------------------------------------
                                    Infant mortality, <1   $180 ($0-$670)................................  $310 ($0-$1,200)
                                     year--(Woodruff et
                                     al. 1997).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Chronic bronchitis (adults, 26 and over)                   $1,900 ($140-$6,500)..........................  $4,100 ($320-$14,000)
Non-fatal acute myocardial infarctions
    3% discount rate.....................................  $960 ($170-$2,300)............................  $2,700 ($460-$6,700)
    7% discount rate.....................................  $930 ($160-$2,300)............................  $2,600 ($430-$6,600)
Hospital admissions for respiratory causes...............  $17 ($8.4-$25)................................  $39 ($19-$57)
Hospital admissions for cardiovascular causes............  $76 ($48-$110)................................  $180 ($120-$250)
Emergency room visits for asthma.........................  $1.3 ($0.70-$1.9).............................  $2.7 ($1.5-$4.1)
Acute bronchitis (children, age 8-12)....................  $0.63 ($0-$1.6)...............................  $1.3 ($0-$3.2)
Lower respiratory symptoms (children, 7-14)..............  $2.0 ($0.75-$3.7).............................  $4.1 ($1.6-$7.6)
Upper respiratory symptoms (asthma, 9-11)................  $2.4 ($0.65-$5.3).............................  $5.0 ($1.4-$11)
Asthma exacerbations.....................................  $5.1 ($0.51-$15)..............................  $11 ($1.1-$32)
Work loss days...........................................  $110 ($94-$120)...............................  $220 ($190-$250)
Minor restricted-activity days (MRADs)...................  $270 ($150-$390)..............................  $540 ($310-$780)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ozone-related Health Effect
--------------------------------------------------------------------------------------------------------------------------------------------------------
Premature mortality, all ages--     Bell et al., 2004....  $540 ($63-$1,400).............................  $1,800 ($210-$4,900)
 derived from multi-city analyses.
                                    Huang et al., 2005...  $910 ($110-$2,300)............................  $3,100 ($360-$8,200)
                                    Schwartz, 2005.......  $830 ($94-$2,200).............................  $2,800 ($310-$7,600)
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 22962]]


Premature mortality, all ages--     Bell et al., 2005....  $1,700 ($220-$4,400)..........................  $5,800 ($740-$15,000)
 derived from meta-analyses.
                                    Ito et al., 2005.....  $2,400 ($330-$5,900)..........................  $8,200 ($1,100-$20,000)
                                    Levy et al., 2005....  $2,400 ($340-$5,900)..........................  $8,200 ($1,100-$20,000)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hospital admissions--respiratory causes (adult, 65 and     $11 ($1.1-$20)................................  $45 ($2.8-$79)
 older).
Hospital admissions--respiratory causes (children, under   $3.8 ($1.8-$5.9)..............................  $12 ($4.9-$19)
 2).
Emergency room visit for asthma (all ages)...............  $0.08 ($0.03-$0.20)...........................  $0.25 ($0-$0.63)
Minor restricted activity days (adults, age 18-65).......  $23 ($9.8-$41)................................  $69 ($25-$120)
School absence days......................................  $12 ($4.6-$17)................................  $37 ($13-$57)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ Monetary benefits are rounded to two significant digits for ease of presentation and computation. PM and ozone benefits are nationwide.
\b\ Monetary benefits adjusted to account for growth in real GDP per capita between 1990 and the analysis year (2020 or 2030).
\c\ Valuation assumes discounting over the SAB recommended 20-year segmented lag structure. Results reflect the use of 3 percent and 7 percent discount
  rates consistent with EPA and OMB guidelines for preparing economic analyses.

D. What Are the Limitations of the Benefits Analysis?

    Every benefit-cost analysis examining the potential effects of a 
change in environmental protection requirements is limited to some 
extent by data gaps, limitations in model capabilities (such as 
geographic coverage), and uncertainties in the underlying scientific 
and economic studies used to configure the benefit and cost models. 
Limitations of the scientific literature often result in the inability 
to estimate quantitative changes in health and environmental effects, 
such as potential increases in premature mortality associated with 
increased exposure to carbon monoxide. Deficiencies in the economics 
literature often result in the inability to assign economic values even 
to those health and environmental outcomes which can be quantified. 
These general uncertainties in the underlying scientific and economics 
literature, which can lead to valuations that are higher or lower, are 
discussed in detail in the RIA and its supporting references. Key 
uncertainties that have a bearing on the results of the benefit-cost 
analysis of the coordinated strategy include the following:
     The exclusion of potentially significant and unquantified 
benefit categories (such as health, odor, and ecological benefits of 
reduction in air toxics, ozone, and PM);
     Errors in measurement and projection for variables such as 
population growth;
     Uncertainties in the estimation of future year emissions 
inventories and air quality;
     Uncertainty in the estimated relationships of health and 
welfare effects to changes in pollutant concentrations including the 
shape of the C-R function, the size of the effect estimates, and the 
relative toxicity of the many components of the PM mixture;
     Uncertainties in exposure estimation; and
     Uncertainties associated with the effect of potential 
future actions to limit emissions.
    As Table VIII-5 indicates, total benefits are driven primarily by 
the reduction in premature mortalities each year. Some key assumptions 
underlying the premature mortality estimates include the following, 
which may also contribute to uncertainty:
     Inhalation of fine particles is causally associated with 
premature death at concentrations near those experienced by most 
Americans on a daily basis. Although biological mechanisms for this 
effect have not yet been completely established, the weight of the 
available epidemiological, toxicological, and experimental evidence 
supports an assumption of causality. The impacts of including a 
probabilistic representation of causality were explored in the expert 
elicitation-based results of the PM NAAQS RIA.
     All fine particles, regardless of their chemical 
composition, are equally potent in causing premature mortality. This is 
an important assumption, because PM produced via transported precursors 
emitted from marine engines may differ significantly from PM precursors 
released from electric generating units and other industrial sources. 
However, no clear scientific grounds exist for supporting differential 
effects estimates by particle type.
     The C-R function for fine particles is approximately 
linear within the range of ambient concentrations under consideration. 
Thus, the estimates include health benefits from reducing fine 
particles in areas with varied concentrations of PM, including both 
regions that may be in attainment with PM2.5 standards and 
those that are at risk of not meeting the standards.
     There is uncertainty in the magnitude of the association 
between ozone and premature mortality. The range of ozone benefits 
associated with the coordinated strategy is estimated based on the risk 
of several sources of ozone-related mortality effect estimates. In a 
recent report on the estimation of ozone-related premature mortality 
published by the National Research Council, a panel of experts and 
reviewers concluded that short-term exposure to ambient ozone is likely 
to contribute to premature deaths and that ozone-related mortality 
should be included in estimates of the health benefits of reducing 
ozone exposure.\168\ EPA has requested advice from the National Academy 
of Sciences on how best to quantify uncertainty in the relationship 
between ozone exposure and premature mortality in the context of 
quantifying benefits.
---------------------------------------------------------------------------

    \168\ National Research Council (NRC). 2008. Estimating 
Mortality Risk Reduction and Economic Benefits from Controlling 
Ozone Air Pollution. The National Academies Press: Washington, DC.
---------------------------------------------------------------------------

    Emissions and air quality modeling decisions are made early in the 
analytical process. For this reason, the emission control scenarios 
used in the air quality and benefits modeling are slightly different 
than the coordinated strategy. The discrepancies impact the benefits 
analysis in two ways:
     The air quality modeling used for the 2020 scenario is 
based on inventory estimates that were modeled using incorrect boundary 
information. We believe the impact of this difference, while modest, 
likely leads to a small underestimate of the benefits that are 
presented in this section. The correct boundary information was used 
for the

[[Page 22963]]

2030 scenario. Please refer to the Chapter 3 of the RIA for more 
information on the emissions excluded from the health impacts analysis.
     The 2020 air quality modeling scenarios do not include 
emission reductions associated with the implementation of global 
controls (set through IMO) beyond the assumed ECA boundary of 200 
nautical miles (nm). Again, while we expect the impact of this 
difference is modest, the omission of these additional emission 
reductions likely leads to a small underestimate of the 2020 benefits 
presented in this section. The 2030 air quality modeling scenario did 
include emission reductions associated with global controls beyond the 
assumed ECA boundary of 200 nm.
    Despite the uncertainties described above, we believe this analysis 
provides a conservative estimate of the estimated economic benefits of 
the standards in future years because of the exclusion of potentially 
significant benefit categories that are not quantifiable at this time. 
Acknowledging benefits omissions and uncertainties, we present a best 
estimate of the total benefits based on our interpretation of the best 
available scientific literature and methods supported by EPA's 
technical peer review panel, the Science Advisory Board's Health 
Effects Subcommittee (SAB-HES). The National Academies of Science (NRC, 
2002) has also reviewed EPA's methodology for analyzing the health 
benefits of measures taken to reduce air pollution. EPA addressed many 
of these comments in the analysis of the final PM 
NAAQS.169 170 This analysis incorporates this most recent 
work to the extent possible.
---------------------------------------------------------------------------

    \169\ National Research Council (NRC). 2002. Estimating the 
Public Health Benefits of Proposed Air Pollution Regulations. The 
National Academies Press: Washington, DC.
    \170\ U.S. Environmental Protection Agency. October 2006. Final 
Regulatory Impact Analysis (RIA) for the Proposed National Ambient 
Air Quality Standards for Particulate Matter. Prepared by: Office of 
Air and Radiation. Available at http://www.epa.gov/ttn/ecas/
ria.html.
---------------------------------------------------------------------------

E. Comparison of Costs and Benefits

    This section presents the cost-benefit comparison related to the 
expected impacts of our coordinated strategy for ocean-going vessels. 
In estimating the net benefits of the coordinated strategy, the 
appropriate cost measure is `social costs.' Social costs represent the 
welfare costs of a rule to society and do not consider transfer 
payments (such as taxes) that are simply redistributions of wealth. For 
this analysis, we estimate that the social costs of the coordinated 
program are equivalent to the estimated compliance costs of the 
program. While vessel owners and operators will see their costs 
increase by the amount of those compliance costs, they are expected to 
pass them on in their entirety to consumers of marine transportation 
services in the form of increased freight rates. Ultimately, these 
costs will be borne by the final consumers of goods transported by 
ocean-going vessels in the form of higher prices for those goods. The 
social benefits of the coordinated strategy are represented by the 
monetized value of health and welfare improvements experienced by the 
U.S. population. Table VIII-6 contains the estimated social costs and 
the estimated monetized benefits of the coordinated strategy.
    The results in Table VIII-6 suggest that the 2020 monetized 
benefits of the coordinated strategy are greater than the expected 
costs. Specifically, the annual benefits of the total program will 
range between $47 to $110 billion annually in 2020 using a three 
percent discount rate, or between $42 to $100 billion assuming a 7 
percent discount rate, compared to estimated social costs of 
approximately $1.9 billion in that same year. These benefits are 
expected to increase to between $110 and $270 billion annually in 2030 
using a three percent discount rate, or between $99 and $240 billion 
assuming a 7 percent discount rate, while the social costs are 
estimated to be approximately $3.1 billion. Though there are a number 
of health and environmental effects associated with the coordinated 
strategy that we are unable to quantify or monetize (see Table VIII-2), 
the benefits of the coordinated strategy far outweigh the projected 
costs.
    Using a conservative benefits estimate, the 2020 benefits outweigh 
the costs by a factor of 22. Using the upper end of the benefits range, 
the benefits could outweigh the costs by a factor of 58. Likewise, in 
2030 benefits outweigh the costs by at least a factor of 32 and could 
be as much as a factor of 87. Thus, even taking the most conservative 
benefits assumptions, benefits of the coordinated strategy clearly 
outweigh the costs.

 Table VIII-6--Summary of Annual Benefits and Costs Associated With a Coordinated U.S. Strategy To Control Ship
                                                   Emissions a
                                           [Millions of 2006 dollars]
----------------------------------------------------------------------------------------------------------------
             Description                              2020                                  2030
----------------------------------------------------------------------------------------------------------------
Total Estimated Costs b.............  $1,900..............................  $3,100.
Total Estimated Health Benefits: c d
 e f
    3-percent discount rate.........  $47,000 to $110,000.................  $110,000 to $270,000.
    7-percent discount rate.........  $42,000 to $100,000.................  $99,000 to $240,000.
Annual Net Benefits (Total Benefits--
 Total Costs):
    3-percent discount rate.........  $45,000 to $110,000.................  $110,000 to $270,000.
    7-percent discount rate.........  $40,000 to $98,000..................  $96,000 to $240,000.
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ All estimates represent annual benefits and costs anticipated for the years 2020 and 2030. Totals are
  rounded to two significant digits and may not sum due to rounding.
\b\ The calculation of annual costs does not require amortization of costs over time. Therefore, the estimates
  of annual cost do not include a discount rate or rate of return assumption (see Chapter 7 of the RIA). In
  Chapter 7, however, we use both a 3-percent and 7-percent social discount rate to calculate the net present
  value of total social costs consistent with EPA and OMB guidelines for preparing economic analyses.
\c\ Total includes ozone and PM2.5 benefits. Range was developed by adding the estimate from the Bell et al.,
  2005 ozone premature mortality function to PM2.5-related premature mortality derived from the ACS (Pope et
  al., 2002) and Six-Cities (Laden et al., 2006) studies.
\d\ Annual benefits analysis results reflect the use of a 3-percent and 7-percent discount rate in the valuation
  of premature mortality and nonfatal myocardial infarctions, consistent with EPA and OMB guidelines for
  preparing economic analyses.
\e\ Valuation of premature mortality based on long-term PM exposure assumes discounting over the SAB recommended
  20-year segmented lag structure described in the Regulatory Impact Analysis for the Final Clean Air Interstate
  Rule (March 2005).
\f\ Not all possible benefits or disbenefits are quantified and monetized in this analysis. Potential benefit
  categories that have not been quantified and monetized are listed in Table VIII-2.


[[Page 22964]]

IX. Public Participation

    Two public hearings were held to provide interested parties the 
opportunity to present data, views, or arguments concerning the 
proposed rule; the first hearing was held in New York, NY on August 4, 
2009, and the second in Long Beach, CA on August 6, 2009. The public 
was invited to submit written comments on the proposed rule during the 
formal comment period, which ended on September 28, 2009. EPA received 
126 comments, and a detailed summary and response to these comments can 
be found in the Summary and Analysis of Comments document in the docket 
(Docket ID EPA-HQ-OAR-2007-0121).
    EPA received a number of comments on the value that a voluntary 
verification program would provide as well as comments on how best to 
implement such a program. The proposed program is discussed in Chapter 
9 of the RIA. EPA is still reviewing these comments and is not taking 
any action today with regard to such a program. We will continue to 
evaluate the potential for such a program and will work in an open 
process with stakeholders should we conclude that such a program is 
appropriate.
    EPA also received a number of comments on the technical challenges 
of operating steamships on lower sulfur fuel. In response, we are not 
taking final action today to apply the ECA fuel sulfur requirements to 
Great Lakes steamships in service prior to January 1, 2009. We will 
continue to study these technical issues and address these vessels in a 
future action, if appropriate.
    This rule includes several technical amendments unrelated to 
Category 3 marine diesel engines. Two of these have generated a 
significant degree of interest from commenters. First, we raised for 
discussion a variety of temporary changes to the bonding requirements 
for nonroad spark-ignition engines below 19 kW (Small SI engines) based 
on feedback received by manufacturers and surety agents. We learned 
over the last several months that manufacturers have been struggling to 
obtain a bond for 2010, as required under Sec.  1054.690. It seemed 
that the bond values specified in the regulation were in some cases 
preventing surety agents and manufacturers from reaching agreeable 
terms. While we were considering these changes, we learned that one 
manufacturer in the United States and nine manufacturers from China 
were able to establish a bond policy. We expect to continue to monitor 
implementation experiences with respect to the bonding provision, but 
we believe it is no longer necessary to adopt the interim regulatory 
provisions we were considering. We are proceeding with one adjustment 
to the bonding provisions. We believe it is appropriate to set a 
maximum value of $10 million for any bond that is required under Sec.  
1054.690. Setting this value the same as the maximum level of fixed 
assets that we require to be exempted from getting a bond would allow 
for a logical correlation regarding the liability for manufacturers 
that are exempt from the bonding requirement and those that are not. 
Nevertheless, we believe it is appropriate to adopt this change for a 
three-year transition period. At that point, we would either change the 
regulation to adopt some permanent cap on bond values or let the 
regulation revert to the original provisions with no maximum value.
    We communicated our intent to make these bonding-related changes to 
those that commented on the bonding provisions when we first adopted 
them, including the Outdoor Power Equipment Institute, the Engine 
Manufacturers Association, and the California Air Resources Board. The 
Outdoor Power Equipment Institute and the Engine Manufacturers 
Association objected to the change, arguing that the reduced bond 
requirement would be insufficient to recover penalties for 
noncompliance in most cases. Based on these comments and on the fact 
that several companies have established bond policies, we have decided 
not to make these changes in this rulemaking. We may choose to pursue 
these or other long-term adjustments to the bonding regulations based 
on our experiences over the next several months, but we would do that 
in the context of a new rulemaking, which would include ample 
opportunity for comment and collaboration. In the meantime, we 
anticipate that small businesses may continue to have difficulty 
establishing a bond. If this is the case, we would be ready to consider 
an application for hardship under the provisions of Sec.  1054.635. 
Small businesses applying for relief under this provision would need to 
provide us with enough information to be able to act on their request. 
In any hardship approval, we would likely first consider the same kinds 
of relief reflected in the interim regulation changes we were 
considering. In particular, we could reduce the specified bond amount 
to preserve a measure of protection that is more carefully calibrated 
for very small sales volumes. We could also consider a manufacturer to 
be exempted from getting a bond based on a good compliance history of 
less than ten years.
    The proposed rule also included new regulatory provisions to 
clarify what we would consider acceptable inventory and stockpiling 
practices for engine and vehicle manufacturers relative to the new 
emission standards for heavy-duty highway engines that take effect in 
2010 and later model years. We have received extensive input in the 
comments, including concerns about how to define and potentially apply 
certain terms such as ``normal inventory'' and ``production'' practices 
given the dynamics of today's market and placed in the context of the 
timing of this final rule, and how such terms might be used by the 
Agency to determine whether inappropriate stockpiling has occurred. 
Based on this, we have decided to defer codification of the stockpiling 
prohibition until a later rulemaking. In the meantime, we plan to 
implement the 2010 standards based on the Agency's existing stockpiling 
guidance and to monitor engine and vehicle manufacturers in order to 
ensure that no circumventions of the Clean Air Act have occurred.

X. Statutory and Executive Order Reviews

    As explained in Section I.A, the program we are finalizing is part 
of a coordinated strategy to address emissions from ocean-going 
vessels. That coordinated strategy includes, among other actions, the 
combination the global Tier 2 NOX standards included in the 
amendments to Annex VI and the ECA Tier 3 NOX limits and 
fuel sulfur limits that will apply when the U.S. coasts are designated 
as an ECA through an additional amendment to Annex VI. These engine and 
fuel standards will be enforceable for all vessels, U.S. and foreign, 
operating in the United States through the Act to Prevent Pollution 
from Ships. Because the coordinated strategy in its entirety is 
economically significant (see cost analysis in Section V), the 
components we are adopting in this rule (engine controls for Category 3 
engines on U.S. vessels under our Clean Air Act program, as required by 
section 213 of the Act that are identical to the MARPOL Annex VI 
NOX limits; limits on hydrocarbon and carbon monoxide 
emissions for Category 3 engines; PM measurement requirement; changes 
to our Clean Air Act diesel fuel program to allow production and sale 
of ECA-compliant fuel; changes to our emission control program for 
smaller marine diesel engines to harmonize with the Annex VI 
NOX requirements, for U.S. vessels that operate 
internationally) may

[[Page 22965]]

also be considered to be economically significant.

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), 
this action is a ``significant regulatory action'' because it raises 
novel legal or policy issues due to the international nature of the use 
of Category 3 marine diesel engines. Accordingly, EPA submitted this 
action to the Office of Management and Budget (OMB) for review under EO 
12866 and any changes made in response to OMB recommendations have been 
documented in the docket for this action.
    In addition, EPA prepared an analysis of the potential costs and 
benefits associated with our coordinated strategy for controlling 
emissions from ocean-going vessels. While the costs of the coordinated 
strategy are ``significant,'' the largest part of these costs are 
related to compliance with MARPOL Annex VI, which applies independently 
of this final rule. The costs of the requirements we are adopting in 
this rule are minimal. This analysis is contained in the Regulatory 
Impact Analysis that was prepared, and is available in the docket for 
this rulemaking and at the docket Internet address listed under 
ADDRESSES above.

B. Paperwork Reduction Act

    The information collection requirements in this rule will be 
submitted for approval to the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The 
information collection requirements are not enforceable until OMB 
approves them.
    Section 208(a) of the Clean Air Act requires that manufacturers 
provide information the Administrator may reasonably require to 
determine compliance with the regulations; submission of the 
information is therefore mandatory. We will consider confidential all 
information meeting the requirements of section 208(c) of the Clean Air 
Act. Recordkeeping and reporting requirements for manufacturers would 
be pursuant to the authority of section 208 of the Clean Air Act.
    The data we require in this action is necessary to comply with 
Title II of the Clean Air Act, as amended in 1990. The Act directs us 
to adopt regulations for nonroad engines if we determine those engines 
contribute significantly to air pollution in the U.S. Now that we have 
made this determination, the Act directs us to set emission standards 
for any category of nonroad engines that contribute to air quality 
nonattainment in two or more areas in the U.S. We can only meet the 
requirements of the Act by collecting data from the regulated industry. 
Also, we will only have an effective program if we know that these 
engines maintain their certified emission level throughout their 
operating lives.
    The burden for certification testing is generally based on 
conducting two engine tests for each engine family, then using that 
test data for several years. The manufacturer's application for 
certification involves an extensive effort the first year, followed by 
relatively little effort in subsequent years. We estimate that 
manufacturers will conduct new certification testing every five years; 
the costs have been estimated on an annual average basis. In addition 
to testing, manufacturers must prepare the application for 
certification and maintain appropriate records. The burden for 
production-line testing is based on an industry-wide calculation. 
Rebuilders, including operators of marine vessels with Category 3 
engines, must keep records as needed to show that rebuilt engines 
continue to meet emission standards, consistent with the manufacturer's 
original design. In addition, owners and operators of marine vessels 
with Category 3 engines must record information about their location 
when rebuilding engines or making other adjustments and send minimal 
annual notification to EPA to show that engine maintenance and 
adjustments have not caused engines to be noncompliant. In total, we 
estimate that 12 engine manufacturers and 200 engine rebuilders will 
together face an estimated compliance burden of 3,012 hours per year, 
which corresponds with annual costs of $191,759 per year. Burden is 
defined at 5 CFR 1320.3(b).
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9. EPA will amend the 
table in 40 CFR part 9 to add OMB control number associated with the 
new regulations in 40 CFR part 1043 once those are approved.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of this rule on small 
entities, small entity is defined as: (1) A small business that is 
primarily engaged in manufacture of large diesel marine engines as 
defined by NAICS code 333618 with 1,000 or fewer employees (based on 
Small Business Administration size standards) or a small business 
primarily engaged in shipbuilding and repairing as defined by NAICS 
code 336611 with 1,000 or fewer employees (based on Small Business 
Administration size standards); (2) a small business that is primarily 
engaged in freight or passenger transportation, either on the Great 
Lakes or in coastal areas as defined by NAICS codes 483113 and 483114 
with 500 or fewer employees (based on Small Business Administration 
size standards); (3) a small governmental jurisdiction that is a 
government of a city, county, town, school district or special district 
with a population of less than 50,000; and (4) a small organization 
that is any not-for-profit enterprise which is independently owned and 
operated and is not dominant in its field.
    After considering the economic impacts of this final rule on small 
entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. Since 
publication of the proposed rulemaking, we have learned that the small 
entities directly regulated by this final rule include shipping 
companies that use fuel subject to the requirements in this rulemaking. 
We have identified four small U.S. companies that are operating 
Category 3 engines that currently burn residual fuel, and have 
estimated the compliance burden for each of these four small companies 
based on available information about the companies and their vessels. 
Our analysis indicates that two companies will have an estimated 
compliance burden representing less than 1 percent of their operating 
revenues, one company will have an estimated compliance burden 
representing between 1 and 3 percent of their operating revenues, and 
one company will have an estimated compliance burden representing 
slightly over 6 percent of their operating revenues.
    Although this final rule will not have a significant economic 
impact on a substantial number of small entities, EPA nonetheless has 
tried to reduce the impact of this rule by adopting provisions to 
reduce the regulatory

[[Page 22966]]

burden for these companies. For example, if we would apply the fuel 
requirements to steamships, a total of five small businesses would have 
an estimated compliance burden representing over 1 percent of their 
operating revenues, with the values for some companies reaching 20 
percent or higher. However, we have decided to adopt provisions 
allowing us to waive the fuel-related requirements for these companies 
if it can be demonstrated that a compliant residual fuel is not 
available, or that the compliance burden will jeopardize the solvency 
of the company. This analysis also does not include cost savings from 
increased durability and reliability or decreased maintenance that 
occurs when using distillate fuel instead of residual fuel. Our 
estimated burden for these companies therefore overestimates the costs 
these companies will actually face when complying with the rule.
    Additionally, in some areas, we consider port areas to be internal 
waters even though they are directly accessed by vessels that operate 
in coastal and international service on the oceans (such as Puget 
Sound). We believe it would not be realistic to expect companies 
operating such vessels to use distillate fuel as they approach U.S. 
ports and then convert the engines to operate on residual fuel for that 
portion of their operation that is considered internal waters. Since it 
would take about an hour of operation to transition back to the 
residual fuel, we believe this would not be commonly practiced whether 
or not fuel requirements apply in internal waters. Nevertheless, we 
have analyzed this scenario for potential small business impacts. We 
found that one U.S. small business with coastal operations would be 
affected by this rule, but that they will have costs representing less 
than one percent of their revenues. As a result, we have concluded that 
all small businesses that own or operate these coastal vessels will see 
no significant economic impact in complying with this rule.

D. Unfunded Mandates Reform Act

    This rule does not contain a Federal mandate that may result in 
expenditures of $100 million or more for State, local, and Tribal 
governments, in the aggregate, or the private sector in any one year. 
While the costs of the coordinated strategy exceed the $100 million per 
year threshold for the private sector, the costs of the components of 
that strategy that are the subject of this rule are less than $100 
million per year, as explained in Section VII. Therefore, this action 
is not subject to the requirements of Sections 202 or 205 of the UMRA. 
This action is also not subject to the requirements of Section 203 of 
UMRA because it contains no regulatory requirements that might 
significantly or uniquely affect small governments.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132. This action will be implemented at 
the Federal level and impose compliance obligations only on private 
industry. Thus, Executive Order 13132 does not apply to this rule.
    Although Section 6 of Executive Order 13132 does not apply to this 
rule, EPA did consult with representatives of various State and local 
governments in developing this rule. EPA consulted with representatives 
from the National Association of Clean Air Agencies (NACAA, formerly 
STAPPA/ALAPCO), the Northeast States for Coordinated Air Use Management 
(NESCAUM), and the California Air Resources Board (CARB).
    In the spirit of Executive Order 13132, and consistent with EPA 
policy to promote communications between EPA and State and local 
governments, EPA specifically solicited comment on the action from 
State and local officials.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This action does not have Tribal implications, as specified in 
Executive Order 13175 (65 FR 67249, November 9, 2000). The rule will be 
implemented at the Federal level and impose compliance costs only on 
manufacturers of marine engines and marine vessels. Tribal governments 
will be affected only to the extent they purchase and use the regulated 
engines and vehicles. Thus, Executive Order 13175 does not apply to 
this action.

G. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    This action is not subject to EO 13045 (62 FR 19885, April 23, 
1997) because it is not economically significant as defined in EO 
12866, and because the Agency does not believe the environmental health 
or safety risks addressed by this action present a disproportionate 
risk to children. This action's health and risk assessments are 
contained in Section II.A and Section VIII in this document and in 
Chapter 2 of the RIA, which has been placed in the public docket under 
Docket ID number EPA-HQ-OAR-2007-0121.

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355 
(May 22, 2001)), requires EPA to prepare and submit a Statement of 
Energy Effects to the Administrator of the Office of Information and 
Regulatory Affairs, Office of Management and Budget, for certain 
actions identified as ``significant energy actions.'' Section 4(b) of 
Executive Order 13211 defines ``significant energy actions'' as ``any 
action by an agency (normally published in the Federal Register) that 
promulgates or is expected to lead to the promulgation of a final rule 
or regulation, including notices of inquiry, advance notices of 
proposed rulemaking, and notices of proposed rulemaking: (1)(i) That is 
a significant regulatory action under Executive Order 12866 or any 
successor order, and (ii) is likely to have a significant adverse 
effect on the supply, distribution, or use of energy; or (2) that is 
designated by the Administrator of the Office of Information and 
Regulatory Affairs as a significant energy action.'' We have prepared a 
Statement of Energy Effects for this action as follows.
    This rule's potential effects on energy supply, distribution, or 
use have been analyzed and are discussed in detail in Section 4.6 of 
the RIA. In summary, while we project that this rule would result in an 
energy effect that exceeds the 10,000 barrel per day change in crude 
oil production threshold noted in E.O. 13211, this rule does not 
significantly affect the energy use, production, or distribution beyond 
what is required by Annex VI of the International Convention for the 
Prevention of Pollution from Ships.

I. National Technology Transfer Advancement Act

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

[[Page 22967]]

bodies. The NTTAA directs EPA to provide Congress, through OMB, 
explanations when the Agency decides not to use available and 
applicable voluntary consensus standards.
    The rulemaking involves technical standards. Therefore, the Agency 
conducted a search to identify potentially applicable voluntary 
consensus standards. The only test procedures outside of EPA that are 
written for Category 3 marine diesel engines are in the NOX 
Technical Code as part of MARPOL Annex VI. These test procedures have 
been adopted by the International Maritime Organization under the 
auspices of the United Nations. As such, they are not technically 
voluntary consensus standards. We have adopted test procedure 
specifications for Category 3 marine diesel engines in 40 CFR part 
1042, which rely on the EPA test procedures in 40 CFR part 1065. We 
have written the part 1065 test procedures to apply broadly to all 
sizes and types of engines. We have coordinated these efforts with a 
wide range of manufacturers from every industry over nearly the last 
ten years. As a result of this effort, we have reached a point that the 
test procedures have been very widely referenced and adopted for use in 
various countries and for various applications. We believe that part 
1065 is the best path toward global harmonization of emission test 
procedures for highway, nonroad, and stationary engines. Nevertheless, 
we have included a provision allowing manufacturers to rely on the 
procedures specified in the NOX Technical Code. We believe 
this appropriately maintains part 1065 as the primary path for adopting 
standardized and harmonized test procedures, without precluding the 
possibility of testing according to the other widely accepted protocol 
for testing Category 3 marine diesel engines.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes 
Federal executive policy on environmental justice. Its main provision 
directs Federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies, and activities on minority populations and low-income 
populations in the United States.
    EPA has determined that this final rule will not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations because it increases the 
level of environmental protection for all affected populations without 
having any disproportionately high and adverse human health or 
environmental effects on any population, including any minority or low-
income population.
    Together, this final rule which addresses emissions from domestic-
flagged vessels and the joint U.S./Canada ECA application to the IMO 
which addresses emissions from foreign-flagged vessels (referred to as 
the ``coordinated strategy'') will achieve significant reductions of 
various emissions from Category 3 marine diesel engines, including 
NOX, SOX, and direct PM. Exposure to these 
pollutants raises concerns regarding environmental health for the U.S. 
population in general including the minority populations and low-income 
populations that are the focus of the environmental justice executive 
order.
    The emission reductions from the new standards in the coordinated 
strategy will have large beneficial effects on communities in proximity 
to port, harbor, and waterway locations, including low-income and 
minority communities. In addition to exhaust emission standards for 
freshly manufactured and remanufactured engines, the coordinated 
strategy will further reduce emissions from regulated engines that 
directly impact low-income and minority communities.
    EPA recently updated its initial screening-level analysis of 
selected marine port areas to better understand the populations, 
including minority and low-income populations, that are exposed to 
diesel PM emission sources from these facilities.171 172 
This screening-level analysis is an inexact tool and should only be 
considered for illustrative purposes to help understand potential 
impacts. The analysis included all emission sources as well as ocean-
going marine diesel engines, and focused on a representative selection 
of national marine ports (45 ports total).173 174 
Considering only ocean-going marine engine diesel PM emissions, the 
results indicate that 6.5 million people are exposed to ambient diesel 
PM levels that are 2.0 [mu]g/m\3\ and 0.2 [mu]g/m\3\ above levels found 
in areas further from these facilities. This population includes a 
disproportionate number of low-income households, African-Americans, 
and Hispanics. The results from all emission sources show that nearly 
18 million people are exposed to higher levels of diesel PM from all 
sources at the marine port areas than urban background levels. Because 
those living in the vicinity of marine ports are more likely to be low-
income households and minority residents, these populations would 
receive a significant benefit from the combined coordinated strategy. 
See Section VIII of this preamble and Chapter 6 of the RIA for a 
discussion on the benefits of this rule, including the benefits to 
minority and low-income communities.
---------------------------------------------------------------------------

    \171\ ICF International. December 1, 2008. Estimation of diesel 
particulate matter concentration isopleths near selected harbor 
areas with revised emissions (revised). Memorandum to EPA under Work 
Assignment Number 1-9, Contract Number EP-C-06-094. This memo is 
available in Docket EPA-HQ-OAR-2007-0121.
    \172\ ICF International. December 10, 2008. Estimation of diesel 
particulate matter population exposure near selected harbor areas 
with revised harbor emissions (revised). Memorandum to EPA under 
Work Assignment Number 2-9, Contract Number EP-C-06-094. This memo 
is available in Docket EPA-HQ-OAR-2007-0121.
    \173\ The emissions inventories used as inputs for the analyses 
are not official estimates and likely underestimate overall 
emissions because they are not inclusive of all emission sources at 
the individual ports in the sample.
    \174\ The Agency selected a representative sample from the top 
150 U.S. ports including coastal, inland and Great Lake ports.
---------------------------------------------------------------------------

K. 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. A Major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2). This rule will be effective June 29, 2010.

XI. Statutory Provisions and Legal Authority

    Statutory authority for the controls in this final rule can be 
found in sections 203-209, 211, 213 (which specifically authorizes 
controls on emissions from nonroad engines and vehicles), 216, and 301 
of the Clean Air Act (CAA), 42 U.S.C. 7414, 7522, 7523, 7424, 7525, 
7541, 7542, 7543, 7545, 7547, 7550, and 7601.

[[Page 22968]]

List of Subjects

40 CFR Part 80

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Confidential business information, Diesel fuel, 
Fuel additives, Imports, Labeling, Penalties, Reporting and 
recordkeeping requirements.

40 CFR Part 85

    Confidential business information, Imports, Labeling, Motor vehicle 
pollution, Reporting and recordkeeping requirements, Research, 
Warranties.

40 CFR Part 86

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Reporting and recordkeeping requirements, Motor 
vehicle.

40 CFR Part 94

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

40 CFR Part 1027

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Imports, Reporting and recordkeeping 
requirements.

40 CFR Part 1033

    Environmental protection, Administrative practice and procedure, 
Confidential business information, Incorporation by reference, 
Labeling, Penalties, Railroads, Reporting and recordkeeping 
requirements.

40 CFR Part 1039

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

40 CFR Part 1042

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

40 CFR Part 1043

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Imports, Incorporation by reference, Vessels, 
Reporting and recordkeeping requirements.

40 CFR Parts 1045, 1048, 1051, 1054, and 1060

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

40 CFR Parts 1065

    Environmental protection, Administrative practice and procedure, 
Incorporation by reference, Reporting and recordkeeping requirements, 
Research.

40 CFR Part 1068

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

    Dated: December 18, 2009.
Lisa P. Jackson,
Administrator.

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

PART 80--REGULATION OF FUEL AND FUEL ADDITIVES

0
1. The authority citation for part 80 continues to read as follows:

    Authority: 42 U.S.C. 7414, 7542, 7545, and 7601.


0
2. Section 80.2 is amended as follows:
0
a. By revising paragraph (ccc).
0
b. By revising paragraph (nnn).
0
c. By adding paragraph (ttt).
0
d. By adding paragraph (uuu).


Sec.  80.2  Definitions.

* * * * *
    (ccc) Heating Oil means any 1, 2, or non-
petroleum diesel blend that is sold for use in furnaces, boilers, and 
similar applications and which is commonly or commercially known or 
sold as heating oil, fuel oil, and similar trade names, and that is not 
jet fuel, kerosene, or MVNRLM diesel fuel.
* * * * *
    (nnn) Nonroad, locomotive, or marine (NRLM) diesel fuel means any 
diesel fuel or other distillate fuel that is used, intended for use, or 
made available for use, as a fuel in any nonroad diesel engines, 
including locomotive and marine diesel engines, except the following: 
Distillate fuel with a T90 at or above 700 [deg]F that is used only in 
Category 2 and 3 marine engines is not NRLM diesel fuel, and ECA marine 
fuel is not NRLM diesel fuel (note that fuel that conforms to the 
requirements of NRLM diesel fuel is excluded from the definition of 
``ECA marine fuel'' in this section without regard to its actual use). 
Use the distillation test method specified in 40 CFR 1065.1010 to 
determine the T90 of the fuel. NR diesel fuel and LM diesel fuel are 
subcategories of NRLM diesel fuel.
    (1) Any diesel fuel that is sold for use in stationary engines that 
are required to meet the requirements of Sec.  80.510(a) and/or (b), 
when such provisions are applicable to nonroad engines, shall be 
considered NRLM diesel fuel.
    (2) [Reserved]
* * * * *
    (ttt) ECA marine fuel is diesel, distillate, or residual fuel that 
meets the criteria of paragraph (ttt)(1) of this section, but not the 
criteria of paragraph (ttt)(2) of this section.
    (1) All diesel, distillate, or residual fuel used, intended for 
use, or made available for use in Category 3 marine vessels while the 
vessels are operating within an Emission Control Area (ECA) is ECA 
marine fuel, unless it meets the criteria of paragraph (ttt)(2) of this 
section.
    (2) ECA marine fuel does not include any of the following fuel:
    (i) Fuel that is allowed by 40 CFR part 1043 to exceed the fuel 
sulfur limits for operation in an ECA (such as fuel used by excluded 
vessels or vessels equipped with equivalent emission controls in 
conformance with 40 CFR 1043.55).
    (ii) Fuel that conforms fully to the requirements of this part for 
NRLM diesel fuel (including being designated as NRLM).
    (iii) Fuel used, or made available for use, in any diesel engines 
not installed on a Category 3 marine vessel.
    (uuu) Category 3 marine vessels, for the purposes of this part 80, 
are vessels that are propelled by engines meeting the definition of 
``Category 3'' in 40 CFR part 1042.901.

Subpart I--Motor Vehicle Diesel Fuel; Nonroad, Locomotive, and 
Marine Diesel Fuel; and ECA Marine Fuel

0
3. The heading for subpart I is revised as set forth above.

0
4. Section 80.501 is amended as follows:
0
a. By revising paragraph (a)(5).

[[Page 22969]]

0
b. By revising paragraph (a)(6).
0
c. By adding paragraph (a)(7).


Sec.  80.501  What fuel is subject to the provisions of this subpart?

    (a) * * *
    (5) ECA marine fuel.
    (6) Other distillate fuels.
    (7) Motor oil that is used as or intended for use as fuel in diesel 
motor vehicles or nonroad diesel engines or is blended with diesel fuel 
for use in diesel motor vehicles or nonroad diesel engines, including 
locomotive and marine diesel engines, at any downstream location.
* * * * *

0
5. Section 80.502 is amended as follows:
0
a. By revising paragraph (a).
0
b. By revising paragraph (b) introductory text and paragraph (b)(1) 
introductory text.
0
c. By revising paragraph (c).
0
d. By revising paragraph (d) introductory text.
0
e. By adding paragraph (g).
0
f. By adding paragraph (h).


Sec.  80.502  What definitions apply for purposes of this subpart?

* * * * *
    (a) Entity means any refiner, importer, distributor, retailer or 
wholesale-purchaser consumer of any distillate fuel (or other product 
subject to the requirements of this subpart I).
    (b) Facility means any place, or series of places, where an entity 
produces, imports, or maintains custody of any distillate fuel (or 
other product subject to the requirements of this subpart I) from the 
time it is received to the time custody is transferred to another 
entity, except as described in paragraphs (b)(1) through (4) of this 
section:
    (1) Where an entity maintains custody of a batch of diesel fuel (or 
other product subject to the requirements of this subpart I) from one 
place in the distribution system to another place (e.g., from a 
pipeline to a terminal), all owned by the same entity, both places 
combined are considered to be one single aggregated facility, except 
where an entity chooses to treat components of such an aggregated 
facility as separate facilities. The choice made to treat these places 
as separate facilities may not be changed by the entity during any 
applicable compliance period. Except as specified in paragraph (b)(2) 
of this section, where compliance requirements depend upon facility-
type, the entire facility must comply with the requirements that apply 
to its components as follows:
* * * * *
    (c) Truck loading terminal means any facility that dyes NRLM diesel 
fuel or ECA marine fuel, pays taxes on motor vehicle diesel fuel per 
IRS code (26 CFR part 48), or adds a fuel marker pursuant to Sec.  
80.510 to heating oil and delivers diesel fuel or heating oil into 
trucks for delivery to retail or ultimate consumer locations.
    (d) Batch means a quantity of diesel fuel (or other product subject 
to the requirements of this subpart I) which is homogeneous with regard 
to those properties that are specified for MVNRLM diesel fuel or ECA 
marine fuel under this subpart I, has the same designation under this 
subpart I (if applicable), and whose custody is transferred from one 
facility to another facility.
* * * * *
    (g) Emission Control Area. An Emission Control Area (ECA), for the 
purposes of this subpart, means the ``ECA'' as defined in 40 CFR 
1043.20 as well as ``ECA associated area'' as defined in 40 CFR 
1043.20.
    (h) Marine diesel engine. For the purposes of this subpart I only, 
marine diesel engine means a diesel engine installed on a Category 1 
(C1) or Category 2 (C2) marine vessel.

0
6. Section 80.510 is amended as follows:
0
a. By revising the section heading.
0
b. By revising paragraph (f) introductory text and adding paragraph 
(f)(6).
0
c. By revising paragraph (g)(1).
0
d. By adding paragraph (k).


Sec.  80.510  What are the standards and marker requirements for NRLM 
diesel fuel and ECA marine fuel?

* * * * *
    (f) Marking provisions. From June 1, 2012 through May 31, 2014:
* * * * *
    (6) Marker solvent yellow 124 shall not be used in any MVNRLM or 
heating oil after May 31, 2014.
    (g) * * *
    (1) Northeast/Mid-Atlantic Area, which includes the following 
States and counties, through May 31, 2014: North Carolina, Virginia, 
Maryland, Delaware, New Jersey, Connecticut, Rhode Island, 
Massachusetts, Vermont, New Hampshire, Maine, Washington DC, New York 
(except for the counties of Chautauqua, Cattaraugus, and Allegany), 
Pennsylvania (except for the counties of Erie, Warren, McKean, Potter, 
Cameron, Elk, Jefferson, Clarion, Forest, Venango, Mercer, Crawford, 
Lawrence, Beaver, Washington, and Greene), and the eight eastern-most 
counties of West Virginia (Jefferson, Berkeley, Morgan, Hampshire, 
Mineral, Hardy, Grant, and Pendleton).
* * * * *
    (k) Beginning June 1, 2014. All ECA marine fuel is subject to a 
maximum per-gallon sulfur content of 1,000 ppm.

0
7. Section 80.511 is amended as follows:
0
a. By revising the section heading.
0
b. By revising paragraph (a).
0
c. By revising paragraphs (b)(4) and (b)(9).
0
d. By adding paragraph (b)(10).


Sec.  80.511  What are the per-gallon and marker requirements that 
apply to NRLM diesel fuel, ECA marine fuel, and heating oil downstream 
of the refiner or importer?

    (a) Applicable dates for marker requirements. Beginning June 1, 
2006, all NRLM diesel fuel and ECA marine fuel shall contain less than 
0.10 milligrams per liter of the marker solvent yellow 124, except for 
LM diesel fuel subject to the marking requirements of Sec.  80.510(e).
    (b) * * *
    (4) Except as provided in paragraphs (b)(5) through (8) of this 
section, the per-gallon sulfur standard of Sec.  80.510(c) shall apply 
to all NRLM diesel fuel beginning August 1, 2014, for all downstream 
locations other than retail outlets or wholesale purchaser-consumer 
facilities, shall apply to all NRLM diesel fuel beginning October 1, 
2014 for retail outlets and wholesale purchaser-consumer facilities, 
and shall apply to all NRLM diesel fuel beginning December 1, 2014, for 
all locations.
* * * * *
    (9) The per-gallon sulfur standard of Sec.  80.510(k) shall apply 
to all ECA marine fuel beginning August 1, 2014, for all downstream 
locations other than retail outlets or wholesale purchaser-consumer 
facilities, shall apply to all ECA marine fuel beginning October 1, 
2014, for retail outlets and wholesale purchaser-consumer facilities, 
and shall apply to all ECA marine fuel beginning December 1, 2014, for 
all locations.
    (10) For the purposes of this section, distributors that have their 
own fuel storage tanks and deliver only to ultimate consumers shall be 
treated the same as retailers and their facilities treated the same as 
retail outlets.

0
8. Section 80.513 is amended by revising paragraph (e) to read as 
follows:


Sec.  80.513  What provisions apply to transmix processing facilities?

* * * * *
    (e) From June 1, 2014 and beyond, NRLM diesel fuel produced by a 
transmix processor is subject to the standards of Sec.  80.510(c).

0
9. Section 80.525 is amended by revising paragraphs (b) and (d) to read 
as follows:

[[Page 22970]]

Sec.  80.525  What requirements apply to kerosene blenders?

* * * * *
    (b) Kerosene blenders are not subject to the requirements of this 
subpart applicable to refiners of diesel fuel, but are subject to the 
requirements and prohibitions applicable to downstream parties.
* * * * *
    (d) Kerosene that a kerosene blender adds or intends to add to 
diesel fuel subject to the 15 ppm sulfur content standard must meet the 
15 ppm sulfur content standard, and either of the following 
requirements:
    (1) The product transfer document received by the kerosene blender 
indicates that the kerosene is diesel fuel that complies with the 15 
ppm sulfur content standard.
    (2) The kerosene blender has test results indicating the kerosene 
complies with the 15 ppm sulfur standard.

0
10. Section 80.551 is amended by revising paragraph (f) to read as 
follows:


Sec.  80.551  How does a refiner obtain approval as a small refiner 
under this subpart?

* * * * *
    (f) Approval of small refiner status for refiners who apply under 
Sec.  80.550(d) will be based on all information submitted under 
paragraph (c) of this section, except as provided in Sec.  80.550(e).
* * * * *

0
11. Section 80.561 is amended by revising the section heading to read 
as follows:


Sec.  80.561  How can a refiner or importer seek temporary relief from 
the requirements of this subpart in case of extreme unforeseen 
circumstances?

* * * * *

0
12. Section 80.570 is amended by revising paragraphs (a) and (b) to 
read as follows:


Sec.  80.570  What labeling requirements apply to retailers and 
wholesale purchaser-consumers of diesel fuel beginning June 1, 2006?

    (a) From June 1, 2006 through November 30, 2010, any retailer or 
wholesale purchaser-consumer who sells, dispenses, or offers for sale 
or dispensing, motor vehicle diesel fuel subject to the 15 ppm sulfur 
standard of Sec.  80.520(a)(1), must affix the following conspicuous 
and legible label, in block letters of no less than 24-point bold type, 
and printed in a color contrasting with the background, to each pump 
stand:
ULTRA-LOW SULFUR HIGHWAY DIESEL FUEL (15 ppm Sulfur Maximum)
    Required for use in all model year 2007 and later highway diesel 
vehicles and engines.
    Recommended for use in all diesel vehicles and engines.
    (b) From June 1, 2006, through November 30, 2010, any retailer or 
wholesale purchaser-consumer who sells, dispenses, or offers for sale 
or dispensing, motor vehicle diesel fuel subject to the 500 ppm sulfur 
standard of Sec.  80.520(c), must prominently and conspicuously display 
in the immediate area of each pump stand from which motor vehicle fuel 
subject to the 500 ppm sulfur standard is offered for sale or 
dispensing, the following legible label, in block letters of no less 
than 24-point bold type, printed in a color contrasting with the 
background:
LOW SULFUR HIGHWAY DIESEL FUEL (500 ppm Sulfur Maximum)
WARNING
    Federal law prohibits use in model year 2007 and later highway 
vehicles and engines.
    Its use may damage these vehicles and engines.
* * * * *

0
13. Section 80.571 is amended by revising paragraphs (b) and (d) to 
read as follows:


Sec.  80.571  What labeling requirements apply to retailers and 
wholesale purchaser-consumers of NRLM diesel fuel or heating oil 
beginning June 1, 2007?

* * * * *
    (b) From June 1, 2007, through September 30, 2010, for pumps 
dispensing NRLM diesel fuel meeting the 500 ppm sulfur standard of 
Sec.  80.510(a):
LOW SULFUR NON-HIGHWAY DIESEL FUEL (500 ppm Sulfur Maximum)
WARNING
    Federal Law prohibits use in highway vehicles or engines.
* * * * *
    (d) From June 1, 2007, and beyond, for pumps dispensing non-motor 
vehicle diesel fuel for use other than in nonroad, locomotive, or 
marine engines, such as for use as heating oil:
HEATING OIL (May Exceed 500 ppm Sulfur)
WARNING
    Federal law prohibits use in highway vehicles or engines, or in 
nonroad, locomotive, or marine diesel engines.
    Its use may damage these diesel engines.
* * * * *

0
14. Section 80.572 is amended by revising paragraphs (a) and (b) to 
read as follows:


Sec.  80.572  What labeling requirements apply to retailers and 
wholesale purchaser-consumers of NR and NRLM diesel fuel and heating 
oil beginning June 1, 2010?

* * * * *
    (a) From June 1, 2010, through September 31, 2014, any retailer or 
wholesale purchaser-consumer who sells, dispenses, or offers for sale 
or dispensing, motor vehicle diesel fuel subject to the 15 ppm sulfur 
standard of Sec.  80.520(a)(1), must affix the following conspicuous 
and legible label, in block letters of no less than 24-point bold type, 
and printed in a color contrasting with the background, to each pump 
stand:
ULTRA-LOW SULFUR HIGHWAY DIESEL FUEL (15 ppm Sulfur Maximum)
    Required for use in all highway diesel vehicles and engines.
    Recommended for use in all diesel vehicles and engines.
    (b) From June 1, 2010, through September 30, 2012, for pumps 
dispensing NR diesel fuel subject to the 15 ppm sulfur standard of 
Sec.  80.510(b):
ULTRA-LOW SULFUR NON-HIGHWAY DIESEL FUEL (15 ppm Sulfur Maximum)
    Required for use in all model year 2011 and later nonroad diesel 
engines.
    Recommended for use in all other non-highway diesel engines.
WARNING
    Federal law prohibits use in highway vehicles or engines.
* * * * *

0
15. Section 80.573 is amended by revising paragraph (a) to read as 
follows:


Sec.  80.573  What labeling requirements apply to retailers and 
wholesale purchaser-consumers of NRLM diesel fuel and heating oil 
beginning June 1, 2012?

* * * * *
    (a) From June 1, 2012, through September 30, 2014, for pumps 
dispensing NRLM diesel fuel subject to the 15 ppm sulfur standard of 
Sec.  80.510(c):
ULTRA-LOW SULFUR NON-HIGHWAY DIESEL FUEL (15 ppm Sulfur Maximum)
    Required for use in all model year 2011 and later nonroad diesel 
engines.
    Recommended for use in all other non-highway diesel engines.

[[Page 22971]]

WARNING
    Federal law prohibits use in highway vehicles or engines.
* * * * *

0
16. Section 80.574 is revised to read as follows:


Sec.  80.574  What labeling requirements apply to retailers and 
wholesale purchaser-consumers of ECA marine fuel beginning June 1, 
2014?

    (a) Any retailer or wholesale purchaser-consumer who sells, 
dispenses, or offers for sale or dispensing ECA marine fuel must 
prominently and conspicuously display in the immediate area of each 
pump stand from which ECA marine fuel is offered for sale or 
dispensing, one of the following legible labels, as applicable, in 
block letters of no less than 24-point bold type, printed in a color 
contrasting with the background:
    (1) From June 1, 2014, and beyond, for pumps dispensing ECA marine 
fuel subject to the 1,000 ppm sulfur standard of Sec.  80.510(k):
1,000 ppm SULFUR ECA MARINE FUEL (1,000 ppm Sulfur Maximum)
    For use in Category 3 (C3) marine vessels only.
WARNING
    Federal law prohibits use in any engine that is not installed on a 
C3 marine vessel; use of fuel oil with a sulfur content greater than 
1,000 ppm in an ECA is prohibited except as allowed by 40 CFR Part 
1043.
    (2) The labels required by paragraph (a)(1) of this section must be 
placed on the vertical surface of each pump housing and on each side 
that has gallon and price meters. The labels shall be on the upper two-
thirds of the pump, in a location where they are clearly visible.
    (b) Alternative labels to those specified in paragraph (a) of this 
section may be used as approved by EPA.
    (1) For U.S. Mail: U.S. EPA, Attn: Diesel Sulfur Alternative Label 
Request, 6406J, 1200 Pennsylvania Avenue, NW., Washington, DC 20460.
    (2) For overnight or courier services: U.S. EPA, Attn: Diesel 
Sulfur Alternative Label Request, 6406J, 1310 L Street, NW., 6th Floor, 
Washington, DC 20005. (202) 343-9038.

0
17. Section 80.580 is amended by adding paragraphs (b)(1) and (c)(1) to 
read as follows:


Sec.  80.580  What are the sampling and testing methods for sulfur?

* * * * *
    (b) * * *
    (1) For ECA marine fuel subject to the 1,000 ppm sulfur standard of 
Sec.  80.510(k), sulfur content may be determined using ASTM D2622 
(incorporated by reference, see paragraph (e) of this section).
* * * * *
    (c) * * *
    (1) Options for testing sulfur content of 1,000 ppm diesel fuel. 
(i) For ECA marine fuel subject to the 1,000 ppm sulfur standard of 
Sec.  80.510(k), sulfur content may be determined using ASTM D4294, 
ASTM D5453, or ASTM D6920 (all incorporated by reference, see paragraph 
(e) of this section), provided that the refiner or importer test result 
is correlated with the appropriate method specified in paragraph (b)(1) 
of this section; or
    (ii) For ECA marine fuel subject to the 1,000 ppm sulfur standard 
of Sec.  80.510(k), sulfur content may be determined using any test 
method approved under Sec.  80.585.
* * * * *

0
18. Section 80.581 is amended by revising the section heading and 
paragraphs (a) and (c)(1) to read as follows:

Sec.  80.581  What are the batch testing and sample retention 
requirements for motor vehicle diesel fuel, NRLM diesel fuel, and ECA 
marine fuel?

    (a) Beginning on June 1, 2006 (or earlier pursuant to Sec.  
80.531), for motor vehicle diesel fuel, and beginning June 1, 2010 (or 
earlier pursuant to Sec.  80.535), for NRLM diesel fuel, and beginning 
June 1, 2014, for ECA marine fuel, each refiner and importer shall 
collect a representative sample from each batch of motor vehicle or 
NRLM diesel fuel produced or imported and subject to the 15 ppm sulfur 
content standard, or ECA marine fuel subject to the 1,000 ppm sulfur 
content standard. Batch, for the purposes of this section, means batch 
as defined under Sec.  80.2 but without the reference to transfer of 
custody from one facility to another facility.
* * * * *
    (c)(1) Any refiner who produces motor vehicle, NRLM diesel fuel, or 
ECA marine fuel using computer-controlled in-line blending equipment, 
including the use of an on-line analyzer test method that is approved 
under the provisions of Sec.  80.580, and who, subsequent to the 
production of the diesel fuel batch tests a composited sample of the 
batch under the provisions of Sec.  80.580 for purposes of designation 
and reporting, is exempt from the requirement of paragraph (b) of this 
section to obtain the test result required under this section prior to 
the diesel fuel leaving the refinery, provided that the refiner obtains 
approval from EPA. The requirement of this paragraph (c)(1) that the 
in-line blending equipment must include an on-line analyzer test method 
that is approved under the provisions of Sec.  80.580 is effective 
beginning June 1, 2006.
* * * * *

0
19. Section 80.583 is amended by revising the section heading to read 
as follows:


Sec.  80.583  What alternative sampling and testing requirements apply 
to importers who transport motor vehicle diesel fuel, NRLM diesel fuel, 
or ECA marine fuel by truck or rail car?

* * * * *

0
20. Section 80.584 is amended by revising the section heading and 
adding paragraphs (a)(3) and (b)(3) to read as follows:


Sec.  80.584  What are the precision and accuracy criteria for approval 
of test methods for determining the sulfur content of motor vehicle 
diesel fuel, NRLM diesel fuel, and ECA marine fuel?

    (a) * * *
    (3) For ECA marine fuel subject to the 1,000 ppm sulfur standard of 
Sec.  80.510(k), of a standard deviation less than 18.07 ppm, computed 
from the results of a minimum of 20 repeat tests made over 20 days on 
samples taken from a single homogeneous commercially available diesel 
fuel with a sulfur content in the range of 700-1,000 ppm. The 20 
results must be a series of tests with a sequential record of the 
analyses and no omissions. A laboratory facility may exclude a given 
sample or test result only if the exclusion is for a valid reason under 
good laboratory practices and it maintains records regarding the sample 
and test results and the reason for excluding them.
    (b) * * *
    (3) For ECA marine fuel subject to the 1,000 ppm sulfur standard of 
Sec.  80.510(k):
    (i) The arithmetic average of a continuous series of at least 10 
tests performed on a commercially available gravimetric sulfur standard 
in the range of 300-400 ppm sulfur shall not differ from the ARV of 
that standard by more than 13.55 ppm sulfur;
    (ii) The arithmetic average of a continuous series of at least 10 
tests performed on a commercially available gravimetric sulfur standard 
in the range of 900-1,000 ppm sulfur shall not differ from the ARV of 
that standard by more than 13.55 ppm sulfur; and
    (iii) In applying the tests of paragraphs (b)(3)(i) and (ii) of 
this section, individual test results shall be

[[Page 22972]]

compensated for any known chemical interferences.


0
21. Section 80.585 is amended by revising the section heading and 
paragraphs (e)(2) and (e)(4) to read as follows:


Sec.  80.585  What is the process for approval of a test method for 
determining the sulfur content of diesel or ECA marine fuel?

* * * * *
    (e) * * *
    (2) Follow paragraph 7.3.1 of ASTM D 6299-02 to check standards 
using a reference material at least monthly or following any major 
change to the laboratory equipment or test procedure. Any deviation 
from the accepted reference value of a check standard greater than 1.44 
ppm (for diesel fuel subject to the 15 ppm sulfur standard), 19.36 ppm 
(for diesel fuel subject to the 500 ppm sulfur standard), or 36.14 ppm 
(for ECA marine fuel subject to the 1,000 ppm sulfur standard must be 
investigated.
* * * * *
    (4) Upon discovery of any quality control testing violation of 
paragraph A 1.5.1.3 or A 1.5.2.1 of ASTM D 6299-02, or any check 
standard deviation greater than 1.44 ppm (for diesel fuel subject to 
the 15 ppm sulfur standard), 19.36 ppm (for diesel fuel subject to the 
500 ppm sulfur standard), or 36.14 ppm (for ECA marine fuel subject to 
the 1,000 ppm sulfur standard), conduct an investigation into the cause 
of such violation or deviation and, after restoring method performance 
to statistical control, retest retained samples from batches originally 
tested since the last satisfactory quality control material or check 
standard testing occasion.
0
22. Section 80.590 is amended as follows:
0
a. By revising the section heading.
0
b. By revising paragraphs (a) introductory text, (a)(5), (a)(6) 
introductory text, and (a)(6)(ii).
0
c. By adding paragraph (a)(7)(vii).
0
d. By redesignating paragraphs (e) through (i) as paragraphs (f) 
through (j), respectively.
0
e. By adding a new paragraph (e).


Sec.  80.590  What are the product transfer document requirements for 
motor vehicle diesel fuel, NRLM diesel fuel, heating oil, ECA marine 
fuel, and other distillates?

    (a) This paragraph (a) applies on each occasion that any person 
transfers custody or title to MVNRLM diesel fuel, heating oil, or ECA 
marine fuel (including distillates used or intended to be used as 
MVNRLM diesel fuel, heating oil, or ECA marine fuel) except when such 
fuel is dispensed into motor vehicles or nonroad equipment, 
locomotives, marine diesel engines or C3 vessels. Note that 40 CFR part 
1043 specifies requirements for documenting fuel transfers to certain 
marine vessels. For all fuel transfers subject to this paragraph (a), 
the transferor must provide to the transferee documents which include 
the following information:
* * * * *
    (5) For transfers of MVNRLM diesel fuel or ECA marine fuel 
(beginning June 1, 2014), the sulfur content standard the transferor 
represents the fuel to meet.
    (6) Beginning June 1, 2006, when an entity, from a facility at any 
point in the distribution system, transfers custody of a distillate or 
residual fuel designated under Sec.  80.598, the following information 
must also be included:
* * * * *
    (ii) An accurate and clear statement of the applicable designation 
and/or classification under Sec.  80.598(a) and (b), for example, ``500 
ppm sulfur NRLM diesel fuel'', or ``jet fuel''; and whether the fuel is 
dyed or undyed, and for heating oil, whether marked or unmarked where 
applicable.
    (7) * * *
    (vii) ECA marine fuel. For ECA marine fuel produced or imported 
beginning June 1, 2014, ``1,000 ppm sulfur (maximum) ECA marine fuel. 
For use in Category 3 marine vessels only. Not for use in engines not 
installed on C3 marine vessels.''
* * * * *
    (e) Beginning June 1, 2014, for ECA marine fuel only (except for 
transfers to truck carriers, retailers or wholesale purchaser-
consumers), product codes may be used to convey the information 
required under this section if such codes are clearly understood by 
each transferee. ``1000'' must appear clearly on the product transfer 
document, and may be contained in the product code. If the designation 
is included in the code, codes used to convey the statement in 
paragraph (a)(7)(vii) of this section must contain the number ``1000''. 
If another letter, number, or symbol is being used to convey the 
statement in paragraph (a)(7)(vii) of this section, it must be clearly 
defined and denoted on the product transfer document.
* * * * *

0
23. Section 80.593 is amended by revising the introductory text to read 
as follows:


Sec.  80.593  What are the reporting requirements for refiners and 
importers of motor vehicle diesel fuel subject to temporary refiner 
relief standards?

    Beginning with 2006, or the first compliance period during which 
credits are generated under Sec.  80.531(b) or (c), whichever is 
earlier, any refiner or importer who produces or imports motor vehicle 
diesel fuel subject to the 500 ppm sulfur standard under Sec.  
80.520(c), or any refiner or importer who generates, uses, obtains, or 
transfers credits under Sec. Sec.  80.530 through 80.532, and 
continuing for each year thereafter, must submit to EPA annual reports 
that contain the information required in this section, and such other 
information as EPA may require:
* * * * *

0
24. Section 80.597 is amended by revising paragraphs (c), (d), (e), and 
(f) and adding paragraph (g) to read as follows:


Sec.  80.597  What are the registration requirements?

* * * * *
    (c) Registration for ECA marine fuel. Refiners and importers that 
intend to produce or supply ECA marine fuel beginning June 1, 2014, 
must provide EPA the information under Sec.  80.76 no later than 
December 31, 2012, if such information has not been previously provided 
under the provisions of this part. In addition, for each import 
facility, the same identifying information as required for each 
refinery under Sec.  80.76(c) must be provided.
    (d) Entity registration. (1) Except as prescribed in paragraph 
(d)(6) of this section, each entity as defined in Sec.  80.502 that 
intends to deliver or receive custody of any of the following fuels 
from June 1, 2006 through May 31, 2010, must register with EPA by 
December 31, 2005, or six months prior to commencement of producing, 
importing, or distributing any distillate listed in paragraphs 
(d)(1)(i) through (d)(1)(iii) of this section:
    (i) Fuel designated as 500 ppm sulfur MVNRLM diesel fuel under 
Sec.  80.598 on which taxes have not been assessed pursuant to IRS code 
(26 CFR part 48).
    (ii) Fuel designated as 15 ppm sulfur MVNRLM diesel fuel under 
Sec.  80.598 on which taxes have not been assessed pursuant to IRS code 
(26 CFR part 48).
    (iii) Fuel designated as NRLM diesel fuel under Sec.  80.598 that 
is undyed pursuant to Sec.  80.520.
    (iv) Fuel designated as California Diesel fuel under Sec.  80.598 
on which taxes have not been assessed and red dye has not been added 
(if required) pursuant to IRS code (26 CFR part 48)

[[Page 22973]]

and that is delivered by pipeline to a terminal outside of the State of 
California pursuant to the provisions of Sec.  80.617(b).
    (2) Except as prescribed in paragraph (d)(6) of this section, each 
entity as defined in Sec.  80.502 that intends to deliver or receive 
custody of any of the following fuels from June 1, 2007, through May 
31, 2014, must register with EPA by December 31, 2005, or six months 
prior to commencement of producing, importing, or distributing any 
distillate listed in paragraph (d)(1) of this section:
    (i) Fuel designated as 500 ppm sulfur MVNRLM diesel fuel under 
Sec.  80.598 on which taxes have not been assessed pursuant to IRS code 
(26 CFR part 48).
    (ii) Fuel designated as NRLM diesel fuel under Sec.  80.598 that is 
undyed pursuant to Sec.  80.520.
    (iii) Fuel designated as heating oil under Sec.  80.598 that is 
unmarked pursuant to Sec.  80.510(d) through (f).
    (iv) Fuel designated as LM diesel fuel under Sec.  
80.598(a)(2)(iii) that is unmarked pursuant to Sec.  80.510(e).
    (3) Except as prescribed in paragraph (d)(6) of this section, each 
entity as defined in Sec.  80.502 that intends to deliver or receive 
custody of any of the following fuels beginning June 1, 2014, must 
register with EPA by December 31, 2012, or prior to commencement of 
producing, importing, or distributing any distillate or residual fuel 
listed in this paragraph (d):
    (i) Fuel designated as 1,000 ppm sulfur ECA marine fuel under Sec.  
80.598.
    (ii) [Reserved]
    (4) Registration shall be on forms prescribed by the Administrator, 
and shall include the name, business address, contact name, telephone 
number, e-mail address, and type of production, importation, or 
distribution activity or activities engaged in by the entity.
    (5) Registration shall include the information required under 
paragraph (e) of this section for each facility owned or operated by 
the entity that delivers or receives custody of a fuel described in 
paragraphs (d)(1) through (3) of this section.
    (6) Exceptions for Excluded Liquids. An entity that would otherwise 
be required to register pursuant to the requirements of paragraphs 
(d)(1) through (3) of this section is exempted from the registration 
requirements under this section provided that:
    (i) The only diesel fuel or heating oil that the entity delivers or 
receives on which taxes have not been assessed or which is not received 
dyed pursuant to IRS code 26 CFR part 48 is an excluded liquid as 
defined pursuant to IRS code 26 CFR 48.4081-1(b).
    (ii) The entity does not transfer the excluded liquid to a facility 
which delivers or receives diesel fuel other than an excluded liquid on 
which taxes have not been assessed pursuant to IRS code (26 CFR part 
48).
    (e) Facility registration. (1) List for each separate facility of 
an entity required to register under paragraph (d) of this section, the 
facility name, physical location, contact name, telephone number, e-
mail address and type of facility. For facilities that are aggregated 
under Sec.  80.502, provide information regarding the nature and 
location of each of the components. If aggregation is changed for any 
subsequent compliance period, the entity must provide notice to EPA 
prior to the beginning of such compliance period.
    (2) If facility records are kept off-site, list the off-site 
storage facility name, physical location, contact name, and telephone 
number.
    (3) Mobile facilities: (i) A description shall be provided in the 
registration detailing the types of mobile vessels that will likely be 
included and the nature of the operations.
    (ii) Entities may combine all mobile operations into one facility; 
or may split the operations by vessel, region, route, waterway, etc. 
and register separate mobile facilities for each.
    (iii) The specific vessels need not be identified in the 
registration, however information regarding specific vessel contracts 
shall be maintained by each registered entity for its mobile 
facilities, pursuant to Sec.  80.602(d).
    (f) Changes to registration information. Any company or entity 
shall submit updated registration information to the Administrator 
within 30 days of any occasion when the registration information 
previously supplied for an entity, or any of its registered facilities, 
becomes incomplete or inaccurate.
    (g) Issuance of registration numbers. EPA will supply a 
registration number to each entity and a facility registration number 
to each of an entity's facilities that is identified, which shall be 
used in all reports to the Administrator.

0
25. Section 80.598 is amended as follows:
0
a. By revising paragraphs (a)(2)(i)(A) through (F).
0
b. By adding paragraph (a)(2)(i)(H).
0
c. By revising paragraph (a)(2)(v) introductory text.
0
d. By adding paragraph (a)(3)(xv).
0
e. By revising paragraphs (b)(4)(i), (b)(4)(ii), (b)(7)(i), (b)(7)(ii), 
(b)(8), (b)(9)(ii), (b)(9)(viii), and (b)(9)(x) introductory text.


Sec.  80.598  What are the designation requirements for refiners, 
importers, and distributors?

    (a) * * *
    (2) * * *
    (i) * * *
    (A) Motor vehicle, nonroad, locomotive or marine (MVNRLM) diesel 
fuel.
    (B) Heating oil.
    (C) Jet fuel.
    (D) Kerosene.
    (E) No. 4 fuel.
    (F) Distillate fuel for export only.
* * * * *
    (H) ECA marine fuel. This designation may be used beginning June 1, 
2014, and fuel designated as such is subject to the restrictions in 
paragraph (a)(3)(xv) of this section.
* * * * *
    (v) From June 1, 2006, through May 31, 2010, any batch designated 
as motor vehicle diesel fuel must also be designated according to one 
of the following distillation classifications that most accurately 
represents the fuel:
* * * * *
    (3) * * *
    (xv) Beginning June 1, 2014, any fuel designated as ECA marine fuel 
will be subject to all the following restrictions:
    (A) Such fuel may not exceed a sulfur level of 1,000 ppm.
    (B) Such fuel may only be produced, distributed, sold, and 
purchased for use in C3 marine vessels.
    (b) * * *
    (4) * * *
    (i) 1D 500 ppm sulfur motor vehicle diesel fuel.
    (ii) 2D 500 ppm sulfur motor vehicle diesel fuel.
* * * * *
    (7) * * *
    (i) 500 ppm sulfur NRLM diesel fuel.
    (ii) Heating oil.
* * * * *
    (8) Beginning June 1, 2014, whenever custody of a batch of 
distillate or residual fuel (other than jet fuel, kerosene, No. 4 fuel, 
fuel for export, fuel intended for use outside an ECA, or fuel 
otherwise allowed to be used under 40 CFR part 1043) having a sulfur 
content greater than 15 ppm is transferred to another facility, the 
entity transferring custody must accurately and clearly designate the 
batch as one of the following and specify its volume:
    (i) ECA marine fuel.
    (ii) Heating oil.
    (iii) Exempt distillate fuels such as fuels that are covered by a 
national security exemption under Sec.  80.606, fuels

[[Page 22974]]

that are used for purposes of research and development pursuant to 
Sec.  80.607, and fuels used in the U.S. Territories pursuant to Sec.  
80.608 (including additional identifying information).
    (9) * * *
    (ii) Until June 1, 2014, any distillate fuel containing greater 
than or equal to 0.10 milligrams per liter of marker solvent yellow 124 
required under Sec.  80.510(d), (e), or (f) must be designated as 
heating oil except that from June 1, 2010, through September 30, 2012, 
it may also be designated as LM diesel fuel as specified under Sec.  
80.510(e).
* * * * *
    (viii) For facilities in areas other than those specified in Sec.  
80.510(g)(1) and (2), batches or portions of batches of unmarked 
distillate received designated as heating oil may be re-designated as 
NRLM or LM diesel fuel only if all the following restrictions are met:
    (A) From June 1, 2007, through May 31, 2010, for any compliance 
period, the volume of high sulfur NRLM diesel fuel delivered from a 
facility cannot be greater than the volume received, unless the volume 
of heating oil delivered from the facility is also greater than the 
volume it received by an equal or greater proportion, as calculated in 
Sec.  80.599(c)(2).
    (B) From June 1, 2010, through May 31, 2014, for any compliance 
period, the volume of fuel designated as heating oil delivered from a 
facility cannot be less than the volume of fuel designated as heating 
oil received, as calculated in Sec.  80.599(c)(4).
* * * * *
    (x) Notwithstanding the provisions of paragraphs (b)(5) and (8) of 
this section, beginning October 1, 2007:
* * * * *

0
26. Section 80.599 is amended as follows:
0
a. By revising paragraph (a)(1).
0
b. By removing and reserving paragraph (a)(2).
0
c. By revising paragraph (e)(4).


Sec.  80.599  How do I calculate volume balances for designation 
purposes?

    (a) * * *
    (1) The annual compliance periods are shown in the following table:

------------------------------------------------------------------------
                                                Ending date of annual
Beginning date of annual compliance period        compliance period
------------------------------------------------------------------------
June 1, 2006..............................  May 31, 2007.
June 1, 2007..............................  June 30, 2008.
July 1, 2008..............................  June 30, 2009.
July 1, 2009..............................  May 31, 2010.
June 1, 2010..............................  June 30, 2011.
July 1, 2011..............................  May 31, 2012.
June 1, 2012..............................  June 30, 2013.
July 1, 2013..............................  May 31, 2014.
------------------------------------------------------------------------

    (2) [Reserved]
* * * * *
    (e) * * *
    (4) The following calculation may be used to account for wintertime 
blending of kerosene and the blending of non-petroleum diesel:

2MV500O<= 2MV500I + 
2MV500P - 2MV500INVCHG + 0.2 * 
(1MV15I + 2MV15I + 
NPMV15I)

Where:

1MV15I = the total volume of fuel received 
during the compliance period that is designated as 1D 15 
ppm sulfur motor vehicle diesel fuel. Any motor vehicle diesel fuel 
produced by or imported into the facility shall not be included in 
this volume.
NPMV15I = the total volume of fuel received during the 
compliance period that is designated as NP15 ppm sulfur motor 
vehicle diesel fuel. Any motor vehicle diesel fuel produced by or 
imported into the facility shall not be included in this volume.
1MV15P = the total volume of fuel produced by or 
imported into the facility during the compliance period that was 
designated as 1D 15 ppm sulfur motor vehicle diesel fuel 
when it was delivered.
* * * * *

0
27. Section 80.600 is amended as follows:
0
a. By revising paragraphs (a)(5) and (a)(12).
0
b. By revising paragraphs (b)(1)(v)(A) and (B).
0
c. By revising paragraph (b)(3).
0
d. By revising paragraph (i).
0
e. By revising paragraphs (o)(1) and (o)(2).


Sec.  80.600  What records must be kept for purposes of the designate 
and track provisions?

    (a) * * *
    (5) Any refiner or importer shall maintain the records specified in 
paragraphs (a)(6) through (10) of this section for each batch of 
distillate or residual fuel that it transfers custody of and designates 
from June 1, 2014, and later as any of the following categories:
    (i) Heating oil.
    (ii) ECA marine fuel.
* * * * *
    (12) Records must be maintained that demonstrate compliance with a 
refiner's compliance plan required under Sec.  80.554, for distillate 
fuel designated as high sulfur NRLM diesel fuel and delivered from June 
1, 2007 through May 31, 2010, for distillate fuel designated as 500 ppm 
sulfur NR diesel fuel and delivered from June 1, 2010, through May 31, 
2012, and for distillate fuel designated as 500 ppm sulfur NRLM diesel 
fuel and delivered from June 1, 2012, through May 31, 2014, in the 
areas specified in Sec.  80.510(g)(2).
* * * * *
    (b) * * *
    (1) * * *
    (v) For each facility that receives fuel designated as heating oil, 
records for each batch of distillate or residual fuel with any of the 
following designations for which custody is received or delivered as 
well as any batches produced from June 1, 2014, and beyond:
    (A) 1,000 ppm sulfur ECA marine fuel.
    (B) Heating oil.
* * * * *
    (3) Records that clearly and accurately identify the total volume 
in gallons of each designated fuel identified under paragraph (b)(1) of 
this section transferred over each of the compliance periods, and over 
the periods from June 1, 2006 to the end of each compliance period. The 
records shall be maintained separately for each fuel designated under 
paragraph (b)(1) of this section, and for each EPA entity and facility 
registration number from whom the fuel was received or to whom it was 
delivered. For batches of fuel received from facilities without an EPA 
facility registration number:
    (i) Any batches of fuel received marked pursuant to Sec.  80.510(d) 
or (f) shall be deemed to be designated as heating oil.
    (ii) Any batches of fuel received marked pursuant to Sec.  
80.510(e) shall be deemed to be designated as heating oil or LM diesel 
fuel.
    (iii) Any batches of fuel received on which taxes have been paid 
pursuant to Section 4082 of the Internal Revenue Code (26 CFR 48.4082) 
shall be deemed to be designated as motor vehicle diesel fuel.
    (iv) Any 500 ppm sulfur diesel fuel dyed pursuant to Sec.  
80.520(b) and not marked pursuant to Sec.  80.510(d) or (f) shall be 
deemed to be designated as NRLM diesel fuel.
    (v) Any diesel fuel with less than or equal to 500 ppm sulfur which 
is dyed pursuant to Sec.  80.520(b) and not marked pursuant to Sec.  
80.510(e) shall be deemed to be NR diesel fuel.
    (vi) Beginning June 1, 2014, any batches of fuel with greater than 
15 ppm sulfur, but less than or equal to 1,000 ppm sulfur, and not 
designated as heating oil shall be deemed to be 1,000 ppm ECA marine 
fuel.
* * * * *
    (i) Additional records that must be kept by mobile facilities. Any 
registered mobile facility must keep records of all contracts from any 
contracted

[[Page 22975]]

components (e.g., tank truck, barge, marine tanker, rail car, etc.) in 
each of its registered mobile facilities.
* * * * *
    (o) * * *
    (1) Any aggregated facility consisting of a refinery and truck 
loading terminal shall maintain records of all the following 
information for each batch of distillate fuel (and/or residual fuel 
with a sulfur level of 1,000 ppm or less that is intended for use in an 
ECA) produced by the refinery and sent over the aggregated facility's 
truck loading terminal rack:
    (i) The batch volume.
    (ii) The batch number, assigned under the batch numbering 
procedures under Sec. Sec.  80.65(d)(3) and 80.502(d)(1).
    (iii) The date of production.
    (iv) A record designating the batch as distillate or residual fuel 
meeting the 500 ppm, 15 ppm, or 1,000 ppm ECA marine sulfur standard.
    (v) A record indicating the volumes that were either taxed, dyed, 
or dyed and marked.
    (2) Volume reports for all distillate fuel (and/or residual fuel 
with a sulfur level of 1,000 ppm or less that is intended for use in an 
ECA) from external sources (i.e., from another refiner or importer), as 
described in Sec.  80.601(f)(2), sent over the aggregated facility's 
truck rack.


0
28. Section 80.601 is amended by revising paragraph (b)(3)(x) to read 
as follows:


Sec.  80.601  What are the reporting requirements for purposes of the 
designate and track provisions?

* * * * *
    (b) * * *
    (3) * * *
    (x) Beginning with the report due August 31, 2011, and ending with 
the report due August 31, 2012, the volume balance under Sec. Sec.  
80.598(b)(9)(ix) and 80.599(d)(2).
* * * * *

0
29. Section 80.602 is amended as follows:
0
a. By revising the section heading.
0
b. By revising paragraphs (a) introductory text, (a)(2) introductory 
text, and (a)(3).
0
c. By revising paragraphs (b) introductory text, (b)(4)(i), and 
(b)(4)(ii).
0
d. By revising paragraphs (g)(1) and (g)(2).


Sec.  80.602  What records must be kept by entities in the NRLM diesel 
fuel, ECA marine fuel, and diesel fuel additive production, 
importation, and distribution systems?

    (a) Records that must be kept by parties in the NRLM diesel fuel, 
ECA marine fuel and diesel fuel additive production, importation, and 
distribution systems. Beginning June 1, 2007, or June 1, 2006, if that 
is the first period credits are generated under Sec.  80.535, any 
person who produces, imports, sells, offers for sale, dispenses, 
distributes, supplies, offers for supply, stores, or transports 
nonroad, locomotive or marine diesel fuel, or ECA marine fuel 
(beginning June 1, 2014) subject to the provisions of this subpart, 
must keep all the following records:
* * * * *
    (2) For any sampling and testing for sulfur content for a batch of 
NRLM diesel fuel produced or imported and subject to the 15 ppm sulfur 
standard or any sampling and testing for sulfur content as part of a 
quality assurance testing program, and any sampling and testing for 
cetane index, aromatics content, marker solvent yellow 124 content or 
dye solvent red 164 content of NRLM diesel fuel, ECA marine fuel, NRLM 
diesel fuel additives or heating oil:
* * * * *
    (3) The actions the party has taken, if any, to stop the sale or 
distribution of any NRLM diesel fuel or ECA marine fuel found not to be 
in compliance with the sulfur standards specified in this subpart, and 
the actions the party has taken, if any, to identify the cause of any 
noncompliance and prevent future instances of noncompliance.
    (b) Additional records to be kept by refiners and importers of NRLM 
diesel fuel and ECA marine fuel. Beginning June 1, 2007, or June 1, 
2006, pursuant to the provisions of Sec. Sec.  80.535 or 80.554(d) (or 
June 1, 2014, pursuant to the provisions of Sec.  80.510(k)), any 
refiner producing distillate or residual fuel subject to a sulfur 
standard under Sec. Sec.  80.510, 80.513, 80.536, 80.554, 80.560, or 
80.561, for each of its refineries, and any importer importing such 
fuel separately for each facility, shall keep records that include the 
following information for each batch of NRLM diesel fuel, ECA marine 
fuel, or heating oil produced or imported:
* * * * *
    (4) * * *
    (i) NRLM diesel fuel, NR diesel fuel, LM diesel fuel, ECA marine 
fuel, or heating oil, as applicable.
    (ii) Meeting the 500 ppm sulfur standard of Sec.  80.510(a), the 15 
ppm sulfur standard of Sec.  80.510(b) and (c), the 1,000 ppm sulfur 
standard of Sec.  80.510(k), or other applicable standard.
* * * * *
    (g) * * *
    (1) All the following information for each batch of distillate fuel 
(or residual fuel with a sulfur level of 1,000 ppm or less if such fuel 
is intended for use in an ECA) produced by the refinery and sent over 
the aggregated facility's truck rack:
    (i) The batch volume.
    (ii) The batch number, assigned under the batch numbering 
procedures under Sec. Sec.  80.65(d)(3) and 80.502(d)(1).
    (iii) The date of production.
    (iv) A record designating the batch as one of the following:
    (A) NRLM diesel fuel, NR diesel fuel, LM diesel fuel, ECA marine 
fuel, or heating oil, as applicable.
    (B) Meeting the 500 ppm sulfur standard of Sec.  80.510(a), the 15 
ppm sulfur standard of Sec.  80.510(b) and (c), the 1,000 ppm sulfur 
standard of Sec.  80.510(k), or other applicable standard.
    (C) Dyed or undyed with visible evidence of solvent red 164.
    (D) Marked or unmarked with solvent yellow 124.
    (2) Hand-off reports for all distillate fuel (or residual fuel with 
a sulfur level of 1,000 ppm or less if such fuel is intended for use in 
an ECA) from external sources (i.e., from another refiner or importer), 
as described in Sec.  80.601(f)(2).

0
30. Section 80.606 is amended as follows:
0
a. By revising the section heading.
0
b. By revising paragraph (a) introductory text and paragraph (a)(1).
0
c. By revising paragraph (b).
0
d. By adding paragraph (c).


Sec.  80.606  What national security exemption applies to fuels covered 
under this subpart?

    (a) The standards of all the fuels listed in paragraph (b) of this 
section do not apply to fuel that is produced, imported, sold, offered 
for sale, supplied, offered for supply, stored, dispensed, or 
transported for use in any of the following:
    (1) Tactical military motor vehicles or tactical military nonroad 
engines, vehicles or equipment, including locomotive and marine, having 
an EPA national security exemption from the motor vehicle emission 
standards under 40 CFR 85.1708, or from the nonroad engine emission 
standards under 40 CFR part 89, 92, 94, 1042, or 1068.
* * * * *
    (b) The exempt fuel must meet any of the following:
    (1) The motor vehicle diesel fuel standards of Sec.  80.520(a)(1), 
(a)(2), and (c).
    (2) The nonroad, locomotive, and marine diesel fuel standards of 
Sec.  80.510(a), (b), and (c).

[[Page 22976]]

    (3) The 1,000 ppm ECA marine fuel standards of Sec.  80.510(k).
    (c) The exempt fuel must meet all the following conditions:
    (1) It must be accompanied by product transfer documents as 
required under Sec.  80.590.
    (2) It must be segregated from non-exempt MVNRLM diesel fuel and 
ECA marine fuel at all points in the distribution system.
    (3) It must be dispensed from a fuel pump stand, fueling truck or 
tank that is labeled with the appropriate designation of the fuel, such 
as ``JP-5'' or ``JP-8''.
    (4) It may not be used in any motor vehicles or nonroad engines, 
equipment or vehicles, including locomotive and marine, other than the 
vehicles, engines, and equipment referred to in paragraph (a) of this 
section.

0
31. Section 80.607 is amended as follows:
0
a. By revising the section heading.
0
b. By revising paragraph (a).
0
c. By revising paragraphs (c)(3)(iv) and (c)(4).
0
d. By revising paragraphs (d)(2), (d)(3), and (d)(4).
0
e. By revising paragraph (e)(1).
0
f. By revising paragraph (f).


Sec.  80.607  What are the requirements for obtaining an exemption for 
diesel fuel or ECA marine fuel used for research, development or 
testing purposes?

    (a) Written request for a research and development exemption. Any 
person may receive an exemption from the provisions of this subpart for 
diesel fuel or ECA marine fuel used for research, development, or 
testing purposes by submitting the information listed in paragraph (c) 
of this section to: Director, Transportation and Regional Programs 
Division (6406J), U.S. Environmental Protection Agency, 1200 
Pennsylvania Avenue, NW., Washington, DC 20460 (postal mail); or 
Director, Transportation and Regional Programs Division, U.S. 
Environmental Protection Agency, 1310 L Street, NW., 6th floor, 
Washington, DC 20005 (express mail/courier); and Director, Air 
Enforcement Division (2242A), U.S. Environmental Protection Agency, 
Ariel Rios Building, 1200 Pennsylvania Avenue, NW., Washington, DC 
20460.
* * * * *
    (c) * * *
    (3) * * *
    (iv) The quantity of fuel which does not comply with the 
requirements of Sec. Sec.  80.520 and 80.521 for motor vehicle diesel 
fuel, or Sec.  80.510 for NRLM diesel fuel or ECA marine fuel.
    (4) With regard to control, a demonstration that the program 
affords EPA a monitoring capability, including all the following:
    (i) The site(s) of the program (including facility name, street 
address, city, county, State, and zip code).
    (ii) The manner in which information on vehicles and engines used 
in the program will be recorded and made available to the Administrator 
upon request.
    (iii) The manner in which information on the fuel used in the 
program (including quantity, fuel properties, name, address, telephone 
number and contact person of the supplier, and the date received from 
the supplier), will be recorded and made available to the Administrator 
upon request.
    (iv) The manner in which the party will ensure that the research 
and development fuel will be segregated from motor vehicle diesel fuel, 
NRLM diesel fuel, or ECA marine fuel, as applicable, and how fuel pumps 
will be labeled to ensure proper use of the research and development 
fuel.
    (v) The name, address, telephone number and title of the person(s) 
in the organization requesting an exemption from whom further 
information on the application may be obtained.
    (vi) The name, address, telephone number and title of the person(s) 
in the organization requesting an exemption who is responsible for 
recording and making available the information specified in this 
paragraph (c), and the location where such information will be 
maintained.
    (d) * * *
    (2) The research and development fuel must be designated by the 
refiner or supplier, as applicable, as research and development fuel.
    (3) The research and development fuel must be kept segregated from 
non-exempt MVNRLM diesel fuel and ECA marine fuel at all points in the 
distribution system.
    (4) The research and development fuel must not be sold, 
distributed, offered for sale or distribution, dispensed, supplied, 
offered for supply, transported to or from, or stored by a fuel retail 
outlet, or by a wholesale purchaser-consumer facility, unless the 
wholesale purchaser-consumer facility is associated with the research 
and development program that uses the fuel.
* * * * *
    (e) * * *
    (1) The volume of fuel subject to the approval shall not exceed the 
estimated amount under paragraph (c)(3)(iv) of this section, unless EPA 
grants a greater amount in writing.
* * * * *
    (f) Effects of exemption. Motor vehicle diesel fuel, NRLM diesel 
fuel, or ECA marine fuel that is subject to a research and development 
exemption under this section is exempt from other provisions of this 
subpart provided that the fuel is used in a manner that complies with 
the purpose of the program under paragraph (c) of this section and the 
requirements of this section.
* * * * *

0
32. Section 80.608 is revised to read as follows:


Sec.  80.608  What requirements apply to diesel fuel and ECA marine 
fuel for use in the Territories?

    The sulfur standards of Sec.  80.520(a)(1) and (c) related to motor 
vehicle diesel fuel, of Sec.  80.510(a), (b), and (c) related to NRLM 
diesel fuel, and of Sec.  80.510(k) related to ECA marine fuel, do not 
apply to fuel that is produced, imported, sold, offered for sale, 
supplied, offered for supply, stored, dispensed, or transported for use 
in the Territories of Guam, American Samoa or the Commonwealth of the 
Northern Mariana Islands, provided that such diesel fuel is all the 
following:
    (a) Designated by the refiner or importer as high sulfur diesel 
fuel only for use in Guam, American Samoa, or the Commonwealth of the 
Northern Mariana Islands.
    (b) Used only in Guam, American Samoa, or the Commonwealth of the 
Northern Mariana Islands.
    (c) Accompanied by documentation that complies with the product 
transfer document requirements of Sec.  80.590(b)(1).
    (d) Segregated from non-exempt MVNRLM diesel fuel and/or non-exempt 
ECA marine fuel at all points in the distribution system from the point 
the fuel is designated as exempt fuel only for use in Guam, American 
Samoa, or the Commonwealth of the Northern Mariana Islands, while the 
exempt fuel is in the United States (or the United States Emission 
Control Area) but outside these Territories.


0
33. Section 80.610 is amended as follows:
0
a. By revising paragraph (a)(1).
0
b. By revising paragraph (b).
0
c. By revising paragraph (c).
0
d. By revising paragraphs (e)(3)(iii) and (e)(4)(iii) and adding 
paragraph (e)(6).
0
e. By revising paragraph (g).


Sec.  80.610  What acts are prohibited under the diesel fuel sulfur 
program?

* * * * *
    (a) * * *
    (1) Produce, import, sell, offer for sale, dispense, supply, offer 
for supply, store or transport motor vehicle diesel fuel,

[[Page 22977]]

NRLM diesel fuel, ECA marine fuel or heating oil that does not comply 
with the applicable standards, dye, marking or any other product 
requirements under this subpart I and 40 CFR part 69, except as allowed 
by 40 CFR part 1043 for ECA marine fuel.
* * * * *
    (b) Designation and volume balance violation. Produce, import, 
sell, offer for sale, dispense, supply, offer for supply, store or 
transport motor vehicle diesel, NRLM diesel fuel, ECA marine fuel, 
heating oil or other fuel that does not comply with the applicable 
designation or volume balance requirements under Sec. Sec.  80.598 and 
80.599.
    (c) Additive violation. (1) Produce, import, sell, offer for sale, 
dispense, supply, offer for supply, store or transport any fuel 
additive for use at a downstream location that does not comply with the 
applicable requirements of Sec.  80.521.
    (2) Blend or permit the blending into motor vehicle diesel fuel, 
NRLM diesel fuel, or ECA marine fuel at a downstream location, or use, 
or permit the use, in motor vehicle diesel fuel, NRLM diesel fuel, or 
ECA marine fuel, of any additive that does not comply with the 
applicable requirements of Sec.  80.521.
* * * * *
    (e) * * *
    (3) * * *
    (iii) This prohibition begins December 1, 2014, in all other areas.
    (4) * * *
    (iii) This prohibition begins December 1, 2014, in all other areas.
* * * * *
    (6) Beginning January 1, 2015, introduce (or permit the 
introduction of) any fuel with a sulfur content greater than 1,000 ppm 
for use in a Category 3 marine vessel within an ECA, except as allowed 
by 40 CFR part 1043. This prohibition is in addition to other 
prohibitions in this section.
* * * * *
    (g) Cause violating fuel or additive to be in the distribution 
system. Cause motor vehicle diesel fuel, NRLM diesel fuel, or ECA 
marine fuel to be in the diesel fuel distribution system which does not 
comply with the applicable standard, dye or marker requirements or the 
product segregation requirements of this subpart I, or cause any fuel 
additive to be in the fuel additive distribution system which does not 
comply with the applicable sulfur standards under Sec.  80.521.


0
34. Section 80.612 is amended by revising paragraph (b) introductory 
text to read as follows:


Sec.  80.612  Who is liable for violations of this subpart?

* * * * *
    (b) Persons liable for failure to comply with other provisions of 
this subpart. Any person who:
* * * * *

0
35. Section 80.613 is amended by revising paragraph (a)(1)(iv) 
introductory text to read as follows:


Sec.  80.613  What defenses apply to persons deemed liable for a 
violation of a prohibited act under this subpart?

    (a) * * *
    (1) * * *
    (iv) For refiners and importers of diesel fuel subject to the 15 
ppm sulfur standard under Sec.  80.510(b) or (c) or Sec.  80.520(a)(1), 
the 500 ppm sulfur standard under Sec.  80.510(a) or Sec.  80.520(c), 
and/or the 1,000 ppm sulfur standard under Sec.  80.510(k), test 
results that--
* * * * *

0
36. Section 80.615 is amended by revising paragraphs (b)(2) and (b)(4) 
to read as follows:


Sec.  80.615  What penalties apply under this subpart?

* * * * *
    (b) * * *
    (2) Any person liable under Sec.  80.612(a)(2) for causing motor 
vehicle diesel fuel, NRLM diesel fuel, ECA marine fuel, heating oil, or 
other distillate fuel to be in the distribution system which does not 
comply with an applicable standard or requirement of this subpart I, 
except as allowed under 40 CFR part 1043, is subject to a separate day 
of violation for each and every day that the noncomplying fuel remains 
any place in the diesel fuel distribution system.
* * * * *
    (4) For purposes of this paragraph (b):
    (i) The length of time the motor vehicle diesel fuel, NRLM diesel 
fuel, ECA marine fuel, heating oil, or other distillate fuel in 
question remained in the diesel fuel distribution system is deemed to 
be 25 days, except as further specified in paragraph (b)(4)(ii) of this 
section.
    (ii) The length of time is deemed not to be 25 days if a person 
subject to liability demonstrates by reasonably specific showings, by 
direct or circumstantial evidence, that the non-complying motor 
vehicle, NR diesel fuel, NRLM diesel fuel, ECA marine fuel, heating 
oil, or distillate fuel remained in the distribution system for fewer 
than or more than 25 days.
* * * * *

PART 85--CONTROL OF AIR POLLUTION FROM MOBILE SOURCES

0
37. The authority citation for part 85 continues to read as follows:

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

Subpart R--[Amended]

0
38. Section 85.1703 is amended by revising the section heading and 
paragraph (a) introductory text to read as follows:


Sec.  85.1703  Definition of motor vehicle.

    (a) For the purpose of determining the applicability of section 
216(2), a vehicle which is self-propelled and capable of transporting a 
person or persons or any material or any permanently or temporarily 
affixed apparatus shall be deemed a motor vehicle, unless any one or 
more of the criteria set forth below are met, in which case the vehicle 
shall be deemed not a motor vehicle:
* * * * *

0
39. A new Sec.  85.1715 is added to subpart R to read as follows:


Sec.  85.1715  Aircraft meeting the definition of motor vehicle.

    This section applies for aircraft meeting the definition of motor 
vehicle in Sec.  85.1703.
    (a) For the purpose of this section, aircraft means any vehicle 
capable of sustained air travel above treetop heights.
    (b) The standards, requirements, and prohibitions of 40 CFR part 86 
do not apply for aircraft or aircraft engines. Standards apply 
separately to certain aircraft engines, as described in 40 CFR part 87.

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

0
40. The authority citation for part 86 continues to read as follows:

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

Subpart A--[Amended]


Sec. Sec.  86.000-15, 86.000-21, 86000-23, 86.000-25, 86.001-1, 86.087-
38, 86.090-8, 86.091-10, 86.094-1. 86.094-15, 86.094-17, 86.094-23, 
86.094-9, 86.096-9, 86.096-10, 86.096-11, 86.096-14, 86.096-23, 86.098-
7, 86.098-8, 86.098-11, 86.098-15, 86.098-17, 86.098-21, 86.098-22, 
86.099-1, and 86.099-30  [Removed]

0
41. Subpart A is amended by removing the following sections: 86.000-15, 
86.000-21, 86.000-23, 86.000-25, 86.001-1, 86.087-38, 86.090-8, 86.091-
10, 86.094-1, 86.094-15, 86.094-17, 86.094-23, 86.094-9, 86.096-9, 
86.096-10, 86.096-11,

[[Page 22978]]

86.096-14, 86.096-23, 86.098-7, 86.098-8, 86.098-11, 86.098-15, 86.098-
17, 86.098-21, 86.098-22, 86.099-1, 86.099-30.


Sec.  86.000-28--[Amended]  


0
42. Section 86.000-28 is amended as follows:
0
a. By removing the introductory text.
0
b. By removing and reserving paragraph (a)(3).
0
c. By removing paragraph (a)(4)(i) introductory text.
0
d. By removing and reserving paragraphs (a)(4)(i)(A) through 
(a)(4)(i)(B)(2)(i).
0
e. By removing paragraphs (a)(4)(i)(B)(2)(iii) through (a)(4)(i)(D)(2).
0
f. By removing and reserving paragraph (a)(4)(ii)(B).
0
g. By removing paragraphs (a)(4)(ii)(C) and (a)(4)(iv) and (v).
0
h. By removing and reserving paragraphs (a)(5) and (a)(6).
0
i. By removing paragraph (a)(7)(i) introductory text.
0
j. By removing and reserving paragraphs (a)(7)(ii) through (b)(4)(i).
0
k. By removing paragraphs (b)(7) through (h).

0
43. Section 86.008-10 is amended by revising paragraph (a)(2) to read 
as follows:


Sec.  86.008-10  Emission standards for 2008 and later model year Otto-
cycle heavy-duty engines and vehicles.

* * * * *
    (a) * * *
    (2) The standards set forth in paragraph (a)(1) of this section 
refer to the exhaust emitted over the operating schedule set forth in 
paragraph (f)(1) of Appendix I to this part, and measured and 
calculated in accordance with the procedures set forth in subpart N or 
P of this part:
    (i) Perform the test interval set forth in paragraph (f)(1) of 
Appendix I of this part with a cold-start according to 40 CFR part 
1065, subpart F. This is the cold-start test interval.
    (ii) Shut down the engine after completing the test interval and 
allow 20 minutes to elapse. This is the hot soak.
    (iii) Repeat the test interval. This is the hot-start test 
interval.
    (iv) Calculate the total emission mass of each constituent, m, and 
the total work, W, over each test interval according to 40 CFR 
1065.650.
    (v) Determine your engine's brake-specific emissions using the 
following calculation, which weights the emissions from the cold-start 
and hot-start test intervals:
[GRAPHIC] [TIFF OMITTED] TR30AP10.000

* * * * *

0
44. Section 86.010-38 is amended by revising paragraphs (j) 
introductory text and (j)(15)(i) introductory text to read as follows:


Sec.  86.010-38  Maintenance instructions.

* * * * *
    (j) The following provisions describe requirements related to 
emission control diagnostic service information for heavy-duty engines 
used in vehicles over 14,000 pounds gross vehicle weight (GVW):
* * * * *
    (15) * * *
    (i) By July 1, 2013, manufacturers shall make available for sale to 
the persons specified in paragraph (j)(3)(i) of this section their own 
manufacturer-specific diagnostic tools at a fair and reasonable cost. 
These tools shall also be made available in a timely fashion either 
through the manufacturer Web site or through a manufacturer-designated 
intermediary. Upon Administrator approval, manufacturers will not be 
required to make available manufacturer-specific tools with 
reconfiguration capabilities if they can demonstrate to the 
satisfaction of the Administrator that these tools are not essential to 
the completion of an emissions-related repair, such as recalibration. 
As a condition of purchase, manufacturers may request that the 
purchaser take all necessary training offered by the engine 
manufacturer. Any required training materials and classes must comply 
with the following:
* * * * *


Sec.  86.091-7  [Amended]

0
45. Section 86.091-7 is amended by removing paragraph (a)(3) and 
removing and reserving paragraphs (c)(3) and (d)(2).


Sec.  86.094-7  [Amended]

0
46. Section 86.094-7 is amended as follows:
0
a. By removing the introductory text.
0
b. By removing and reserving paragraphs (a) introductory text through 
(a)(2).
0
c. By removing and reserving paragraphs (b) through (c)(2), (c)(4) 
through (d)(1)(v), (d)(3) through (g), and (h)(1).
0
d. By removing paragraphs (h)(6) and (i).


Sec.  86.094-14  [Amended]

0
47. Section 86.094-14 is amended as follows:
0
a. By removing paragraph (c)(7)(i)(C)(4).
0
b. By removing and reserving paragraph (c)(11)(ii)(B)(1).
0
c. By removing paragraphs (c)(11)(ii)(B)(16) through (18).
0
d. By removing and reserving paragraphs (c)(11)(ii)(C) and 
(c)(11)(ii)(D)(1) through (6)


Sec.  86.094-21  [Amended]

0
48. Section 86.094-21 is amended by removing and reserving paragraph 
(b)(6).


Sec.  86.094-22  [Amended]

0
49. Section 86.094-22 is amended by removing and reserving paragraph 
(d)(1).


Sec.  86.094-26  [Amended]

0
50. Section 86.094-26 is amended as follows:
0
a. By removing and reserving paragraph (a)(2).
0
b. By removing the text of paragraph (a)(3) introductory text and the 
(a)(3)(i) paragraph heading.
0
c. By removing and reserving paragraphs (a)(3)(i)(A), (a)(3)(i)(C), 
(a)(3)(ii)(C), and (a)(4)(i)(C).
0
d. By removing paragraph (a)(6)(iii).
0
e. By removing and reserving paragraphs (a)(9)(ii) and (b)(2)(i) and 
(ii).
0
f. By removing paragraphs (b)(2)(iv) and (b)(4)(i)(C), and (D).
0
g. By removing and reserving paragraphs (b)(4)(ii), (c), and 
(d)(2)(ii).


Sec.  86.094-28  [Amended]

0
51. Section 86.094-28 is amended as follows:
0
a. By removing and reserving paragraphs (a)(1) and (2).
0
b. By removing the text of paragraphs (a)(4) introductory text and 
(a)(4)(i) introductory text.
0
c. By removing and reserving paragraph (a)(4)(i)(B)(2)(ii).

[[Page 22979]]

0
d. By removing paragraph (a)(4)(i)(C).
0
e. By removing and reserving paragraph (a)(4)(ii) and(iii).
0
f. By removing paragraph (a)(4)(v).
0
g. By removing paragraph and reserving (a)(7) introductory text.
0
h. By removing and reserving paragraphs (a)(7)(i), (b)(1) and (2), and 
(b)(4)(ii).
0
i. By removing paragraphs (b)(4)(iii) and (iv), (b)(5) through (8), and 
(c) and (d).


Sec.  86.094-30  [Amended]

0
52. Section 86.094-30 is amended as follows:
0
a. By removing and reserving paragraphs (a)(3) and (a)(4)(i) and (ii).
0
b. By removing and reserving paragraph (a)(4)(iv) introductory text.
0
c. By removing and reserving paragraphs (a)(10), (11), (13), 
(b)(1)(ii)(B), (b)(1)(ii)(D), and (b)(2).
0
d. By removing and reserving paragraph (b)(4)(ii) introductory text.
0
e. By removing and reserving paragraph (b)(4)(ii)(B).
0
f. By removing paragraphs (b)(4)(iii) and (iv) and (f).


Sec.  86.095-14  [Amended]

0
53. Section 86.095-14 is amended by removing the introductory text and 
removing and reserving paragraphs (a) through (c)(11)(ii)(B)(15) and 
(c)(11)(ii)(D)(7) through (c)(15).


Sec.  86.095-23  [Amended]

0
54. Section 86.095-23 is amended as follows:
0
a. By removing and reserving paragraphs (a) and (b).
0
b. By removing and reserving paragraph (c)(2).
0
c. By removing and reserving paragraphs (d) and (e).
0
d. By removing and reserving paragraphs (h) through (k).


Sec.  86.095-26  [Amended]

0
55. Section 86.095-26 is amended as follows:
0
a. By removing the introductory text.
0
b. By removing and reserving paragraphs (a) through (b)(4)(i)(C) and 
(b)(4)(ii)(C).
0
c. By removing paragraphs (b)(4)(iii) through (d).


Sec.  86.095-30  [Amended]

0
56. Section 86.095-30 is amended as follows:
0
a. By removing the introductory text.
0
b. By removing and reserving paragraphs (a)(1) through (a)(3) and 
(a)(4)(i) through (iii).
0
c. By removing paragraphs (a)(4)(iv)(A) through (C).
0
d. By removing and reserving paragraphs (a)(5) through (12).
0
e. By removing paragraph (a)(14).
0
f. By removing and reserving paragraph (b).
0
g. By removing paragraphs (c) through (f).


Sec.  86.095-35  [Amended]

0
57. Section 86.095-35 is amended as follows:
0
a. By removing the introductory text.
0
b. By removing and reserving paragraphs (a)(2) introductory text 
through (a)(2)(iii)(C).
0
c. By removing and reserving paragraph (c).


Sec.  86.096-7  [Amended]

0
58. Section 86.096-7 is amended as follows:
0
a. By removing the introductory text.
0
b. By removing and reserving paragraphs (a) through (h)(5).
0
c. By removing the heading for paragraph (h)(6) introductory text and 
removing and reserving paragraph (h)(6)(i).
0
d. By removing paragraph (h)(7)(vii).


Sec.  86.096-8  [Amended]

0
59. Section 86.096-8 is amended as follows:
0
a. By removing paragraph (a)(1)(iii).
0
b. By removing and reserving paragraph (a)(2).
0
c. By removing paragraph (a)(3).
0
d. By removing and reserving paragraphs (b) introductory text through 
(b)(4).


Sec.  86.096-21  [Amended]

0
60. Section 86.096-21 is amended by removing the introductory text and 
removing and reserving paragraphs (a) through (j).


Sec.  86.096-24  [Amended]

0
61. Section 86.096-24 is amended as follows:
0
a. By removing and reserving paragraphs (a)(5) through (7), (b)(1)(i) 
and (ii), and (b)(1)(vii).
0
b. By removing and reserving paragraphs (b)(1)(viii) introductory text 
and (b)(1)(viii)(A).
0
c. By removing and reserving paragraph (f).
0
d. By removing paragraph (g)(3).


Sec.  86.096-26  [Amended]

0
62. Section 86.096-26 is amended as follows:
0
a. By removing the introductory text.
0
b. By removing and reserving paragraphs (a) and (b).
0
c. By removing and reserving paragraphs (c)(1) through (c)(3).
0
d. By removing paragraph (d).


Sec.  86.096-30  [Amended]

0
63. Section 86.096-30 is amended as follows:
0
a. By removing the introductory text.
0
b. By removing and reserving paragraphs (a)(1) through (14).
0
c. By removing paragraphs (a)(19) through (24).
0
d. By removing and reserving paragraph (b).
0
e. By removing paragraphs (c) through (f).


Sec.  86.097-9  [Amended]

0
64. Section 86.097-9 is amended as follows:
0
a. By removing paragraph (a)(1)(iv).
0
b. By removing and reserving paragraph (a)(2).
0
c. By removing paragraph (a)(3).
0
d. By removing and reserving paragraphs (b) and (d) through (f).


Sec.  86.098-10  [Amended]

0
65. Section 86.098-10 is amended by removing and reserving paragraph 
(b).


Sec.  86.098-23  [Amended]

0
66. Section 86.098-23 is amended as follows:
0
a. By removing the introductory text.
0
b. By removing and reserving paragraphs (b)(2), (c), and (d)(2).
0
c. By removing paragraph (d)(3).
0
d. By removing and reserving paragraphs (f) through (g) and (l).


Sec.  86.098-24  [Amended]

0
67. Section 86.098-24 is amended as follows:
0
a. By removing the introductory text.
0
b. By removing paragraph (a) introductory text.
0
c. By removing and reserving paragraphs (a)(1) through (4).
0
d. By removing paragraph (a)(8) through (15).
0
e. By removing and reserving paragraphs (b) introductory text and(b)(1) 
introductory text.
0
f. By removing and reserving paragraphs (b)(1)(i) through (vi) and 
(b)(1)(viii)(B).
0
g. By removing paragraphs (b)(1)(ix) through (xii).
0
h. By removing and reserving paragraph (b)(2).
0
i. By removing paragraphs (b)(3) and (c) through (h).


Sec.  86.098-25  [Amended]

0
68. Section 86.098-25 is amended as follows:
0
a. By removing the introductory text.
0
b. By removing and reserving paragraph (a).
0
c. By removing and reserving paragraph (b) introductory text.

[[Page 22980]]

0
d. By removing and reserving paragraphs (b)(1) through (2).
0
e. By removing and reserving paragraph (b)(3) introductory text through 
(b)(3)(vi)(D).
0
f. By removing paragraphs (b)(3)(vii), (b)(4) through (7), and (c) 
through (h).


Sec.  86.098-26  [Amended]

0
69. Section 86.098-26 is amended as follows:
0
a. By removing the introductory text.
0
b. By removing and reserving paragraphs (a)(1) and (2).
0
c. By removing and reserving paragraphs (a)(3) introductory text and 
(a)(3)(i)(A) and (B).
0
d. By removing paragraph (a)(3)(i)(D).
0
e. By removing and reserving paragraph (a)(3)(ii)(A) and (B).
0
h. By removing paragraphs (a)(3)(ii)(D) and (a)(4) through (11).
0
i. By removing and reserving paragraph (b).
0
j. By removing paragraphs (c) through (d).


Sec.  86.098-28  [Amended]

0
70. Section 86.098-28 is amended as follows:
0
a. By removing the introductory text.
0
b. By removing and reserving paragraphs (a)(1) through (a)(3).
0
c. By removing and reserving paragraphs (a)(4)(i) introductory text, 
(a)(4)(i)(A) and (B), and (a)(4)(ii)(A) .
0
d. By removing and reserving paragraphs (a)(4)(iii) and (iv).
0
f. By removing and reserving paragraphs (a)(5) and (6), (a)(7)(i) and 
(ii), and (b).
0
g. By removing paragraphs (c) through (h).


Sec.  86.098-30  [Amended]

0
71. Section 86.098-30 is amended as follows:
0
a. By removing the introductory text.
0
b. By removing and reserving paragraphs (a)(1) through (18), (b)(1), 
and (b)(3).
0
c. By removing and reserving paragraphs (b)(4) introductory text, 
(b)(4)(i), and (b)(4)(ii)(A).
0
d. By removing paragraphs (b)(5) through (f).


Sec.  86.099-8  [Amended]

0
72. Section 86.099-8 is amended as follows:
0
a. By removing the introductory text.
0
b. By removing and reserving paragraph (a)(1) introductory text.
0
c. By removing and reserving paragraphs (a)(1)(i) and (ii), (b)(5), and 
(c).
0
d. By removing paragraphs (e) through (k).


Sec.  86.099-9  [Amended]

0
73. Section 86.099-9 is amended as follows:
0
a. By removing the introductory text.
0
b. By removing and reserving paragraph (a)(1) introductory text.
0
c. By removing and reserving paragraphs (a)(1)(i) through (iii).
0
d. By removing paragraph (c) through (k).

Subpart B--[Amended]

0
74. Section 86.138-96 is amended by revising paragraph (k) to read as 
follows:


Sec.  86.138-96  Hot soak test.

* * * * *
    (k) For the supplemental two-diurnal test sequence (see Sec.  
86.130-96), perform a hot soak test as described in this section, 
except that the test shall be conducted within seven minutes after 
completion of the hot start exhaust test and temperatures throughout 
the hot soak measurement period must be between 68 [deg] and 86 [deg]F. 
This hot soak test is followed by two consecutive diurnal heat builds, 
described in Sec.  86.133-96(p).
* * * * *

0
75. Section 86.144-94 is amended by revising paragraph (c)(7)(ii) to 
read as follows:


Sec.  86.144-94  Calculations; exhaust emissions.

* * * * *
    (c) * * *
    (7) * * *
    (ii) For methanol-fueled vehicles, where fuel composition is 
CxHyOz as measured, or calculated, for 
the fuel used:
[GRAPHIC] [TIFF OMITTED] TR30AP10.001

* * * * *

Subpart E--[Amended]

0
76. Section 86.415-78 is amended by revising paragraph (b) to read as 
follows:


Sec.  86.415-78  Production vehicles.

* * * * *
    (b) Any manufacturer obtaining certification shall notify the 
Administrator of the number of vehicles of each engine family-engine 
displacement-emission control system-fuel system-transmission type-
inertial mass category combination produced for sale in the United 
States during the preceding year. This report must be submitted every 
year within 45 days after the end of the model year.
* * * * *

Subpart G--Selective Enforcement Auditing of New Light-Duty 
Vehicles, Light-Duty Trucks, and Heavy-Duty Vehicles

0
77. The heading for subpart G is revised as set forth above.

0
78. Section 86.601-84 is amended by revising the introductory text to 
read as follows:


Sec.  86.601-84  Applicability.

    The provisions of this subpart apply to light-duty vehicles, light-
duty trucks, and heavy-duty vehicles. However, manufacturers that 
optionally certify heavy-duty vehicles based on chassis testing under 
Sec.  86.1863-07 may choose instead to perform selective enforcement 
audits using the procedures specified in 40 CFR part 1068, subpart E. 
References to ``light-duty vehicle'' or ``LDT'' in this subpart G shall 
be deemed to include light-duty trucks and heavy-duty vehicles as 
appropriate.
* * * * *

0
79. Subpart K, consisting of Sec.  86.1001, is revised to read as 
follows:

Subpart K--Selective Enforcement Auditing of New Heavy-Duty Engines


Sec.  86.1001  Applicability.

    (a) The selective enforcement auditing program described in 40 CFR 
part 1068,

[[Page 22981]]

subpart E, applies for all heavy-duty engines as described in this 
section. In addition, the provisions of 40 CFR 1068.10 and 1068.20 
apply for any selective enforcement audits of these engines.
    (b) For heavy-duty engines, the prescribed test procedure is the 
Federal Test Procedure as described in subparts I, N, and P of this 
part (including provisions of 40 CFR part 1065 as specified in this 
part), except that they shall not be subject to the test procedures 
specified in Sec. Sec.  86.1360(b)(2) and (f), 86.1370, 86.1372, and 
86.1380. The Administrator may, on the basis of a written application 
by a manufacturer, approve optional test procedures other than those in 
subparts I, N, and P of this part for any heavy-duty vehicle which is 
not susceptible to satisfactory testing using the procedures in 
subparts I, N, and P of this part.

Subpart N--[Amended]

0
80. Section 86.1305-2010 is amended by revising paragraph (h)(2) to 
read as follows:


Sec.  86.1305-2010  Introduction; structure of subpart.

* * * * *
    (h) * * *
    (2) Follow the provisions of 40 CFR 1065.342 to verify the 
performance of any sample dryers in your system. Correct your 
measurements according to 40 CFR 1065.659, except use the value of 
Kw in Sec.  86.1342-90(i) as the value of (1-
xH2Oexh) in Equation 1065.659-1.
* * * * *

Subpart T--[Amended]

0
81. Section 86.1910 is amended by revising paragraph (d) to read as 
follows:


Sec.  86.1910  How must I prepare and test my in-use engines?

* * * * *
    (d) You must test the selected engines while they remain installed 
in the vehicle. Use portable emission sampling equipment and field-
testing procedures referenced in Sec.  86.1375. Measure emissions of 
THC, NMHC (by any method specified in 40 CFR part 1065, subpart J), CO, 
NOX, PM (as appropriate), and CO2. Measure or 
determine O2 emissions using good engineering judgment.
* * * * *

PART 94--CONTROL OF EMISSIONS FROM MARINE COMPRESSION-IGNITION 
ENGINES

0
82. The authority citation for part 94 continues to read as follows:

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

Subpart A--[Amended]

0
83. Section 94.1 is amended by revising paragraph (b)(3) to read as 
follows:


Sec.  94.1  Applicability.

* * * * *
    (b) * * *
    (3) Marine engines subject to the standards of 40 CFR part 1042, 
and marine engines that optionally certify (to the Tier 1 or Tier 2 
standards) under the provisions of 40 CFR part 1042. Note that 40 CFR 
1042.1 specifies that marine compression-ignition engines that are not 
certified under this part are subject to 40 CFR part 1042. Such engines 
may also be subject to the standards of this part 94.
* * * * *

0
84. Section 94.12 is amended by adding paragraph (j) to read as 
follows:


Sec.  94.12  Interim provisions.

* * * * *
    (j) Transition to new category thresholds. Beginning model year 
2012, engines with maximum engine power at or below 3700 kW with per-
cylinder displacement at or above 5.0 liters and below 7.0 liters are 
Category 1 engines subject to 40 CFR part 1042. Similarly, beginning 
model year 2014, engines with maximum engine power above 3700 kW with 
per-cylinder displacement at or above 5.0 liters and below 7.0 liters 
are Category 1 engines subject to 40 CFR part 1042. For purposes of 
this paragraph (j), maximum engine power has the meaning given in 40 
CFR 1042.901.

Subpart J--[Amended]

0
85. Section 94.904 is amended by revising paragraph (a) to read as 
follows:


Sec.  94.904  Exemptions.

    (a) Except as specified otherwise in this subpart, the provisions 
of Sec. Sec.  94.904 through 94.913 exempt certain new engines from the 
standards, other requirements, and prohibitions of this part, except 
for the requirements of this subpart and the requirements of Sec.  
94.1104. Additional requirements may apply for imported engines; these 
are described in subpart I of this part. Engines may also be exempted 
from the standards of this part under the provisions of 40 CFR part 
1042 or part 1068.
* * * * *

PART 1027--FEES FOR ENGINE, VEHICLE, AND EQUIPMENT COMPLIANCE 
PROGRAMS

0
86. The authority citation for part 1027 continues to read as follows:

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


0
87. Section 1027.101 is amended as follows:
0
a. By revising paragraph (a)(2)(iii).
0
b. By adding paragraph (a)(4).
0
c. By revising paragraph (d).


Sec.  1027.101  To whom do these requirements apply?

    (a) * * *
    (2) * * *
    (iii) Marine compression-ignition engines we regulate under 40 CFR 
part 94, 1042, or 1043.
* * * * *
    (4) Portable fuel containers we regulate under 40 CFR part 59, 
subpart F.
* * * * *
    (d) Paragraph (a) of this section identifies the parts of the CFR 
that define emission standards and other requirements for particular 
types of engines, vehicles, and fuel-system components. This part 1027 
refers to each of these other parts generically as the ``standard-
setting part.'' For example, 40 CFR part 1051 is always the standard-
setting part for recreational vehicles. For some nonroad engines, we 
allow for certification related to evaporative emissions separate from 
exhaust emissions. In this case, 40 CFR part 1060 is the standard-
setting part for the equipment or fuel system components you produce.

0
88. Section 1027.105 is amended by revising paragraph (b)(3) to read as 
follows:


Sec.  1027.105  How much are the fees?

* * * * *
    (b) * * *
    (3) The following fees apply for nonroad and stationary engines, 
vehicles, equipment, and components:

------------------------------------------------------------------------
             Category                 Certificate type          Fee
------------------------------------------------------------------------
(i) Locomotives and locomotive      All.................            $826
 engines.
(ii) Marine compression-ignition    All, including EIAPP             826
 engines and stationary
 compression-ignition engines with
 per-cylinder displacement at or
 above 10 liters.

[[Page 22982]]


(iii) Other nonroad compression-    All.................           1,822
 ignition engines and stationary
 compression-ignition engines with
 per-cylinder displacement below
 10 liters.
(iv) Large SI engines.............  All.................             826
(v) Stationary spark-ignition       All.................             826
 engines above 19 kW.
(vi) Marine SI engines and Small    Exhaust only........             826
 SI engines.
(vii) Stationary spark-ignition     Exhaust only........             826
 engines at or below 19 kW.
(viii) Recreational vehicles......  Exhaust (or combined             826
                                     exhaust and evap).
(ix) Equipment and fuel-system      Evap (where separate             241
 components associated with          certification is
 nonroad and stationary spark-       required).
 ignition engines, including
 portable fuel containers.
------------------------------------------------------------------------

* * * * *

0
89. Section 1027.115 is amended by revising paragraph (g) to read as 
follows:


Sec.  1027.115  What special provisions apply for certification related 
to nonroad and stationary engines?

* * * * *
    (g) For marine compression-ignition engines, if you apply for a 
Federal certificate and an EIAPP certificate for the same engine 
family, a single fee applies for the engine family (see 40 CFR parts 
94, 1042, and 1043).
* * * * *

0
89b. Section 1027.150 is amended by revising the section heading to 
read as follows and removing the definition of ``Annex VI.''


Sec.  1027.150  What definitions apply to this part?

* * * * *

PART 1033--CONTROL OF EMISSIONS FROM LOCOMOTIVES

0
90. The authority citation for part 1033 continues to read as follows:

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

Subpart A--[Amended]

0
91. Section 1033.15 is amended by revising paragraph (a) to read as 
follows:


Sec.  1033.15  Other regulation parts that apply for locomotives.

    (a) Part 1065 of this chapter describes procedures and equipment 
specifications for testing engines to measure exhaust emissions. 
Subpart F of this part 1033 describes how to apply the provisions of 
part 1065 of this chapter to test locomotives to determine whether they 
meet the exhaust emission standards in this part.
* * * * *
0
92. A new Sec.  1033.30 is added to subpart A to read as follows:


Sec.  1033.30  Submission of information.

    (a) This part includes various requirements to record data or other 
information. Refer to Sec.  1033.925 and 40 CFR 1068.25 regarding 
recordkeeping requirements. Unless we specify otherwise, store these 
records in any format and on any media and keep them readily available 
for one year after you send an associated application for 
certification, or one year after you generate the data if they do not 
support an application for certification. You must promptly send us 
organized, written records in English if we ask for them. We may review 
them at any time.
    (b) The regulations in Sec.  1033.255 and 40 CFR 1068.101 describe 
your obligation to report truthful and complete information and the 
consequences of failing to meet this obligation. This includes 
information not related to certification.
    (c) Send all reports and requests for approval to the Designated 
Compliance Officer (see Sec.  1033.901).
    (d) Any written information we require you to send to or receive 
from another company is deemed to be a required record under this 
section. Such records are also deemed to be submissions to EPA. We may 
require you to send us these records whether or not you are a 
certificate holder.

Subpart B--[Amended]

0
93. Section 1033.101 is amended by revising paragraph (d) to read as 
follows:


Sec.  1033.101  Exhaust emission standards.

* * * * *
    (d) Averaging, banking, and trading. You may generate or use 
emission credits under the averaging, banking, and trading (ABT) 
program as described in subpart H of this part to comply with the 
NOX and/or PM standards of this part. You may also use ABT 
to comply with the Tier 4 HC standards of this part as described in 
paragraph (j) of this section. Generating or using emission credits 
requires that you specify a family emission limit (FEL) for each 
pollutant you include in the ABT program for each engine family. These 
FELs serve as the emission standards for the engine family with respect 
to all required testing instead of the standards specified in 
paragraphs (a) and (b) of this section. FELs may not be higher than the 
following limits:
    (1) FELs for Tier 0 and Tier 1 locomotives originally manufactured 
before 2002 may have any value.
    (2) FELs for Tier 1 locomotives originally manufactured 2002 
through 2004 may not exceed 9.5 g/bhp-hr for NOX emissions 
or 0.60 g/bhp-hr for PM emissions measured over the line-haul duty 
cycle. FELs for these locomotives may not exceed 14.4 g/bhp-hr for 
NOX emissions or 0.72 g/bhp-hr for PM emissions measured 
over the switch duty cycle.
    (3) FELs for Tier 2 and Tier 3 locomotives may not exceed the Tier 
1 standards of this section.
    (4) FELs for Tier 4 locomotives may not exceed the Tier 3 standards 
of this section.
* * * * *

0
94. Section 1033.115 is amended by revising paragraph (f) to read as 
follows:


Sec.  1033.115  Other requirements.

* * * * *
    (f) Defeat devices. You may not equip your locomotives with a 
defeat device. A defeat device is an auxiliary emission control device 
(AECD) that reduces the effectiveness of emission controls under 
conditions that the locomotive may reasonably be expected to encounter 
during normal operation and use.
    (1) This does not apply to AECDs you identify in your application 
for certification if any of the following is true:
    (i) The conditions of concern were substantially included in the 
applicable duty cycle test procedures described in subpart F of this 
part.
    (ii) You show your design is necessary to prevent locomotive damage 
or accidents.
    (iii) The reduced effectiveness applies only to starting the 
locomotive.
    (iv) The locomotive emissions when the AECD is functioning are at 
or below the notch caps of Sec.  1033.101.
    (2) This does not apply to AECDs related to hotel mode that conform 
to the specifications of this paragraph (f)(2). This provision is 
intended for AECDs that have the primary function of operating the 
engine at a different speed than would be done to generate

[[Page 22983]]

the same propulsive power when not operating in hotel mode. Identify 
and describe these AECDs in your application for certification. We may 
allow the AECDs to modify engine calibrations where we determine that 
such modifications are environmentally beneficial or needed for proper 
engine function. You must obtain preliminary approval under Sec.  
1033.210 before incorporating such modifications. Otherwise, you must 
apply the same injection timing and intake air cooling strategies in 
hotel mode and non-hotel mode.
* * * * *

0
95. Section 1033.120 is amended by revising paragraph (c) to read as 
follows:


Sec.  1033.120  Emission-related warranty requirements.

* * * * *
    (c) Components covered. The emission-related warranty covers all 
components whose failure would increase a locomotive's emissions of any 
regulated pollutant. This includes components listed in 40 CFR part 
1068, Appendix I, and components from any other system you develop to 
control emissions. The emission-related warranty covers the components 
you sell even if another company produces the component. Your emission-
related warranty does not need to cover components whose failure would 
not increase a locomotive's emissions of any regulated pollutant. For 
remanufactured locomotives, your emission-related warranty is required 
to cover only those parts that you supply or those parts for which you 
specify allowable part manufacturers. It does not need to cover used 
parts that are not replaced during the remanufacture.
* * * * *

0
95b. Section 1033.150 amended by revising paragraph (a)(4) and 
redesignating paragraph (k)(1) as paragraph (l) to read as follows:


Sec.  1033.150  Interim provisions.

* * * * *
    (a) * * *
    (4) Estimate costs as follows:
    (i) The cost limits described in paragraph (a)(1) of this section 
are specified in terms of 2007 dollars. Adjust these values for future 
years according to the following equation:

Actual Limit = (2007 Limit) x [(0.6000) x (Commodity Index) + (0.4000) 
x (Earnings Index)]

Where:

2007 Limit = The value specified in paragraph (a)(1) of this section 
($250,000 or $125,000).
Commodity Index = The U.S. Bureau of Labor Statistics Producer Price 
Index for Industrial Commodities Less Fuel (Series WPU03T15M05) for 
the month prior to the date you submit your application divided by 
173.1.
Earnings Index = The U.S. Bureau of Labor Statistics Estimated 
Average Hourly Earnings of Production Workers for Durable 
Manufacturing (Series CES3100000008) for the month prior to the date 
you submit your application divided by 18.26.

    (ii) Calculate all costs in current dollars (for the month prior to 
the date you submit your application). Calculate fuel costs based on a 
fuel price adjusted by the Association of American Railroads' monthly 
railroad fuel price index (P), which is available at https://
www.aar.org//media/AAR/RailCostIndexes/Index_MonthlyFuelPrices.ashx. 
(Use the value for the column in which P equals 539.8 for November 
2007.) Calculate a new fuel price using the following equation:

Fuel Price = ($2.76 per gallon) x (P/539.8)
* * * * *

Subpart C--[Amended]

0
96. Section 1033.220 is amended by revising the introductory text and 
paragraph (a) to read as follows:


Sec.  1033.220  Amending maintenance instructions.

    You may amend your emission-related maintenance instructions after 
you submit your application for certification, as long as the amended 
instructions remain consistent with the provisions of Sec.  1033.125. 
You must send the Designated Compliance Officer a request to amend your 
application for certification for an engine family if you want to 
change the emission-related maintenance instructions in a way that 
could affect emissions. In your request, describe the proposed changes 
to the maintenance instructions. If owners/operators follow the 
original maintenance instructions rather than the newly specified 
maintenance, this does not allow you to disqualify those locomotives 
from in-use testing or deny a warranty claim.
    (a) If you are decreasing or eliminating any of the specified 
maintenance, you may distribute the new maintenance instructions to 
your customers 30 days after we receive your request, unless we 
disapprove your request. This would generally include replacing one 
maintenance step with another. We may approve a shorter time or waive 
this requirement.
* * * * *

0
97. Section 1033.225 is amended as follows:
0
a. By revising the introductory text.
0
b. By revising paragraphs (b) introductory text and (b)(2).
0
c. By revising paragraphs (e) and (f).


Sec.  1033.225  Amending applications for certification.

    Before we issue you a certificate of conformity, you may amend your 
application to include new or modified locomotive configurations, 
subject to the provisions of this section. After we have issued your 
certificate of conformity, you may send us an amended application 
requesting that we include new or modified locomotive configurations 
within the scope of the certificate, subject to the provisions of this 
section. You must also amend your application if any changes occur with 
respect to any information that is included or should be included in 
your application. For example, you must amend your application if you 
determine that your actual production variation for an adjustable 
parameter exceeds the tolerances specified in your application.
* * * * *
    (b) To amend your application for certification, send the relevant 
information to the Designated Compliance Officer.
* * * * *
    (2) Include engineering evaluations or data showing that the 
amended engine family complies with all applicable requirements. You 
may do this by showing that the original emission-data locomotive is 
still appropriate for showing that the amended family complies with all 
applicable requirements.
* * * * *
    (e) For engine families already covered by a certificate of 
conformity, you may start producing the new or modified locomotive 
anytime after you send us your amended application, before we make a 
decision under paragraph (d) of this section. However, if we determine 
that the affected locomotives do not meet applicable requirements, we 
will notify you to cease production of the locomotives and may require 
you to recall the locomotives at no expense to the owner. Choosing to 
produce locomotives under this paragraph (e) is deemed to be consent to 
recall all locomotives that we determine do not meet applicable 
emission standards or other requirements and to remedy the 
nonconformity at no expense to the owner. If you do not provide 
information required under paragraph

[[Page 22984]]

(c) of this section within 30 days after we request it, you must stop 
producing the new or modified locomotives.
    (f) You may ask us to approve a change to your FEL in certain cases 
after the start of production. The changed FEL may not apply to 
locomotives you have already introduced into U.S. commerce, except as 
described in this paragraph (f). If we approve a changed FEL after the 
start of production, you must include the new FEL on the emission 
control information label for all locomotives produced after the 
change. You may ask us to approve a change to your FEL in the following 
cases:
    (1) You may ask to raise your FEL for your engine family at any 
time. In your request, you must show that you will still be able to 
meet the emission standards as specified in subparts B and H of this 
part. If you amend your application by submitting new test data to 
include a newly added or modified locomotive, as described in paragraph 
(b)(3) of this section, use the appropriate FELs with corresponding 
production volumes to calculate emission credits for the model year, as 
described in subpart H of this part. In all other circumstances, you 
must use the higher FEL for the entire family to calculate emission 
credits under subpart H of this part.
    (2) You may ask to lower the FEL for your emission family only if 
you have test data from production locomotives showing that emissions 
are below the proposed lower FEL. The lower FEL applies only to engines 
or fuel-system components you produce after we approve the new FEL. Use 
the appropriate FELs with corresponding production volumes to calculate 
emission credits for the model year, as described in subpart H of this 
part.

0
98. Section 1033.235 is amended by revising paragraphs (c) and (d) 
introductory text to read as follows:


Sec.  1033.235  Emission testing required for certification.

* * * * *
    (c) We may measure emissions from any of your emission-data 
locomotives or other locomotives from the engine family.
    (1) We may decide to do the testing at your plant or any other 
facility. If we do this, you must deliver the locomotive to a test 
facility we designate. If we do the testing at your plant, you must 
schedule it as soon as possible and make available the instruments, 
personnel, and equipment we need.
    (2) If we measure emissions from one of your locomotives, the 
results of that testing become the official emission results for the 
locomotive. Unless we later invalidate these data, we may decide not to 
consider your data in determining if your engine family meets 
applicable requirements.
    (3) Before we test one of your locomotives, we may set its 
adjustable parameters to any point within the adjustable ranges (see 
Sec.  1033.115(b)).
    (4) Before we test one of your locomotives, we may calibrate it 
within normal production tolerances for anything we do not consider an 
adjustable parameter. For example, this would apply where we determine 
that an engine parameter is not an adjustable parameter (as defined in 
Sec.  1033.901) but that it is subject to production variability.
    (d) You may ask to use carryover emission data from a previous 
model year instead of doing new tests if all the following are true:
* * * * *

0
99. Section 1033.240 is amended by revising paragraph (a) introductory 
text and paragraph (b) introductory text to read as follows:


Sec.  1033.240  Demonstrating compliance with exhaust emission 
standards.

    (a) For purposes of certification, your engine family is considered 
in compliance with the applicable numerical emission standards in Sec.  
1033.101 if all emission-data locomotives representing that family have 
test results showing official emission results and deteriorated 
emission levels at or below these standards.
* * * * *
    (b) Your engine family is deemed not to comply if any emission-data 
locomotive representing that family has test results showing an 
official emission result or a deteriorated emission level for any 
pollutant that is above an applicable emission standard. Use the 
following steps to determine the deteriorated emission level for the 
test locomotive:
* * * * *

0
100. Section 1033.255 is amended by revising paragraph (b) to read as 
follows:


Sec.  1033.255  EPA decisions.

* * * * *
    (b) We may deny your application for certification if we determine 
that your engine family fails to comply with emission standards or 
other requirements of this part or the Clean Air Act. We will base our 
decision on all available information. If we deny your application, we 
will explain why in writing.
* * * * *

Subpart D--[Amended]

0
101. Section 1033.325 is amended by revising paragraph (d) to read as 
follows:


Sec.  1033.325  Maintenance of records; submittal of information.

* * * * *
    (d) Nothing in this section limits our authority to require you to 
establish, maintain, keep or submit to us information not specified by 
this section. We may also ask you to send less information.
* * * * *

Subpart F--[Amended]

0
102. Section 1033.501 is amended by revising paragraph (i) to read as 
follows:


Sec.  1033.501  General provisions.

* * * * *
    (i) For passenger locomotives that can generate hotel power from 
the main propulsion engine, the locomotive must comply with the 
emission standards when in non-hotel setting. For hotel mode, the 
locomotive is subject to the notch cap provisions of Sec.  1033.101 and 
the defeat device prohibition of Sec.  1033.115.

0
103. Section 1033.505 is amended by revising paragraph (a) to read as 
follows:


Sec.  1033.505  Ambient conditions.

* * * * *
    (a) Temperature. (1) Testing may be performed with ambient 
temperatures from 15.5 [deg]C (60 [deg]F) to 40.5 [deg]C (105 [deg]F). 
Do not correct emissions for temperature effects within this range.
    (2) It is presumed that combustion air will be drawn from the 
ambient air. Thus, the ambient temperature limits of this paragraph (a) 
apply for intake air upstream of the engine. If you do not draw 
combustion air from the ambient air, use good engineering judgment to 
ensure that any temperature difference (between the ambient air and 
combustion air) does not cause the emission measurement to be 
unrepresentative of in-use emissions.
    (3) If we allow you to perform testing at ambient temperatures 
below 15.5 [deg]C, you must correct NOX emissions for 
temperature effects, consistent with good engineering judgment. For 
example, if the intake air temperature (at the manifold) is lower at 
the test temperature than it would be for equivalent operation at an 
ambient temperature of 15.5 [deg]C, you generally will need to adjust 
your measured NOX emissions to account for the effect of the 
lower intake air temperature. However, if you maintain a constant 
manifold air

[[Page 22985]]

temperature, you will generally not need to correct emissions.
* * * * *

0
104. Section 1033.515 is amended by revising the section heading and 
paragraphs (d) and (e) to read as follows:


Sec.  1033.515  Discrete-mode steady-state emission tests of 
locomotives and locomotive engines.

* * * * *
    (d) Use one of the following approaches for sampling PM emissions 
during discrete-mode steady-state testing:
    (1) Engines certified to a PM standard/FEL at or above 0.05 g/bhp-
hr. Use a separate PM filter sample for each test mode of the 
locomotive test cycle according to the procedures specified in 
paragraph (a) through (c) of this section. You may ask to use a shorter 
sampling period if the total mass expected to be collected would cause 
unacceptably high pressure drop across the filter before reaching the 
end of the required sampling time. We will not allow sampling times 
shorter than 60 seconds. When we conduct locomotive emission tests, we 
will adhere to the time limits for each of the numbered modes in Table 
1 to this section.
    (2) Engines certified to a PM standard/FEL below 0.05 g/bhp-hr. (i) 
You may use separate PM filter samples for each test mode as described 
in paragraph (d)(1) of this section; however, we recommend that you do 
not. The low rate of sample filter loading will result in very long 
sampling times and the large number of filter samples may induce 
uncertainty stack-up that will lead to unacceptable PM measurement 
accuracy. Instead, we recommend that you measure PM emissions as 
specified in paragraph (d)(2)(ii) of this section.
    (ii) You may use a single PM filter for sampling PM over all of the 
test modes of the locomotive test cycle as specified in this paragraph 
(d)(2). Vary the sample time to be proportional to the applicable line-
haul or switch weighting factors specified in Sec.  1033.530 for each 
mode. The minimum sampling time for each mode is 400 seconds multiplied 
by the weighting factor. For example, for a mode with a weighting 
factor of 0.030, the minimum sampling time is 12.0 seconds. PM sampling 
in each mode must be proportional to engine exhaust flow as specified 
in 40 CFR part 1065. Begin proportional sampling of PM emissions at the 
beginning of each test mode as is specified in paragraph (c) of this 
section. End the sampling period for each test mode so that sampling 
times are proportional to the weighting factors for the applicable duty 
cycles. If necessary, you may extend the time limit for each of the 
test modes beyond the sampling times in Table 1 to this section to 
increase the sampled mass of PM emissions or to account for proper 
weighting of the PM emission sample over the entire cycle, using good 
engineering judgment.
    (e) This paragraph (e) describes how to test locomotive engines 
when not installed in a locomotive. Note that the test procedures for 
dynamometer engine testing of locomotive engines are intended to 
produce emission measurements that are the same as emission 
measurements produced during testing of complete locomotives using the 
same engine configuration. The following requirements apply for all 
engine tests:
    (1) Specify a second-by-second set of engine speed and load points 
that are representative of in-use locomotive operation for each of the 
set-points of the locomotive test cycle described in Table 1 to this 
section, including transitions from one notch to the next. This is your 
reference cycle for validating your cycle. You may ignore points 
between the end of the sampling period for one mode and the point at 
which you change the notch setting to begin the next mode.
    (2) Keep the temperature of the air entering the engine after any 
charge air cooling to within 5 [deg]C of the typical intake manifold 
air temperature when the engine is operated in the locomotive under 
similar ambient conditions.
    (3) Proceed as specified in paragraphs (a) through (d) of this 
section for testing complete locomotives.

0
105. Section 1033.530 is amended by revising paragraphs (e) and (h) to 
read as follows:


Sec.  1033.530  Duty cycles and calculations.

* * * * *
    (e) Automated Start-Stop. For a locomotive equipped with features 
that shut the engine off after prolonged periods of idle, multiply the 
measured idle mass emission rate over the idle portion of the 
applicable test cycles by a factor equal to one minus the estimated 
fraction reduction in idling time that will result in use from the 
shutdown feature. Do not apply this factor to the weighted idle power. 
Application of this adjustment is subject to our approval if the 
fraction reduction in idling time that is estimated to result from the 
shutdown feature is greater than 25 percent. This paragraph (e) does 
not apply if the locomotive is (or will be) covered by a separate 
certificate for idle control.
* * * * *
    (h) Calculation adjustments for energy-saving design features. The 
provisions of this paragraph (h) apply for locomotives equipped with 
new energy-saving locomotive design features. They do not apply for 
features that only improve the engine's brake-specific fuel 
consumption. They also do not apply for features that were commonly 
incorporated in locomotives before 2008. See paragraph (h)(6) of this 
section for provisions related to determining whether certain features 
are considered to have been commonly incorporated in locomotives before 
2008.
    (1) Manufacturers/remanufacturers choosing to adjust emissions 
under this paragraph (h) must do all of the following for 
certification:
    (i) Describe the energy-saving features in your application for 
certification.
    (ii) Describe in your installation instruction and/or maintenance 
instructions all steps necessary to utilize the energy-saving features.
    (2) If your design feature will also affect the locomotives' duty 
cycle, you must comply with the requirements of paragraph (g) of this 
section.
    (3) Calculate the energy savings as follows:
    (i) Estimate the expected mean in-use fuel consumption rate (on a 
BTU per ton-mile basis) with and without the energy saving design 
feature, consistent with the specifications of paragraph (h)(4) of this 
section. The energy savings is the ratio of fuel consumed from a 
locomotive operating with the new feature to fuel consumed from a 
locomotive operating without the feature under identical conditions. 
Include an estimate of the 80 percent confidence interval for your 
estimate of the mean and other statistical parameters we specify.
    (ii) Your estimate must be based on in-use operating data, 
consistent with good engineering judgment. Where we have previously 
certified your design feature under this paragraph (h), we may require 
you to update your analysis based on all new data that are available. 
You must obtain approval before you begin collecting operational data 
for this purpose.
    (iii) We may allow you to consider the effects of your design 
feature separately for different route types, regions, or railroads. We 
may require that you certify these different locomotives in different 
engine families and may restrict their use to the specified 
applications.
    (iv) Design your test plan so that the operation of the locomotives 
with and without is as similar as possible in all material aspects 
(other than the design

[[Page 22986]]

feature being evaluated). Correct all data for any relevant 
differences, consistent with good engineering judgment.
    (v) Do not include any brake-specific energy savings in your 
calculated values. If it is not possible to exclude such effects from 
your data gathering, you must correct for these effects, consistent 
with good engineering judgment.
    (4) Calculate adjustment factors as described in this paragraph 
(h)(4). If the energy savings will apply broadly, calculate and apply 
the adjustment on a cycle-weighted basis. Otherwise, calculate and 
apply the adjustment separately for each notch. To apply the 
adjustment, multiply the emissions (either cycle-weighted or notch-
specific, as applicable) by the adjustment. Use the lower bound of the 
80 percent confidence interval of the estimate of the mean as your 
estimated energy savings rate. We may cap your energy savings rate for 
this paragraph (h)(4) at 80 percent of the estimate of the mean. 
Calculate the emission adjustment factors as:

AF = 1.000 - (energy savings rate)

    (5) We may require you to collect and report data from locomotives 
we allow you to certify under this paragraph (h) and to recalculate the 
adjustment factor for future model years based on such data.
    (6) Features that are considered to have not been commonly 
incorporated in locomotives before 2008 include but are not limited to 
those identified in this paragraph (h)(6).
    (i) Electronically controlled pneumatic (ECP) brakes, computerized 
throttle management control, and advanced hybrid technology were not 
commonly incorporated in locomotives before 2008. Manufacturers may 
claim full credit for energy savings that result from applying these 
features to freshly manufactured and/or remanufactured locomotives.
    (ii) Distributed power systems that use radio controls to optimize 
operation of locomotives in the middle and rear of a train were 
commonly incorporated in some but not all locomotives in 2008. 
Manufacturers may claim credit for incorporating these features into 
locomotives as follows:
    (A) Manufacturers may claim prorated credit for incorporating 
distributed power systems in freshly manufactured locomotives. Multiply 
the energy saving rate by 0.50 when calculating the adjustment factor:

AF = 1.000-(energy savings rate) x (0.50)

    (B) Manufacturers may claim full credit for retrofitting 
distributed power systems in remanufactured locomotives.

Subpart G--[Amended]

0
106. Section 1033.601 is amended by revising paragraph (a) to read as 
follows:


Sec.  1033.601  General compliance provisions.

* * * * *
    (a) Meaning of terms. When used in 40 CFR part 1068, apply meanings 
for specific terms as follows:
    (1) ``Manufacturer'' means manufacturer and/or remanufacturer.
    (2) ``Date of manufacture'' means date of original manufacture for 
freshly manufactured locomotives and the date on which a remanufacture 
is completed for remanufactured engines.
* * * * *

0
107. Section 1033.625 is amended by revising paragraphs (a)(1), (b), 
and (c) to read as follows:


Sec.  1033.625  Special certification provisions for non-locomotive-
specific engines.

* * * * *
    (a) * * *
    (1) Before being installed in the locomotive, the engines were 
covered by a certificate of conformity issued under 40 CFR Part 1039 
(or part 89) that is effective for the calendar year in which the 
manufacture or remanufacture occurs. You may use engines certified 
during the previous years if they were subject to the same standards. 
You may not make any modifications to the engines unless we approve 
them.
* * * * *
    (b) To certify your locomotives by design under this section, 
submit your application as specified in Sec.  1033.205, with the 
following exceptions:
    (1) Include the following instead of the locomotive test data 
otherwise required by Sec.  1033.205:
    (i) A description of the engines to be used, including the name of 
the engine manufacturer and engine family identifier for the engines.
    (ii) A brief engineering analysis describing how the engine's 
emission controls will function when installed in the locomotive 
throughout the locomotive's useful life.
    (iii) The emission data submitted under 40 CFR part 1039 (or part 
89).
    (2) You may separately submit some of the information required by 
Sec.  1033.205, consistent with the provisions of Sec.  1033.1(d). For 
example, this may be an appropriate way to submit detailed information 
about proprietary engine software. Note that this allowance to 
separately submit some of the information required by Sec.  1033.205 is 
also available for applications not submitted under this section.
    (c) Locomotives certified under this section are subject to all the 
requirements of this part except as specified in paragraph (b) of this 
section. The engines used in such locomotives are not considered to be 
included in the otherwise applicable engines family of 40 CFR part 1039 
(or part 89).
* * * * *

0
108. A new Sec.  1033.652 is added to subpart G to read as follows:


Sec.  1033.652  Special provisions for exported locomotives.

    (a) Uncertified locomotives. Locomotives covered by an export 
exemption under 40 CFR 1068.230 may be introduced into U.S. commerce 
prior to being exported, but may not be used in any revenue generating 
service in the United States. Locomotives covered by this paragraph (a) 
may not include any EPA emission control information label. Such 
locomotives may include emission control information labels for the 
country to which they are being exported.
    (b) Locomotives covered by export-only certificates. Locomotives 
may be certified for export under 40 CFR 1068.230. Such locomotives may 
be introduced into U.S. commerce prior to being exported, but may not 
be used in any revenue generating service in the United States.
    (c) Locomotives included in a certified engine family. Except as 
specified in paragraph (d) of this section, locomotives included in a 
certified engine family may be exported without restriction. Note that 
Sec.  1033.705 requires that exported locomotives be excluded from 
emission credit calculations in certain circumstances.
    (d) Locomotives certified to FELs above the standards. The 
provisions of this paragraph (d) apply for locomotive configurations 
included in engine families certified to one or more FELs above any 
otherwise applicable standard. Individual locomotives that will be 
exported may be excluded from an engine family if they are unlabeled. 
For locomotives that were labeled during production, you may remove the 
emission control information labels prior to export. All unlabeled 
locomotives that will be exported are subject to the provisions of 
paragraph (a) of this section. Locomotives that are of a configuration 
included in an engine family certified to one of more FELs above any 
otherwise applicable standard that include an EPA emission control 
information label when exported

[[Page 22987]]

are considered to be part of the engine family and must be included in 
credit calculations under Sec.  1033.705. Note that this requirement 
does not apply for locomotives that do not have an EPA emission control 
information label, even if they have other labels (such as an export-
only label).

Subpart H--[Amended]

0
109. Section 1033.705 is amended by revising paragraph (b) introductory 
text to read as follows:


Sec.  1033.705  Calculating emission credits.

* * * * *
    (b) For each participating engine family, calculate positive or 
negative emission credits relative to the otherwise applicable emission 
standard. For the end of year report, round the sum of emission credits 
to the nearest one hundredth of a megagram (0.01 Mg). Round your end of 
year emission credit balance to the nearest megagram (Mg). Use 
consistent units throughout the calculation. When useful life is 
expressed in terms of megawatt-hrs, calculate credits for each engine 
family from the following equation:
* * * * *

0
110. Section 1033.715 is revised to read as follows:


Sec.  1033.715  Banking emission credits.

    (a) Banking is the retention of emission credits by the 
manufacturer/remanufacturer generating the emission credits (or owner/
operator, in the case of transferred credits) for use in future model 
years for averaging, trading, or transferring. You may use banked 
emission credits only as allowed by Sec.  1033.740.
    (b) You may designate any emission credits you plan to bank in the 
reports you submit under Sec.  1033.730 as reserved credits. During the 
model year and before the due date for the final report, you may 
designate your reserved emission credits for averaging, trading, or 
transferring.
    (c) Reserved credits become actual emission credits when you submit 
your final report. However, we may revoke these emission credits if we 
are unable to verify them after reviewing your reports or auditing your 
records.

0
111. Section 1033.725 is amended by revising paragraph (b)(2) to read 
as follows:


Sec.  1033.725  Requirements for your application for certification.

* * * * *
    (b) * * *
    (2) Detailed calculations of projected emission credits (positive 
or negative) based on projected production volumes. We may require you 
to include similar calculations from your other engine families to 
demonstrate that you will be able to avoid a negative credit balance 
for the model year. If you project negative emission credits for a 
family, state the source of positive emission credits you expect to use 
to offset the negative emission credits.

0
112. Section 1033.730 is amended by revising paragraphs (b)(3) and 
(b)(5) to read as follows:


Sec.  1033.730  ABT reports.

* * * * *
    (b) * * *
    (3) The FEL for each pollutant. If you change the FEL after the 
start of production, identify the date that you started using the new 
FEL and/or give the engine identification number for the first engine 
covered by the new FEL. In this case, identify each applicable FEL and 
calculate the positive or negative emission credits as specified in 
Sec.  1033.225.
* * * * *
    (5) Rated power for each locomotive configuration, and the average 
locomotive power weighted by U.S.-directed production volumes for the 
engine family.
* * * * *

0
113. Section 1033.735 is amended by revising paragraphs (b), (d), and 
(e) to read as follows:


Sec.  1033.735  Required records.

* * * * *
    (b) Keep the records required by this section for at least eight 
years after the due date for the end-of-year report. You may not use 
emission credits for any engines if you do not keep all the records 
required under this section. You must therefore keep these records to 
continue to bank valid credits. Store these records in any format and 
on any media, as long as you can promptly send us organized, written 
records in English if we ask for them. You must keep these records 
readily available. We may review them at any time.
* * * * *
    (d) Keep records of the engine identification number for each 
locomotive you produce that generates or uses emission credits under 
the ABT program. If you change the FEL after the start of production, 
identify the date you started using each FEL and the range of engine 
identification numbers associated with each FEL. You must also be able 
to identify the purchaser and destination for each engine you produce.
    (e) We may require you to keep additional records or to send us 
relevant information not required by this section in accordance with 
the Clean Air Act.

Subpart J--[Amended]

0
114. Section 1033.901 is amended by revising the definitions for 
``Carryover'', ``Total hydrocarbon equivalent'', and ``Useful life'' 
and adding a new definition for ``Alcohol-fueled locomotive'' in 
alphabetical order to read as follows:


Sec.  1033.901  Definitions.

* * * * *
    Alcohol-fueled locomotive means a locomotive with an engine that is 
designed to run using an alcohol fuel. For purposes of this definition, 
alcohol fuels do not include fuels with a nominal alcohol content below 
25 percent by volume.
* * * * *
    Carryover means relating to certification based on emission data 
generated from an earlier model year as described in Sec.  1033.235(d).
* * * * *
    Total hydrocarbon equivalent has the meaning given in 40 CFR 
1065.1001. This generally means the sum of the carbon mass 
contributions of non-oxygenated hydrocarbons, alcohols and aldehydes, 
or other organic compounds that are measured separately as contained in 
a gas sample, expressed as exhaust hydrocarbon from petroleum-fueled 
locomotives. The atomic hydrogen-to-carbon mass ratio of the equivalent 
hydrocarbon is 1.85:1.
* * * * *
    Useful life means the period during which the locomotive engine is 
designed to properly function in terms of reliability and fuel 
consumption, without being remanufactured, specified as work output or 
miles. It is the period during which a locomotive is required to comply 
with all applicable emission standards. See Sec.  1033.101(g).
* * * * *

0
115. Section 1033.905 is amended by adding ``ABT'', ``AF'', and U.S.'' 
in alphabetical order to read as follows:


Sec.  1033.925  Symbols, acronyms, and abbreviations.

* * * * *
ABT averaging, banking, and trading.
* * * * *
AF adjustment factor (see Sec.  1033.530).
* * * * *
U.S. United States.
* * * * *

0
116. A new Sec.  1033.925 is added to subpart J to read as follows:

[[Page 22988]]

Sec.  1033.925  Reporting and recordkeeping requirements.

    Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the 
Office of Management and Budget approves the reporting and 
recordkeeping specified in the applicable regulations. Failing to 
properly report information and keep the records we specify violates 40 
CFR 1068.101(a)(2), which may involve civil or criminal penalties. The 
following items illustrate the kind of reporting and recordkeeping we 
require for engines regulated under this part:
    (a) We specify the following requirements related to engine 
certification in this part 1033:
    (1) In Sec.  1033.150 we state the requirements for interim 
provisions.
    (2) In subpart C of this part we identify a wide range of 
information required to certify engines.
    (3) In Sec.  1033.325 we specify certain records related to 
production-line testing.
    (4) In subpart G of this part we identify several reporting and 
recordkeeping items for making demonstrations and getting approval 
related to various special compliance provisions.
    (5) In Sec. Sec.  1033.725, 1033.730, and 1033.735 we specify 
certain records related to averaging, banking, and trading.
    (6) In subpart I of this part we specify certain records related to 
meeting requirements for remanufactured engines.
    (b) We specify the following requirements related to testing in 40 
CFR part 1065:
    (1) In 40 CFR 1065.2 we give an overview of principles for 
reporting information.
    (2) In 40 CFR 1065.10 and 1065.12 we specify information needs for 
establishing various changes to published test procedures.
    (3) In 40 CFR 1065.25 we establish basic guidelines for storing 
test information.
    (4) In 40 CFR 1065.695 we identify the specific information and 
data items to record when measuring emissions.
    (c) We specify the following requirements related to the general 
compliance provisions in 40 CFR part 1068:
    (1) In 40 CFR 1068.5 we establish a process for evaluating good 
engineering judgment related to testing and certification.
    (2) In 40 CFR 1068.25 we describe general provisions related to 
sending and keeping information.
    (3) In 40 CFR 1068.27 we require manufacturers to make engines 
available for our testing or inspection if we make such a request.
    (4) In 40 CFR 1068.105 we require vessel manufacturers to keep 
certain records related to duplicate labels from engine manufacturers.
    (5) In 40 CFR 1068.120 we specify recordkeeping related to 
rebuilding engines.
    (6) In 40 CFR part 1068, subpart C, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to various exemptions.
    (7) In 40 CFR part 1068, subpart D, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to importing engines.
    (8) In 40 CFR 1068.450 and 1068.455 we specify certain records 
related to testing production-line engines in a selective enforcement 
audit.
    (9) In 40 CFR 1068.501 we specify certain records related to 
investigating and reporting emission-related defects.
    (10) In 40 CFR 1068.525 and 1068.530 we specify certain records 
related to recalling nonconforming engines.

PART 1039--CONTROL OF EMISSIONS FROM NEW AND IN-USE NONROAD 
COMPRESSION-IGNITION ENGINES

0
117. The authority citation for part 1039 continues to read as follows:

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

Subpart A--[Amended]

0
118. Section 1039.2 is revised to read as follows:


Sec.  1039.2  Who is responsible for compliance?

    The regulations in this part 1039 contain provisions that affect 
both engine manufacturers and others. However, the requirements of this 
part are generally addressed to the engine manufacturer. The term 
``you'' generally means the engine manufacturer, as defined in Sec.  
1039.801, especially for issues related to certification.

0
119. Section 1039.5 is amended by revising paragraph (a) to read as 
follows:


Sec.  1039.5  Which engines are excluded from this part's requirements?

* * * * *
    (a) Locomotive engines. (1) The following locomotive engines are 
not subject to the provisions of this part 1039:
    (i) Engines in locomotives certified under 40 CFR part 1033.
    (ii) Engines in locomotives that are exempt from the standards of 
40 CFR part 92 or 1033 pursuant to the provisions of 40 CFR part 1033 
or 1068 (except for the provisions of 40 CFR 1033.150(e)).
    (2) The following locomotive engines are subject to the provisions 
of this part 1039:
    (i) Engines in locomotives exempt from 40 CFR part 1033 pursuant to 
the provisions of 40 CFR 1033.150(e).
    (ii) Locomotive engines excluded from the definition of locomotive 
in 40 CFR 1033.901.
* * * * *

0
120. Section 1039.15 is amended by revising paragraph (a) to read as 
follows:


Sec.  1039.15  Do any other regulation parts apply to me?

    (a) Part 1065 of this chapter describes procedures and equipment 
specifications for testing engines to measure exhaust emissions. 
Subpart F of this part 1039 describes how to apply the provisions of 
part 1065 of this chapter to determine whether engines meet the exhaust 
emission standards in this part.
* * * * *

0
121. A new Sec.  1039.30 is added to subpart A to read as follows:


Sec.  1039.30  Submission of information.

    (a) This part includes various requirements to record data or other 
information. Refer to Sec.  1039.825 and 40 CFR 1068.25 regarding 
recordkeeping requirements. Unless we specify otherwise, store these 
records in any format and on any media and keep them readily available 
for one year after you send an associated application for 
certification, or one year after you generate the data if they do not 
support an application for certification. You must promptly send us 
organized, written records in English if we ask for them. We may review 
them at any time.
    (b) The regulations in Sec.  1039.255 and 40 CFR 1068.101 describe 
your obligation to report truthful and complete information and the 
consequences of failing to meet this obligation. This includes 
information not related to certification.
    (c) Send all reports and requests for approval to the Designated 
Compliance Officer (see Sec.  1039.801).
    (d) Any written information we require you to send to or receive 
from another company is deemed to be a required record under this 
section. Such records are also deemed to be submissions to EPA. We may 
require you to send us these records whether or not you are a 
certificate holder.

Subpart B--[Amended]

0
122. Section 1039.104 is amended by adding paragraph (h) to read as 
follows:

[[Page 22989]]

Sec.  1039.104  Are there interim provisions that apply only for a 
limited time?

* * * * *
    (h) Delayed compliance with labeling requirements. Before the 2011 
model year, you may omit the dates of manufacture from the emission 
control information label as specified in Sec.  1039.135(c)(6) if you 
keep those records and provide them to us upon request.

0
123. Section 1039.120 is amended by revising paragraph (c) to read as 
follows:


Sec.  1039.120  What emission-related warranty requirements apply to 
me?

* * * * *
    (c) Components covered. The emission-related warranty covers all 
components whose failure would increase an engine's emissions of any 
regulated pollutant, including components listed in 40 CFR part 1068, 
Appendix I, and components from any other system you develop to control 
emissions. The emission-related warranty covers these components even 
if another company produces the component. Your emission-related 
warranty does not need to cover components whose failure would not 
increase an engine's emissions of any regulated pollutant.
* * * * *

0
124. Section 1039.125 is amended as follows:
0
a. By revising paragraphs (a)(1)(iii), (a)(2)(ii), and (a)(3)(ii).
0
b. By redesignating paragraph (a)(4) as paragraph (a)(6).
0
c. By adding a new paragraph (a)(4).
0
d. By adding paragraph (a)(5).
0
e. By revising paragraphs (c), (d), and (g) introductory text to read 
as follows:


Sec.  1039.125  What maintenance instructions must I give to buyers?

* * * * *
    (a) * * *
    (1) * * *
    (iii) You provide the maintenance free of charge and clearly say so 
in your maintenance instructions.
* * * * *
    (2) * * *
    (ii) For the following components, including associated sensors and 
actuators, the minimum interval is 3,000 hours: Fuel injectors, 
turbochargers, catalytic converters, electronic control units, EGR 
systems (including related components, but excluding filters and 
coolers), and other add-on components.
    (3) * * *
    (ii) For the following components, including associated sensors and 
actuators, the minimum interval is 4,500 hours: Fuel injectors, 
turbochargers, catalytic converters, electronic control units, EGR 
systems (including related components, but excluding filters and 
coolers), and other add-on components.
    (4) For particulate traps, trap oxidizers, and components related 
to either of these, scheduled maintenance may include cleaning or 
repair at the intervals specified in paragraph (a)(2) or (3) of this 
section, as applicable. Scheduled maintenance may include a shorter 
interval for cleaning or repair and may also include adjustment or 
replacement, but only if we approve it. We will approve your request if 
you provide the maintenance free of charge and clearly state this in 
your maintenance instructions, and you provide us additional 
information as needed to convince us that the maintenance will occur.
    (5) You may ask us to approve a maintenance interval shorter than 
that specified in paragraphs (a)(2) and (3) of this section under Sec.  
1039.210, including emission-related components that were not in 
widespread use with nonroad compression-ignition engines before 2011. 
In your request you must describe the proposed maintenance step, 
recommend the maximum feasible interval for this maintenance, include 
your rationale with supporting evidence to support the need for the 
maintenance at the recommended interval, and demonstrate that the 
maintenance will be done at the recommended interval on in-use engines. 
In considering your request, we will evaluate the information you 
provide and any other available information to establish alternate 
specifications for maintenance intervals, if appropriate. We will 
announce any decision we make under this paragraph (a)(5) in the 
Federal Register. Anyone may request a hearing regarding such a 
decision (see Sec.  1039.820).
* * * * *
    (c) Special maintenance. You may specify more frequent maintenance 
to address problems related to special situations, such as atypical 
engine operation. You must clearly state that this additional 
maintenance is associated with the special situation you are 
addressing. We may disapprove your maintenance instructions if we 
determine that you have specified special maintenance steps to address 
engine operation that is not atypical, or that the maintenance is 
unlikely to occur in use. If we determine that certain maintenance 
items do not qualify as special maintenance under this paragraph (c), 
you may identify this as recommended additional maintenance under 
paragraph (b) of this section.
    (d) Noncritical emission-related maintenance. Subject to the 
provisions of this paragraph (d), you may schedule any amount of 
emission-related inspection or maintenance that is not covered by 
paragraph (a) of this section (that is, maintenance that is neither 
explicitly identified as critical emission-related maintenance, nor 
that we approve as critical emission-related maintenance). Noncritical 
emission-related maintenance generally includes maintenance on the 
components we specify in 40 CFR part 1068, Appendix I, that is not 
covered in paragraph (a) of this section. You must state in the owners 
manual that these steps are not necessary to keep the emission-related 
warranty valid. If operators fail to do this maintenance, this does not 
allow you to disqualify those engines from in-use testing or deny a 
warranty claim. Do not take these inspection or maintenance steps 
during service accumulation on your emission-data engines.
* * * * *
    (g) Payment for scheduled maintenance. Owners are responsible for 
properly maintaining their engines. This generally includes paying for 
scheduled maintenance. However, manufacturers must pay for scheduled 
maintenance during the useful life if the regulations require it or if 
it meets all the following criteria:
* * * * *


0
125. Section 1039.135 is amended by revising paragraphs (c)(6) and 
(c)(8) to read as follows:


Sec.  1039.135  How must I label and identify the engines I produce?

* * * * *
    (c) * * *
    (6) State the date of manufacture [DAY (optional), MONTH, and 
YEAR]; however, you may omit this from the label if you stamp, engrave, 
or otherwise permanently identify it elsewhere on the engine, in which 
case you must also describe in your application for certification where 
you will identify the date on the engine.
* * * * *
    (8) Identify the emission-control system. Use terms and 
abbreviations as described in 40 CFR 1068.45. You may omit this 
information from the label if there is not enough room for it and you 
put it in the owners manual instead.
* * * * *

[[Page 22990]]

Subpart C--[Amended]

0
126. Section 1039.201 is amended by adding paragraph (h) to read as 
follows:


Sec.  1039.201  What are the general requirements for obtaining a 
certificate of conformity?

* * * * *
    (h) For engines that become new after being placed into service, 
such as engines converted to nonroad use after being used in motor 
vehicles, we may specify alternate certification provisions consistent 
with the intent of this part. See the definition of ``new nonroad 
engine'' in Sec.  1039.801.


0
127. Section 1039.220 is revised to read as follows:


Sec.  1039.220  How do I amend the maintenance instructions in my 
application?

    You may amend your emission-related maintenance instructions after 
you submit your application for certification as long as the amended 
instructions remain consistent with the provisions of Sec.  1039.125. 
You must send the Designated Compliance Officer a written request to 
amend your application for certification for an engine family if you 
want to change the emission-related maintenance instructions in a way 
that could affect emissions. In your request, describe the proposed 
changes to the maintenance instructions. If operators follow the 
original maintenance instructions rather than the newly specified 
maintenance, this does not allow you to disqualify those engines from 
in-use testing or deny a warranty claim.
    (a) If you are decreasing or eliminating any specified maintenance, 
you may distribute the new maintenance instructions to your customers 
30 days after we receive your request, unless we disapprove your 
request. This would generally include replacing one maintenance step 
with another. We may approve a shorter time or waive this requirement.
    (b) If your requested change would not decrease the specified 
maintenance, you may distribute the new maintenance instructions 
anytime after you send your request. For example, this paragraph (b) 
would cover adding instructions to increase the frequency of filter 
changes for engines in severe-duty applications.
    (c) You need not request approval if you are making only minor 
corrections (such as correcting typographical mistakes), clarifying 
your maintenance instructions, or changing instructions for maintenance 
unrelated to emission control. We may ask you to send us copies of 
maintenance instructions revised under this paragraph (c).

0
128. Section 1039.225 is amended by revising the section heading, the 
introductory text, and paragraphs (b) introductory text, (b)(2), (e), 
and (f) to read as follows:


Sec.  1039.225  How do I amend my application for certification?

    Before we issue you a certificate of conformity, you may amend your 
application to include new or modified engine configurations, subject 
to the provisions of this section. After we have issued your 
certificate of conformity, you may send us an amended application 
requesting that we include new or modified engine configurations within 
the scope of the certificate, subject to the provisions of this 
section. You must amend your application if any changes occur with 
respect to any information that is included or should be included in 
your application.
* * * * *
    (b) To amend your application for certification, send the relevant 
information to the Designated Compliance Officer.
* * * * *
    (2) Include engineering evaluations or data showing that the 
amended engine family complies with all applicable requirements. You 
may do this by showing that the original emission-data engine is still 
appropriate for showing that the amended family complies with all 
applicable requirements.
* * * * *
    (e) For engine families already covered by a certificate of 
conformity, you may start producing the new or modified engine 
configuration anytime after you send us your amended application and 
before we make a decision under paragraph (d) of this section. However, 
if we determine that the affected engines do not meet applicable 
requirements, we will notify you to cease production of the engines and 
may require you to recall the engines at no expense to the owner. 
Choosing to produce engines under this paragraph (e) is deemed to be 
consent to recall all engines that we determine do not meet applicable 
emission standards or other requirements and to remedy the 
nonconformity at no expense to the owner. If you do not provide 
information required under paragraph (c) of this section within 30 days 
after we request it, you must stop producing the new or modified 
engines.
    (f) You may ask us to approve a change to your FEL in certain cases 
after the start of production. The changed FEL may not apply to engines 
you have already introduced into U.S. commerce, except as described in 
this paragraph (f). If we approve a changed FEL after the start of 
production, you must include the new FEL on the emission control 
information label for all engines produced after the change. You may 
ask us to approve a change to your FEL in the following cases:
    (1) You may ask to raise your FEL for your engine family at any 
time. In your request, you must show that you will still be able to 
meet the emission standards as specified in subparts B and H of this 
part. If you amend your application by submitting new test data to 
include a newly added or modified engine, as described in paragraph 
(b)(3) of this section, use the appropriate FELs with corresponding 
production volumes to calculate emission credits for the model year, as 
described in subpart H of this part. In all other circumstances, you 
must use the higher FEL for the entire engine family to calculate 
emission credits under subpart H of this part.
    (2) You may ask to lower the FEL for your engine family only if you 
have test data from production engines showing that emissions are below 
the proposed lower FEL. The lower FEL applies only to engines you 
produce after we approve the new FEL. Use the appropriate FELs with 
corresponding production volumes to calculate emission credits for the 
model year, as described in subpart H of this part.

0
129. Section 1039.230 is amended by revising paragraphs (b) and (d) to 
read as follows:


Sec.  1039.230  How do I select engine families?

* * * * *
    (b) Group engines in the same engine family if they are the same in 
all the following aspects:
    (1) The combustion cycle and fuel.
    (2) The cooling system (water-cooled vs. air-cooled).
    (3) Method of air aspiration.
    (4) Method of exhaust aftertreatment (for example, catalytic 
converter or particulate trap).
    (5) Combustion chamber design.
    (6) Bore and stroke.
    (7) Cylinder arrangement (such as in-line vs. vee configurations). 
This applies for engines with aftertreatment devices only.
    (8) Method of control for engine operation other than governing 
(i.e., mechanical or electronic).
    (9) Power category.
    (10) Numerical level of the emission standards that apply to the 
engine.
* * * * *
    (d) In unusual circumstances, you may group engines that are not 
identical

[[Page 22991]]

with respect to the things listed in paragraph (b) of this section in 
the same engine family if you show that their emission characteristics 
during the useful life will be similar.
* * * * *

0
130. Section 1039.235 is amended by revising the section heading and 
paragraphs (c) and (d) introductory text to read as follows:


Sec.  1039.235  What testing requirements apply for certification?

* * * * *
    (c) We may measure emissions from any of your emission-data engines 
or other engines from the engine family, as follows:
    (1) We may decide to do the testing at your plant or any other 
facility. If we do this, you must deliver the engine to a test facility 
we designate. The engine you provide must include appropriate 
manifolds, aftertreatment devices, electronic control units, and other 
emission-related components not normally attached directly to the 
engine block. If we do the testing at your plant, you must schedule it 
as soon as possible and make available the instruments, personnel, and 
equipment we need.
    (2) If we measure emissions on one of your engines, the results of 
that testing become the official emission results for the engine. 
Unless we later invalidate these data, we may decide not to consider 
your data in determining if your engine family meets applicable 
requirements.
    (3) Before we test one of your engines, we may set its adjustable 
parameters to any point within the physically adjustable ranges (see 
Sec.  1039.115(e)).
    (4) Before we test one of your engines, we may calibrate it within 
normal production tolerances for anything we do not consider an 
adjustable parameter. For example, this would apply for an engine 
parameter that is subject to production variability because it is 
adjustable during production, but is not considered an adjustable 
parameter (as defined in Sec.  1039.801) because it is permanently 
sealed.
    (d) You may ask to use carryover emission data from a previous 
model year instead of doing new tests, but only if all the following 
are true:
* * * * *

0
131. Section 1039.240 is amended by revising paragraphs (a), (b), and 
(c)(1) to read as follows:


Sec.  1039.240  How do I demonstrate that my engine family complies 
with exhaust emission standards?

    (a) For purposes of certification, your engine family is considered 
in compliance with the emission standards in Sec.  1039.101(a) and (b), 
Sec.  1039.102(a) and (b), Sec.  1039.104, and Sec.  1039.105 if all 
emission-data engines representing that family have test results 
showing official emission results and deteriorated emission levels at 
or below these standards. This also applies for all test points for 
emission-data engines within the family used to establish deterioration 
factors. Note that your FELs are considered to be the applicable 
emission standards with which you must comply if you participate in the 
ABT program in subpart H of this part.
    (b) Your engine family is deemed not to comply if any emission-data 
engine representing that family has test results showing an official 
emission result or a deteriorated emission level for any pollutant that 
is above an applicable emission standard. Similarly, your engine family 
is deemed not to comply if any emission-data engine representing that 
family has test results showing any emission level above the applicable 
not-to-exceed emission standard for any pollutant. This also applies 
for all test points for emission-data engines within the family used to 
establish deterioration factors.
    (c) * * *
    (1) Additive deterioration factor for exhaust emissions. Except as 
specified in paragraph (c)(2) of this section, use an additive 
deterioration factor for exhaust emissions. An additive deterioration 
factor is the difference between exhaust emissions at the end of the 
useful life and exhaust emissions at the low-hour test point. In these 
cases, adjust the official emission results for each tested engine at 
the selected test point by adding the factor to the measured emissions. 
If the factor is less than zero, use zero. Additive deterioration 
factors must be specified to one more decimal place than the applicable 
standard.
* * * * *

0
132. Section 1039.245 is amended by revising the introductory text to 
read as follows:


Sec.  1039.245  How do I determine deterioration factors from exhaust 
durability testing?

    This section describes how to determine deterioration factors, 
either with an engineering analysis, with pre-existing test data, or 
with new emission measurements. Apply these deterioration factors to 
determine whether your engines will meet the duty-cycle emission 
standards throughout the useful life as described in Sec.  1039.240.
* * * * *

0
133. Section 1039.250 is amended by revising paragraphs (a) 
introductory text and (c) and removing paragraph (e) to read as 
follows:


Sec.  1039.250  What records must I keep and what reports must I send 
to EPA?

    (a) Within 45 days after the end of the model year, send the 
Designated Compliance Officer a report describing the following 
information about engines you produced during the model year:
* * * * *
    (c) Keep data from routine emission tests (such as test cell 
temperatures and relative humidity readings) for one year after we 
issue the associated certificate of conformity. Keep all other 
information specified in this section for eight years after we issue 
your certificate.
* * * * *

0
134. Section 1039.255 is amended by revising paragraph (b) to read as 
follows:


Sec.  1039.255  What decisions may EPA make regarding my certificate of 
conformity?

* * * * *
    (b) We may deny your application for certification if we determine 
that your engine family fails to comply with emission standards or 
other requirements of this part or the Clean Air Act. We will base our 
decision on all available information. If we deny your application, we 
will explain why in writing.
* * * * *


0
135. Section 1039.510 is amended by revising paragraph (b) and adding 
paragraph (c) to read as follows:


Sec.  1039.510  Which duty cycles do I use for transient testing?

* * * * *
    (b) The transient test sequence consists of an initial run through 
the transient duty cycle from a cold start, 20 minutes with no engine 
operation, then a final run through the same transient duty cycle. 
Start sampling emissions immediately after you start the engine. 
Calculate the official transient emission result from the following 
equation:

[[Page 22992]]

[GRAPHIC] [TIFF OMITTED] TR30AP10.002

    (c) Calculate cycle statistics and compare with the established 
criteria as specified in 40 CFR 1065.514 to confirm that the test is 
valid.

Subpart G--[Amended]

0
136. Section 1039.605 is amended by revising paragraph (d)(3) 
introductory text to read as follows:


Sec.  1039.605  What provisions apply to engines certified under the 
motor-vehicle program?

* * * * *
    (d) * * *
    (3) You must show that fewer than 50 percent of the engine family's 
total sales in the United States are used in nonroad applications. This 
includes engines used in any application without regard to which 
company manufactures the vehicle or equipment. Show this as follows:
* * * * *

0
137. Section 1039.610 is amended by revising paragraph (d)(3) 
introductory text to read as follows:


Sec.  1039.610  What provisions apply to vehicles certified under the 
motor-vehicle program?

* * * * *
    (d) * * *
    (3) You must show that fewer than 50 percent of the engine family's 
total sales in the United States are used in nonroad applications. This 
includes any type of vehicle, without regard to which company completes 
the manufacturing of the nonroad equipment. Show this as follows:
* * * * *

0
138. Section 1039.627 is amended by revising paragraphs (a)(3)(ii) and 
(a)(3)(iii) to read as follows:


Sec.  1039.627  What are the incentives for equipment manufacturers to 
use cleaner engines?

* * * * *
    (a) * * *
    (3) * * *

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

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

                                                  * * * * * * *
(ii) 56 <= kW < 130...........  Two engines.....  NOX standards in Sec.  Standards in Tables 2  One engine.
                                                     1039.102(e)(1),      through 7 of Sec.
                                                   and NMHC standard of   1039.102 or in Sec.
                                                   0.19 g/kW-hr, a PM      1039.101.
                                                   standard of 0.02 g/
                                                   kW-hr, and a CO
                                                   standard of 5.0 g/kW-
                                                   hr.
(iii) 130 <= kW < 560.........  Two engines.....  NOX standards in Sec.  Standards in Tables 2  One engine.
                                                     1039.102(e)(2), an   through 7 of Sec.
                                                   NMHC standard of       1039.102 or in Sec.
                                                   0.19 g/kW-hr, a PM      1039.101.
                                                   standard of 0.02 g/
                                                   kW-hr, and a CO
                                                   standard of 3.5 g/kW-
                                                   hr.
----------------------------------------------------------------------------------------------------------------

* * * * *

Subpart H--[Amended]


0
139. Section 1039.705 is amended by revising paragraph (b) introductory 
text (before the equation) to read as follows:


Sec.  1039.705  How do I generate and calculate emission credits?

* * * * *
    (b) For each participating family, calculate positive or negative 
emission credits relative to the otherwise applicable emission 
standard. Calculate positive emission credits for a family that has an 
FEL below the standard. Calculate negative emission credits for a 
family that has an FEL above the standard. Sum your positive and 
negative credits for the model year before rounding. Round the sum of 
emission credits to the nearest kilogram (kg), using consistent units 
throughout the following equation:
* * * * *

0
140. Section 1039.715 is revised to read as follows:


Sec.  1039.715  How do I bank emission credits?

    (a) Banking is the retention of emission credits by the 
manufacturer generating the emission credits for use in future model 
years for averaging or trading.
    (b) You may designate any emission credits you plan to bank in the 
reports you submit under Sec.  1039.730 as reserved credits. During the 
model year and before the due date for the final report, you may 
designate your reserved emission credits for averaging or trading.
    (c) Reserved credits become actual emission credits when you submit 
your final report. However, we may revoke these emission credits if we 
are unable to verify them after reviewing your reports or auditing your 
records.

0
141. Section 1039.720 is amended by revising paragraph (b) to read as 
follows:


Sec.  1039.720  How do I trade emission credits?

* * * * *
    (b) You may trade actual emission credits as described in this 
subpart. You may also trade reserved emission credits, but we may 
revoke these emission credits based on our review of your records or 
reports or those of the company with which you traded emission credits. 
You may trade banked credits within an averaging set to any certifying 
manufacturer.
* * * * *

0
142. Section 1039.725 is amended by revising paragraph (b)(2) to read 
as follows:


Sec.  1039.725  What must I include in my application for 
certification?

* * * * *
    (b) * * *
    (2) Detailed calculations of projected emission credits (positive 
or negative) based on projected production volumes. We may require you 
to include similar calculations from your other engine families to 
demonstrate that you will be able to avoid a negative credit balance 
for the model year. If you project negative emission credits for a 
family, state the source of positive emission credits you expect to use 
to offset the negative emission credits.


0
143. Section 1039.730 is amended by revising paragraphs (b)(3), (b)(4), 
(b)(5), and (f) to read as follows:

[[Page 22993]]

Sec.  1039.730  What ABT reports must I send to EPA?

* * * * *
    (b) * * *
    (3) The FEL for each pollutant. If you change the FEL after the 
start of production, identify the date that you started using the new 
FEL and/or give the engine identification number for the first engine 
covered by the new FEL. In this case, identify each applicable FEL and 
calculate the positive or negative emission credits as specified in 
Sec.  1039.225.
    (4) The projected and actual U.S.-directed production volumes for 
the model year. If you changed an FEL during the model year, identify 
the actual production volume associated with each FEL.
    (5) Maximum engine power for each engine configuration, and the 
average engine power weighted by U.S.-directed production volumes for 
the engine family.
* * * * *
    (f) Correct errors in your end-of-year report or final report as 
follows:
    (1) You may correct any errors in your end-of-year report when you 
prepare the final report, as long as you send us the final report by 
the time it is due.
    (2) If you or we determine within 270 days after the end of the 
model year that errors mistakenly decreased your balance of emission 
credits, you may correct the errors and recalculate the balance of 
emission credits. You may not make these corrections for errors that 
are determined more than 270 days after the end of the model year. If 
you report a negative balance of emission credits, we may disallow 
corrections under this paragraph (f)(2).
    (3) If you or we determine anytime that errors mistakenly increased 
your balance of emission credits, you must correct the errors and 
recalculate the balance of emission credits.

0
144. Section 1039.735 is amended by revising paragraphs (b), (d), and 
(e) to read as follows:


Sec.  1039.735  What records must I keep?

* * * * *
    (b) Keep the records required by this section for at least eight 
years after the due date for the end-of-year report. You may not use 
emission credits for any engines if you do not keep all the records 
required under this section. You must therefore keep these records to 
continue to bank valid credits. Store these records in any format and 
on any media, as long as you can promptly send us organized, written 
records in English if we ask for them. You must keep these records 
readily available. We may review them at any time.
* * * * *
    (d) Keep records of the engine identification number for each 
engine you produce that generates or uses emission credits under the 
ABT program. You may identify these numbers as a range. If you change 
the FEL after the start of production, identify the date you started 
using each FEL and the range of engine identification numbers 
associated with each FEL. You must also identify the purchaser and 
destination for each engine you produce to the extent this information 
is available.
    (e) We may require you to keep additional records or to send us 
relevant information not required by this section in accordance with 
the Clean Air Act.

Subpart I--[Amended]

0
145. Section 1039.801 is amended as follows:
0
a. By adding definitions for ``Alcohol-fueled engine'', ``Carryover'', 
and ``Date of manufacture'' in alphabetical order.
0
b. By revising the definitions for ``Engine configuration'', ``Model 
year'', ``New nonroad engine'', ``Total hydrocarbon'', ``Total 
hydrocarbon equivalent'', and ``Useful life.


Sec.  1039.801  What definitions apply to this part?

* * * * *
    Alcohol-fueled engine means an engine that is designed to run using 
an alcohol fuel. For purposes of this definition, alcohol fuels do not 
include fuels with a nominal alcohol content below 25 percent by 
volume.
* * * * *
    Carryover means relating to certification based on emission data 
generated from an earlier model year as described in Sec.  1039.235(d).
* * * * *
    Date of manufacture has the meaning given in 40 CFR 1068.30.
* * * * *
    Engine configuration means a unique combination of engine hardware 
and calibration within an engine family. Engines within a single engine 
configuration differ only with respect to normal production variability 
or factors unrelated to emissions.
* * * * *
    Model year means one of the following things:
    (1) For freshly manufactured equipment and engines (see definition 
of ``new nonroad engine,'' paragraph (1)), model year means one of the 
following:
    (i) Calendar year.
    (ii) Your annual new model production period if it is different 
than the calendar year. This must include January 1 of the calendar 
year for which the model year is named. It may not begin before January 
2 of the previous calendar year and it must end by December 31 of the 
named calendar year.
    (2) For an engine that is converted to a nonroad engine after being 
placed into service as a stationary engine, or being certified and 
placed into service as a motor vehicle engine, model year means the 
calendar year in which the engine was originally produced. For a motor 
vehicle engine that is converted to be a nonroad engine without having 
been certified, model year means the calendar year in which the engine 
becomes a new nonroad engine. (See definition of ``new nonroad 
engine,'' paragraph (2).)
    (3) For a nonroad engine excluded under Sec.  1039.5 that is later 
converted to operate in an application that is not excluded, model year 
means the calendar year in which the engine was originally produced 
(see definition of ``new nonroad engine,'' paragraph (3)).
    (4) For engines that are not freshly manufactured but are installed 
in new nonroad equipment, model year means the calendar year in which 
the engine is installed in the new nonroad equipment (see definition of 
``new nonroad engine,'' paragraph (4)).
    (5) For imported engines:
    (i) For imported engines described in paragraph (5)(i) of the 
definition of ``new nonroad engine,'' model year has the meaning given 
in paragraphs (1) through (4) of this definition.
    (ii) For imported engines described in paragraph (5)(ii) of the 
definition of ``new nonroad engine,'' model year has the meaning given 
in 40 CFR 89.602 for independent commercial importers.
    (iii) For imported engines described in paragraph (5)(iii) of the 
definition of ``new nonroad engine,'' model year means the calendar 
year in which the engine is first assembled in its imported 
configuration, unless specified otherwise in this part or in 40 CFR 
part 1068.
* * * * *
    New nonroad engine means any of the following things:
    (1) A freshly manufactured nonroad engine for which the ultimate 
purchaser has never received the equitable or legal title. This kind of 
engine might commonly be thought of as ``brand new.'' In the case of 
this paragraph (1), the engine is new from the time it is produced 
until the ultimate purchaser receives the title or the product is 
placed into service, whichever comes first.

[[Page 22994]]

    (2) An engine originally manufactured as a motor vehicle engine or 
a stationary engine that is later used or intended to be used in a 
piece of nonroad equipment. In this case, the engine is no longer a 
motor vehicle or stationary engine and becomes a ``new nonroad 
engine.'' The engine is no longer new when it is placed into nonroad 
service. This paragraph (2) applies if a motor vehicle engine or a 
stationary engine is installed in nonroad equipment, or if a motor 
vehicle or a piece of stationary equipment is modified (or moved) to 
become nonroad equipment.
    (3) A nonroad engine that has been previously placed into service 
in an application we exclude under Sec.  1039.5, when that engine is 
installed in a piece of equipment that is covered by this part 1039. 
The engine is no longer new when it is placed into nonroad service 
covered by this part 1039. For example, this would apply to marine 
diesel engine that is no longer used in a marine vessel but is instead 
installed in a piece of nonroad equipment subject to the provisions of 
this part.
    (4) An engine not covered by paragraphs (1) through (3) of this 
definition that is intended to be installed in new nonroad equipment. 
This generally includes installation of used engines in new equipment. 
The engine is no longer new when the ultimate purchaser receives a 
title for the equipment or the product is placed into service, 
whichever comes first.
    (5) An imported nonroad engine, subject to the following 
provisions:
    (i) An imported nonroad engine covered by a certificate of 
conformity issued under this part that meets the criteria of one or 
more of paragraphs (1) through (4) of this definition, where the 
original engine manufacturer holds the certificate, is new as defined 
by those applicable paragraphs.
    (ii) An imported engine covered by a certificate of conformity 
issued under this part, where someone other than the original engine 
manufacturer holds the certificate (such as when the engine is modified 
after its initial assembly), is a new nonroad engine when it is 
imported. It is no longer new when the ultimate purchaser receives a 
title for the engine or it is placed into service, whichever comes 
first.
    (iii) An imported nonroad engine that is not covered by a 
certificate of conformity issued under this part at the time of 
importation is new, but only if it was produced on or after the dates 
shown in the following table. This addresses uncertified engines and 
equipment initially placed into service that someone seeks to import 
into the United States. Importation of this kind of engine (or 
equipment containing such an engine) is generally prohibited by 40 CFR 
part 1068. However, the importation of such an engine is not prohibited 
if the engine has an earlier model year than that identified in the 
following table:

     Applicability of Emission Standards for Nonroad Diesel Engines
------------------------------------------------------------------------
                                            Initial date of  emission
          Maximum engine power                      standards
------------------------------------------------------------------------
kW < 19................................  January 1, 2000.
19 <= kW < 37..........................  January 1, 1999.
37 <= kW < 75..........................  January 1, 1998.
75 <= kW < 130.........................  January 1, 1997.
130 <= kW <= 560.......................  January 1, 1996.
kW > 560...............................  January 1, 2000.
------------------------------------------------------------------------

* * * * *
    Total hydrocarbon has the meaning given in 40 CFR 1065.1001. This 
generally means the combined mass of organic compounds measured by the 
specified procedure for measuring total hydrocarbon, expressed as a 
hydrocarbon with an atomic hydrogen-to-carbon ratio of 1.85:1.
    Total hydrocarbon equivalent has the meaning given in 40 CFR 
1065.1001. This generally means the sum of the carbon mass 
contributions of non-oxygenated hydrocarbons, alcohols and aldehydes, 
or other organic compounds that are measured separately as contained in 
a gas sample, expressed as exhaust hydrocarbon from petroleum-fueled 
engines. The atomic hydrogen-to-carbon ratio of the equivalent 
hydrocarbon is 1.85:1.
* * * * *
    Useful life means the period during which the engine is designed to 
properly function in terms of reliability and fuel consumption, without 
being remanufactured, specified as a number of hours of operation or 
calendar years, whichever comes first. It is the period during which a 
nonroad engine is required to comply with all applicable emission 
standards. See Sec.  1039.101(g).
* * * * *


Sec.  1039.810  [Removed]


0
146. Section 1039.810 is removed.

PART 1042--CONTROL OF EMISSIONS FROM NEW AND IN-USE MARINE 
COMPRESSION-IGNITION ENGINES AND VESSELS

0
147. The authority citation for part 1042 continues to read as follows:

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

Subpart A--[Amended]

0
148. Section 1042.1 is revised to read as follows:


Sec.  1042.1  Applicability.

    Except as provided in this section and Sec.  1042.5, the 
regulations in this part 1042 apply for all new compression-ignition 
marine engines (including new engines deemed to be compression-ignition 
engines under this section) and vessels containing such engines. See 
Sec.  1042.901 for the definitions of engines and vessels considered to 
be new.
    (a) The emission standards of this part 1042 for freshly 
manufactured engines apply for new marine engines starting with the 
model years noted in the following tables:

                         Table 1 to Sec.   1042.1--Part 1042 Applicability by Model Year
----------------------------------------------------------------------------------------------------------------
                                                                          Displacement (L/cyl) or
             Engine category                 Maximum engine power a             application           Model year
----------------------------------------------------------------------------------------------------------------
Category 1..............................  kW < 75....................  disp. < 0.9.................       b 2009
                                         -----------------------------------------------------------------------
                                          75 <= kW <= 3700...........  disp. < 0.9.................         2012
                                                                      ------------------------------------------
                                                                       0.9 <= disp. < 1.2..........         2013
                                                                      ------------------------------------------
                                                                       1.2 <= disp. < 2.5..........         2014
                                                                      ------------------------------------------
                                                                       2.5 <= disp. < 3.5..........         2013
                                                                      ------------------------------------------
                                                                       3.5 <= disp. < 7.0..........         2012
                                         -----------------------------------------------------------------------

[[Page 22995]]


                                          kW > 3700..................  disp. < 7.0.................         2014
----------------------------------------------------------------------------------------------------------------
Category 2..............................  kW <= 3700.................  7.0 < disp. < 15.0..........         2013
                                         -----------------------------------------------------------------------
                                          kW > 3700..................  7.0 <= disp. < 15.0.........         2014
                                         -----------------------------------------------------------------------
                                          All........................  15 <= disp. < 30............         2014
----------------------------------------------------------------------------------------------------------------
Category 3..............................  All........................  disp. >= 30.................         2011
----------------------------------------------------------------------------------------------------------------
a See Sec.   1042.140, which describes how to determine maximum engine power.
b See Table 1 of Sec.   1042.101 for the first model year in which this part 1042 applies for engines with
  maximum engine power below 75 kW and displacement at or above 0.9 L/cyl.

    (b) New engines with maximum engine power below 37 kW and 
originally manufactured and certified before the model years identified 
in Table 1 to this section are subject to emission standards and 
requirements of 40 CFR part 89. The provisions of this part 1042 do not 
apply for such engines certified under 40 CFR part 89, except as 
follows beginning June 29, 2010:
    (1) The allowances of this part apply.
    (2) The definitions of ``new marine engine'' and ``model year'' 
apply.
    (c) Freshly manufactured engines with maximum engine power at or 
above 37 kW and originally manufactured and certified before the model 
years identified in Table 1 to this section are subject to emission 
standards and requirements of 40 CFR part 94. The provisions of this 
part 1042 do not apply for such engines certified under 40 CFR part 89, 
except as follows beginning June 29, 2010:
    (1) The allowances of this part apply.
    (2) The definitions of ``new marine engine'' and ``model year'' 
apply.
    (3) The remanufacturing provisions in subpart I of this part may 
apply for remanufactured engines originally manufactured in model years 
before the model years identified in Table 1 to this section.
    (4) 40 CFR part 94 specifies other provisions from this part 1042 
that apply.
    (d) Engines with model years before those specified in Table 1 to 
this section are generally subject to the Tier 1 or Tier 2 standards of 
40 CFR part 94. Such engines may be certified to those standards under 
this part 1042. All the provisions of this part except the emission 
standards apply to such engines if they are certified under this part. 
Note that engines subject to, but not certified to, the standards of 40 
CFR part 94 are subject to the requirements and prohibitions of this 
part and 40 CFR part 1068.
    (e) The requirements of subpart I of this part apply to 
remanufactured Category 1 and Category 2 engines beginning July 7, 
2008.
    (f) The marine engines listed in this paragraph (f) are subject to 
all the requirements of this part even if they do not meet the 
definition of ``compression-ignition'' in Sec.  1042.901. The following 
engines are deemed to be compression-ignition engines for purposes of 
this part:
    (1) Marine engines powered by natural gas or other gaseous fuels 
with maximum engine power at or above 250 kW. Note that gaseous-fueled 
engines with maximum engine power below 250 kW may or may not meet the 
definition of ``compression-ignition'' in Sec.  1042.901.
    (2) Marine gas turbine engines.
    (3) Other marine internal combustion engines that do not meet the 
definition of ``spark-ignition'' in Sec.  1042.901.
    (g) Some of the provisions of this part may apply for other engines 
as specified in 40 CFR part 1043.

0
149. Section 1042.2 is revised to read as follows:


Sec.  1042.2  Who is responsible for compliance?

    The regulations in this part 1042 contain provisions that affect 
both engine manufacturers and others. However, the requirements of this 
part, other than those of subpart I of this part, are generally 
addressed to the engine manufacturer for freshly manufactured marine 
engines or other certificate holders. The term ``you'' generally means 
the engine manufacturer, as defined in Sec.  1042.901, especially for 
issues related to certification (including production-line testing, 
reporting, etc.).

0
150. Section 1042.5 is amended by revising paragraph (a) and adding 
paragraph (c) to read as follows:


Sec.  1042.5  Exclusions.

* * * * *
    (a) Foreign vessels. The requirements and prohibitions of this part 
do not apply to engines installed on foreign vessels, as defined in 
Sec.  1042.901. Note however, that the requirements and prohibitions of 
this part do apply to engines installed on any formerly foreign vessels 
that are reflagged as U.S.-flagged vessels.
* * * * *
    (c) Recreational gas turbine engines. The requirements and 
prohibitions of this part do not apply to gas turbine engines installed 
on recreational vessels, as defined in Sec.  1042.901.

0
151. Section 1042.15 is revised to read as follows:


Sec.  1042.15  Do any other regulation parts apply to me?

    (a) Part 1043 of this chapter describes requirements related to 
international pollution prevention that apply for some of the engines 
subject to this part.
    (b) The evaporative emission requirements of part 1060 of this 
chapter apply to vessels that include installed engines fueled with a 
volatile liquid fuel as specified in Sec.  1042.107. (Note: 
Conventional diesel fuel is not considered to be a volatile liquid 
fuel.)
    (c) Part 1065 of this chapter describes procedures and equipment 
specifications for testing engines to measure exhaust emissions. 
Subpart F of this part 1042 describes how to apply the provisions of 
part 1065 of this chapter to determine whether engines meet the exhaust 
emission standards in this part.
    (d) The requirements and prohibitions of part 1068 of this chapter 
apply to everyone, including anyone who manufactures, imports, 
installs, owns, operates, or rebuilds any of the engines subject to 
this part 1042, or vessels containing these engines. Part 1068 of this 
chapter describes general provisions, including these seven areas:
    (1) Prohibited acts and penalties for engine manufacturers, vessel 
manufacturers, and others.
    (2) Rebuilding and other aftermarket changes.
    (3) Exclusions and exemptions for certain engines.

[[Page 22996]]

    (4) Importing engines.
    (5) Selective enforcement audits of your production.
    (6) Defect reporting and recall.
    (7) Procedures for hearings.
    (e) Other parts of this chapter apply if referenced in this part.
0
152. A new Sec.  1042.30 is added to subpart A to read as follows:


Sec.  1042.30  Submission of information.

    (a) This part includes various requirements to record data or other 
information. Refer to Sec.  1042.925 and 40 CFR 1068.25 regarding 
recordkeeping requirements. Unless we specify otherwise, store these 
records in any format and on any media and keep them readily available 
for one year after you send an associated application for 
certification, or one year after you generate the data if they do not 
support an application for certification. You must promptly send us 
organized, written records in English if we ask for them. We may review 
them at any time.
    (b) The regulations in Sec.  1042.255 and 40 CFR 1068.101 describe 
your obligation to report truthful and complete information and the 
consequences of failing to meet this obligation. This includes 
information not related to certification.
    (c) Send all reports and requests for approval to the Designated 
Compliance Officer (see Sec.  1042.901).
    (d) Any written information we require you to send to or receive 
from another company is deemed to be a required record under this 
section. Such records are also deemed to be submissions to EPA. We may 
require you to send us these records whether or not you are a 
certificate holder.

Subpart B--[Amended]

0
153. Section 1042.101 is amended by revising the section heading, Table 
1 in paragraph (a)(3), and paragraph (d)(1)(iii) to read as follows:


Sec.  1042.101  Exhaust emission standards for Category 1 engines and 
Category 2 engines.

    (a) * * *
    (3) * * *
BILLING CODE 6560-50-P

[[Page 22997]]

[GRAPHIC] [TIFF OMITTED] TR30AP10.104

BILLING CODE 6560-50-C
* * * * *
    (d) * * *
    (1) * * *
    (iii) Diesel-fueled and all other engines not described in 
paragraph (d)(1)(i) or (ii) of this section must comply with Tier 3 HC 
standards based on THC emissions and with Tier 4 standards based on 
NMHC emissions.
* * * * *

0
154. A new Sec.  1042.104 is added to subpart B to read as follows:


Sec.  1042.104  Exhaust emission standards for Category 3 engines.

    (a) Duty-cycle standards. Exhaust emissions from your engines may 
not exceed emission standards, as follows:
    (1) Measure emissions using the test procedures described in 
subpart F of this part. Note that while no PM standards apply for 
Category 3 engines, PM emissions must be measured for certification 
testing and reported under Sec.  1042.205. Note also that you are not 
required to measure PM emissions for other testing.
    (2) NOX standards apply based on the engine's model year 
and maximum in-use engine speed as shown in the following table:

[[Page 22998]]



               Table 1 to Sec.   1042.104--NOX Emission Standards for Category 3 Engines (g/kW-hr)
----------------------------------------------------------------------------------------------------------------
                                                                       Maximum in-use engine speed
                                                        --------------------------------------------------------
        Emission standards              Model year        Less than                                   Over 2000
                                                           130 RPM          130-2000  RPM \a\            RPM
----------------------------------------------------------------------------------------------------------------
Tier 1...........................  2004-2010 \b\.......         17.0  45.0[middot]n (-0.20)                  9.8
Tier 2...........................  2011-2015...........         14.4  44.0[middot]n (-0.23)                  7.7
Tier 3...........................  2016 and later......          3.4  9.0[middot]n (-0.20)                   2.0
----------------------------------------------------------------------------------------------------------------
\a\ Applicable standards are calculated from n (maximum in-use engine speed, in RPM, as specified in Sec.
  1042.140). Round the standards to one decimal place.
\b\ Tier 1 NOX standards apply as specified in 40 CFR part 94 for engines originally manufactured in model years
  2004 through 2010. They are shown here only for reference.

     (3) The HC standard for Tier 2 and later engines is 2.0 g/kW-hr. 
This standard applies as follows:
    (i) Alcohol-fueled engines must comply with HC standards based on 
THCE emissions.
    (ii) Natural gas-fueled engines must comply with HC standards based 
on NMHC emissions.
    (iii) Diesel-fueled and all other engines not described in 
paragraph (a)(3)(i) or (ii) of this section must comply with HC 
standards based on THC emissions.
    (4) The CO standard for Tier 2 and later engines is 5.0 g/kW-hr.
    (b) Averaging, banking, and trading. Category 3 engines are not 
eligible for participation in the averaging, banking, and trading (ABT) 
program as described in subpart H of this part.
    (c) Mode caps. Measured NOX emissions may not exceed the 
cap specified in this paragraph (c) for any applicable duty-cycle test 
modes with power greater than 10 percent maximum engine power. 
Calculate the mode cap by multiplying the applicable NOX 
standard by 1.5 and rounding to the nearest 0.1 g/kW-hr. Note that mode 
caps do not apply for pollutants other than NOX and do not 
apply for any modes of operation outside of the applicable duty cycles 
in Sec.  1042.505. Category 3 engines are not subject to not-to-exceed 
standards.
    (d) Useful life. Your engines must meet the exhaust emission 
standards of this section over their full useful life, expressed as a 
period in years or hours of engine operation, whichever comes first.
    (1) The minimum useful life value is 3 years or 10,000 hours of 
operation.
    (2) Specify a longer useful life in hours for an engine family 
under either of two conditions:
    (i) If you design, advertise, or market your engine to operate 
longer than the minimum useful life (your recommended hours until 
rebuild indicates a longer design life).
    (ii) If your basic mechanical warranty is longer than the minimum 
useful life.
    (e) Applicability for testing. The duty-cycle emission standards in 
this section apply to all testing performed according to the procedures 
in Sec.  1042.505, including certification, production-line, and in-use 
testing. See paragraph (g) of this section for standards that apply for 
certain other test procedures, such as some production-line testing.
    (f) Domestic engines. Engines installed on vessels excluded from 40 
CFR part 1043 because they operate only domestically may not be 
certified for use with residual fuels.
    (g) Alternate installed-engine standards. NOX emissions 
may not exceed the standard specified in this paragraph (g) for test of 
engines installed on vessels when you are unable to operate the engine 
at the test points for the specified duty cycle, and you approximate 
these points consistent with the specifications of section 6 of 
Appendix 8 to the NOX Technical Code (incorporated by 
reference in Sec.  1042.910). Calculate the alternate installed-engine 
standard by multiplying the applicable NOX standard by 1.1 
and rounding to the nearest 0.1 g/kW-hr.

0
155. Section 1042.110 is amended by revising paragraph (a)(2) and 
adding paragraphs (a)(3) and (d) to read as follows:


Sec.  1042.110  Recording reductant use and other diagnostic functions.

    (a) * * *
    (2) The onboard computer log must record in nonvolatile computer 
memory all incidents of engine operation with inadequate reductant 
injection or reductant quality. Use good engineering judgment to ensure 
that the operator can readily access the information to submit the 
report required by Sec.  1042.660. For example, you may meet this 
requirement by documenting the incident in a text file that can be 
downloaded or printed by the operator.
    (3) SCR systems must also conform to the provisions of paragraph 
(d) of this section if they are equipped with on-off controls as 
allowed under Sec.  1042.115(g).
* * * * *
    (d) For Category 3 engines equipped with on-off NOX 
controls (as allowed by Sec.  1042.115(g)), you must also equip your 
engine to continuously monitor NOX concentrations in the 
exhaust. See Sec.  1042.650 to determine if this requirement applies 
for a given Category 1 or Category 2 engine. Use good engineering 
judgment to alert operators if measured NOX concentrations 
indicate malfunctioning emission controls. Record any such operation in 
nonvolatile computer memory. You are not required to monitor 
NOX concentrations during operation for which the emission 
controls may be disabled under Sec.  1042.115(g). For the purpose of 
this paragraph (d), ``malfunctioning emission controls'' means any 
condition in which the measured NOX concentration exceeds 
the highest value expected when the engine is in compliance with the 
installed engine standard of Sec.  1042.104(g). Use good engineering 
judgment to determine these expected values during production-line 
testing of the engine using linear interpolation between test points 
and accounting for the degree to which the cycle-weighted emissions of 
the engine are below the standard. You may also use additional 
intermediate test points measured during the production-line test. Note 
that the provisions of paragraph (a) of this section also apply for SCR 
systems covered by this paragraph (d). For engines subject to both the 
provisions of paragraph (a) of this section and this paragraph (d), use 
good engineering judgment to integrate diagnostic features to comply 
with both paragraphs.

0
156. Section 1042.115 is amended by revising paragraphs (d)(2) 
introductory text, (f) introductory text, and adding paragraphs (f)(4) 
and (g) to read as follows:


Sec.  1042.115  Other requirements.

* * * * *
    (d) * * *

[[Page 22999]]

    (2) Category 2 and Category 3 engines that have adjustable 
parameters must meet all the requirements of this part for any 
adjustment in the specified adjustable range. You must specify in your 
application for certification the adjustable range of each adjustable 
parameter on a new engine to--
* * * * *
    (f) Defeat devices. You may not equip your engines with a defeat 
device. A defeat device is an auxiliary emission control device that 
reduces the effectiveness of emission controls under conditions that 
the engine may reasonably be expected to encounter during normal 
operation and use. (Note that this means emission control for operation 
outside of and between the official test modes is generally expected to 
be similar to emission control demonstrated at the test modes.) This 
does not apply to auxiliary emission control devices you identify in 
your application for certification if any of the following is true:
* * * * *
    (4) The engine is a Category 3 engine and the AECD conforms to the 
requirements of paragraph (g) of this section. See Sec.  1042.650 to 
determine if this allowance applies for a given Category 1 or Category 
2 engine.
    (g) On-off controls for Category 3 engines. Manufacturers may equip 
Category 3 engines with features that disable Tier 3 NOX 
emission controls subject to the provisions of this paragraph (g). See 
Sec.  1042.650 to determine if this allowance applies for a given 
Category 1 or Category 2 engine. Where this paragraph (g) applies for a 
Category 1 or Category 2 engine, read ``Tier 2'' to mean ``Tier 3'' and 
read ``Tier 3'' to mean ``Tier 4''.
    (1) Features that disable Tier 3 emission controls are considered 
to be AECDs whether or not they meet the definition of an AECD. For 
example, manually operated on-off features are AECDs under this 
paragraph (g). The features must be identified in your application for 
certification as AECDs. For purposes of this paragraph (g), the term 
``features that disable Tier 3 emission controls'' includes (but is not 
limited to) any combination of the following that cause the engine's 
emissions to exceed any Tier 3 emission standard:
    (i) Bypassing of exhaust aftertreatment.
    (ii) Reducing or eliminating flow of reductant to an SCR system.
    (iii) Modulating engine calibration in a manner that increases 
engine-out emissions of a regulated pollutant.
    (2) You must demonstrate that the AECD will not disable emission 
controls while operating in areas where emissions could reasonably be 
expected to adversely affect U.S. air quality. If an ECA has been 
established for U.S. waters, this means you must demonstrate that the 
AECD will not disable emission control while operating in waters within 
the ECA or any ECA associated area. (Note: See the regulations in 40 
CFR part 1043 for requirements related to operation in ECAs, including 
foreign ECAs.) Compliance with this paragraph will generally require 
that the AECD operation be based on Global Positioning System (GPS) 
inputs. We may consider any relevant information to determine whether 
your AECD conforms to this paragraph (g).
    (3) The onboard computer log must record in nonvolatile computer 
memory all incidents of engine operation with the Tier 3 emission 
controls disabled.
    (4) The engine must comply fully with the Tier 2 standards when the 
Tier 3 emission controls are disabled.

0
157. Section 1042.120 is amended by adding paragraph (b)(2) and 
revising paragraph (c) to read as follows:


Sec.  1042.120  Emission-related warranty requirements.

* * * * *
    (b) * * *
    (2) For Category 3 engines, your emission-related warranty must be 
valid throughout the engine's full useful life as specified in Sec.  
1042.104(d).
* * * * *
    (c) Components covered. The emission-related warranty covers all 
components whose failure would increase an engine's emissions of any 
regulated pollutant, including components listed in 40 CFR part 1068, 
Appendix I, and components from any other system you develop to control 
emissions. The emission-related warranty for freshly manufactured 
marine engines covers these components even if another company produces 
the component. Your emission-related warranty does not need to cover 
components whose failure would not increase an engine's emissions of 
any regulated pollutant. For remanufactured engines, your emission-
related warranty is required to cover only those parts that you supply 
or those parts for which you specify allowable part manufacturers. It 
does not need to cover used parts that are not replaced during the 
remanufacture.
* * * * *

0
158. Section 1042.125 is amended by revising the section heading, 
introductory text, and paragraphs (a)(1)(iii) and (d) to read as 
follows:


Sec.  1042.125  Maintenance instructions.

    Give the ultimate purchaser of each new engine written instructions 
for properly maintaining and using the engine, including the emission 
control system, as described in this section. The maintenance 
instructions also apply to service accumulation on your emission-data 
engines as described in Sec.  1042.245 and in 40 CFR part 1065. The 
restrictions specified in paragraphs (a) through (e) of this section 
related to allowable maintenance apply only to Category 1 and Category 
2 engines. Manufacturers may specify any maintenance for Category 3 
engines.
    (a) * * *
    (1) * * *
    (iii) You provide the maintenance free of charge and clearly say so 
in your maintenance instructions.
* * * * *
    (d) Noncritical emission-related maintenance. Subject to the 
provisions of this paragraph (d), you may schedule any amount of 
emission-related inspection or maintenance that is not covered by 
paragraph (a) of this section (that is, maintenance that is neither 
explicitly identified as critical emission-related maintenance, nor 
that we approve as critical emission-related maintenance). Noncritical 
emission-related maintenance generally includes maintenance on the 
components we specify in 40 CFR part 1068, Appendix I that is not 
covered in paragraph (a) of this section. You must state in the owners 
manual that these steps are not necessary to keep the emission-related 
warranty valid. If operators fail to do this maintenance, this does not 
allow you to disqualify those engines from in-use testing or deny a 
warranty claim. Do not take these inspection or maintenance steps 
during service accumulation on your emission-data engines.
* * * * *

0
159. Section 1042.135 is amended by revising paragraphs (c)(5), (c)(8), 
(c)(9), and (c)(11) and adding paragraphs (c)(12) and (c)(13) to read 
as follows:


Sec.  1042.135  Labeling.

* * * * *
    (c) * * *
    (5) State the date of manufacture [DAY (optional), MONTH, and 
YEAR]; however, you may omit this from the label if you stamp, engrave, 
or otherwise permanently identify it elsewhere on the engine, in which 
case you must also describe in your application for certification where 
you will identify the date on the engine.
* * * * *

[[Page 23000]]

    (8) State the useful life for your engine family if the applicable 
useful life is based on the provisions of Sec.  1042.101(e)(2) or (3), 
or Sec.  1042.104(d)(2).
    (9) Identify the emission control system. Use terms and 
abbreviations as described in 40 CFR 1068.45. You may omit this 
information from the label if there is not enough room for it and you 
put it in the owners manual instead.
* * * * *
    (11) For a Category 1 or Category 2 engine that can be modified to 
operate on residual fuel, but has not been certified to meet the 
standards on such a fuel, include the statement: ``THIS ENGINE IS 
CERTIFIED FOR OPERATION ONLY WITH DIESEL FUEL. MODIFYING THE ENGINE TO 
OPERATE ON RESIDUAL OR INTERMEDIATE FUEL MAY BE A VIOLATION OF FEDERAL 
LAW SUBJECT TO CIVIL PENALTIES.''
    (12) For an engine equipped with on-off emissions controls as 
allowed by Sec.  1042.115, include the statement: ``THIS ENGINE IS 
CERTIFIED WITH ON-OFF EMISSION CONTROLS. OPERATION OF THE ENGINE 
CONTRARY TO 40 CFR 1042.115(g) IS A VIOLATION OF FEDERAL LAW SUBJECT TO 
CIVIL PENALTIES.''
    (13) For engines intended for installation on domestic or public 
vessels, include the following statement: ``THIS ENGINE DOES NOT COMPLY 
WITH INTERNATIONAL MARINE REGULATIONS FOR COMMERCIAL VESSELS UNLESS IT 
IS ALSO COVERED BY AN EIAPP CERTIFICATE.''
* * * * *

0
160. Section 1042.140 is amended by revising the section heading and 
introductory text and adding paragraph (g) to read as follows:


Sec.  1042.140  Maximum engine power, displacement, power density, and 
maximum in-use engine speed.

    This section describes how to determine the maximum engine power, 
displacement, and power density of an engine for the purposes of this 
part. Note that maximum engine power may differ from the definition of 
``maximum test power'' in Sec.  1042.901. This section also specifies 
how to determine maximum in-use engine speed for Category 3 engines.
* * * * *
    (g) Calculate a maximum test speed for the nominal power curve as 
specified in 40 CFR 1065.610. This is the maximum in-use engine speed 
used for calculating the NOX standard in Sec.  1042.104 for 
Category 3 engines. Alternatively, you may use a lower value if engine 
speed will be limited in actual use to that lower value.

0
161. Section 1042.145 is amended by revising paragraph (a) and the 
heading of paragraph (c) introductory text and adding paragraphs (h) 
and (i) to read as follows:


Sec.  1042.145  Interim provisions.

    (a) General. The provisions in this section apply instead of other 
provisions in this part. This section describes when these interim 
provisions expire. Only the provisions of paragraph (h) of this section 
apply for Category 3 engines.
* * * * *
    (c) Part 1065 test procedures for Category 1 and Category 2 
engines. * * *
* * * * *
    (h) The following interim provisions apply for Category 3 engines:
    (1) Applicability of Tier 3 standards to Category 3 engines 
operating in Alaska, Hawaii, and U.S. territories. (i) Category 3 
engines are not required to comply with the Tier 3 NOX 
standard when operating in areas of Guam, American Samoa, the 
Commonwealth of the Northern Mariana Islands, Puerto Rico, or U.S. 
Virgin Islands. Category 3 engines are also not required to comply with 
the Tier 3 NOX standards when operating in the waters of the 
smallest Hawaiian islands or in the waters of Alaska west of Kodiak. 
For the purpose of this paragraph (h)(1), ``the smallest Hawaiian 
islands'' includes all Hawaiian islands other than Hawaii, Kahoolawe, 
Kauai, Lanai, Maui, Molokai, Niihau, and Oahu. Engines must comply 
fully with the appropriate Tier 2 NOX standard and all other 
applicable requirements when operating in the areas identified in this 
paragraph (h)(1).
    (ii) The provisions of paragraph (h)(1)(i) of this section do not 
apply to ships operating in an ECA or an ECA associated area. The Tier 
3 standards apply in full for any area included in an ECA or an ECA 
associated area.
    (2) Part 1065 test procedures. You must generally use the test 
procedures specified in subpart F of this part for Category 3 engines, 
including the applicable test procedures in 40 CFR part 1065. You may 
use a combination of the test procedures specified in this part and the 
test procedures specified in 40 CFR part 94 before January 1, 2016 
without request. After this date, you must use test procedures only as 
specified in subpart F of this part.
    (i) Limitation of 40 CFR 1068.101 before July 1, 2010. 
Notwithstanding other provisions of this part or 40 CFR part 94, for 
the period June 29, 2010 through July 1, 2010, it is not a violation of 
40 CFR 1068.101 to operate in U.S. waters uncertified engines installed 
on vessels manufactured outside of the United States before June 29, 
2010. Operation of such vessels in U.S. waters on or after July 1, 2010 
is deemed to be introduction into U.S. commerce of a new marine engine.

Subpart C--[Amended]

0
162. Section 1042.201 is amended by revising paragraph (h) to read as 
follows:


Sec.  1042.201  General requirements for obtaining a certificate of 
conformity.

* * * * *
    (h) For engines that become new after being placed into service, 
such as engines installed on imported vessels, we may specify alternate 
certification provisions consistent with the intent of this part. See 
the definition of ``new marine engine'' in Sec.  1042.901.

0
163. Section 1042.205 is amended by adding paragraph (b)(12) and 
revising paragraphs (i), (o), and (s)(5) to read as follows:


Sec.  1042.205  Application requirements.

* * * * *
    (b) * * *
    (12) Include any other information required by this part with 
respect to AECDs. For example, see Sec.  1042.115 for requirements 
related to on-off technologies.
* * * * *
    (i) Include the maintenance and warranty instructions you will give 
to the ultimate purchaser of each new engine (see Sec. Sec.  1042.120 
and 1042.125). Describe your plan for meeting warranty obligations 
under Sec.  1042.120.
* * * * *
    (o) Present emission data for HC, NOX, PM, and CO on an 
emission-data engine to show your engines meet emission standards as 
specified in Sec. Sec.  1042.101 or 1042.104. Note that you must submit 
PM data for all engines, whether or not a PM standard applies. Show 
emission figures before and after applying adjustment factors for 
regeneration and deterioration factors for each pollutant and for each 
engine. If we specify more than one grade of any fuel type (for 
example, high-sulfur and low-sulfur diesel fuel), you need to submit 
test data only for one grade, unless the regulations of this part 
specify otherwise for your engine. Include emission results for each 
mode for Category 3 engines or for other engines if you do discrete-
mode testing under Sec.  1042.505. Note that Sec. Sec.  1042.235

[[Page 23001]]

and 1042.245 allows you to submit an application in certain cases 
without new emission data.
* * * * *
    (s) * * *
    (5) For Category 2 and Category 3 engines, propose a range of 
adjustment for each adjustable parameter, as described in Sec.  
1042.115(d). Include information showing why the limits, stops, or 
other means of inhibiting adjustment are effective in preventing 
adjustment of parameters on in-use engines to settings outside your 
proposed adjustable ranges.
* * * * *

0
164. Section 1042.220 is revised to read as follows:


Sec.  1042.220  Amending maintenance instructions.

    You may amend your emission-related maintenance instructions after 
you submit your application for certification as long as the amended 
instructions remain consistent with the provisions of Sec.  1042.125. 
You must send the Designated Compliance Officer a written request to 
amend your application for certification for an engine family if you 
want to change the emission-related maintenance instructions in a way 
that could affect emissions. In your request, describe the proposed 
changes to the maintenance instructions. If operators follow the 
original maintenance instructions rather than the newly specified 
maintenance, this does not allow you to disqualify those engines from 
in-use testing or deny a warranty claim.
    (a) If you are decreasing or eliminating any specified maintenance, 
you may distribute the new maintenance instructions to your customers 
30 days after we receive your request, unless we disapprove your 
request. This would generally include replacing one maintenance step 
with another. We may approve a shorter time or waive this requirement.
    (b) If your requested change would not decrease the specified 
maintenance, you may distribute the new maintenance instructions 
anytime after you send your request. For example, this paragraph (b) 
would cover adding instructions to increase the frequency of filter 
changes for engines in severe-duty applications.
    (c) You need not request approval if you are making only minor 
corrections (such as correcting typographical mistakes), clarifying 
your maintenance instructions, or changing instructions for maintenance 
unrelated to emission control. We may ask you to send us copies of 
maintenance instructions revised under this paragraph (c).

0
165. Section 1042.225 is amended by revising the introductory text, 
paragraphs (b) introductory text, (b)(2), (e), and (f) to read as 
follows:


Sec.  1042.225  Amending applications for certification.

    Before we issue you a certificate of conformity, you may amend your 
application to include new or modified engine configurations, subject 
to the provisions of this section. After we have issued your 
certificate of conformity, you may send us an amended application 
requesting that we include new or modified engine configurations within 
the scope of the certificate, subject to the provisions of this 
section. You must amend your application if any changes occur with 
respect to any information that is included or should be included in 
your application.
* * * * *
    (b) To amend your application for certification as specified in 
paragraph (a) of this section, send the relevant information to the 
Designated Compliance Officer.
* * * * *
    (2) Include engineering evaluations or data showing that the 
amended engine family complies with all applicable requirements. You 
may do this by showing that the original emission-data engine is still 
appropriate for showing that the amended family complies with all 
applicable requirements.
* * * * *
    (e) For engine families already covered by a certificate of 
conformity, you may start producing the new or modified engine 
configuration anytime after you send us your amended application and 
before we make a decision under paragraph (d) of this section. However, 
if we determine that the affected engines do not meet applicable 
requirements, we will notify you to cease production of the engines and 
may require you to recall the engines at no expense to the owner. 
Choosing to produce engines under this paragraph (e) is deemed to be 
consent to recall all engines that we determine do not meet applicable 
emission standards or other requirements and to remedy the 
nonconformity at no expense to the owner. If you do not provide 
information required under paragraph (c) of this section within 30 days 
after we request it, you must stop producing the new or modified 
engines.
    (f) You may ask us to approve a change to your FEL in certain cases 
after the start of production. The changed FEL may not apply to engines 
you have already introduced into U.S. commerce, except as described in 
this paragraph (f). If we approve a changed FEL after the start of 
production, you must include the new FEL on the emission control 
information label for all engines produced after the change. You may 
ask us to approve a change to your FEL in the following cases:
    (1) You may ask to raise your FEL for your engine family at any 
time. In your request, you must show that you will still be able to 
meet the emission standards as specified in subparts B and H of this 
part. If you amend your application by submitting new test data to 
include a newly added or modified engine, as described in paragraph 
(b)(3) of this section, use the appropriate FELs with corresponding 
production volumes to calculate emission credits for the model year, as 
described in subpart H of this part. In all other circumstances, you 
must use the higher FEL for the entire family to calculate emission 
credits under subpart H of this part.
    (2) You may ask to lower the FEL for your engine family only if you 
have test data from production engines showing that emissions are below 
the proposed lower FEL. The lower FEL applies only to engines you 
produce after we approve the new FEL. Use the appropriate FELs with 
corresponding production volumes to calculate emission credits for the 
model year, as described in subpart H of this part.

0
166. Section 1042.230 is amended by revising paragraphs (a), (b), (f) 
introductory text, and (g) and adding paragraph (d) to read as follows:


Sec.  1042.230  Engine families.

    (a) For purposes of certification, divide your product line into 
families of engines that are expected to have similar emission 
characteristics throughout the useful life as described in this 
section. You may not group engines in different engine categories in 
the same family. Your engine family is limited to a single model year.
    (b) For Category 1 engines, group engines in the same engine family 
if they are the same in all the following aspects:
    (1) The combustion cycle and the fuel with which the engine is 
intended or designed to be operated.
    (2) The cooling system (for example, raw-water vs. separate-circuit 
cooling).
    (3) Method of air aspiration.
    (4) Method of exhaust aftertreatment (for example, catalytic 
converter or particulate trap).
    (5) Combustion chamber design.
    (6) Nominal bore and stroke.
    (7) Cylinder arrangement (such as in-line vs. vee configurations). 
This applies for engines with aftertreatment devices only.

[[Page 23002]]

    (8) Method of control for engine operation other than governing 
(i.e., mechanical or electronic).
    (9) Application (commercial or recreational).
    (10) Numerical level of the emission standards that apply to the 
engine, except as allowed under paragraphs (f) and (g) of this section.
* * * * *
    (d) For Category 3 engines, group engines into engine families 
based on the criteria specified in Section 4.3 of the NOX 
Technical Code (incorporated by reference in Sec.  1042.910), except as 
allowed in paragraphs (e) and (f) of this section.
* * * * *
    (f) You may group engines that are not identical with respect to 
the things listed in paragraph (b), (c), or (d) of this section in the 
same engine family, as follows:
* * * * *
    (g) If you combine engines that are subject to different emission 
standards into a single engine family under paragraph (f) of this 
section, you must certify the engine family to the more stringent set 
of standards for that model year. For Category 3 engine families that 
include a range of maximum in-use engine speeds, use the highest value 
of maximum in-use engine speed to establish the applicable 
NOX emission standard.

0
167. Section 1042.235 is amended by revising the section heading, the 
introductory text, and paragraphs (a), (c), and (d) introductory text 
to read as follows:


Sec.  1042.235  Emission testing related to certification.

    This section describes the emission testing you must perform to 
show compliance with the emission standards in Sec.  1042.101(a) or 
Sec.  1042.104. See Sec.  1042.205(p) regarding emission testing 
related to the NTE standards. See Sec. Sec.  1042.240 and 1042.245 and 
40 CFR part 1065, subpart E, regarding service accumulation before 
emission testing. See Sec.  1042.655 for special testing provisions 
available for Category 3 engines subject to Tier 3 standards.
    (a) Select an emission-data engine from each engine family for 
testing. For engines at or above 560 kW, you may use a development 
engine that is equivalent in design to the engine being certified. For 
Category 3 engines, you may use a single-cylinder version of the 
engine. Using good engineering judgment, select the engine 
configuration most likely to exceed an applicable emission standard 
over the useful life, considering all exhaust emission constituents and 
the range of installation options available to vessel manufacturers.
* * * * *
    (c) We may measure emissions from any of your emission-data engines 
or other engines from the engine family, as follows:
    (1) We may decide to do the testing at your plant or any other 
facility. If we do this, you must deliver the engine to a test facility 
we designate. The engine you provide must include appropriate 
manifolds, aftertreatment devices, electronic control units, and other 
emission-related components not normally attached directly to the 
engine block. If we do the testing at your plant, you must schedule it 
as soon as possible and make available the instruments, personnel, and 
equipment we need.
    (2) If we measure emissions from one of your engines, the results 
of that testing become the official emission results for the engine. 
Unless we later invalidate these data, we may decide not to consider 
your data in determining if your engine family meets applicable 
requirements.
    (3) Before we test one of your engines, we may set its adjustable 
parameters to any point within the specified adjustable ranges (see 
Sec.  1042.115(d)).
    (4) Before we test one of your engines, we may calibrate it within 
normal production tolerances for anything we do not consider an 
adjustable parameter. For example, this would apply for an engine 
parameter that is subject to production variability because it is 
adjustable during production, but is not considered an adjustable 
parameter (as defined in Sec.  1042.901) because it is permanently 
sealed.
    (d) You may ask to use carryover emission data from a previous 
model year instead of doing new tests, but only if all the following 
are true:
* * * * *

0
168. Section 1042.240 is amended by revising paragraphs (a), (b), and 
(c) introductory text and adding paragraphs (e) and (f) to read as 
follows:


Sec.  1042.240  Demonstrating compliance with exhaust emission 
standards.

    (a) For purposes of certification, your engine family is considered 
in compliance with the emission standards in Sec.  1042.101(a) or Sec.  
1042.104 if all emission-data engines representing that family have 
test results showing official emission results and deteriorated 
emission levels at or below these standards. This also applies for all 
test points for emission-data engines within the family used to 
establish deterioration factors. See paragraph (f) of this section for 
provisions related to demonstrating compliance with non-duty-cycle 
standards, such as NTE standards. Note that your FELs are considered to 
be the applicable emission standards with which you must comply if you 
participate in the ABT program in subpart H of this part.
    (b) Your engine family is deemed not to comply if any emission-data 
engine representing that family has test results showing an official 
emission result or a deteriorated emission level for any pollutant that 
is above an applicable emission standard. Similarly, your engine family 
is deemed not to comply if any emission-data engine representing that 
family has test results showing any emission level above the applicable 
not-to-exceed emission standard for any pollutant. This also applies 
for all test points for emission-data engines within the family used to 
establish deterioration factors.
    (c) To compare emission levels from the emission-data engine with 
the applicable emission standards, apply deterioration factors to the 
measured emission levels for each pollutant. Section 1042.245 specifies 
how to test your Category 1 or Category 2 engine to develop 
deterioration factors that represent the deterioration expected in 
emissions over your engines' full useful life. See paragraph (e) of 
this section for determining deterioration factors for Category 3 
engines. Your deterioration factors must take into account any 
available data from in-use testing with similar engines. Small-volume 
engine manufacturers and post-manufacture marinizers may use assigned 
deterioration factors that we establish. Apply deterioration factors as 
follows:
* * * * *
    (e) For Category 3 engines, determine a deterioration factor based 
on an engineering analysis. The engineering analysis must describe how 
the measured emission levels from the emission-data engine show that 
engines comply with applicable emission standards throughout the useful 
life. Include this analysis in your application for certification and 
add a statement that all data, analyses, evaluations, and other 
information you used are available for our review upon request.
    (f) For NTE standards and mode caps, use good engineering judgment 
to demonstrate compliance throughout the useful life. You may, but are 
not required to, apply the same deterioration factors used to show 
compliance with the applicable duty-cycle standards. We will deny your 
application for certification if we determine that your test data show 
that

[[Page 23003]]

your engines would exceed one or more NTE standard or mode cap during 
their useful lives.

0
169. Section 1042.245 is amended by revising the introductory text and 
paragraph (a) to read as follows:


Sec.  1042.245  Deterioration factors.

    This section describes how to determine deterioration factors for 
Category 1 and Category 2 engines, either with an engineering analysis, 
with pre-existing test data, or with new emission measurements. Apply 
these deterioration factors to determine whether your engines will meet 
the duty-cycle emission standards throughout the useful life as 
described in Sec.  1042.240. This section does not apply for Category 3 
engines.
    (a) You may ask us to approve deterioration factors for an engine 
family with established technology based on engineering analysis 
instead of testing. Engines certified to a NOX+HC standard 
or FEL greater than the Tier 3 NOX+HC standard are 
considered to rely on established technology for control of gaseous 
emissions, except that this does not include any engines that use 
exhaust-gas recirculation or aftertreatment. In most cases, 
technologies used to meet the Tier 1 and Tier 2 emission standards 
would qualify as established technology. We must approve your plan to 
establish a deterioration factor under this paragraph (a) before you 
submit your application for certification.
* * * * *

0
170. Section 1042.250 is amended by revising paragraphs (a) and (c) and 
removing paragraph (e) to read as follows:


Sec.  1042.250  Recordkeeping and reporting.

    (a) Send the Designated Compliance Officer information related to 
your U.S.-directed production volumes as described in Sec.  1042.345. 
In addition, within 45 days after the end of the model year, you must 
send us a report describing information about engines you produced 
during the model year as follows:
    (1) State the total production volume for each engine family that 
is not subject to reporting under Sec.  1042.345.
    (2) State the total production volume for any engine family for 
which you produce engines after completing the reports required in 
Sec.  1042.345.
* * * * *
    (c) Keep data from routine emission tests (such as test cell 
temperatures and relative humidity readings) for one year after we 
issue the associated certificate of conformity. Keep all other 
information specified in this section for eight years after we issue 
your certificate.
* * * * *

0
171. Section 1042.255 is amended by revising paragraph (b) to read as 
follows:


Sec.  1042.255  EPA decisions.

* * * * *
    (b) We may deny your application for certification if we determine 
that your engine family fails to comply with emission standards or 
other requirements of this part or the Clean Air Act. We will base our 
decision on all available information. If we deny your application, we 
will explain why in writing.
* * * * *

Subpart D--[Amended]

0
172. Section 1042.301 is amended by revising paragraphs (a)(2), (c), 
(e), and (f) to read as follows:


Sec.  1042.301  General provisions.

    (a) * * *
    (2) We may exempt Category 1 engine families with a projected U.S.-
directed production volume below 100 engines from routine testing under 
this subpart. Request this exemption in your application for 
certification and include your basis for projecting a production volume 
below 100 units. We will approve your request if we agree that you have 
made good-faith estimates of your production volumes. Your exemption is 
approved when we grant your certificate. You must promptly notify us if 
your actual production exceeds 100 units during the model year. If you 
exceed the production limit or if there is evidence of a nonconformity, 
we may require you to test production-line engines under this subpart, 
or under 40 CFR part 1068, subpart E, even if we have approved an 
exemption under this paragraph (a)(2).
* * * * *
    (c) Other regulatory provisions authorize us to suspend, revoke, or 
void your certificate of conformity, or order recalls for engine 
families, without regard to whether they have passed these production-
line testing requirements. The requirements of this subpart do not 
affect our ability to do selective enforcement audits, as described in 
40 CFR part 1068. Individual engines in families that pass these 
production-line testing requirements must also conform to all 
applicable regulations of this part and 40 CFR part 1068.
* * * * *
    (e) If you certify a Category 1 or Category 2 engine family with 
carryover emission data, as described in Sec.  1042.235(d), and these 
equivalent engine families consistently pass the production-line 
testing requirements over the preceding two-year period, you may ask 
for a reduced testing rate for further production-line testing for that 
family. The minimum testing rate is one engine per engine family. If we 
reduce your testing rate, we may limit our approval to any number of 
model years. In determining whether to approve your request, we may 
consider the number of engines that have failed the emission tests.
    (f) We may ask you to make a reasonable number of production-line 
engines available for a reasonable time so we can test or inspect them 
for compliance with the requirements of this part. For Category 3 
engines, you are not required to deliver engines to us, but we may 
inspect and test your engines at any facility at which they are 
assembled or installed in vessels.

0
173. A new Sec.  1042.302 is added to subpart D to read as follows:


Sec.  1042.302  Applicability of this subpart for Category 3 engines.

    If you produce Tier 3 or later Category 3 engines that are 
certified under this part, you must test them as described in this 
subpart, except as specified in this section.
    (a) You must test each engine at the sea trial of the vessel in 
which it is installed or within the first 300 hours of operation, 
whichever occurs first. Since you must test each engine, the provisions 
of Sec. Sec.  1042.310 and 1042.315(b) do not apply for Category 3 
engines. If we determine that an engine failure under this subpart is 
caused by defective components or design deficiencies, we may revoke or 
suspend your certificate for the engine family as described in Sec.  
1042.340. If we determine that an engine failure under this subpart is 
caused only by incorrect assembly, we may suspend your certificate for 
the engine family as described in Sec.  1042.325. If the engine fails, 
you may continue operating only to complete the sea trial and return to 
port. It is a violation of 40 CFR 1068.101(b)(1) to operate the vessel 
further until you remedy the cause of failure. Each two-hour period of 
such operation constitutes a separate offense. A violation lasting less 
than two hours constitutes a single offense.
    (b) You are only required to measure NOX emissions. You 
do not need to measure HC, CO or PM emissions under this subpart.
    (c) If you are unable to operate the engine at the test points for 
the specified duty cycle, you may approximate these

[[Page 23004]]

points consistent with the specifications of section 6 of Appendix 8 to 
the NOX Technical Code (incorporated by reference in Sec.  
1042.910) and show compliance with the alternate installed-engine 
standard of Sec.  1042.104(g). You must obtain EPA approval of your 
test procedure prior to testing the engine. Include in your request a 
description of your basis for concluding that the engine cannot be 
tested at the actual test points of the specified duty cycle.
    (d) You may measure NOX emissions at additional test 
points for the purposes of the continuous NOX monitoring 
requirements of Sec.  1042.110(d). If you do, you must report these 
values along with your other test results. Describe in your application 
for certification how you plan to use these values for continuous 
NOX monitoring.
    (e) You may ask to measure emissions according to the Direct 
Measurement and Monitoring method specified in section 6.4 of the 
NOX Technical Code (incorporated by reference in Sec.  
1042.910).

0
174. Section 1042.305 is amended by revising paragraphs (a), (d) 
introductory text, (d)(2), (e)(2), and (g) to read as follows:


Sec.  1042.305  Preparing and testing production-line engines.

* * * * *
    (a) Test procedures. Test your production-line engines using the 
applicable testing procedures in subpart F of this part to show you 
meet the duty-cycle emission standards in subpart B of this part. For 
Category 1 and Category 2 engines, the not-to-exceed standards apply 
for this testing of Category 1 and Category 2 engines, but you need not 
do additional testing to show that production-line engines meet the 
not-to-exceed standards. The mode cap standards apply for the testing 
of Category 3 engines.
* * * * *
    (d) Setting adjustable parameters. Before any test, we may require 
you to adjust any adjustable parameter on a Category 1 engine to any 
setting within its physically adjustable range. We may adjust or 
require you to adjust any adjustable parameter on a Category 2 or 
Category 3 engine to any setting within its specified adjustable range.
* * * * *
    (2) We may specify adjustments within the physically adjustable 
range or the specified adjustable range by considering their effect on 
emission levels. We may also consider how likely it is that someone 
will make such an adjustment with in-use engines.
    (e) * * *
    (2) For Category 2 or Category 3 engines, you may ask us to approve 
a Green Engine Factor for each regulated pollutant for each engine 
family. Use the Green Engine Factor to adjust measured emission levels 
to establish a stabilized low-hour emission level.
* * * * *
    (g) Retesting after invalid tests. You may retest an engine if you 
determine an emission test is invalid under subpart F of this part. 
Explain in your written report reasons for invalidating any test and 
the emission results from all tests. If we determine that you 
improperly invalidated a test, we may require you to ask for our 
approval for future testing before substituting results of the new 
tests for invalid ones.

0
175. Section 1042.310 is amended by revising the section heading to 
read as follows:


Sec.  1042.310  Engine selection for Category 1 and Category 2 engines.

* * * * *

0
176. Section 1042.315 is amended by revising paragraphs (a) and (b) to 
read as follows:


Sec.  1042.315  Determining compliance.

* * * * *
    (a) Calculate your test results as follows:
    (1) Initial and final test results. Calculate and round the test 
results for each engine. If you do several tests on an engine, 
calculate the initial results for each test, then add all the test 
results together and divide by the number of tests. Round this final 
calculated value for the final test results on that engine. Include the 
Green Engine Factor to determine low-hour emission results, if 
applicable.
    (2) Final deteriorated test results. Apply the deterioration factor 
for the engine family to the final test results (see Sec.  
1042.240(c)).
    (3) Round deteriorated test results. Round the results to the 
number of decimal places in the emission standard expressed to one more 
decimal place.
    (b) For Category 1 and Category 2 engines, if a production-line 
engine fails to meet emission standards and you test two additional 
engines as described in Sec.  1042.310, calculate the average emission 
level for each pollutant for the three engines. If the calculated 
average emission level for any pollutant exceeds the applicable 
emission standard, the engine family fails the production-line testing 
requirements of this subpart. Tell us within ten working days if this 
happens. You may request to amend the application for certification to 
raise the FEL of the engine family as described in Sec.  1042.225(f).

0
177. Section 1042.320 is amended by revising paragraph (a)(2) to read 
as follows:


Sec.  1042.320  What happens if one of my production-line engines fails 
to meet emission standards?

    (a) * * *
    (2) Include the test results and describe the remedy for each 
engine in the written report required under Sec.  1042.345.
* * * * *

0
178. Section 1042.325 is amended by revising paragraph (e) to read as 
follows:


Sec.  1042.325  What happens if an engine family fails the production-
line testing requirements?

* * * * *
    (e) You may request to amend the application for certification to 
raise the FEL of the entire engine family before or after we suspend 
your certificate as described in Sec.  1042.225(f). We will approve 
your request if the failure is not caused by a defect and it is clear 
that you used good engineering judgment in establishing the original 
FEL.

0
179. Section 1042.345 is amended by revising paragraphs (a)(6) and (b) 
to read as follows:


Sec.  1042.345  Reporting.

    (a) * * *
    (6) Provide the test number; the date, time and duration of 
testing; test procedure; all initial test results; final test results; 
and final deteriorated test results for all tests. Provide the emission 
results for all measured pollutants. Include information for both valid 
and invalid tests and the reason for any invalidation.
* * * * *
    (b) We may ask you to add information to your written report so we 
can determine whether your new engines conform with the requirements of 
this subpart. We may also ask you to send less information.
* * * * *

0
180. Section 1042.350 is amended by revising paragraphs (b), (e), and 
(f) to read as follows:


Sec.  1042.350  Recordkeeping.

* * * * *
    (b) Keep paper or electronic records of your production-line 
testing for eight years after you complete all the testing required for 
an engine family in a model year.
* * * * *
    (e) If we ask, you must give us a more detailed description of 
projected or actual production figures for an engine family. We may ask 
you to divide your

[[Page 23005]]

production figures by maximum engine power, displacement, fuel type, or 
assembly plant (if you produce engines at more than one plant).
    (f) Keep records of the engine identification number for each 
engine you produce under each certificate of conformity. You may 
identify these numbers as a range. Give us these records within 30 days 
if we ask for them.
* * * * *

Subpart F--[Amended]

0
181. Section 1042.501 is amended by revising paragraphs (a) and (c) and 
adding paragraph (g) to read as follows:


Sec.  1042.501  How do I run a valid emission test?

    (a) Use the equipment and procedures for compression-ignition 
engines in 40 CFR part 1065 to determine whether engines meet the duty-
cycle emission standards in Sec. Sec.  1042.101 or 1042.104. Measure 
the emissions of all regulated pollutants as specified in 40 CFR part 
1065. Use the applicable duty cycles specified in Sec.  1042.505.
* * * * *
    (c) Use the fuels and lubricants specified in 40 CFR part 1065, 
subpart H, for all the testing we require in this part, except as 
specified in this section and Sec.  1042.515.
    (1) For service accumulation, use the test fuel or any commercially 
available fuel that is representative of the fuel that in-use engines 
will use.
    (2) For diesel-fueled engines, use the appropriate diesel fuel 
specified in 40 CFR part 1065, subpart H, for emission testing. Unless 
we specify otherwise, the appropriate diesel test fuel for Category 1 
and Category 2 engines is the ultra low-sulfur diesel fuel. If we allow 
you to use a test fuel with higher sulfur levels, identify the test 
fuel in your application for certification. Unless we specify 
otherwise, the appropriate diesel test fuel for Category 3 engines is 
the high-sulfur diesel fuel. For Category 2 and Category 3 engines, you 
may ask to use commercially available diesel fuel similar but not 
necessarily identical to the applicable fuel specified in 40 CFR part 
1065, subpart H; we will approve your request if you show us that it 
does not affect your ability to demonstrate compliance with the 
applicable emission standards.
    (3) For Category 1 and Category 2 engines that are expected to use 
a type of fuel (or mixed fuel) other than diesel fuel (such as natural 
gas, methanol, or residual fuel), use a commercially available fuel of 
that type for emission testing. If a given engine is designed to 
operate on different fuels, we may (at our discretion) require testing 
on each fuel. Propose test fuel specifications that take into account 
the engine design and the properties of commercially available fuels. 
Describe these test fuel specifications in the application for 
certification.
* * * * *
    (g) For Category 3 engines, instead of test data collected as 
specified in 40 CFR part 1065, you may submit test data for 
NOX, HC, and CO emissions that were collected as specified 
in the NOX Technical Code (incorporated by reference in 
Sec.  1042.910). For example, this allowance includes the allowance to 
perform the testing using test fuels allowed under the NOX 
Technical Code that do not meet the sulfur specifications of this 
section. We may require you to include a brief engineering analysis 
showing how these data demonstrate that your engines would meet the 
applicable emission standards if you had used the test procedures 
specified in 40 CFR part 1065.

0
182. Section 1042.505 is amended by revising paragraph (b) introductory 
text to read as follows:


Sec.  1042.505  Testing engines using discrete-mode or ramped-modal 
duty cycles.

* * * * *
    (b) Measure emissions by testing the engine on a dynamometer with 
one of the following duty cycles (as specified) to determine whether it 
meets the emission standards in Sec. Sec.  1042.101 or 1042.104:
* * * * *

0
183. Section 1042.525 is amended by revising paragraph (b) and adding 
paragraph (g) to read as follows:


Sec.  1042.525  How do I adjust emission levels to account for 
infrequently regenerating aftertreatment devices?

* * * * *
    (b) Calculating average adjustment factors. Calculate the average 
adjustment factor (EFA) based on the following equation:

EFA = (F)(EFH) + (1-F)(EFL)

Where:

F = The frequency of the regeneration event during normal in-use 
operation, expressed in terms of the fraction of equivalent tests 
during which the regeneration occurs. You may determine F from in-
use operating data or running replicate tests. For example, if you 
observe that the regeneration occurs 125 times during 1,000 MW-hrs 
of operation, and your engine typically accumulates 1 MW-hr per 
test, F would be (125) / (1,000) / (1) = 0.125. No further 
adjustments, including weighting factors, may be applied to F.
EFH = Measured emissions from a test segment in which the 
regeneration occurs.
EFL = Measured emissions from a test segment in which the 
regeneration does not occur.
* * * * *
    (g) Category 3 engines. We may specify an alternate methodology to 
account for regeneration events from Category 3 engines. If we do not, 
the provisions of this section apply as specified.

Subpart G--[Amended]

0
184. Section 1042.601 is amended by revising paragraph (b) and adding 
paragraphs (g), (h), and (i) to read as follows:


Sec.  1042.601  General compliance provisions for marine engines and 
vessels.

* * * * *
    (b) Subpart I of this part describes how the prohibitions of 40 CFR 
1068.101(a)(1) apply for certain remanufactured engines. The provisions 
of 40 CFR 1068.105 do not allow the installation of a new 
remanufactured engine in a vessel that is defined as a new vessel 
unless the remanufactured engine is subject to the same standards as 
the standards applicable to freshly manufactured engines of the 
required model year.
* * * * *
    (g) The selective enforcement audit provisions of 40 CFR part 1068 
do not apply for Category 3 engines.
    (h) The defect reporting requirements of 40 CFR 1068.501 apply for 
Category 3 engines, except the threshold for filing a defect report is 
two engines.
    (i) You may not circumvent the requirements of this part or the 
Clean Air Act by manufacturing a vessel outside the United States or 
initially flagging a vessel in another country. The definition of ``new 
marine engine'' in Sec.  1042.901 includes provisions for U.S.-flagged 
vessels that are manufactured or reflagged outside of U.S. waters. 
These provisions have the effect of applying the prohibitions of 40 CFR 
1068.101(a)(1) to such vessels no later than when they first enter U.S. 
waters. The inclusion of these provisions does not affect requirements 
or prohibitions of the Clean Air Act or other statutes that may apply 
to the vessel before it first enters U.S. waters.

0
185. Section 1042.605 is amended by revising paragraph (a) to read as 
follows:

[[Page 23006]]

Sec.  1042.605  Dressing engines already certified to other standards 
for nonroad or heavy-duty highway engines for marine use.

    (a) General provisions. If you are an engine manufacturer 
(including someone who marinizes a land-based engine), this section 
allows you to introduce new marine engines into U.S. commerce if they 
are already certified to the requirements that apply to compression-
ignition engines under 40 CFR parts 85 and 86 or 40 CFR part 89, 92, 
1033, or 1039 for the appropriate model year. If you comply with all 
the provisions of this section, we consider the certificate issued 
under 40 CFR part 86, 89, 92, 1033, or 1039 for each engine to also be 
a valid certificate of conformity under this part 1042 for its model 
year, without a separate application for certification under the 
requirements of this part 1042. This section does not apply for 
Category 3 engines.
* * * * *

0
186. Section 1042.610 is amended by revising the introductory text to 
read as follows:


Sec.  1042.610  Certifying auxiliary marine engines to land-based 
standards.

    This section applies to auxiliary marine engines that are identical 
to certified land-based engines. See Sec.  1042.605 for provisions that 
apply to propulsion marine engines or auxiliary marine engines that are 
modified for marine applications. This section does not apply for 
Category 3 engines.
* * * * *

0
187. Section 1042.615 is amended by revising the introductory text and 
paragraph (a)(4) and adding paragraph (d) to read as follows:


Sec.  1042.615  Replacement engine exemption.

    For Category 1 and Category 2 replacement engines, apply the 
provisions of 40 CFR 1068.240 as described in this section. In unusual 
circumstances, you may ask us to allow you to apply these provisions 
for a new Category 3 engine.
    (a) * * *
    (4) The replacement engine must conform to the applicable 
requirements of 40 CFR part 1043. Note that 40 CFR 1043.10 specifies 
allowances for vessels that operate only domestically.
* * * * *
    (d) We may reduce the reporting and recordkeeping requirements in 
this section.

0
188. Section 1042.620 is revised to read as follows:


Sec.  1042.620  Engines used solely for competition.

    The provisions of this section apply for new Category 1 engines and 
vessels built on or after January 1, 2009.
    (a) We may grant you an exemption from the standards and 
requirements of this part for a new engine on the grounds that it is to 
be used solely for competition. The requirements of this part, other 
than those in this section, do not apply to engines that we exempt for 
use solely for competition.
    (b) We will exempt engines that we determine will be used solely 
for competition. The basis of our determination is described in 
paragraphs (c) and (d) of this section. Exemptions granted under this 
section are good for only one model year and you must request renewal 
for each subsequent model year. We will not approve your renewal 
request if we determine the engine will not be used solely for 
competition.
    (c) Engines meeting all the following criteria are considered to be 
used solely for competition:
    (1) Neither the engine nor any vessels containing the engine may be 
displayed for sale in any public dealership or otherwise offered for 
sale to the general public. Note that this does not preclude display of 
these engines as long as they are not available for sale to the general 
public.
    (2) Sale of the vessel in which the engine is installed must be 
limited to professional racing teams, professional racers, or other 
qualified racers. For replacement engines, the sale of the engine 
itself must be limited to professional racing teams, professional 
racers, other qualified racers, or to the original vessel manufacturer.
    (3) The engine and the vessel in which it is installed must have 
performance characteristics that are substantially superior to 
noncompetitive models.
    (4) The engines are intended for use only as specified in paragraph 
(e) of this section.
    (d) You may ask us to approve an exemption for engines not meeting 
the criteria listed in paragraph (c) of this section as long as you 
have clear and convincing evidence that the engines will be used solely 
for competition.
    (e) Engines are considered to be used solely for competition only 
if their use is limited to competition events sanctioned by the U.S. 
Coast Guard or another public organization with authorizing permits for 
participating competitors. Operation of such engines may include only 
racing events, trials to qualify for racing events, and practice 
associated with racing events. Authorized attempts to set speed records 
are also considered racing events. Engines will not be considered to be 
used solely for competition if they are ever used for any recreational 
or other noncompetitive purpose. Use of exempt engines in any 
recreational events, such as poker runs and lobsterboat races, is a 
violation of 40 CFR 1068.101(b)(4).
    (f) You must permanently label engines exempted under this section 
to clearly indicate that they are to be used only for competition. 
Failure to properly label an engine will void the exemption for that 
engine.
    (g) If we request it, you must provide us any information we need 
to determine whether the engines are used solely for competition. This 
would include documentation regarding the number of engines and the 
ultimate purchaser of each engine as well as any documentation showing 
a vessel manufacturer's request for an exempted engine. Keep these 
records for five years.

0
189. Section 1042.625 is amended by adding introductory text to read as 
follows:


Sec.  1042.625  Special provisions for engines used in emergency 
applications.

    This section describes an exemption that is available for certain 
Category 1 and Category 2 engines. This exemption is not available for 
Category 3 engines.
* * * * *

0
190. Section 1042.630 is amended by revising the introductory text to 
read as follows:


Sec.  1042.630  Personal-use exemption.

    This section applies to individuals who manufacture vessels for 
personal use with used Category 1 engines. If you and your vessel meet 
all the conditions of this section, the vessel and its engine are 
considered to be exempt from the standards and requirements of this 
part that apply to new engines and new vessels. The prohibitions in 
Sec.  1068.101(a)(1) do not apply to engines exempted under this 
section. For example, you may install an engine that was not certified 
as a marine engine.
* * * * *

0
191. Section 1042.635 is amended by revising paragraph (a) to read as 
follows:


Sec.  1042.635  National security exemption.

* * * * *
    (a) An engine is exempt without a request if it will be used or 
owned by an agency of the Federal government responsible for national 
defense, where the vessel in which it is installed has armor, 
permanently attached weaponry,

[[Page 23007]]

specialized electronic warfare systems, unique stealth performance 
requirements, and/or unique combat maneuverability requirements. This 
applies to both remanufactured and freshly manufactured marine engines. 
Gas turbine engines are also exempt without a request if they will be 
owned by an agency of the Federal government responsible for national 
defense.
* * * * *

0
192. Section 1042.650 is amended by revising the section heading and 
the introductory text and adding a new paragraph (d) to read as 
follows:


Sec.  1042.650  Exemptions for migratory vessels and auxiliary engines 
on Category 3 vessels.

    The provisions of this section apply for Category 1 and Category 2 
engines, including auxiliary engines installed on vessels with Category 
3 propulsion engines. These provisions do not apply for any Category 3 
engines. All engines exempted under this section must comply with the 
applicable requirements of 40 CFR part 1043.
* * * * *
    (d) Auxiliary engines on Category 3 vessels. As specified in this 
paragraph (d), auxiliary engines on vessels with Category 3 propulsion 
engines are exempt from the standards of this part.
    (1) To be eligible for this exemption, the engine must meet all of 
the following criteria.
    (i) The engine must conform fully to the applicable NOX 
standards of Annex VI and meet all other applicable requirements of 40 
CFR part 1043. Engines installed on vessels constructed on or after 
January 1, 2016 must conform fully to the Annex VI Tier III 
NOX standards under 40 CFR part 1043 and meet all other 
applicable requirements in 40 CFR part 1043. Engines that would 
otherwise be subject to the Tier 4 standards of this part must also 
conform fully to the Annex VI Tier III NOX standards under 
40 CFR part 1043.
    (ii) The engine may not be used for propulsion (except for 
emergency engines).
    (iii) The engine may be equipped with on-off NOX 
controls, provided it conforms to the requirements of Sec.  
1042.115(g).
    (2) You must notify the Designated Compliance Officer of your 
intent to use this exemption when applying for the EIAPP certificate 
for the engine under 40 CFR part 1043.
    (3) The remanufactured engine requirements of subpart I of this 
part do not apply.
    (4) If you introduce an engine into U.S. commerce under this 
paragraph (d), you must meet the labeling requirements in Sec.  
1042.135, but add the following statement instead of the compliance 
statement in Sec.  1042.135(c)(10):
    THIS ENGINE DOES NOT COMPLY WITH CURRENT U.S. EPA EMISSION 
STANDARDS UNDER 40 CFR 1042.650 AND IS FOR USE SOLELY IN VESSELS WITH 
CATEGORY 3 PROPULSION ENGINES. INSTALLATION OR USE OF THIS ENGINE IN 
ANY OTHER APPLICATION MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO 
CIVIL PENALTY.

0
193. A new Sec.  1042.655 is added to subpart G to read as follows:


Sec.  1042.655  Special certification provisions for--Category 3 
engines with aftertreatment.

    This section describes an optional approach for demonstrating for 
certification that catalyst-equipped engines (or engines equipped with 
other aftertreatment devices) comply with applicable emission 
standards. You must use good engineering judgment for all aspects of 
this allowance.
    (a) Eligibility. You may use the provisions of this section without 
our prior approval to demonstrate that aftertreatment-equipped Category 
3 engines meet the Tier 3 standards. In unusual circumstances, we may 
also allow you to use this approach to demonstrate that aftertreatment-
equipped Category 2 engines meet the Tier 4 standards. We will 
generally approve this for Category 2 engines only if the engines are 
too large to be practically tested in a laboratory with a fully 
assembled aftertreatment system. If we approve this approach for a 
Category 2 engine, interpret references to Tier 3 in this section to 
mean Tier 4, and interpret references to Tier 2 in this section to mean 
Tier 3.
    (b) Required testing. The emission-data engine must be tested as 
specified in Subpart F to verify that the engine-out emissions comply 
with the Tier 2 standards. The catalyst material or other 
aftertreatment device must be tested under conditions that accurately 
represent actual engine conditions for the test points. This catalyst 
or aftertreatment testing may be performed on a benchscale.
    (c) Engineering analysis. Include with your application a detailed 
engineering analysis describing how the test data collected for the 
engine and aftertreatment demonstrate that all engines in the family 
will meet all applicable emission standards. We may require that you 
submit this analysis separately from your application, or that you 
obtain preliminary approval under Sec.  1042.210.
    (d) Verification. You must verify your design by testing a complete 
production engine with installed aftertreatment in the final assembled 
configuration. Unless we specify otherwise, do this by complying with 
production-line testing requirements of subpart D of this part.
    (e) Other requirements. All other requirements of this part, 
including the non-testing requirements for certification, apply for 
these engines. Nothing in this section affects requirements in other 
regulatory parts, such as Coast Guard safety requirements.

0
194. Section 1042.660 is revised to read as follows:


Sec.  1042.660  Requirements for vessel manufacturers, owners, and 
operators.

    (a) For vessels equipped with emission controls requiring the use 
of specific fuels, lubricants, or other fluids, owners and operators 
must comply with the manufacturer/remanufacturer's specifications for 
such fluids when operating the vessels. Failure to comply with the 
requirements of this paragraph is a violation of 40 CFR 1068.101(b)(1). 
For marine vessels that are excluded from the requirements of 40 CFR 
part 1043 because they operate only domestically, it is also a 
violation of 40 CFR 1068.101(b)(1) to operate the vessel using residual 
fuel on or after January 1, 2015. Note that 40 CFR part 80 also 
includes provisions that restrict the use of certain fuels by certain 
marine engines.
    (b) For vessels equipped with SCR systems requiring the use of urea 
or other reductants, owners and operators must report to us within 30 
days any operation of such vessels without the appropriate reductant. 
Failure to comply with the requirements of this paragraph is a 
violation of 40 CFR 1068.101(a)(2). Note that such operation is a 
violation of 40 CFR 1068.101(b)(1).
    (c) The provisions of this paragraph (c) apply for marine vessels 
containing Category 3 engines.
    (1) The requirements of this paragraph (c)(1) apply only for 
Category 3 engines. All maintenance, repair, adjustment, and alteration 
of Category 3 engines subject to the provisions of this part performed 
by any owner, operator or other maintenance provider must be perform 
using good engineering judgment, in such a manner that the engine 
continues (after the maintenance, repair, adjustment or alteration) to 
meet the emission standards it was certified as meeting prior to the 
need for service. This includes but is not limited to complying with 
the maintenance

[[Page 23008]]

instructions described in Sec.  1042.125. Adjustments are limited to 
the range specified by the engine manufacturer in the approved 
application for certification. Note that where a repair (or other 
maintenance) cannot be completed while at sea, it is not a violation to 
continue operating the engine to reach your destination.
    (2) It is a violation of 40 CFR 1068.101(b)(1) to operate the 
vessel with the engine adjusted outside of the specified adjustable 
range. Each two-hour period of such operation constitutes a separate 
offense. A violation lasting less than two hours constitutes a single 
offense.
    (3) The owner and operator of the engine must maintain on board the 
vessel records of all maintenance, repair, and adjustment that could 
reasonably affect the emission performance of any engine subject to the 
provision of this part. Owners and operators must also maintain, on 
board the vessel, records regarding certification, parameter 
adjustment, and fuels used. For engines that are automatically adjusted 
electronically, all adjustments must be logged automatically. Owners 
and operators must make these records available to EPA upon request. 
These records must include the following:
    (i) The Technical File, Record Book of Engine Parameters, and 
bunker delivery notes as specified in 40 CFR 1043.70. The Technical 
File must be transferred to subsequent purchasers in the event of a 
sale of the engine or vessel. (ii) Specific descriptions of engine 
maintenance, repair, adjustment, and alteration (including rebuilding). 
The descriptions must include at least the date, time, and nature of 
the maintenance, repair, adjustment, or alteration and the position of 
the vessel when the maintenance, repair, adjustment, or alteration was 
made.
    (iii) Emission-related maintenance instructions provided by the 
manufacturer. These instructions must be transferred to subsequent 
purchasers in the event of a sale of the engine or vessel.
    (4) Owners and operators of engines equipped with on-off emission 
controls must comply with the requirements of this paragraph (c)(4) 
whenever a malfunction of the emission controls is indicated as 
specified in Sec.  1042.110(d). You must determine the cause of the 
malfunction and remedy it consistent with paragraph (c)(1) of this 
section. See paragraph (b) of this section if the malfunction is due to 
either a lack of reductant or inadequate reductant quality. If the 
malfunction occurs during the useful life, report the malfunction to 
the certificate holder for investigation and compliance with defect 
reporting requirements of 40 CFR 1068.501 (unless the malfunction is 
due to operation without adequate urea or other malmaintenance).
    (d) For each marine vessel containing a Category 3 engine, the 
owner must annually review the vessel's records and submit to EPA a 
signed statement certifying compliance during the preceding year with 
the requirements of this part that are applicable to owners and 
operators of such vessels. Alternately, if review of the vessel's 
records indicates that there has been one or more violations of the 
requirements of this part, the owner must submit to EPA a signed 
statement specifying the noncompliance, including the nature of the 
noncompliance, the time of the noncompliance, and any efforts made to 
remedy the noncompliance. The statement of compliance (or 
noncompliance) required by this paragraph must be signed by the 
executive with responsibility for marine activities of the owner. If 
the vessel is operated by a different business entity than the vessel 
owner, the reporting requirements of this paragraph (e) apply to both 
the owner and the operator. Compliance with these review and 
certification requirements by either the vessel owner or the vessel 
operator with respect to a compliance statement will be considered 
compliance with these requirements by both of these parties for that 
compliance statement. The executive(s) may authorize a captain or other 
primary operator to conduct this review and submit the certification, 
provided that the certification statement is accompanied by written 
authorization for that individual to submit such statements. The 
Administrator may waive the requirements of this paragraph when 
equivalent assurance of compliance is otherwise available.
    (e) Manufacturers, owners and operators must allow emission tests 
and inspections required by this part to be conducted and must provide 
reasonable assistance to perform such tests or inspections.

0
195. A new Sec.  1042.670 is added to subpart G to read as follows:


Sec.  1042.670  Special provisions for gas turbine engines.

    The provisions of this section apply for gas turbine engines.
    (a) Implementation schedule. The requirements of this part do not 
apply for gas turbine engines below 600 kW before the 2014 model year. 
The requirements of this part do not apply for Tier 3 or earlier gas 
turbine engines at or above 600 kW. The provisions of 40 CFR part 1068 
also do not apply for gas turbine engines produced in these earlier 
model years.
    (b) Special test procedures. Manufacturers seeking certification of 
gas turbine engines must obtain preliminary approval of the test 
procedures to be used, consistent with Sec.  1042.210 and 40 CFR 
1065.10.
    (c) Remanufacturing. The requirements of subpart I of this part do 
not apply for gas turbine engines.
    (d) Equivalent displacement. Apply displacement-based provisions of 
this part by calculating an equivalent displacement from the maximum 
engine power. The equivalent per-cylinder displacement (in liters) 
equals the maximum engine power in kW multiplied by 0.00311, except 
that all gas turbines with maximum engine power above 9,300 kW are 
considered to have an equivalent per-cylinder displacement of 29.0 
liters.
    (e) Emission-related components. All components meeting the 
criteria of 40 CFR 1068.501(a)(1) are considered to be emission-related 
components with respect to maintenance, warranty, and defect reporting 
for gas turbine engines.
    (f) Engines used for national defense. See Sec.  1042.635 for 
provisions related to exempting gas turbine engines used for national 
defense.

Subpart H--[Amended]

0
196. Section 1042.701 is amended by adding introductory text to read as 
follows:


Sec.  1042.701  General provisions.

    This subpart describes how you may use emission credits to 
demonstrate that Category 1 and Category 2 engines comply with emission 
standards under this part. The provisions of this subpart do not apply 
for Category 3 engines.
* * * * *

0
197. Section 1042.705 is amended by revising paragraph (a) introductory 
text, before the equation, to read as follows:


Sec.  1042.705  Generating and calculating emission credits.

* * * * *
    (a) For each participating family, calculate positive or negative 
emission credits relative to the otherwise applicable emission 
standard. Calculate positive emission credits for a family that has an 
FEL below the standard. Calculate negative emission credits for a 
family that has an FEL above the standard. Sum your positive and 
negative credits for the model year before rounding. Round the sum of 
emission credits to the nearest kilogram

[[Page 23009]]

(kg) using consistent units throughout the following equation:
* * * * *

0
198. Section 1042.715 is revised to read as follows:


Sec.  1042.715  Banking emission credits.

    (a) Banking is the retention of emission credits by the 
manufacturer generating the emission credits for use in future model 
years for averaging or trading.
    (b) You may designate any emission credits you plan to bank in the 
reports you submit under Sec.  1042.730 as reserved credits. During the 
model year and before the due date for the final report, you may 
designate your reserved emission credits for averaging or trading.
    (c) Reserved credits become actual emission credits when you submit 
your final report. However, we may revoke these emission credits if we 
are unable to verify them after reviewing your reports or auditing your 
records.

0
199. Section 1042.720 is amended by revising paragraph (b) to read as 
follows:


Sec.  1042.720  Trading emission credits.

* * * * *
    (b) You may trade actual emission credits as described in this 
subpart. You may also trade reserved emission credits, but we may 
revoke these emission credits based on our review of your records or 
reports or those of the company with which you traded emission credits. 
You may trade banked credits within an averaging set to any certifying 
manufacturer.
* * * * *

0
200. Section 1042.725 is amended by revising paragraph (b)(2) to read 
as follows:


Sec.  1042.725  Information required for the application for 
certification.

* * * * *
    (b) * * *
    (2) Detailed calculations of projected emission credits (positive 
or negative) based on projected production volumes. We may require you 
to include similar calculations from your other engine families to 
demonstrate that you will be able to avoid a negative credit balance 
for the model year. If you project negative emission credits for a 
family, state the source of positive emission credits you expect to use 
to offset the negative emission credits.

0
201. Section 1042.730 is amended by revising paragraphs (b)(3), (b)(4), 
and (b)(5) to read as follows:


Sec.  1042.730  ABT reports.

* * * * *
    (b) * * *
    (3) The FEL for each pollutant. If you change the FEL after the 
start of production, identify the date that you started using the new 
FEL and/or give the engine identification number for the first engine 
covered by the new FEL. In this case, identify each applicable FEL and 
calculate the positive or negative emission credits under each FEL.
    (4) The projected and actual U.S.-directed production volumes for 
the model year, as described in Sec.  1042.705(c). If you changed an 
FEL during the model year, identify the actual production volume 
associated with each FEL.
    (5) Maximum engine power for each engine configuration, and the 
average engine power weighted by U.S.-directed production volumes for 
the engine family.
* * * * *

0
202. Section 1042.735 is amended by revising paragraphs (b), (d), and 
(e) to read as follows:


Sec.  1042.735  Recordkeeping.

* * * * *
    (b) Keep the records required by this section for at least eight 
years after the due date for the end-of-year report. You may not use 
emission credits for any engines if you do not keep all the records 
required under this section. You must therefore keep these records to 
continue to bank valid credits. Store these records in any format and 
on any media as long as you can promptly send us organized, written 
records in English if we ask for them. You must keep these records 
readily available. We may review them at any time.
* * * * *
    (d) Keep records of the engine identification number for each 
engine you produce that generates or uses emission credits under the 
ABT program. You may identify these numbers as a range. If you change 
the FEL after the start of production, identify the date you started 
using each FEL and the range of engine identification numbers 
associated with each FEL. You must also identify the purchaser and 
destination for each engine you produce to the extent this information 
is available.
    (e) We may require you to keep additional records or to send us 
relevant information not required by this section in accordance with 
the Clean Air Act.

Subpart I--[Amended]

0
203. Section 1042.801 is amended by revising the introductory text and 
paragraph (a) to read as follows:


Sec.  1042.801  General provisions.

    This subpart describes how the provisions of this part 1042 apply 
for certain remanufactured marine engines.
    (a) The requirements of this subpart apply for remanufactured Tier 
2 and earlier commercial Category 1 and Category 2 marine engines at or 
above 600 kW, excluding those engines originally manufactured before 
1973. Note that the requirements of this subpart do not apply for 
engines below 600 kW, Category 3 engines, engines installed on 
recreational vessels, or Tier 3 and later engines.
* * * * *

0
204. Section 1042.836 is amended by revising the introductory text and 
paragraphs (a) introductory text and (c) to read as follows:


Sec.  1042.836  Marine certification of locomotive remanufacturing 
systems.

    If you certify a Tier 0, Tier 1, or Tier 2 remanufacturing system 
for locomotives under 40 CFR part 1033, you may also certify the system 
under this part 1042, according to the provisions of this section. Note 
that in certain cases before 2013, locomotives may be certified under 
40 CFR part 1033 to the standards of 40 CFR part 92.
    (a) Include the following with your application for certification 
under 40 CFR part 1033 (or as an amendment to your application):
* * * * *
    (c) Systems certified to the standards of 40 CFR part 92 are 
subject to the following restrictions:
    (1) Tier 0 locomotives systems may not be used for any Category 1 
engines or Tier 1 or later Category 2 engines.
    (2) Where systems certified to the standards of 40 CFR part 1033 
are also available for an engine, you may not use a system certified to 
the standards of 40 CFR part 92.

0
205. Section 1042.850 is amended by revising paragraph (c) to read as 
follows:


Sec.  1042.850  Exemptions and hardship relief.

* * * * *
    (c) If you believe that a remanufacturing system that we identified 
as being available cannot be installed without significant modification 
of your vessel, you may ask us to determine that a remanufacturing 
system is not considered available for your vessel because the cost 
would exceed the total marginal cost threshold in Sec.  1042.815(a)(2).
* * * * *

[[Page 23010]]

Subpart J--[Amended]

0
206. Section 1042.901 is amended as follows:
0
a. By revising the definitions for ``Carryover'', ``Category 1'', 
``Category 2'', ``Category 3'', ``Compression-ignition'', 
``Deterioration factor'', ``Engine configuration'', ``Freshly 
manufactured marine engine'', ``Hydrocarbon (HC)'', ``Manufacture'', 
``Manufacturer'', ``Model year'', ``New marine engine'', ``Residual 
fuel'', ``Small-volume boat builder'', ``Small-volume engine 
manufacturer'', ``Tier 2'', ``Tier 3'', ``Total hydrocarbon 
equivalent'', and ``Useful life''.
0
b. Adding new definitions for ``2008 Annex VI'', ``Alcohol-fueled 
engine'', ``Date of manufacture'', ``ECA associated area'', ``Emission 
control area (ECA)'', ``Gas turbine engine'', ``Maximum in-use engine 
speed'', ``Reflag'', ``NOX Technical Code'', and ``U.S. 
waters'' in alphanumeric order.
0
c. By removing the definition for ``Annex VI Technical Code''.


Sec.  1042.901  Definitions.

* * * * *
    2008 Annex VI means MARPOL Annex VI, which is an annex to the 
International Convention on the Prevention of Pollution from Ships, 
1973, as modified by the protocol of 1978 relating thereto 
(incorporated by reference in Sec.  1042.910).
* * * * *
    Alcohol-fueled engine means an engine that is designed to run using 
an alcohol fuel. For purposes of this definition, alcohol fuels do not 
include fuels with a nominal alcohol content below 25 percent by 
volume.
* * * * *
    Carryover means relating to certification based on emission data 
generated from an earlier model year as described in Sec.  1042.235(d).
    Category 1 means relating to a marine engine with specific engine 
displacement below 7.0 liters per cylinder. See Sec.  1042.670 to 
determine equivalent per-cylinder displacement for nonreciprocating 
marine engines (such as gas turbine engines).
    Category 2 means relating to a marine engine with a specific engine 
displacement at or above 7.0 liters per cylinder but less than 30.0 
liters per cylinder. See Sec.  1042.670 to determine equivalent per-
cylinder displacement for nonreciprocating marine engines (such as gas 
turbine engines).
    Category 3 means relating to a reciprocating marine engine with a 
specific engine displacement at or above 30.0 liters per cylinder.
* * * * *
    Compression-ignition means relating to a type of reciprocating, 
internal-combustion engine that is not a spark-ignition engine. Note 
that certain other marine engines (such as those powered by natural gas 
with maximum engine power at or above 250 kW) are deemed to be 
compression-ignition engines in Sec.  1042.1.
* * * * *
    Date of manufacture has the meaning given in 40 CFR 1068.30.
* * * * *
    Deterioration factor means the relationship between emissions at 
the end of useful life and emissions at the low-hour test point (see 
Sec. Sec.  1042.240 and 1042.245), expressed in one of the following 
ways:
    (1) For multiplicative deterioration factors, the ratio of 
emissions at the end of useful life to emissions at the low-hour test 
point.
    (2) For additive deterioration factors, the difference between 
emissions at the end of useful life and emissions at the low-hour test 
point.
* * * * *
    ECA associated area has the meaning given in 40 CFR 1043.20.
    Emission control area (ECA) has the meaning given in 40 CFR 
1043.20.
* * * * *
    Engine configuration means a unique combination of engine hardware 
and calibration within an engine family. Engines within a single engine 
configuration differ only with respect to normal production variability 
or factors unrelated to emissions.
* * * * *
    Freshly manufactured marine engine means a marine engine that has 
not been placed into service. An engine becomes freshly manufactured 
when it is originally manufactured. See the definition of ``New marine 
engine'' for provisions that specify that certain other types of new 
engines are treated as freshly manufactured engines.
* * * * *
    Gas turbine engine has the meaning given in 40 CFR 1068.30. In 
general, this means anything commercially known as a gas turbine 
engine. It does not include external combustion steam engines.
* * * * *
    Hydrocarbon (HC) means the hydrocarbon group on which the emission 
standards are based for each fuel type, as described in Sec.  
1042.101(d) and Sec.  1042.104(a).
* * * * *
    Manufacture means the physical and engineering process of 
designing, constructing, and assembling an engine or a vessel, or 
modifying or operating an engine or vessel in a way that makes it a new 
marine engine or new marine vessel.
    Manufacturer means any person who manufactures (see definition of 
``manufacture'' in this section) a new engine or vessel or imports such 
engines or vessels for resale. All manufacturing entities under the 
control of the same person are considered to be a single manufacturer.
    (1) This term includes, but is not limited to:
    (i) Any person who manufactures an engine or vessel for sale in the 
United States or otherwise introduces a new marine engine into U.S. 
commerce.
    (ii) Importers who import engines or vessels for resale.
    (iii) Post-manufacture marinizers.
    (iv) Vessel owners/operators that reflag a formerly foreign vessel 
as a U.S.-flagged vessel.
    (v) Any person who modifies or operates an engine or vessel in a 
way that makes it a new marine engine or new marine vessel.
    (2) Dealers that do not cause an engine or vessel to become new are 
not manufacturers.
* * * * *
    Maximum in-use engine speed has the meaning given in Sec.  
1042.140.
* * * * *
    Model year means any of the following:
    (1) For freshly manufactured marine engines (see definition of 
``new marine engine,'' paragraph (1)), model year means one of the 
following:
    (i) Calendar year.
    (ii) Your annual new model production period if it is different 
than the calendar year. This must include January 1 of the calendar 
year for which the model year is named. It may not begin before January 
2 of the previous calendar year and it must end by December 31 of the 
named calendar year. For seasonal production periods not including 
January 1, model year means the calendar year in which the production 
occurs, unless you choose to certify the applicable engine family with 
the following model year. For example, if your production period is 
June 1, 2010 through November 30, 2010, your model year would be 2010 
unless you choose to certify the engine family for model year 2011.
    (2) For an engine that is converted to a marine engine after being 
certified and placed into service as a motor vehicle engine, a nonroad 
engine that is not a marine engine, or a stationary engine, model year 
means the calendar year in which the engine was originally produced. 
For an engine that is

[[Page 23011]]

converted to a marine engine after being placed into service as a motor 
vehicle engine, a nonroad engine that is not a marine engine, or a 
stationary engine without having been certified, model year means the 
calendar year in which the engine becomes a new marine engine. (See 
definition of ``new marine engine,'' paragraph (2)).
    (3) For an uncertified marine engine excluded under Sec.  1042.5 
that is later subject to this part 1042 as a result of being installed 
in a different vessel, model year means the calendar year in which the 
engine was installed in the non-excluded vessel. For a marine engine 
excluded under Sec.  1042.5 that is later subject to this part 1042 as 
a result of reflagging the vessel, model year means the calendar year 
in which the engine was originally manufactured. For a marine engine 
that become new under paragraph (7) of the definition of ``new marine 
engine,'' model year means the calendar year in which the engine was 
originally manufactured. (See definition of ``new marine engine,'' 
paragraphs (3) and (7)).
    (4) For engines that do not meet the definition of ``freshly 
manufactured'' but are installed in new vessels, model year means the 
calendar year in which the engine is installed in the new vessel. (See 
definition of ``new marine engine,'' paragraph (4)).
    (5) For remanufactured engines, model year means the calendar year 
in which the remanufacture takes place.
    (6) For imported engines:
    (i) For imported engines described in paragraph (5)(i) of the 
definition of ``new marine engine,'' model year has the meaning given 
in paragraphs (1) through (4) of this definition.
    (ii) For imported engines described in paragraph (5)(ii) of the 
definition of ``new marine engine,'' model year means the calendar year 
in which the engine is remanufactured.
    (iii) For imported engines described in paragraph (5)(iii) of the 
definition of ``new marine engine,'' model year means the calendar year 
in which the engine is first assembled in its imported configuration, 
unless specified otherwise in this part or in 40 CFR part 1068.
    (iv) For imported engines described in paragraph (5)(iv) of the 
definition of ``new marine engine,'' model year means the calendar year 
in which the engine is imported.
    (7) [Reserved].
    (8) For freshly manufactured vessels, model year means the calendar 
year in which the keel is laid or the vessel is at a similar stage of 
construction. For vessels that become new under paragraph (2) of the 
definition of ``new vessel'' (as a result of modifications), model year 
means the calendar year in which the modifications physically begin.
* * * * *
    New marine engine means any of the following:
    (1) A freshly manufactured marine engine for which the ultimate 
purchaser has never received the equitable or legal title. This kind of 
engine might commonly be thought of as ``brand new.'' In the case of 
this paragraph (1), the engine is new from the time it is produced 
until the ultimate purchaser receives the title or the product is 
placed into service, whichever comes first.
    (2) An engine originally manufactured as a motor vehicle engine, a 
nonroad engine that is not a marine engine, or a stationary engine that 
is later used or intended to be used as a marine engine. In this case, 
the engine is no longer a motor vehicle, nonmarine, or stationary 
engine and becomes a ``new marine engine.'' The engine is no longer new 
when it is placed into marine service as a marine engine. This 
paragraph (2) applies for engines we exclude under Sec.  1042.5, where 
that engine is later installed as a marine engine in a vessel that is 
covered by this part 1042. For example, this would apply to an engine 
that is no longer used in a foreign vessel. An engine converted to a 
marine engine without having been certified is treated as a freshly 
manufactured engine under this part 1042.
    (3) A marine engine that has been previously placed into service in 
an application we exclude under Sec.  1042.5, where that engine is 
installed in a vessel that is covered by this part 1042. The engine is 
new when it first enters U.S. waters on a vessel covered by this part 
1042. For example, this would apply to an engine that is no longer used 
in a foreign vessel and for engines on a vessel that is reflagged as a 
U.S. vessel. Note paragraph (7) of this definition may also apply.
    (4) An engine not covered by paragraphs (1) through (3) of this 
definition that is intended to be installed in a new vessel. This 
generally includes installation of used engines in new vessels. The 
engine is no longer new when the ultimate purchaser receives a title 
for the vessel or it is placed into service, whichever comes first. 
Such an engine is treated as a freshly manufactured engine under this 
part 1042, whether or not it meets the definition of ``freshly 
manufactured marine engine.''
    (5) A remanufactured marine engine. An engine becomes new when it 
is remanufactured (as defined in this section) and ceases to be new 
when placed back into service.
    (6) An imported marine engine, subject to the following provisions:
    (i) An imported marine engine covered by a certificate of 
conformity issued under this part that meets the criteria of one or 
more of paragraphs (1) through (4) of this definition, where the 
original engine manufacturer holds the certificate, is new as defined 
by those applicable paragraphs.
    (ii) An imported remanufactured engine that would have been 
required to be certified if it had been remanufactured in the United 
States.
    (iii) An imported engine that will be covered by a certificate of 
conformity issued under this part, where someone other than the 
original engine manufacturer holds the certificate (such as when the 
engine is modified after its initial assembly), is a new marine engine 
when it is imported. It is no longer new when the ultimate purchaser 
receives a title for the engine or it is placed into service, whichever 
comes first.
    (iv) An imported marine engine that is not covered by a certificate 
of conformity issued under this part at the time of importation is new, 
but only if it was produced on or after the dates shown in the 
following table. This addresses uncertified engines and vessels 
initially placed into service that someone seeks to import into the 
United States. Importation of this kind of engine (or vessel containing 
such an engine) is generally prohibited by 40 CFR part 1068.

                   Applicability of Emission Standards for Compression-Ignition Marine Engines
----------------------------------------------------------------------------------------------------------------
                                                                                                       Initial
                                                                         Per-cylinder displacement    model year
         Engine category and type                   Power (kW)                    (L/cyl)            of emission
                                                                                                      standards
----------------------------------------------------------------------------------------------------------------
Category 1...............................  P < 19.....................  All........................         2000

[[Page 23012]]


Category 1...............................  19 <= P < 37...............  All........................         1999
Category 1, Recreational.................  P >= 37....................  disp. < 0.9................         2007
Category 1, Recreational.................  All........................  0.9 <= disp. < 2.5.........         2006
Category 1, Recreational.................  All........................  disp. >= 2.5...............         2004
Category 1, Commercial...................  P >= 37....................  disp. < 0.9................         2005
Category 1, Commercial...................  All........................  disp. >= 0.9...............         2004
Category 2 and Category 3................  All........................  disp. >= 5.0...............         2004
----------------------------------------------------------------------------------------------------------------

    (7) A marine engine that is not covered by a certificate of 
conformity issued under this part on a U.S.-flag vessel entering U.S. 
waters is new, but only if it was produced on or after the dates 
identified in paragraph (6)(iv) of this definition. Such entrance is 
deemed to be introduction into U.S. commerce.
* * * * *
    NOX Technical Code means the ``Technical Code on Control of 
Emission of Nitrogen Oxides from Marine Diesel Engines'' adopted by the 
International Maritime Organization (incorporated by reference in Sec.  
1042.910). The Technical Code is part of 2008 Annex VI.
* * * * *
    Reflag means to register as a U.S. vessel any vessel that 
previously had a foreign registry or had been placed into service 
without registration.
* * * * *
    Residual fuel means any fuel with a T90 greater than 700 
[deg]F as measured with the distillation test method specified in 40 
CFR 1065.1010. This generally includes all RM grades of marine fuel 
without regard to whether they are known commercially as residual fuel. 
For example, fuel marketed as intermediate fuel may be residual fuel.
* * * * *
    Small-volume boat builder means a boat manufacturer with fewer than 
500 employees and with annual worldwide production of fewer than 100 
boats. For manufacturers owned by a parent company, these limits apply 
to the combined production and number of employees of the parent 
company and all its subsidiaries. Manufacturers that produce vessels 
with Category 3 engines are not small-volume boat builders.
    Small-volume engine manufacturer means a manufacturer of Category 1 
and/or Category 2 engines with annual worldwide production of fewer 
than 1,000 internal combustion engines (marine and nonmarine). For 
manufacturers owned by a parent company, the limit applies to the 
production of the parent company and all its subsidiaries. 
Manufacturers that certify or produce any Category 3 engines are not 
small-volume engine manufacturers.
* * * * *
    Tier 2 means relating to the Tier 2 emission standards, as shown in 
Sec.  1042.104 and Appendix I.
    Tier 3 means relating to the Tier 3 emission standards, as shown in 
Sec.  1042.101 and Sec.  1042.104.
* * * * *
    Total hydrocarbon equivalent has the meaning given in 40 CFR 
1065.1001. This generally means the sum of the carbon mass 
contributions of non-oxygenated hydrocarbons, alcohols and aldehydes, 
or other organic compounds that are measured separately as contained in 
a gas sample, expressed as exhaust hydrocarbon from petroleum-fueled 
engines. The atomic hydrogen-to-carbon ratio of the equivalent 
hydrocarbon is 1.85:1.
* * * * *
    U.S. waters includes U.S. navigable waters and the U.S. EEZ.
    Useful life means the period during which the engine is designed to 
properly function in terms of reliability and fuel consumption, without 
being remanufactured, specified as a number of hours of operation or 
calendar years, whichever comes first. It is the period during which an 
engine is required to comply with all applicable emission standards. 
See Sec. Sec.  1042.101(e) and 1042.104(d).

0
207. Section 1042.905 is amended by adding the acronyms ``ECA'', 
``EEZ'', and ``IMO'' in alphabetical order to read as follows:


Sec.  1042.905  Symbols, acronyms, and abbreviations.

* * * * *
ECA Emission Control Area.
EEZ Exclusive Economic Zone.
* * * * *
IMO International Maritime Organization.
* * * * *

0
208. Section 1042.910 is revised to read as follows:


Sec.  1042.910  Reference materials.

    Documents listed in this section have been incorporated by 
reference into this part. The Director of the Federal Register approved 
the incorporation by reference as prescribed in 5 U.S.C. 552(a) and 1 
CFR part 51. Anyone may inspect copies at the U.S. EPA, Air and 
Radiation Docket and Information Center, 1301 Constitution Ave., NW., 
Room B102, EPA West Building, Washington, DC 20460, (202) 566-1744, or 
at the National Archives and Records Administration (NARA). For 
information on the availability of this material at NARA, call 202-741-
6030, or go to: http://www.archives.gov/federal_register/code_of_
federal_regulations/ibr_locations.html.
    (a) IMO material. This paragraph (a) lists material from the 
International Maritime Organization that we have incorporated by 
reference. Anyone may purchase copies of these materials from the 
International Maritime Organization, 4 Albert Embankment, London SE1 
7SR, United Kingdom, or http://www.imo.org, or 44-(0)20-7735-7611.
    (1) Revised MARPOL Annex VI, Regulations for the Prevention of Air 
Pollution from Ships, and NOX Technical Code 2008, 2009 
edition.
    (i) Revised MARPOL Annex VI, Regulations for the Prevention of 
Pollution from Ships (``2008 Annex VI''); IBR approved for Sec.  
1042.901.
    (ii) NOX Technical Code 2008 (``NOX Technical 
Code''); IBR approved for Sec. Sec.  1042.104(g), 1042.230(d), 
1042.302(c) and (e), 1042.501(g), and 1042.901.
    (2) [Reserved]
    (b) [Reserved]

0
209. Appendix I to part 1042 is amended by revising paragraphs (b)(2) 
introductory text and (b)(3) to read as follows:

Appendix I to Part 1042--Summary of Previous Emission Standards

* * * * *
    (b) * * *
    (2) Tier 2 primary standards. Exhaust emissions from Category 1 
engines at or

[[Page 23013]]

above 37 kW and all Category 2 engines may not exceed the values 
shown in the following table:
* * * * *
    (3) Tier 2 supplemental standards. The not-to-exceed emission 
standards specified in 40 CFR 94.8(e) apply for all engines subject 
to the Tier 2 standards described in paragraph (b)(2) of this 
appendix.

0
210. A new part 1043 is added to subchapter U to read as follows:

PART 1043--CONTROL OF NOX, SOX, AND PM EMISSIONS FROM MARINE 
ENGINES AND VESSELS SUBJECT TO THE MARPOL PROTOCOL

Sec.
1043.1 Overview.
1043.5 Effective dates.
1043.10 Applicability.
1043.20 Definitions.
1043.30 General obligations.
1043.40 EIAPP certificates.
1043.41 EIAPP certification process.
1043.50 Approval of methods to meet Tier 1 retrofit NOX 
standards.
1043.55 Applying equivalent controls instead of complying with fuel 
requirements.
1043.60 Operating requirements for engines and vessels subject to 
this part.
1043.70 General recordkeeping and reporting requirements.
1043.80 Recordkeeping and reporting requirements for fuel suppliers.
1043.90 [RESERVED]
1043.95 Interim provisions.
1043.100 Reference materials.

    Authority: 33 U.S.C. 1901-1915.


Sec.  1043.1  Overview.

    The Act to Prevent Pollution from Ships (APPS) requires engine 
manufacturers, owners and operators of vessels, and other persons to 
comply with Annex VI of the MARPOL Protocol. This part implements 
portions of APPS as it relates to Regulations 13, 14 and 18 of Annex 
VI. These regulations clarify the application of some Annex VI 
provisions; provide procedures and criteria for the issuance of EIAPP 
certificates; and specify requirements applicable to ships that are not 
registered by Parties to Annex VI. This part includes provisions to 
apply the equivalency provisions of Regulation 4 of Annex VI with 
respect to Regulations 14 and 18 of Annex VI. Additional regulations 
may also apply with respect to the Annex VI, such as those issued 
separately by the U.S. Coast Guard. Note that references in this part 
to a specific subsection of an Annex VI regulation (such as Regulation 
13.5.1) reflect the regulation numbering of the 2008 Annex VI 
(incorporated by reference in Sec.  1043.100).
    (a) The general requirements for non-public U.S.-flagged and other 
Party vessels are specified in Annex VI, as implemented by 33 U.S.C. 
1901-1915. These requirements apply to engine manufacturers, owners and 
operators of vessels, and other persons.
    (b) The provisions of this part specify how Regulations 13, 14 and 
18 of Annex VI, as implemented by APPS, will be applied to U.S.-flagged 
vessels that operate only domestically.
    (c) This part implements section 33 U.S.C. 1902(e) by specifying 
that non-public vessels flagged by a country that is not a party to 
Annex VI are subject to certain provisions under this part that are 
equivalent to the substantive requirements of Regulations 13, 14 and 18 
of Annex VI as implemented by APPS.
    (d) This part also describes where the requirements of Regulation 
13.5.1 of Annex VI and Regulation 14.4 of Annex VI will apply.
    (e) This part 1043 does not limit the requirements specified in 
Annex VI, as implemented by APPS, except as specified in Sec.  
1043.10(a)(2) and (b)(3).
    (f) Nothing in this part limits the operating requirements and 
restrictions applicable for engines and vessels subject to 40 CFR part 
1042 or the requirements and restrictions applicable for fuels subject 
to 40 CFR part 80.
    (g) The provisions of this part specify how to obtain EIAPP 
certificates and certificates for Approved Methods.


Sec.  1043.5  Effective dates.

    (a) The requirement of APPS for marine vessels to comply with Annex 
VI of the MARPOL Protocol is in effect.
    (b) The amendments to Annex VI adopted on October 8, 2008 enter 
into force July 1, 2010. The requirement of APPS for marine vessels to 
comply with the amended Annex VI is effective July 1, 2010, although 
some requirements do not become applicable until later dates.
    (c) Compliance with the applicable regulations of this part is 
required for all persons as of July 1, 2010. (Note that certain 
requirements begin later, as described in paragraph (d) of this 
section.) Note also that compliance with Sec. Sec.  1043.40 and 1043.41 
is required to obtain EIAPP certificates under this part whether the 
application is submitted before July 1, 2010 or later.
    (d) Compliance with the requirements related to ECAs are effective 
as follows:
    (1) Compliance with the ECA NOX requirements (see Sec.  
1043.60(a)) is required beginning on the date on which the ECA enters 
into force for the United States under Annex VI.
    (2) Compliance with the fuel content requirements applicable within 
ECAs and ECA associated areas (see Sec.  1043.60(b)) is required 
beginning 12 months after date on which the ECA enters into force for 
the United States under Annex VI.


Sec.  1043.10  Applicability.

    (a) U.S.-flagged vessels. The provisions of this part apply for all 
U.S.-flagged vessels wherever they are located (including engines 
installed or intended to be installed on such vessels), except as 
specified in this paragraph (a) or in Sec.  1043.95.
    (1) Public vessels are excluded from this part.
    (2) Vessels that operate only domestically and conform to the 
requirements of this paragraph (a)(2) are excluded from Regulation 13 
of Annex VI (including the requirement to obtain an EIAPP certificate) 
and the NOX-related requirements of this part. For the 
purpose of this exclusion, the phrase ``operate only domestically'' 
means the vessels do not enter waters subject to the jurisdiction or 
control of any foreign country, except for Canadian portions of the 
Great Lakes. (See Sec. Sec.  1043.60 and 1043.70 for provisions related 
to fuel use by such vessels). To be excluded, the vessel must conform 
to each of the following provisions:
    (i) All compression-ignition engines on the vessel must conform 
fully to all applicable provisions of 40 CFR parts 94 and 1042.
    (ii) The vessel may not contain any engines with a specific engine 
displacement at or above 30.0 liters per cylinder.
    (iii) Any engine installed in the vessel that is not covered by an 
EIAPP must be labeled as specified in 40 CFR 1042.135 with respect to 
whether it meets the requirements of Regulation 13 of Annex VI.
    (b) Foreign-flagged vessels. The provisions of this part apply for 
all non-public foreign-flagged vessels (including engines installed on 
such vessels) as follows:
    (1) The requirements of this part apply for foreign-flagged vessels 
operating in U.S. navigable waters or the U.S. EEZ.
    (2) For non-public vessels flagged by a country that is not a party 
to Annex VI, the requirements of this part apply in the same manner as 
apply for Party vessels, except as otherwise provided in this part. For 
example, see Sec.  1043.30(b)(3) for provisions related to showing 
compliance with this requirement without an EIAPP certificate. See 
Sec.  1043.60 for specific operating requirements.
    (3) Canadian vessels that operate only within the Great Lakes and 
are subject to an alternative NOX control measure 
established by the Canadian government

[[Page 23014]]

are excluded from the NOX-related requirements of this part.
    (c) Fuel suppliers. The provisions of Sec.  1043.80 apply for all 
persons supplying fuel to any vessel subject to this part.
    (d) Sea bed mineral exploration. This part does not apply to 
emissions directly arising from the exploration, exploitation, and 
associated offshore processing of sea-bed mineral resources. Note that 
other regulations apply with respect to these emissions in certain 
circumstances, and that engines that are not solely dedicated to such 
activities are otherwise subject to all requirements of this part.


Sec.  1043.20  Definitions.

    The following definitions apply to this part:
    2008 Annex VI means Annex VI to the MARPOL Protocol, including 
amendments adopted in October 2008. The 2008 Annex VI is incorporated 
by reference in Sec.  1043.100. Note that this version of Annex VI does 
not include any amendments that may be adopted in the future. This 2008 
version applies for certain provisions of this part such as those 
applicable for internal waters and for non-Party vessels.
    Administrator means the Administrator of the Environmental 
Protection Agency.
    Annex VI means Annex VI of the MARPOL Protocol.
    APPS means the Act to Prevent Pollution from Ships (33 U.S.C. 1901-
1915).
    Designated Certification Officer means the EPA official to whom the 
Administrator has delegated authority to issue EIAPP certificates. Note 
that the Designated Certification Officer is also delegated certain 
authorities under this part in addition to the authority to issue EIAPP 
certificates.
    ECA associated area means the U.S. internal waters that are 
navigable from the ECA. This term does not include internal waters that 
are shoreward of ocean waters that are not part of an emission control 
area.
    EIAPP certificate means a certificate issued to certify initial 
compliance with Regulation 13 of Annex VI. (Note that EIAPP stands for 
Engine International Air Pollution Prevention under Annex VI.)
    Emission control area (ECA) means an area designated pursuant to 
Annex VI as an Emission Control Area that:
    (1) Is in force; and
    (2) Includes waters of the U.S. territorial sea and/or EEZ.
    Engine has the meaning given in 40 CFR 1068.30.
    EPA means the United States Environmental Protection Agency.
    Foreign-flagged vessel means a vessel of foreign registry or a 
vessel operated under the authority of a country other than the United 
States.
    Good engineering judgment has the meaning given in 40 CFR 1068.30. 
We will evaluate engineering judgments as described in 40 CFR 1068.5.
    Great Lakes means all the streams, rivers, lakes, and other bodies 
of water that are within the drainage basin of the St. Lawrence River, 
west of Anticosti Island.
    IMO means the International Maritime Organization.
    Major conversion has the meaning given in 2008 Annex VI 
(incorporated by reference in Sec.  1043.100).
    MARPOL Protocol has the meaning given in 33 U.S.C. 1901.
    Navigable waters has the meaning given in 33 U.S.C. 1901.
    Non-Party vessel means a vessel flagged by a country that is not a 
party to Annex VI.
    NOX Technical Code means the ``Technical Code on Control of 
Emission of Nitrogen Oxides from Marine Diesel Engines'' adopted by IMO 
(incorporated by reference in Sec.  1043.100). The Technical Code is 
part of 2008 Annex VI.
    Operator has the meaning given in 33 U.S.C. 1901.
    Owner has the meaning given in 33 U.S.C. 1901.
    Party vessel means a vessel flying the flag of, registered in, or 
operating under the authority of a country that is a party to Annex VI.
    Person has the meaning given in 33 U.S.C. 1901.
    Public vessels means warships, naval auxiliary vessels, and other 
vessels owned or operated by a sovereign country when engaged in 
noncommercial service.
    Secretary has the meaning given in 33 U.S.C. 1901.
    U.S. EEZ means the Exclusive Economic Zone of the United States, as 
defined in Presidential Proclamation 5030 of March 10, 1983.
    U.S.-flagged vessel means a vessel of U.S. registry or a vessel 
operated under the authority of the United States.
    Vessel has the meaning given to ``ship'' in APPS.
    We means EPA.


Sec.  1043.30  General obligations.

    (a) 33 U.S.C. 1907 prohibits any person from violating any 
provisions of the MARPOL Protocol, whether or not they are a 
manufacturer, owner or operator. For manufacturers, owners and 
operators of vessels subject to this part, it is the responsibility of 
such manufacturers, owners and operators to ensure that all employees 
and other agents operating on their behalf comply with these 
requirements.
    (b) Manufacturers of engines to be installed on U.S. vessels 
subject to this part must obtain an EIAPP certificate for an engine 
prior to it being installed in a vessel.
    (c) Engines with power output of more than 130 kW that are listed 
in this paragraph (c) must be covered by a valid EIAPP certificate, 
certifying the engine meets the applicable emission standards of Annex 
VI, unless the engine is excluded under Sec.  1043.10 or paragraph (d) 
of this section. An EIAPP certificate is valid for a given engine only 
if it certifies compliance with the tier of standards applicable to 
that engine and the vessel into which it is being installed (or a later 
tier). Note that none of the requirements of this paragraph (c) are 
limited to new engines.
    (1) Engines meeting any of the following criteria must be covered 
by a valid EIAPP certificate:
    (i) Engines installed (or intended to be installed) on vessels that 
were constructed on or after January 1, 2000. This includes engines 
that met the definition of ``new marine engine'' in 40 CFR 1042.901 at 
any time on or after January 1, 2000, unless such engines are installed 
on vessels that were constructed before January 1, 2000.
    (ii) Engines that undergo a major conversion on or after January 1, 
2000, unless the engines have been exempt from this requirement under 
paragraph (e) of this section.
    (2) For such engines intended to be installed on U.S.-flagged 
vessels, the engine may not be introduced into U.S. commerce before it 
is covered by a valid EIAPP certificate, except as allowed by this 
paragraph (c)(2).
    (i) This paragraph (c)(2) does not apply for engines installed on 
vessels excluded under this part 1043.
    (ii) Engines without a valid EIAPP certificate (because they are 
intended for domestic use only) may be introduced into U.S. commerce, 
but may not be installed on vessels that do not meet the requirements 
of Sec.  1043.10(a)(2).
    (iii) Engines that have been temporarily exempted by EPA under 40 
CFR part 1042 or part 1068 may be introduced into U.S. commerce without 
a valid EIAPP certificate to the same extent they are allowed to be 
introduced into U.S. commerce without a valid part 1042 certificate of 
conformity, however, this allowance does not affect whether the engine 
must ultimately be covered by an EIAPP certificate. Unless otherwise 
excluded or exempted under this part 1043, the engine must be covered 
by an EIAPP certificate before

[[Page 23015]]

being placed into service. For example, engines allowed to be 
temporarily distributed in an uncertified configuration under 40 CFR 
1068.260 would not be required to be covered by an EIAPP certificate 
while it is covered by the temporary exemption under 40 CFR 1068.260; 
however, it would be required to be covered by an EIAPP certificate 
before being placed into service.
    (iv) All uninstalled marine engines within the United States are 
presumed to be intended to be installed on a U.S.-flagged vessel, 
unless there is clear and convincing evidence to the contrary.
    (3) For engines installed on Party vessels, the engine may not 
operate in the U.S. navigable waters or the U.S. exclusive economic 
zone, or other areas designated under 33 U.S.C. 1902(a)(5)(B)(iii), 
(C)(iii), or (D)(iv) unless it is covered by a valid EIAPP certificate.
    (4) Engines installed on non-Party vessels are not required to have 
EIAPP certificates, but the operator must have evidence of conformity 
with Regulation 13 of Annex VI issued by either the government of a 
country that is party to Annex VI or a recognized classification 
society. For the purposes of this paragraph, ``recognized 
classification society'' means a classification society that is a 
participating member of the International Association of Classification 
Societies (IACS).
    (d) In addition to the engines excluded under Sec.  1043.10, the 
following engines are excluded from the requirement to have an EIAPP 
certificate (or equivalent demonstration of compliance in the case of 
non-Party vessels) or otherwise meet the requirements of Regulation 13 
of Annex VI.
    (1) Spark-ignition engines.
    (2) Non-reciprocating engines.
    (3) Engines that do not use liquid fuel.
    (4) Engines intended to be used solely for emergencies. This 
includes engines that power equipment such as pumps that are intended 
to be used solely for emergencies and engines installed in lifeboats 
intended to be used solely for emergencies. It does not include engines 
to be used for both emergency and non-emergency purposes.
    (e) The following requirements apply to Party vessels, including 
U.S.-flagged vessels:
    (1) The requirements specified in Annex VI apply for vessels 
subject to this part for operation in U.S. navigable waters or the U.S. 
EEZ. (See Sec.  1043.60 for a summary of the standards included in 
these requirements.)
    (2) Vessels operating in an ECA must also comply with the 
requirements of Annex VI applicable to operation in an ECA.
    (3) Vessels operating in waters of an ECA associated area must also 
comply with the requirements in Sec.  1043.60.
    (f) The following requirements apply to non-Party vessels:
    (1) Non-Party vessels operating in U.S. navigable waters or the 
U.S. EEZ must comply with the operating and recordkeeping requirements 
of the 2008 Annex VI (incorporated by reference in Sec.  1043.100) 
related to Regulations 13, 14 and 18 of the 2008 Annex VI. This 
paragraph (f)(1) does not address requirements of other portions of 
Annex VI.
    (2) Non-Party vessels operating in an ECA or ECA associated area 
must also comply with the requirements in Sec.  1043.60.
    (g) A replacement engine may be exempted by EPA from Regulation 13 
of Annex VI and the NOX-related requirements of this part if 
it is identical to the engine being replaced and the old engine was not 
subject to Regulation 13 of Annex VI. Send requests for such exemptions 
to the Designated Certification Officer.
    (h) Compliance with the provisions of this part 1043 does not 
affect your responsibilities under 40 CFR part 1042 for engines subject 
to that part 1042.


Sec.  1043.40  EIAPP certificates.

    (a) Engine manufacturers seeking EIAPP certificates for new engines 
to be used in U.S.-flagged vessels must apply to EPA for an EIAPP 
certificate in compliance with the requirements of this section (which 
references 40 CFR part 1042). Note that under APPS engine manufacturers 
must comply with the applicable requirements of Regulation 13 of Annex 
VI to obtain a certificate. Note also that only the Administrator or 
the EPA official designated by the Administrator may issue EIAPP 
certificates on behalf of the U.S. Government.
    (b) Persons other than engine manufacturers may apply for and 
obtain EIAPP certificates for new engines to be used in U.S.-flagged 
vessels by complying with the requirements of this section (which 
references 40 CFR part 1042) and the applicable requirements of 
Regulation 13 of Annex VI.
    (c) In appropriate circumstances, EPA may issue an EIAPP 
certificate under this section for non-new engines or engines for 
vessels that will not initially be flagged in the U.S.
    (d) The process for obtaining an EIAPP certificate is described in 
Sec.  1043.41. That section references regulations in 40 CFR part 1042, 
which apply under the Clean Air Act. References in that part to 
certificates of conformity are deemed to mean EIAPP certificates. 
References in that part to the Clean Air Act as the applicable statute 
are deemed to mean 33 U.S.C. 1901-1915.
    (e) For engines that undergo a major conversion or for engines 
installed on imported vessels that become subject to the requirements 
of this part, we may specify alternate certification provisions 
consistent with the intent of this part.
    (f) This paragraph (f) applies for engines that were originally 
excluded from this part because they were intended for domestic use and 
were introduced into U.S. commerce without an EIAPP certificate. Note 
that such engines must be labeled as specified under 40 CFR 1042.135 to 
indicate that they are intended for domestic use. Such engines may be 
installed on vessels not intended only for domestic operation provided 
the engine manufacturer, vessel manufacturer, or vessel owner obtains 
an EIAPP certificate. Similarly, vessels originally intended only for 
domestic operation may be used internationally provided the engine 
manufacturer, vessel manufacturer, or vessel owner obtains an EIAPP 
certificate. In either case, the Technical File must specify that the 
engine was originally certified for domestic use only, prior to being 
covered by an EIAPP certificate. Engine manufacturers may provide a 
supplemental label to clarify that the engine is no longer limited to 
domestic service. An engine manufacturer, vessel manufacturer, or 
vessel owner may also ask to apply the provisions of this paragraph to 
engines originally certified for public vessels.


Sec.  1043.41  EIAPP certification process.

    This section describes the process for obtaining the EIAPP 
certificate required by Sec.  1043.40.
    (a) You must send the Designated Certification Officer a separate 
application for an EIAPP certificate for each engine family. An EIAPP 
certificate is valid starting with the indicated effective date and is 
valid for any production until such time as the design of the engine 
family changes or more stringent emission standards become applicable, 
whichever comes first. You may obtain preliminary approval of portions 
of the application under 40 CFR 1042.210.
    (b) The application must contain all the information required by 
this part. It must not include false or incomplete statements or 
information (see 40 CFR 1042.255). Include the information specified in 
40 CFR 1042.205 except as follows:

[[Page 23016]]

    (1) You must include the dates on which the test engines were built 
and the locations where the test engines were built.
    (2) Include a copy of documentation required by this part related 
to maintenance and in-use compliance for operators, such as the 
Technical File and onboard NOX verification procedures as 
specified by the NOX Technical Code (incorporated by 
reference in Sec.  1043.100).
    (3) You are not required to provide information specified in 40 CFR 
1042.205 regarding useful life, emission labels, deterioration factors, 
PM emissions, or not-to-exceed standards.
    (4) You must include a copy of your warranty instructions, but are 
not required to describe how you will meet warranty obligations.
    (c) We may ask you to include less information than we specify in 
this section as long as you maintain all the information required by 
paragraph (b) of this section.
    (d) You must use good engineering judgment for all decisions 
related to your application (see 40 CFR 1068.5).
    (e) An authorized representative of your company must approve and 
sign the application.
    (f) See 40 CFR 1042.255 for provisions describing how we will 
process your application.
    (g) Your application, including the Technical File and onboard 
NOX verification procedures, is subject to amendment as 
described in 40 CFR 1042.225.
    (h) Perform emission tests as follows:
    (1) Select an emission-data engine from each engine family for 
testing. For engines at or above 560 kW, you may use a development 
engine that is equivalent in design to the engine being certified. For 
Category 3 engines, you may use a single-cylinder version of the 
engine. Using good engineering judgment, select the engine 
configuration most likely to exceed an applicable emission standard, 
considering all exhaust emission constituents and the range of 
installation options available to vessel manufacturers.
    (2) Test your emission-data engines using the procedures and 
equipment specified in 40 CFR part 1042, subpart F, or in the 
NOX Technical Code (incorporated by reference in Sec.  
1043.100). We may require that your test be witnessed by an EPA 
official.
    (3) We may measure emissions from any of your test engines or other 
engines from the engine family, as follows:
    (i) We may decide to do the testing at your plant or any other 
facility. You must deliver the test engine to any test facility we 
designate. The test engine you provide must include appropriate 
manifolds, aftertreatment devices, electronic control units, and other 
emission-related components not normally attached directly to the 
engine block. If we do the testing at your plant, you must schedule it 
as soon as possible and make available the instruments, personnel, and 
equipment we need.
    (ii) If we measure emissions from one of your test engines, the 
results of that testing become the official emission results for the 
engine. Unless we later invalidate these data, we may decide not to 
consider your data in determining if your engine family meets 
applicable requirements.
    (iii) Before we test one of your engines, we may set its adjustable 
parameters to any point within the specified adjustable ranges (see 40 
CFR 1042.115(d)).
    (iv) Before we test one of your engines, we may calibrate it within 
normal production tolerances for anything we do not consider an 
adjustable parameter.
    (4) We may require you to test a second engine of the same or 
different configuration in addition to the engine tested under 
paragraph (b) of this section.
    (5) If you use an alternate test procedure under 40 CFR 1065.10 and 
later testing shows that such testing does not produce results that are 
equivalent to the procedures otherwise required by this part, we may 
reject data you generated using the alternate procedure.
    (i) Collect emission data using measurements to one more decimal 
place than the applicable standard, then round the value to the same 
number of decimal places as the emission standard. Compare the rounded 
emission levels to the emission standard for each emission-data engine.
    (j) Your engine family is considered in compliance with the 
emission standards in Regulation 13 of Annex VI if all emission-data 
engines representing that family have test results showing emission 
levels at or below these standards. Your engine family is deemed not to 
comply if any emission-data engine representing that family has test 
results showing an emission level above an applicable emission standard 
for any pollutant.
    (k) If we determine your application is complete and shows that the 
engines meet all the requirements of this part, we will issue an EIAPP 
certificate for your engines. We may make the approval subject to 
additional conditions.


Sec.  1043.50  Approval of methods to meet Tier 1 retrofit NOX 
standards.

    Regulation 13 of Annex VI provides for certification of Approved 
Methods, which are retrofit procedures that enable Pre-Tier 1 engines 
to meet the Tier 1 NOX standard of regulation 13 of Annex 
VI. Any person may request approval of such a method by submitting an 
application for certification of an Approve Method to the Designated 
Certification Officer. If we determine that your application conforms 
to the requirements of Regulation 13 of Annex VI, we will issue a 
certificate and notify IMO that your Approved Method has been 
certified.


Sec.  1043.55  Applying equivalent controls instead of complying with 
fuel requirements.

    Regulation 4 of Annex VI allows Administrations to approve the use 
of fuels not meeting the requirements of Regulation 14 of the Annex, 
provided the vessel applies a method that results in equivalent 
emission reductions. This section describes provisions related to 
applying this allowance.
    (a) Any person may request approval of such equivalent methods for 
controlling emissions on U.S.-flagged vessels by submitting an 
application for certification of an equivalent control method to the 
Designated Certification Officer. If we determine that your control 
method achieves emission levels equivalent to those achieved by the use 
of fuels meeting the requirements of Regulation 14 of Annex VI, we will 
issue a certificate and notify IMO that your method has been certified.
    (b) The provisions of this paragraph (b) apply for vessels equipped 
with controls certified by the Administration of a foreign flag vessel 
to achieve emission levels equivalent to those achieved by the use of 
fuels meeting the applicable fuel sulfur limits of Regulation 14 of 
Annex VI. Fuels not meeting the applicable fuel sulfur limits of 
Regulation 14 of Annex VI may be used on such vessels consistent with 
the provisions of the IAPP certificate, APPS and Annex VI.
    (c) Compliance with the requirements of this section does not 
affect the applicability of requirements or prohibitions specified by 
other statutes or regulations with respect to water pollution.


Sec.  1043.60  Operating requirements for engines and vessels subject 
to this part.

    This section specifies the operating requirements of this part. 
Note that it does not limit the operating requirements of APPS or Annex 
VI that

[[Page 23017]]

are applicable to U.S.-flagged vessels outside of U.S. domestic waters.
    (a) Except as specified otherwise in this part, NOX 
emission limits apply to all vessels subject to this part as specified 
in the following table:

                       Table 1 to Sec.   1043.60 Annex VI NOX Emission Standards (g/kW-hr)
----------------------------------------------------------------------------------------------------------------
                                                                              Maximum in-use engine speed
                                      Area of                        -------------------------------------------
             Tier                  applicability        Model year     Less than                      Over 2000
                                                                        130 RPM     130-2000 RPM\a\      RPM
----------------------------------------------------------------------------------------------------------------
Tier 1.......................  All U.S. navigable    2004-2010......         17.0   45.0[middot]n(-          9.8
                                waters and EEZ.                                               0.20)
Tier 2.......................  All U.S. navigable    2011-2015......         14.4   44.0[middot]n(-          7.7
                                waters and EEZ.                                               0.23)
Tier 2.......................  All U.S. navigable    2016 and later.         14.4   44.0[middot]n(-          7.7
                                waters and EEZ,                                               0.23)
                                exluding ECA and
                                ECA associated
                                areas.
Tier 3.......................  ECA and ECA           2016 and later.          3.4    9.0[middot]n(-          2.0
                                associated areas.                                             0.20)
----------------------------------------------------------------------------------------------------------------
\a\ Applicable standards are calculated from n (maximum in-use engine speed, in RPM, as specified in Sec.
  1042.140). Round the standards to one decimal place.

     (b) Except as specified otherwise in this part, fuel sulfur limits 
apply to all vessels subject to this part as specified in the following 
table:

                              Table 2 to Sec.   1043.60 Annex VI Fuel Sulfur Limits
                                                     [wt %]
----------------------------------------------------------------------------------------------------------------
                                                                  Sulfur limit in all    Sulfur limit in ECA and
                        Calendar years                           U.S. navigable waters     ECA associated areas
                                                                   and EEZ (percent)            (percent)
----------------------------------------------------------------------------------------------------------------
2010-2011.....................................................                     4.50                     1.00
2012-2015.....................................................                     3.50                     1.00
2016-2019.....................................................                     3.50                     0.10
2020 and later................................................                     0.50                     0.10
----------------------------------------------------------------------------------------------------------------

     (c) Operators of non-Party vessels must comply with the 
requirements of paragraphs (a) and (b) of this section as well as other 
operating requirements and restrictions specified in 2008 Annex VI 
(incorporated by reference in Sec.  1043.100) related to Regulations 
13, 14, and 18.
    (d) This paragraph (d) applies for vessels that are excluded from 
Regulation 13 of Annex VI and the NOX-related requirements 
of this part under Sec.  1043.10(a)(2) or (b)(3) because they operate 
only domestically. Where the vessels operate using only fuels meeting 
the specifications of 40 CFR part 80 for distillate fuel, they are 
deemed to be in full compliance with the fuel use requirements and 
prohibitions of this part and of Regulations 14 and 18 of Annex VI.
    (e) Except as noted in paragraph (d) of this section, nothing in 
this section limits the operating requirements and restrictions of 
Annex VI, as implemented by APPS, for Party vessels, including U.S.-
flagged vessels. Note also that nothing in this part limits the 
operating requirements and restrictions applicable for engines and 
vessels subject to 40 CFR part 1042 or the requirements and 
restrictions applicable for fuels subject to 40 CFR part 80.
    (f) We may exempt historic steamships from the fuel requirements of 
this part for operation in U.S. internal waters. Send requests for 
exemptions to the Designated Certification Officer.


Sec.  1043.70  General recordkeeping and reporting requirements.

    (a) Under APPS, owners and operators of Party vessels must keep 
records related to NOX standards and in-use fuel 
specifications such as the Technical File, the Engine Book of Record 
Parameters, and bunker delivery notes. Owners and operators of non-
Party vessels must keep these records as specified in the 
NOX Technical Code and Regulations 13, 14, and 18 of Annex 
VI (incorporated by reference in Sec.  1043.100). We may inspect these 
records as allowed by APPS. As part of our inspection, we may require 
that the owner submit copies of these records to us.
    (b) Nothing in this part limits recordkeeping and reporting the 
Secretary may require, nor does it preclude the Secretary from 
providing copies of any records to EPA.
    (c) Nothing in this part limits the recordkeeping and reporting 
requirements applicable with respect to engines and vessels subject to 
40 CFR part 1042 or with respect to fuels subject to 40 CFR part 80.
    (d) This paragraph (d) applies for vessels that are excluded from 
Regulation 13 of Annex VI and the NOX-related requirements 
of this part under Sec.  1043.10(a)(2) or (b)(3) because they operate 
only domestically. Where the vessel operator has fuel receipts (or 
equivalent records) for the preceding three years showing it operated 
using only fuels meeting the specifications of 40 CFR part 80 for 
distillate fuel, they are deemed to be in full compliance with the fuel 
recordkeeping requirements and prohibitions of this part and Annex VI.


Sec.  1043.80  Recordkeeping and reporting requirements for fuel 
suppliers.

    Under APPS, fuel suppliers must provide bunker delivery notes to 
vessel operators for any fuel for an engine on any vessel identified in 
paragraph (a) of this section. Fuel suppliers must also keep copies of 
these records.
    (a) The requirements of this section apply for fuel delivered to 
any of the following vessels:
    (1) Vessels of 400 gross tonnage and above engaged in voyages to 
ports or offshore terminals under the jurisdiction of other Parties.
    (2) Platforms and drilling rigs engaged in voyages to waters under 
the sovereignty or jurisdiction of other Parties.

[[Page 23018]]

    (b) Except as allowed by paragraph (c) of this section, the bunker 
delivery note must contain the following:
    (1) The name and IMO number of the receiving vessel.
    (2) Port (or other description of the location, if the delivery 
does not take place at a port).
    (3) Date the fuel is delivered to the vessel (or date on which the 
delivery begins where the delivery begins on one day and ends on a 
later day).
    (4) Name, address, and telephone number of fuel supplier.
    (5) Fuel type and designation under 40 CFR part 80.
    (6) Quantity in metric tons.
    (7) Density at 15 [deg]C, in kg/m\3\.
    (8) Sulfur content in weight percent.
    (9) A signed statement by an authorized representative of fuel 
supplier certifying that the fuel supplied conforms to Regulations 14 
and 18 of Annex VI consistent with it designation, intended use, and 
the date on which it is to be used. For example, with respect to 
conformity to Regulation 14 of Annex VI, a fuel designated and intended 
for use in an ECA any time between July 1, 2010 and January 1, 2015 may 
not have a sulfur content above 1.00 weight percent. This statement is 
not required where the vessel conforms to the requirements of Sec.  
1043.55.
    (c) You may measure density and sulfur content according to the 
specifications of Annex VI, or according to other equivalent methods 
that we approve. Where the density and/or sulfur content of the 
delivered fuel cannot be measured, we may allow the use of alternate 
methods to specify the density and/or sulfur content of the fuel. For 
example, where fuel is supplied from multiple tanks on a supply vessel, 
we may allow the density and sulfur content of the fuel to be 
calculated as a weighted average of the measured densities and sulfur 
contents of the fuel that is supplied from each tank.


Sec.  1043.90  [Reserved]


Sec.  1043.95  Interim provisions.

    The interim provisions of this section apply for vessels operating 
exclusively in the Great Lakes.
    (a) Notwithstanding other provisions of this part, the requirements 
of this part do not apply for vessels propelled by steam turbine 
engines or reciprocating steam engines (also known as steamships), 
provided they were propelled by steam engines and operated within the 
Great Lakes before October 30, 2009 and continue to operate exclusively 
within the Great Lakes.
    (b) In cases of serious economic hardship, we may exempt Great 
Lakes vessels from the otherwise applicable fuel use requirements under 
this part.
    (1) To be eligible, you must demonstrate that all of the following 
are true:
    (i) Unusual circumstances exist that impose serious economic 
hardship and significantly affect your ability to comply.
    (ii) You have taken all reasonable steps to minimize the extent of 
the nonconformity.
    (iii) No other allowances are available under the regulations in 
this chapter to avoid the impending violation.
    (2) Send the Designated Certification Officer a written request for 
an exemption no later than January 1, 2014.
    (3) Applicants must provide, at a minimum, the following 
information:
    (i) Detailed description of existing contract freight rates, the 
additional operating costs attributed to complying with the 
regulations, any loan covenants or other requirements regarding vessel 
financial instruments or agreements.
    (ii) Bond rating of entity that owns the vessels in question (in 
the case of joint ventures, include the bond rating of the joint 
venture entity and the bond ratings of all partners; in the case of 
corporations, include the bond ratings of any parent or subsidiary 
corporations).
    (iii) Estimated capital investment needed to comply with the 
requirements of this part by the applicable date.
    (4) In determining whether to grant the exemptions, we will 
consider all relevant factors, including the following:
    (i) The number of vessels to be exempted.
    (ii) The size of your company and your ability to endure the 
hardship.
    (iii) The length of time a vessel is expected to remain out of 
compliance with this part.
    (iv) The ability of an individual vessel to recover capital 
investments incurred to repower or otherwise modify a vessel to reduce 
air emissions.
    (5) In addition to the application requirements of paragraphs 
(b)(1) through (4) of this section, your application for temporary 
relief under this paragraph (b) must also include a compliance plan 
that shows the period over which the waiver is needed.
    (6) We may impose conditions on the waiver, including conditions to 
limit or recover any environmental loss.
    (c) Prior to January 1, 2015, it is not a violation of this part 
for vessels operating exclusively in the Great Lakes to use a residual 
fuel not meeting the sulfur limits of Regulation 14.4.2 of Annex VI, 
where the operator bunkers with the lowest sulfur marine residual fuel 
that was available within the port area where the vessel bunkered the 
fuel. For purposes of this paragraph (c), port area means the 
geographic limits of the port as specified by the Army Corps of 
Engineers. The reporting and recordkeeping requirements of this part 
continue to apply for such operation. In addition, if you operate using 
a residual fuel not meeting the sulfur limits of Regulation 14.4.2 
under this paragraph (c), you must send a report to the Designated 
Certification Officer that identifies the fuel that was used and 
documents how you determined that no compliant fuel was available. You 
must send this report within three months after the fueling event.


Sec.  1043.100  Reference materials.

    Documents listed in this section have been incorporated by 
reference into this part. The Director of the Federal Register approved 
the incorporation by reference as prescribed in 5 U.S.C. 552(a) and 1 
CFR part 51. Anyone may inspect copies at the U.S. EPA, Air and 
Radiation Docket and Information Center, 1301 Constitution Ave., NW., 
Room B102, EPA West Building, Washington, DC 20460, (202) 566-1744, or 
at the National Archives and Records Administration (NARA). For 
information on the availability of this material at NARA, call 202-741-
6030, or go to: http://www.archives.gov/federal_register/code_of_
federal_regulations/ibr_locations.html.
    (a) IMO material. This paragraph (a) lists material from the 
International Maritime Organization that we have incorporated by 
reference. Anyone may purchase copies of these materials from the 
International Maritime Organization, 4 Albert Embankment, London SE1 
7SR, United Kingdom, or http://www.imo.org, or 44-(0)20-7735-7611.
    (1) Revised MARPOL Annex VI, Regulations for the Prevention of Air 
Pollution from Ships, and NOX Technical Code 2008, 2009 
edition.
    (i) Revised MARPOL Annex VI, Regulations for the Prevention of 
Pollution from Ships (``2008 Annex VI''); IBR approved for Sec.  
1043.1, 1043.20, 1043.30(f), and 1043.60(c), and 1043.70(a).
    (ii) NOX Technical Code 2008 (``NOX Technical 
Code''); IBR approved for Sec. Sec.  1043.20, 1043.41(b) and (h), and 
1043.70(a).
    (2) [Reserved]
    (b) [Reserved]

[[Page 23019]]

PART 1045--CONTROL OF EMISSIONS FROM SPARK-IGNITION PROPULSION 
MARINE ENGINES AND VESSELS

0
211. The authority citation for part 1045 continues to read as follows:

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

Subpart B--[Amended]

0
212. Section 1045.103 is amended by revising paragraph (b) introductory 
text to read as follows:


Sec.  1045.103  What exhaust emission standards must my outboard and 
personal watercraft engines meet?

* * * * *
    (b) Averaging, banking, and trading. You may generate or use 
emission credits under the averaging, banking, and trading (ABT) 
program described in subpart H of this part for demonstrating 
compliance with HC+NOX emission standards. For CO emissions, 
you may generate or use emission credits for averaging as described in 
subpart H of this part, but such credits may not be banked or traded. 
To generate or use emission credits, you must specify a family emission 
limit for each pollutant you include in the ABT program for each engine 
family. These family emission limits serve as the emission standards 
for the engine family with respect to all required testing instead of 
the standards specified in this section. An engine family meets 
emission standards even if its family emission limit is higher than the 
standard, as long as you show that the whole averaging set of 
applicable engine families meets the emission standards using emission 
credits and the engines within the family meet the family emission 
limit. The following FEL caps apply:
* * * * *


0
213. Section 1045.125 is amended as follows:
0
a. By revising paragraphs (a)(2).
0
b. By adding paragraph (a)(3).
0
c. By revising paragraph (c).


Sec.  1045.125  What maintenance instructions must I give to buyers?

* * * * *
    (a) * * *
    (2) You may not schedule critical emission-related maintenance 
within the useful life period for aftertreatment devices, pulse-air 
valves, fuel injectors, oxygen sensors, electronic control units, 
superchargers, or turbochargers, except as specified in paragraph 
(a)(3), (b), or (c) of this section.
    (3) You may ask us to approve a maintenance interval shorter than 
that specified in paragraph (a)(2) of this section. In your request you 
must describe the proposed maintenance step, recommend the maximum 
feasible interval for this maintenance, include your rationale with 
supporting evidence to support the need for the maintenance at the 
recommended interval, and demonstrate that the maintenance will be done 
at the recommended interval on in-use engines. In considering your 
request, we will evaluate the information you provide and any other 
available information to establish alternate specifications for 
maintenance intervals, if appropriate.
* * * * *
    (c) Special maintenance. You may specify more frequent maintenance 
to address problems related to special situations, such as atypical 
engine operation. You must clearly state that this additional 
maintenance is associated with the special situation you are 
addressing. We may disapprove your maintenance instructions if we 
determine that you have specified special maintenance steps to address 
engine operation that is not atypical, or that the maintenance is 
unlikely to occur in use. If we determine that certain maintenance 
items do not qualify as special maintenance under this paragraph (c), 
you may identify this as recommended additional maintenance under 
paragraph (b) of this section.
* * * * *


0
214. Section 1045.140 is amended by revising paragraph (a) to read as 
follows:


Sec.  1045.140  What is my engine's maximum engine power?

    (a) An engine configuration's maximum engine power is the maximum 
brake power point on the nominal power curve for the engine 
configuration, as defined in this section. Round the power value to the 
nearest whole kilowatt for engines above 30 kW and to the nearest 0.1 
kilowatt for engines at or below 30 kW.
* * * * *


0
215. Section 1045.145 is amended by adding paragraph (o) to read as 
follows:


Sec.  1045.145  Are there interim provisions that apply only for a 
limited time?

* * * * *
    (o) Banking early credits for jet boat engines. Banked emission 
credits that were originally generated from outboard and personal 
watercraft engines under 40 CFR part 91 may be used to certify jet boat 
engines under the provisions Sec.  1045.660.

Subpart C--[Amended]

0
216. Section 1045.201 is amended by adding paragraph (h) to read as 
follows:


Sec.  1045.201  What are the general requirements for obtaining a 
certificate of conformity?

* * * * *
    (h) For engines that become new after being placed into service, 
such as engines installed on imported vessels or engines converted to 
run on a different fuel, we may specify alternate certification 
provisions consistent with the intent of this part. See Sec.  1045.645 
and the definition of ``new propulsion marine engine'' in Sec.  
1045.801.


0
217. Section 1045.220 is amended by revising paragraph (a) to read as 
follows:


Sec.  1045.220  How do I amend the maintenance instructions in my 
application?

* * * * *
    (a) If you are decreasing or eliminating any specified maintenance, 
you may distribute the new maintenance instructions to your customers 
30 days after we receive your request, unless we disapprove your 
request. This would generally include replacing one maintenance step 
with another. We may approve a shorter time or waive this requirement.
* * * * *

0
218. Section 1045.230 is amended by revising paragraph (b)(4) to read 
as follows:


Sec.  1045.230  How do I select engine families?

* * * * *
    (b) * * *
    (4) The number, arrangement (such as in-line or vee configuration), 
and approximate bore diameter of cylinders.
* * * * *


0
219. Section 1045.240 is amended by revising paragraphs (a) and (b) and 
adding paragraph (e) to read as follows:


Sec.  1045.240  How do I demonstrate that my engine family complies 
with exhaust emission standards?

    (a) For purposes of certification, your engine family is considered 
in compliance with the duty-cycle emission standards in Sec.  1045.103 
or Sec.  1045.105 if all emission-data engines representing that family 
have test results showing official emission results and deteriorated 
emission levels at or below these standards. This also applies for all 
test points for emission-data engines within the family used to 
establish deterioration factors. Note that your FELs are considered to 
be the applicable

[[Page 23020]]

emission standards with which you must comply if you participate in the 
ABT program in subpart H of this part. See paragraph (e) of this 
section for provisions related to demonstrating compliance with NTE 
standards.
    (b) Your engine family is deemed not to comply with the duty-cycle 
emission standards in Sec.  1045.103 or Sec.  1045.105 if any emission-
data engine representing that family has test results showing an 
official emission result or a deteriorated emission level for any 
pollutant that is above an applicable emission standard. Similarly, 
your engine family is deemed not to comply if any emission-data engine 
representing that family has test results showing any emission level 
above the applicable not-to-exceed emission standard for any pollutant. 
This also applies for all test points for emission-data engines within 
the family used to establish deterioration factors.
* * * * *
    (e) Use good engineering judgment to demonstrate compliance with 
NTE standards throughout the useful life. You may, but are not required 
to, apply the same deterioration factors used to show compliance with 
the applicable duty-cycle standards.

Subpart E--[Amended]

0
220. Section 1045.405 is amended by revising paragraphs (c) and (e) to 
read as follows:


Sec.  1045.405  How does this program work?

* * * * *
    (c) Send us an in-use testing plan for engine families selected for 
testing as described in this paragraph (c). Complete the testing within 
36 months after we direct you to test a particular engine family. Send 
us a complete in-use testing plan according to the following deadlines:
    (1) Within six months after we direct you to test a particular 
engine family.
    (2) By February 28 of the following year if you select engine 
families for testing under paragraph (b)(1) of this section.
    (3) Within six months after we approve certification for engine 
families subject to the requirements of paragraph (b)(2) of this 
section.
    (4) If we request additional information or require you to modify 
your plan to meet the requirements of this subpart, you must provide 
the information or the modified plan within 30 days of our request.
* * * * *
    (e) In appropriate extreme and unusual circumstances that are 
clearly outside your control and could not have been avoided by the 
exercise of prudence, diligence, and due care, we may allow more time 
to complete testing or we may waive the in-use testing requirement for 
an engine family. For example, if your test fleet is destroyed by 
severe weather during service accumulation and we agree that completion 
of testing is not possible, we would generally waive testing 
requirements for that engine family.

Subpart F--[Amended]

0
221. Section 1045.515 is amended by revising paragraph (c)(5) 
introductory text to read as follows:


Sec.  1045.515  What are the test procedures related to not-to-exceed 
standards?

* * * * *
    (c) * * *
    (5) For two-stroke engines not equipped with a catalyst, the NTE 
zone described in paragraph (c)(3) of this section is divided into 
subzones for testing to determine compliance with the applicable NTE 
standards. Measure emissions to get an NTE result by collecting 
emissions at five points as described in this paragraph (c)(5). 
Calculate a weighted test result for these emission measurements using 
the weighting factors from Appendix II of this part for the 
corresponding modal result (similar to discrete-mode testing for 
certification). Test engines over the following modes corresponding to 
the certification duty cycle:
* * * * *

Subpart H--[Amended]

0
222. Section 1045.701 is amended by revising paragraphs (d), (g), 
(j)(4) and (j)(5) to read as follows:


Sec.  1045.701  General provisions.

* * * * *
    (d) Sterndrive/inboard engines certified under Sec.  1045.660 for 
jet boats may use HC+NOx and CO exhaust credits generated 
from outboard and personal watercraft engines, as long as the credit-
using engine is the same model as an engine model from an outboard or 
personal watercraft family. Such emission credits that you generate 
under this part 1045 may be used for averaging, but not for banking or 
trading. The FEL caps for such jet boat families are the 
HC+NOx and CO standard for outboard and personal watercraft 
engines. U.S.-directed sales from jet boat engines using the provisions 
of this paragraph (d) may not be greater than the U.S.-directed sales 
of the same engine model for outboard or personal watercraft engines.
* * * * *
    (g) Emission credits may be used for averaging in the model year 
they are generated or banked for averaging in future model years, 
except that CO emission credits for outboard and personal watercraft 
engines may not be banked or traded.
* * * * *
    (j) * * *
    (4) Engines or vessels not subject to the requirements of this 
part, such as those excluded under Sec.  1045.5.
    (5) Any other engines or vessels where we indicate elsewhere in 
this part 1045 that they are not to be included in the calculations of 
this subpart.

0
223. Section 1045.705 is amended by revising paragraph (a) to read as 
follows:


Sec.  1045.705  How do I generate and calculate exhaust emission 
credits?

* * * * *
    (a) For each participating family, calculate positive or negative 
emission credits relative to the otherwise applicable emission 
standard. Calculate positive emission credits for a family that has an 
FEL below the standard. Calculate negative emission credits for a 
family that has an FEL above the standard. Sum your positive and 
negative credits for the model year before rounding. Round the sum of 
emission credits to the nearest kilogram (kg) using consistent units 
throughout the following equation:

Emission credits (kg) = (STD-FEL) x (Volume) x (Power) x (UL) x (LF) x 
(10-3)

Where:

STD = the emission standard, in g/kW-hr.
FEL = the family emission limit for the family, in g/kW-hr.
Volume = the number of engines eligible to participate in the 
averaging, banking, and trading program within the given family 
during the model year, as described in Sec.  1045.701(j).
Power = maximum engine power for the family, in kilowatts (see Sec.  
1045.140).
UL = The useful life for the given family.
LF = load factor. Use 0.207. We may specify a different load factor 
if we approve the use of special test procedures for an engine 
family under 40 CFR 1065.10(c)(2), consistent with good engineering 
judgment.

* * * * *

Subpart I--[Amended]

0
224. Section 1045.801 is amended by revising the definition of ``Fuel 
system'' and paragraphs (2) and (5)(iii) of the definition of ``Model 
year'' to read as follows:


Sec.  1045.801  What definitions apply to this part?

* * * * *

[[Page 23021]]

    Fuel system means all components involved in transporting, 
metering, and mixing the fuel from the fuel tank to the combustion 
chamber(s), including the fuel tank, fuel tank cap, fuel pump, fuel 
filters, fuel lines, carburetor or fuel-injection components, and all 
fuel-system vents. In the case where the fuel tank cap or other 
components (excluding fuel lines) are directly mounted on the fuel 
tank, they are considered to be a part of the fuel tank.
* * * * *
    Model year * * *
    (2) For an engine that is converted to a propulsion marine engine 
after being certified and placed into service as a motor vehicle 
engine, a nonroad engine that is not a propulsion marine engine, or a 
stationary engine, model year means the calendar year in which the 
engine was originally produced. For an engine that is converted to a 
propulsion marine engine after being placed into service as a motor 
vehicle engine, a nonroad engine that is not a propulsion marine 
engine, or a stationary engine without having been certified, model 
year means the calendar year in which the engine becomes a new 
propulsion marine engine. (See definition of ``new propulsion marine 
engine,'' paragraph (2).)
* * * * *
    (5) * * *
    (iii) For imported engines described in paragraph (5)(iii) of the 
definition of ``new propulsion marine nonroad engine,'' model year 
means the calendar year in which the engine is first assembled in its 
imported configuration, unless specified otherwise in this part or in 
40 CFR part 1068.
* * * * *

PART 1048--CONTROL OF EMISSIONS FROM NEW, LARGE NONROAD SPARK-
IGNITION ENGINES

0
225. The authority citation for part 1048 continues to read as follows:

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

Subpart A--[Amended]

0
226. Section 1048.15 is amended by revising paragraph (b) to read as 
follows:


Sec.  1048.15  Do any other regulation parts apply to me?

* * * * *
    (b) Part 1065 of this chapter describes procedures and equipment 
specifications for testing engines to measure exhaust emissions. 
Subpart F of this part 1048 describes how to apply the provisions of 
part 1065 of this chapter to determine whether engines meet the exhaust 
emission standards in this part.
* * * * *
0
227. A new Sec.  1048.30 is added to subpart A to read as follows:


Sec.  1048.30  Submission of information.

    (a) This part includes various requirements to record data or other 
information. Refer to Sec.  1048.825 and 40 CFR 1068.25 regarding 
recordkeeping requirements. Unless we specify otherwise, store these 
records in any format and on any media and keep them readily available 
for one year after you send an associated application for 
certification, or one year after you generate the data if they do not 
support an application for certification. You must promptly send us 
organized, written records in English if we ask for them. We may review 
them at any time.
    (b) The regulations in Sec.  1048.255 and 40 CFR 1068.101 describe 
your obligation to report truthful and complete information and the 
consequences of failing to meet this obligation. This includes 
information not related to certification.
    (c) Send all reports and requests for approval to the Designated 
Compliance Officer (see Sec.  1048.801).
    (d) Any written information we require you to send to or receive 
from another company is deemed to be a required record under this 
section. Such records are also deemed to be submissions to EPA. We may 
require you to send us these records whether or not you are a 
certificate holder.

Subpart B--[Amended]

0
228. Section 1048.120 is amended by revising paragraph (b) to read as 
follows:


Sec.  1048.120  What emission-related warranty requirements apply to 
me?

* * * * *
    (b) Warranty period. Your emission-related warranty for evaporative 
emission controls must be valid for at least two years. Your emission-
related warranty for exhaust emission controls must be valid for at 
least 50 percent of the engine's useful life in hours of operation or 
at least three years, whichever comes first. In the case of a high-cost 
warranted part, the warranty must be valid for at least 70 percent of 
the engine's useful life in hours of operation or at least five years, 
whichever comes first. You may offer an emission-related warranty more 
generous than we require. The emission-related warranty for the engine 
may not be shorter than any published warranty you offer without charge 
for the engine. Similarly, the emission-related warranty for any 
component may not be shorter than any published warranty you offer 
without charge for that component. If an engine has no hour meter, we 
base the warranty periods in this paragraph (b) only on the engine's 
age (in years). The warranty period begins when the engine is placed 
into service.
* * * * *

0
229. Section 1048.125 is amended by adding paragraph (a)(4) and 
revising paragraph (c) to read as follows:


Sec.  1048.125  What maintenance instructions must I give to buyers?

* * * * *
    (a) * * *
    (4) You may ask us to approve a maintenance interval shorter than 
that specified in paragraphs (a)(2) of this section. In your request 
you must describe the proposed maintenance step, recommend the maximum 
feasible interval for this maintenance, include your rationale with 
supporting evidence to support the need for the maintenance at the 
recommended interval, and demonstrate that the maintenance will be done 
at the recommended interval on in-use engines. In considering your 
request, we will evaluate the information you provide and any other 
available information to establish alternate specifications for 
maintenance intervals, if appropriate.
* * * * *
    (c) Special maintenance. You may specify more frequent maintenance 
to address problems related to special situations, such as substandard 
fuel or atypical engine operation. For example, you may specify more 
frequent cleaning of fuel system components for engines you have reason 
to believe will be using fuel that causes substantially more engine 
performance problems than commercial fuels of the same type that are 
generally available across the United States. You must clearly state 
that this additional maintenance is associated with the special 
situation you are addressing. We may disapprove your maintenance 
instructions if we determine that you have specified special 
maintenance steps to address engine operation that is not atypical, or 
that the maintenance is unlikely to occur in use. If we determine that 
certain maintenance items do not qualify as special maintenance under 
this paragraph (c), you may identify this as recommended additional 
maintenance under paragraph (b) of this section.
* * * * *

[[Page 23022]]

Subpart C--[Amended]

0
230. Section 1048.201 is amended by adding paragraph (h) to read as 
follows:


Sec.  1048.201  What are the general requirements for obtaining a 
certificate of conformity?

* * * * *
    (h) For engines that become new after being placed into service, 
such as engines converted to nonroad use after being used in motor 
vehicles, we may specify alternate certification provisions consistent 
with the intent of this part. See the definition of ``new nonroad 
engine'' in Sec.  1048.801.

0
231. Section 1048.220 is amended by revising paragraphs (a) and (c) to 
read as follows:


Sec.  1048.220  How do I amend the maintenance instructions in my 
application?

* * * * *
    (a) If you are decreasing or eliminating any specified maintenance, 
you may distribute the new maintenance instructions to your customers 
30 days after we receive your request, unless we disapprove your 
request. This would generally include replacing one maintenance step 
with another. We may approve a shorter time or waive this requirement.
* * * * *
    (c) You need not request approval if you are making only minor 
corrections (such as correcting typographical mistakes), clarifying 
your maintenance instructions, or changing instructions for maintenance 
unrelated to emission control. We may ask you to send us copies of 
maintenance instructions revised under this paragraph (c).

0
232. Section 1048.230 is amended by revising paragraph (b)(6) to read 
as follows:


Sec.  1048.230  How do I select engine families?

* * * * *
    (b) * * *
    (6) The number, arrangement (such as in-line or vee configuration), 
and approximate bore diameter of cylinders.
* * * * *

0
233. Section 1048.240 is amended by revising paragraphs (a) and (b) and 
adding paragraph (e) to read as follows:


Sec.  1048.240  How do I demonstrate that my engine family complies 
with exhaust emission standards?

    (a) For purposes of certification, your engine family is considered 
in compliance with the applicable numerical emission standards in Sec.  
1048.101(a) and (b) if all emission-data engines representing that 
family have test results showing official emission results and 
deteriorated emission levels at or below these standards. This includes 
all test points over the course of the durability demonstration. This 
also applies for all test points for emission-data engines within the 
family used to establish deterioration factors. See paragraph (e) of 
this section for provisions related to demonstrating compliance with 
field-testing standards.
    (b) Your engine family is deemed not to comply if any emission-data 
engine representing that family has test results showing an official 
emission result or a deteriorated emission level for any pollutant that 
is above an applicable emission standard from Sec.  1048.101(a) and 
(b). Similarly, your engine family is deemed not to comply if any 
emission-data engine representing that family has test results showing 
any emission level above the applicable field-testing standard for any 
pollutant. This also applies for all test points for emission-data 
engines within the family used to establish deterioration factors.
* * * * *
    (e) Use good engineering judgment to demonstrate compliance with 
field-testing standards throughout the useful life. You may, but are 
not required to, apply the same deterioration factors used to show 
compliance with the applicable duty-cycle standards.

0
234. Section 1048.245 is amended by revising paragraph (e) to read as 
follows:


Sec.  1048.245  How do I demonstrate that my engine family complies 
with evaporative emission standards?

* * * * *
    (e) You may demonstrate that your engine family complies with the 
evaporative emission standards by demonstrating that you use the 
following control technologies:
    (1) For certification to the standards specified in Sec.  
1048.105(c), with the following technologies:
    (i) Use a tethered or self-closing gas cap on a fuel tank that 
stays sealed up to a positive pressure of 24.5 kPa (3.5 psig); however, 
they may contain air inlets that open when there is a vacuum pressure 
inside the tank. Nonmetal fuel tanks must also use one of the 
qualifying designs for controlling permeation emissions specified in 40 
CFR 1060.240.
    (ii) [Reserved]
    (2) For certification to the standards specified in Sec.  
1048.105(d), demonstrating that you use design features to prevent fuel 
boiling under all normal operation. If you install engines in 
equipment, you may do this using fuel temperature data measured during 
normal operation. Otherwise, you may do this by including appropriate 
information in your emission-related installation instructions.
    (3) We may establish additional options for design-based 
certification where we find that new test data demonstrate that a 
technology will ensure compliance with the emission standards in this 
section.

0
235. Section 1048.255 is amended by revising paragraph (b) to read as 
follows:


Sec.  1048.255  What decisions may EPA make regarding my certificate of 
conformity?

* * * * *
    (b) We may deny your application for certification if we determine 
that your engine family fails to comply with emission standards or 
other requirements of this part or the Clean Air Act. We will base our 
decision on all available information. If we deny your application, we 
will explain why in writing.
* * * * *

Subpart E--[Amended]

0
236. Section 1048.405 is amended by revising paragraphs (b) and (d) to 
read as follows:


Sec.  1048.405  How does this program work?

* * * * *
    (b) Send us an in-use testing plan within six months after we 
direct you to test a particular engine family. If we request additional 
information or require you to modify your plan to meet the requirements 
of this subpart, you must provide the information or the modified plan 
within 30 days of our request. Complete the testing within 36 months 
after we direct you to test a particular engine family.
* * * * *
    (d) In appropriate extreme and unusual circumstances that are 
clearly outside your control and could not have been avoided by the 
exercise of prudence, diligence, and due care, we may allow more time 
to complete testing or we may waive the in-use testing requirement for 
an engine family. For example, if your test fleet is destroyed by 
severe weather during service accumulation and we agree that completion 
of testing is not possible, we would generally waive testing 
requirements for that engine family.

Subpart F--[Amended]

0
237. Section 1048.505 is amended by revising the section heading and 
paragraph (b)(5)(i) and Table 3 to read as follows:

[[Page 23023]]

Sec.  1048.505  How do I test engines using steady-state duty cycles, 
including ramped-modal testing?

* * * * *
    (b) * * *
    (5) * * *
    (i) The following duty cycle applies for discrete-mode testing:

                                           Table 3 of Sec.   1048.505
----------------------------------------------------------------------------------------------------------------
                                                            Torque (percent)   Minimum time in      Weighting
           Mode No.                    Engine speed                \1\         mode (minutes)        factors
----------------------------------------------------------------------------------------------------------------
1............................  Maximum test speed.........               100               3.0              0.50
2............................  Maximum test speed.........                75               3.0              0.50
----------------------------------------------------------------------------------------------------------------
\1\ The percent torque is relative to the maximum torque at maximum test speed.

* * * * *

0
238. Section 1048.510 is amended by adding paragraph (b) to read as 
follows:


Sec.  1048.510  What transient duty cycles apply for laboratory 
testing?

* * * * *
    (b) Calculate cycle statistics and compare with the established 
criteria as specified in 40 CFR 1065.514 to confirm that the test is 
valid.
* * * * *

Subpart I--[Amended]

0
239. Section 1048.801 is amended by adding definitions for 
``Carryover'' and ``Date of manufacture'' in alphabetical order to read 
as follows:


Sec.  1048.801  What definitions apply to this part?

* * * * *
    Carryover means relating to certification based on emission data 
generated from an earlier model year as described in Sec.  1048.235(d).
* * * * *
    Date of manufacture has the meaning given in 40 CFR 1068.30.
* * * * *

PART 1051--CONTROL OF EMISSIONS FROM RECREATIONAL ENGINES AND 
VEHICLES

0
240. The authority citation for part 1051 continues to read as follows:

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

Subpart A--[Amended]

0
241. Section 1051.15 is amended by revising paragraph (a) to read as 
follows:


Sec.  1051.15  Do any other regulation parts apply to me?

    (a) Parts 86 and 1065 of this chapter describe procedures and 
equipment specifications for testing vehicles and engines to measure 
exhaust emissions. Subpart F of this part 1051 describes how to apply 
the provisions of parts 86 and 1065 of this chapter to determine 
whether vehicles meet the exhaust emission standards in this part.
* * * * *

0
242. Section 1051.20 is amended by adding paragraph (g) to read as 
follows:


Sec.  1051.20  May I certify a recreational engine instead of the 
vehicle?

* * * * *
    (g) Apply the provisions of 40 CFR part 1068 for engines certified 
under this section as if they were subject to engine-based standards. 
For example, you may rely on the provisions of 40 CFR 1068.261 to have 
vehicle manufacturers install catalysts that you describe in your 
application for certification.

0
243. A new Sec.  1051.30 is added to subpart A to read as follows:


Sec.  1051.30  Submission of information.

    (a) This part includes various requirements to record data or other 
information. Refer to Sec.  1051.825 and 40 CFR 1068.25 regarding 
recordkeeping requirements. Unless we specify otherwise, store these 
records in any format and on any media and keep them readily available 
for one year after you send an associated application for 
certification, or one year after you generate the data if they do not 
support an application for certification. You must promptly send us 
organized, written records in English if we ask for them. We may review 
them at any time.
    (b) The regulations in Sec.  1051.255 and 40 CFR 1068.101 describe 
your obligation to report truthful and complete information and the 
consequences of failing to meet this obligation. This includes 
information not related to certification.
    (c) Send all reports and requests for approval to the Designated 
Compliance Officer (see Sec.  1051.801).
    (d) Any written information we require you to send to or receive 
from another company is deemed to be a required record under this 
section. Such records are also deemed to be submissions to EPA. We may 
require you to send us these records whether or not you are a 
certificate holder.

Subpart B--[Amended]

0
244. Section 1051.125 is amended by adding paragraph (a)(3) and 
revising paragraph (c) to read as follows:


Sec.  1051.125  What maintenance instructions must I give to buyers?

* * * * *
    (a) * * *
    (3) You may ask us to approve a maintenance interval shorter than 
that specified in paragraph (a)(2) of this section. In your request you 
must describe the proposed maintenance step, recommend the maximum 
feasible interval for this maintenance, include your rationale with 
supporting evidence to support the need for the maintenance at the 
recommended interval, and demonstrate that the maintenance will be done 
at the recommended interval on in-use engines. In considering your 
request, we will evaluate the information you provide and any other 
available information to establish alternate specifications for 
maintenance intervals, if appropriate.
* * * * *
    (c) Special maintenance. You may specify more frequent maintenance 
to address problems related to special situations, such as atypical 
engine operation. You must clearly state that this additional 
maintenance is associated with the special situation you are 
addressing. We may disapprove your maintenance instructions if we 
determine that you have specified special maintenance steps to address 
engine operation that is not atypical, or that the maintenance is 
unlikely to occur in use. If we determine that certain maintenance 
items do not qualify as special maintenance under this paragraph (c), 
you may identify this as recommended additional maintenance under 
paragraph (b) of this section.
* * * * *

[[Page 23024]]


0
245. Section 1051.135 is amended by revising paragraph (c)(12) to read 
as follows:


Sec.  1051.135  How must I label and identify the vehicles I produce?

* * * * *
    (c) * * *
    (12) State: ``THIS VEHICLE MEETS U.S. EPA REGULATIONS FOR [MODEL 
YEAR] [SNOWMOBILES or OFF-ROAD MOTORCYCLES or ATVs or OFFROAD UTILITY 
VEHICLES].''
* * * * *

Subpart C--[Amended]

0
246. Section 1051.201 is amended by adding paragraph (h) to read as 
follows:


Sec.  1051.201  What are the general requirements for obtaining a 
certificate of conformity?

* * * * *
    (h) For vehicles that become new after being placed into service, 
such as vehicles converted to run on a different fuel, we may specify 
alternate certification provisions consistent with the intent of this 
part. See Sec.  1051.650 and the definition of ``new'' in Sec.  
1051.801.
0
247. Section 1051.220 is amended by revising paragraphs (a) and (c) to 
read as follows:


Sec.  1051.220  How do I amend the maintenance instructions in my 
application?

* * * * *
    (a) If you are decreasing or eliminating any specified maintenance, 
you may distribute the new maintenance instructions to your customers 
30 days after we receive your request, unless we disapprove your 
request. This would generally include replacing one maintenance step 
with another. We may approve a shorter time or waive this requirement.
* * * * *
    (c) You need not request approval if you are making only minor 
corrections (such as correcting typographical mistakes), clarifying 
your maintenance instructions, or changing instructions for maintenance 
unrelated to emission control. We may ask you to send us copies of 
maintenance instructions revised under this paragraph (c).

0
248. Section 1051.230 is amended by revising paragraph (b)(7) to read 
as follows:


Sec.  1051.230  How do I select engine families?

* * * * *
    (b) * * *
    (7) The number, arrangement (such as in-line or vee configuration), 
and approximate bore diameter of cylinders.
* * * * *

0
249. Section 1051.255 is amended by revising paragraph (b) to read as 
follows:


Sec.  1051.255  What decisions may EPA make regarding my certificate of 
conformity?

* * * * *
    (b) We may deny your application for certification if we determine 
that your engine family fails to comply with emission standards or 
other requirements of this part or the Clean Air Act. We will base our 
decision on all available information. If we deny your application, we 
will explain why in writing.
* * * * *

Subpart I--[Amended]

0
250. Section 1051.801 is amended by revising paragraph (2) of the 
definition for ``All-terrain vehicle'' and the definition for ``Offroad 
utility vehicle'' to read as follows:


Sec.  1051.801  What definitions apply to this part?

* * * * *
    All-terrain vehicle means * * *
    (2) Other all-terrain vehicles have three or more wheels and one or 
more seats, are designed for operation over rough terrain, are intended 
primarily for transportation, and have a maximum vehicle speed higher 
than 25 miles per hour. Golf carts generally do not meet these criteria 
since they are generally not designed for operation over rough terrain.
* * * * *
    Offroad utility vehicle means a nonroad vehicle that has four or 
more wheels, seating for two or more persons, is designed for operation 
over rough terrain, and has either a rear payload capacity of 350 
pounds or more or seating for six or more passengers. Vehicles intended 
primarily for recreational purposes that are not capable of 
transporting six passengers (such as dune buggies) are not offroad 
utility vehicles. (Note: Sec.  1051.1(a) specifies that some offroad 
utility vehicles are required to meet the requirements that apply for 
all-terrain vehicles.) Unless there is significant information to the 
contrary, we consider vehicles to be intended primarily for 
recreational purposes if they are marketed for recreational use, have a 
rear payload capacity no greater than 1,000 pounds, and meet at least 
five of the following criteria:
    (1) Front and rear suspension travel is greater than 18 cm.
    (2) The vehicle has no tilt bed.
    (3) The vehicle has no mechanical power take-off (PTO) and no 
permanently installed hydraulic system for operating utility-oriented 
accessory devices.
    (4) The engine has in-use operating speeds at or above 4,000 rpm.
    (5) Maximum vehicle speed is greater than 35 miles per hour.
    (6) The speed at which the engine produces peak power is above 
4,500 rpm and the engine is equivalent to engines in ATVs certified by 
the same manufacturer. For the purpose of this paragraph (6), the 
engine is considered equivalent if it could be included in the same 
emission family based on the characteristics specified in Sec.  
1051.230(b).
    (7) Gross Vehicle Weight Rating is no greater than 3,750 pounds. 
This is the maximum design loaded weight of the vehicle as defined in 
40 CFR 86.1803-01, including passengers and cargo.
* * * * *

PART 1054--CONTROL OF EMISSIONS FROM NEW, SMALL NONROAD SPARK-
IGNITION ENGINES AND EQUIPMENT

0
251. The authority citation for part 1054 continues to read as follows:

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

Subpart A--[Amended]

0
252. Section 1054.1 is amended by revising paragraph (a)(4) to read as 
follows:


Sec.  1054.1  Does this part apply for my engines and equipment?

    (a) * * *
    (4) This part 1054 applies for other spark-ignition engines as 
follows:
    (i) The provisions of Sec. Sec.  1054.620 and 1054.801 apply for 
new engines used solely for competition beginning January 1, 2010.
    (ii) The provisions of Sec. Sec.  1054.660 and 1054.801 apply for 
new engines used in emergency rescue equipment beginning January 1, 
2010.
* * * * *

Subpart B--[Amended]

0
253. Section 1054.125 is amended by adding paragraph (a)(4) and 
revising paragraph (c) to read as follows:


Sec.  1054.125  What maintenance instructions must I give to buyers?

* * * * *
    (a) * * *
    (4) You may ask us to approve a maintenance interval shorter than 
that specified in paragraph (a)(3) of this

[[Page 23025]]

section. In your request you must describe the proposed maintenance 
step, recommend the maximum feasible interval for this maintenance, 
include your rationale with supporting evidence to support the need for 
the maintenance at the recommended interval, and demonstrate that the 
maintenance will be done at the recommended interval on in-use engines. 
In considering your request, we will evaluate the information you 
provide and any other available information to establish alternate 
specifications for maintenance intervals, if appropriate.
* * * * *
    (c) Special maintenance. You may specify more frequent maintenance 
to address problems related to special situations, such as atypical 
engine operation. You must clearly state that this additional 
maintenance is associated with the special situation you are 
addressing. We may disapprove your maintenance instructions if we 
determine that you have specified special maintenance steps to address 
engine operation that is not atypical, or that the maintenance is 
unlikely to occur in use. If we determine that certain maintenance 
items do not qualify as special maintenance under this paragraph (c), 
you may identify this as recommended additional maintenance under 
paragraph (b) of this section.
* * * * *

0
254. Section 1054.145 is amended by adding paragraph (o) to read as 
follows:


Sec.  1054.145  Are there interim provisions that apply only for a 
limited time?

* * * * *
    (o) Interim bonding provisions. Through 2012, the maximum value of 
the bond under Sec.  1054.690 is $10 million. This maximum value 
applies without adjustment for inflation.

Subpart C--[Amended]

0
255. Section 1054.201 is amended by adding paragraph (h) to read as 
follows:


Sec.  1054.201  What are the general requirements for obtaining a 
certificate of conformity?

* * * * *
    (h) For engines that become new after being placed into service, 
such as engines converted to run on a different fuel, we may specify 
alternate certification provisions consistent with the intent of this 
part. See Sec.  1054.645 and the definition of ``new nonroad engine'' 
in Sec.  1054.801.

0
256. Section 1054.205 is amended by revising paragraph (b) to read as 
follows:


Sec.  1054.205  What must I include in my application?

* * * * *
    (b) Explain how the emission control systems operate. Describe the 
evaporative emission controls and show how your design will prevent 
running loss emissions, if applicable. Also describe in detail all 
system components for controlling exhaust emissions, including all 
auxiliary emission control devices (AECDs) and all fuel-system 
components you will install on any production or test engine. Identify 
the part number of each component you describe. For this paragraph (b), 
treat as separate AECDs any devices that modulate or activate 
differently from each other. Include sufficient detail to allow us to 
evaluate whether the AECDs are consistent with the defeat device 
prohibition of Sec.  1054.115. For example, if your engines will 
routinely experience in-use operation that differs from the specified 
duty cycle for certification, describe how the fuel-metering system 
responds to varying speeds and loads not represented by the duty cycle. 
If you test an emission-data engine by disabling the governor for full-
load operation such that the engine operates at an air-fuel ratio 
significantly different than under full-load operation with an 
installed governor, explain why these differences are necessary or 
appropriate. For conventional carbureted engines without electronic 
fuel controls, it is sufficient to state that there is no significant 
difference in air-fuel ratios.
* * * * *

0
257. Section 1054.220 is amended by revising paragraph (a) to read as 
follows:


Sec.  1054.220  How do I amend the maintenance instructions in my 
application?

* * * * *
    (a) If you are decreasing or eliminating any specified maintenance, 
you may distribute the new maintenance instructions to your customers 
30 days after we receive your request, unless we disapprove your 
request. This would generally include replacing one maintenance step 
with another. We may approve a shorter time or waive this requirement.
* * * * *

0
258. Section 1054.230 is amended by revising paragraph (b)(6) to read 
as follows:


Sec.  1054.230  How do I select emission families?

* * * * *
    (b) * * *
    (6) The number and arrangement of cylinders (such as in-line or vee 
configuration) and approximate total displacement.
* * * * *

Subpart G--[Amended]

0
259. Section 1054.601 is amended by revising the section heading and 
adding paragraph (c) to read as follows:


Sec.  1054.601  What compliance provisions apply?

* * * * *
    (c) The provisions of 40 CFR 1068.215 apply for cases in which the 
manufacturer takes possession of engines for purposes of recovering 
components as described in this paragraph (c). Note that this paragraph 
(c) does not apply for certified engines that still have the emission 
control information label since such engines do not need an exemption.
    (1) You must label the engine as specified in 40 CFR 
1068.215(c)(3), except that the label may be removable as specified in 
40 CFR 1068.45(b).
    (2) You may not resell the engine. For components other than the 
engine block, you may generate revenue from the sale of the components 
that you recover, or from the sale of new engines containing these 
components. You may also use components other than the engine block for 
engine rebuilds as otherwise allowed under the regulations. You may use 
the engine block from an engine that is exempted under this paragraph 
(c) only to make a new engine, and then only where such an engine has a 
separate identity from the original engine.
    (3) Once the engine has reached its final destination, you may stop 
collecting records describing the engine's final disposition and how 
you use the engine. This does not affect the requirement to maintain 
the records you have already collected under 40 CFR 1068.215. This also 
does not affect the requirement to maintain records for new engines.

0
260. Section 1054.690 is amended by revising paragraphs (d), (f), and 
(j) to read as follows:


Sec.  1054.690  What bond requirements apply for certified engines?

* * * * *
    (d) The minimum value of the bond is $500,000. A higher bond value 
may apply based on the per-engine bond values shown in Table 1 to this 
section and on the U.S.-directed production volume from each 
displacement grouping for the calendar model year. For example, if you 
have projected U.S.-directed production volumes of 10,000 engines with 
180 cc displacement and

[[Page 23026]]

10,000 engines with 400 cc displacement in 2013, the appropriate bond 
amount is $750,000. Adjust the value of the bond as follows:
    (1) If your estimated or actual U.S.-directed production volume in 
any later year increases beyond the level appropriate for your current 
bond payment, you must post additional bond to reflect the increased 
volume within 90 days after you change your estimate or determine the 
actual production volume. You may not decrease your bond.
    (2) If you sell engines without aftertreatment components under the 
provisions of Sec.  1054.610, you must increase the per-engine bond 
values for the current year by 20 percent.

           Table 1 to Sec.   1054.690--Per-engine bond values
------------------------------------------------------------------------
                                                          The per-engine
 For engines with displacement falling in the following  bond value is .
                      ranges . . .                             . .
------------------------------------------------------------------------
Disp. < 225 cc.........................................              $25
225 <= Disp. < 740 cc..................................               50
740 <= Disp. <= 1,000 cc...............................              100
Disp. > 1,000 cc.......................................              200
------------------------------------------------------------------------

* * * * *
    (f) You may meet the bond requirements of this section by obtaining 
a bond from a third-party surety that is cited in the U.S. Department 
of Treasury Circular 570, ``Companies Holding Certificates of Authority 
as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring 
Companies'' (http://www.fms.treas.gov/c570/c570.html#certified). You 
must maintain this bond for every year in which you sell certified 
engines. The surety agent remains responsible for obligations under the 
bond for two years after the bond is cancelled or expires without being 
replaced.
* * * * *
    (j) The following provisions apply if you import engines for resale 
when those engines have been certified by someone else (or equipment 
containing such engines):
    (1) You and the certificate holder are each responsible for 
compliance with the requirements of this part and the Clean Air Act. 
For example, we may require you to comply with the warranty 
requirements in Sec.  1054.120.
    (2) You do not need to post bond if you or the certificate holder 
complies with the bond requirements of this section. You also do not 
need to post bond if the certificate holder complies with the asset 
requirements of this section and the repair-network provisions of Sec.  
1054.120(f)(4).

Subpart H--[Amended]

0
261. Section 1054.730 is amended by revising paragraph (b)(4) to read 
as follows:


Sec.  1054.730  What ABT reports must I send to EPA?

* * * * *
    (b) * * *
    (4) The projected and actual U.S.-directed production volumes for 
the model year, as described in Sec.  1054.701(i). For fuel tanks, 
state the production volume in terms of surface area and production 
volume for each fuel tank configuration and state the total surface 
area for the emission family. If you changed an FEL during the model 
year, identify the actual production volume associated with each FEL.
* * * * *

Subpart I--[Amended]

0
262. Section 1054.801 is amended by revising the definitions for 
``Oxides of nitrogen'', ``Total hydrocarbon'', and ``Total hydrocarbon 
equivalent'' to read as follows:


Sec.  1054.801  What definitions apply to this part?

* * * * *
    Oxides of nitrogen has the meaning given in 40 CFR 1065.1001.
* * * * *
* * * * *
    Total hydrocarbon has the meaning given in 40 CFR 1065.1001. This 
generally means the combined mass of organic compounds measured by the 
specified procedure for measuring total hydrocarbon, expressed as an 
atomic hydrocarbon with a hydrogen-to-carbon ratio of 1.85:1.
    Total hydrocarbon equivalent has the meaning given in 40 CFR 
1065.1001. This generally means the sum of the carbon mass 
contributions of non-oxygenated hydrocarbons, alcohols and aldehydes, 
or other organic compounds that are measured separately as contained in 
a gas sample, expressed as exhaust hydrocarbon from petroleum-fueled 
engines. The atomic hydrogen-to-carbon ratio of the equivalent 
hydrocarbon is 1.85:1.
* * * * *

PART 1060--CONTROL OF EVAPORATIVE EMISSIONS FROM NEW AND IN-USE 
NONROAD AND STATIONARY EQUIPMENT

0
263. The authority citation for part 1060 continues to read as follows:

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

Subpart B--[Amended]

0
264. Section 1060.103 is amended by revising paragraph (e) to read as 
follows:


Sec.  1060.103  What permeation emission control requirements apply for 
fuel tanks?

* * * * *
    (e) Fuel caps may be certified separately relative to the 
permeation emission standard in paragraph (b) of this section using the 
test procedures specified in Sec.  1060.521. Fuel caps certified alone 
do not need to meet the emission standard. Rather, fuel caps would be 
certified with a Family Emission Limit, which is used for demonstrating 
that fuel tanks meet the emission standard as described in Sec.  
1060.520(b)(5). For the purposes of this paragraph (e), gaskets or O-
rings that are produced as part of an assembly with the fuel cap are 
considered part of the fuel cap.
* * * * *

0
265. Section 1060.135 is amended by revising paragraph (a)(5) to read 
as follows:


Sec.  1060.135  How must I label and identify the engines and equipment 
I produce?

* * * * *
    (a) * * *
    (5) Readily visible in the final installation. It may be under a 
hinged door or other readily opened cover. It may not be hidden by any 
cover attached with screws or any similar designs. Labels on marine 
vessels (except personal watercraft) must be visible from the helm.
* * * * *

0
266. Section 1060.137 is amended by revising paragraphs (a) 
introductory text and (a)(4) to read as follows:


Sec.  1060.137  How must I label and identify the fuel-system 
components I produce?

* * * * *
    (a) Label the components identified in this paragraph (a), unless 
the components are too small to be properly labeled. Unless we approve 
otherwise, we consider parts large enough to be properly labeled if 
they have space for 12 characters in six-point font (approximately 2 mm 
x 12 mm). For these small parts, you may omit the label as long as you 
identify those part numbers in your maintenance and installation 
instructions.
* * * * *
    (4) Fuel caps, as described in this paragraph (a)(4). Fuel caps 
must be labeled if they are separately certified under Sec.  1060.103 
or if the diurnal control system requires that the fuel tank hold 
pressure. Fuel caps must also be labeled if they are mounted directly

[[Page 23027]]

on the fuel tank, unless the fuel tank is certified based on a worst-
case fuel cap.
* * * * *

Subpart F--[Amended]

0
267. Section 1060.515 is amended by revising paragraph (c) to read as 
follows:


Sec.  1060.515  How do I test EPA Nonroad Fuel Lines and EPA Cold-
Weather Fuel Lines for permeation emissions?

* * * * *
    (c) Measure fuel line permeation emissions using the equipment and 
procedures for weight-loss testing specified in SAE J30 or SAE J1527 
(incorporated by reference in Sec.  1060.810). Start the measurement 
procedure within 8 hours after draining and refilling the fuel line. 
Perform the emission test over a sampling period of 14 days. Determine 
your final emission result based on the highest measured valued over 
the 14-day period.
* * * * *
0
268. Section 1060.520 is amended as follows:
0
a. By adding paragraph (a)(4).
0
b. By removing and reserving paragraph (b)(3).
0
c. By revising paragraphs (b)(5)(ii)(B), (d)(8), (d)(9), and (d)(10).


Sec.  1060.520  How do I test fuel tanks for permeation emissions?

* * * * *
    (a) * * *
    (4) Cap testing. Perform durability cycles on fuel caps intended 
for use with handheld equipment by putting the fuel cap on and taking 
it off 300 times. Tighten the fuel cap each time in a way that 
represents the typical in-use experience.
    (b) * * *
    (5) * * *
    (ii) * * *
    (B) You may seal the fuel inlet with a nonpermeable covering if you 
separately account for permeation emissions from the fuel cap. This may 
involve a separate measurement of permeation emissions from a worst-
case fuel cap as described in Sec.  1060.521. This may also involve 
specifying a worst-case Family Emission Limit based on separately 
certified fuel caps as described in Sec.  1060.103(e).
* * * * *
    (d) * * *
    (8) Measure weight loss daily by retaring the balance using the 
reference tank and weighing the sealed test tank. Calculate the 
cumulative weight loss in grams for each measurement. Calculate the 
coefficient of determination, r\2\, based on a linear plot of 
cumulative weight loss vs. test days. Use the equation in 40 CFR 
1065.602(k), with cumulative weight loss represented by yi 
and cumulative time represented by yref. The daily 
measurements must be at approximately the same time each day. You may 
omit up to two daily measurements in any seven-day period. Test for ten 
full days, then determine when to stop testing as follows:
    (i) You may stop testing after the measurement on the tenth day if 
r\2\ is at or above 0.95 or if the measured value is less than 50 
percent of the applicable standard. (Note that if a Family Emission 
Limit applies for the family, it is considered to be the applicable 
standard for that family.) This means that if you stop testing with an 
r\2\ below 0.95, you may not use the data to show compliance with a 
Family Emission Limit less than twice the measured value.
    (ii) If after ten days of testing your r\2\ value is below 0.95 and 
your measured value is more than 50 percent of the applicable standard, 
continue testing for a total of 20 days or until r\2\ is at or above 
0.95. If r\2\ is not at or above 0.95 within 20 days of testing, 
discontinue the test and precondition the fuel tank further until it 
has stabilized emission levels, then repeat the testing.
    (9) Record the difference in mass between the reference tank and 
the test tank for each measurement. This value is Mi, where 
i is a counter representing the number of days elapsed. Subtract 
Mi from Mo and divide the difference by the 
internal surface area of the fuel tank. Divide this g/m\2\ value by the 
number of test days (using at least two decimal places) to calculate 
the emission rate in g/m\2\/day. Example: If a tank with an internal 
surface area of 0.720 m\2\ weighed 1.31 grams less than the reference 
tank at the beginning of the test and weighed 9.86 grams less than the 
reference tank after soaking for 10.03 days, the emission rate would 
be--

((-1.31 g) - (-9.82 g))/0.720 m\2\/10.03 days = 1.1784 g/m\2\/day

    (10) Determine your final emission result based on the cumulative 
weight loss measured on the final day of testing. Round this result to 
the same number of decimal places as the emission standard.
* * * * *

Subpart G--[Amended]

0
269. Section 1060.601 is amended by adding paragraph (h) to read as 
follows:


Sec.  1060.601  How do the prohibitions of 40 CFR 1068.101 apply with 
respect to the requirements of this part?

* * * * *
    (h) If equipment manufacturers hold certificates of conformity for 
their equipment but they use only fuel-system components that have been 
certified by other companies, they may satisfy their defect-reporting 
obligations by tracking the information described in 40 CFR 
1068.501(b)(1) related to possible defects, reporting this information 
to the appropriate component manufacturers, and keeping these records 
for eight years. Such equipment manufacturers will not be considered in 
violation of 40 CFR 1068.101(b)(6) for failing to perform 
investigations, make calculations, or submit reports to EPA as 
specified in 40 CFR 1068.501. See Sec.  1060.5(a).

Subpart I--[Amended]

0
270. Section 1060.801 is amended by revising the definitions for 
``Detachable fuel line'', ``Installed marine fuel tank'', and 
``Sealed'' and adding definitions for ``Installed marine fuel line'' 
and ``Portable marine fuel line'' to read as follows:


Sec.  1060.801  What definitions apply to this part?

* * * * *
    Detachable fuel line means a fuel line or fuel line assembly 
intended to be used with a portable nonroad fuel tank and which is 
connected by special fittings to the fuel tank and/or engine for easy 
disassembly. Fuel lines that require a wrench or other tools to 
disconnect are not considered detachable fuel lines. Fuel lines that 
are labeled or marketed as USCG Type B1 fuel line as specified in 33 
CFR 183.540 are not considered detachable fuel lines if they are sold 
to the ultimate purchaser without quick-connect fittings or similar 
hardware.
* * * * *
    Installed marine fuel line means a fuel line designed for 
delivering fuel to a Marine SI engine that does not meet the definition 
of portable marine fuel line.
    Installed marine fuel tank means a fuel tank designed for 
delivering fuel to a Marine SI engine that does not meet the definition 
of portable marine fuel tanks.
* * * * *
    Portable marine fuel line means a detachable fuel line that is used 
or intended to be used to supply fuel to a marine engine during 
operation. This also includes any fuel line labeled or marketed at USCG 
Type B1 fuel line as specified in 33 CFR 183.540, whether or not it 
includes detachable connecting hardware; this is often called universal 
fuel line.
* * * * *

[[Page 23028]]

    Sealed means lacking openings to the atmosphere that would allow a 
measurable amount of liquid or vapor to leak out under normal operating 
pressures or other pressures specified in this part. For example, you 
may generally establish a maximum value for operating pressures based 
on the highest pressure you would observe from an installed fuel tank 
during continuous equipment operation on a sunny day with ambient 
temperatures of 35 [deg]C. A fuel system may be considered to have no 
measurable leak if it does not release bubbles when held underwater at 
the identified tank pressure for 60 seconds. This determination 
presumes the use of good engineering judgment; for example, it would 
not be appropriate to test the fuel tank such that small leaks would 
avoid detection by collecting in a cavity created by holding the tank 
with a certain orientation. Sealed fuel systems may have openings for 
emission controls or for fuel lines needed to route fuel to the engine.
* * * * *

PART 1065--ENGINE-TESTING PROCEDURES

0
271. The authority citation for part 1065 continues to read as follows:

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

Subpart A--[Amended]

0
272. Section 1065.1 is amended by revising paragraphs (d) and (g) to 
read as follows:


Sec.  1065.1  Applicability.

* * * * *
    (d) Paragraph (a) of this section identifies the parts of the CFR 
that define emission standards and other requirements for particular 
types of engines. In this part, we refer to each of these other parts 
generically as the ''standard-setting part.'' For example, 40 CFR part 
1051 is always the standard-setting part for snowmobiles. Note that 
while 40 CFR part 86 is the standard-setting part for heavy-duty 
highway engines, this refers specifically to 40 CFR part 86, subpart A, 
and to certain portions of 40 CFR part 86, subpart N, as described in 
40 CFR 86.1301.
* * * * *
    (g) For additional information regarding these test procedures, 
visit our Web site at http://www.epa.gov, and in particular http://
www.epa.gov/nvfel/testing/regulations.htm.

0
273. Section 1065.2 is amended by revising paragraphs (a) and (b) to 
read as follows:


Sec.  1065.2  Submitting information to EPA under this part.

    (a) You are responsible for statements and information in your 
applications for certification, requests for approved procedures, 
selective enforcement audits, laboratory audits, production-line test 
reports, field test reports, or any other statements you make to us 
related to this part 1065. If you provide statements or information to 
someone for submission to EPA, you are responsible for these statements 
and information as if you had submitted them to EPA yourself.
    (b) In the standard-setting part and in 40 CFR 1068.101, we 
describe your obligation to report truthful and complete information 
and the consequences of failing to meet this obligation. See also 18 
U.S.C. 1001 and 42 U.S.C. 7413(c)(2). This obligation applies whether 
you submit this information directly to EPA or through someone else.
* * * * *

0
274. Section 1065.10 is amended by revising paragraphs (c)(2) and 
(c)(7) introductory text to read as follows:


Sec.  1065.10  Other procedures.

* * * * *
    (c) * * *
    (2) You may request to use special procedures if your engine cannot 
be tested using the specified procedures. For example, this may apply 
if your engine cannot operate on the specified duty cycle. In this 
case, tell us in writing why you cannot satisfactorily test your engine 
using this part's procedures and ask to use a different approach. We 
will approve your request if we determine that it would produce 
emission measurements that represent in-use operation and we determine 
that it can be used to show compliance with the requirements of the 
standard-setting part. Where we approve special procedures that differ 
substantially from the specified procedures, we may preclude you from 
participating in averaging, banking, and trading with the affected 
engine families.
* * * * *
    (7) You may request to use alternate procedures that are equivalent 
to the allowed procedures, or procedures that are more accurate or more 
precise than the allowed procedures. The following provisions apply to 
requests for alternate procedures:
* * * * *

0
275. Section 1065.15 is amended by revising paragraph (c) to read as 
follows:


Sec.  1065.15  Overview of procedures for laboratory and field testing.

* * * * *
    (c) We generally set brake-specific emission standards over test 
intervals and/or duty cycles, as follows:
    (1) Engine operation. Testing may involve measuring emissions and 
work in a laboratory-type environment or in the field, as described in 
paragraph (f) of this section. For most laboratory testing, the engine 
is operated over one or more duty cycles specified in the standard-
setting part. However, laboratory testing may also include non-duty 
cycle testing (such as simulation of field testing in a laboratory). 
For field testing, the engine is operated under normal in-use 
operation. The standard-setting part specifies how test intervals are 
defined for field testing. Refer to the definitions of ``duty cycle'' 
and ``test interval'' in Sec.  1065.1001. Note that a single duty cycle 
may have multiple test intervals and require weighting of results from 
multiple test intervals to calculate a composite brake-specific 
emissions value to compare to the standard.
    (2) Constituent determination. Determine the total mass of each 
constituent over a test interval by selecting from the following 
methods:
    (i) Continuous sampling. In continuous sampling, measure the 
constituent's concentration continuously from raw or dilute exhaust. 
Multiply this concentration by the continuous (raw or dilute) flow rate 
at the emission sampling location to determine the constituent's flow 
rate. Sum the constituent's flow rate continuously over the test 
interval. This sum is the total mass of the emitted constituent.
    (ii) Batch sampling. In batch sampling, continuously extract and 
store a sample of raw or dilute exhaust for later measurement. Extract 
a sample proportional to the raw or dilute exhaust flow rate. You may 
extract and store a proportional sample of exhaust in an appropriate 
container, such as a bag, and then measure HC, CO, and NOX 
concentrations in the container after the test interval. You may 
deposit PM from proportionally extracted exhaust onto an appropriate 
substrate, such as a filter. In this case, divide the PM by the amount 
of filtered exhaust to calculate the PM concentration. Multiply batch 
sampled concentrations by the total (raw or dilute) flow from which it 
was extracted during the test interval. This product is the total mass 
of the emitted constituent.
    (iii) Combined sampling. You may use continuous and batch sampling

[[Page 23029]]

simultaneously during a test interval, as follows:
    (A) You may use continuous sampling for some constituents and batch 
sampling for others.
    (B) You may use continuous and batch sampling for a single 
constituent, with one being a redundant measurement. See Sec.  1065.201 
for more information on redundant measurements.
    (3) Work determination. Determine work over a test interval by one 
of the following methods:
    (i) Speed and torque. Synchronously multiply speed and brake torque 
to calculate instantaneous values for engine brake power. Sum engine 
brake power over a test interval to determine total work.
    (ii) Fuel consumed and brake-specific fuel consumption. Directly 
measure fuel consumed or calculate it with chemical balances of the 
fuel, intake air, and exhaust. To calculate fuel consumed by a chemical 
balance, you must also measure either intake-air flow rate or exhaust 
flow rate. Divide the fuel consumed during a test interval by the 
brake-specific fuel consumption to determine work over the test 
interval. For laboratory testing, calculate the brake-specific fuel 
consumption using fuel consumed and speed and torque over a test 
interval. For field testing, refer to the standard-setting part and 
Sec.  1065.915 for selecting an appropriate value for brake-specific 
fuel consumption.
* * * * *

Subpart B--[Amended]

0
276. Section 1065.125 is amended by revising paragraphs (c) and (e) to 
read as follows:


Sec.  1065.125  Engine intake air.

* * * * *
    (c) Maintain the temperature of intake air to (25  5) 
[deg]C, except as follows:
    (1) Follow the standard-setting part if it specifies different 
temperatures.
    (2) For engines above 560 kW, you may use 35 [deg]C as the upper 
bound of the tolerance. However, your system must be capable of 
controlling the temperature to the 25 [deg]C setpoint for any steady-
state operation at > 30% of maximum engine power.
    (3) You may ask us to allow you to apply a different setpoint for 
intake air temperature if it is necessary to remain consistent with the 
provisions of Sec.  1065.10(c)(1) for testing during which ambient 
temperature will be outside this range.
* * * * *
    (e) This paragraph (e) includes provisions for simulating charge-
air cooling in the laboratory. This approach is described in paragraph 
(e)(1) of this section. Limits on using this approach are described in 
paragraphs (e)(2) and (3) of this section.
    (1) Use a charge-air cooling system with a total intake-air 
capacity that represents production engines' in-use installation. 
Design any laboratory charge-air cooling system to minimize 
accumulation of condensate. Drain any accumulated condensate and 
completely close all drains before starting a duty cycle. Keep the 
drains closed during the emission test. Maintain coolant conditions as 
follows:
    (i) Maintain a coolant temperature of at least 20 [deg]C at the 
inlet to the charge-air cooler throughout testing. We recommend 
maintaining a coolant temperature of 25 5 [deg]C at the 
inlet of the charge-air cooler.
    (ii) At the engine conditions specified by the manufacturer, set 
the coolant flow rate to achieve an air temperature within 5 [deg]C of the value specified by the manufacturer after the 
charge-air cooler's outlet. Measure the air-outlet temperature at the 
location specified by the manufacturer. Use this coolant flow rate set 
point throughout testing. If the engine manufacturer does not specify 
engine conditions or the corresponding charge-air cooler air outlet 
temperature, set the coolant flow rate at maximum engine power to 
achieve a charge-air cooler air outlet temperature that represents in-
use operation.
    (iii) If the engine manufacturer specifies pressure-drop limits 
across the charge-air cooling system, ensure that the pressure drop 
across the charge-air cooling system at engine conditions specified by 
the manufacturer is within the manufacturer's specified limit(s). 
Measure the pressure drop at the manufacturer's specified locations.
    (2) Using a constant flow rate as described in paragraph (e)(1) of 
this section may result in unrepresentative overcooling of the intake 
air. The provisions of this paragraph (e)(2) apply instead of the 
provisions of Sec.  1065.10(c)(1) for this simulation. Our allowance to 
cool intake air as specified in this paragraph (e) does not affect your 
liability for field testing or for laboratory testing that is done in a 
way that better represents in-use operation. Where we determine that 
this allowance adversely affects your ability to demonstrate that your 
engines would comply with emission standards under in-use conditions, 
we may require you to use more sophisticated setpoints and controls of 
charge-air pressure drop, coolant temperature, and flow rate to achieve 
more representative results.
    (3) This approach does not apply for field testing. You may not 
correct measured emission levels from field testing to account for any 
differences caused by the simulated cooling in the laboratory.

0
277. Section 1065.140 is revised amended by revising paragraphs (c)(6), 
(e) introductory text, and (e)(4) to read as follows:


Sec.  1065.140  Dilution for gaseous and PM constituents.

* * * * *
    (c) * * *
    (6) Aqueous condensation. This paragraph (c)(6) describes how you 
must address aqueous condensation in the CVS. As described below, you 
may meet these requirements by preventing or limiting aqueous 
condensation in the CVS from the exhaust inlet to the last emission 
sample probe. See that paragraph for provisions related to the CVS 
between the last emission sample probe and the CVS flow meter. You may 
heat and/or insulate the dilution tunnel walls, as well as the bulk 
stream tubing downstream of the tunnel to prevent or limit aqueous 
condensation. Where we allow aqueous condensation to occur, use good 
engineering judgment to ensure that the condensation does not affect 
your ability to demonstrate that your engines comply with the 
applicable standards (see Sec.  1065.10(a)).
    (i) Preventing aqueous condensation. To prevent condensation, you 
must keep the temperature of internal surfaces, excluding any sample 
probes, above the dew point of the dilute exhaust passing through the 
CVS tunnel. Use good engineering judgment to monitor temperatures in 
the CVS. For the purposes of this paragraph (c)(6), assume that aqueous 
condensation is pure water condensate only, even though the definition 
of ``aqueous condensation'' in Sec.  1065.1001 includes condensation of 
any constituents that contain water. No specific verification check is 
required under this paragraph (c)(6)(i), but we may ask you to show how 
you comply with this requirement. You may use engineering analysis, CVS 
tunnel design, alarm systems, measurements of wall temperatures, and 
calculation of water dew point to demonstrate compliance with this 
requirement. For optional CVS heat exchangers, you may use the lowest 
water temperature at the inlet(s) and outlet(s) to determine the 
minimum internal surface temperature.
    (ii) Limiting aqueous condensation. This paragraph (c)(6)(ii) 
specifies limits of allowable condensation and requires

[[Page 23030]]

you to verify that the amount of condensation that occurs during each 
test interval does not exceed the specified limits.
    (A) Use chemical balance equations in Sec.  1065.655 to calculate 
the mole fraction of water in the dilute exhaust continuously during 
testing. Alternatively, you may continuously measure the mole fraction 
of water in the dilute exhaust prior to any condensation during 
testing. Use good engineering judgment to select, calibrate and verify 
water analyzers/detectors. The linearity verification requirements of 
Sec.  1065.307 do not apply to water analyzers/detectors used to 
correct for the water content in exhaust samples.
    (B) Use good engineering judgment to select and monitor locations 
on the CVS tunnel walls prior to the last emission sample probe. If you 
are also verifying limited condensation from the last emission sample 
probe to the CVS flow meter, use good engineering judgment to select 
and monitor locations on the CVS tunnel walls, optional CVS heat 
exchanger, and CVS flow meter. For optional CVS heat exchangers, you 
may use the lowest water temperature at the inlet(s) and outlet(s) to 
determine the minimum internal surface temperature. Identify the 
minimum surface temperature on a continuous basis.
    (C) Identify the maximum potential mole fraction of dilute exhaust 
lost on a continuous basis during the entire test interval. This value 
must be less than or equal to 0.02 (i.e. 2%). Calculate on a continuous 
basis the mole fraction of water that would be in equilibrium with 
liquid water at the measured minimum surface temperature. Subtract this 
mole fraction from the mole fraction of water that would be in the 
exhaust without condensation (either measured or from the chemical 
balance), and set any negative values to zero. This difference is the 
potential mole fraction of the dilute exhaust that would be lost due to 
water condensation on a continuous basis.
    (D) Integrate the product of the molar flow rate of the dilute 
exhaust and the potential mole fraction of dilute exhaust lost, and 
divide by the totalized dilute exhaust molar flow over the test 
interval. This is the potential mole fraction of the dilute exhaust 
that would be lost due to water condensation over the entire test 
interval. Note that this assumes no re-evaporation. This value must be 
less than or equal to 0.005 (i.e. 0.5%).
* * * * *
    (e) Dilution air temperature, dilution ratio, residence time, and 
temperature control of PM samples. Dilute PM samples at least once 
upstream of transfer lines. You may dilute PM samples upstream of a 
transfer line using full-flow dilution, or partial-flow dilution 
immediately downstream of a PM probe. In the case of partial-flow 
dilution, you may have up to 26 cm of insulated length between the end 
of the probe and the dilution stage, but we recommend that the length 
be as short as practical. The intent of these specifications is to 
minimize heat transfer to or from the emission sample before the final 
stage of dilution, other than the heat you may need to add to prevent 
aqueous condensation. This is accomplished by initially cooling the 
sample through dilution. Configure dilution systems as follows:
* * * * *
    (4) Control sample temperature to a (47 5) [deg]C 
tolerance, as measured anywhere within 20 cm upstream or downstream of 
the PM storage media (such as a filter). Measure this temperature with 
a bare-wire junction thermocouple with wires that are (0.500 0.025) mm diameter, or with another suitable instrument that has 
equivalent performance.

0
278. Section 1065.145 is revised to read as follows:


Sec.  1065.145  Gaseous and PM probes, transfer lines, and sampling 
system components.

    (a) Continuous and batch sampling. Determine the total mass of each 
constituent with continuous or batch sampling, as described in Sec.  
1065.15(c)(2). Both types of sampling systems have probes, transfer 
lines, and other sampling system components that are described in this 
section.
    (b) Options for engines with multiple exhaust stacks. Measure 
emissions from a test engine as described in this paragraph (b) if it 
has multiple exhaust stacks. You may choose to use different 
measurement procedures for different pollutants under this paragraph 
(b) for a given test. For purposes of this part 1065, the test engine 
includes all the devices related to converting the chemical energy in 
the fuel to the engine's mechanical output energy. This may or may not 
involve vehicle- or equipment-based devices. For example, all of an 
engine's cylinders are considered to be part of the test engine even if 
the exhaust is divided into separate exhaust stacks. As another 
example, all the cylinders of a diesel-electric locomotive are 
considered to be part of the test engine even if they transmit power 
through separate output shafts, such as might occur with multiple 
engine-generator sets working in tandem. Use one of the following 
procedures to measure emissions with multiple exhaust stacks:
    (1) Route the exhaust flow from the multiple stacks into a single 
flow as described in Sec.  1065.130(c)(6). Sample and measure emissions 
after the exhaust streams are mixed. Calculate the emissions as a 
single sample from the entire engine. We recommend this as the 
preferred option, since it requires only a single measurement and 
calculation of the exhaust molar flow for the entire engine.
    (2) Sample and measure emissions from each stack and calculate 
emissions separately for each stack. Add the mass (or mass rate) 
emissions from each stack to calculate the emissions from the entire 
engine. Testing under this paragraph (b)(2) requires measuring or 
calculating the exhaust molar flow for each stack separately. If the 
exhaust molar flow in each stack cannot be calculated from combustion 
air flow(s), fuel flow(s), and measured gaseous emissions, and it is 
impractical to measure the exhaust molar flows directly, you may 
alternatively proportion the engine's calculated total exhaust molar 
flow rate (where the flow is calculated using combustion air mass 
flow(s), fuel mass flow(s), and emissions concentrations) based on 
exhaust molar flow measurements in each stack using a less accurate, 
non-traceable method. For example, you may use a total pressure probe 
and static pressure measurement in each stack.
    (3) Sample and measure emissions from one stack and repeat the duty 
cycle as needed to collect emissions from each stack separately. 
Calculate the emissions from each stack and add the separate 
measurements to calculate the mass (or mass rate) emissions from the 
entire engine. Testing under this paragraph (b)(3) requires measuring 
or calculating the exhaust molar flow for each stack separately. You 
may alternatively proportion the engine's calculated total exhaust 
molar flow rate based on calculation and measurement limitations as 
described in paragraph (b)(2) of this section. Use the average of the 
engine's total power or work values from the multiple test runs to 
calculate brake-specific emissions. Divide the total mass (or mass 
rate) of each emission by the average power (or work). You may 
alternatively use the engine power or work associated with the 
corresponding stack during each test run if these values can be 
determined for each stack separately.
    (4) Sample and measure emissions from each stack separately and 
calculate emissions for the entire engine based on the stack with the 
highest concentration. Testing under this paragraph (b)(4)

[[Page 23031]]

requires only a single exhaust flow measurement or calculation for the 
entire engine. You may determine which stack has the highest 
concentration by performing multiple test runs, reviewing the results 
of earlier tests, or using good engineering judgment. Note that the 
highest concentration of different pollutants may occur in different 
stacks. Note also that the stack with the highest concentration of a 
pollutant during a test interval for field testing may be a different 
stack than the one you identified based on average concentrations over 
a duty cycle.
    (5) Sample emissions from each stack separately and combine the wet 
sample streams from each stack proportionally to the exhaust molar 
flows in each stack. Measure the emission concentrations and calculate 
the emissions for the entire engine based on these weighted 
concentrations. Testing under this paragraph (b)(5) requires measuring 
or calculating the exhaust molar flow for each stack separately during 
the test run to proportion the sample streams from each stack. If it is 
impractical to measure the exhaust molar flows directly, you may 
alternatively proportion the wet sample streams based on less accurate, 
non-traceable flow methods. For example, you may use a total pressure 
probe and static pressure measurement in each stack. The following 
restrictions apply for testing under this paragraph (b)(5):
    (i) You must use an accurate, traceable measurement or calculation 
of the engine's total exhaust molar flow rate for calculating the mass 
of emissions from the entire engine.
    (ii) You may dry the single, combined, proportional sample stream; 
you may not dry the sample streams from each stack separately.
    (iii) You must measure and proportion the sample flows from each 
stack with active flow controls. For PM sampling, you must measure and 
proportion the diluted sample flows from each stack with active flow 
controls that use only smooth walls with no sudden change in cross-
sectional area. For example, you may control the dilute exhaust PM 
sample flows using electrically conductive vinyl tubing and a control 
device that pinches the tube over a long enough transition length so no 
flow separation occurs.
    (iv) For PM sampling, the transfer lines from each stack must be 
joined so the angle of the joining flows is 12.5[deg] or less. Note 
that the exhaust manifold must meet the same specifications as the 
transfer line according to paragraph (d) of this section.
    (6) Sample emissions from each stack separately and combine the wet 
sample streams from each stack equally. Measure the emission 
concentrations and calculate the emissions for the entire engine based 
on these measured concentrations. Testing under this paragraph (b)(6) 
assumes that the raw-exhaust and sample flows are the same for each 
stack. The following restrictions apply for testing under this 
paragraph (b)(6):
    (i) You must measure and demonstrate that the sample flow from each 
stack is within 5% of the value from the stack with the highest sample 
flow. You may alternatively ensure that the stacks have equal flow 
rates without measuring sample flows by designing a passive sampling 
system that meets the following requirements:
    (A) The probes and transfer line branches must be symmetrical, have 
equal lengths and diameters, have the same number of bends, and have no 
filters.
    (B) If probes are designed such that they are sensitive to stack 
velocity, the stack velocity must be similar at each probe. For 
example, a static pressure probe used for gaseous sampling is not 
sensitive to stack velocity.
    (C) The stack static pressure must be the same at each probe. You 
can meet this requirement by placing probes at the end of stacks that 
are vented to atmosphere.
    (D) For PM sampling, the transfer lines from each stack must be 
joined so the angle of the joining flows is 12.5[deg] or less. Note 
that the exhaust manifold must meet the same specifications as the 
transfer line according to paragraph (d) of this section.
    (ii) You may use the procedure in this paragraph (b)(6) only if you 
perform an analysis showing that the resulting error due to imbalanced 
stack flows and concentrations is either at or below 2%. You may 
alternatively show that the resulting error does not impact your 
ability to demonstrate compliance with applicable standards. For 
example, you may use less accurate, non-traceable measurements of 
emission concentrations and molar flow in each stack and demonstrate 
that the imbalances in flows and concentrations cause 2% or less error.
    (iii) For a two-stack engine, you may use the procedure in this 
paragraph (b)(6) only if you can show that the stack with the higher 
flow has the lower average concentration for each pollutant over the 
duty cycle.
    (iv) You must use an accurate, traceable measurement or calculation 
of the engine's total exhaust molar flow rate for calculating the mass 
of emissions from the entire engine.
    (v) You may dry the single, equally combined, sample stream; you 
may not dry the sample streams from each stack separately.
    (vi) You may determine your exhaust flow rates with a chemical 
balance of exhaust gas concentrations and either intake air flow or 
fuel flow.
    (c) Gaseous and PM sample probes. A probe is the first fitting in a 
sampling system. It protrudes into a raw or diluted exhaust stream to 
extract a sample, such that its inside and outside surfaces are in 
contact with the exhaust. A sample is transported out of a probe into a 
transfer line, as described in paragraph (d) of this section. The 
following provisions apply to sample probes:
    (1) Probe design and construction. Use sample probes with inside 
surfaces of 300 series stainless steel or, for raw exhaust sampling, 
use any nonreactive material capable of withstanding raw exhaust 
temperatures. Locate sample probes where constituents are mixed to 
their mean sample concentration. Take into account the mixing of any 
crankcase emissions that may be routed into the raw exhaust. Locate 
each probe to minimize interference with the flow to other probes. We 
recommend that all probes remain free from influences of boundary 
layers, wakes, and eddies--especially near the outlet of a raw-exhaust 
tailpipe where unintended dilution might occur. Make sure that purging 
or back-flushing of a probe does not influence another probe during 
testing. You may use a single probe to extract a sample of more than 
one constituent as long as the probe meets all the specifications for 
each constituent.
    (2) Gaseous sample probes. Use either single-port or multi-port 
probes for sampling gaseous emissions. You may orient these probes in 
any direction relative to the raw or diluted exhaust flow. For some 
probes, you must control sample temperatures, as follows:
    (i) For probes that extract NOX from diluted exhaust, 
control the probe's wall temperature to prevent aqueous condensation.
    (ii) For probes that extract hydrocarbons for THC or NMHC analysis 
from the diluted exhaust of compression-ignition engines, 2-stroke 
spark-ignition engines, or 4-stroke spark-ignition engines below 19 kW, 
we recommend heating the probe to minimize hydrocarbon contamination 
consistent with good engineering judgment. If you routinely fail the 
contamination check in the 1065.520 pretest check, we recommend heating

[[Page 23032]]

the probe section to approximately 190 [deg]C to minimize 
contamination.
    (3) PM sample probes. Use PM probes with a single opening at the 
end. Orient PM probes to face directly upstream. If you shield a PM 
probe's opening with a PM pre-classifier such as a hat, you may not use 
the preclassifier we specify in paragraph (f)(1) of this section. We 
recommend sizing the inside diameter of PM probes to approximate 
isokinetic sampling at the expected mean flow rate.
    (d) Transfer lines. You may use transfer lines to transport an 
extracted sample from a probe to an analyzer, storage medium, or 
dilution system, noting certain restrictions for PM sampling in Sec.  
1065.140(e). Minimize the length of all transfer lines by locating 
analyzers, storage media, and dilution systems as close to probes as 
practical. We recommend that you minimize the number of bends in 
transfer lines and that you maximize the radius of any unavoidable 
bend. Avoid using 90[deg] elbows, tees, and cross-fittings in transfer 
lines. Where such connections and fittings are necessary, take steps, 
using good engineering judgment, to ensure that you meet the 
temperature tolerances in this paragraph (d). This may involve 
measuring temperature at various locations within transfer lines and 
fittings. You may use a single transfer line to transport a sample of 
more than one constituent, as long as the transfer line meets all the 
specifications for each constituent. The following construction and 
temperature tolerances apply to transfer lines:
    (1) Gaseous samples. Use transfer lines with inside surfaces of 300 
series stainless steel, PTFE, VitonTM, or any other material 
that you demonstrate has better properties for emission sampling. For 
raw exhaust sampling, use a non-reactive material capable of 
withstanding raw exhaust temperatures. You may use in-line filters if 
they do not react with exhaust constituents and if the filter and its 
housing meet the same temperature requirements as the transfer lines, 
as follows:
    (i) For NOX transfer lines upstream of either an 
NO2-to-NO converter that meets the specifications of Sec.  
1065.378 or a chiller that meets the specifications of Sec.  1065.376, 
maintain a sample temperature that prevents aqueous condensation.
    (ii) For THC transfer lines for testing compression-ignition 
engines, 2-stroke spark-ignition engines, or 4-stroke spark-ignition 
engines below 19 kW, maintain a wall temperature tolerance throughout 
the entire line of (191 11) [deg]C. If you sample from raw 
exhaust, you may connect an unheated, insulated transfer line directly 
to a probe. Design the length and insulation of the transfer line to 
cool the highest expected raw exhaust temperature to no lower than 191 
[deg]C, as measured at the transfer line's outlet. For dilute sampling, 
you may use a transition zone between the probe and transfer line of up 
to 92 cm to allow your wall temperature to transition to (191 11) [deg]C.
    (2) PM samples. We recommend heated transfer lines or a heated 
enclosure to minimize temperature differences between transfer lines 
and exhaust constituents. Use transfer lines that are inert with 
respect to PM and are electrically conductive on the inside surfaces. 
We recommend using PM transfer lines made of 300 series stainless 
steel. Electrically ground the inside surface of PM transfer lines.
    (e) Optional sample-conditioning components for gaseous sampling. 
You may use the following sample-conditioning components to prepare 
gaseous samples for analysis, as long as you do not install or use them 
in a way that adversely affects your ability to show that your engines 
comply with all applicable gaseous emission standards.
    (1) NO2-to-NO converter. You may use an NO2-to-NO 
converter that meets the converter conversion verification specified in 
Sec.  1065.378 at any point upstream of a NOX analyzer, 
sample bag, or other storage medium.
    (2) Sample dryer. You may use either type of sample dryer described 
in this paragraph (e)(2) to decrease the effects of water on gaseous 
emission measurements. You may not use a chemical dryer, or use dryers 
upstream of PM sample filters.
    (i) Osmotic-membrane. You may use an osmotic-membrane dryer 
upstream of any gaseous analyzer or storage medium, as long as it meets 
the temperature specifications in paragraph (d)(1) of this section. 
Because osmotic-membrane dryers may deteriorate after prolonged 
exposure to certain exhaust constituents, consult with the membrane 
manufacturer regarding your application before incorporating an 
osmotic-membrane dryer. Monitor the dewpoint, Tdew, and 
absolute pressure, ptotal, downstream of an osmotic-membrane 
dryer. You may use continuously recorded values of Tdew and 
ptotal in the amount of water calculations specified in 
Sec.  1065.645. For our testing we may use average temperature and 
pressure values over the test interval or a nominal pressure value that 
we estimate as the dryer's average pressure expected during testing as 
constant values in the amount of water calculations specified in Sec.  
1065.645. For your testing, you may use the maximum temperature or 
minimum pressure values observed during a test interval or duty cycle 
or the high alarm temperature setpoint or low alarm pressure setpoint 
as constant values in the calculations specified in Sec.  1065.645. For 
your testing, you may also use a nominal ptotal, which you 
may estimate as the dryer's lowest absolute pressure expected during 
testing.
    (ii) Thermal chiller. You may use a thermal chiller upstream of 
some gas analyzers and storage media. You may not use a thermal chiller 
upstream of a THC measurement system for compression-ignition engines, 
2-stroke spark-ignition engines, or 4-stroke spark-ignition engines 
below 19 kW. If you use a thermal chiller upstream of an 
NO2-to-NO converter or in a sampling system without an 
NO2-to-NO converter, the chiller must meet the 
NO2 loss-performance check specified in Sec.  1065.376. 
Monitor the dewpoint, Tdew, and absolute pressure, 
ptotal, downstream of a thermal chiller. You may use 
continuously recorded values of Tdew and ptotal 
in the amount of water calculations specified in Sec.  1065.645. If it 
is valid to assume the degree of saturation in the thermal chiller, you 
may calculate Tdew based on the known chiller performance 
and continuous monitoring of chiller temperature, Tchiller. 
If it is valid to assume a constant temperature offset between 
Tchiller and Tdew, due to a known and fixed 
amount of sample reheat between the chiller outlet and the temperature 
measurement location, you may factor in this assumed temperature offset 
value into emission calculations. If we ask for it, you must show by 
engineering analysis or by data the validity of any assumptions allowed 
by this paragraph (e)(2)(ii). For our testing we may use average 
temperature and pressure values over the test interval or a nominal 
pressure value that we estimate as the dryer's average pressure 
expected during testing as constant values in the calculations 
specified in Sec.  1065.645. For your testing you may use the maximum 
temperature and minimum pressure values observed during a test interval 
or duty cycle or the high alarm temperature setpoint and the low alarm 
pressure setpoint as constant values in the amount of water 
calculations specified in Sec.  1065.645. For your testing you may also 
use a nominal ptotal, which you may estimate as the dryer's 
lowest absolute pressure expected during testing.
    (3) Sample pumps. You may use sample pumps upstream of an analyzer 
or storage medium for any gas. Use sample pumps with inside surfaces of 
300 series stainless steel, PTFE, or any other material that you 
demonstrate has

[[Page 23033]]

better properties for emission sampling. For some sample pumps, you 
must control temperatures, as follows:
    (i) If you use a NOX sample pump upstream of either an 
NO2-to-NO converter that meets Sec.  1065.378 or a chiller 
that meets Sec.  1065.376, it must be heated to prevent aqueous 
condensation.
    (ii) For testing compression-ignition engines, 2-stroke spark-
ignition engines, or 4-stroke spark-ignition engines below 19 kW, if 
you use a THC sample pump upstream of a THC analyzer or storage medium, 
its inner surfaces must be heated to a tolerance of (191 11) [deg]C.
    (4) Ammonia Scrubber. You may use ammonia scrubbers for any or all 
gaseous sampling systems to prevent interference with NH3, 
poisoning of the NO2-to-NO converter, and deposits in the 
sampling system or analyzers. Follow the ammonia scrubber 
manufacturer's recommendations or use good engineering judgment in 
applying ammonia scrubbers.
    (f) Optional sample-conditioning components for PM sampling. You 
may use the following sample-conditioning components to prepare PM 
samples for analysis, as long as you do not install or use them in a 
way that adversely affects your ability to show that your engines 
comply with the applicable PM emission standards. You may condition PM 
samples to minimize positive and negative biases to PM results, as 
follows:
    (1) PM preclassifier. You may use a PM preclassifier to remove 
large-diameter particles. The PM preclassifier may be either an 
inertial impactor or a cyclonic separator. It must be constructed of 
300 series stainless steel. The preclassifier must be rated to remove 
at least 50% of PM at an aerodynamic diameter of 10 [mu]m and no more 
than 1% of PM at an aerodynamic diameter of 1 [mu]m over the range of 
flow rates for which you use it. Follow the preclassifier 
manufacturer's instructions for any periodic servicing that may be 
necessary to prevent a buildup of PM. Install the preclassifier in the 
dilution system downstream of the last dilution stage. Configure the 
preclassifier outlet with a means of bypassing any PM sample media so 
the preclassifier flow may be stabilized before starting a test. Locate 
PM sample media within 75 cm downstream of the preclassifier's exit. 
You may not use this preclassifier if you use a PM probe that already 
has a preclassifier. For example, if you use a hat-shaped preclassifier 
that is located immediately upstream of the probe in such a way that it 
forces the sample flow to change direction before entering the probe, 
you may not use any other preclassifier in your PM sampling system.
    (2) Other components. You may request to use other PM conditioning 
components upstream of a PM preclassifier, such as components that 
condition humidity or remove gaseous-phase hydrocarbons from the 
diluted exhaust stream. You may use such components only if we approve 
them under Sec.  1065.10.

Subpart C--[Amended]

0
279. Section 1065.201 is amended by revising paragraph (h) to read as 
follows:


Sec.  1065.201  Overview and general provisions.

* * * * *
    (h) Recommended practices. This subpart identifies a variety of 
recommended but not required practices for proper measurements. We 
believe in most cases it is necessary to follow these recommended 
practices for accurate and repeatable measurements. However, we do not 
specifically require you to follow these recommended practices to 
perform a valid test, as long as you meet the required calibrations and 
verifications of measurement systems specified in subpart D of this 
part. Similarly, we are not required to follow all recommended 
practices, as long as we meet the required calibrations and 
verifications. Our decision to follow or not follow a given 
recommendation when testing your engine is not dependent on whether or 
not you followed it during your testing.


0
280. Section 1065.205 is revised to read as follows:


Sec.  1065.205  Performance specifications for measurement instruments.

    Your test system as a whole must meet all the applicable 
calibrations, verifications, and test-validation criteria specified in 
subparts D and F of this part or subpart J of this part for using PEMS 
and for performing field testing. We recommend that your instruments 
meet the specifications in Table 1 of this section for all ranges you 
use for testing. We also recommend that you keep any documentation you 
receive from instrument manufacturers showing that your instruments 
meet the specifications in Table 1 of this section.
BILLING CODE 6560-50-P

[[Page 23034]]

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[GRAPHIC] [TIFF OMITTED] TR30AP10.106


[[Page 23035]]


[GRAPHIC] [TIFF OMITTED] TR30AP10.107

BILLING CODE 6560-50-C


0
281. Section 1065.240 is amended by revising paragraph (d) introductory 
text to read as follows:


Sec.  1065.240  Dilution air and diluted exhaust flow meters.

* * * * *
    (d) Exhaust cooling. You may cool diluted exhaust upstream of a 
dilute-exhaust flow meter, as long as you observe all the following 
provisions:
* * * * *


0
282. Section 1065.260 is amended by revising paragraph (c) to read as 
follows:


Sec.  1065.260  Flame-ionization detector.

* * * * *
    (c) Heated FID analyzers. For compression-ignition engines, two-
stroke spark-ignition engines, and four-stroke spark-ignition engines 
below 19 kW, you must use heated FID analyzers that maintain all 
surfaces that are exposed to emissions at a temperature of (191  11) [deg]C.
* * * * *

Subpart D--[Amended]

0
283. Section 1065.303 is revised to read as follows:


Sec.  1065.303  Summary of required calibration and verifications

    The following table summarizes the required and recommended 
calibrations and verifications described in this subpart and indicates 
when these have to be performed:

     Table 1 of Sec.   1065.303--Summary of Required Calibration and
                              Verifications
------------------------------------------------------------------------
  Type of calibration or verification         Minimum frequency \a\
------------------------------------------------------------------------
Sec.   1065.305: Accuracy,               Accuracy: Not required, but
 repeatability and noise.                 recommended for initial
                                          installation.
                                         Repeatability: Not required,
                                          but recommended for initial
                                          installation.
                                         Noise: Not required, but
                                          recommended for initial
                                          installation.
Sec.   1065.307: Linearity verification  Speed: Upon initial
                                          installation, within 370 days
                                          before testing and after major
                                          maintenance.
                                         Torque: Upon initial
                                          installation, within 370 days
                                          before testing and after major
                                          maintenance.
                                         Electrical power: Upon initial
                                          installation, within 370 days
                                          before testing and after major
                                          maintenance.
                                         Fuel flow: Upon initial
                                          installation, within 370 days
                                          before testing, and after
                                          major maintenance.
                                         Clean gas and diluted exhaust
                                          flows: Upon initial
                                          installation, within 370 days
                                          before testing and after major
                                          maintenance, unless flow is
                                          verified by propane check or
                                          by carbon or oxygen balance.
                                         Raw exhaust flow: Upon initial
                                          installation, within 185 days
                                          before testing and after major
                                          maintenance, unless flow is
                                          verified by propane check or
                                          by carbon or oxygen balance.

[[Page 23036]]


                                         Gas dividers: Upon initial
                                          installation, within 370 days
                                          before testing, and after
                                          major maintenance.
                                         Gas analyzers: Upon initial
                                          installation, within 35 days
                                          before testing and after major
                                          maintenance.
                                         FTIR and photoacoustic
                                          analyzers: Upon initial
                                          installation, within 370 days
                                          before testing and after major
                                          maintenance.
                                         GC-ECD: Upon initial
                                          installation and after major
                                          maintenance.
                                         PM balance: Upon initial
                                          installation, within 370 days
                                          before testing and after major
                                          maintenance.
                                         Pressure, temperature, and
                                          dewpoint: Upon initial
                                          installation, within 370 days
                                          before testing and after major
                                          maintenance.
Sec.   1065.308: Continuous gas          Upon initial installation or
 analyzer system response and updating-   after system modification that
 recording verification--for gas          would affect response.
 analyzers not continuously compensated
 for other gas species.
Sec.   1065.309: Continuous gas          Upon initial installation or
 analyzer system-response and updating-   after system modification that
 recording verification--for gas          would affect response.
 analyzers continuously compensated for
 other gas species.
Sec.   1065.310: Torque................  Upon initial installation and
                                          after major maintenance.
Sec.   1065.315: Pressure, temperature,  Upon initial installation and
 dewpoint.                                after major maintenance.
Sec.   1065.320: Fuel flow.............  Upon initial installation and
                                          after major maintenance.
Sec.   1065.325: Intake flow...........  Upon initial installation and
                                          after major maintenance.
Sec.   1065.330: Exhaust flow..........  Upon initial installation and
                                          after major maintenance.
Sec.   1065.340: Diluted exhaust flow    Upon initial installation and
 (CVS).                                   after major maintenance.
Sec.   1065.341: CVS and batch sampler   Upon initial installation,
 verification \b\.                        within 35 days before testing,
                                          and after major maintenance.
Sec.   1065.342 Sample dryer             For thermal chillers: Upon
 verification.                            installation and after major
                                          maintenance.
                                         For osmotic membranes; upon
                                          installation, within 35 days
                                          of testing, and after major
                                          maintenance.
Sec.   1065.345: Vacuum leak...........  For laboratory testing: Upon
                                          initial installation of the
                                          sampling system, within 8
                                          hours before the start of the
                                          first test interval of each
                                          duty-cycle sequence, and after
                                          maintenance such as pre-filter
                                          changes.
                                         For field testing: After each
                                          installation of the sampling
                                          system on the vehicle, prior
                                          to the start of the field
                                          test, and after maintenance
                                          such as pre-filter changes.
Sec.   1065.350: CO2 NDIR H2O            Upon initial installation and
 interference.                            after major maintenance.
Sec.   1065.355: CO NDIR CO2 and H2O     Upon initial installation and
 interference.                            after major maintenance.
Sec.   1065.360: FID calibration.......  Calibrate all FID analyzers:
                                          Upon initial installation and
                                          after major maintenance.
THC FID optimization, and THC FID        Optimize and determine CH4
 verification.                            response for THC FID
                                          analyzers: Upon initial
                                          installation and after major
                                          maintenance.
                                         Verify CH4 response for THC FID
                                          analyzers: Upon initial
                                          installation, within 185 days
                                          before testing, and after
                                          major maintenance.
Sec.   1065.362: Raw exhaust FID O2      For all FID analyzers: Upon
 interference.                            initial installation, and
                                          after major maintenance.
                                         For THC FID analyzers: Upon
                                          initial installation, after
                                          major maintenance, and after
                                          FID optimization according to
                                          Sec.   1065.360.
Sec.   1065.365: Nonmethane cutter       Upon initial installation,
 penetration.                             within 185 days before
                                          testing, and after major
                                          maintenance.
Sec.   1065.370: CLD CO2 and H2O quench  Upon initial installation and
                                          after major maintenance.
Sec.   1065.372: NDUV HC and H2O         Upon initial installation and
 interference.                            after major maintenance.
Sec.   1065.375: N2O analyzer            Upon initial installation and
 interference.                            after major maintenance.
Sec.   1065.376: Chiller NO2             Upon initial installation and
 penetration.                             after major maintenance.
Sec.   1065.378: NO2-to-NO converter     Upon initial installation,
 conversion.                              within 35 days before testing,
                                          and after major maintenance.
Sec.   1065.390: PM balance and          Independent verification: Upon
 weighing.                                initial installation, within
                                          370 days before testing, and
                                          after major maintenance.
                                         Zero, span, and reference
                                          sample verifications: Within
                                          12 hours of weighing, and
                                          after major maintenance.
Sec.   1065.395: Inertial PM balance     Independent verification: Upon
 and weighing.                            initial installation, within
                                          370 days before testing, and
                                          after major maintenance.
                                         Other verifications: Upon
                                          initial installation and after
                                          major maintenance.
------------------------------------------------------------------------
\a\ Perform calibrations and verifications more frequently, according to
  measurement system manufacturer instructions and good engineering
  judgment.
\b\ The CVS verification described in Sec.   1065.341 is not required
  for systems that agree within  2% based on a chemical
  balance of carbon or oxygen of the intake air, fuel, and diluted
  exhaust.


[[Page 23037]]


0
284. Section 1065.305 is amended by revising paragraphs (d)(4), (d)(5), 
and (d)(7) to read as follows:


Sec.  1065.305  Verifications for accuracy, repeatability, and noise.

* * * * *
    (d) * * *
    (4) Use the instrument to quantify a NIST-traceable reference 
quantity, yref. For gas analyzers the reference gas must 
meet the specifications of Sec.  1065.750. Select a reference quantity 
near the mean value expected during testing. For all gas analyzers, use 
a quantity near the flow-weighted mean concentration expected at the 
standard or expected during testing, whichever is greater. For noise 
verification, use the same zero gas from paragraph (d)(2) of this 
section as the reference quantity. In all cases, allow time for the 
instrument to stabilize while it measures the reference quantity. 
Stabilization time may include time to purge an instrument and time to 
account for its response.
    (5) Sample and record values for 30 seconds (you may select a 
longer sampling period if the recording update frequency is less than 
0.5 Hz), record the arithmetic mean, yi and record the 
standard deviation, [sigma]i of the recorded values. Refer 
to Sec.  1065.602 for an example of calculating arithmetic mean and 
standard deviation.
* * * * *
    (7) Subtract the reference value, yref (or 
yrefi), from the arithmetic mean, yi. Record this 
value as the error, [egr]i.
* * * * *

0
285. Section 1065.307 is amended by revising paragraphs (c)(6), 
(c)(11), (d), (e), and Table 1 of Sec.  1065.307 to read as follows:


Sec.  1065.307  Linearity verification.

* * * * *
    (c) * * *
    (6) For all measured quantities, use instrument manufacturer 
recommendations and good engineering judgment to select reference 
values, yrefi, that cover a range of values that you expect 
would prevent extrapolation beyond these values during emission 
testing. We recommend selecting a zero reference signal as one of the 
reference values of the linearity verification. For pressure, 
temperature, dewpoint, and GC-ECD linearity verifications, we recommend 
at least three reference values. For all other linearity verifications 
select at least ten reference values.
* * * * *
    (11) At a recording frequency of at least f Hz, specified in Table 
1 of Sec.  1065.205, measure the reference value for 30 seconds (you 
may select a longer sampling period if the recording update frequency 
is less than 0.5 Hz) and record the arithmetic mean of the recorded 
values, yi. Refer to Sec.  1065.602 for an example of 
calculating an arithmetic mean.
* * * * *
    (d) Reference signals. This paragraph (d) describes recommended 
methods for generating reference values for the linearity-verification 
protocol in paragraph (c) of this section. Use reference values that 
simulate actual values, or introduce an actual value and measure it 
with a reference-measurement system. In the latter case, the reference 
value is the value reported by the reference-measurement system. 
Reference values and reference-measurement systems must be NIST-
traceable. We recommend using calibration reference quantities that are 
NIST-traceable within 0.5% uncertainty, if not specified otherwise in 
other sections of this part 1065. Use the following recommended methods 
to generate reference values or use good engineering judgment to select 
a different reference:
    (1) Speed. Run the engine or dynamometer at a series of steady-
state speeds and use a strobe, a photo tachometer, or a laser 
tachometer to record reference speeds.
    (2) Torque. Use a series of calibration weights and a calibration 
lever arm to simulate engine torque. You may instead use the engine or 
dynamometer itself to generate a nominal torque that is measured by a 
reference load cell or proving ring in series with the torque-
measurement system. In this case use the reference load cell 
measurement as the reference value. Refer to Sec.  1065.310 for a 
torque-calibration procedure similar to the linearity verification in 
this section.
    (3) Electrical power. Use a controlled source of current and a 
watt-hour standard reference meter. Complete calibration systems that 
contain a current source and a reference watt-hour meter are commonly 
used in the electrical power distribution industry and are therefore 
commercially available.
    (4) Fuel rate. Operate the engine at a series of constant fuel-flow 
rates or re-circulate fuel back to a tank through the fuel flow meter 
at different flow rates. Use a gravimetric reference measurement (such 
as a scale, balance, or mass comparator) at the inlet to the fuel-
measurement system. Use a stopwatch or timer to measure the time 
intervals over which reference masses of fuel are introduced to the 
fuel measurement system. The reference fuel mass divided by the time 
interval is the reference fuel flow rate.
    (5) Flow rates--inlet air, dilution air, diluted exhaust, raw 
exhaust, or sample flow. Use a reference flow meter with a blower or 
pump to simulate flow rates. Use a restrictor, diverter valve, a 
variable-speed blower or a variable-speed pump to control the range of 
flow rates. Use the reference meter's response as the reference values.
    (i) Reference flow meters. Because the flow range requirements for 
these various flows are large, we allow a variety of reference meters. 
For example, for diluted exhaust flow for a full-flow dilution system, 
we recommend a reference subsonic venturi flow meter with a restrictor 
valve and a blower to simulate flow rates. For inlet air, dilution air, 
diluted exhaust for partial-flow dilution, raw exhaust, or sample flow, 
we allow reference meters such as critical flow orifices, critical flow 
venturis, laminar flow elements, master mass flow standards, or Roots 
meters. Make sure the reference meter is calibrated by the flow-meter 
manufacturer and its calibration is NIST-traceable. If you use the 
difference of two flow measurements to determine a net flow rate, you 
may use one of the measurements as a reference for the other.
    (ii) Reference flow values. Because the reference flow is not 
absolutely constant, sample and record values of nrefi for 
30 seconds and use the arithmetic mean of the values, nref, 
as the reference value. Refer to Sec.  1065.602 for an example of 
calculating arithmetic mean.
    (6) Gas division. Use one of the two reference signals:
    (i) At the outlet of the gas-division system, connect a gas 
analyzer that meets the linearity verification described in this 
section and has not been linearized with the gas divider being 
verified. For example, verify the linearity of an analyzer using a 
series of reference analytical gases directly from compressed gas 
cylinders that meet the specifications of Sec.  1065.750. We recommend 
using a FID analyzer or a PMD or MPD O2 analyzer because of 
their inherent linearity. Operate this analyzer consistent with how you 
would operate it during an emission test. Connect a span gas to the 
gas-divider inlet. Use the gas-division system to divide the span gas 
with purified air or nitrogen. Select gas divisions that you typically 
use. Use a selected gas division as the measured value. Use the 
analyzer response divided by the span gas concentration as the 
reference gas-division value.

[[Page 23038]]

Because the instrument response is not absolutely constant, sample and 
record values of xrefi for 30 seconds and use the arithmetic 
mean of the values, xref, as the reference value. Refer to 
Sec.  1065.602 for an example of calculating arithmetic mean.
    (ii) Using good engineering judgment and gas divider manufacturer 
recommendations, use one or more reference flow meters to measure the 
flow rates of the gas divider and verify the gas-division value.
    (7) Continuous constituent concentration. For reference values, use 
a series of gas cylinders of known gas concentration or use a gas-
division system that is known to be linear with a span gas. Gas 
cylinders, gas-division systems, and span gases that you use for 
reference values must meet the specifications of Sec.  1065.750.
    (8) Temperature. You may perform the linearity verification for 
temperature measurement systems with thermocouples, RTDs, and 
thermistors by removing the sensor from the system and using a 
simulator in its place. Use a NIST-traceable simulator that is 
independently calibrated and, as appropriate, cold-junction 
compensated. The simulator uncertainty scaled to temperature must be 
less than 0.5% of Tmax. If you use this option, you must use 
sensors that the supplier states are accurate to better than 0.5% of 
Tmax compared with their standard calibration curve.
    (e) Measurement systems that require linearity verification. Table 
1 of this section indicates measurement systems that require linearity 
verifications, subject to the following provisions:
    (1) Perform a linearity verification more frequently based on the 
instrument manufacturer's recommendation or good engineering judgment.
    (2) The expression ``xmin'' refers to the reference 
value used during the linearity verification that is closest to zero. 
This is the value used to calculate the first tolerance in Table 1 of 
this section using the intercept, a0. Note that this value 
may be zero, positive, or negative depending on the reference values. 
For example, if the reference values chosen to validate a pressure 
transducer vary from -10 to -1 kPa, xmin is -1 kPa. If the 
reference values used to validate a temperature device vary from 290 to 
390 K, xmin is 290 K.
    (3) The expression ``max'' generally refers to the absolute value 
of the reference value used during the linearity verification that is 
furthest from zero. This is the value used to scale the first and third 
tolerances in Table 1 of this section using a0 and SEE. For 
example, if the reference values chosen to validate a pressure 
transducer vary from -10 to -1 kPa, then pmax is +10 kPa. If 
the reference values used to validate a temperature device vary from 
290 to 390 K, then Tmax is 390 K. For gas dividers where 
``max'' is expressed as, xmax/xspan; 
xmax is the maximum gas concentration used during the 
verification, xspan is the undivided, undiluted, span gas 
concentration, and the resulting ratio is the maximum divider point 
reference value used during the verification (typically 1). The 
following are special cases where ``max'' refers to a different value:
    (i) For linearity verification with a PM balance, mmax 
refers to the typical mass of a PM filter.
    (ii) For linearity verification of torque on the engine's primary 
output shaft, Tmax refers to the manufacturer's specified 
engine torque peak value of the lowest torque engine to be tested.
    (4) The specified ranges are inclusive. For example, a specified 
range of 0.98-1.02 for a1 means 0.98<=a1<=1.02.
    (5) These linearity verifications are optional for systems that 
pass the flow-rate verification for diluted exhaust as described in 
Sec.  1065.341 (the propane check) or for systems that agree within 
2% based on a chemical balance of carbon or oxygen of the 
intake air, fuel, and exhaust.
    (6) You must meet the a1 criteria for these quantities 
only if the absolute value of the quantity is required, as opposed to a 
signal that is only linearly proportional to the actual value.
    (7) Linearity checks are required for the following temperature 
measurements:
    (i) The following temperature measurements always require linearity 
checks:
    (A) Air intake.
    (B) Aftertreatment bed(s), for engines tested with aftertreatment 
devices subject to cold-start testing.
    (C) Dilution air for PM sampling, including CVS, double-dilution, 
and partial-flow systems.
    (D) PM sample, if applicable.
    (E) Chiller sample, for gaseous sampling systems that use thermal 
chillers to dry samples and use chiller temperature to calculate the 
dewpoint at the outlet of the chiller. For your testing, if you choose 
to use a high alarm temperature setpoint for the chiller temperature as 
a constant value in the amount of water calculations in Sec.  1065.645, 
you may use good engineering judgment to verify the accuracy of the 
high alarm temperature setpoint in lieu of the linearity verification 
on the chiller temperature. We recommend that you input a reference 
simulated temperature signal below the alarm trip point, increase this 
signal until the high alarm trips, and verify that the alarm trip point 
value is no less than 2.0 [deg]C below the reference value at the trip 
point.
    (ii) Linearity checks are required for the following temperature 
measurements if these temperature measurements are specified by the 
engine manufacturer:
    (A) Fuel inlet.
    (B) Air outlet to the test cell's charge air cooler air outlet, for 
engines tested with a laboratory heat exchanger that simulates an 
installed charge air cooler.
    (C) Coolant inlet to the test cell's charge air cooler, for engines 
tested with a laboratory heat exchanger that simulates an installed 
charge air cooler.
    (D) Oil in the sump/pan.
    (E) Coolant before the thermostat, for liquid-cooled engines.
    (8) Linearity checks are required for the following pressure 
measurements:
    (i) The following pressure measurements always require linearity 
checks:
    (A) Air intake restriction.
    (B) Exhaust back pressure.
    (C) Barometer.
    (D) CVS inlet gage pressure.
    (E) Sample dryer, for gaseous sampling systems that use either 
osmotic-membrane or thermal chillers to dry samples. For your testing, 
if you choose to use a low alarm pressure setpoint for the sample dryer 
pressure as a constant value in the amount of water calculations in 
Sec.  1065.645, you may use good engineering judgment to verify the 
accuracy of the low alarm pressure setpoint in lieu of the linearity 
verification on the sample dryer pressure. We recommend that you input 
a reference pressure signal above the alarm trip point, decrease this 
signal until the low alarm trips, and verify that the trip point value 
is no more than 4.0 kPa above the reference value at the trip point.
    (ii) Linearity checks are required for the following pressure 
measurements if these pressure measurements are specified by the engine 
manufacturer:
    (A) The test cell's charge air cooler and interconnecting pipe 
pressure drop, for turbo-charged engines tested with a laboratory heat 
exchanger that simulates an installed charge air cooler.
    (B) Fuel outlet.

[[Page 23039]]



                             Table 1 of Sec.   1065.307--Measurement Systems That Require Linearity Verifications--continued
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Linearity criteria
                                                    Minimum     ----------------------------------------------------------------------------------------
      Measurement system          Quantity       verification     [verbarlm]xmin(a1-1) + a0
                                                   frequency              [verbarlm]                a1                    SEE                   r 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Speed........................  fn............  Within 370 days   <=0.05% [middot] fnmax.....       0.98-1.02  <=2% [middot] fnmax.......  =0.
                                                before testing.                                                                                      990
Torque.......................  T.............  Within 370 days   <=1% [middot] Tmax.........       0.98-1.02  <=2% [middot] Tmax........  =0.
                                                before testing.                                                                                      990
Electrical power.............  P.............  Within 370 days   <=1% [middot] Pmax.........       0.98-1.02  <=2% [middot] Pmax........         >=0.990
                                                before testing.
Fuel flow rate...............  m.............  Within 370 days   <=1% [middot] mmax.........       0.98-1.02  <=2% [middot] mmax........  0.9
                                                before testing.                                                                                       90
Intake-air flow rate.........  n.............  Within 370 days   <=1% [middot] nmax.........       0.98-1.02  <=2% [middot] nmax........         >=0.990
                                                before testing.
Dilution air flow rate.......  n.............  Within 370 days   <=1% [middot] nmax.........       0.98-1.02  <=2% [middot] nmax........  =0.
                                                before testing.                                                                                      990
Diluted exhaust..............  n.............  Within 370 days   <=1% [middot] nmax.........       0.98-1.02  <=2% [middot] nmax........  =0.
flow rate....................                   before testing.                                                                                      990
Raw exhaust flow rate........  n.............  Within 185 days   <=1% [middot] nmax.........       0.98-1.02  <=2% [middot] nmax........  =0.
                                                before testing.                                                                                      990
Batch sampler flow rates.....  n.............  Within 370 days   <=1% [middot] nmax.........       0.98-1.02  <=2% [middot] nmax........  =0.
                                                before testing.                                                                                      990
Gas dividers.................  x/xspan.......  Within 370 days   <=0.5% [middot] xmax/xspan.       0.98-1.02  <=2% [middot] xmax/xspan..  0.9
                                                before testing.                                                                                       90
Gas analyzers for laboratory   x.............  Within 35 days    <=0.5% [middot] xmax.......       0.99-1.01  <=1% [middot] xmax........  =0.
 testing.                                       before testing.                                                                                      998
Gas analyzers for field        x.............  Within 35 days    <=1% [middot] xmax.........       0.99-1.01  <=1% [middot] xmax........  =0.
 testing.                                       before testing.                                                                                      998
PM balance...................  m.............  Within 370 days   <=1% [middot] mmax.........       0.99-1.01  <=1% [middot] mmax........  =0.
                                                before testing.                                                                                      998
Pressures....................  p.............  Within 370 days   <=1% [middot] pmax.........       0.99-1.01  <=1% [middot] pmax........  =0.
                                                before testing.                                                                                      998
Dewpoint for intake air, PM-   Tdew..........  Within 370 days   <=0.5% [middot] Tdewmax....       0.99-1.01  <=0.5% [middot] Tdewmax...  =0.
 stabilization and balance                      before testing.                                                                                      998
 environments.
Other dewpoint measurements..  Tdew..........  Within 370 days   <=1% [middot] Tdewmax......       0.99-1.01  <=1% [middot] Tdewmax.....  =0.
                                                before testing.                                                                                      998
Analog-to-digital conversion   T.............  Within 370 days   <=1% [middot] Tmax.........       0.99-1.01  <=1% [middot] Tmax........  =0.
 of temperature signals.                        before testing.                                                                                      998
--------------------------------------------------------------------------------------------------------------------------------------------------------


0
286. Section 1065.309 is amended by revising paragraph (d)(2) to read 
as follows:


Sec.  1065.309  Continuous gas analyzer system-response and updating-
recording verification--for gas analyzers continuously compensated for 
other gas species.

* * * * *
    (d) * * *
    (2) Equipment setup. We recommend using minimal lengths of gas 
transfer lines between all connections and fast-acting three-way valves 
(2 inlets, 1 outlet) to control the flow of zero and blended span gases 
to the sample system's probe inlet or a tee near the outlet of the 
probe. Normally the gas flow rate is higher than the probe sample flow 
rate and the excess is overflowed out the inlet of the probe. If the 
gas flow rate is lower than the probe flow rate, the gas concentrations 
must be adjusted to account for the dilution from ambient air drawn 
into the probe. Select span gases for the species being continuously 
combined, other than H2O. Select concentrations of 
compensating species that will yield concentrations of these species at 
the analyzer inlet that covers the range of concentrations expected 
during testing. You may use binary or multi-gas span gases. You may use 
a gas blending or mixing device to blend span gases. A gas blending or 
mixing device is recommended when blending span gases diluted in 
N2 with span gases diluted in air. You may use a multi-gas 
span gas, such as NO-CO-CO2-C3H8-
CH4, to verify multiple analyzers at the same time. In 
designing your experimental setup, avoid pressure pulsations due to 
stopping the flow through the gas blending device. If H2O 
correction is applicable, then span gases must be humidified before 
entering the analyzer; however, you may not humidify NO2 
span gas by passing it through a sealed humidification vessel that 
contains water. You must humidify NO2 span gas with another 
moist gas stream. We recommend humidifying your NO-CO-CO2-
C3H8-CH4, balance N2 
blended gas by flowing the gas mixture through a sealed vessel that 
humidifies the gas by bubbling it through distilled water and then 
mixing the gas with dry NO2 gas, balance purified synthetic 
air. If your system does not use a sample dryer to remove water from 
the sample gas, you must humidify your span gas to the highest sample 
H2O content that you estimate during emission sampling. If 
your system uses a sample dryer during testing, it must pass the sample 
dryer verification check in Sec.  1065.342, and you must humidify your 
span gas to an H2O content greater than or equal to the 
level determined in Sec.  1065.145(e)(2). If you are humidifying span 
gases without NO2, use good engineering judgment to ensure 
that the wall temperatures in the transfer lines, fittings, and valves 
from the humidifying system to the probe are above the dewpoint 
required for the target H2O content. If you are humidifying 
span gases with NO2, use good engineering judgment to ensure 
that there is no condensation in the transfer lines, fittings, or 
valves from the point where humidified gas is mixed

[[Page 23040]]

with NO2 span gas to the probe. We recommend that you design 
your setup so that the wall temperatures in the transfer lines, 
fittings, and valves from the humidifying system to the probe are at 
least 5 [deg]C above the local sample gas dewpoint. Operate the 
measurement and sample handling system as you do for emission testing. 
Make no modifications to the sample handling system to reduce the risk 
of condensation. Flow humidified gas through the sampling system before 
this check to allow stabilization of the measurement system's sampling 
handling system to occur, as it would for an emission test.
* * * * *

0
287. Section 1065.315 is amended by revising paragraph (a)(2) to read 
as follows:


Sec.  1065.315  Pressure, temperature, and dewpoint calibration.

    (a) * * *
    (2) Temperature. We recommend digital dry-block or stirred-liquid 
temperature calibrators, with data logging capabilities to minimize 
transcription errors. We recommend using calibration reference 
quantities that are NIST-traceable within 0.5% uncertainty. You may 
perform the linearity verification for temperature measurement systems 
with thermocouples, RTDs, and thermistors by removing the sensor from 
the system and using a simulator in its place. Use a NIST-traceable 
simulator that is independently calibrated and, as appropriate, cold-
junction compensated. The simulator uncertainty scaled to temperature 
must be less than 0.5% of Tmax. If you use this option, you 
must use sensors that the supplier states are accurate to better than 
0.5% of Tmax compared with their standard calibration curve.
* * * * *

0
288. Section 1065.342 is amended by revising paragraphs (a), (c), 
(d)(4), and (d)(7) to read as follows:


Sec.  1065.342  Sample dryer verification.

    (a) Scope and frequency. If you use a sample dryer as allowed in 
Sec.  1065.145(e)(2) to remove water from the sample gas, verify the 
performance upon installation, after major maintenance, for thermal 
chiller. For osmotic membrane dryers, verify the performance upon 
installation, after major maintenance, and within 35 days of testing.
* * * * *
    (c) System requirements. The sample dryer must meet the 
specifications as determined in Sec.  1065.145(e)(2) for dewpoint, 
Tdew, and absolute pressure, ptotal, downstream 
of the osmotic-membrane dryer or thermal chiller.
    (d) * * *
    (4) Maintain the sample lines, fittings, and valves from the 
location where the humidified gas water content is measured to the 
inlet of the sampling system at a temperature at least 5 [deg]C above 
the local humidified gas dewpoint. For dryers used in NOX 
sample systems, verify the sample system components used in this 
verification prevent aqueous condensation as required in Sec.  
1065.145(d)(1)(i). We recommend that the sample system components be 
maintained at least 5 [deg]C above the local humidified gas dewpoint to 
prevent aqueous condensation.
* * * * *
    (7) The sample dryer meets the verification if the dewpoint at the 
sample dryer pressure as measured in paragraph (d)(6) of this section 
is less than the dewpoint corresponding to the sample dryer 
specifications as determined in Sec.  1065.145(e)(2) plus 2 [deg]C or 
if the mole fraction of water as measured in (d)(6) is less than the 
corresponding sample dryer specifications plus 0.002 mol/mol.
* * * * *

0
289. Section 1065.345 is amended by revising paragraphs (a) and 
(e)(1)(iii) to read as follows:


Sec.  1065.345  Vacuum-side leak verification.

    (a) Scope and frequency. Verify that there are no significant 
vacuum-side leaks using one of the leak tests described in this 
section. For laboratory testing, perform the vacuum-side leak 
verification upon initial sampling system installation, within 8 hours 
before the start of the first test interval of each duty-cycle 
sequence, and after maintenance such as pre-filter changes. For field 
testing, perform the vacuum-side leak verification after each 
installation of the sampling system on the vehicle, prior to the start 
of the field test, and after maintenance such as pre-filter changes. 
This verification does not apply to any full-flow portion of a CVS 
dilution system.
* * * * *
    (e) * * *
    (1) * * *
    (iii) Close a leak-tight valve located in the sample transfer line 
within 92 cm of the probe.
* * * * *

0
290. Section 1065.350 is amended by revising paragraph (d) to read as 
follows:


Sec.  1065.350  H2O interference verification for CO2 NDIR analyzers.

* * * * *
    (d) Procedure. Perform the interference verification as follows:
    (1) Start, operate, zero, and span the CO2 NDIR analyzer 
as you would before an emission test. If the sample is passed through a 
dryer during emission testing, you may run this verification test with 
the dryer if it meets the requirements of Sec.  1065.342. Operate the 
dryer at the same conditions as you will for an emission test. You may 
also run this verification test without the sample dryer.
    (2) Create a humidified test gas by bubbling zero gas that meets 
the specifications in Sec.  1065.750 through distilled water in a 
sealed vessel. If the sample is not passed through a dryer during 
emission testing, control the vessel temperature to generate an 
H2O level at least as high as the maximum expected during 
emission testing. If the sample is passed through a dryer during 
emission testing, control the vessel temperature to generate an 
H2O level at least as high as the level determined in Sec.  
1065.145(e)(2) for that dryer.
    (3) Introduce the humidified test gas into the sample system. You 
may introduce it downstream of any sample dryer, if one is used during 
testing.
    (4) If the sample is not passed through a dryer during this 
verification test, measure the water mole fraction, xH2O, of 
the humidified test gas, as close as possible to the inlet of the 
analyzer. For example, measure dewpoint, Tdew, and absolute 
pressure, ptotal, to calculate xH2O. Verify that 
the water content meets the requirement in paragraph (d)(2) of this 
section. If the sample is passed through a dryer during this 
verification test, you must verify that the water content of the 
humidified test gas downstream of the vessel meets the requirement in 
paragraph (d)(2) of this section based on either direct measurement of 
the water content (e.g., dewpoint and pressure) or an estimate based on 
the vessel pressure and temperature. Use good engineering judgment to 
estimate the water content. For example, you may use previous direct 
measurements of water content to verify the vessel's level of 
saturation.
    (5) If a sample dryer is not used in this verification test, use 
good engineering judgment to prevent condensation in the transfer 
lines, fittings, or valves from the point where xH2O is 
measured to the analyzer. We recommend that you design your system so 
the wall temperatures in the transfer lines, fittings, and valves from 
the point where xH2O is measured to the analyzer are at

[[Page 23041]]

least 5 [deg]C above the local sample gas dewpoint.
    (6) Allow time for the analyzer response to stabilize. 
Stabilization time may include time to purge the transfer line and to 
account for analyzer response.
    (7) While the analyzer measures the sample's concentration, record 
30 seconds of sampled data. Calculate the arithmetic mean of this data. 
The analyzer meets the interference verification if this value is 
within (0 0.4) mmol/mol.

0
291. Section 1065.355 is amended by revising paragraphs (d) and (e)(1) 
to read as follows:


Sec.  1065.355  H2O and CO2 interference verification for CO NDIR 
analyzers.

* * * * *
    (d) Procedure. Perform the interference verification as follows:
    (1) Start, operate, zero, and span the CO NDIR analyzer as you 
would before an emission test. If the sample is passed through a dryer 
during emission testing, you may run this verification test with the 
dryer if it meets the requirements of Sec.  1065.342. Operate the dryer 
at the same conditions as you will for an emission test. You may also 
run this verification test without the sample dryer.
    (2) Create a humidified CO2 test gas by bubbling a 
CO2 span gas that meets the specifications in Sec.  1065.750 
through distilled water in a sealed vessel. If the sample is not passed 
through a dryer during emission testing, control the vessel temperature 
to generate an H2O level at least as high as the maximum 
expected during emission testing. If the sample is passed through a 
dryer during emission testing, control the vessel temperature to 
generate an H2O level at least as high as the level 
determined in Sec.  1065.145(e)(2) for that dryer. Use a CO2 
span gas concentration at least as high as the maximum expected during 
testing.
    (3) Introduce the humidified CO2 test gas into the 
sample system. You may introduce it downstream of any sample dryer, if 
one is used during testing.
    (4) If the sample is not passed through a dryer during this 
verification test, measure the water mole fraction, xH2O, of 
the humidified CO2 test gas as close as possible to the 
inlet of the analyzer. For example, measure dewpoint, Tdew, 
and absolute pressure, ptotal, to calculate xH2O. 
Verify that the water content meets the requirement in paragraph (d)(2) 
of this section. If the sample is passed through a dryer during this 
verification test, you must verify that the water content of the 
humidified test gas downstream of the vessel meets the requirement in 
paragraph (d)(2) of this section based on either direct measurement of 
the water content (e.g., dewpoint and pressure) or an estimate based on 
the vessel pressure and temperature. Use good engineering judgment to 
estimate the water content. For example, you may use previous direct 
measurements of water content to verify the vessel's level of 
saturation.
    (5) If a sample dryer is not used in this verification test, use 
good engineering judgment to prevent condensation in the transfer 
lines, fittings, or valves from the point where xH2O is 
measured to the analyzer. We recommend that you design your system so 
that the wall temperatures in the transfer lines, fittings, and valves 
from the point where xH2O is measured to the analyzer are at 
least 5 [deg]C above the local sample gas dewpoint.
    (6) Allow time for the analyzer response to stabilize. 
Stabilization time may include time to purge the transfer line and to 
account for analyzer response.
    (7) While the analyzer measures the sample's concentration, record 
its output for 30 seconds. Calculate the arithmetic mean of this data.
    (8) The analyzer meets the interference verification if the result 
of paragraph (d)(7) of this section meets the tolerance in paragraph 
(c) of this section.
    (9) You may also run interference procedures for CO2 and 
H2O separately. If the CO2 and H2O 
levels used are higher than the maximum levels expected during testing, 
you may scale down each observed interference value by multiplying the 
observed interference by the ratio of the maximum expected 
concentration value to the actual value used during this procedure. You 
may run separate interference concentrations of H2O (down to 
0.025 mol/mol H2O content) that are lower than the maximum 
levels expected during testing, but you must scale up the observed 
H2O interference by multiplying the observed interference by 
the ratio of the maximum expected H2O concentration value to 
the actual value used during this procedure. The sum of the two scaled 
interference values must meet the tolerance in paragraph (c) of this 
section.
    (e) * * *
    (1) You may omit this verification if you can show by engineering 
analysis that for your CO sampling system and your emission-calculation 
procedures, the combined CO2 and H2O interference 
for your CO NDIR analyzer always affects your brake-specific CO 
emission results within 0.5% of the applicable CO standard.
* * * * *

0
292. Section 1065.360 is amended by revising paragraph (e)(2) to read 
as follows:


Sec.  1065.360  FID optimization and verification.

* * * * *
    (e) * * *
    (2) If RFCH4[THC-FID] is not within the tolerance 
specified in this paragraph (e), re-optimize the FID response as 
described in paragraph (c) of this section.
* * * * *

0
293. Section 1065.370 is amended by revising paragraphs (e)(5) and 
(g)(1) to read as follows:


Sec.  1065.370  CLD CO2 and H2O quench verification.

* * * * *
    (e) * * *
    (5) Humidify the NO span gas by bubbling it through distilled water 
in a sealed vessel. If the humidified NO span gas sample does not pass 
through a sample dryer for this verification test, control the vessel 
temperature to generate an H2O level approximately equal to 
the maximum mole fraction of H2O expected during emission 
testing. If the humidified NO span gas sample does not pass through a 
sample dryer, the quench verification calculations in Sec.  1065.675 
scale the measured H2O quench to the highest mole fraction 
of H2O expected during emission testing. If the humidified 
NO span gas sample passes through a dryer for this verification test, 
control the vessel temperature to generate an H2O level at 
least as high as the level determined in Sec.  1065.145(e)(2). For this 
case, the quench verification calculations in Sec.  1065.675 do not 
scale the measured H2O quench.
* * * * *
    (g) * * *
    (1) You may omit this verification if you can show by engineering 
analysis that for your NOX sampling system and your emission 
calculation procedures, the combined CO2 and H2O 
interference for your NOX CLD analyzer always affects your 
brake-specific NOX emission results within no more than 
1.0% of the applicable NOX standard. If you 
certify to a combined emission standard (such as a NOX + 
NMHC standard), scale your NOX results to the combined 
standard based on the measured results (after incorporating 
deterioration factors, if applicable). For example, if your final 
NOX + NMHC value is half of the emission standard,

[[Page 23042]]

double the NOX result to estimate the level of 
NOX emissions corresponding to the applicable standard.
* * * * *

0
294. Section 1065.390 is amended by revising paragraph (d)(9) to read 
as follows:


Sec.  1065.390  PM balance verifications and weighing process 
verification.

* * * * *
    (d) * * *
    (9) If any of the reference filters' observed mass changes by more 
than that allowed under this paragraph, you must invalidate all PM mass 
determinations made since the last successful reference media (e.g. 
filter) mass validation. You may discard reference PM media (e.g. 
filters) if only one of the filter's mass changes by more than the 
allowable amount and you can positively identify a special cause for 
that filter's mass change that would not have affected other in-process 
filters. Thus, the validation can be considered a success. In this 
case, you do not have to include the contaminated reference media when 
determining compliance with paragraph (d)(10) of this section, but the 
affected reference filter must be immediately discarded and replaced 
prior to the next weighing session.
* * * * *

Subpart F--[Amended]

0
295. Section 1065.501 is amended by revising paragraph (b)(2) to read 
as follows:


Sec.  1065.501  Overview.

* * * * *
    (b) * * *
    (2) Steady-state cycles. Steady-state duty cycles are typically 
specified in the standard-setting part as a list of discrete operating 
points (modes or notches), where each operating point has one value of 
a normalized speed command and one value of a normalized torque (or 
power) command. Ramped-modal cycles for steady-state testing also list 
test times for each mode and transition times between modes where speed 
and torque are linearly ramped between modes, even for cycles with % 
power. Start a steady-state cycle as a hot running test, where you 
start to measure emissions after an engine is started, warmed up and 
running. You may run a steady-state duty cycle as a discrete-mode cycle 
or a ramped-modal cycle, as follows:
    (i) Discrete-mode cycles. Before emission sampling, stabilize an 
engine at the first discrete mode. Sample emissions and other 
parameters for that mode in the same manner as a transient cycle, with 
the exception that reference speed and torque values are constant. 
Record mean values for that mode, and then stabilize the engine at the 
next mode. Continue to sample each mode discretely as separate test 
intervals and calculate weighted emission results according to the 
standard-setting part.
    (ii) Ramped-modal cycles. Perform ramped-modal cycles similar to 
the way you would perform transient cycles, except that ramped-modal 
cycles involve mostly steady-state engine operation. Generate a ramped-
modal duty cycle as a sequence of second-by-second (1 Hz) reference 
speed and torque points. Run the ramped-modal duty cycle in the same 
manner as a transient cycle and use the 1 Hz reference speed and torque 
values to validate the cycle, even for cycles with % power. 
Proportionally sample emissions and other parameters during the cycle 
and use the calculations in subpart G of this part to calculate 
emissions.
* * * * *

0
296. Section 1065.510 is amended by revising paragraphs (b)(5) and 
(d)(5) to read as follows:


Sec.  1065.510  Engine mapping.

* * * * *
    (b) * * *
    (5) Perform one of the following:
    (i) For any engine subject only to steady-state duty cycles (i.e., 
discrete-mode or ramped-modal), you may perform an engine map by using 
discrete speeds. Select at least 20 evenly spaced setpoints from 95% of 
warm idle speed to the highest speed above maximum power at which 50% 
of maximum power occurs. We refer to this 50% speed as the check point 
speed as described in paragraph (b)(5)(iii) of this section. At each 
setpoint, stabilize speed and allow torque to stabilize. Record the 
mean speed and torque at each setpoint. We recommend that you stabilize 
an engine for at least 15 seconds at each setpoint and record the mean 
feedback speed and torque of the last (4 to 6) seconds. Use linear 
interpolation to determine intermediate speeds and torques. Use this 
series of speeds and torques to generate the power map as described in 
paragraph (e) of this section.
    (ii) For any variable-speed engine, you may perform an engine map 
by using a continuous sweep of speed by continuing to record the mean 
feedback speed and torque at 1 Hz or more frequently and increasing 
speed at a constant rate such that it takes (4 to 6) min to sweep from 
95% of warm idle speed to the check point speed as described in 
paragraph (b)(5)(iii) of this section. Use good engineering judgment to 
determine when to stop recording data to ensure that the sweep is 
complete. In most cases, this means that you can stop the sweep at any 
point after the power falls to 50% of the maximum value. From the 
series of mean speed and maximum torque values, use linear 
interpolation to determine intermediate values. Use this series of 
speeds and torques to generate the power map as described in paragraph 
(e) of this section.
    (iii) The check point speed of the map is the highest speed above 
maximum power at which 50% of maximum power occurs. If this speed is 
unsafe or unachievable (e.g., for ungoverned engines or engines that do 
not operate at that point), use good engineering judgment to map up to 
the maximum safe speed or maximum achievable speed. For discrete 
mapping, if the engine cannot be mapped to the check point speed, make 
sure the map includes at least 20 points from 95% of warm idle to the 
maximum mapped speed. For continuous mapping, if the engine cannot be 
mapped to the check point speed, verify that the sweep time from 95% of 
warm idle to the maximum mapped speed is (4 to 6) min.
    (iv) Note that under Sec.  1065.10(c)(1) we may allow you to 
disregard portions of the map when selecting maximum test speed if the 
specified procedure would result in a duty cycle that does not 
represent in-use operation.
* * * * *
    (d) * * *
    (5) Record at 1 Hz the mean of feedback speed and torque. Use the 
dynamometer to increase torque at a constant rate. Unless the standard-
setting part specifies otherwise, complete the map such that it takes 
(2 to 4) min to sweep from no-load governed speed to the speed below 
maximum mapped power at which the engine develops 90% of maximum mapped 
power. You may map your engine to lower speeds. Stop recording after 
you complete the sweep. Use this series of speeds and torques to 
generate the power map as described in paragraph (e) of this section.
* * * * *

0
297. Section 1065.514 is amended by revising paragraph (d) and Table 1 
of Sec.  1065.514 to read as follows:


Sec.  1065.514  Cycle-validation criteria for operation over specified 
duty cycles.

* * * * *
    (d) Omitting additional points. Besides engine cranking, you may 
omit additional points from cycle-validation

[[Page 23043]]

statistics as described in the following table:

   Table 1 of Sec.   1065.514--Permissible Criteria for Omitting Points From Duty-Cycle Regression Statistics
----------------------------------------------------------------------------------------------------------------
  When operator demand is at its . . .         you may omit . . .                       if . . .
----------------------------------------------------------------------------------------------------------------
             For reference duty cycles that are specified in terms of speed and torque (fnref, Tref)
----------------------------------------------------------------------------------------------------------------
minimum.................................  power and torque...........  Tref < 0% (motoring).
minimum.................................  power and speed............  fnref = 0% (idle speed) and Tref = 0%
                                                                        (idle torque) and Tref - (2% [middot]
                                                                        Tmax mapped) < T < Tref + (2% [middot]
                                                                        Tmax mapped).
minimum.................................  power and either torque or   fn >fnref or T > Tref but not if fn >
                                           speed.                       (fnref [middot] 102%) and T >Tref  (2% [middot] Tmax mapped).
maximum.................................  power and either torque or   fn < fnref or T < Tref but not if fn <
                                           speed.                       (fnref [middot] 98%) and T < Tref - (2%
                                                                        [middot] Tmax mapped).
----------------------------------------------------------------------------------------------------------------
             For reference duty cycles that are specified in terms of speed and power (fnref, Pref)
----------------------------------------------------------------------------------------------------------------
minimum.................................  power and torque...........  Pref < 0% (motoring).
minimum.................................  power and speed............  fnref = 0% (idle speed) and Pref = 0%
                                                                        (idle power) and Pref - (2% [middot]
                                                                        Pmax mapped) < P < Pref + (2% [middot]
                                                                        Pmax mapped).
minimum.................................  power and either torque or   fn >fnref or P > Pref but not if fn >
                                           speed.                       (fnref [middot] 102%) and P >Pref + (2%
                                                                        [middot] Pmax mapped).
maximum.................................  power and either torque or   fn < fnref or P < Pref but not if fn <
                                           speed.                       (fnref [middot] 98%) and P < Pref - (2%
                                                                        [middot] Pmax mapped).
----------------------------------------------------------------------------------------------------------------

* * * * *

0
298. Section 1065.520 is amended by revising paragraphs (b) and (g) 
introductory text to read as follows:


Sec.  1065.520  Pre-test verification procedures and pre-test data 
collection.

* * * * *
    (b) Unless the standard-setting part specifies different 
tolerances, verify at some point before the test that ambient 
conditions are within the tolerances specified in this paragraph (b). 
For purposes of this paragraph (b), ``before the test'' means any time 
from a point just prior to engine starting (excluding engine restarts) 
to the point at which emission sampling begins.
    (1) Ambient temperature of (20 to 30) [deg]C. See Sec.  1065.530(j) 
for circumstances under which ambient temperatures must remain within 
this range during the test.
    (2) Atmospheric pressure of (80.000 to 103.325) kPa and within 
5 kPa of the value recorded at the time of the last engine 
map. You are not required to verify atmospheric pressure prior to a hot 
start test interval for testing that also includes a cold start.
    (3) Dilution air conditions as specified in Sec.  1065.140, except 
in cases where you preheat your CVS before a cold start test. We 
recommend verifying dilution air conditions just prior to the start of 
each test interval.
* * * * *
    (g) Verify the amount of nonmethane contamination in the exhaust 
and background HC sampling systems within 8 hours before the start of 
the first test interval of each duty-cycle sequence for laboratory 
tests. You may verify the contamination of a background HC sampling 
system by reading the last bag fill and purge using zero gas. For any 
NMHC measurement system that involves separately measuring methane and 
subtracting it from a THC measurement, verify the amount of THC 
contamination using only the THC analyzer response. There is no need to 
operate any separate methane analyzer for this verification, however 
you may measure and correct for THC contamination in the CH4 
sample train for the cases where NMHC is determined by subtracting 
CH4 from THC, using an NMC as configured in Sec.  
1065.365(d), (e), and (f); and the calculations in Sec.  
1065.660(b)(2). Perform this verification as follows:
* * * * *

0
299. Section 1065.530 is amended by revising paragraphs (g)(3)(iv), 
(g)(4)(i), and (j) to read as follows:


Sec.  1065.530  Emission test sequence.

* * * * *
    (g) * * *
    (3) * * *
    (iv) Analyze non-conventional gaseous batch samples, such as 
ethanol (NMHCE) as soon as practical using good engineering judgment.
    (4) * * *
    (i) For batch and continuous gas analyzers, record the mean 
analyzer value after stabilizing a zero gas to the analyzer. 
Stabilization may include time to purge the analyzer of any sample gas, 
plus any additional time to account for analyzer response.
* * * * *
    (j) Measure and record ambient temperature, pressure, and humidity, 
as appropriate. For testing the following engines, you must record 
ambient temperature continuously to verify that it remains within the 
pre-test temperature range as specified in Sec.  1065.520(b):
    (1) Air-cooled engines.
    (2) Engines equipped with auxiliary emission control devices that 
sense and respond to ambient temperature.
    (3) Any other engine for which good engineering judgment indicates 
this is necessary to remain consistent with Sec.  1065.10(c)(1).

0
300. Section 1065.545 is amended by revising the section heading and 
removing paragraph (d) to read as follows:


Sec.  1065.545  Validation of proportional flow control for batch 
sampling.

* * * * *

0
301. A new Sec.  1065.546 is added to subpart F to read as follows:


Sec.  1065.546  Validation of minimum dilution ratio for PM batch 
sampling.

    Use continuous flows and/or tracer gas concentrations for transient 
and ramped modal cycles to validate the minimum dilution ratios for PM 
batch sampling as specified in Sec.  1065.140(e)(2) over the test 
interval. You may use mode-average values instead of continuous 
measurements for discrete mode steady-state duty cycles. Determine the 
minimum primary and minimum overall dilution ratios using one of the 
following methods (you may

[[Page 23044]]

use a different method for each stage of dilution):
    (a) Determine minimum dilution ratio based on molar flow data. This 
involves determination of at least two of the following three 
quantities: Raw exhaust flow (or previously diluted flow), dilution air 
flow, and dilute exhaust flow. You may determine the raw exhaust flow 
rate based on the measured intake air molar flow rate and the chemical 
balance terms in Sec.  1065.655. You may alternatively estimate the 
molar raw exhaust flow rate based on intake air, fuel rate 
measurements, and fuel properties, consistent with good engineering 
judgment.
    (b) Determine minimum dilution ratio based on tracer gas (e.g., 
CO2) concentrations in the raw (or previously diluted) and 
dilute exhaust corrected for any removed water.
    (c) Use good engineering judgment to develop your own method of 
determining dilution ratios.

0
302. Section 1065.550 is amended by revising paragraph (b)(2) and 
adding paragraph (b)(3) to read as follows:


Sec.  1065.550  Gas analyzer range validation, drift validation, and 
drift correction.

* * * * *
    (b) * * *
    (2) For standards consisting of multiple emission mass measurements 
(such as NMHC + NOX or separate NO and NO2 
measurements to comply with a NOX standard), the duty cycle 
shall be validated for drift if you satisfy one of the following:
    (i) For each test interval of the duty cycle and for each 
individual mass, the difference between the uncorrected and the 
corrected brake-specific emission values over the test interval is 
within 4% of the uncorrected value; or
    (ii) For the entire duty cycle the difference between the combined 
(e.g. NMHC + NOX) uncorrected and combined (e.g. NMHC + 
NOX) corrected composite brake-specific emissions values 
over the entire duty cycle is within 4% of the uncorrected 
value or the applicable emissions standard, whichever is greater.
    (3) If the test is not validated for drift, you may consider the 
test results for the duty cycle to be valid only if, using good 
engineering judgment, the observed drift does not affect your ability 
to demonstrate compliance with the applicable emission standards. For 
example, if the drift-corrected value is less than the standard by at 
least two times the absolute difference between the uncorrected and 
corrected values, you may consider the data to be valid for 
demonstrating compliance with the applicable standard.
* * * * *

Subpart G--[Amended]

0
303. Section 1065.601 is amended by revising paragraph (b) to read as 
follows:


Sec.  1065.601  Overview.

* * * * *
    (b) You may use data from multiple systems to calculate test 
results for a single emission test, consistent with good engineering 
judgment. You may also make multiple measurements from a single batch 
sample, such as multiple weighings of a PM filter or multiple readings 
from a bag sample. You may not use test results from multiple emission 
tests to report emissions. We allow weighted means where appropriate. 
You may discard statistical outliers, but you must report all results.
* * * * *

0
304. Section 1065.602 is amended by revising paragraphs (b), (e), and 
(l)(1)(iii) to read as follows:


Sec.  1065.602  Statistics.

* * * * *
    (b) Arithmetic mean. Calculate an arithmetic mean, y, as follows:
    [GRAPHIC] [TIFF OMITTED] TR30AP10.003
    
Example:

N = 3
y1 = 10.60
y2 = 11.91
yN = y3 = 11.09
[GRAPHIC] [TIFF OMITTED] TR30AP10.004

y = 11.20
* * * * *
    (e) Accuracy. Determine accuracy as described in this paragraph 
(e). Make multiple measurements of a standard quantity to create a set 
of observed values, yi, and compare each observed value to 
the known value of the standard quantity. The standard quantity may 
have a single known value, such as a gas standard, or a set of known 
values of negligible range, such as a known applied pressure produced 
by a calibration device during repeated applications. The known value 
of the standard quantity is represented by yrefi . If you 
use a standard quantity with a single value, yrefi would be 
constant. Calculate an accuracy value as follows:
[GRAPHIC] [TIFF OMITTED] TR30AP10.005

Example:

yref = 1800.0
N = 3
y1 = 1806.4
y2 = 1803.1
y3 = 1798.9
[GRAPHIC] [TIFF OMITTED] TR30AP10.006

[GRAPHIC] [TIFF OMITTED] TR30AP10.007

accuracy = 2.8
* * * * *
    (l) * * *
    (1) * * *
    (iii) Use your estimated values as described in the following 
example calculation:

[[Page 23045]]

[GRAPHIC] [TIFF OMITTED] TR30AP10.008

[GRAPHIC] [TIFF OMITTED] TR30AP10.009

Example:

eNOx = 2.5 g/(kW[middot]hr)
Wref = 11.883 kW[middot]hr
MNOx = 46.0055 g/mol = 46.0055[middot]10-6 g/
[mu]mol
[Delta]tdutycycle = 20 min = 1200 s
Pref = 35.65 kW
Pfrict = 15%
Pmax = 125 kW
pmax = 300 kPa = 300000 Pa
Vdisp = 3.0 l = 0.0030 m3
fnmax = 2800 rev/min = 46.67 rev/s
Nstroke = 4 1/rev
[eta]V = 0.9
R = 8.314472 J/(mol[middot]K)
Tmax = 348.15 K
[GRAPHIC] [TIFF OMITTED] TR30AP10.010

nexhmax = 6.53 mol/s
[GRAPHIC] [TIFF OMITTED] TR30AP10.011

xexp = 189.4 [mu]mol/mol
* * * * *
0
305. Section 1065.610 is amended by revising paragraph (c)(3) 
introductory text to read as follows:


Sec.  1065.610  Duty cycle generation.

* * * * *
    (c) * * *
    (3) Intermediate speed. If your normalized duty cycle specifies a 
speed as ``intermediate speed,'' use your torque-versus-speed curve to 
determine the speed at which maximum torque occurs. This is peak torque 
speed. If maximum torque occurs in a flat region of the torque-versus-
speed curve, your peak torque speed is the midpoint between the lowest 
and highest speeds at which the trace reaches the flat region. For 
purposes of this paragraph (c)(3), a flat region is one in which 
measured torque values are within 2.0% of the maximum recorded value. 
Identify your reference intermediate speed as one of the following 
values:
* * * * *

0
306. Section 1065.640 is amended as follows:
0
a. By revising paragraphs (b)(1), (b)(5), and Table 1 of Sec.  
1065.640.
0
b. By revising paragraphs (c)(3), (c)(4) introductory text, and 
(c)(4)(i).
0
c. By revising paragraph (c)(5), (d)(1) (including Table 4 of Sec.  
1065.640), and (e)(3).


Sec.  1065.640  Flow meter calibration calculations.

* * * * *
    (b) * * *
    (1) PDP volume pumped per revolution, Vrev (m\3\/rev):
    [GRAPHIC] [TIFF OMITTED] TR30AP10.012
    
Example:

nref = 25.096 mol/s
R = 8.314472 J/(mol[middot]K)
Tin = 299.5 K
Pin = 98290 Pa
fnPDP = 1205.1 rev/min = 20.085 rev/s
[GRAPHIC] [TIFF OMITTED] TR30AP10.013

Vrev = 0.03166 m\3\/rev
* * * * *
    (5) The following example illustrates these calculations:

       Table 1 of Sec.   1065.640--Example of PDP Calibration Data
------------------------------------------------------------------------

------------------------------------------------------------------------
f8nPDP                                                   a1           a0
(rev/min)                                        (m\3\/min)   (m\3\/rev)
------------------------------------------------------------------------
755.0.........................................        50.43        0.056
987.6.........................................        49.86       -0.013
1254.5........................................        48.54        0.028
1401.3........................................        47.30       -0.061
------------------------------------------------------------------------

* * * * *
    (c) * * *
    (3) Calculate r as follows:
    (i) For SSV systems only, calculate rSSV using the 
following equation:
[GRAPHIC] [TIFF OMITTED] TR30AP10.014


Where:
[Delta]pSSV = Differential static pressure; venturi inlet 
minus venturi throat.

    (ii) For CFV systems only, calculate rCFV iteratively 
using the following equation:
[GRAPHIC] [TIFF OMITTED] TR30AP10.015

    (4) You may make any of the following simplifying assumptions of 
the governing equations, or you may use good engineering judgment to 
develop more appropriate values for your testing:
    (i) For emission testing over the full ranges of raw exhaust, 
diluted exhaust and dilution air, you may assume that

[[Page 23046]]

the gas mixture behaves as an ideal gas: Z = 1.
* * * * *
    (5) The following example illustrates the use of the governing 
equations to calculate the discharge coefficient, Cd of an 
SSV flow meter at one reference flow meter value. Note that calculating 
Cd for a CFV flow meter would be similar, except that 
Cf would be determined from Table 2 of this section or 
calculated iteratively using values of [beta] and [gamma] as described 
in paragraph (c)(2) of this section.

Example:

nref= 57.625 mol/s
    Z = 1
    Mmix = 28.7805 g/mol = 0.0287805 kg/mol
    R = 8.314472 J/(mol[middot]K)
    Tin = 298.15 K
    At = 0.01824 m\2\
    pin = 99132.0 Pa
    [gamma] = 1.399
    [beta] = 0.8
    [Delta]p = 2.312 kPa
    [GRAPHIC] [TIFF OMITTED] TR30AP10.016
    
    [GRAPHIC] [TIFF OMITTED] TR30AP10.017
    
Cf = 0.274
[GRAPHIC] [TIFF OMITTED] TR30AP10.018

Cd = 0.981

    (d) * * *
    (1) Calculate the Reynolds number, Re, for each 
reference molar flow rate, using the throat diameter of the venturi, 
dt. Because the dynamic viscosity, [mu], is needed to 
compute Re, you may use your own fluid viscosity 
model to determine [mu] for your calibration gas (usually air), using 
good engineering judgment. Alternatively, you may use the Sutherland 
three-coefficient viscosity model to approximate [mu], as shown in the 
following sample calculation for Re:
[GRAPHIC] [TIFF OMITTED] TR30AP10.019

    Where, using the Sutherland three-coefficient viscosity model:
    [GRAPHIC] [TIFF OMITTED] TR30AP10.020
    

Where:

[mu] = Dynamic viscosity of calibration gas.
[mu]0 = Sutherland reference viscosity.
T0 = Sutherland reference temperature.
S = Sutherland constant.


               Table 4 of Sec.   1065.640--Sutherland Three-Coefficient Viscosity Model Parameters
----------------------------------------------------------------------------------------------------------------
                                                [mu]0           T0           S         Temp range      Pressure
                                          ------------------------------------------  within  2%   ------------
                 Gas \a\                         kg/                                      error
                                            (m[middot]s)        K            K      ----------------     kPa
                                                                                            K
----------------------------------------------------------------------------------------------------------------
Air......................................  1.716[middot]1          273          111    170 to 1,900     <= 1,800
                                                      0-5
CO2......................................  1.370[middot]1          273          222    190 to 1,700     <= 3,600
                                                      0-5
H2O......................................  1.12[middot]10-         350        1,064    360 to 1,500    <= 10,000
                                                        5
O2.......................................  1.919[middot]1          273          139    190 to 2,000     <= 2,500
                                                      0-5
N2.......................................  1.663[middot]1          273          107    100 to 1,500     <= 1,600
                                                      0-5
----------------------------------------------------------------------------------------------------------------
\a\ Use tabulated parameters only for the pure gases, as listed. Do not combine parameters in calculations to
  calculate viscosities of gas mixtures.


Example:

[mu]0 = 1.716 [middot] 10-5 kg/(m[middot]s)
T0 = 273.11 K
S = 110.56 K

[[Page 23047]]

[GRAPHIC] [TIFF OMITTED] TR30AP10.021

[mu] = 1.837[middot]10-5 kg/(m[middot]s)
Mmix = 28.7805 g/mol
nref = 57.625 mol/s
dt = 152.4 mm
Tin = 298.15 K
[GRAPHIC] [TIFF OMITTED] TR30AP10.022

Re = 7.541[middot]10\5\

* * * * *
    (e) * * *
    (3) If the standard deviation of all the Cd values is 
less than or equal to 0.3% of the mean Cd, use the mean 
Cd in Eq 1065.642-6, and use the CFV only down to the lowest 
r measured during calibration using the following equation:
[GRAPHIC] [TIFF OMITTED] TR30AP10.023


Where:
[Delta]pCFV = Differential static pressure; venturi inlet 
minus venturi outlet.

* * * * *


0
307. Section 1065.642 is revised to read as follows:


Sec.  1065.642  SSV, CFV, and PDP molar flow rate calculations.

    This section describes the equations for calculating molar flow 
rates from various flow meters. After you calibrate a flow meter 
according to Sec.  1065.640, use the calculations described in this 
section to calculate flow during an emission test.
    (a) PDP molar flow rate. Based upon the speed at which you operate 
the PDP for a test interval, select the corresponding slope, 
a1, and intercept, a0, as calculated in Sec.  
1065.640, to calculate molar flow rate, n as follows:
[GRAPHIC] [TIFF OMITTED] TR30AP10.024


Where:
[GRAPHIC] [TIFF OMITTED] TR30AP10.025

Example:

a1 = 50.43 (m\3\/min) = 0.8405 (m\3\/s)
fnPDP = 755.0 rev/min = 12.58 rev/s
pout = 99950 Pa
pin = 98575 Pa
a0 = 0.056 (m\3\/rev)
R = 8.314472 J/(mol[middot]K)
Tin = 323.5 K
Cp = 1000 (J/m\3\)/kPa
Ct = 60 s/min
[GRAPHIC] [TIFF OMITTED] TR30AP10.026

Vrev = 0.06383 m\3\/rev
[GRAPHIC] [TIFF OMITTED] TR30AP10.027

n = 29.428 mol/s

    (b) SSV molar flow rate. Based on the Cd versus 
Re equation you determined according to Sec.  
1065.640, calculate SSV molar flow rate, n during an emission test as 
follows:
[GRAPHIC] [TIFF OMITTED] TR30AP10.028

Example:

At = 0.01824 m\2\
pin = 99132 Pa
Z = 1
Mmix = 28.7805 g/mol = 0.0287805 kg/mol
R = 8.314472 J/(mol\.\K)
Tin = 298.15 K
Re = 7.232\.\10\5\
[gamma] = 1.399
[beta] = 0.8
[Delta]p = 2.312 kPa
Using Eq. 1065.640-7,
rssv = 0.997
Using Eq. 1065.640-6,
Cf = 0.274
Using Eq. 1065.640-5,
Cd = 0.990
[GRAPHIC] [TIFF OMITTED] TR30AP10.029

n = 58.173 mol/s

    (c) CFV molar flow rate. Some CFV flow meters consist of a single 
venturi and some consist of multiple venturis, where different 
combinations of venturis are used to meter different flow rates. If you 
use multiple venturis and you calibrated each venturi independently to 
determine a separate discharge coefficient, Cd, for each 
venturi, calculate the individual molar flow rates through each venturi 
and sum all their flow rates to determine n. If you use multiple 
venturis and you calibrated each combination of venturis, calculate n 
using the sum of the active venturi throat areas as At, the 
sum of the active venturi throat diameters as dt, and the 
ratio of venturi throat to inlet diameters as the ratio of the sum of 
the active venturi throat diameters to the diameter of the common 
entrance to all of the venturis. To calculate the molar flow rate 
through one venturi or one combination of venturis, use its respective 
mean Cd and other constants you determined according to 
Sec.  1065.640 and calculate its molar flow rate n during an emission 
test, as follows:

[[Page 23048]]

[GRAPHIC] [TIFF OMITTED] TR30AP10.030

Example:

Cd = 0.985
Cf = 0.7219
At = 0.00456 m\2\
pin = 98836 Pa
Z = 1
Mmix = 28.7805 g/mol = 0.0287805 kg/mol
R = 8.314472 J/(mol\.\K)
Tin = 378.15 K
[GRAPHIC] [TIFF OMITTED] TR30AP10.031

n = 33.690 mol/s

0
308. Section 1065.645 is amended by revising paragraphs (a)(2), (b), 
and (c) to read as follows:


Sec.  1065.645  Amount of water in an ideal gas.

* * * * *
    (a) * * *
    (2) For humidity measurements over ice at ambient temperatures from 
(-100 to 0) [deg]C, use the following equation:
[GRAPHIC] [TIFF OMITTED] TR30AP10.032

Example:

Tice = -15.4 [deg]C
Tice = -15.4 + 273.15 = 257.75 K
[GRAPHIC] [TIFF OMITTED] TR30AP10.033

log10(pH20) = -0.798207
pH20 = 10 \0.79821\ = 0.159145 kPa

    (b) Dewpoint. If you measure humidity as a dewpoint, determine the 
amount of water in an ideal gas, xH20, as follows:
[GRAPHIC] [TIFF OMITTED] TR30AP10.034


Where:
xH20 = amount of water in an ideal gas.
pH20 = water vapor pressure at the measured dewpoint, 
Tsat = Tdew.
pabs = wet static absolute pressure at the location of 
your dewpoint measurement.
Example::
pabs = 99.980 kPa
Tsat = Tdew = 9.5 [deg]C
Using Eq. 1065.645-1,
pH20 = 1.186581 kPa
xH2O = 1.186581/99.980
xH2O = 0.011868 mol/mol

    (c) Relative humidity. If you measure humidity as a relative 
humidity, RH%, determine the amount of water in an ideal gas, 
xH2O, as follows:
[GRAPHIC] [TIFF OMITTED] TR30AP10.035


Where:
xH20 = amount of water in an ideal gas.
RH% = relative humidity.
pH20 = water vapor pressure at 100% relative humidity at 
the location of your relative humidity measurement, Tsat 
= Tamb.
pabs = wet static absolute pressure at the location of 
your relative humidity measurement.
Example:

RH% = 50.77%
pabs = 99.980 kPa
Tsat = Tamb = 20 [deg]C
Using Eq. 1065.645-1,
pH20 = 2.3371 kPa
xH2O = (50.77% [middot] 2.3371)/99.980
xH2O = 0.011868 mol/mol



0
309. Section 1065.650 is amended by revising paragraphs (a), (b), (c) 
introductory text, (d) introductory text, (d)(7), (e)(2), (f)(4), (g), 
and (h) to read as follows:


Sec.  1065.650  Emission calculations.

    (a) General. Calculate brake-specific emissions over each 
applicable duty cycle or test interval. For test intervals with zero 
work (or power), calculate the emission mass (or mass rate), but do not 
calculate brake-specific emissions. For duty cycles with multiple test 
intervals, refer to the standard-setting part for calculations you need 
to determine a composite result, such as a calculation that weights and 
sums the results of individual test intervals in a duty cycle. If the 
standard-setting part does not include those calculations, use the 
equations in paragraph (g) of this section. This section is written 
based on rectangular integration, where each indexed value (i.e., 
``i'') represents (or approximates) the mean value of the 
parameter for its respective time interval, delta-t. You may also 
integrate continuous signals using trapezoidal integration consistent 
with good engineering judgment.
    (b) Brake-specific emissions over a test interval. We specify three 
alternative ways to calculate brake-specific emissions over a test 
interval, as follows:
    (1) For any testing, you may calculate the total mass of emissions, 
as described in paragraph (c) of this section, and divide it by the 
total work generated over the test interval, as described in paragraph 
(d) of this section, using the following equation:
[GRAPHIC] [TIFF OMITTED] TR30AP10.036


Example:

mNOx = 64.975 g
W = 25.783 kW[middot]hr
eNOx = 64.975/25.783
eNOx = 2.520 g/(kW[middot]hr)

    (2) For discrete-mode steady-state testing, you may calculate the 
brake-specific emissions over a test interval

[[Page 23049]]

using the ratio of emission mass rate to power, as described in 
paragraph (e) of this section, using the following equation:
[GRAPHIC] [TIFF OMITTED] TR30AP10.037

    (3) For field testing, you may calculate the ratio of total mass to 
total work, where these individual values are determined as described 
in paragraph (f) of this section. You may also use this approach for 
laboratory testing, consistent with good engineering judgment. Good 
engineering judgment dictates that this method not be used if there are 
any work flow paths described in Sec.  1065.210 that cross the system 
boundary, other than the primary output shaft (crankshaft). This is a 
special case in which you use a signal linearly proportional to raw 
exhaust molar flow rate to determine a value proportional to total 
emissions. You then use the same linearly proportional signal to 
determine total work using a chemical balance of fuel, intake air, and 
exhaust as described in Sec.  1065.655, plus information about your 
engine's brake-specific fuel consumption. Under this method, flow 
meters need not meet accuracy specifications, but they must meet the 
applicable linearity and repeatability specifications in subpart D or 
subpart J of this part. The result is a brake-specific emission value 
calculated as follows:
[GRAPHIC] [TIFF OMITTED] TR30AP10.038


Example:

m = 805.5 g
W = 52.102 kW[middot]hr
eCO = 805.5/52.102
eCO = 2.520 g/(kW[middot]hr)

    (c) Total mass of emissions over a test interval. To calculate the 
total mass of an emission, multiply a concentration by its respective 
flow. For all systems, make preliminary calculations as described in 
paragraph (c)(1) of this section, then use the method in paragraphs 
(c)(2) through (4) of this section that is appropriate for your system. 
Calculate the total mass of emissions as follows:
* * * * *
    (d) Total work over a test interval. To calculate the total work 
from the engine over a test interval, add the total work from all the 
work paths described in Sec.  1065.210 that cross the system boundary 
including electrical energy/work, mechanical shaft work, and fluid 
pumping work. For all work paths, except the engine's primary output 
shaft (crankshaft), the total work for the path over the test interval 
is the integration of the net work flow rate (power) out of the system 
boundary. When energy/work flows into the system boundary, this work 
flow rate signal becomes negative; in this case, include these negative 
work rate values in the integration to calculate total work from that 
work path. Some work paths may result in a negative total work. Include 
negative total work values from any work path in the calculated total 
work from the engine rather than setting the values to zero. The rest 
of this paragraph (d) describes how to calculate total work from the 
engine's primary output shaft over a test interval. Before integrating 
power on the engine's primary output shaft, adjust the speed and torque 
data for the time alignment used in Sec.  1065.514(c). Any advance or 
delay used on the feedback signals for cycle validation must also be 
used for calculating work. Account for work of accessories according to 
Sec.  1065.110. Exclude any work during cranking and starting. Exclude 
work during actual motoring operation (negative feedback torques), 
unless the engine was connected to one or more energy storage devices. 
Examples of such energy storage devices include hybrid powertrain 
batteries and hydraulic accumulators, like the ones illustrated in 
Figure 1 of Sec.  1065.210. Exclude any work during reference zero-load 
idle periods (0% speed or idle speed with 0 N[middot]m reference 
torque). Note, that there must be two consecutive reference zero load 
idle points to establish a period where this applies. Include work 
during idle points with simulated minimum torque such as Curb Idle 
Transmissions Torque (CITT) for automatic transmissions in ``drive''. 
The work calculation method described in paragraphs (b)(1) through (7) 
of this section meets these requirements using rectangular integration. 
You may use other logic that gives equivalent results. For example, you 
may use a trapezoidal integration method as described in paragraph 
(b)(8) of this section.
* * * * *
    (7) Integrate the resulting values for power over the test 
interval. Calculate total work as follows:
[GRAPHIC] [TIFF OMITTED] TR30AP10.039


Where:

W = total work from the primary output shaft
Pi = instantaneous power from the primary output shaft 
over an interval i.

[GRAPHIC] [TIFF OMITTED] TR30AP10.040


Example:

N = 9000
fn1 = 1800.2 rev/min
fn2 = 1805.8 rev/min
T1 = 177.23 N\.\m
T2 = 175.00 N\.\m
Crev = 2[middot][pi] rad/rev
Ct1 = 60 s/min
Cp = 1000 (N[middot]m[middot]rad/s)/kW
frecord = 5 Hz
Ct2 = 3600 s/hr
[GRAPHIC] [TIFF OMITTED] TR30AP10.041

P1 = 33.41 kW
P2 = 33.09 kW
Using Eq. 1065.650-5,
[Delta]t = \1/5\ = 0.2 s
[GRAPHIC] [TIFF OMITTED] TR30AP10.042

W = 16.875 kW[middot]hr

* * * * *
    (e) * * *
    (2) To calculate an engine's mean steady-state total power, P, add 
the mean steady-state power from all the work paths described in Sec.  
1065.210 that cross the system boundary including electrical power, 
mechanical shaft power, and fluid pumping power. For all work paths, 
except the engine's primary output shaft (crankshaft), the mean steady-
state power over the test interval is the integration of the net work 
flow rate (power) out of the system boundary divided by the period of 
the test interval. When power flows into the system boundary, the 
power/work flow rate signal becomes negative; in this case, include 
these negative power/work rate values in the integration to calculate 
the mean power from that work path. Some work paths may result in a 
negative mean power. Include negative mean power values from any work 
path in the mean total power from the engine rather than setting these 
values to zero. The rest of this paragraph (e)(2) describes how to 
calculate the mean power from the engine's primary output shaft. 
Calculate P using Equation 1065.650-13, noting that P, fnrecord = 5 Hz
efuel = 285 g/(kW[middot]hr)
wfuel = 0.869 g/g
Mc = 12.0107 g/mol
n1= 3.922 ~mol/s = 14119.2 mol/hr
xCcombdry1 = 91.634 mmol/mol = 0.091634 mol/mol
xH2Oexh1 = 27.21 mmol/mol = 0.02721 mol/mol
Using Eq. 1065.650-5,
[Delta]t = 0.2 s
[GRAPHIC] [TIFF OMITTED] TR30AP10.044

W= 5.09 (kW[middot]hr)

    (g) Brake-specific emissions over a duty cycle with multiple test 
intervals. The standard-setting part may specify a duty cycle with 
multiple test intervals, such as with discrete-mode steady-state 
testing. Unless we specify otherwise, calculate composite brake-
specific emissions over the duty cycle as described in this paragraph 
(g). If a measured mass (or mass rate) is negative, set it to zero for 
calculating composite brake-specific emissions, but leave it unchanged 
for drift validation. In the case of calculating composite brake-
specific emissions relative to a combined emission standard (such as a 
NOX + NMHC standard), change any negative mass (or mass 
rate) values to zero for a particular pollutant before combining the 
values for the different pollutants.
    (1) Use the following equation to calculate composite brake-
specific emissions for duty cycles with multiple test intervals all 
with prescribed durations, such as cold-start and hot-start transient 
cycles:
[GRAPHIC] [TIFF OMITTED] TR30AP10.045

Where:

i = test interval number.
N = number of test intervals.
WF = weighting factor for the test interval as defined in the 
standard-setting part.
m = mass of emissions over the test interval as determined in 
paragraph (c) of this section.
W = total work from the engine over the test interval as determined 
in paragraph (d) of this section.
Example:

N = 2
WF1 = 0.1428
WF2 = 0.8572
m1 = 70.125 g
m2 = 64.975 g
W1 = 25.783 kW[middot]hr
W2 = 25.783 kW[middot]hr
[GRAPHIC] [TIFF OMITTED] TR30AP10.046

eNOxcomposite = 2.548 g/kW[middot]hr

    (2) Calculate composite brake-specific emissions for duty cycles 
with multiple test intervals that allow use of varying duration, such 
as discrete-mode steady-state duty cycles, as follows:
    (i) Use the following equation if you calculate brake-specific 
emissions over test intervals based on total mass and total work as 
described in paragraph (b)(1) of this section:
[GRAPHIC] [TIFF OMITTED] TR30AP10.047

Where:

i = test interval number.
N = number of test intervals.
WF = weighting factor for the test interval as defined in the 
standard-setting part.
m = mass of emissions over the test interval as determined in 
paragraph (c) of this section.

[[Page 23051]]

W = total work from the engine over the test interval as determined 
in paragraph (d) of this section.
t = duration of the test interval.
Example:

N = 2
WF1 = 0.85
WF2 = 0.15
m1 = 1.3753 g
m2 = 0.4135 g
t1 = 120 s
t2 = 200 s
W1 = 2.8375 kW[middot]hr
W2 = 0.0 kW[middot]hr
[GRAPHIC] [TIFF OMITTED] TR30AP10.048

eNOxcomposite = 0.5001 g/kW[middot]hr

    (ii) Use the following equation if you calculate brake-specific 
emissions over test intervals based on the ratio of mass rate to power 
as described in paragraph (b)(2) of this section:
[GRAPHIC] [TIFF OMITTED] TR30AP10.049


Where:

i = test interval number.
N = number of test intervals.
WF = weighting factor for the test interval as defined in the 
standard-setting part.
 m= mean steady-state mass rate of emissions over the test interval 
as determined in paragraph (e) of this section.
 P is the mean steady-state power over the test interval as 
described in paragraph (e) of this section.

Example:
N = 2
WF1 = 0.85
WF2 = 0.15
m1 = 2.25842 g/hr
m2 = 0.063443 g/hr
P1= 4.5383 kW
P2= 0.0 kW
[GRAPHIC] [TIFF OMITTED] TR30AP10.050

eNOxcomposite = 0.5001 g/kW[middot]hr

    (h) Rounding. Round the final brake-specific emission values to be 
compared to the applicable standard only after all calculations are 
complete (including any drift correction, applicable deterioration 
factors, adjustment factors, and allowances) and the result is in g/
(kW[middot]hr) or units equivalent to the units of the standard, such 
as g/(hp[middot]hr). See the definition of ``Round'' in Sec.  
1065.1001.


0
310. Section 1065.655 is amended by revising paragraphs (c), (d), Table 
1 of Sec.  1065.655, and paragraph (e)(3) to read as follows:


Sec.  1065.655  Chemical balances of fuel, intake air, and exhaust.

* * * * *
    (c) Chemical balance procedure. The calculations for a chemical 
balance involve a system of equations that require iteration. We 
recommend using a computer to solve this system of equations. You must 
guess the initial values of up to three quantities: The amount of water 
in the measured flow, xH2Oexh, fraction of dilution air in 
diluted exhaust, xdil/exh, and the amount of products on a 
C1 basis per dry mole of dry measured flow, 
xCcombdry. You may use time-weighted mean values of 
combustion air humidity and dilution air humidity in the chemical 
balance; as long as your combustion air and dilution air humidities 
remain within tolerances of 0.0025 mol/mol of their 
respective mean values over the test interval. For each emission 
concentration, x, and amount of water, xH2Oexh, you must 
determine their completely dry concentrations, xdry and 
xH2Oexhdry. You must also use your fuel's atomic hydrogen-
to-carbon ratio, [alpha], oxygen-to-carbon ratio, [beta], sulfur-to-
carbon ratio, [gamma], and nitrogen-to-carbon ratio, [delta]. You may 
measure [alpha], [beta], [gamma], and [delta] or you may use default 
values for a given fuel as described in Sec.  1065.655(d). Use the 
following steps to complete a chemical balance:
    (1) Convert your measured concentrations such as, 
xCO2meas, xNOmeas, and xH2Oint, to dry 
concentrations by dividing them by one minus the amount of water 
present during their respective measurements; for example: 
xH2OxCO2meas x, H2OxNOmeas, and 
xH2Oint. If the amount of water present during a ``wet'' 
measurement is the same as the unknown amount of water in the exhaust 
flow, xH2Oexh, iteratively solve for that value in the 
system of equations. If you measure only total NOX and not 
NO and NO2 separately, use good engineering judgment to 
estimate a split in your total NOX concentration between NO 
and NO2 for the chemical balances. For example, if you 
measure emissions from a stoichiometric spark-ignition engine, you may 
assume all NOX is NO. For a compression-ignition engine, you 
may assume that your molar concentration of NOX, 
xNOx, is 75% NO and 25% NO2. For NO2 
storage aftertreatment systems, you may assume xNOx is 25% 
NO and 75% NO2. Note that for calculating the mass of 
NOX emissions, you must use the molar mass of NO2 
for the effective molar mass of all NOX species, regardless 
of the actual NO2 fraction of NOX.
    (2) Enter the equations in paragraph (c)(4) of this section into a 
computer program to iteratively solve for xH2Oexh,

[[Page 23052]]

xCcombdry, and xdil/exh. Use good engineering 
judgment to guess initial values for xH2Oexh, 
xCcombdry, and xdil/exh. We recommend guessing an 
initial amount of water that is about twice the amount of water in your 
intake or dilution air. We recommend guessing an initial value of 
xCcombdry as the sum of your measured CO2, CO, 
and THC values. We also recommend guessing an initial 
xdil/exh between 0.75 and 0.95, such as 0.8. Iterate values 
in the system of equations until the most recently updated guesses are 
all within  1% of their respective most recently calculated 
values.
    (3) Use the following symbols and subscripts in the equations for 
this paragraph (c):
xdil/exh = amount of dilution gas or excess air per mole of 
exhaust.
xH2Oexh = amount of water in exhaust per mole of exhaust.
xCcombdry = amount of carbon from fuel in the exhaust per 
mole of dry exhaust.
xH2dry = amount of H2 in exhaust per amount of 
dry exhaust.
KH2Ogas = water-gas reaction equilibrium coefficient. You 
may use 3.5 or calculate your own value using good engineering 
judgment.
xH2Oexhdry = amount of water in exhaust per dry mole of dry 
exhaust.
xprod/intdry = amount of dry stoichiometric products per dry 
mole of intake air.
xdil/exhdry = amount of dilution gas and/or excess air per 
mole of dry exhaust.
xint/exhdry = amount of intake air required to produce 
actual combustion products per mole of dry (raw or diluted) exhaust.
xraw/exhdry = amount of undiluted exhaust, without excess 
air, per mole of dry (raw or diluted) exhaust.
xO2int = amount of intake air O2 per mole of 
intake air.
xCO2intdry = amount of intake air CO2 per mole of 
dry intake air. You may use xCO2intdry = 375 [mu]mol/mol, 
but we recommend measuring the actual concentration in the intake air.
xH2Ointdry = amount of intake air H2O per mole of 
dry intake air.
xCO2int = amount of intake air CO2 per mole of 
intake air.
xCO2dil = amount of dilution gas CO2 per mole of 
dilution gas.
xCO2dildry = amount of dilution gas CO2 per mole 
of dry dilution gas. If you use air as diluent, you may use 
xCO2dildry = 375 [mu]mol/mol, but we recommend measuring the 
actual concentration in the intake air.
xH2Odildry = amount of dilution gas H2O per mole 
of dry dilution gas.
xH2Odil = amount of dilution gas H2O per mole of 
dilution gas.
x[emission]meas = amount of measured emission in the sample 
at the respective gas analyzer.
x[emission]dry = amount of emission per dry mole of dry 
sample.
xH2O[emission]meas = amount of water in sample at emission-
detection location. Measure or estimate these values according to Sec.  
1065.145(e)(2).
xH2Oint = amount of water in the intake air, based on a 
humidity measurement of intake air.nb
[alpha] = atomic hydrogen-to-carbon ratio of the mixture of fuel(s) 
being combusted, weighted by molar consumption.
[beta] = atomic oxygen-to-carbon ratio of the mixture of fuel(s) being 
combusted, weighted by molar consumption.
[gamma] = atomic sulfur-to-carbon ratio of the mixture of fuel(s) being 
combusted, weighted by molar consumption.
[delta] = atomic nitrogen-to-carbon ratio of the mixture of fuel(s) 
being combusted, weighted by molar consumption.

    (4) Use the following equations to iteratively solve for 
xdil/exh, xH2Oexh, and xCcombdry:
[GRAPHIC] [TIFF OMITTED] TR30AP10.051

[GRAPHIC] [TIFF OMITTED] TR30AP10.052

[GRAPHIC] [TIFF OMITTED] TR30AP10.053

[GRAPHIC] [TIFF OMITTED] TR30AP10.054

[GRAPHIC] [TIFF OMITTED] TR30AP10.055

[GRAPHIC] [TIFF OMITTED] TR30AP10.056

[GRAPHIC] [TIFF OMITTED] TR30AP10.057

[GRAPHIC] [TIFF OMITTED] TR30AP10.058


[[Page 23053]]


[GRAPHIC] [TIFF OMITTED] TR30AP10.059

[GRAPHIC] [TIFF OMITTED] TR30AP10.060

[GRAPHIC] [TIFF OMITTED] TR30AP10.061

[GRAPHIC] [TIFF OMITTED] TR30AP10.062

[GRAPHIC] [TIFF OMITTED] TR30AP10.063

[GRAPHIC] [TIFF OMITTED] TR30AP10.064

[GRAPHIC] [TIFF OMITTED] TR30AP10.065

[GRAPHIC] [TIFF OMITTED] TR30AP10.066

[GRAPHIC] [TIFF OMITTED] TR30AP10.067

[GRAPHIC] [TIFF OMITTED] TR30AP10.068

    (5) The following example is a solution for xdil/exh, 
xH2Oexh, and xCcombdry using the 
equations in paragraph (c)(4) of this section:
[GRAPHIC] [TIFF OMITTED] TR30AP10.069

[GRAPHIC] [TIFF OMITTED] TR30AP10.070

[GRAPHIC] [TIFF OMITTED] TR30AP10.071

[GRAPHIC] [TIFF OMITTED] TR30AP10.072


[[Page 23054]]


[GRAPHIC] [TIFF OMITTED] TR30AP10.073

[GRAPHIC] [TIFF OMITTED] TR30AP10.074

[GRAPHIC] [TIFF OMITTED] TR30AP10.075

[GRAPHIC] [TIFF OMITTED] TR30AP10.076

[GRAPHIC] [TIFF OMITTED] TR30AP10.077

[GRAPHIC] [TIFF OMITTED] TR30AP10.078

[GRAPHIC] [TIFF OMITTED] TR30AP10.079

[GRAPHIC] [TIFF OMITTED] TR30AP10.080

[GRAPHIC] [TIFF OMITTED] TR30AP10.081

[GRAPHIC] [TIFF OMITTED] TR30AP10.082

[GRAPHIC] [TIFF OMITTED] TR30AP10.083

[GRAPHIC] [TIFF OMITTED] TR30AP10.084

[GRAPHIC] [TIFF OMITTED] TR30AP10.085

[GRAPHIC] [TIFF OMITTED] TR30AP10.086

[alpha] = 1.8
[beta] = 0.05
[gamma] = 0.0003
[delta] = 0.0001

    (d) Carbon mass fraction. Determine carbon mass fraction of fuel, 
wc, using one of the following methods:
    (1) You may calculate wc as described in this paragraph 
(d)(1) based on measured fuel properties. To do so, you must determine 
values for [alpha] and [beta] in all cases, but you may set [gamma] and 
[delta] to zero if the default value listed in Table 1 of this section 
is zero. Calculate wc using the following equation:
[GRAPHIC] [TIFF OMITTED] TR30AP10.087



[[Page 23055]]


Where:
wC, = carbon mass fraction of fuel.
MC = molar mass of carbon.
[alpha] = atomic hydrogen-to-carbon ratio of the mixture of fuel(s) 
being combusted, weighted by molar consumption.
MH = molar mass of hydrogen.
[beta] = atomic oxygen-to-carbon ratio of the mixture of fuel(s) 
being combusted, weighted by molar consumption.
MO = molar mass of oxygen.
[gamma] = atomic sulfur-to-carbon ratio of the mixture of fuel(s) 
being combusted, weighted by molar consumption.
MS = molar mass of sulfur.
[delta] = atomic nitrogen-to-carbon ratio of the mixture of fuel(s) 
being combusted, weighted by molar consumption.
MN = molar mass of nitrogen.
Example:

[alpha] = 1.8
[beta] = 0.05
[gamma] = 0.0003
[delta] = 0.0001
MC = 12.0107
MH = 1.01
MO = 15.9994
MS = 32.065
MN = 14.0067
[GRAPHIC] [TIFF OMITTED] TR30AP10.088

wC, = 0.8205

    (2) You may use the default values in the following table to 
determine wc for a given fuel:

 Table 1 of Sec.   1065.655--Default Values of [alpha], [beta], [gamma],
                   [delta], and wc, for Various Fuels
------------------------------------------------------------------------

------------------------------------------------------------------------
Fuel                               Atomic hydrogen,          Carbon mass
                                    oxygen, sulfur, and.    fraction, wc
                                   nitrogen-to-carbon               g/g.
                                    ratios.
                                   CH[alpha]O[beta]S[gam
                                    ma]N[delta].
------------------------------------------------------------------------
Gasoline.........................  CH1.85O0S0N0.........           0.866
2 Diesel................  CH1.80O0S0N0.........           0.869
1 Diesel................  CH1.93O0S0N0.........           0.861
Liquefied Petroleum Gas..........  CH2.64O0S0N0.........           0.819
Natural gas......................  CH3.78O0.016S0N0.....           0.747
Ethanol..........................  CH3O0.5S0N0..........           0.521
Methanol.........................  CH4O1S0N0............           0.375
------------------------------------------------------------------------
Residual fuel blends.............   Must be determined by measured fuel
                                    properties as described in paragraph
                                           (d)(1) of this section.
------------------------------------------------------------------------

    (e) * * *
    (3) Fuel mass flow rate calculation. Based on mfuel, 
calculate nexh as follows:
[GRAPHIC] [TIFF OMITTED] TR30AP10.089


Where:
nexh = raw exhaust molar flow rate from which you 
measured emissions.
mfuel = fuel flow rate including humidity in intake air.
Example:

mfuel = 7.559 g/s
wC = 0.869 g/g
MC = 12.0107 g/mol
xCcombdry = 99.87 mmol/mol = 0.09987 mol/mol
xH20exhdry = 107.64 mmol/mol = 0.10764 mol/mol
[GRAPHIC] [TIFF OMITTED] TR30AP10.090

nexh= 6.066 mol/s


0
311. Section 1065.667 is amended by revising paragraphs (d) and (e) to 
read as follows:


Sec.  1065.667  Dilution air background emission correction.

* * * * *
    (d) The following is an example of using the flow-weighted mean 
fraction of dilution air in diluted exhaust, xdil/exh, and 
the total mass of background emissions calculated using the total flow 
of diluted exhaust, ndexh, as described in Sec.  
1065.650(c):
[GRAPHIC] [TIFF OMITTED] TR30AP10.091

[GRAPHIC] [TIFF OMITTED] TR30AP10.092


Example:
MNOx = 46.0055 g/mol
xbkgnd = 0.05 [mu]mol/mol = 0.05[middot]10-6 
mol/mol
ndexh = 23280.5 mol

xdil/exh = 0.843 mol/mol
mbkgndNOxdexh = 
46.0055[middot]0.05[middot]10-6[middot]23280.5
mbkgndNOxdexh = 0.0536 g
mbkgndNOx = 0.843 [middot] 0.0536
mbkgndNOx = 0.0452 g

    (e) The following is an example of using the fraction of dilution 
air in

[[Page 23056]]

diluted exhaust, xdil/exh, and the mass rate of background 
emissions calculated using the flow rate of diluted exhaust, 
ndexh, as described in Sec.  1065.650(c):
[GRAPHIC] [TIFF OMITTED] TR30AP10.093

[GRAPHIC] [TIFF OMITTED] TR30AP10.094


Example:
MNOx = 46.0055 g/mol
xbkgnd = 0.05 [mu]mol/mol = 0.05[middot]10-6 
mol/mol
ndexh = 23280.5 mol/s
xdil/exh = 0.843 mol/mol
mbkgndNOxdexh = 
36.0055[middot]0.05[middot]10-6 [middot] 23280.5
mbkgndNOXdexh = 0.0536 g/hr
mbkgndNOx = 0.843 [middot] 0.0536
mbkgndNOx = 0.0452 g/hr


0
312. Section 1065.670 is revised to read as follows:


Sec.  1065.670  NOX intake-air humidity and temperature corrections.

    See the standard-setting part to determine if you may correct 
NOX emissions for the effects of intake-air humidity or 
temperature. Use the NOX intake-air humidity and temperature 
corrections specified in the standard-setting part instead of the 
NOX intake-air humidity correction specified in this part 
1065. If the standard-setting part does not prohibit correcting 
NOX emissions for intake-air humidity according to this part 
1065, first apply any NOX corrections for background 
emissions and water removal from the exhaust sample, then correct 
NOX concentrations for intake-air humidity. You may use a 
time-weighted mean combustion air humidity to calculate this correction 
if your combustion air humidity remains within a tolerance of 0.0025 mol/mol of the mean value over the test interval. For 
intake-air humidity correction, use one of the following approaches:
    (a) For compression-ignition engines, correct for intake-air 
humidity using the following equation:
[GRAPHIC] [TIFF OMITTED] TR30AP10.095


Example:

xNOxuncor = 700.5 [mu]mol/mol
xH2O = 0.022 mol/mol
xNOxcor = 700.5 [middot] (9.953 [middot] 0.022 + 0.832)
xNOxcor = 736.2 [micro]mol/mol

    (b) For spark-ignition engines, correct for intake-air humidity 
using the following equation:
[GRAPHIC] [TIFF OMITTED] TR30AP10.096


Example:

xNOxuncor = 154.7 [mu]mol/mol
xH2O = 0.022 mol/mol
xNOxcor = 154.7 [middot] (18.840 [middot] 0.022 + 
0.68094)
xNOxcor = 169.5 [mu]mol/mol

    (c) Develop your own correction, based on good engineering 
judgment.

0
313. Section 1065.672 is amended by revising paragraph (d)(7) to read 
as follows:


Sec.  1065.672  Drift correction.

* * * * *
    (d) * * *
    (7) Usually the reference concentration of the zero gas, 
xrefzero, is zero: xrefzero = 0 [micro]mol/mol. 
However, in some cases you might know that xrefzero has a 
non-zero concentration. For example, if you zero a CO2 
analyzer using ambient air, you may use the default ambient air 
concentration of CO2, which is 375 [mu]mol/mol. In this 
case, xrefzero = 375 [mu]mol/mol. Note that when you zero an 
analyzer using a non-zero xrefzero, you must set the 
analyzer to output the actual xrefzero concentration. For 
example, if xrefzero = 375 [mu]mol/mol, set the analyzer to 
output a value of 375 [mu]mol/mol when the zero gas is flowing to the 
analyzer.

0
314. Section 1065.690 is amended by revising paragraphs (c) and (e) to 
read as follows:


Sec.  1065.690  Buoyancy correction for PM sample media.

* * * * *
    (c) Air density. Because a PM balance environment must be tightly 
controlled to an ambient temperature of (22 1) [deg]C and 
humidity has an insignificant effect on buoyancy correction, air 
density is primarily a function of atmospheric pressure. Therefore you 
may use nominal constant values for temperature and humidity in the 
buoyancy correction equation in Eq. 1065.690-2.
* * * * *
    (e) Correction calculation. Correct the PM sample media for 
buoyancy using the following equations:
[GRAPHIC] [TIFF OMITTED] TR30AP10.097

Where:

mcor = PM mass corrected for buoyancy.
muncor = PM mass uncorrected for buoyancy.
[rho]air = density of air in balance environment.

[[Page 23057]]

[rho]weight = density of calibration weight used to span 
balance.
[rho]media = density of PM sample media, such as a 
filter.
[GRAPHIC] [TIFF OMITTED] TR30AP10.098

Where:
pabs = absolute pressure in balance environment.
Mmix = molar mass of air in balance environment.
R = molar gas constant.
Tamb = absolute ambient temperature of balance 
environment.

Example:

pabs = 99.980 kPa
Tsat = Tdew = 9.5 [deg]C
Using Eq. 1065.645-1,
pH20 = 1.1866 kPa
Using Eq. 1065.645-3,
xH2O = 0.011868 mol/mol
Using Eq. 1065.640-9,
Mmix = 28.83563 g/mol
R = 8.314472 J/(mol\.\K)
Tamb = 20 [deg]C
[GRAPHIC] [TIFF OMITTED] TR30AP10.099

[rho]air = 1.18282 kg/m\3\
muncorr = 100.0000 mg
[rho]weight = 8000 kg/m\3\
[rho]media = 920 kg/m\3\
[GRAPHIC] [TIFF OMITTED] TR30AP10.100

mcor = 100.1139 mg

Subpart H-- [Amended]

0
315. Section 1065.701 is amended by revising paragraph (f) and Table 1 
of Sec.  1065.701 to read as follows:


Sec.  1065.701  General requirements for test fuels.

* * * * *
    (f) Service accumulation and field testing fuels. If we do not 
specify a service-accumulation or field-testing fuel in the standard-
setting part, use an appropriate commercially available fuel such as 
those meeting minimum specifications from the following table:

 Table 1 of Sec.   1065.701--Examples of Service-accumulation and Field-
                              testing Fuels
------------------------------------------------------------------------
                                                     Reference procedure
        Fuel category              Subcategory               \1\
------------------------------------------------------------------------
                              Light distillate and  ASTM D975-07b.
                               light blends with
                               residual.
Diesel......................  Middle distillate...  ASTM D6985-04a.
                              Biodiesel (B100)....  ASTM D6751-07b.
Intermediate and residual     All.................  See Sec.   1065.705.
 fuel.
Gasoline....................  Motor vehicle         ASTM D4814-07a.
                               gasoline.
                              Minor oxygenated      ASTM D4814-07a.
                               gasoline blends.
Alcohol.....................  Ethanol (Ed75-85)...  ASTM D5798-07.
                              Methanol (M70-M85)..  ASTM D5797-07.
Aviation fuel...............  Aviation gasoline...  ASTM D910-07.
                              Gas turbine.........  ASTM D1655-07e01.
                              Jet B wide cut......  ASTM D6615-06.
Gas turbine fuel............  General.............  ASTM D2880-03l.
------------------------------------------------------------------------
 \1\ASTM specifications are incorporated by reference in Sec.
  1065.1010.


0
316. Section 1065.703 is amended by revising Table 1 of Sec.  1065.703 
to read as follows:


Sec.  1065.703  Distillate diesel fuel.

* * * * *

                 Table 1 of Sec.   1065.703--Test Fuel Specifications for Distillate Diesel Fuel
----------------------------------------------------------------------------------------------------------------
                                                    Ultra low                               Reference procedure
             Item                     Units           sulfur     Low sulfur  High sulfur            \1\
----------------------------------------------------------------------------------------------------------------
Cetane Number.................  .................        40-50        40-50        40-50  ASTM D613-05.
----------------------------------------------------------------------------------------------------------------
Distillation range:
Initial boiling point.........  [deg]C...........      171-204      171-204      171-204  ASTM D86-07a.
----------------------------------------------------------------------------------------------------------------
10 pct. point.................  .................      204-238      204-238      204-238
----------------------------------------------------------------------------------------------------------------
50 pct. point.................  .................      243-282      243-282      243-282
----------------------------------------------------------------------------------------------------------------
90 pct. point.................  .................      293-332      293-332      293-332
----------------------------------------------------------------------------------------------------------------
Endpoint......................  .................      321-366      321-366      321-366
----------------------------------------------------------------------------------------------------------------
Gravity.......................  [deg]API.........        32-37        32-37        32-37  ASTM D4052-96e01.
----------------------------------------------------------------------------------------------------------------
Total sulfur, ultra low sulfur  mg/kg............         7-15  ...........  ...........  See 40 CFR 80.580.
----------------------------------------------------------------------------------------------------------------
Total sulfur, low and high      mg/kg............  ...........      300-500     800-2500  ASTM D2622-07 or
 sulfur.                                                                                   alternates as allowed
                                                                                           under 40 CFR 80.580.
----------------------------------------------------------------------------------------------------------------
Aromatics, min. (Remainder      g/kg.............          100          100          100  ASTM D5186-03.
 shall be paraffins,
 naphthalenes, and olefins)
Flashpoint, min...............  [deg]C...........           54           54           54  ASTM D93-07.

[[Page 23058]]


Kinematic Viscosity...........  cSt..............      2.0-3.2      2.0-3.2      2.0-3.2  ASTM D445-06.
----------------------------------------------------------------------------------------------------------------
 \1\ASTM procedures are incorporated by reference in Sec.   1065.1010. See Sec.   1065.701(d) for other allowed
  procedures.

Subpart I--[Amended]

0
317. Section 1065.845 is amended by revising paragraph (b) to read as 
follows:


Sec.  1065.845  Response factor determination.

* * * * *
    (b) Alcohol/carbonyl calibration gases must remain within 2% of the labeled concentration. You must demonstrate the 
stability based on a quarterly measurement procedure with a precision 
of 2% percent or another method that we approve. Your 
measurement procedure may incorporate multiple measurements. If the 
true concentration of the gas changes deviates by more than 2%, but less than 10%, the gas may be relabeled with 
the new concentration.

Subpart J-- [Amended]

0
318. Section 1065.910 is amended by revising paragraphs (a)(3) and (c) 
to read as follows:


Sec.  1065.910  PEMS auxiliary equipment for field testing.

* * * * *
    (a) * * *
    (3) Flow restriction. Use flow meters, connectors, and tubing that 
do not increase flow restriction so much that it exceeds the 
manufacturer's maximum specified value. You may verify this at the 
maximum exhaust flow rate by measuring pressure at the manufacturer-
specified location with your system connected. You may also perform an 
engineering analysis to verify an acceptable configuration, taking into 
account the maximum exhaust flow rate expected, the field test system's 
flexible connectors, and the tubing's characteristics for pressure 
drops versus flow.
* * * * *
    (c) Use mounting hardware as required for securing flexible 
connectors, ambient sensors, and other equipment. Use structurally 
sound mounting points such as vehicle frames, trailer hitch receivers, 
walk spaces, and payload tie-down fittings. We recommend mounting 
hardware such as clamps, suction cups, and magnets that are 
specifically designed for your application. We also recommend 
considering mounting hardware such as commercially available bicycle 
racks, trailer hitches, and luggage racks where applicable.
* * * * *

Subpart K--[Amended]

0
319. Section 1065.1001 is amended by revising the definitions for 
``Duty cycle'' and ``Percent'' to read as follows:


Sec.  1065.1001  Definitions.

* * * * *
    Duty cycle means one of the following:
    (1) A series of speed and torque values (or power values) that an 
engine must follow during a laboratory test. Duty cycles are specified 
in the standard-setting part. A single duty cycle may consist of one or 
more test intervals. A series of speed and torque values meeting the 
definition of this paragraph (1) may also be considered a test cycle. 
For example, a duty cycle may be a ramped-modal cycle, which has one 
test interval; a cold-start plus hot-start transient cycle, which has 
two test intervals; or a discrete-mode cycle, which has one test 
interval for each mode.
    (2) A set of weighting factors and the corresponding speed and 
torque values, where the weighting factors are used to combine the 
results of multiple test intervals into a composite result.
* * * * *
    Percent (%) means a representation of exactly 0.01 (with infinite 
precision). Significant digits for the product of % and another value, 
or the expression of any other value as a percentage, are defined as 
follows:
    (1) Where we specify some percentage of a total value, the 
calculated value has the same number of significant digits as the total 
value. The specified percentage by which the total value is multiplied 
has infinite precision. Note that not all displayed or recorded digits 
are significant. For example, 2% of a span value where the span value 
is 101.3302 is 2.026604. However, where the span value has limited 
precision such that only one digit to the right of the decimal is 
significant (i.e., the actual value is 101.3), 2% of the span value is 
2.026.
    (2) In other cases, determine the number of significant digits 
using the same method as you would use for determining the number of 
significant digits of any calculated value. For example, a calculated 
value of 0.321, where all three digits are significant, is equivalent 
to 32.1%.
* * * * *

PART 1068--GENERAL COMPLIANCE PROVISIONS FOR ENGINE PROGRAMS

0
320. The authority citation for part 1068 continues to read as follows:

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

0
321. The heading for part 1068 is revised as set forth above.

Subpart A--[Amended]

0
322. Section 1068.1 is amended by revising paragraphs (a)(4), (b)(4), 
(b)(8), and (d)(1) to read as follows:


Sec.  1068.1  Does this part apply to me?

    (a) * * *
    (4) Marine compression-ignition engines we regulate under 40 CFR 
part 1042.
* * * * *
    (b) * * *
    (4) Land-based nonroad compression-ignition engines we regulate 
under 40 CFR part 89.
* * * * *
    (8) Marine compression-ignition engines we regulate under 40 CFR 
parts 89 or 94.
* * * * *
    (d) * * *
    (1) The provisions of Sec. Sec.  1068.30 and 1068.310 apply for 
stationary spark-ignition engines built on or after January 1, 2004, 
and for stationary compression-ignition engines built on or after 
January 1, 2006.
* * * * *

0
323. Section 1068.25 is amended by adding paragraph (c) to read as 
follows:


Sec.  1068.25  What information must I give to EPA?

* * * * *
    (c) You are responsible for statements and information in your 
applications for certification or any other requests or reports. If you 
provide statements or information to someone for submission to EPA, you 
are responsible for these statements and information as if you had 
submitted them to EPA yourself. For example, knowingly submitting

[[Page 23059]]

false information to someone else for inclusion in an application for 
certification would be deemed to be a submission of false information 
to the U.S. government in violation of 18 U.S.C. 1001.

0
324. Section 1068.30 is amended as follows:
0
a. By revising the introductory text of the definition for ``Engine''.
0
b. By adding a definition for ``Engine configuration'' in alphabetical 
order.
0
c. By adding a definition for ``Gas turbine engine'' in alphabetical 
order.
0
d. By revising the definition for ``Ultimate purchaser''.


Sec.  1068.30  What definitions apply to this part?

* * * * *
    Engine means an engine block with an installed crankshaft, or a gas 
turbine engine. The term engine does not include engine blocks without 
an installed crankshaft, nor does it include any assembly of 
reciprocating engine components that does not include the engine block. 
(Note: For purposes of this definition, any component that is the 
primary means of converting an engine's energy into usable work is 
considered a crankshaft, whether or not it is known commercially as a 
crankshaft.) This includes complete and partially complete engines as 
follows:
* * * * *
    Engine configuration means a unique combination of engine hardware 
and calibration within an engine family. Engines within a single engine 
configuration differ only with respect to normal production variability 
or factors unrelated to emissions.
* * * * *
    Gas turbine engine means anything commercially known as a gas 
turbine engine or any collection of assembled engine components that is 
substantially similar to engines commercially known as gas turbine 
engines. For example, a jet engine is a gas turbine engine. Gas turbine 
engines may be complete or partially complete. Turbines that rely on 
external combustion such as steam engines are not gas turbine engines.
* * * * *
    Ultimate purchaser means the first person who in good faith 
purchases a new engine or new piece of equipment for purposes other 
than resale.
* * * * *

0
325. Section 1068.31 is amended by revising paragraph (d) to read as 
follows:


Sec.  1068.31  What provisions apply to nonroad or stationary engines 
that change their status?

* * * * *
    (d) Changing the status of a nonroad engine to be a new stationary 
engine as described in paragraph (e) of this section is a violation of 
Sec.  1068.101(a)(1) unless the engine complies with all the 
requirements of this chapter for new stationary engines of the same 
type (for example, a compression-ignition engine rated at 40 kW) and 
model year. For a new stationary engine that is required to be 
certified under 40 CFR part 60, the engine must have been certified to 
be compliant with all the requirements that apply to new stationary 
engines of the same type and model year, and must be in its certified 
configuration. Note that the definitions of ``model year'' in the 
standard-setting parts generally identify the engine's original date of 
manufacture as the basis for determining which standards apply if it 
becomes a stationary engine after it is no longer new. For example, see 
40 CFR 60.4219 and 60.4248.
* * * * *

0
326. Section 1068.40 is revised to read as follows:


Sec.  1068.40  What special provisions apply for implementing changes 
in the regulations?

    (a) During the 12 months following the effective date of any change 
in the provisions of this part, you may ask to apply the previously 
applicable provisions. We will generally approve your request if you 
can demonstrate that it would be impractical to comply with the new 
requirements. We may consider the potential for adverse environmental 
impacts in our decision. Similarly, in unusual circumstances, you may 
ask for relief under this paragraph (a) from new requirements that 
apply under the standard-setting part.
    (b) During the 60 days following the effective date of any change 
in the provisions of this part, you may use the previously applicable 
provisions without request if they meet either of the following 
criteria:
    (1) The new provisions require you to redesign your engines/
equipment, modify your engine/equipment labels, or change your 
production procedures.
    (2) The new provisions change what you must include in an 
application for certification that you submit before the end of this 
60-day period. You are not required to amend such applications to 
comply with the new provisions for that model year; however, this 
allowance does not apply for later model years, even if you certify an 
engine family using carryover emission data. This allowance does not 
affect your obligation to provide information that we request separate 
from an application for certification.
    (c) Prior to the dates listed you may comply with earlier versions 
of applicable regulations as follows:
    (1) Prior to June 1, 2010, you may comply with the provisions of 
Sec.  1068.240 that were in effect on April 30, 2010.
    (2) [Reserved]

0
327. Section 1068.45 is amended by revising paragraph (c) introductory 
text to read as follows:


Sec.  1068.45  General labeling provisions.

* * * * *
    (c) Labels on packaging. Unless we specify otherwise, where we 
require engine/equipment labels that may be removable, you may instead 
label the packaging if the engines/equipment are packaged together as 
described in this paragraph (c). For example, this may involve 
packaging engines together by attaching them to a rack, binding them 
together on a pallet, or enclosing them in a box. The provisions of 
this paragraph (c) also apply for engines/equipment boxed individually 
where you do not apply labels directly to the engines/equipment. The 
following provisions apply if you label the packaging instead of 
labeling engines/equipment individually:
* * * * *
0
328. Section 1068.101 is revised to read as follows:


Sec.  1068.101  What general actions does this regulation prohibit?

    This section specifies actions that are prohibited and the maximum 
civil penalties that we can assess for each violation in accordance 
with 42 U.S.C. 7522 and 7524. The maximum penalty values listed in 
paragraphs (a) and (b) of this section apply as of January 12, 2009. As 
described in paragraph (h) of this section, these maximum penalty 
limits are different for earlier violations and they may be adjusted as 
set forth in 40 CFR part 19.
    (a) The following prohibitions and requirements apply to 
manufacturers of new engines, manufacturers of equipment containing 
these engines, and manufacturers of new equipment, except as described 
in subparts C and D of this part:
    (1) Introduction into commerce. You may not sell, offer for sale, 
or introduce or deliver into commerce in the United States or import 
into the United States any new engine/equipment after emission 
standards take effect for the engine/equipment, unless it is covered by 
a valid certificate of conformity for its model year and has the 
required label or tag. You also may not take any of the actions listed 
in the previous sentence with respect to any equipment

[[Page 23060]]

containing an engine subject to this part's provisions unless the 
engine is covered by a valid certificate of conformity for its model 
year and has the required engine label or tag. We may assess a civil 
penalty up to $37,500 for each engine or piece of equipment in 
violation.
    (i) For purposes of this paragraph (a)(1), a valid certificate of 
conformity is one that applies for the same model year as the model 
year of the equipment (except as allowed by Sec.  1068.105(a)), covers 
the appropriate category of engines/equipment (such as locomotive or 
Marine SI), and conforms to all requirements specified for equipment in 
the standard-setting part. Engines/equipment are considered not covered 
by a certificate unless they are in a configuration described in the 
application for certification.
    (ii) The requirements of this paragraph (a)(1) also cover new 
engines you produce to replace an older engine in a piece of equipment, 
unless the engine qualifies for the replacement-engine exemption in 
Sec.  1068.240.
    (iii) For engines used in equipment subject to equipment-based 
standards, you may not sell, offer for sale, or introduce or deliver 
into commerce in the United States or import into the United States any 
new engine unless it is covered by a valid certificate of conformity 
for its model year and has the required label or tag. See the standard-
setting part for more information about how this prohibition applies.
    (2) Reporting and recordkeeping. This chapter requires you to 
record certain types of information to show that you meet our 
standards. You must comply with these requirements to make and maintain 
required records (including those described in Sec.  1068.501). You may 
not deny us access to your records or the ability to copy your records 
if we have the authority to see or copy them. Also, you must give us 
complete and accurate reports and information without delay as required 
under this chapter. Failure to comply with the requirements of this 
paragraph is prohibited. We may assess a civil penalty up to $37,500 
for each day you are in violation. In addition, knowingly submitting 
false information is a violation of 18 U.S.C. 1001, which may involve 
criminal penalties and up to five years imprisonment.
    (3) Testing and access to facilities. You may not keep us from 
entering your facility to test engines/equipment or inspect if we are 
authorized to do so. Also, you must perform the tests we require (or 
have the tests done for you). Failure to perform this testing is 
prohibited. We may assess a civil penalty up to $37,500 for each day 
you are in violation.
    (b) The following prohibitions apply to everyone with respect to 
the engines and equipment to which this part applies:
    (1) Tampering. You may not remove or render inoperative any device 
or element of design installed on or in engines/equipment in compliance 
with the regulations prior to its sale and delivery to the ultimate 
purchaser. You also may not knowingly remove or render inoperative any 
such device or element of design after such sale and delivery to the 
ultimate purchaser. This includes, for example, operating an engine 
without a supply of appropriate quality urea if the emissions control 
system relies on urea to reduce NOx emissions or the use of incorrect 
fuel or engine oil that renders the emissions control system 
inoperative. Section 1068.120 describes how this applies to rebuilding 
engines. See the standard-setting part, which may include additional 
provisions regarding actions prohibited by this requirement. For a 
manufacturer or dealer, we may assess a civil penalty up to $37,500 for 
each engine or piece of equipment in violation. For anyone else, we may 
assess a civil penalty up to $3,750 for each day an engine or piece of 
equipment is operated in violation. This prohibition does not apply in 
any of the following situations:
    (i) You need to repair the engine/equipment and you restore it to 
proper functioning when the repair is complete.
    (ii) You need to modify the engine/equipment to respond to a 
temporary emergency and you restore it to proper functioning as soon as 
possible.
    (iii) You modify new engines/equipment that another manufacturer 
has already certified to meet emission standards and recertify them 
under your own family. In this case you must tell the original 
manufacturer not to include the modified engines/equipment in the 
original family.
    (2) Defeat devices. You may not knowingly manufacture, sell, offer 
to sell, or install, any part that bypasses, impairs, defeats, or 
disables the control of emissions of any regulated pollutant, except as 
explicitly allowed by the standard-setting part. We may assess a civil 
penalty up to $3,750 for each part in violation.
    (3) Stationary engines. For an engine that is excluded from any 
requirements of this chapter because it is a stationary engine, you may 
not move it or install it in any mobile equipment except as allowed by 
the provisions of this chapter. You may not circumvent or attempt to 
circumvent the residence-time requirements of paragraph (2)(iii) of the 
nonroad engine definition in Sec.  1068.30. Anyone violating this 
paragraph (b)(3) is deemed to be a manufacturer in violation of 
paragraph (a)(1) of this section. We may assess a civil penalty up to 
$37,500 for each engine or piece of equipment in violation.
    (4) Competition engines/equipment. For uncertified engines/
equipment that are excluded or exempted from any requirements of this 
chapter because they are to be used solely for competition, you may not 
use any of them in a manner that is inconsistent with use solely for 
competition. Anyone violating this paragraph (b)(4) is deemed to be a 
manufacturer in violation of paragraph (a)(1) of this section. We may 
assess a civil penalty up to $37,500 for each engine or piece of 
equipment in violation.
    (5) Importation. You may not import an uncertified engine or piece 
of equipment if it is defined to be new in the standard-setting part 
with a model year for which emission standards applied. Anyone 
violating this paragraph (b)(5) is deemed to be a manufacturer in 
violation of paragraph (a)(1) of this section. We may assess a civil 
penalty up to $37,500 for each engine or piece of equipment in 
violation. Note the following:
    (i) The definition of new is broad for imported engines/equipment; 
uncertified engines and equipment (including used engines and 
equipment) are generally considered to be new when imported.
    (ii) Used engines/equipment that were originally manufactured 
before applicable EPA standards were in effect are generally not 
subject to emission standards.
    (6) Warranty, recall, and maintenance instructions. You must meet 
your obligation to honor your emission-related warranty under Sec.  
1068.115, including any commitments you identify in your application 
for certification. You must also fulfill all applicable requirements 
under subpart F of this part related to emission-related defects and 
recalls. You must also provide emission-related installation and 
maintenance instructions as described in the standard-setting part. 
Failure to meet these obligations is prohibited. Also, except as 
specifically provided by regulation, you are prohibited from directly 
or indirectly communicating to the ultimate purchaser or a later 
purchaser that the emission-related warranty is valid only if the owner 
has service performed at

[[Page 23061]]

authorized facilities or only if the owner uses authorized parts, 
components, or systems. We may assess a civil penalty up to $37,500 for 
each engine or piece of equipment in violation.
    (7) Labeling. (i) You may not remove or alter an emission control 
information label or other required permanent label except as specified 
in this paragraph (b)(7) or otherwise allowed by this chapter. Removing 
or altering an emission control information label is a violation of 
paragraph (b)(1) of this section. However, it is not a violation to 
remove a label in the following circumstances:
    (A) The engine is destroyed, is permanently disassembled, or 
otherwise loses its identity such that the original title to the engine 
is no longer valid.
    (B) The regulations specifically direct you to remove the label. 
For example, see Sec.  1068.235.
    (C) The part on which the label is mounted needs to be replaced. In 
this case, you must have a replacement part with a duplicate of the 
original label installed by the certifying manufacturer or an 
authorized agent, except that the replacement label may omit the date 
of manufacture if applicable. We generally require labels to be 
permanently attached to parts that will not normally be replaced, but 
this provision allows for replacements in unusual circumstances, such 
as damage in a collision or other accident.
    (D) The original label is incorrect, provided that it is replaced 
with the correct label from the certifying manufacturer or an 
authorized agent. This allowance to replace incorrect labels does not 
affect whether the application of an incorrect original label is a 
violation.
    (ii) Removing or altering a temporary or removable label contrary 
to the provisions of this paragraph (b)(7)(ii) is a violation of 
paragraph (b)(1) of this section.
    (A) For labels identifying temporary exemptions, you may not remove 
or alter the label while the engine/equipment is in an exempt status. 
The exemption is automatically revoked for each engine/equipment for 
which the label has been removed.
    (B) For temporary or removable consumer information labels, only 
the ultimate purchaser may remove the label.
    (iii) You may not apply a false emission control information label. 
You also may not manufacture, sell, or offer to sell false labels. The 
application, manufacture, sale, or offer for sale of false labels is a 
violation of this section (such as paragraph (a)(1) or (b)(2) of this 
section). Note that applying an otherwise valid emission control 
information label to the wrong engine is considered to be applying a 
false label.
    (c) If you cause someone to commit a prohibited act in paragraph 
(a) or (b) of this section, you are in violation of that prohibition.
    (d) Exemptions from these prohibitions are described in subparts C 
and D of this part and in the standard-setting part.
    (e) The standard-setting parts describe more requirements and 
prohibitions that apply to manufacturers (including importers) and 
others under this chapter.
    (f) The specification of prohibitions and penalties in this part 
does not limit the prohibitions and penalties described in the Clean 
Air Act. Additionally, a single act may trigger multiple violations 
under this section and the Act. We may pursue all available 
administrative, civil, or criminal remedies for those violations even 
if the regulation references only a single prohibited act in this 
section.
    (g) [Reserved]
    (h) The maximum penalty values listed in paragraphs (a) and (b) of 
this section apply as of January 12, 2009. Maximum penalty values for 
earlier violations are published in 40 CFR part 19. Maximum penalty 
limits may be adjusted after January 12, 2009 based on the Consumer 
Price Index. The specific regulatory provisions for changing the 
maximum penalties, published in 40 CFR part 19, reference the 
applicable U.S. Code citation on which the prohibited action is based. 
The following table is shown here for informational purposes:

Table 1 of Sec.   1068.101--Legal Citation for Specific Prohibitions for
                   Determining Maximum Penalty Amounts
------------------------------------------------------------------------
    Part 1068 regulatory                             U.S. Code citation
   citation of prohibited      General description    for Clean Air Act
           action                of prohibition           authority
------------------------------------------------------------------------
Sec.   1068.101(a)(1).......  Introduction into     42 U.S.C. 7522(a)(1)
                               U.S. commerce of an   and (a)(4).
                               uncertified source.
Sec.   1068.101(a)(2).......  Failure to provide    42 U.S.C.
                               information.          7522(a)(2).
Sec.   1068.101(a)(3).......  Denying access to     42 U.S.C.
                               facilities.           7522(a)(2).
Sec.   1068.101(b)(1).......  Tampering with        42 U.S.C.
                               emission controls     7522(a)(3).
                               by a manufacturer
                               or dealer.
                              Tampering with
                               emission controls
                               by someone other
                               than a manufacturer
                               or dealer.
Sec.   1068.101(b)(2).......  Sale or use of a      42 U.S.C.
                               defeat device.        7522(a)(3).
Sec.   1068.101(b)(3).......  Mobile use of a       42 U.S.C. 7522(a)(1)
                               stationary engine.    and (a)(4).
Sec.   1068.101(b)(4).......  Noncompetitive use    42 U.S.C. 7522(a)(1)
                               of uncertified        and (a)(4).
                               engines/equipment
                               that is exempted
                               for competition.
Sec.   1068.101(b)(5).......  Importation of an     42 U.S.C. 7522(a)(1)
                               uncertified source.   and (a)(4).
Sec.   1068.101(b)(6).......  Recall and warranty.  42 U.S.C.
                                                     7522(a)(4).
Sec.   1068.101(b)(7).......  Removing labels.....  42 U.S.C.
                                                     7522(a)(3).
------------------------------------------------------------------------


0
329. Section 1068.103 is amended by revising paragraph (a) to read as 
follows:


Sec.  1068.103  What are the provisions related to the duration and 
applicability of certificates of conformity?

    (a) Engines/equipment covered by a certificate of conformity are 
limited to those that are produced during the period specified in the 
certificate and conform to the specifications described in the 
certificate and the associated application for certification. For the 
purposes of this paragraph (a), ``specifications'' includes any 
conditions or limitations identified by the manufacturer or EPA. For 
example, if the application for certification specifies certain engine 
configurations, the certificate does not cover any configurations that 
are not specified. We may ignore any information provided in the 
application that we determine is not relevant to a demonstration of 
compliance with applicable regulations,

[[Page 23062]]

such as your projected production volumes in many cases.
* * * * *

0
330. Section 1068.105 is amended by revising paragraph (a) to read as 
follows:


Sec.  1068.105  What other provisions apply to me specifically if I 
manufacture equipment needing certified engines?

* * * * *
    (a) Transitioning to new engine-based standards. If new engine-
based emission standards apply in a given model year, your equipment in 
that calendar year must have engines that are certified to the new 
standards, except that you may continue to use up normal inventories of 
earlier engines that were built before the date of the new or changed 
standards. For purposes of this paragraph (a), normal inventory applies 
for engines you possess and engines from your engine supplier's 
inventory. (Note: this paragraph (a) does not apply in the case of new 
remanufacturing standards.) For example, if your normal inventory 
practice is to keep on hand a one-month supply of engines based on your 
upcoming production schedules, and a new tier of standards starts to 
apply for the 2015 model year, you may order engines consistent with 
your normal inventory requirements late in the engine manufacturer's 
2014 model year and install those engines in your equipment, regardless 
of the date of installation. Also, if your model year starts before the 
end of the calendar year preceding new standards, you may use engines 
from the previous model year for those units you produce before January 
1 of the year that new standards apply. If emission standards for the 
engine do not change in a given model year, you may continue to install 
engines from the previous model year without restriction (or any 
earlier model year for which the same standards apply). You may not 
circumvent the provisions of Sec.  1068.101(a)(1) by stockpiling 
engines that were built before new or changed standards take effect. 
Similarly, you may not circumvent the provisions of Sec.  
1068.101(a)(1) by knowingly installing engines that were stockpiled by 
engine suppliers in violation of Sec.  1068.103(f). Note that this 
allowance does not apply for equipment subject to equipment-based 
standards. See 40 CFR 1060.601 for similar provisions that apply for 
equipment subject to evaporative emission standards.
* * * * *

0
331. Section 1068.120 is amended by revising paragraph (e) to read as 
follows:


Sec.  1068.120  What requirements must I follow to rebuild engines?

* * * * *
    (e) If the rebuilt engine remains installed or is reinstalled in 
the same piece of equipment, you must rebuild it to the original 
configuration, except as allowed by this paragraph (e). You may rebuild 
it to a different certified configuration of the same or later model 
year. You may also rebuild it to a certified configuration from an 
earlier model year as long as the earlier configuration is as clean or 
cleaner than the original configuration. For purposes of this paragraph 
(e), ``as clean or cleaner'' means one of the following:
    (1) For engines not certified with a Family Emission Limit for 
calculating credits for a particular pollutant, this means that the 
same emission standard applied for both model years. This includes 
supplemental standards such as Not-to-Exceed standards.
    (2) For engines certified with a Family Emission Limit for a 
particular pollutant, this means that the configuration to which the 
engine is being rebuilt has a Family Emission Limit for that pollutant 
that is at or below the standard that applied to the engine originally, 
and is at or below the original Family Emission Limit.
* * * * *

0
332. Section 1068.125 is amended by revising paragraph (b) introductory 
text to read as follows:


Sec.  1068.125  What happens if I violate the regulations?

* * * * *
    (b) Administrative penalties. Instead of bringing a civil action, 
we may assess administrative penalties if the total is less than 
$295,000 against you individually. This maximum penalty may be greater 
if the Administrator and the Attorney General jointly determine that a 
greater administrative penalty assessment is appropriate, or if the 
limit is adjusted under 40 CFR part 19. No court may review this 
determination. Before we assess an administrative penalty, you may ask 
for a hearing (subject to 40 CFR part 22). The Administrator may 
compromise or remit, with or without conditions, any administrative 
penalty that may be imposed under this section.
* * * * *

Subpart C--[Amended]

0
333. Section 1068.215 is amended by revising paragraphs (a) and (b) to 
read as follows:


Sec.  1068.215  What are the provisions for exempting manufacturer-
owned engines/equipment?

    (a) You are eligible for the exemption for manufacturer-owned 
engines/equipment only if you are a certificate holder. Any engine for 
which you meet all applicable requirements under this section is exempt 
without request.
    (b) Engines/equipment may be exempt without a request if they are 
nonconforming engines/equipment under your ownership, possession, and 
control and you do not operate them for purposes other than to develop 
products, assess production methods, or promote your engines/equipment 
in the marketplace, or other purposes we approve. You may not loan, 
lease, sell, or use the engine/equipment to generate revenue, either by 
itself or for an engine installed in a piece of equipment, except as 
allowed by Sec.  1068.201(i). Note that this paragraph (b) does not 
prevent the sale or shipment of a partially complete engine to a 
secondary engine manufacturer that will meet the requirements of this 
paragraph (b). See Sec.  1068.262 for provisions related to shipping 
partially complete engines to secondary engine manufacturers.
* * * * *

0
334. Section 1068.225 is amended by revising paragraph (b) to read as 
follows:


Sec.  1068.225  What are the provisions for exempting engines/equipment 
for national security?

* * * * *
    (b) Manufacturers may request a national security exemption for 
engines/equipment not meeting the conditions of paragraph (a) of this 
section as long as the request is endorsed by an agency of the Federal 
government responsible for national defense. In your request, explain 
why you need the exemption.
* * * * *

0
335. Section 1068.240 is amended as follows:
0
a. By revising paragraphs (a) and (b)(6).
0
b. By adding paragraph (b)(7).
0
c. By revising paragraphs (c) introductory text, (c)(2)(ii), and 
(c)(4).
0
d. By revising paragraphs (d), (e), and (g)(2).


Sec.  1068.240  What are the provisions for exempting new replacement 
engines?

* * * * *
    (a) General provisions. You are eligible for the exemption for new 
replacement engines only if you are a certificate holder. Note that 
this exemption does not apply for locomotives (40 CFR 1033.601) and 
that unique provisions apply to marine compression-ignition engines (40 
CFR

[[Page 23063]]

1042.615). Paragraphs (b), (c), and (d) of this section describe 
different approaches for exempting new replacement engines where the 
engines are specially built to correspond to an earlier model year that 
was subject to less stringent standards than those that apply for 
current production (or is no longer covered by a certificate of 
conformity). Paragraph (e) of this section describes a simpler approach 
for exempting partially complete new replacement engines that are built 
under a certificate of conformity that is valid for producing engines 
for the current model year.
    (b) * * *
    (6) You add a permanent label, consistent with Sec.  1068.45, with 
your corporate name and trademark and the following additional 
information:
    (i) Add the following statement if the engine being replaced was 
not subject to any emission standards under this chapter:


THIS ENGINE DOES NOT COMPLY WITH U.S. EPA EMISSION REQUIREMENTS. 
SELLING OR INSTALLING THIS ENGINE FOR ANY PURPOSE OTHER THAN TO REPLACE 
AN ENGINE BUILT BEFORE JANUARY 1, [Insert appropriate year reflecting 
when the earliest tier of standards began to apply to engines of that 
size and type] MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL 
PENALTY.

    (ii) Add the following statement if the engine being replaced was 
subject to emission standards:


THIS ENGINE COMPLIES WITH U.S. EPA EMISSION REQUIREMENTS FOR [Identify 
the appropriate emission standards (by model year, tier, or emission 
levels) for the replaced engine] ENGINES UNDER 40 CFR 1068.240. SELLING 
OR INSTALLING THIS ENGINE FOR ANY PURPOSE OTHER THAN TO REPLACE A 
[Identify the appropriate emission standards for the replaced engine, 
by model year(s), tier(s), or emission levels)] ENGINE MAY BE A 
VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.

    (7) Engines exempt under this paragraph (b) may not be introduced 
into commerce before you make the determination under paragraph (b)(3), 
except as specified in this paragraph (b)(7). We may waive this 
restriction for engines excluded under paragraph (c)(5) of this section 
that you ship to a distributor. Where we waive this restriction, you 
must take steps to ensure that the engine is installed consistent with 
the requirements of this paragraph (b). For example, at a minimum you 
must report to us annually whether engines we allowed you to ship to a 
distributor under this paragraph (b)(7) have been placed into service 
or remain in inventory. After an engine is placed into service, your 
report must describe how the engine was installed consistent with the 
requirements of this paragraph (b). Send these reports to the 
Designated Compliance Officer by the deadlines we specify.
    (c) Previous-tier replacement engines without tracking. You may 
produce a limited number of new replacement engines that are not from a 
currently certified engine family under the provisions of this 
paragraph (c). If you produce new engines under this paragraph (c) to 
replace engines subject to emission standards, the new replacement 
engine must be in a configuration identical in all material respects to 
the old engine and meet the requirements of Sec.  1068.265. This would 
apply, for example, for engine configurations that were certified in an 
earlier model year but are no longer covered by a certificate of 
conformity. You must comply with the requirements of paragraph (b) of 
this section for any number of replacement engines you produce in 
excess of what we allow under this paragraph (c). Engines produced 
under this paragraph (c) may be redesignated as engines subject to 
paragraph (b) of this section, as long as you meet all the requirements 
and conditions of paragraph (b) of this section before the end of the 
calendar year in which the engine was produced. The following 
provisions apply to engines exempted under this paragraph (c):
    (2) * * *
    (ii) Partially complete engines exempted under paragraph (e) of 
this section.
* * * * *
    (4) Add a permanent label as specified in paragraph (b)(6) of this 
section. For partially complete engines, you may alternatively add a 
permanent or removable label as specified in paragraph (d) of this 
section.
* * * * *
    (d) Partially complete engines. The following requirements apply if 
you ship a partially complete replacement engine under paragraph (b) or 
(c) of this section:
    (1) Provide instructions specifying how to complete the engine 
assembly such that the resulting engine conforms to the applicable 
certificate of conformity or the specifications of Sec.  1068.265. 
Where a partially complete engine can be built into multiple different 
configurations, you must be able to identify all the engine models and 
model years for which the partially complete engine may properly be 
used for replacement purposes. Your instructions must make clear how 
the final assembler can determine which configurations are appropriate 
for the engine they receive.
    (2) You must label the engine as follows:
    (i) If you have a reasonable basis to believe that the fully 
assembled engine will include the original emission control information 
label, you may add a removable label to the engine with your corporate 
name and trademark and the statement: ``This replacement engine is 
exempt under 40 CFR 1068.240.'' This would generally apply if all the 
engine models that are compatible with the replacement engine were 
covered by a certificate of conformity and they were labeled in a 
position on the engine or equipment that is not included as part of the 
partially complete engine being shipped for replacement purposes. 
Removable labels must meet the requirements specified in Sec.  1068.45.
    (ii) If you do not qualify for using a removable label in paragraph 
(d)(1) of this section, you must add a permanent label in a readily 
visible location, though it may be obscured after installation in a 
piece of equipment. Include on the permanent label your corporate name 
and trademark, the engine's part number (or other identifying 
information), and the statement: ``This replacement engine is exempt 
under 40 CFR 1068.240.'' If there is not enough space for this 
statement, you may alternatively add: ``REPLACEMENT'' or ``SERVICE 
ENGINE''. For purposes of this paragraph (d)(2), engine part numbers 
permanently stamped or engraved on the engine are considered to be 
included on the label.
    (e) Partially complete current-tier replacement engines. The 
provisions of paragraph (d) of this section apply for partially 
complete engines you produce from a current line of certified engines 
or vehicles. This applies for engine-based and equipment-based 
standards as follows:
    (1) Where engine-based standards apply, you may introduce into U.S. 
commerce short blocks or other partially complete engines from a 
currently certified engine family as replacement components for in-use 
equipment powered by engines you originally produced. You must be able 
to identify all the engine models and model years for which the 
partially complete engine may properly be used for replacement 
purposes.

[[Page 23064]]

    (2) Where equipment-based standards apply, you may introduce into 
U.S. commerce engines that are identical to engines covered by a 
current certificate of conformity by demonstrating compliance with 
currently applicable standards where the engines will be installed as 
replacement engines. These engines might be fully assembled, but we 
would consider them to be partially complete engines because they are 
not yet installed in the equipment.
* * * * *
    (g)* * *
    (2) Anyone installing or completing assembly of an exempted new 
replacement engine is deemed to be a manufacturer of a new engine with 
respect to the prohibitions of Sec.  1068.101(a)(1). This applies to 
all engines exempted under this section.
* * * * *

0
336. Section 1068.260 is amended by revising paragraphs (a), (b), (c), 
and (e) to read as follows:


Sec.  1068.260  What general provisions apply for selling or shipping 
engines that are not yet in their certified configuration?

* * * * *
    (a) The provisions of this paragraph (a) apply for emission-related 
components that cannot practically be assembled before shipment because 
they depend on equipment design parameters.
    (1) You do not need an exemption to ship an engine that does not 
include installation or assembly of certain emission-related 
components, if those components are shipped along with the engine. For 
example, you may generally ship aftertreatment devices along with 
engines rather than installing them on the engine before shipment. We 
may require you to describe how you plan to use this provision.
    (2) You may ask us at the time of certification for an exemption to 
allow you to ship your engines without emission-related components. If 
we allow this, we may specify conditions that we determine are needed 
to ensure that shipping the engine without such components will not 
result in the engine being operated outside of its certified 
configuration. See paragraph (d) of this section for additional 
provisions that apply in certain circumstances.
    (b) You do not need an exemption to ship engines without specific 
components if they are not emission-related components identified in 
Appendix I of this part. For example, you may generally ship engines 
without radiators needed to cool the engine.
    (c) If you are a certificate holder, partially complete engines 
shipped between two of your facilities are exempt, subject to the 
provisions of this paragraph (c), as long as you maintain ownership and 
control of the engines until they reach their destination. We may also 
allow this where you do not maintain actual ownership and control of 
the engines (such as hiring a shipping company to transport the 
engines) but only if you demonstrate that the engines will be 
transported only according to your specifications. See Sec.  
1068.261(b) for the provisions that apply instead of this paragraph (c) 
for the special case of integrated manufacturers using the delegated-
assembly exemption. Notify us of your intent to use this exemption in 
your application for certification, if applicable. Your exemption is 
effective when we grant your certificate. You may alternatively request 
an exemption in a separate submission; for example, this would be 
necessary if you will not be the certificate holder for the engines in 
question. We may require you to take specific steps to ensure that such 
engines are in a certified configuration before reaching the ultimate 
purchaser. Note that since this is a temporary exemption, it does not 
allow you to sell or otherwise distribute to ultimate purchasers an 
engine in an uncertified configuration. Note also that the exempted 
engine remains new and subject to emission standards (see definition of 
``exempted'' in Sec.  1068.30) until its title is transferred to the 
ultimate purchaser or it otherwise ceases to be new.
* * * * *
    (e) Engines used in hobby vehicles are not presumed to be engines 
subject to the prohibitions of Sec.  1068.101. Hobby vehicles are 
reduced-scale models of vehicles that are not capable of transporting a 
person. Some gas turbine engines are subject to the prohibitions of 
Sec.  1068.101, but we do not presume that all gas turbine engines are 
subject to these prohibitions. Other engines that do not have a valid 
certificate of conformity or exemption when introduced into U.S. 
commerce are presumed to be engines subject to the prohibitions of 
Sec.  1068.101 unless we determine that such engines are excluded from 
the prohibitions of Sec.  1068.101.
* * * * *


Sec.  1068.261  [Amended]

0
337. Section 1068.261 is amended by removing and reserving paragraph 
(c)(5).

Subpart D--[Amended]

0
338. Section 1068.325 is amended by revising paragraph (g) to read as 
follows:


Sec.  1068.325  What are the temporary exemptions for imported engines/
equipment?

* * * * *
    (g) Exemption for partially complete engines. You may import an 
engine if another company already has a certificate of conformity and 
will be modifying the engine to be in its final certified configuration 
or a final exempt configuration under the provisions of Sec.  1068.262. 
You may also import a partially complete engine by shipping it from one 
of your facilities to another under the provisions of Sec.  
1068.260(c). If you are importing a used engine that becomes new as a 
result of importation, you must meet all the requirements that apply to 
original engine manufacturers under Sec.  1068.262.
* * * * *

Subpart E--[Amended]


Sec.  1068.410  [Amended]

0
339. Section 1068.410 is amended by removing and reserving paragraph 
(e)(1).

0
340. Section 1068.440 is amended by revising paragraph (b) to read as 
follows:


Sec.  1068.440  How do I ask EPA to reinstate my suspended certificate?

* * * * *
    (b) Give us test data from production engines/equipment showing 
that engines/equipment in the remedied family comply with all the 
emission standards that apply.

Subpart F--[Amended]

0
341. Section 1068.501 is amended by revising paragraphs (a)(5), (e), 
and (f) to read as follows:


Sec.  1068.501  How do I report emission-related defects?

* * * * *
    (a)* * *
    (5) You must track the information specified in paragraph (b)(1) of 
this section. You must assess this data at least every three months to 
evaluate whether you exceed the thresholds specified in paragraphs (e) 
and (f) of this section. Where thresholds are based on a percentage of 
engines/equipment in the family, use actual U.S.-directed production 
volumes for the whole model year when they become available. Use 
projected production figures until the actual production figures become 
available. You are not required to collect additional information other 
than that specified in paragraph (b)(1) of this section before reaching 
a threshold for an investigation specified in paragraph (e) of this 
section.
* * * * *

[[Page 23065]]

    (e) Thresholds for conducting a defect investigation. You must 
begin a defect investigation based on the following number of engines/
equipment that may have the defect:
    (1) For engines/equipment with maximum engine power at or below 560 
kW:
    (i) For families with annual production below 500 units: 50 or more 
engines/equipment.
    (ii) For families with annual production from 500 to 50,000 units: 
more than 10.0 percent of the total number of engines/equipment in the 
family.
    (iii) For families with annual production from 50,000 to 550,000 
units: more than the total number of engines/equipment represented by 
the following equation:

Investigation threshold = 5,000 + (Production units--50,000) x 0.04

    (iv) For families with annual production above 550,000 units: 
25,000 or more engines/equipment.
    (2) For engines/equipment with maximum engine power greater than 
560 kW:
    (i) For families with annual production below 250 units: 25 or more 
engines/equipment.
    (ii) For families with annual production at or above 250 units: 
more than 10.0 percent of the total number of engines/equipment in the 
family.
    (f) Thresholds for filing a defect report. You must send a defect 
report based on the following number of engines/equipment that have the 
defect:
    (1) For engines/equipment with maximum engine power at or below 560 
kW:
    (i) For families with annual production below 1,000 units: 20 or 
more engines/equipment.
    (ii) For families with annual production from 1,000 to 50,000 
units: more than 2.0 percent of the total number of engines/equipment 
in the family.
    (iii) For families with annual production from 50,000 to 550,000 
units: more than the total number of engines/equipment represented by 
the following equation:

Reporting threshold = 1,000 + (Production units--50,000) x 0.01

    (iv) For families with annual production above 550,000 units: 6,000 
or more engines/equipment.
    (2) For engines/equipment with maximum engine power greater than 
560 kW:
    (i) For families with annual production below 150 units: 10 or more 
engines/equipment.
    (ii) For families with annual production from 150 to 750 units: 15 
or more engines/equipment.
    (iii) For families with annual production above 750 units: more 
than 2.0 percent of the total number of engines/equipment in the 
family.
* * * * *
[FR Doc. 2010-2534 Filed 4-29-10; 8:45 am]
BILLING CODE 6560-50-P

