                                       

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY                NATIONAL VEHICLE AND FUEL EMISSIONS LABORATORY
                              2565 PLYMOUTH ROAD
                        ANN ARBOR, MICHIGAN 48105-2498
                                       

                                   OFFICE OF
                               AIR AND RADIATION
                                   OFFICE OF
                               AIR AND RADIATION
		                                                                                   	                                            

MEMORANDUM


					
SUBJECT:	Determination of no SISNOSE for Proposed Aircraft Engine Emission Standards

FROM:		John Mueller, Mechanical Engineer
		Assessment and Standards Division

TO:		Docket ID No. EPA - HQ - OAR - 2019-0660

DATE:		December 6, 2021

This memorandum presents the EPA's Small Business Flexibility Analysis (SBFA) which evaluates the potential impacts of the proposed aircraft engine emission standards rule on small entities.  The Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 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 (SISNOSE).

Requirements of the Regulatory Flexibility Act
 
When proposing and promulgating rules subject to notice and comment under the Clean Air Act, the EPA is generally required under the RFA to conduct a regulatory flexibility analysis unless it certifies that the requirements of a regulation will not cause a SISNOSE.  The key elements of the RFA include:

 a description of and, where feasible, an estimate of the number of small entities to which the rule will apply;
 the projected reporting, record keeping, and other compliance requirements of the rule, including an estimate of the classes of small entities which will be subject to the requirements and the type of professional skills necessary for preparation of the report or record;
 an identification to the extent practicable, of all other relevant Federal rules which may duplicate, overlap, or conflict with the rule; and,
 any significant alternatives to the rule which accomplish the stated objectives of applicable statutes and which minimize any significant economic impact of the rule on small entities.

The RFA was amended by SBREFA to ensure that concerns regarding small entities are adequately considered during the development of new regulations that affect them.  Although the EPA is not required by the Clean Air Act to provide special treatment to small businesses, the RFA requires the EPA to carefully consider the economic impacts that its rules will have on small entities.  Specifically, the RFA requires the EPA to determine, to the extent feasible, the rule's economic impact on small entities, explore regulatory options for reducing any significant economic impact on a substantial number of such entities, and explain our ultimate choice of regulatory approach.

In developing this proposed rule, the EPA concluded that the proposed aircraft engine emission standards program would not have a SISNOSE.  The EPA based this conclusion on the fact that the proposed rule would not place any burden on small governmental jurisdictions or small nonprofit organizations.  Further, there is only one small business in the group of potentially affected entities - an aircraft engine manufacturer, and that manufacturer is not expected to be subject to the proposed emission standards.  There is no economic burden associated with this rule.  Thus, this proposed rule would not place any burden on small entities.

Need for the Rulemaking and Rulemaking Objectives

A detailed discussion on the need for and objectives of this proposed rule is located in the preamble to the proposed rule.  The standards in this proposed rule are the equivalent to the International Civil Aviation Organization (ICAO) standards.

Definition and Description of Small Entities

Small entities include small businesses, small organizations, and small governmental jurisdictions.  For the purposes of assessing the impacts of the rule on small entities, a small entity is defined as: (1) a small business that meets the definition for business based on the Small Business Administration's (SBA) size standards (see Table 1); (2) 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 (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.  Table 1 provides an overview of the primary SBA small business category potentially affected by this regulation.
Table 1 -  Small Business Definitions
Industry
Defined as small entity by SBA if:
NAICS Codesa
Manufacturers of new airplane engines
<=1,500 employees
336412
 North American Industry Classification System (NAICS)


Summary of Small Entities to which the Proposed Rulemaking Would Apply

The businesses that are potentially affected by this proposed rule are those that manufacture new aircraft engines.  As part of the recent rulemaking regarding airplane greenhouse gas emissions (GHG), the EPA performed an industry characterization of airplane and airplane engine manufacturers potentially affected by that action.  This industry characterization was based in part on a detailed report performed by ICF International, Inc. for the EPA.
 
The industry characterization performed for the airplane GHG rulemaking was used to determine which aircraft engine manufacturers meet the SBA definition of a small business under this proposed rule.  From the industry characterization, we determined that there is only a single aircraft engine manufacturer that meets the definition of a small business.  This single manufacturer, however, only currently produces engines below the rated thrust applicability threshold for the proposed particulate matter standards for subsonic engines. Also, this manufacturer does not currently produce commercial supersonic engines, and so is not expected to be subject to the proposed revision to the rated thrust applicability threshold for smoke standards of commercial supersonic engines.  This entity is therefore not expected to be subject to the proposed standards unless it begins producing engines that meet the applicability thresholds.  Although the ICF study upon which this analysis is based was performed in 2018, the EPA is confident this accounting of the number of potentially affected small businesses is both correct and unlikely to change in the near future.

Related Federal Rules

The EPA is not aware of any area where the regulations directly duplicate or overlap with the existing federal, state, or local regulations.  The FAA will follow this rulemaking with its own rulemaking to incorporate the EPA's standards into its certification and compliance framework.

Projected Effects of the Proposed Rulemaking on Small Entities

After considering the economic impacts of the proposed rule on small entities, the EPA does not believe that this proposed action will have a SISNOSE.  There is no economic burden associated with this proposed rule.

Regulatory Alternatives to Accommodate Small Entities

Given that the EPA does not believe the proposed rule would have any impact on even a single small entity, it does not believe there is a need for regulatory alternatives to help minimize such a burden on small entities.
